As filed with the Securities and Exchange Commission on November 21, 1996
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
LOGIC DEVICES INCORPORATED
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-2893789
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
628 East Evelyn Avenue
Sunnyvale, California 94086
(408) 737-3300
(Address, including zip code and telephone number, including
area code, of Registrant's principal executive offices)
______________________
William J. Volz
President
Logic Devices Incorporated
628 East Evelyn Avenue
Sunnyvale, California 94086
(408) 737-3300
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
_______________________
COPIES TO:
David R. Selmer, Esq.
Barack, Ferrazzano, Kirschbaum & Perlman
333 West Wacker Drive
Suite 2700
Chicago, Illinois 60606
Approximate date of commencement of proposed sale to the public: As soon
as possible after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. <square>
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.
<checked-box>
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, the following
box and list the Securities Act registration statement number of earlier
effective registration statement for the same offering. <square>
_______________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. <square> ________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.<square>
CALCULATION OF REGISTRATION FEE
Title of Each Class
of Securities
to be Registered..............Common Stock, no par value
Amount to be
Registered(1).................1,919,014
Proposed Maximum
Offering Price
Per Share(2)..................$2.16
Proposed Maximum
Aggregate Offering
Price(2)......................$4,145,070.20
Amount of
Registration Fee(2)...........$1,257.00
(1) Consisting of (i) 1,784,664 shares of Common Stock and (ii) 134,350
additional shares of Common Stock issuable upon exercise of warrants
to purchase Common Stock being registered on this form and an
indeterminate number of additional shares of Common Stock issuable
pursuant to the antidilution provisions of these warrants.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), and the average of the high and low
sales prices as reported on the National Association of Securities
Dealers Automated Quotation National Market System for November 20,
1996.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 21, 1996
LOGIC DEVICES INCORPORATED
1,919,014 SHARES OF COMMON STOCK
This Prospectus relates to (i) 1,784,664 shares of common stock, no
par value per share (the "Common Stock"), of Logic Devices Incorporated
(the "Company") and (ii) 134,350 additional shares of Common Stock
issuable upon exercise of certain warrants (the "Warrants") to purchase
Common Stock which shares and Warrants are held by the "Selling
Shareholders" identified herein (the "Offered Securities"). Warrants for
2,500 shares are exercisable for a period ending August 21, 1998, a
Warrant for 31,850 shares is exercisable for a period ending September 19,
1998 and a Warrant to purchase 100,000 shares is exercisable for a period
ending February 15, 2000. See "Subsequent Events."
The Offered Securities may be offered from time to time by the
"Selling Shareholders" or their pledgees, donees, transferees or other
successors in interest. See "Selling Shareholders." THE SELLING
SHAREHOLDERS HAVE ADVISED THE COMPANY THAT SALES OF THE OFFERED SECURITIES
MAY BE MADE, IF AT ALL, FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART, THROUGH THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART OR RULE 144 OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), IN THE
OVER-THE-COUNTER MARKET THROUGH LICENSED BROKER-DEALERS OR OTHERWISE, AT
THE THEN PREVAILING MARKET PRICES OR OTHERWISE AT PRICES AND ON TERMