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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2 )*
LOGIMETRICS, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
54141 01 06
---------------------
(CUSIP Number)
Greg Manocherian, 3 New York Plaza, 18th Floor, New York, New York 10004
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receiver Notices
and Communications)
October 21, 1998
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Check the following box if a fee is being paid with the statement |_|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
<TABLE>
SCHEDULE 13D
<CAPTION>
- ----------------------------------------------------- --------------------------------------------
<S> <C>
CUSIP No. 54141 01 06 Page 2 of 5 Pages
- ----------------------------------------------------- --------------------------------------------
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GREG MANOCHERIAN
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|_|
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 4,938,259
OWNED BY --------------------------------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING --
PERSON WITH --------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
4,938,259
--------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,938,259
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.36%
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE 13D
<CAPTION>
- ----------------------------------------------------- --------------------------------------------
<S> <C>
CUSIP No. 54141 01 06 Page 3 of 5 Pages
- ----------------------------------------------------- --------------------------------------------
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KABUKI PARTNERS ADP, GP
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|_|
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
- --------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 409,299
OWNED BY --------------------------------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING --
PERSON WITH --------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
409,299
--------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
409,299
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.42%
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE 13D
<CAPTION>
- ----------------------------------------------------- --------------------------------------------
<S> <C>
CUSIP No. 54141 01 06 Page 4 of 5 Pages
- ----------------------------------------------------- --------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WHITEHALL PROPERTIES, LLC
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|_|
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
- --------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,360,988
OWNED BY ---------------------------------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING --
PERSON WITH ---------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,360,988
---------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,360,988
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.59%
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE 13D
<CAPTION>
- ----------------------------------------------------- --------------------------------------------
<S> <C>
CUSIP No. 54141 01 06 Page 5 of 5 Pages
- ----------------------------------------------------- --------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PAMELA EQUITIES CORP.
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |X|
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|_|
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
- --------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 2,594,931
OWNED BY ---------------------------------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING --
PERSON WITH ---------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
2,594,931
---------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,594,931
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.44%
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
</TABLE>
<PAGE>
This statement constitutes Amendment No. 2 to the Schedule 13D (the
"Schedule 13D") of Mr. Greg Manocherian with respect to the Common Stock, par
value of one cent ($0.01) per share (the "Common Stock") of Logimetrics, Inc., a
Delaware corporation (the "Company"). This Amendment No. 2 amends the initial
statement of Mr. Manocherian on Schedule 13D with respect to the event dated
March 7, 1996, and Amendment No.1 thereto with respect to the event dated July
30, 1997, and includes three reporting persons controlled by Mr. Manocherian:
Kabuki Partners ADP, GP ("Kabuki"), Whitehall Properties, LLC ("Whitehall"), and
Pamela Equities Corp ("Pamela") (Mr. Manocherian, Kabuki, Whitehall, and Pamela
are collectively referred to herein as the "Reporting Persons"). The Schedule
13D is hereby amended and restated as follows:
Item 1. Security and Issuer.
--------------------
This Amendment No. 2 is being filed to report the transactions
by the Reporting Persons in the Common Stock of the Company,
par value of $.01 per share (the "Common Stock"), and the
following securities of the Company that are convertible into
or exercisable to purchase Common Stock: Class A 13%
Convertible Senior Subordinated Pay-In-Kind Debentures Due
1999 (the "Class A Debentures"), which Debentures are
convertible into shares of Common Stock at a conversion price
of $.41667 per share; Class C 13% Convertible Senior
Subordinated Due1999 (the "Class C Debentures"), which
Debentures are convertible into shares of Common Stock at a
conversion price of $.41667 per share; Series G Warrants (the
"G Warrants"), which G Warrants are exercisable for a period
of seven (7) years to purchase shares of Common Stock at an
exercise price of $.50 per share; Series H Warrants (the "H
Warrants"), which H Warrants are exercisable for a period of
seven (7) years to purchase shares of Common Stock at an
exercise price of $.60 per share; and Series I Warrants (the
"I Warrants"), which I Warrants are exercisable for a period
of seven (7) years to purchase shares of Common Stock at an
exercise price of $1.125 per share.
On July 29, 1997, certain investors, including the Reporting
Persons, entered into a Purchase Agreement (the "Initial
Purchase Agreement") relating to a proposed financing (the
"Initial Financing") of the Company, consisting of up to
$3,583,333 principal amount of Class A Debentures, up to
9,350,000 G Warrants at a purchase price of $.07 per G
Warrant, up to 1,433,333 H Warrants at a purchase price of
$.06 per H Warrant and up to 716,667 I Warrants at a purchase
price of $.04 per I Warrant, for aggregate gross proceeds to
the Company of up to $4,352,500. On July 30, 1997, certain of
the foregoing investors, including certain of the Reporting
Persons, consummated the first closing of the initial purchase
(the "Initial Purchase") of such Financing, consisting of an
aggregate of $2,535,942 principal amount of Class A
Debentures, 6,866,129 G Warrants, 1,074,114 H Warrants and
537,057 I Warrants. One of the investors, not among the
Reporting Persons, has the right, in a second closing of the
Initial Purchase, to purchase $214,058 principal amount of
Class A Debentures, 483,871 G Warrants, 25,886 H Warrants and
12,943 I Warrants. In May and August of 1998, certain
investors, including certain of the Reporting Persons,
exercised an option to purchase (the "Optional Purchase"), in
the aggregate, $833,333 principal amount of Debentures,
2,000,000 G Warrants, 333,333 H Warrants and 166,667 I
Warrants.
<PAGE>
On October 21, 1998, certain investors, including certain of
the Reporting Persons, entered into a Purchase Agreement (the
"Second Purchase Agreement") with the Company, for the
purchase (the "Class C Purchase") by such investors of
$2,666,667 in aggregate principal amount of Class C Debentures
for aggregate gross proceeds to the Company of $2,000,000.
In addition, on October 21, 1998, certain investors, including
certain of the Reporting Persons, entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement") with an
individual stockholder of the Company, for the purchase (the
"Common Purchase"; and together with the Class C Purchase, the
"Second Financing") by such investors of 2,000,000 shares of
Common Stock for an aggregate purchase price of $500,000.
The principal executive offices of the Company are located at
50 Orville Drive, Bohemia, New York 11716.
Item 2. Identity and Background.
------------------------
(a) This Schedule 13D is being filed by Mr. Manocherian,
Kabuki, Whitehall, and Pamela. Mr. Manocherian, Kabuki,
Whitehall and Pamela are making this single, joint filing
because they may be deemed to constitute a "group" within the
meaning of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended. The Reporting Persons disclaim the existence
of a group with the other investors in the Company.
(b) - (c)
Greg Manocherian
----------------
Mr. Manocherian is an individual principally employed as an
investor. The principal business address of Mr. Manocherian is
3 New York Plaza, 18th Floor, New York, New York 10004.
Kabuki Partners ADP, GP
-----------------------
Kabuki is a general partnership that invests in various
opportunities as they arise. Mr. Manocherian is the
controlling partner. The principal business address of Kabuki
is 3 New York Plaza, 18th Floor, New York, New York 10004.
Whitehall Properties LLC
------------------------
Whitehall is a limited liability company that holds interests
in real estate partnerships. The principal business address of
Whitehall is 3 New York Plaza, 18th Floor, New York, New York
10004.
Pamela Equities Corp.
---------------------
Pamela is a corporation that owns and manages real estate. The
principal business address of Pamela is 3 New York Plaza, 18th
Floor, New York, New York 10001.
<PAGE>
(d) To the best knowledge of the Reporting Persons, during the
last five (5) years, none of the Reporting Persons has been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) To the best knowledge of the Reporting Persons, during the
last five years, none of the Reporting Persons has been a
party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and is subject to any judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or a finding of any violation with
respect to such laws.
(f) Mr. Manocherian is a citizen of the United States of
America. Kabuki is a New York corporation. Whitehall is a New
York limited liability company. Pamela is a New York
corporation.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
The source of the $150,000 paid by Kabuki, the $185,000 paid
by Whitehall, and the $265,000 paid by Pamela for the
Debentures, and the $33,750 paid by Kabuki, the $41,625 paid
by Whitehall, and the $76,291.50 paid by Pamela for Common
Stock purchased by such entities, as set forth in Item 5
below, was working capital of such entities.
Item 4. Purpose of Transaction.
-----------------------
The Reporting Persons acquired the Class C Debentures and the
Common Stock of the Company reported herein as being owned by
each of them for investment purposes. Depending upon market
conditions and other factors that each of the Reporting
Persons may deem material to their respective investment
decisions, the Reporting Persons may purchase shares of Common
Stock of the Company in the open market or in private
transactions, or may dispose of all or a portion of the Class
C Debentures and the Common Stock or other securities of the
Company that each now owns or hereafter may acquire, subject
to restrictions on transfer under the securities laws and
under the documents pursuant to which such securities were
purchased.
Each of the Reporting Persons has entered into a stockholders'
agreement (a copy of which is attached hereto as Exhibit 4,
the "Stockholders' Agreement") with the Company and Charles
Brand, the Chairman and Chief Executive Officer of the Company
and the Company's largest shareholder, in which the Reporting
Persons agreed, among other things, to certain limitations on
their ability to dispose of their shares of the Common Stock,
grant and are granted certain "tag-along" rights with respect
to future sales of the Common Stock, and agree to vote their
shares of Common Stock for the appointment of certain nominees
as members of the Company's Board of Directors and for certain
other matters as set forth below. The Reporting Persons,
except for Phineas Broadband Systems, L.P., entered into a
separate stockholders' agreement with certain investors in the
Initial Purchase (the "InterPurchaser Agreement") pursuant to
which the Reporting Persons granted and
<PAGE>
were granted certain additional "tag-along" rights with
respect to future sales of Common Stock.
Among other things, the Stockholders' Agreement provides that
a majority of the Directors appointed by the Majority
Investors can recommend to the Board that the Company be sold
and Mr. Brand and any transferee of his securities have agreed
to use their best efforts to cause the Brand Directors to vote
in favor of the sale provided that such recommendation is
consistent with their fiduciary duties.
Certain amendments have been made to the by-laws of the
Company to implement the provisions of the Stockholders'
Agreement.
Except as otherwise set forth above, the Reporting Persons
have no plans or proposals which relate to, or could result
in, any of the matters referred to in Paragraphs (b) through
(j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
Set forth below is a description of the number of shares of
Common Stock and the percentage of the aggregate shares of
Common Stock issued and outstanding, held by each Reporting
Person. All of the Class C Debentures reported below were
purchased by the respective Reporting Persons on October 21,
1998 pursuant to the Second Purchase Agreement, at a purchase
price equal to 75% of the principal amount of the Class C
Debentures purchased by such Reporting Persons. All shares of
outright Common Stock reported herein as being held by
Reporting Persons were acquired on October 21, 1998 pursuant
to the Stock Purchase Agreement, at a price per share of $.25.
(a) - (b)
Greg Manocherian
----------------
Mr. Manocherian beneficially owns 4,938,259 shares of Common
Stock, comprised of 107,000 shares of Common Stock; 47,170
shares of Common Stock issuable upon conversion of .5 shares
of Preferred Stock; 20,000 shares of Common Stock issuable
upon conversion of Class A Warrants; 47,170 shares of Common
Stock issuable upon conversion of Class D Warrants; 1,541,218
shares of Common Stock issuable upon exercise of $642,174
principal amount of Debentures; 1,501,480 shares of Common
Stock issuable upon exercise of 1,501,480 G Warrants; 77,658
shares of Common Stock issuable upon exercise of 77,658 H
Warrants; and 38,829 shares of Common Stock issuable upon
exercise of 38,829 I Warrants; comprising 15.36% of the issued
and outstanding shares of Common Stock based on information
received from the Company. The foregoing shares of Common
Stock are owned by Mr. Manocherian individually. With respect
to the remaining securities set forth above and described in
more detail below, Mr. Manocherian may be deemed to be a
beneficial owner of such securities by virtue of his being a
"control person" with respect to Kabuki, Whitehall and Pamela.
<PAGE>
Kabuki Partners ADP, GP
-----------------------
Kabuki beneficially owns 362,999 shares of Common Stock
comprised of 135,000 shares of Common Stock, 102,748 shares
issuable upon conversion of $42,812 principal amount of Class
A Debentures, 46,500 shares issuable upon exercise of the
$150,000 principal amount of the Class C Debentures, 96,774
shares issuable upon exercise of 96,774 G Warrants, 5,177
shares issuable upon exercise of 5,177 H Warrants, and 2,589
shares issuable upon exercise of 2,589 I Warrants.
Such 362,999 shares of Common Stock comprise 1.42% of the
issued and outstanding shares of Common Stock, based on
information received from the Company.
Whitehall Properties LLC
------------------------
Whitehall beneficially owns 1,360,988 shares of the Common
Stock comprised of (a) 166,500 shares of Common Stock; 380,761
shares issuable upon conversion of $158,650 principal amount
of the Class A Debentures, 57350 shares issuable upon
conversion of the $185,000 principal amount of the Class C
Debentures, 358,624 shares issuable upon exercise of 358,624 G
Warrants, 19,186 shares issuable upon exercise of 19,186 H
Warrants and 9,593 shares issuable upon exercise of 9,593 I
Warrants, currently owned by Whitehall, and (b) 132,979 shares
issuable upon exercise of $55,408 principal amount of the
Class A Debentures, 125,247 shares issuable upon exercise of
125,247 G Warrants, 6,700 shares issuable upon exercise of
6,700 H Warrants and 3,350 shares issuable upon exercise of
3,350 I Warrants, which Whitehall has the right to purchase as
part of the Optional Purchase.
Such 1,360,988 shares of Common Stock comprise 4.59% of the
issued and outstanding shares of Common Stock based on
information received from the Company.
Whitehall has and will have the sole power to vote and dispose
of all such securities.
Pamela Equities Corp.
---------------------
Pamela beneficially owns 2,594,931 shares of Common Stock,
comprised of (a) 238,500 shares of Common Stock; 761,522
shares issuable upon conversion of $317,301 principal amount
of Class A Debentures, 82,150 shares issuable uopn conversion
of the $265,000 principal amount of the Class C Debentures,
717,247 shares issuable upon exercise of 717,247 G Warrants,
38,371 shares issuable upon exercise of 38,371 H Warrants and
19,186 shares issuable upon exercise of 19,186 I Warrants,
currently owned by Pamela, and (b) 265,957 shares issuable
upon exercise of $110,816 principal amount of the Class A
Debentures, 250,495 shares issuable upon exercise of 250,495 G
Warrants, 13,401 shares issuable upon exercise of 13,401 H
Warrants and 6,700 shares issuable upon exercise of 6,700 I
Warrants.
Such 2,594,931 shares of Common Stock comprise 8.7% of the
issued and outstanding shares of the Common Stock, based on
information received from the Company.
<PAGE>
Pamela has and will have the sole power to vote and dispose of
all such securities.
(c) None.
Other than as set forth above and elsewhere in this Item 5,
none of the Reporting Persons effected any transaction in the
Shares during the past sixty (60) days.
(d) Each of the Reporting Persons affirms that no person other
than the Reporting Persons has the right to receive, or the
power to direct the receipt of, dividends from, or the
proceeds from the sale of, the Common Stock owned by the
Reporting Persons.
(e) It is inapplicable for the purposes herein to state the
date on which the Reporting Persons ceased to be the owners of
more than five percent (5%) of the Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships
with respect to Securities of the Issuer.
--------------------------------------------------------
In accordance with the terms of the Class C Debentures, from
and after the earliest of (i) January 31, 1999, (ii) the
consummation of a Qualifying Offering (as defined therein), or
(iii) the date of any repayment notice given by the Company
pursuant to Section 2(d) thereof, any holder of the Class C
Debentures has the right, exercisable at his, her or its
option at any time during which the principal amount of such
Class C Debenture is outstanding, to convert the Class C
Debenture, into a number of fully paid and non-assessable
shares equal to (i) the result obtained by dividing the stated
principal amount of the Class C Debenture by the conversion
rate established for any equity security issued in a
Qualifying Offering (as defined in the Class C Debenture), if
the Class C Debenture is converted on or after the
consummation of a Qualifying Offering, or (ii) if no
Qualifying Offering has occurred on or prior to such
conversion, the result obtained by dividing the stated
principal amount of the Class C Debenture by (X) $0.52 per
share if the Class C Debenture is converted on or prior to
January 31, 1999, (Y) $0.45 per share if the Class C Debenture
is converted on or after February 1, 1999 and on or prior to
April 30, 1999, or (Z) $0.31 per share if the Class C
Debenture is converted on or after May 1, 1999. The respective
conversion prices set forth above are subject to adjustment in
certain circumstances as provided in the Class C Debenture.
Pursuant to a Registration Rights Agreement (the "Registration
Rights Agreement"), dated as of October 21, 1998, the Company
has agreed to provide certain registration rights to investors
(including certain Reporting Persons) in the Class C
Debentures purchased pursuant to the Second Purchase
Agreement.
Reference is made to Item 1 above regarding the Debentures.
Reference is made to Item 4 above regarding certain
arrangements relating to transfer or voting of securities.
<PAGE>
Except as set forth elsewhere in this Schedule 13D, the
Reporting Persons do not have any contract, arrangement,
understanding or relationship (legal or otherwise) with any
person with respect to any securities of the Company,
including, but not limited to, transfer or voting of any such
securities, finders' fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division
of profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
---------------------------------
1. Agreement dated August 11, 1997 among the Reporting
Persons relating to the filing of a joint statement
pursuant to Rule 13d-1(f)(1)
2. Stockholders' Agreement
3. InterPurchaser Agreement
4. Form of Class C Debenture
5. Registration Rights Agreement
<PAGE>
SIGNATURE
---------
After reasonable inquiry, and to the best of our knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete, and correct.
Date: November 24, 1998
/s/
---------------------------------------
GREG MANOCHERIAN
KABUKI PARTNERS ADP, GP
By: /s/
------------------------------
Greg Manocherian, Partner
WHITEHALL PROPERTIES, LLC
By: /s/
------------------------------
Greg Manocherian, Member
PAMELA EQUITIES CORP.
By: /s/
------------------------------
Greg Manocherian, President
<PAGE>
Exhibit Index
-------------
Sequential
Exhibit No. Description Page
----------- ----------- ----
1 Agreement dated November 24, 1998 among the Reporting
Persons relating to filing of a joint acquisition
statement pursuant to Rule 13d - 1(f)(1).
2 Stockholders' Agreement dated July 29, 1997 among the
Company and several stockholders, including the
Reporting Persons.
3 Stockholders' Agreement [InterPurchaser Agreement]
dated as of July 1997 among several stockholders of
the Company, including Reporting Persons.
4 Form of Class C 13% Senior Subordinated Debenture Due
1999.
5 Registration Rights Agreement dated as of October
1998 among the Company and several stockholders,
including the Reporting Persons.
<PAGE>
EXHIBIT 1
The undersigned hereby agree, pursuant to Rule 13d-1(f)(1) to file a
joint statement on Schedule 13D and amendments thereto pertaining to their
ownership of Class C 13% Convertible Senior Subordinated Debentures Due
September 30, 1999, Common Stock, par value of one cent ($0.01) per share, of
LogiMetrics, Inc.
This agreement may be terminated for any reason by any party hereto
immediately upon the personal delivery or facsimile transmission of notice to
that effect to the other parties hereto.
Date: November 24, 1997
/s/
---------------------------------------
GREG MANOCHERIAN
KABUKI PARTNERS ADP, GP
By: /s/
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Greg Manocherian, Partner
WHITEHALL PROPERTIES, LLC
By: /s/
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Greg Manocherian, Member
PAMELA EQUITIES CORP.
By: /s/
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Greg Manocherian, President
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EXHIBIT 2
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of July 29, 1997, by and among
LogiMetrics, Inc., a Delaware corporation (the "Company"), Charles S. Brand
("Brand"), and the other individuals and entities listed on the signature pages
hereto (the "Purchasers" and, collectively with Brand and each other Person who,
in accordance with the terms hereof, shall become a party to or be bound by the
terms of this Agreement after the date hereof, the "Stockholders").
W I T N E S S E T H :
WHEREAS, Brand currently is the beneficial owner of 19,387,800 shares
of Common Stock, par value $.01 per share, of the Company (the "Common Stock");
and
WHEREAS, the Purchasers beneficially own an aggregate of 700,000 shares
of Common Stock: and
WHEREAS, pursuant to the terms of a Purchase Agreement, dated as of
even date herewith (the "Purchase Agreement"), by and among the Company and the
Purchasers, the Purchasers have acquired or will shortly acquire beneficial
ownership of an additional 15,600,000 shares of Common Stock in the aggregate;
and
WHEREAS, under the terms of the Purchase Agreement, the Purchasers have
the right to acquire beneficial ownership of an additional 4,500 000 shares of
Common Stock; and
WHEREAS, the Company and the Stockholders desire to make provision with
respect to (i) the ownership, transfer or other disposition of their equity
interests in the Company, and (ii) the management of the affairs of the Company;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein,and intending to be legally bound, the parties hereby agree as follows:
ARTICLE I
Certain Definitions
Section 1.1 Certain Definitions. As used in this Agreement, the
following terms have the respective meanings set forth below.
"Affiliate" means, with respect to any Person, any other Person who
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common
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control with, such Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlled" and "controlling" have
meanings correlative thereto. Any Relative of an individual shall be deemed to
be an Affiliate of such individual for purposes hereof.
"beneficial owner" (and, with correlative meanings, "beneficially own"
and "beneficial ownership") of any interest means a Person who, together with
his, her or its Affiliates, is or may be deemed a beneficial owner of such
interest for purposes of Rule 13d-3 or 13d-5 under the Securities Exchange Act
of 1934, as amended, or who, together with his, her or its Affiliates, has the
right to become such a beneficial owner of such interest (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise, conversion or
exchange of any warrant, right or other instrument, or otherwise.
"Board" means the Board of Directors of the Company in office at the
applicable time, as elected in accordance with the provisions of this Agreement.
"Company Sale" means any of (i) a Transfer or other disposition of all
or substantially all of the assets of the Company to any Person, or group of
related Persons, other than an Affiliate of the Company, in one transaction or a
series of related transactions, (ii) a merger, consolidation, recapitalization,
share exchange or reorganization of the Company in which the holders of voting
stock of the Company immediately prior thereto will not own at least 50% of the
voting shares of the continuing or surviving entity (whether or not the Company)
immediately thereafter, (iii) the sale or other disposition of voting stock of
the Company representing 50% or more of the total voting power of the Company's
outstanding capital stock in one transaction or a series of related transactions
to any Person, or group of related Persons, other than a Stockholder or any of
its Affiliates, (iv) the issuance of additional shares of voting stock
(including, but not limited to, the issuance of Rights to purchase shares of
voting stock) if, as a result thereof, any Person, or group of related Persons,
other than a Stockholder or any of its Affiliates, would beneficially own 50% or
more of the total voting power of the Company's outstanding capital stock in one
transaction or a series of related transactions, or (v) the formation of any
form of partnership, joint venture, association or other business organization
or strategic alliance, in which the Company would participate if, as a result
thereof, all or substantially all of the assets of the Company would be
Transferred to any Person not wholly owned by the Company or one or more wholly
owned Subsidiaries of the Company.
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"Contract" means any written or oral agreement, contract, arrangement
or instrument.
"Person" means an individual, partnership, corporation, joint stock
company, unincorporated organization or association, trust or joint venture, or
a governmental agency or political subdivision thereof.
"Purchaser Group" means, collectively, the Purchasers and all Purchaser
Transferees (as defined in Section 2.1 (f)).
"Relative" means, with respect to any Stockholder, the spouse of such
Stockholder or any of such Stockholder's ancestors, descendants, siblings,
descendants of any such siblings, or the spouse of any of the foregoing "Right"
means any option, warrant, security, right or other instrument convertible into
or exchangeable or exercisable for or otherwise giving the holder thereof the
right to acquire, directly or indirectly, any Common Stock or any other such
option, warrant, security, right or instrument.
"Shares" means shares of Common Stock.
"Subsidiary" means any corporation, association or other organization
whether incorporated or unincorporated of which at least a majority of the
securities or interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is at the time
directly or indirectly owned or controlled by another corporation, association
or other organization, or by any one or more Subsidiaries of such other
corporation, association or other organization, or by such other corporation,
association or other organization and one or more of its Subsidiaries.
"Transfer" means, directly or indirectly, any transfer, sale,
assignment, pledge, hypothecation, gift, or other transfer or disposition,
whether or not by operation of law and whether or not voluntarily, of any Shares
or any interest therein.
Section 1.2. Interpretation. Unless otherwise indicated to the contrary
herein by the context or use thereof: (i) the words, "herein," "hereto,"
"hereof" and words of similar import refer to this Agreement as a whole and not
to any particular Section or paragraph hereof; (ii) words importing the
masculine gender shall also include the feminine and neutral genders, and vice
versa; and (iii) words importing the singular shall also include the plural, and
vice versa.
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ARTICLE II
Restrictions on Certain Transfers
Section 2.1. Tag-Along. (a) Except as set forth in paragraphs (f) and
(g) below, no Stockholder (an "Initiating Stockholder"), whether acting alone or
in concert with any other Stockholder, shall enter into a Contract to Transfer,
arrange for the Transfer of or Transfer to any Person or group (as defined
pursuant to Rule 13d-5 promulgated under the Securities Exchange Act of 1934, as
amended), directly or indirectly or through one or more intermediaries, in a
single transaction or a series of related transactions, any Shares then
beneficially owned by the Initiating Stockholder or any interest therein, if
immediately following the consummation of such Transfer, such acquiring Person
or group, together with any Affiliates thereof (or Affiliate of any member of
such group), would be the beneficial owner, directly or indirectly, of more than
50% of the outstanding Shares (including as outstanding for such purpose any
Shares issuable upon exercise of any Rights to be acquired from such Initiating
Stockholder and all other Rights beneficially owned by any such Affiliate,
Person, group or member thereof), unless all Stockholders are given the
opportunity to Transfer all (but not less than all) of the Shares then owned by
each of them (including without limitation Shares issuable upon exercise of
Rights then owned by each of them) concurrently with such proposed Transfer on
terms (including, without limitation, the form and amount of, and the time of
receipt of, consideration therefor) identical to those applicable to such
proposed Transfer (the "Tag-Along Rights").
(b) No opportunity shall be deemed given to any Stockholder for
purposes of Section 2.1 (a) unless (i) such Stockholder shall have received
written notice from the Initiating Stockholder setting forth the material terms
of the proposed Transfer (a "Tag-Along Notice"), and shall have been given at
least twenty days after receipt of such Tag-Along Notice to exercise its rights
contained in this Section 2.1 by giving written notice thereof to the Initiating
Stockholder (a "Tag-Along Exercise Notice"), (ii) if such Stockholder is then
the holder of any Rights, it shall be permitted to exercise, convert or exchange
such Rights strictly in accordance with the terms thereof, (iii) the terms on
which the Initiating Stockholder actually sells its Shares are no more favorable
to the Initiating Stockholder (including, without limitation, the form and
amount of, and the time of receipt of, consideration therefor), than the terms
set forth in the Tag-Along Notice given by it pursuant to clause (i) of this
sentence, (iv) the Person or group to which the applicable Transfer is proposed
to be made makes an offer to all of the Stockholders to purchase any or all
outstanding Shares then owned by the Stockholders (including Shares issuable
upon the exercise, conversion or exchange of Rights) that (A) is distributed in
writing to all Stockholders, (B) is open for acceptance by all Stockholders for
a period of at least twenty business days after such distribution,
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and (C) provides for per Share consideration identical to that being paid in the
Transfer to each Stockholder who accepts such offer, and (v) the Person or group
to which the Initiating Stockholder Transfers its Shares purchases, at or prior
to the time of purchase of such Shares, from each Person exercising his or its
rights pursuant to this Section 2.1, at least such number of Shares as such
Person shall specify in the notice given by such Person pursuant to clause (i)
of this sentence.
(c) The Initiating Stockholder and any proposed Transferee shall have
the right, in their sole discretion, at all times prior to consummation of any
proposed Transfer, to abandon any such proposed Transfer whereupon all Tag-Along
Rights with respect to such proposed Transfer shall terminate, and neither the
Initiating Stockholder nor any proposed Transferees shall have any liability or
obligation to any Stockholder with respect thereto.
(d) In determining the consideration paid for purposes hereof, the
aggregate purchase price shall be increased to the extent that the Initiating
Stockholder or its Affiliates shall receive additional consideration (i) for
covenants against competition, or (ii) for services (such as pursuant to
management or consulting agreements) in amounts in excess of amounts which would
be payable to a third party in an arms' length transaction.
(e) If any Stockholder does not timely deliver a Tag-Along Exercise
Notice, such Stockholder will be deemed to have waived its rights with respect
to the proposed Transfer described in the Tag-Along Notice and the Initiating
Stockholder shall have 60 days after the expiration date for the delivery of
such Tag-Along Exercise Notice in which to Transfer not more than the number of
Shares described in the Tag-Along Notice on terms not more favorable to the
Initiating Stockholder than were set forth in the Tag-Along Notice. If, at the
end of such 60-day period, the Initiating Stockholder has not completed the
Transfer of its Shares in accordance with the terms described in the Tag-Along
Notice, then all of the restrictions on sale or other disposition contained in
this Agreement with respect to Shares beneficially owned by the Initiating
Stockholder shall again be in effect.
(f) The provisions of this Section 2.1 shall not apply to any Transfer
(x) by any Purchaser that is an individual (an "Individual Purchaser" ) or a
Purchaser Transferee (as defined below) that is an individual (an "Individual
Transferee"), by inter vivos gift, qualified domestic relations order,
testamentary bequest or otherwise, with or without consideration, of any Shares
which the Individual Purchaser or such Individual Transferee may now or at any
time hereafter own to (i) a trust for the benefit of such Individual Purchaser
or such Individual Transferee, as applicable, or for one or more of such
Individual Purchaser's or such Individual Transferee's Relatives, as applicable,
or (ii) to one or more of such Individual Purchaser's or such Individual
Transferee's Relatives, as applicable, or (y) with or without
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consideration, by any Purchaser or a Purchaser Transferee of any Shares which
such Person may now or at any time hereafter own to any other Purchaser, or any
Affiliate of any Purchaser; provided, however, that any such Transferee pursuant
to either clause (x) or clause (y) (a "Purchaser Transferee") shall expressly
agree in writing in an instrument satisfactory to the Company to be bound by the
terms of this Agreement. Any Shares, or any interest therein, Transferred
pursuant to this clause (f) shall continue to be subject to the terms of this
Agreement.
(g) The provisions of this Section 2.1 shall not apply to any Transfer
by Brand or a Brand Transferee (as defined below), by inter vivos gift,
qualified domestic relations order, testamentary bequest or otherwise, with or
without consideration, of any Shares which Brand or such Brand Transferee may
now or at any time hereafter own to (i) a trust for the benefit of Brand or such
Brand Transferee, as applicable, or for one or more of Brand's or such Brand
Transferee's Relatives, as applicable, or (ii) to one or more of Brand's or such
Brand Transferee's Relatives, as applicable; provided, however, that any such
Transferee (a "Brand Transferee") shall expressly agree in writing in an
instrument satisfactory to the Company to be bound by the terms of this
Agreement. Any Shares, or any interest therein, Transferred pursuant to this
clause (g) shall continue to be subject to the terms of this Agreement.
Section 2.2. Go-Along Obligations. (a) Subject to the provisions of
Section 2.2(c), if at any time after the date hereof, any member of the
Purchaser Group receives a firm, bona fide, written offer from a third party (an
"Offeror") to purchase or otherwise acquire all of the Shares beneficially owned
by the Purchaser Group in one transaction or series of related transactions, and
the holders of a majority of the Shares beneficially owned by all of the members
of the Purchaser Group (the "Majority Holders") have determined to accept such
offer, then, notwithstanding the other provisions of this Agreement, the
Majority Holders shall have the right (the "Go-Along Right") to require all
other Stockholders to sell or otherwise dispose of all Shares beneficially owned
by them to such Offeror on the same terms and conditions set forth in such
offer. In determining the consideration to be paid pursuant to such offer, the
aggregate purchase price for the Shares to be sold by the Purchaser Group shall
be increased to the extent that any member of the Purchaser Group or their
respective Affiliates shall receive additional consideration (i) for covenants
against competition, or (ii) for services (such as pursuant to management or
consulting agreements) in amounts in excess of amounts which would be payable to
a third party in an arms' length transaction.
(b) If the Majority Holders elect to exercise their Go-Along Rights
hereunder, they shall provide written notice (the "Go-Along Notice") to the
Company and each other Stockholder of such election at least 20 days prior to
the closing date for such
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transaction, which Go-Along Notice shall include the terms and conditions of
such offer, the name of the Offeree and the proposed closing date of such
transaction. Each other Stockholder shall be obligated to sell or otherwise
dispose of all Shares beneficially owned by it to such Offeror in accordance
with the terms set forth in the Go-Along Notice. However, if such transaction is
not completed within 90 days of the giving of such Go-Along Notice, then any
exercise by the Majority Holders of their Go-Along Right shall require a new
notice pursuant to this Section 2.2.
(c) Notwithstanding the other provisions of this Section 2.2, no
Stockholder shall be required to Transfer its Shares pursuant to this Section
2.2 unless the consideration to be received by the Stockholders in exchange for
the Shares to be Transferred to the Offeror pursuant to such transaction shall
have been determined to be fair to the Stockholders pursuant to a written
fairness opinion issued by an investment banking firm selected by the Company's
Board of Directors with the concurrence of (x) the holders of a majority of the
Shares then owned by Brand and any Brand Transferees, as a group, and (y) the
Majority Holders.
Section 2.3. Additional Transfer Restrictions. Without the prior
approval of the Majority Holders, which approval shall not be unreasonably
withheld or delayed, neither Brand nor any Brand Transferee, whether acting
alone or in concert with any other Person, shall enter into a Contract to
Transfer, arrange for the Transfer of or Transfer to any Person or group (as
defined pursuant to Rule 13d-5 promulgated under the Securities Exchange Act of
1934, as amended) (other than to Brand or a Brand Transferee), directly or
indirectly or through one or more intermediaries, in a single transaction or a
series of related transactions, any Shares then beneficially owned by Brand or
such Brand Transferee or any interest therein, if immediately following the
consummation of such Transfer, such acquiring Person or group, together with any
Affiliates thereof (or Affiliate of any member of such group), would be the
beneficial owner, directly or indirectly, of 20% or more of the outstanding
Shares (including as outstanding for such purpose any Shares issuable upon
exercise of any Rights to be acquired from Brand or a Brand Transferee in such
transaction and all other Rights beneficially owned by any such Affiliate,
Person, group or member thereof). For purposes of this Section 2.3, the Majority
Holders shall be deemed to have approved a Transfer pursuant to this Section 2.3
if Brand or the Brand Transferee, as the case may be, gives written notice to
the Purchasers of his, its or their intention to make a Transfer pursuant to
this Section 2.3, which notice shall include the terms and conditions of such
Transfer, the names of the proposed acquiring Person or group and the proposed
closing date of such Transfer, and Brand or the Brand Transferee, as the case
may be, shall not have received within 10 days thereafter a written notice from
the Majority Holders objecting to the proposed Transfer.
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ARTICLE III
Board of Directors; Committees
Section 3.1. Composition of the Board of Directors. (a) Subject to the
provisions of Section 3.1 (b) and 3.1 (d), the Company shall use its best
efforts to, and each Stockholder shall, take and cause to be taken all necessary
action (corporate and other), including the voting of Shares, to set the number
of directors at seven and to elect as the members of the Board four individuals
(the "Brand Directors") selected and nominated from time to time by Brand
(provided that such individuals shall be reasonably satisfactory to a majority
of the directors appointed by the Purchaser Group) and three individuals (the
"Purchaser Directors") selected and nominated from time to time by the Purchaser
Group, by action of the Majority Holders (provided that such individuals shall
be reasonably satisfactory to a majority of the Brand Directors); provided,
however, that in the event that the Purchaser Group acquires all of the
Additional Securities (as defined in the Purchase Agreement) pursuant to the
terms of Section 1.4 of the Purchase Agreement, the number of directors shall be
set at eight and the Purchaser Group shall have the right from and after the
Option Closing Date (as defined in the Purchase Agreement) to appoint a fourth
Purchaser Director; provided, further, that if any member of the Purchaser Group
is ever entitled to appoint a member of the Board pursuant to the rights granted
by the Company to the holders of the Cerberus Debentures (as such term is
defined in the Purchase Agreement) as a result of the purchase of the Cerberus
Debentures or otherwise, the size of the Board and the number of directors which
the Purchaser Group shall have the right to appoint pursuant to the terms hereof
shall be reduced by one. At any time during which the Purchaser Group is
entitled to appoint at least four Purchaser Directors pursuant to the provisions
of this Section 3.1 (a), at the request of either Brand or the Majority Holders,
the size of the Board shall be increased by one and Brand and the Purchaser
Group by action of the Majority Holders, shall mutually select one additional
director who shall not be employed by or otherwise be an Affiliate of either the
Company, Brand or any member of the Purchaser Group (the "Independent Director")
to fill the vacancy caused by such increase in the size of the Board.
(b) In the event that Cerberus Partners L.P. ("Cerberus") or any other
holder of the Cerberus Debentures (Cerberus or such holder, the 'Debenture
Holder") exercises its right to appoint a member of the Board pursuant to the
terms of the Unit Purchase Agreement, dated as of March 7, 1996 (the "Cerberus
Agreement"), by and between the Company and Cerberus, the number of directors
shall be increased by two, one of such additional directors shall be the
director appointed by the Debenture Holder (the "Debenture Director") and Brand
and the Purchaser Group, by action of the Majority Holders, shall mutually
select one additional Independent Director to fill the vacancies caused by such
increase in the size
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of the Board. Each Stockholder shall use its best efforts to cause the Company
to comply with the requirements of the Cerberus Agreement, including without
limitation, voting all of their Shares in favor of the election of such person
as the Debenture Holder may designate as a director of the Company. In the event
that the Debenture Director resigns, is removed or otherwise is unable to
continue to serve as a director of the Company and the Debenture Holder does not
exercise its right to appoint a successor Debenture Director, one Independent
Director to be mutually selected by Brand and the Majority Holders shall be
deemed to have resigned as a director effective as of the date that the
Debenture Holder notifies the Company that it will not exercise its rights under
the Cerberus Agreement and shall cease to be a member of the Board of Directors.
(c) The term of office of all directors shall continue until the next
succeeding annual meeting of stockholders of the Company and until their
successors are duly elected and qualified. Each of Brand and the Purchaser Group
shall at all times have the right, exercisable by such Person in his or its sole
discretion, to designate successors for the directors appointed by such Person
(provided that such successors shall be reasonably satisfactory to a majority of
the Purchaser Directors or the Brand Directors, as the case may be), to cause
the Stockholders to remove, with or without cause, one or more of the directors
appointed by such Person, and to fill any vacancy on the Board resulting from
the death, resignation or removal of any director appointed by such Person
(provided that any nominee selected to fill such a vacancy shall be reasonably
satisfactory to a majority of the Brand Directors or the Purchaser Directors, as
the case may be); provided, however, that no such actions may be taken with
respect to any Independent Director unless mutually agreed to by Brand and the
Purchaser Group and; provided, further, that any Independent Director shall be
reasonably satisfactory to a majority of both the Brand Directors and the
Purchaser Directors. Each Stockholder shall vote for such removal and for the
election of such successor or successors at a meeting of the stockholders or
shall execute a written consent to such effect without a meeting and consents to
the prompt holding of a special meeting for that purpose, in each case, at the
written request of the Person seeking to remove and replace such director given
to the Company.
(d) The permanent successor Chief Executive Officer hired pursuant to
Section 4.4 hereof shall become a member of the Board effective as of the
effective date of his or her employment by the Company (the "Commencement Date")
and shall be deemed to be a Brand Director for all purposes hereunder. On or
prior to the Commencement Date, Brand and any Brand Transferees shall take all
action reasonably necessary to cause a Brand Director to resign from the Board
effective as of the Commencement Date and to appoint the permanent Chief
Executive Officer to fill the vacancy created by such resignation.
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(e) In the event that either Brand or the Purchaser Group is no longer
entitled to designate directors pursuant to this Article III, all directors
designated by such Person (other than the permanent Chief Executive Officer
hired pursuant to Section 4.4 hereof) shall be deemed to have resigned as
directors effective immediately and shall cease to be members of the Board.
(f) The participation of any former director in the deliberations of
the Board subsequent to the date of his or her termination as a director shall
not affect in any respect any corporate action which has been approved by a
majority of the remaining members of the Board, whether at a meeting at which a
quorum of the Board (excluding any such former director) was present or pursuant
to a written consent signed by the remaining directors.
Section 3.2. Quorum. At all meetings of the Board, the presence, in
person or by proxy, of a majority of the entire Board shall constitute a quorum
for the transaction of business. Any director may participate in a meeting of
the Board, or any committee thereof, by means of conference telephone or similar
communications equipment by means of which all Persons participating in the
meeting can hear each other.
Section 3.3 Composition of Board Committees. Promptly following the
execution and delivery of this Agreement, the Stockholders shall take and shall
cause their respective director designees to take all actions necessary and
advisable to (i) cause the Executive Committee of the Board (the "Executive
Committee") to be comprised of two Brand Directors to be designated from time to
time by Brand (one of whom shall be the chairman of the committee) and one
Purchaser Director to be designated from time to time by the Purchaser Group;
provided, however, that from and after the Option Closing Date, the size of the
Executive Committee shall be increased by one and the Purchaser Group shall have
the right to designate a second Purchaser Director to be a member of the
Executive Committee, and; provided, further, that from and after the
Commencement Date, the size of the Executive Committee shall be further
increased by one and the permanent Chief Executive Officer of the Company shall
become a member of the Executive Committee, ex officio, (ii) cause the
Compensation Committee of the Board to be comprised of two Brand Directors to be
designated from time to time by Brand and two Purchaser Directors to be
designated from time to time by the Purchaser Group, and (iii) cause the Audit
Committee of the Board to be comprised of two Brand Directors to be designated
from time to time by Brand and two Purchaser Directors to be designated from
time to time by the Purchaser Group.
Section 3.4. Action by Stockholders to Reconstitute Board of Directors
or Committees Thereof. If at any time and for any reason the Board shall fail to
be constituted as required by this Article III, then, at the request of any
Stockholder, the Company shall
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cause a special meeting of stockholders to be held or the Stockholders shall act
by written consent of stockholders without a meeting for the purpose of taking
whatever action may be necessary to assure that the Board is constituted as set
forth in this Article III as promptly as practicable. If at any time and for any
reason the committees of the Board shall fail to be constituted as required by
this Article III, then, at the request of any Stockholder, the Company and the
Stockholders shall take whatever action may be necessary to assure that such
committees are constituted as set forth in this Article III as promptly as
practicable.
Section 3.5. Certain Covenants. Each Stockholder shall vote, in person
or by proxy, all Shares over which it may have or share voting power, at any
annual or special meeting of stockholders of the Company called for the purpose
of voting on the election of directors, or to execute written consents of
stockholders without a meeting with respect to the election of directors, to
vote in favor of the election of each director nominated in accordance with
Section 3.1 and in favor of the removal of any director who is required to be
removed pursuant to Section 3.1 and to take all other necessary and appropriate
actions to cause such events to occur. The Company shall use its best efforts to
cause Persons to be so nominated, elected or removed, as the case may be, in
accordance with the applicable provisions of this Agreement. Each Stockholder
shall vote all Shares over which it may have or share voting power and shall
take all other actions necessary and appropriate (including, without limitation,
removing any director) to ensure that the Company's Certificate of Incorporation
and by-laws contain all provisions necessary to implement the terms of this
Agreement and do not at any time conflict with the provisions of this Agreement
and shall not vote to approve (or consent to the approval of) any amendment to
the Company's Certificate of Incorporation or by-laws which would be
inconsistent with this Agreement.
ARTICLE IV
Other Corporate Matters
Section 4.1. Management of the Company; Certain Actions. (a) The
business and affairs of the Company shall be managed by or under the direction
of the Board, subject to the provisions set forth in this Section 4.1 and
Section 4.2.
(b) Subject to oversight and control by the Board, the senior
management of the Company shall have the right to manage the day to day
operations of the Company, including, without limitation, the implementation of
the Company's strategic and business plans, ordinary course dealings with
customers and suppliers, the hiring and firing of officers and employees of the
Company and its Subsidiaries, and the ordinary course operation of the Company's
business as it is currently being conducted, and neither any
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member of the Purchasers nor the Purchaser Directors shall take any action,
directly or indirectly, which may reasonably be expected to hinder, impede,
interfere with or otherwise restrict the management of the Company's affairs as
aforesaid.
(c) In the event that a majority of the Purchaser Directors (a
"Purchaser Majority") recommend to the Board that the Company enter into a
Company Sale, Brand and any Brand Transferees shall use their respective best
efforts to cause the Brand Directors to vote in favor of such Company Sale;
provided, however, that neither Brand nor any Brand Transferee shall have any
obligation to cause the Brand Directors to vote in favor of a Company Sale if
counsel of recognized standing advises the Brand Directors that approval of the
Company Sale recommended by the Purchaser Directors would result in a breach of
fiduciary duty by the Brand Directors.
Section 4.2. Actions Requiring Purchaser Approval. The Company shall
not, and no officer of the Company shall have the power or authority to cause
the Company to, without the consent of a Purchaser Majority:
(a) redeem, repurchase or otherwise acquire shares of the Company's
capital stock except pursuant to or in connection with (i) the conversion of any
class or series of the Company's capital stock into another security of the
Company, (ii) the exercise of any Right, (iii) the redemption, at the request of
the holder thereof, of shares of any class or series of capital stock that is
redeemable at the option of the holder thereof, (iv) any compensatory plan or
arrangement Subsidiaries; provided, however, that such plan or arrangement has
been with an officer, director or employee of the Company or its approved by the
Board or the Compensation Committee thereof; or
(b) take any voluntary action in furtherance of the liquidation,
dissolution or winding up of the business of the Company.
Section 4.3. Voting by Stockholders. Each Stockholder shall vote, in
person or by proxy, all Shares over which it may have or share voting power, at
any annual or special meeting of stockholders of the Company (i) in favor of all
matters approved by a majority of the entire Board (or a majority of all of the
members of any duly constituted committee thereof) pursuant to Section 4.1 (a),
(ii) in favor of all matters approved by the entire Board upon the
recommendation of a Purchaser Majority pursuant to Section 4.1(c) or Section
4.2, and (iii) against all matters not approved by the Board or a duly
constituted committee thereof pursuant to clauses (i) or (ii).
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<PAGE>
Section 4.4. Executive Search. Promptly following the execution and
delivery hereof, the Board shall establish an ad hoc committee of the Board (the
"Search Committee"), the members of which shall include the Company's Chief
Executive Officer (who shall be the chairman), the Company's Chief Operating
Officer and two Purchaser Directors, which shall promptly commence a search for
a suitably qualified permanent successor to the Chief Executive Officer. The
Search Committee may establish such regulations for its operations as the
members thereof may determine are necessary or advisable. Without limiting the
generality of the foregoing, the Search Committee shall be authorized to engage
such consultants and other agents to assist in the identification and evaluation
of appropriate candidates as the members thereof deem necessary or advisable.
The Search Committee shall report to the Board on its activities from time to
time as events warrant. Following the completion of its initial screening
process and interviews with appropriate candidates, the Search Committee shall
recommend one or more finalists to the Board and, with consultation from the
Board, shall complete all arrangements relating to the hiring of a new Chief
Executive Officer from the list of finalists; provided, however, that such new
Chief Executive Officer shall be approved by Brand, which approval may be
withheld by Brand in his sole and absolute discretion. The terms and conditions
of any such hiring shall be approved by the Board upon the advice and with the
recommendation of Compensation Committee of the Board. In the event that the
permanent Chief Executive Officer ceases to serve as the Chief Executive Officer
of the Company for any reason, then, for purposes of this Agreement (including,
without limitation, the Board and Board committee composition provisions
hereof), the Company shall be deemed to have not designated a permanent
successor Chief Executive Officer and the provisions of this Section 4.4 shall
again come into effect.
Section 4.5. Indemnification; Maintenance of D&O Insurance. The Company
shall indemnify the directors and officers of the Company to the fullest extent
permissible under Delaware law and, without limiting the generality of the
foregoing, the Company and the Stockholders shall take all actions necessary to
include provisions in the Company's Certificate of Incorporation limiting the
liability of directors to the maximum extent permitted by Delaware law and
providing that the directors and officers shall be indemnified to the maximum
extent permitted by Delaware law. The Company shall maintain appropriate
directors and officers insurance in such amounts and covering such risks as the
Board may determine from time to time in light of the cost and availability of
such insurance.
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<PAGE>
ARTICLE V
Legend
Section 5.1. Legends. Any certificates evidencing Shares subject to
this Agreement shall be stamped or endorsed with a legend in substantially the
following form; provided, however, that in the event that Shares are registered
under the Securities Act of 1933, as amended, the Company shall promptly upon
request, but in any event not later than is necessary in order to consummate any
sale pursuant to any underwriting agreement or sales agency agreement relating
thereto, deliver a replacement certificate not containing the first paragraph of
the legend below in exchange for the legended certificate (it being understood
that such legend shall be placed on such replacement certificate if the sale
does not occur in accordance with the terms of the registration statement); and
provided, further, that the Company shall upon termination of this Agreement
promptly upon request deliver a replacement certificate not containing the
second paragraph of the legend below in exchange for the legended certificate:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS,
AND ACCORDINGLY NEITHER THE SHARES NOR ANY INTEREST THEREIN MAY BE SOLD,
TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF UNLESS SO REGISTERED OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, TRANSFERS, VOTING AND
OTHER MATTERS IN RESPECT OF THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS AGREEMENT DATED AS OF JULY 29, 1997
AMONG THE COMPANY AND CERTAIN STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND MAY BE OBTAINED
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY.
Section 5.2. Removal of Legends. From and after the effective date of
any registration statement registering the Shares subject hereto for sale
pursuant to the Securities Act of 1933, as amended, and compliance by the
Company with any applicable state securities or "Blue Sky" laws, the
Stockholders shall be entitled to exchange the certificates representing their
Shares for certificates not bearing the first restrictive legend set forth in
Section 5.1 above. In connection with any Transfer permitted pursuant to this
Agreement (other than Transfers pursuant to Sections 2.1(f) or 2.1(g)), the
Stockholder Transferring Shares shall be entitled to exchange the certificates
representing the Shares being Transferred for replacement certificates not
bearing the second restrictive legend set forth in Section 5.1 above.
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<PAGE>
ARTICLE VI
Effectiveness; Termination
Section 6.1. Effectiveness; Termination of Agreement. This Agreement
shall become effective as of the date first above written and shall terminate
upon the earliest to occur of the following: (i) upon the written consent of (x)
the Majority Holders, and (y) the holders of a majority of the shares of Common
Stock then beneficially owned by Brand and any Brand Transferee, as a group,
(ii) Brand and any Brand Transferees, as a group, or the Purchaser Group
becoming the beneficial owner of less than 10% of the outstanding Common Stock
(determined on a fully-diluted basis), or (iii) the consummation of a Company
Sale, only to the extent that such transaction has been duly approved pursuant
to Section 4.1 (c); provided, however, that no such termination shall relieve
any Person of any liability for a breach or default.
ARTICLE VII
Miscellaneous
Section 7.1 . Recapitalization, Exchanges, etc. Affecting the Common
Stock. The provisions of this Agreement shall apply to the full extent set forth
herein with respect to (a) the Shares and (b) any and all shares of capital
stock of The Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution for the Shares, by reason of any
stock dividend, split, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. In the event of any change
in the capitalization of the Company, as a result of any stock split, stock
dividend or stock combination, the provisions of this Agreement shall be
appropriately adjusted.
Section 7.2 No Joint Venture or Partnership. No party shall have any
authority to bind or commit any other party hereto and no such authority shall
be implied by the provisions hereof. Nothing herein shall be deemed or construed
to create a joint venture, partnership or agency relationship between any of the
parties hereto for any purpose.
Section 7.3. Injunctive Relief. Each party hereto acknowledges that it
would be impossible to determine the amount of damages that would result from
any breach of any of the provisions of this Agreement and that the remedy at law
for any breach, or threatened breach, of any of such provisions would likely be
inadequate and, accordingly, each other party shall, in addition to any other
rights or remedies which it may have, be entitled to equitable and injunctive
relief, including, without limitation, temporary, preliminary and permanent
injunctive
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<PAGE>
relief, to compel specific performance of, or restrain any party from violating,
any of such provisions. In connection with any action or proceeding for
injunctive relief, each party hereto hereby waives the claim or defense that a
remedy at law alone is adequate and, to the maximum extent permitted by law,
consents to have each provision of this Agreement specifically enforced against
him or it, without the necessity of posting bond or other security against him
or it, and consents to the entry of injunctive relief against him or it
enjoining or restraining any breach or threatened breach of such provisions of
this Agreement.
Section 7.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. This Agreement shall be for the
sole benefit of the parties to this Agreement and their respective successors,
assigns and legal representatives and is not intended, nor shall be construed,
to give any Person, other than the parties hereto and their respective
successors, assigns and legal representatives, any legal or equitable right,
remedy or claim hereunder. This Agreement may not be assigned by operation of
law or otherwise, and any attempted assignment shall be null and void, except
that, any Stockholder may assign its rights hereunder, in whole but not in part,
in connection with a Transfer of Shares made in compliance with all of the
provisions of this Agreement. If any Stockholder shall acquire additional
Shares, in any manner, whether by a Transfer permitted hereunder, operation of
law or otherwise, such Shares shall be held subject to all of the terms of this
Agreement, and by taking and holding such Shares such Person shall be
conclusively deemed to have agreed to be bound by and to comply with all of the
terms and provisions of this Agreement. Any Transferee wishing to become a party
hereto or otherwise required to become such a party shall execute an instrument
in the form of Exhibit A hereof agreeing to be bound by the provisions hereof.
Section 7.5. Expenses. Except as provided in the Purchase Agreement,
each party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated hereby.
Section 7.6. Amendment; Waiver. (a) This Agreement may be amended by a
written instrument duly executed by the parties affected thereby.
(b) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon breach thereof shall constitute a waiver of any
such breach or of any other covenant, duty, agreement or condition, any such
waiver being effective only if contained in a writing executed by the waiving
party.
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<PAGE>
Section 7.7. Notices. Except as otherwise provided in this Agreement,
all notices, requests, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, when delivered by courier, three days after being deposited
in the mail (registered or certified mail, postage prepaid, return receipt
requested), or when received by facsimile transmission upon receipt of a
confirmed transmission report, as follows:
If to the Company: 50 Orville Drive
Bohemia, New York 11716
Tel: (516) 784-4110
Fax: (516) 784-4132
Attention: Chief Executive Officer
and if to the other parties at the address or facsimile transmission number
specified below its name on the signature pages hereto (or, in the case of
Persons who become parties hereto subsequently, at their last addresses or
facsimile transmission numbers shown on the record books of the Company). Any
party hereto, by notice given to the other parties hereto in accordance with
this Section 7.7, may change the address or facsimile transmission number to
which such notice or other communications are to be sent to such party. Whenever
pursuant to this Agreement any notice is required to be given by any Stockholder
to any other Stockholder or Stockholders, such Stockholder may request from the
Company a list of addresses and facsimile transmission numbers of all
Stockholders of the Company, which list shall be promptly furnished to such
Stockholder.
Section 7.8. Inspection. For so long as this Agreement shall be in
effect, this Agreement, any amendments hereto and a complete list of the names
and addresses of all Stockholders shall be made available for inspection and
copying on any business day by any Stockholder at the offices of the Company at
the address thereof set forth in Section 7.7 above.
Section 7.9. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF, EXCEPT TO THE EXTENT
THAT THE PROVISIONS OF THE DELAWARE GENERAL CORPORATION LAW APPLY THERETO.
Section 7.10. Headings. The descriptive headings of the several
sections in this Agreement are for convenience only and do not constitute part
of this Agreement and shall not affect in any way the meaning or interpretation
of this Agreement.
Section 7.11. Integration. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with
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<PAGE>
respect to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with respect to its
subject matter other than those expressly set forth or referred to herein.
Section 7.12. Severability. If any term or provision of this Agreement
or any application thereof shall be declared or held invalid, illegal or
unenforceable, in whole or in part, whether generally or in any particular
jurisdiction, such provision shall be deemed amended to the extent, but only to
the extent, necessary to cure such invalidity, illegality or unenforceability,
and the validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
Section 7.13. Consent to Jurisdiction. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court for the Southern District of New
York for the purpose of any suit, action, proceeding or judgment relating to or
arising out of this Agreement and the transactions contemplated hereby. Service
of process in connection with any such suit, action or proceeding may be served
on each party hereto anywhere in the world by the same methods as are specified
for the giving of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 7.14. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
LOGIMETRICS, INC.
By:/s/ Charles S. Brand
--------------------------
Name:
Title:
/s/ Charles S. Brand
--------------------------
Charles S. Brand
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<PAGE>
20 Meridian Road
Eatontown, New Jersey 07724
Tel: (908) 935-7150
Fax: (908) 935-7151
CRAMER ROSENTHAL McGLYNN, INC.
By:/s/ Eugene A. Trainor
--------------------------
Name: Eugene A. Trainor
Title: Chief Financial Officer
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
L A.D. EQUITY PARTNERS, L.P
By: Flint Investments, Inc.
Its General Partner
By:/s/ Arthur J. Pergament
--------------------------
Name: Arthur J. Pergament
Title: Vice President
520 Madison Avenue
New York New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
/s/ Gerald B. Cramer
--------------------------
Gerald B. Cramer
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax (212) 644-8291
/s/ Edward J. Rosenthal
----------------------------
Edward J. Rosenthal, Keogh
520 Madison Avenue
New York, New York 10022
Tel. (212) 838-3830
Fax (212) 644-8291
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<PAGE>
CRM 1997 ENTERPRISE FUND, LLC
By: Cramer Rosenthal McGlynn, Inc.
Its Managing Member
By: Eugene A. Trainor
----------------------
Name: Eugene A. Trainor
Title: Chief Financial Officer
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
CRM PARTNERS, L.P.
By: CRM Management, Inc.
Its General Partner
By:/s/ Eugene A. Trainor
----------------------
Name: Eugene A. Trainor
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
CRM RETIREMENT PARTNERS, L.P.
By: CRM Management, Inc.
Its General Partner
By:/s/ Eugene A. Trainor
------------------------
Name: Eugene A. Trainor
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
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<PAGE>
CRM MADISON PARTNERS, L.P.
By: CRM Management, Inc.
Its General Partner
By:/s/ Eugene A. Trainor
------------------------
Name: Eugene A. Trainor
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
CRM U.S. VALUE FUND, LTD.
By: CRM Management, Inc.
Its General Partner
By:/s/ Eugene A. Trainor
------------------------
Name: Eugene A. Trainor
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
CRM EURYCLEIA PARTNERS, L.P.
By: CRM Eurycleia Investment, LLC.
Its General Partner
By: CRM Management, Inc.
Its Managing Member
By:/s/ Eugene A. Trainor
------------------------
Name: Eugene A. Trainor
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
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<PAGE>
A.C. ISRAEL ENTERPRISES, INC.
By:/s/ Jay Howard
-----------------
Name: Jay Howard
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
CRM-EFO PARTNERS, L.P.
By: CRM-EFO Investments, LLC,
Its General Partner
By: CRM Management Inc.,
Its Managing Member
By:/s/ Eugene A. Trainor
------------------------
Name: Eugene A. Trainor
Title:
520 Madison Avenue
New York, New York 10022
Tel; (212) 838-3830
Fax: (217) 644-8291
/s/ Richard S. Fuld, Jr.
------------------------
Richard S. Fuld, Jr.
By: Cramer Rosenthal McGlynn, Inc.,
Attorney-in-Fact
By:/s/ Eugene A. Trainor
------------------------
Name: Eugene A. Trainor
Title Chief Financial Officer
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (217) 644-8291
PAMELA EQUITIES CORP.
By:/s/ Greg Manocherian
-----------------------
Name:
Title:
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<PAGE>
3 New York Plaza
18th Floor
New York, New York 10004
Tel: (212) 837-4829
Fax:(212) 837-4938
WHITEHALL PROPERTIES, LLC
By:/s/ Greg Manocherian
-----------------------
Name:
Title: Manager
3 New York Plaza
18th Floor
New York, New York 10004
Tel: (212) 837-4829
Fax: (212) 837-4938
KABUKI PARTNERS ADP, GP
By:/s/ Greg Manocherian
-----------------------
Name:
Title: General Partner
3 New York Plaza
18th Floor
New York, New York 10004
Tel: (212) 837-4829
Fax: (212) 837-4938
MBF CAPITAL CORP.
By:/s/ Mark B. Fisher
---------------------
Name: Mark B. Fisher
Title: President
12 East 49th Street
35th Floor
New York, New York 10017
Telephone: (212) 339-2861
Facsimile: (212) 339-2834
MBF BROADBAND SYSTEMS, L.P.
By: MBF Broadband Systems, Inc.,
Its General Partner
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<PAGE>
By:/s/ Mark B. Fisher
---------------------
Name: Mark B. Fisher
Title: President
12 East 49th Street
35th Floor
New York, New York 10017
Telephone: (212) 339-2861
Facsimile: (212) 339-2834
PHINEAS BROADBAND SYSTEMS, L.P.
By: MBF Broadband Systems, Inc.,
Its General Partner
By:/s/ Mark B. Fisher
---------------------
Name: Mark B. Fisher
Title: President
12 East 49th Street
35th Floor
New York, New York 10017
Telephone: (212) 339-2861
Facsimile: (212) 339-2834
/s/ Mark B. Fisher
---------------------
Mark B. Fisher
12 East 49th Street
35th Floor
New York, New York 10017
Telephone: (212) 339-2861
Facsimile: (212) 339-2834
McGLYNN FAMILY PARTNERSHIP
By:/s/ Ronald H. McGlynn
------------------------
Name: Ronald H. McGlynn
Title: General Partner
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
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<PAGE>
Fred M. Filoon
---------------------
Fred M. Filoon
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
/s/ Eugene A. Trainor
---------------------
Eugene A. Trainor
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
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<PAGE>
EXHIBIT A
In consideration of the Transfer of Shares to the undersigned, the
undersigned, having all due authority, hereby agrees to be bound by the terms
and provisions of the Stockholders Agreement, dated as of July 29, 1997 (the
"Stockholders Agreement"), by and among LogiMetrics, Inc. and the Stockholders
party thereto relating to such Shares as a Stockholder thereunder. Capitalized
defined terms used herein without definition shall have the same meanings
respectively as assigned thereto in the Stockholders Agreement.
Name:
By:
Date:
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<PAGE>
EXHIBIT 3
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "Agreement"), dated as of July ___,
1997, byand among: (i) Pamela Equities Corp., a New York corporation, Whitehall
Properties, LLC, a New York limited liability company and Kabuki Partners ADP,
GP, a New York general partnership (collectively, the "Manocherian Entities"),
(ii) MBF Capital Corp., a New York corporation, MBF Broadband Systems, L.P., a
New York limited partnership, MBF Broadband Investments, L.P., a New York
limited partnership and Mark B. Fisher (collectively, the "Fisher Entities"),
and (iii) those entities listed on Exhibit "A" attached hereto (collectively,
the "Cramer Entities"). Each of the Manocherian Entities, the Fisher Entities
and the Cramer Entities is sometimes referred to herein as an "Entity."
WHEREAS:
The Fisher Entities, Manocherian Entities and Cramer Entities (each a "Party",
collectively, the "Parties") are among the parties to a certain Stockholders
Agreement dated as of July ___, 1997 (the "Logi Agreement"), pursuant to which
they have agreed to purchase those interests in an entity known as Logimetrics,
Inc. ("Logi") shown on Exhibit "B" attached hereto;
As provided in the Logi Agreement and the other agreements referred to or
contemplated therein, various groups or "Purchasers" have acquired or
contemplated certain rights and incurred certain obligations including
"tag-along" rights as defined in Section 2.1 of the Logi Agreement;
The Parties, being among the "Purchasers," wish to set forth a further
agreement, as among themselves, with respect to such "tag-along rights."
NOW, THEREFORE, the Parties agree as follows:
ARTICLE I
Definitions
Except as expressly provided herein, defined terms used herein shall
have the meanings provided in the Logi Agreement.
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<PAGE>
ARTICLE II
Restrictions on Certain Transfers
Section 2.1. Tag-Along. (a) Except as set forth in Section 2.2, below,
no Party (an "Initiating Party") shall enter into a Contract to Transfer,
arrange for the Transfer of or Transfer to any Person, directly or indirectly,
any Shares,unless all Parties are given the opportunity to Transfer all of the
Shares then owned by each of them (including without limitation Shares issuable
upon exercise of Rights then owned by each of them) concurrently with such
proposed Transfer on terms identical to those applicable to such proposed
Transfer (the "Tag-Along Rights").
(b) No opportunity shall be deemed to have been given to any Party for
purposes of Section 2.1(a) unless:
(i) such Party shall have received written notice from the Initiating
Party setting forth the material terms of the proposed Transfer (a "Tag-Along
Notice"), and shall have been given at least 10 days after receipt of such
Tag-Along Notice to exercise its rights contained in this Section 2.1 by given
written notice thereof to the Initiating Party (a "Tag-Along Exercise Notice"),
(ii) if such Party is then the holder of any Rights, it shall be
permitted to exercise, convert or exchange such Rights strictly in accordance
with the terms thereof,
(iii) the terms on which the Initiating Party actually sells its Shares
are not more favorable to the Initiating Party, then the terms set forth in the
Tag-Along Notice given by its pursuant to clause (i) above,
(iv) the Person to which the applicable Transfer is proposed to be made
makes an offer to all of the Parties to purchase all outstanding Shares then
owned by the Parties (including Shares issuable upon the exercise, conversion or
exchange of Rights) that [A] is distributed in writing to all Parties, [B] is
open for acceptance by all Parties for a period of at least 10 business days
after such distribution, [C] provides for per Share consideration identical to
that being paid in the Transfer to each Party who accepts such offer, and
(v) the Person to which the Initiating Party Transfers its Shares
purchases, at or prior to the time of purchase of such Shares, from each Person
exercising his or its rights pursuant to this Section 2.1, at least such number
of Shares as such Person shall specify in the notice given by such Person
pursuant to clause (i), above.
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<PAGE>
(c) The Initiating Party and any proposed Transferor shall have the
right, in their sole discretion, at all times prior to consummation of any
proposed Transfer, to abandon any such proposed Transfer whereupon all Tag-Along
rights with respect to such proposed Transfer shall terminate, and neither the
Initiating Party nor any proposed Transferees shall have any liability or
obligation to any Party with respect thereto.
(d) In determining the consideration paid for purposes hereof, the
aggregate purchase price shall be increased to the extent that the Initiating
Party or its Affiliates shall receive or be entitled to receive or direct the
payment of additional consideration of any form in amounts in excess of amounts
which would be payable to a third party in an arms' length transaction.
(e) If a Party does not timely deliver a Tag-Along Exercise Notice,
such Party will be deemed to have waived its rights with respect to the proposed
Transfer described in the Tag-Along Notice and the Initiating Party shall have
30 days after the expiration date for the delivery of such Tag-Along Exercise
Notice in which to Transfer not more than the number of Shares described in the
Tag-Along Notice on terms not more favorable to the Initiating Party than were
set forth in the Tag-Along Notice. If, at the end of such 30-day period, the
Initiating Party has not completed the Transfer of its Shares in accordance with
the terms described in the Tag-Along Notice, then all of the restrictions on
sale or other disposition contained in this Agreement with respect to shares
beneficially owned by the Initiating Party shall again be in effect.
Section 2.2. Exceptions. The provisions of Section 2.1 shall not apply
to any Transfer:
(i) to another Entity or to an Affiliate with or without consideration,
or by inter vivos gift, qualified domestic relations order, or testamentary
bequest, or
(ii) to one or more of the Purchaser's Relatives or, with or without
consideration, to any Affiliate of any Purchaser provided, however, that any
transferee pursuant to either clause (i) or clause (ii) above, shall expressly
agree in writing in an instrument satisfactory to the Parties to be bound by the
terms of this Agreement. Any Shares, or any interest therein, Transferred
pursuant to this Section 2.2 shall continue to be subject to the terms of this
Agreement.
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<PAGE>
ARTICLE III
Acknowledgment and Waiver
Each Party, on its own behalf and on behalf of its associated Entities,
hereby acknowledges that it has had a full opportunity to conduct such
examination of the records and affairs of Logi as it sees fit and consult with
counsel with respect thereto, has made the decision to invest in Logi and enter
into the Logi Agreement and the other agreements referred to or contemplated
therein (the "Investment") based on such examination, and in so doing has not
relied on any representation or warranty of any other Party or Entity. Each of
the Parties, on its own behalf and on behalf of its associated Entities, hereby
releases the others and their respective officers, directors, employees and
agents, from and against any claims, losses, liabilities, damages and costs
(including, without limitation, reasonable attorneys' fees and expenses) that
may arise as a result of the Investment.
ARTICLE IV
Miscellaneous
Section 4.1. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. This Agreement may not be
assigned by operation of law or otherwise and any attempted assignment shall be
null and void, except that, any Party may assign its rights hereunder, in whole
but not in part, in connection with a Transfer of Shares made in compliance with
all of the provisions of this Agreement.
Section 4.2. Expenses. Each party hereby shall pay its own expenses
incident to this Agreement and the transactions contemplated hereby.
Section 4.3. Amendment; Waiver.
(a) This Agreement may be amended only by a written instrument duly
executed by the Parties.
(b) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right to remedy consequent upon breach thereof shall constitute a waiver of any
such breach, any such waiver being effective only if contained in a writing
executed by the waiving party.
Section 4.4. Notices. Except as otherwise provided in this Agreement,
all notices, requests, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered or by courier, three days after being deposited in the mail
(registered or certified mail, postage prepaid, return receipt requested), or
when received
- 4 -
<PAGE>
by facsimile transmission if promptly confirmed by one of the foregoing means,
as provided in the Logi Agreement.
Section 4.5. Applicable Laws; Jurisdiction. The provisions of the Logi
Agreement with respect to applicable law and submission to jurisdiction shall
govern among the Parties with respect to any dispute arising hereunder or with
respect hereto.
Section 4.6. Integration. This Agreement and the Logi Agreement and the
further documents referred to or contemplated therein contain the entire
understanding of the Parties with respect to its subject matter and supersede
all prior agreements and understandings between the parties with respect to the
subject matter of this Agreement.
Section 4.7. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
PAMELA EQUITIES CORPORATION, a New York corporation
/s/ Greg Manocherian
- - ----------------------
By: Greg Manocherian
Its: Vice President
WHITEHALL PROPERTIES, LLC, a New York limited liability corporation
/s/ Greg Manocherian
- - ----------------------
By: Greg Manocherian
Its: Manager
KABUKI PARTNERS ADP, GP, a New York general partnership
/s/ Greg Manocherian
- - ----------------------
By: Greg Manocherian
Its: General Partner
MBF CAPITAL CORP., a New York corporation
/s/ Mark B. Fisher
- - ----------------------
By:
Its:
- 5 -
<PAGE>
MBF BROADBAND SYSTEMS, LP, a New York limited partnership
/s/ Mark B. Fisher
- ------------------------
By:
Its:
MARK B. FISHER
/s/ Mark B. Fisher
- -----------------------
CRM ENTITIES PER EXHIBIT A
- -----------------------
By:/s/ Eugene A. Trainor III
-------------------------
Eugene A. Trainor III
A.C. ISRAEL ENTERPRISES, INC.
By:/s/ Jay Howard VP
-----------------
- 6 -
<PAGE>
EXHIBIT 4
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND CANNOT BE SOLD OR TRANSFERRED
UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION UNDER SUCH ACT OR
LAWS IS AVAILABLE. THE TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT TO
THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF OCTOBER 21, 1998 AMONG THE
COMPANY AND THE PURCHASERS NAMED THEREIN.
CLASS C 13% CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 1999
October 21, 1998
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 in lawful money of the United
States, together with interest thereon calculated from the date hereof and
payable in accordance with the provisions of this debenture ("Debenture").
By accepting this Debenture, the Holder agrees that the obligations of
the Company to the Holder under this Debenture shall be subordinated only to the
Senior Debt (as hereinafter defined) of the Company, all upon the terms set
forth in paragraph 4 hereof.
This Debenture may be surrendered for transfer or exchange by the
Holder hereof upon surrender of this Debenture, together with a properly
completed bond power or other instrument of transfer, and any required signature
guarantees, at the office of the Company set forth in Section 11 hereof. Upon
proper surrender, the Company shall issue one or more replacement Debentures of
like tenor registered in the names and in the denominations requested by the
surrendering Holder and dated the date of issuance thereof; provided, however,
that (i) appropriate adjustments shall be made to reflect the date of issue and
principal amount of each such replacement Debenture, (ii) the aggregate
principal amount of all Debentures shall be limited to $2,666,667, and (iii) no
Debenture shall be issued in a principal amount of less than $5,000 unless in
connection with a transfer resulting from the complete liquidation of the
original Holder of this Debenture. All Debentures shall rank pari passu.
1. Payment of Interest. Interest will accrue from the date hereof at
the rate of thirteen percent (13%) per annum on the unpaid principal amount of
this Debenture outstanding from time to time on the basis of a 360-day year for
the actual number of days elapsed. Subject to paragraph 4 hereof, the Company
will pay to the Holder all accrued and unpaid interest on this Debenture on
January 15, 1999 and quarterly thereafter, in arrears, on the 15th day of
January, the 15th day of April, the 15th day of July and the 15th day of October
(each, an "Interest Payment Date") to and including the earlier to occur of the
Conversion Date (hereinafter defined) or the Due Date (hereinafter
defined).Interest will accrue at the greater of the Default Rate (hereinafter
defined) and the rate of fifteen percent (15%) per annum on any principal
payment past due under this Debenture and, unless prohibited under applicable
law (and if so prohibited then only to the extent not so prohibited), on any
interest which has not been paid on the date on which it is due and payable
(without giving effect to any applicable grace periods or paragraph 4 hereof)
until such time as payment therefor is actually delivered to the Holder.
<PAGE>
2. Payment of Principal on Debenture.
(a) Scheduled Payments. The Company will repay the principal amount of
this Debenture on September 30, 1999 ("Due Date").
(b) Optional Prepayment. 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.
(c) Mandatory Prepayment. The Company shall 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
prepayment within forty (40) days after the consummation of a Qualifying
Offering. As used herein, "Qualifying Offering" means the public or private sale
by the Company of debt or equity securities resulting in net proceeds to the
Company (after the deduction for all necessary and customary expenses payable by
the Company in connection therewith) of at least $15 million.
(d) 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 only the following (and no other indebtedness of any kind
or nature whatsoever): (i) the Company's indebtedness to North Fork Bank
("Bank") under (A) that certain $640,000.04 Restated and Amended Term Loan Note,
dated April 25, 1997, and (B) that certain $2,200,000 Modified Revolving Credit
Note, dated April 30, 1998, 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;
provided, however, that the principal amount of the Senior Debt shall not exceed
$2.8 million.
<PAGE>
(b) Default on Senior Debt. So long as the Senior Debt has not been
paid in full, if there shall occur a default in the payment when due of any
amount due and owing on account of Senior Debt (any of the foregoing being a
"Senior Debt Default") then, from and after the receipt of written notice
thereof from the holder of Senior Debt unless and until such Senior Debt Default
shall have been remedied or waived the Company will not make any Payment on any
Subordinated Debt, and the Holders of Subordinated Debt will not receive or
accept any direct or indirect Payment in respect thereof, and the Company may
not redeem or otherwise acquire any Subordinated Debt.
(c) Changes in Senior Debt. Any holder of Senior Debt may, at any time
and from time to time, without the consent of, or notice to, the Holder and
without incurring responsibility to the Holder, and without impairing or
releasing the obligations of the Holder hereunder:
(i) Change the manner, place or terms of payment or change or
extend the time of payment of or renew or alter the Senior Debt or any portion
thereof; provided, however, that without the written consent of the Majority
Holders (hereinafter defined) the principal amount of and interest rate
applicable from time to time to Senior Debt may not be increased (other than
pursuant to the terms of the Senior Debt as such terms existed on the date of
issuance hereof);
(ii) Sell, exchange, release or otherwise deal with any
collateral securing the Senior Debt or any other property by whomsoever at any
time pledged or mortgaged to secure, or however securing, the Senior Debt or any
portion thereof; and
(iii) Apply any sums by whomsoever paid or however released to
the Senior Debt or any portion thereof.
(d) Consent to Senior Debt. By acceptance of this Debenture, the Holder
hereby consents to the making of Senior Debt and hereby acknowledges that each
current and future holder of Senior Debt has relied, and in the future will
rely, upon the terms of this Debenture. The holders of Senior Debt shall have no
liability to the Holder and the Holder hereby waives any claim which it may have
now or hereafter against any holder of Senior Debt arising from any and all
actions which any holder of Senior Debt may take or omit to take in good faith
with regard to the Senior Debt or its rights or obligations hereunder.
(e) Payments in Trust. Until the Senior Debt has been repaid in full,
in the event the Holder shall receive any Payment in contravention of the
provisions of this paragraph 4 including, Payments arising under the
subordination provisions of any other indebtedness of the Company, the Holder
shall hold all such Payments so received in trust for the holders of Senior Debt
and shall forthwith turn over all such Payments to the holders of Senior Debt in
the form received (except for the endorsement or assignment of the Holder as
necessary, without recourse or warranty) to be applied to payment of the Senior
Debt whether or not then due and payable. Any Payment so received in trust and
turned over to the holders of Senior Debt shall not be deemed a Payment in
satisfaction of the Subordinated Debt by the Company.
(f) Payment in full of Senior Debt; Subrogation. If any Payment to
which a Holder of Subordinated Debt would otherwise have been entitled but for
the provisions of this paragraph 4 shall have been applied, pursuant to the
provisions of this paragraph 4, to the
<PAGE>
payment of Senior Debt, then and in such case, the Holder of the Subordinated
Debt (i) shall be entitled to receive from the holders of Senior Debt at the
time outstanding any payments or distributions received by such holders of
Senior Debt in excess of the amount sufficient to pay all Senior Debt in cash in
full (whether or not then due), and (ii) following payment of the Senior Debt in
full, shall be subrogated to any right of the holders of Senior Debt to receive
any and all further payments or distributions applicable to Senior Debt, until
all the Subordinated Debt shall have been paid in full. If the Holder of the
Subordinated Debt shall have been subrogated to the rights of the holders of
Senior Debt due to the operation of this paragraph 4(f), the Company agrees to
take all such reasonable actions as are requested by such Holders of the
Subordinated Debt in order to cause such Holders to be able to obtain payments
from the Company with respect to such subrogation rights as soon as possible.
(g) No Impairment of the Company's Obligations. Nothing contained in
this paragraph 4, as between the Company and the Holder of this Debenture, shall
impair the obligation of the Company, which is absolute and unconditional, to
pay to the Holder the principal of and interest on this Debenture as and when
the same shall become due and payable in accordance with the terms hereof.
(h) Advances in Reliance. The Holder of this Debenture, by its
acceptance hereof, agrees that each holder of Senior Debt has advanced funds or
may in the future advance funds in reliance upon the terms and conditions
hereof.
(i) Non-Waiver of Rights. No right of any holder of Senior Debt to
enforce its right of subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company, or by any act or failure to act by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Debenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(j) Recaptured Payments. Any Payments received by a holder of Senior
Debt from the Company or the Holder which, in connection with an Insolvency
Event or Proceeding (hereinafter defined), is required to be remitted to the
payor or the bankrupt estate shall not be deemed a Payment to such holder of
Senior Debt for all purposes hereunder.
(k) Right to Convert Unaffected. Nothing contained in this Section 4
shall be construed so as to limit or restrict the ability of the Holder to
convert this Debenture in accordance with the terms hereof.
5. Intentionally Omitted.
6. Conversion Rights.
(a) From and after the earliest of (i) January 31, 1999, (ii) the
consummation of a Qualifying Offering, or (iii) the date of any repayment notice
given by the Company pursuant to Section 2(d) hereof, the Holder of this
Debenture shall have 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 a number of
fully paid and non-assessable shares equal to (i) the result obtained by
dividing the stated principal amount of this Debenture by the conversion rate
established for any equity security issued in a Qualifying Offering, if this
Debenture is converted on or after the consummation of a Qualifying Offering, or
(ii) if no
<PAGE>
Qualifying Offering has occurred on or prior to such conversion, the result
obtained by dividing the stated principal amount of this Debenture by (X) $0.52
per share if this Debenture is converted on or prior to January 31, 1999, (Y)
$0.45 per share if this Debenture is converted on or after February 1, 1999 and
on or prior to April 30, 1999, or (Z) $0.31 per share if this Debenture is
converted on or after May 1, 1999. The respective conversion prices set forth
above shall be subject to adjustment in certain circumstances as provided
herein. The conversion price in effect at the time of the conversion of this
Debenture is hereinafter referred to as the "Conversion Price." No fractional
shares shall be issuable upon the conversion of this Debenture. In lieu of any
such fractional share interest, upon conversion the Holder shall be entitled to
a cash payment equal to such fractional interest multiplied by the Conversion
Price in effect at the time of such conversion.
(b) The Conversion Right is exercisable upon surrender of this
Debenture, together with a conversion notice, in the form attached hereto as
Exhibit A, duly executed and completed, evidencing the election of the Holder to
exercise the Conversion Right, at the Company's principal office at 50 Orville
Drive, Bohemia, New York 11716. 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 the
exercise or conversion of (i) the Debentures (and any replacement Debenture or
Debentures issued upon transfer or exchange of this Debenture), (ii) the
Company's Class A 13% Convertible Senior Subordinated Pay-in-Kind Debentures due
1999 (the "Class A Debentures") (and any replacement Class A Debenture or Class
A Debentures issued upon transfer or exchange of the Class A Debentures), (iii)
any additional securities issued in lieu of cash interest otherwise payable on
the Class A Debentures (the "Class A Accrued Interest Debentures") (and any
replacement Class A Accrued Interest Debenture or Class A Accrued Interest
Debentures issued upon transfer or exchange of the Class A Accrued Interest
Debentures), (iv) the Company's Amended and Restated Class B 13% Convertible
Senior Subordinated Pay-in-Kind Debentures due 1999 (the "Class B Debentures")
(and any replacement Class B Debenture or Class B Debentures issued upon
transfer or exchange of the Class B Debentures), (v) any additional securities
issued in lieu of cash interest otherwise payable on the Class B Debentures (the
"Class B Accrued Interest Debentures") (and any replacement Class B Accrued
Interest Debenture or Class B Accrued Interest Debentures issued upon transfer
or exchange of the Class B Accrued Interest Debentures), (vi) securities
outstanding on the date hereof, (vii) awards made from and after the Issuance
Date pursuant to the Company's Stock Compensation Program (the "Plan"), or
(viii) awards made from and after the Issuance Date pursuant to any incentive
compensation plan or arrangement approved by the Company's Board of Directors or
by the Compensation Committee of the Company's Board of Directors subject to an
aggregate limit of 2,000,000 shares of Common Stock for issuances pursuant to
clauses (vii) and (viii) (subject to adjustment in the circumstances set forth
in the Plan or such arrangements) (such securities, collectively, the "Subject
Securities") for a consideration per share less than the Conversion Price (the
"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
<PAGE>
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 suchPrice), 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
<PAGE>
exchange of such Convertible Securities, and that they were issued or sold for
the consideration actually received by the Company upon such conversion or
exchange, plus the consideration, if any, actually received by the Company for
the issue or sale of all such Convertible Securities which shall have been
converted or exchanged.
(iii) In case the Company shall grant any rights or options to
subscribe for, purchase or otherwise acquire Common Stock of any class other
than the Subject Securities, there shall be determined the price per share for
which Common Stock is issuable upon the exercise of such rights or options, such
determination to be made by dividing (a) the total amount, if any, received or
receivable by the Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or options, by (b) the
maximum number of shares of Common Stock issuable upon the exercise of such
rights or options.
If the price per share so determined shall be less than the Trigger
Price (or, if a Pro Forma Adjusted Trigger Price shall be in effect, less than
such Price) as of the date of such issue or sale, then the granting of such
rights or options shall be deemed to be an issue or sale for cash (as of the
date of the granting of such rights or options) of such maximum number of shares
of Common Stock at the price per share so determined, provided that, if such
rights or options shall by their terms provide for an increase or increases,
with the passage of time, in the amount of additional consideration, if any,
payable to the Company upon the exercise thereof, the Pro Forma Adjusted Trigger
Price per share shall, forthwith upon any such increase becoming effective, be
readjusted to reflect the same, and provided, further, that upon the expiration
of such rights or options, if any thereof shall not have been exercised, the Pro
Forma Adjusted Trigger Price per share shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the exercise of such rights or options and that they were
issued or sold for the consideration actually received by the Company upon such
exercise, plus the consideration, if any, actually received by the Company for
the granting of all such rights or options, whether or not exercised.
(iv) In case the Company shall grant any rights or options to subscribe
for, purchase or otherwise acquire Convertible Securities other than the Subject
Securities, such Convertible Securities shall be deemed, for the purposes of
subparagraph (iii) above, to have been issued or sold for the total amount
received or receivable by the Company as consideration for the granting of such
rights or options plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of such rights or options,
provided that, upon the expiration of such rights or options, if any thereof
shall not have been exercised, the Pro Forma Adjusted Trigger Price per share
shall forthwith be readjusted and thereafter be the price which it would have
been had an adjustment been made upon the basis that the only Convertible
Securities so issued or sold were those issued or sold upon the exercise of such
rights or options and that they were issued or sold for the consideration
actually received by the Company upon such exercise, plus the consideration, if
any, actually received by the Company for the granting of all such rights or
options, whether or not exercised.
(v) In case any shares of stock or other securities, other than Common
Stock of the Company, shall at any time be receivable upon the conversion of
this Debenture, and in case any additional shares of such stock or any
additional such securities (or any stock or other securities convertible into or
exchangeable for any such stock or securities) shall be issued or sold for a
<PAGE>
consideration per share such as to dilute the purchase rights evidenced by this
Debenture, then and in each such case the Pro Forma Adjusted Trigger Price per
share shall forthwith be adjusted, substantially in the manner provided for
above in this paragraph (c), so as to protect the Holder of this Debenture
against the effect of such dilution.
(vi) In case any shares of Common Stock or Convertible Securities or
any rights or options to subscribe for, purchase or otherwise acquire any Common
Stock or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by the
Company therefor, after deducting any expenses incurred and any underwriting or
similar commissions, compensation or concessions paid or allowed by the Company
in connection with such issue or sale.
(vii) In case any shares of Common Stock or Convertible Securities or
any rights or options to subscribe for, purchase or otherwise acquire any Common
Stock or Convertible Securities shall be issued or sold for a consideration
other than cash (or a consideration which includes cash and other assets) then,
for the purpose of this paragraph (c), the Board of Directors of the Company
shall promptly determine the fair value of such consideration, and such Common
Stock, Convertible Securities, rights or options shall be deemed to have been
issued or sold on the date of such determination in good faith. Such value shall
not be more than the amount at which such consideration is recorded in the books
of the Company for accounting purposes except in the case of an acquisition
accounted for on a pooling of interest basis. In case any Common Stock or
Convertible Securities or any rights or options to subscribe for, purchase or
otherwise acquire any Common Stock or Convertible Securities shall be issued or
sold together with other stockor securities or other assets of the Company for a
consideration which covers both, the Board of Directors of the Company shall
promptly determine in good faith what part of the consideration so received is
to be deemed to be the consideration for the issue or sale of such Common Stock
or Convertible Securities or such rights or options.
The Company covenants and agrees that, should any determination of fair
value of consideration or of allocation of consideration be made by the Board of
Directors of the Company, pursuant to this subparagraph (vii), it will, not less
than seven (7) days after any and each such determination, deliver to the Holder
of this Debenture a certificate signed by the President or a Vice President and
the Treasurer or an Assistant Treasurer of the Company reciting such value as
thus determined and setting forth the nature of the transaction for which such
determination was required to be made, the nature of any consideration, other
than cash, for which Common Stock, Convertible Securities, rights or options
have been or are to be issued, the basis for its valuation, the number of shares
of Common Stock which have been or are to be issued, and a description of any
Convertible Securities, rights or options which have been or are to be issued,
including their number, amount and terms.
(viii) In case the Company shall take a record of the holders of shares
of its stock of any class for the purpose of entitling them (a) to receive a
dividend or a distribution payable in Common Stock or in Convertible Securities,
or (b) to subscribe for, purchase or otherwise acquire Common Stock or
Convertible Securities, then such record date shall be deemed to be the date of
the issue or sale of the Common Stock issued or sold or deemed to have been
issued or sold upon the declaration of such dividend or the making of such other
distribution, or the date of the granting of such rights of subscription,
purchase or other acquisition, as the case may be.
<PAGE>
(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
becovered 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
<PAGE>
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
<PAGE>
the time deliverable upon the exercise of this
Debenture) shall be entitled to exchange their shares
of Common Stock of any class (or such other stock or
securities) for reclassification, consolidation,
merger, conveyance, dissolution, liquidation or
winding up or (iii) the amount and character of the
stock or other securities proposed to be issued or
granted, the date of such proposed issuance or grant
and the persons or class of persons to whom such
stock or other securities are to be offered, issued
or granted. Such notice shall be mailed at least
thirty (30) days prior to the date therein specified.
(xvi) The Company will at all times reserve and keep available, solely
for issuance and delivery upon the conversion of this Debenture and other
similar Debentures, such shares of Common Stock and other stock, securities and
property as from time to time shall be issuable upon the exercise of this
Debenture and all other similar Debentures at the time outstanding.
(xvii) Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Debenture and (in the case
of loss, theft or destruction) upon delivery of an indemnity agreement in an
amount reasonably satisfactory to it, or (in the case of mutilation) upon
surrender and cancellation thereof, the Company will issue, in lieu thereof, a
new Debenture of like tenor.
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;
(ii) duly pay and discharge all taxes or other claims which might
become a lien upon any of its properties except to the extent that such items
are being in good faith appropriately contested;
(iii) maintain, preserve and keep its properties in good repair,
working order and condition, and make all reasonable repairs, replacements,
additions, betterments and improvements thereto;
(iv) conduct its business in substantially the same manner and in
substantially the same fields as such business is now carried on and conducted;
(v) comply with all statutes, rules and regulations and maintain its
corporate existence;
(vi) provide the Holder with the following financial information:
(A) annually, as soon as available, but in any event
within one hundred twenty (120) days after the last
day of each fiscal year, audited financial
statements, including balance sheets as of the last
day of the fiscal year and statements of income and
retained earnings and changes in financial condition
for such fiscal year each prepared in accordance with
generally accepted accounting
<PAGE>
principles, consistently applied ("GAAP") for the
period and prior periods by independent Certified
Public Accountants satisfactory to the Majority
Holders; provided, however, that the Company shall
have until January 31, 1999 to deliver the financial
statements for the fiscal year ended June 30, 1998;
(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; provided, however, that the Company shall
have until January 31, 1999 to deliver the financial
statements for the fiscal quarter ended September 30,
1998;
(C) within a reasonable time after a written request
therefor, such other financial data or information as
the Holder may reasonably request from time to time;
(D) at the same time as it delivers the financial
statements required under the provisions of
subsections (A) and (B) hereof, a certificate signed
by the president or the chief financial, or
accounting, officer of the Company, to the effect
that no Event of Default hereunder or material
default under any other agreement to which the
Company is a party or by which it is bound, or by
which any of its properties or assets may be
affected, and no event which, with the giving of
notice or the lapse of time, or both, would
constitute such an Event of Default, has occurred;
(E) on a monthly basis, no later than the tenth (10th)
day after each such month, backlog reports and
accounts receivable agings of the Company;
(vii) permit the Holder to make or cause to be made, inspections and
audits of any books, records and papers of the Company and of any parent or
subsidiary thereof and to make extracts therefrom at all such reasonable times
and as often as the Holder may reasonably require;
(viii) immediately give notice to the Holder that an Event of Default
has occurred or that an event which, with the giving of notice or lapse of time,
or both, would constitute an Event of Default, has occurred and specifying the
action which the Company has taken and proposes to take with respect thereto.
(b) Financial Covenant: At the end of each fiscal quarter, the Company
shall maintain a Tangible Net Worth of (-3,042,322) or greater (as calculated in
accordance with GAAP). For purposes hereof "Tangible Net Worth" shall mean, at
any date, (i) the net book value of assets (other than patents, patent rights,
trademarks, trade names, franchises, copyrights, licenses, permits, goodwill and
other intangible assets classified as such in accordance with GAAP) after all
appropriate adjustments in accordance with GAAP (including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and amortization)
plus (ii) subordinated indebtedness, in each case computed in accordance with
GAAP.
(c) Negative Covenants: The Company will not, and will not permit any
subsidiary to:
<PAGE>
(i) create, incur, assume or suffer to exist any liability for borrowed
money, except (A) indebtedness to the Bank or any other financial institution
constituting "Senior Debt" hereunder; (B) indebtedness outstanding on the date
hereof; (C) indebtedness represented by the Debentures (and any replacement
Debenture or Debentures issued upon transfer or exchange of the Debentures); (D)
indebtedness represented by the Class A Accrued Interest Debentures (and any
replacement Class A Accrued Interest Debenture or Class A Accrued Interest
Debentures issued upon transfer or exchange of the Class A Accrued Interest
Debentures); (E) indebtedness represented by the Class B Accrued Interest
Debentures (and any replacement Class B Accrued Interest Debenture or Class B
Accrued Interest Debentures issued upon transfer or exchange of the Class B
Accrued Interest Debentures); and (F) other indebtedness for borrowed money
(whether or not constituting a refinancing of existing indebtedness) so long as
(x) such indebtedness is not secured by collateral securing repayment of the
Debentures, (y) such indebtedness contains provisions reasonably satisfactory to
the Majority Holders subordinating the payment of principal and interest thereon
to the prior payment of principal and interest on the Debentures, and (z) the
incurrence of which will not cause an Event of Default, or an event which with
notice or the lapse of time or both would constitute an Event of Default,
hereunder (collectively, "Permitted Indebtedness");
(ii) create, incur, assume or suffer to exist, any mortgage, pledge,
lien or encumbrance of or upon or security interest in, any of its property or
assets now owned or hereafter acquired except (A) mortgages, liens, pledges and
security interests securing Permitted Indebtedness; (B)other liens, charges and
encumbrances incidental to the conduct of its business or the ownership of its
property and assets which are not incurred in connection with the borrowing of
money or the obtaining of advances or credit and which do not materially impair
the use thereof in the operation of its business; (C) liens for taxes or other
governmental charges which are not delinquent or which are being contested in
good faith and for which a reserve shall have been established in accordance
with GAAP; (D) liens granted to secure purchase money financing of equipment,
provided such liens are limited to the equipment financed; and (E) liens granted
to refinance unencumbered equipment provided such liens are limited to the
equipment refinanced and the incurrence of which will not cause a default
hereunder or in any Senior Debt;
(iii) assume, endorse, be or become liable for or guarantee the
obligations of any other person except by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business;
(iv) (A) terminate any pension plan so as to result in any material
liability to The Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (the "PBGC"), (B) engage in or permit any person
to engage in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended) involving any
pension plan which would subject the Company to any material tax, penalty or
other liability, (C) incur or suffer to exist any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived,
involving any pension plan, or (D) allow or suffer to exist any event or
condition, which presents a material risk of incurring a material liability to
the PBGC by reason of termination of any pension plan;
(v) amend, supplement or modify the terms of the Subject Securities or
increase the outstanding amount of any Subject Securities (excluding awards
granted under the Plan or under an incentive compensation plan or arrangement
approved by the Company's Board of Directors or by
<PAGE>
the Compensation Committee of the Company's Board of Directors) without the
prior consent of the Majority Holders;
(vi) enter into any merger or consolidation unless the Company shall be
the surviving entity in any such merger or consolidation, 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) loans outstanding on the date hereof;
(viii) declare or pay any dividends or distributions on account of its
capital stock or purchase, redeem, retire or otherwise acquire any of its
capital stock or any securities convertible into, exchangeable for, or giving
any person the right to acquire or otherwise subscribe for, any shares of the
Company's capital stock; provided, however, that so long as no Event of Default
or event which, with the giving of notice, the lapse of time, or both would
constitute an Event of Default hereunder has occurred and is continuing, the
Company may pay regular quarterly dividends on the Preferred Stock in accordance
with the terms thereof; or
(ix) engage in any transaction with any person or entity who directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the Company (an "Affiliate"), other than
director and compensation arrangements with Affiliates serving as officers
and/or directors of the Company approved by the Company's Board of Directors and
other than transactions with Affiliates entered into in the ordinary course of
business on terms which are at least as favorable to the Company as those
available from unrelated third parties. As used herein, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the Company, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlled" and "controlling" have meanings correlative thereto.
8. Events of Default.
(a) Definition. For the purposes of this Debenture, an Event of Default
hereunder will be deemed to have occurred if:
(i) the Company fails to pay the principal amount of this Debenture
when due (whether upon the Due Date, upon acceleration or otherwise), whether or
not such payment is prohibited by paragraph 4 hereof;
(ii) the Company fails to pay any interest, premium or penalty on this
Debenture when due and such failure has continued for a period of ten (10) days;
<PAGE>
(iii) the Company fails to perform or observe the provisions set forth
in Paragraphs 7(b) or 7(c) hereof;
(iv) the Company fails to perform or observe any provision contained in
this Debenture (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 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;
(vii) 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; or
(viii) any representation or warranty made by the Company in the
Purchase Agreement, dated October 21, 1998 between the Company and the original
Holder of this Debenture or any other certificate or instrument delivered in
connection therewith shall have been untrue in any material respect when made.
(b) Consequences of Events of Default.
(i) If any Event of Default (other than the type described
insubparagraph 8(a)(vi) 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)(vi)
above has
<PAGE>
occurred, then all of the outstanding principal amount of the Debentures shall
automatically be immediately due and payable without any action on the part of
any Holders of the Debentures.
(ii) If an Event of Default has occurred, each Holder of the
Debentures will also have any other rights which such Holder may have pursuant
to applicable law, in each case provided such rights are consistent with the
provisions of paragraph 4 hereof.
9. Amendment and Waiver. Except as otherwise expressly provided herein,
the provisions of this Debenture may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Majority Holders, provided, however, neither the interest rate or principal
amounts payable under the Debentures, the dates on which interest or principal
under the Debentures is due nor the obligations to make payments on the
Debentures on a pro rata basis shall be amended without the prior written
consent of each Holder affected thereby, and further provided, however, that any
amendment or waiver which might in any way adversely affect the holders of
Senior Debt, including, but not limited to, any amendment or waiver affecting
the provisions of paragraph 4 or this paragraph 9 shall require the prior
written consent of each holder of Senior Debt. Any amendment or waiver effected
in accordance with this paragraph 9 shall be binding upon each Holder of this
Debenture and each future Holder of this Debenture.
10. Cancellation. After all principal and accrued interest at any time
owed on this Debenture has been paid in full, this Debenture will be surrendered
to the Company for cancellation and will not be reissued.
11. Place of Payment. Payments of principal and interest are to be
delivered to the Holder at the office of the Company, 50 Orville Drive, Bohemia,
New York 11716, or to such other address or to the attention of such other
Person as specified by prior written notice to the Company.
12. Waiver of Presentment, Demand and Dishonor. The Company hereby
waives presentment for payment, protest, demand, notice of protest, notice of
non-payment and diligence with respect to this Debenture, and waives and
renounces all rights to the benefit of any statute of limitations or any
moratorium, appraisement, exemption or homestead now provided or that hereafter
may be provided by any federal or applicable state statute, including but not
limited to exemptions provided by or allowed under the Federal Bankruptcy Code,
both as to itself and as to all of its property, whether real or personal,
against the enforcement and collection of the obligations evidenced by this
Debenture and any and all extensions, renewals and modifications hereof.
No failure on the part of the Holder hereof or of any other Debentures
to exercise any right or remedy hereunder with respect to the Company, whether
before or after the happening of an Event of Default, shall constitute a waiver
of any future Event of Default or of any other Event of Default. No failure to
accelerate the debt of the Company evidenced hereby by reason of an Event of
Default or indulgence granted from time to time shall be construed to be a
waiver of the right to insist upon prompt payment thereafter; or shall be deemed
to be a novation of this Debenture or a reinstatement of such debt evidenced
hereby or a waiver of such right of acceleration or any other right, or be
construed so as to preclude the exercise of any right the Holder may have,
whether by the laws of the state governing this Debenture, by agreement or
otherwise; and the Company hereby expressly waives the benefit of any statute or
rule of law or equity that would produce a result contrary to or in conflict
with the foregoing.
<PAGE>
13. Usury. The Holder and the Company intend that the obligations
evidenced by this Debenture conform strictly to the applicable usury laws from
time to time in force. All agreements between the Company and the Holder,
whether now existing or hereafter arising and whether oral or written, hereby
are expressly limited so that in no contingency or event whatsoever, whether by
acceleration of maturity hereof or otherwise, shall the amount paid or agreed to
be paid to the Holder, or collected by the Holder, by or on behalf of the
Company for the use, forbearance or detention of the money to be loaned to the
Company hereunder or otherwise, or for the payment or performance of any
covenant or obligation contained herein of the Company to the Holder, or in any
other document evidencing, securing or pertaining to such indebtedness evidenced
hereby, exceed the maximum amount permissible under applicable usury law. If
under any circumstances whatsoever fulfillment of any provision hereof or any
other document, at the time performance of such provisions shall be due, shall
involve transcending the limit of validity prescribed by law, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity;
and if under any circumstances the Holder ever shall receive from or on behalf
of the Company an amount deemed interest, by applicable law, which would exceed
the highest lawful rate, such amount that would be excessive interest under
applicable usury laws shall be applied to the reduction of the Company's
principal amount owing hereunder and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal and such other
indebtedness, the excess shall be deemed to have been a payment made by mistake
and shall be refunded to the Company or to any other person making such payment
on the Company's behalf.
14. Governing Law. The validity, construction and interpretation of
this Debenture will be governed by the internal laws, but not the law of
conflicts and choices of law, of the State of New York.
IN WITNESS WHEREOF, the Company has executed and delivered this Class C
13% Convertible Senior Subordinated Debenture this_____day of ___________, 1998.
LOGIMETRICS, INC.
By:
--------------------------------
Name: Norman M. Phipps
Title: Chief Operating Officer
<PAGE>
EXHIBIT A
ELECTION TO CONVERT
(All capitalized terms used and not otherwise
defined herein shall have the meanings
assigned to them in the Class C 13% Convertible Senior
Subordinated Debentures)
LogiMetrics, Inc.
50 Orville Drive
Bohemia, New York 11716
TO WHOM IT MAY CONCERN:
The undersigned registered owner of the attached Class C 13%
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
<PAGE>
EXHIBIT 5
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of November
__,1998, among LogiMetrics, Inc., a Delaware corporation (the "Company"), and
the parties whose names appear on the signature pages hereof.
W I T N E S S E T H:
WHEREAS, the Company and the parties hereto (the "Purchasers") have
entered into a Purchase Agreement of even date herewith (the "Purchase
Agreement") pursuant to which the Company has agreed to sell to such parties
$2,666,667 in aggregate principal amount of its Class C Debentures (the
"Debentures"); and
WHEREAS, the Debentures are convertible into shares (the "Debenture
Shares") of the Company's common stock, par value $.01 per share; and
WHEREAS, the Company has agreed to effect the registration of Debenture
Shares on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound, the parties
hereto hereby agree as follows:
1. Certain Definitions.
For purposes of this Agreement, the following terms have the following
meanings when used herein:
(a) "Affiliate" means, with respect to any Person, means any other
Person who directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms"controlled" and "controlling" have meanings correlative thereto.
(b) "Business Day" means any day other than a Saturday or Sunday on
which banking institutions in New York, New York are open for the general
conduct of business.
(c) "Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
(d) "Common Stock" means the Common Stock, par value $.01 per share, of
the Company.
(e) "Company" means LogiMetrics, Inc., a Delaware corporation, and its
successors and assigns.
<PAGE>
(f) "Demand Registration" means any registration of Registrable
Securities effected pursuant to Section 2.
(g) "Effective Date" means the earlier of (i) September 1, 1999 and
(ii) the termination of the engagement letter, dated August 7, 1998, by and
between the Company and Donaldson Lufkin Jenrette Securities Corporation.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended (or any similar successor federal statute), and the rules and
regulations thereunder, as in effect from time to time.
(i) "Holders" means the Purchasers party to the Purchase Agreement or
any permitted transferees thereof holding Registrable Securities.
(j) "Majority Registered Holders" means, in the case of any
registration statement, the Holders of a majority of the Registrable Securities
proposed to be covered in such registration statement (or that are actually so
covered).
(k) "Person" means any individual, partnership, corporation (including
a business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, or other entity, or a government or
any political subdivision or agency.
(l) "Piggyback Registration" means any registration of Registrable
Securities effected pursuant to Section 3.
(m) "Registrable Securities" means (i) the Debenture Shares, and (ii)
any securities issued or issuable in respect of or in exchange for any of the
Debenture Shares by way of stock dividend or other distribution on the Common
Stock, stock split or combination of shares, recapitalization, reclassification
merger, consolidation or exchange offer. For purposes hereof, a Registrable
Security ceases to be a Registrable Security when either (x) it has been
effectively registered under the Securities Act and sold or distributed to any
Person pursuant to an effective registration statement covering it or (y) it has
been sold or distributed to any Person pursuant to Rule 144 or Rule 145(d).
(n) "Registration" means any Demand Registration or Piggyback
Registration.
(o) "Rule 10b-6" means Rule 10b-6 promulgated by the Commission under
the Exchange Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission.
(p) "Rule 144," "Rule 145" and "Rule 424" mean, respectively, Rule 144,
Rule 145 and Rule 424, each promulgated by the Commission under the Securities
Act, in each case as amended from time to time, or any similar successor rule
thereto that may be promulgated by the Commission.
(q) "Securities Act" means the Securities Act of 1933, as amended (or
any similar successor federal statute), and the rules and regulations
thereunder, as the same are in effect from time to time.
2. Demand Registrations.
<PAGE>
(a) At any time after the Effective Date and until the earlier of (i)
the date that all of the Registrable Securities may be freely resold by the
Holders thereof pursuant to Rule 144(k) and (ii) two years from the conversion
of all of the Debentures (the "Registration Rights Period"), upon written notice
to the Company from one or more Holders of Registrable Securities who held on
the Effective Date (together with their Affiliates at such time) in the
aggregate not less than 50% of the Debenture Shares (the Holders furnishing such
written notice being hereinafter referred to as the "Initiating Holders")
requesting that the Company effect, pursuant to this Section 2, the registration
of any or all of such Initiating Holders' Registrable Securities under the
Securities Act (which notice shall specify (A) the Registrable Securities so
requested to be registered, (B) the proposed amounts thereof (which in the
aggregate shall equal at least (x) 50% of the Debenture Shares, or (y) if such
Registrable Securities are all of the remaining Registrable Securities held by
the Initiating Holders, 25% of the Debenture Shares), and (C) the intended
method of disposition by such Initiating Holders, including whether or not the
proposed offering is to be underwritten), the Company shall promptly (but in any
event within 20 days) give written notice of such requested registration to all
Holders, and thereupon the Company shall, as expeditiously as possible, use its
best efforts to effect the registration under the Securities Act of:
(x) the Registrable Securities that the Initiating Holders have
requested the Company to register, for disposition in accordance with the
intended method of disposition stated in their notice to the Company; and
(y) all other Registrable Securities the Holders of which shall have
made a written request to the Company for registration thereof (which request
shall specify such Registrable Securities and the proposed amounts thereof)
within 30 days after the receipt of such written notice from the Company, all to
the extent requisite to permit the disposition (in accordance with the method of
disposition specified in the notice given to the Company by the Initiating
Holders) by Holders of the securities then constituting Registrable Securities
so to be registered.
(b) Number of Demand Registrations: Duration: Sale of Registrable
Securities. Notwithstanding the provisions of Section 2(a), the Company shall
not be required to effect a Demand Registration pursuant to this Section 2: (i)
if a Demand Registration has previously been effected by the Company pursuant to
this Section 2 within one year of the date on which notice is given by the
Initiating Holders pursuant to Section 2(a); or (ii) if the Company shall
previously have effected two Demand Registrations; provided that a Demand
Registration shall not be deemed to have been effected for purposes of the
limitations of this Section 2(b) unless the applicable registration statement
was declared effective and kept effective until the earlier of (A) nine months
following the date on which it was declared effective and (B) the sale pursuant
thereto of all of the Registrable Securities covered thereby. A request from
Initiating Holders pursuant to Section 2(a) shall be deemed withdrawn upon
commencement of a Black-Out Period (as defined in Section 4(c)).
(c) Inclusion of Other Securities. The Company shall not include
securities in any Demand Registration other than (i) Registrable Securities, and
(ii) securities entitled to piggyback registration rights granted by the Company
prior to the date hereof without the prior written consent of the Majority
Registered Holders which shall not be unreasonably withheld or delayed.
3. Piggyback Registrations.
(a) Effective Registration. If prior to the end of the Registration
Rights Period the Company proposes to file a registration statement under the
Securities Act with respect to any class
<PAGE>
of equity securities (other than in connection with the registration of equity
securities issued or issuable pursuant to a dividend reinvestment, employee
stock option, stock purchase, stock bonus or similar plan or pursuant to a
merger, exchange offer or transaction of the type specified in paragraph (a) of
Rule 145) at any time, then the Company shall give written notice of such
proposed filing to the Holders at least 20 days before the anticipated filing
date, and such notice shall offer the Holders the opportunity to register such
amount of Registrable Securities as each such Holder may request. The Company
shall use its best efforts to cause the managing underwriter or underwriters of
a proposed underwritten offering to permit the inclusion therein of any
Registrable Securities the Holders of which request, within 15 days after
receiving written notice of the proposed filing from the Company, such
inclusion, at the same initial public offering price and subject to the same
underwriting discount and commissions as any similar securities of the Company
so included. Any Holder's request for such inclusion may be withdrawn, in whole
or in part, at any time prior to the effective date of the registration
statement for such offering.
(b) Number of Piggyback Registrations: Duration: Sale of Registrable
Securities. Notwithstanding the provisions of Section 3(a) but subject to
thesecond proviso to Section 3(c), the Company shall not be required to effect a
Piggyback Registration pursuant to this Section 3 in response to a request made
pursuant to Section 3(a) if the Company shall previously have so effected three
Piggyback Registrations in response to such requests; provided that a Piggyback
Registration shall not be deemed to have been effected for purposes of this
limitation unless, in respect thereof, the following conditions (hereinafter,
the "Conditions") were satisfied: (i) the applicable registration statement
covered the full amount of Registrable Securities requested to be so covered by
each Holder, without any reductions in any such amount pursuant to Section 3(c)
or otherwise, except as a result of withdrawals pursuant to the last sentence of
Section 3(a); and (ii) the applicable registration statement was declared
effective and kept effective until the earlier of (A) nine months following the
date on which it was declared effective and (B) the sale pursuant thereto of all
of the Registrable Securities covered thereby, provided, that such non-month
period shall be tolled during a Black-Out Period (as defined in Section 4(b)).
(c) Cut-Backs. Notwithstanding the provisions of Section 3(a), if the
managing underwriter or underwriters of a proposed underwritten offering as
described in Section 3(a) deliver a written opinion to the Holders requesting
inclusion of their Registrable Securities, stating that the total amount or kind
of securities that they or any other Persons (other than the Company) seek to
include in such offering would materially and adversely affect the success of
such offering, then, in addition to the number of such securities being included
in the offering for the account of the Company, the Company shall be required to
include in the offering only that number of additional such securities,
including Registrable Securities (collectively, the "Additional Securities"),
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering, and the Additional Securities so included shall be
apportioned pro rata among the selling stockholders and the Holders of
Registrable Securities according to the total amount of securities requested to
be included therein by each selling stockholder and the Holders or in such other
proportions as shall mutually be agreed to by such selling stockholders and the
Holders.
(d) Control by the Company. The Company may withdraw any registration
statement and abandon any proposed offering initiated by the Company without the
consent of any Holder of Registrable Securities, notwithstanding the request of
any such Holder to participate therein in accordance with this Section 3, if the
Board of Directors of the Company determines in its sole discretion that such
action is in the best interests of the Company.
<PAGE>
4. Holdback Agreements; Blackouts.
(a) Restrictions on Public Sales by Holders of Registrable Securities.
To the extent not inconsistent with applicable law, each Holder whose
Registrable Securities are included in a Registration that is timely notified in
writing by the managing underwriter or underwriters shall not effect any public
sale or distribution (including a sale pursuant to Rule 144) of any issue being
registered in an underwritten offering (other than pursuant to a dividend
reinvestment, employee stock option, stock purchase, stock bonus or similar
plan, pursuant to a merger, exchange offer or a transaction of the type
specified in Rule 145(a) or pursuant to a "shelf" registration), any securities
of the Company similar to any such issue or any securities of the Company
convertible into or exchangeable or exercisable for any such issue, during
the10-day period prior to, and during the 180-day period beginning on, the
effective date of the applicable registration statement (or, if later, the date
on which a bona fide offering of the securities covered thereby commences),
except as part of such Registration.
(b) Restrictions on Public Sales by the Company. The Company shall not
effect any public sale or distribution for its own account of any issue being
registered in an underwritten offering (other than pursuant to a dividend
reinvestment, employee stock option, stock purchase, stock bonus or similar
plan, pursuant to a merger, exchange offer or a transaction of the type
specified in Rule 145(a) under the Securities Act or pursuant to a "shelf"
registration), any securities of the Company similar to any such issue or any
securities of the Company convertible into or exchangeable or exercisable for
any such issue, during the 10-day period prior to, and during the 180-day period
beginning on, the effective date of the applicable registration statement (or,
if later, the date on which a bona fide offering of the securities covered
thereby commences), except as part of such Registration.
(c) Black-Outs. Notwithstanding the provisions of Sections 2 and 3, the
Company may, by giving written notice to the Holders at any time prior to the
effectiveness of the applicable registration statement, delay effecting a Demand
Registration or a Piggyback Registration for a reasonable period of time (the
"Black-Out Period") not to exceed:
(i) 90 days, if at the time the Company is otherwise engaged in an
issuer tender offer (within the meaning of Section 13(e) of the Exchange Act)
for securities of the same class (within the meaning of the Exchange Act) as the
Registrable Securities that are proposed to be registered and sold; provided
that the Board of Directors of the Company shall have determined in good faith,
based on advice of counsel to the Company, that such issuer tender offer may
not, under Rule 10b-6, be continued and consummated if offers or sales of
Registrable Securities were to be made pursuant to such Demand Registration or
Piggyback Registration; provided, further, that the Company, if requested by the
Majority Registered Holders, shall cooperate with the Holders to obtain from the
staff of the Commission a no-action letter to the effect that the staff would
not recommend enforcement action to the Commission with respect to Rule 10b-6,
or would grant an exemption from Rule 10b-6, in the event such offers and sales
were to be so made; and
(ii) 90 days, if at the time the Company is otherwise engaged in a
financing, acquisition, corporate reorganization or other material transaction
whose disclosure in the good faith judgment of the Board of Directors of the
Company would (a) be detrimental to the interests of the Company and (b) based
on advice of counsel to the Company, be required in connection with such Demand
Registration or Piggyback Registration.
<PAGE>
5. Registration Procedures.
(a) Company Procedures. Whenever the Company is required by this
Agreement to effect the registration of any Registrable Securities under the
Securities Act pursuant to a registration statement, the Company shall use its
best efforts to effect each such registration to permit the sale of such
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall, as soon as
practicable:
(i) prepare and file with the Commission the requisite registration
statement to effect such registration and thereafter use its best efforts to
cause such registration statement to be declared effective as soon as
practicable and to remain continuously effective for the time period required by
this Agreement to the extent permitted under the Securities Act, provided that
as soon as practicable but in no event later than three Business Days before
filing such registration statement, any related prospectus or any amendment or
supplement thereto, other than any amendment or supplement made solely as a
result of incorporation by reference of documents filed with the Commission
subsequent to the filing of such registration statement, the Company shall
furnish to the Holders of the Registrable Securities covered by such
registration statement and the underwriters, if any, copies of all such
documents proposed to be filed, which documents shall be subject to the review
of such statement or amendment thereto or any prospectus or any supplement
thereto (other than any amendment or supplement made solely as a result of
incorporation by reference of documents filed with the Commission subsequent to
the filing of such registration statement) to which the managing underwriters of
the applicable offering, if any, or the Majority Registered Holders shall have
reasonably objected in writing, within two Business Days after receipt of such
documents, to the effect that such registration statement or amendment thereto
or prospectus or supplement thereto does not comply in all material respects
with the requirements of the Securities Act and specifying in reasonable detail
the reasons therefor (provided that the foregoing shall not limit the right of
any Holder whose Registrable Securities are covered by a registration statement
to reasonably object, within two Business Days after receipt of such documents,
to any particular information that is to be contained in such registration
statement, amendment, prospectus or supplement and relates specifically to such
Holder, including without limitation any information describing the manner in
which such Holder acquired such Registrable Securities and the intended method
of distribution of such Registrable Securities), and if the Company is unable to
file any such document due to the objections of such underwriters or such
Holders, the Company shall use its best efforts to cooperate with such
underwriters and Holders to prepare, as soon as practicable, a document that is
responsive in all material respects to the reasonable objections of such
underwriters and Holders;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to such registration statement as may be necessary
tokeep such registration statement continuously effective and current for the
period required by this Agreement to the extent permitted under the Securities
Act; cause each related prospectus to be supplemented by any prospectus
supplement as may be required, and as so supplemented to be filed pursuant to
Rule 424, if required; and otherwise use its best efforts to comply with the
provisions of the Securities Act as may be necessary to facilitate the
disposition of all Registrable Securities covered by such registration statement
during the applicable period and in accordance with the intended method of
disposition by the selling Holders thereof set forth in such registration
statement or such prospectus or prospectus supplement;
(iii) notify the Holders and the managing underwriters, if any, of the
applicable offering (providing, if requested by any such Persons, confirmation
in writing) as soon as practicable after
<PAGE>
becoming aware of: (A) the filing of any prospectus or prospectus supplement or
the filing or effectiveness (or anticipated date of effectiveness) of such
registration statement or any post-effective amendment thereto; (B) any request
by the Commission for amendments or supplements to such registration statement
or the related prospectus or for additional information; (C) the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose; (D) the receipt
by the Company of any notification with respect to the suspension of the
qualification or registration (or exemption therefrom) of any Registrable
Securities for sale in any jurisdiction in the United States or the initiation
or threatening of any proceeding for such purposes; or (B) the happening of any
event that makes any statement made in such registration statement or in any
related prospectus, prospectus supplement, amendment or document incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in such registration statement or in any such prospectus,
supplement, amendment or other such document so that it will not contain 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 the case of
any prospectus or supplement in the light of the circumstances under which they
were made) notmisleading;
(iv) use its best efforts to obtain at the earliest possible moment the
withdrawal of any order or other action suspending the effectiveness of any such
registration statement or suspending the qualification or registration (or
exemption therefrom) of the Registrable Securities for sale in any jurisdiction;
(v) if reasonably requested by the managing underwriters, if any, of
the applicable offering, or by the Majority Registered Holders, as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as such underwriters or the Majority Registered Holders, as the
case may be, agree should be included therein relating to the sale and offering
of the applicable Registrable Securities, including without limitation
information with respect to the number of Registrable Securities being sold to
any underwriters, the purchase price being paid therefor by any such
underwriters and any other terms of the offering of the Registrable Securities;
and make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable following receipt of notice of the matters to
be incorporated therein;
(vi) as soon as practicable after filing such documents with the
Commission, furnish to the Holders and each of the underwriters, if any, without
charge, at least one manually signed or conformed copy of such registration
statement and any post-effective amendment thereto, including financial
statements and schedules; and as soon as practicable after the request of any
Holder or underwriter, furnish to such Holder or underwriter, as the case may
be, at least one copy of any document incorporated by reference in such
registration statement or in any related prospectus, prospectus supplement or
amendment, together with all exhibits thereto (including those previously
furnished or incorporated by reference);
(vii) deliver to the Holders and to each of the underwriters, if any,
without charge, as many copies of the prospectus or prospectuses (including each
preliminary prospectus) and any amendment or supplement thereto as such Persons
may reasonably request; subject to Section 5(b)(i), the Company consents to the
use of any such prospectus or any amendment or supplement thereto by the Holders
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by any such prospectus or any amendment or
supplement thereto;
<PAGE>
(viii) prior to any public offering of Registrable Securities, register
or qualify, or obtain an exemption therefrom (with the cooperation of the
Holders, the underwriters, if any, and their respective counsel in connection
therewith to the extent necessary) of, such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions in the United
States as the Holders or the underwriters, if any, shall reasonably request in
writing; use its best efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period during which such
registration statement is required to be kept effective pursuant to this
Agreement, to the extent permitted under the Securities Act; and do any and all
other acts and things reasonably necessary or advisable to facilitate the
disposition in such jurisdictions of the Registrable Securities covered by such
registration statement; provided that the Company shall not be required to
qualify to do business in any jurisdiction where it would not be required so to
qualify but for this Section 5(a)(viii);
(ix) cooperate with Holders participating in such registration and the
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing the Registrable Securities to be sold; and enable such
Registrable Securities to be in such denominations and registered in such names
as the underwriters, if any, may request at least two Business Days prior to any
sale of Registrable Securities to the underwriters;
(x) use its best efforts to cause the Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities in the United States as may be reasonably
necessary to enable the Holders or the underwriters, if any, to consummate the
disposition of such Registrable Securities;
(xi) as soon as practicable after the occurrence of any event described
in Section 5(a)(iii)(E), prepare a supplement or post-effective amendment to
such registration statement or to the related prospectus or any document
incorporated therein by reference, or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such prospectus shall not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading; if any event described in Section
5(a)(iii)(B) occurs, use its best efforts to cooperate with the Commission to
prepare, as soon as practicable, any amendment or supplement to such
registration statement or such related prospectus and any other additional
information, or to take other action that may have been requested by
theCommission;
(xii) use its best efforts to cause all Common Stock constituting
Registrable Securities covered by such registration statement to be listed on
each securities exchange (or quotation system operated by a national securities
association), if any, on which the Common Stock of the Company is then listed
(or included), if so requested by the Majority Registered Holders or the
underwriters, if any, and enter into customary agreements including, if
necessary, a listing application and indemnification agreement in customary
form, and provide a transfer agent for such Registrable Securities no later than
the effective date of such registration statement; use its best efforts to cause
any other Registrable Securities covered by such registration statement to be
listed (or included) on each securities exchange (or quotation system operated
by a national securities association) on which securities of the same class and
series, if any, are then listed (or included) (or on any exchange or quotation
system on which any Person other than a Holder shall have the right to have
securities of the same class and series, if any, listed or included), if so
requested by the Majority Registered Holders or the underwriters, if any, and
enter into customary agreements including, if necessary, a
<PAGE>
listing application and indemnification agreement in customary form, and, if
necessary, provide a registration statement;
(xiii) provide a CUSIP number for the Registrable Securities no later
than the effective date of such registration statement;
(xiv) enter into customary agreements (including, in the case of an
underwritten offering, an underwriting agreement in customary form for the
managing underwriters with respect to issuers of similar market capitalization
and reporting and financial histories) and take all such other appropriate
actions in connection therewith in order to expedite or facilitate the
disposition of the Registrable Securities included in such registration
statement and, in the case of an underwritten offering: (A) make representations
and warranties to each Holder of Registrable Securities participating in such
offering and to each of the underwriters, in such form, substance and scope as
are customarily made to the managing underwriters by issuers of similar market
capitalization and reporting and financial histories and confirm the same to the
extent customary if and when requested; (B) obtain opinions of counsel to the
Company addressed to each Holder of Registrable Securities participating in such
offering and to each of the underwriters, such opinions to be in customary form
and covering the matters customarily covered in opinions obtained in
underwritten offerings by the managing underwriters for issuers of similar
market capitalization and reporting and financial histories; (C) use its best
efforts to obtain "comfort" letters from the Company's independent certified
public accountants addressed to each Holder of Registrable Securities
participating in such offering and to each of the underwriters, such letters to
be in customary form and covering matters of the type customarily covered in
"comfort" letters to the managing underwriters in connection with underwritten
offerings by them for issuers of similar market capitalization and reporting and
financial histories; (D) provide, in the underwriting agreement or agency
agreement to be entered into in connection with such offering, indemnification
and contribution provisions and procedures no less favorable than those set
forth in Section 7 with respect to all parties to be indemnified pursuant to
Section 7; and (E) deliver such customary documents and certificates as may be
reasonably requested by the Majority Registered Holders and the managing
underwriters to evidence compliance with clause (A) of this paragraph (xiv) and
with any customary conditions contained in the underwriting agreement entered
into by the Company in connection with such offering;
(xv) in the case of any nonunderwritten offering: (A) obtain an opinion
of counsel to the Company at the time of effectiveness of such registration
statement covering such offering and an update thereof at the time of
effectiveness of any post-effective amendment to such registration statement
(other than by reason of incorporation by reference of documents filed with the
Commission) addressed to each Holder of any Registrable Securities covered by
such registration statement, covering matters that are no more extensive in
scope than would be customarily covered in opinions obtained in underwritten
offerings by issuers with similar market capitalization and reporting and
financial histories; (B) use its best efforts to obtain a "comfort" letter from
the Company's independent certified public accountants at the time of
effectiveness of such registration statement and, upon the request of the
Majority Registered Holders, updates thereof, in each case addressed to each
Holder of Registrable Securities participating in such offering and covering
matters that are no more extensive in scope than would be customarily covered in
"comfort" letters and updates obtained in underwritten offerings by issuers with
similar market capitalization and reporting and financial histories; and (C)
deliver a certificate of a senior executive officer of the Company at the time
of effectiveness of such registration statement and, upon the request of the
Majority Registered Holders, updates thereof, such certificates to cover matters
no more extensive in scope than those matters customarily covered in officers'
certificates delivered in connection with
<PAGE>
underwritten offerings by issuers with similar market capitalization and
reporting and financial histories;
(xvi) make available, for inspection by the Holders of the Registrable
Securities included in such registration, any underwriter participating in any
disposition of Registrable Securities pursuant to such registration statement,
and any attorney, accountant or other representative retained by such selling
Holders or by any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such underwriter, attorney, accountant or other representative
in connection with such registration, provided that no record, document or
property that is subject to a claim of privilege need be made available for
inspection by any Person pursuant to this clause (xvi) if inspection thereof by
such Person could, in the opinion of the Company's counsel, result in the waiver
of such privilege;
(xvii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission relating to such registration and the
distribution of the securities being offered (including, without limitation,
Rule l0b-6, with respect to which the Company shall also use its best efforts
timely to apprise each Holder of any bids and purchases by the Company, and of
any known bids and purchases by each "affiliated purchaser" (as defined in Rule
l0b-6) of the Company, that would in the opinion of the Company be prohibited
under Rule l0b-6 in connection with a "distribution" (as so defined) by such
Holder of securities of the Company) and make generally available to its
security holders earning statements satisfying the provisions of Section 11(a)
of the Securities Act (including Rule 158 thereunder), not later than 60 days
after the end of any 12-month period (or 120 days, if such period is a fiscal
year) commencing at the end of any fiscal quarter in which the Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering, or, if not sold to underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of such registration statement, which earning
statements shall cover such 12-month periods;
(xviii) cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc. and in the performance of
any customary or required due diligence investigation by any underwriter,
provided that no record, document or property that is subject to a claim of
privilege need be made available for investigation by any underwriter pursuant
to this clause (xviii) if investigation thereof by such underwriter could, in
the opinion of the Company's counsel, result in the waiver of such privilege;
and
(xix) use its best efforts to effect such registration in the manner
contemplated by this Agreement.
(b) Holder Procedures.
(i) Each Holder agrees, by acquisition of the Registrable Securities
that, upon receipt of any notice from the Company of the happening of any event
described in Section 5(a)(iii) (B), 5(a) (iii) (C), 5(a)(iii)(D) or
5(a)(iii)(E), such Holder shall forthwith discontinue disposition of any
Registrable Securities (but, in the case of an event described in Section
5(a)(iii)(D), in the affected jurisdiction or jurisdictions only) covered by the
affected registration statement or prospectus until such Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section
5(a)(iii) or 5(a)(xi) or until such Holder is (it being agreed by the Company
that the underwriters, if any, shall also be) advised in writing (the "Advice")
by the Company that the use of
<PAGE>
the applicable prospectus may be resumed. If the Company shall have given any
such notice during a period when a Demand Registration or Piggyback Registration
is in effect, the one-year period mentioned in Section 2(b) or Section 3(b), as
the case may be, shall be extendedby the number of days from and including the
date of the giving of such notice to and including the date when each Holder of
Registrable Securities included in such Registration shall have received the
copies of the supplemented or amended prospectus contemplated by Section
5(a)(iii) or 5(a)(xi) or the Advice, as the case may be.
(ii) In connection with any underwritten public offering of Registrable
Securities, the managing underwriter of such offering shall be, (A) in the case
of a Demand Registration, a nationally recognized investment banking firm
selected by the Majority Registered Holders and reasonably acceptable to the
Company and (B) in the case of a Piggyback Registration, a nationally recognized
investment banking firm selected by the Company and reasonably acceptable to the
Majority Registered Holders.
6. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with the provisions of this Agreement, including without limitation all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including fees and disbursements of counsel in connection with
blue sky qualifications or registrations (or the obtaining of exemptions
therefrom) of the Registrable Securities), printing expenses (including expenses
of printing prospectuses), messenger and delivery expenses, internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), fees and disbursements of its
counsel and its independent certified public accounts (including the expenses of
any special audit or "comfort" letters required by or incident to such
performance or compliance), securities acts liability insurance (if the Company
elects to obtain such insurance), fees and expenses of any special experts
retained by the Company in connection with such Registration, fees and expenses
of other Persons retained by the Company shall be borne by the Company. Each
Holder shall bear the fees and expenses of its counsel, the out-of-pocket
expenses of the Holders incurred in connection herewith and any underwriting
discounts, commissions or fees attributable to the sale of Registrable
Securities included in any Registration.
7. Indemnification: Contribution.
(a) Indemnification by the Company. The Company shall indemnify, to the
full extent permitted by law, each Holder of Registrable Securities, its
officers, directors, employees and agents, each Person who controls such Holder
(within the meaning of the Securities Act) and any investment adviser thereof or
agent therefor, against all losses, claims, damages, liabilities and expenses
(including costs of investigation and legal expenses) arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in any
registration statement covering any Registrable Securities, any related
prospectus or preliminary prospectus, or any amendment or supplement thereto, or
any omission or alleged omission to state in any thereof a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a prospectus or prospectus supplement, in light of the circumstances
under which they were made) not misleading, except in each case insofar, but
only insofar, as the same arises out of or is based upon an untrue statement
oralleged untrue statement of a material fact or an omission or alleged omission
to state a material fact in such registration statement, prospectus, preliminary
prospectus, amendment or supplement, as the case may be, made or omitted, as the
case may be, in reliance upon and in
<PAGE>
conformity with written information furnished to the Company by such Holder
expressly for use therein. This indemnity is in addition to any liability that
the Company may otherwise have. The Company shall also indemnify any
underwriters of the Registrable Securities, selling brokers, dealer managers and
similar securities industries professionals participating in the distribution
and their officers and directors and each Person who controls such underwriters
or other Persons (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of Holders and other
specified Persons.
(b) Indemnification by Holders of Registrable Securities. In connection
with any registration statement covering Registrable Securities, each Holder any
of whose Registrable Securities are covered thereby shall furnish to the Company
in writing such information and affidavits with respect to such Holder as the
Company reasonably requests for use in connection with such registration
statement, any related prospectus or preliminary prospectus, or any amendment or
supplement thereto, and shall indemnify, to the full extent permitted by law,
the Company, the Company's directors, officers, employees and agents, each
Person who controls the Company (within the meaning of the Securities Act) and
any investment adviser thereof or agent therefor, against all losses, claims,
damages, liabilities and expenses (including costs of investigation and legal
expenses) arising out of or based upon any untrue or alleged untrue statement of
a material fact contained in any registration statement covering any Registrable
Securities, any related prospectus or preliminary prospectus, or any amendment
or supplement thereto, or any omission or alleged omission to state in any
thereof a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus or prospectus supplement,
inlight of the circumstances under which they were made) not misleading, in each
case to the extent, but only to the extent, that the same arises out of or is
based upon an untrue statement or alleged untrue statement of a material fact or
an omission or alleged omission to state a material fact in such registration
statement or in such related prospectus, preliminary prospectus, amendment or
supplement, as the case may be, made or omitted, as the case may be, in reliance
upon and in conformity with written information furnished to the Company by such
Holder expressly for use therein. Notwithstanding any other provision hereof, in
no event shall the indemnification obligation of any Holder be greater in amount
than the dollar amount of the proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such obligation.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification under this Section 7 agrees to give prompt written notice to the
indemnifying party after the receipt by such Person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim indemnification or contribution
pursuant to this Agreement and, unless in the judgment of such indemnified party
a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to such
indemnified party (which may be regular counsel to the Company). If the
indemnifying party is not entitled to, or elects not to, assume the defense of a
claim, it shall not be obligated to pay the fees and expenses of more than one
counsel with respect to such claim, unless in the judgment of counsel to such
indemnified party, expressed in a writing delivered to the indemnifying party, a
conflict of interest may exist between such indemnified party and any other
indemnified party with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional counsel
or counsels (which shall be limited to one counsel per indemnified party). The
indemnifying party shall not be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably withheld or
delayed.
<PAGE>
(d) Contribution.
(i) If the indemnification provided for in this Section 7 from the
indemnifying party is unavailable to an 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 in Section 7(c), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7(d) 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 any Holder be greater in amount than the excess of (A) the dollar
amount of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such contribution obligation over (B) the dollar
amount of any damages that such 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.
(iii) If any provision of an indemnification or contribution clause in
an underwriting agreement or agency agreement executed by or on behalf of a
Holder of Registrable Securities in accordance with Section 5(a)(xiv)(D) differs
from a provision in this Section 7, such provision in the underwriting agreement
shall determine such Holder's rights in respect thereof.
8. Participation in Underwritten Registrations
No Person may participate in any underwritten Registration unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements, (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and (c) agrees to pay
such Person's pro rata portion of all underwriting discounts and commissions.
9. Cooperation with the Company.
Each Holder by the acceptance of Registrable Securities agrees to use
its best efforts to cooperate with the Company in all reasonable respects in
connection with the preparation and filing
<PAGE>
of Registrations hereunder in which such Registrable Securities are included or
requested to be included.
10. Miscellaneous.
(a) Modifications in Connection with a Qualifying Offering. In
connection with the consummation of a Qualifying Offering (as such term is
defined in the Purchase Agreement), the registration rights provided hereunder
shall be modified to the extent determined in the reasonable judgment of the
Company's financial advisor to be reasonably necessary to permit consummation of
the Qualifying Offering on the terms most favorable to the Company; provided,
however, that the registration rights granted to the investors in the Qualifying
Offering shall not be more favorable than those granted to the Holders hereunder
(as so modified) without the approval of the Holders of at least a majority of
the Registrable Securities then outstanding. The Holders shall have the right to
participate in discussions with such financial advisor regarding any proposed
change in the terms of this Agreement. The Holders shall execute and deliver
appropriate amendments or supplements to this Agreement necessary to effect any
such modification.
(b) Remedies. Each Holder of Registrable Securities, in addition to
being entitled to exercise all rights in an action at law, including recovery of
damages, shall be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company shall have obtained the prior written consent of the Holders
of at least a majority of the securities then constituting Registrable
Securities.
(d) Notices. All notices, requests, waivers, releases, consents, and
other communications required or permitted by this Agreement (collectively,
"Notices") shall be in writing. Notices shall be deemed sufficiently given for
all purposes under this Agreement when delivered in person, when dispatched by
telegram or (upon written confirmation of receipt) by electronic facsimile
transmission or (upon written confirmation of receipt) when dispatched by a
nationally recognized overnight courier service. All Notices shall be delivered
as follows:
(i) if to a Holder of Registrable Securities, at the address indicated
on Company's registrar relating to such securities or at such other address as
such Holder may have furnished to the Company in writing; and
(ii) if to the Company, at:
LogiMetrics, Inc.
50 Orville Drive
Bohemia, New York 11716
Attention: President
<PAGE>
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto,
including any successors to the Company by merger.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings: Construction. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. Unless the context otherwise requires, all references to
Sections are to Sections of this Agreement, "or" is inclusively disjunctive, and
words in the singular include the plural and vice versa. In computing any period
of time specified in this Agreement or in any Notices, the date of the act or
event from which such period of time is to be measured shall be included, any
such period shall expire at 5:00 p.m., New York City time, on the last day of
such period, and any such period denominated in months shall expire on the date
in the last month of such period that has the same numerical designation as the
date of the act or event from which such period is to be measured; provided,
however, that if there is no date in the last month of such period that has the
same numerical designation as the date of such act or event, such period shall
expire on the last day of the last month of such period.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of laws thereof.
(i) Severability. If one or more of the provisions hereof, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect, for any reason, the validity, legality and
enforceability of the remaining provisions hereof shall not be in any way
affected or impaired thereby, and the provision held to be invalid, illegal or
unenforceable shall be reformed to the minimum extent necessary, and in a manner
as consistent with the purposes thereof as is practicable, so as to render it
valid, legal and enforceable, it being intended that all of the rights and
privileges of the Holders hereunder shall be enforceable to the fullest extent
permitted by law.
(j) Entire Agreement. This Agreement is intended by the Company and the
Purchasers to be a final expression thereof and is intended to be a complete and
exclusive statement of the agreement and understanding of the Company and the
Purchasers in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the Company and any Holders with respect to such subject
matter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LOGIMETRICS, INC.
By:______________________________
Title:
L.A.D. EQUITY PARTNERS, L.P.
<PAGE>
By: /s/
----------------------------------------
Name: Arthur J. Pergament
Title: Vice President
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
By: /s/
----------------------------------------
Gerald B. Cramer
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
<PAGE>
By: /s/
----------------------------------------
Edward J. Rosenthal, Keogh
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
CRM 1998 ENTERPRISE FUND, LLC
By: Cramer Rosenthal McGlynn, Inc.,
Its Managing Member
By: /s/
----------------------------------------
Name: Eugene A. Trainor, III
Title: Chief Financial Officer
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
A.C. ISRAEL ENTERPRISES, INC.
By: /s/
----------------------------------------
Name: Jay Howard
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
<PAGE>
CRM-EFO PARTNERS, L.P.
By: CRM-EFO Investments, LLC,
Its General Partner
By: CRM Management, Inc.,
Its Managing Member
By: /s/
----------------------------------------
Name: Eugene A. Trainor, III
Title:
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
By: /s/
----------------------------------------
Richard S. Fuld, Jr.
By: Cramer Rosenthal McGlynn, Inc.,
Attorney-in-Fact
By: /s/
----------------------------------------
Name: Eugene A. Trainor, III
Title: Chief Financial Officer
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
<PAGE>
PAMELA EQUITIES CORP.
By: /s/
----------------------------------------
Name:
Title:
3 New York Plaza
18th Floor
New York, New York 10004
Tel: (212) 837-4829
Fax: (212) 837-4938
WHITEHALL PROPERTIES, LLC
By: /s/
----------------------------------------
Name:
Title: Manager
3 New York Plaza
18th Floor
New York, New York 10004
Tel: (212) 837-4829
Fax: (212) 837-4938
KABUKI PARTNERS ADP, GP
By: /s/
----------------------------------------
Name:
Title: General Partner
3 New York Plaza
18th Floor
New York, New York 10004
Tel: (212) 837-4829
Fax: (212) 837-4938
McGLYNN FAMILY PARTNERSHIP
By: /s/
----------------------------------------
Name: Ronald H. McGlynn
<PAGE>
Title: General Partner
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
By: /s/
----------------------------------------
Fred M. Filoon
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
By: /s/
----------------------------------------
Eugene A. Trainor, III
520 Madison Avenue
New York, New York 10022
Tel: (212) 838-3830
Fax: (212) 644-8291
By: /s/
----------------------------------------
Charles S. Brand
20 Meridian Way
Eatontown, New Jersey 07724
Tel: (732) 935-7150
Fax: (732) 935-7151
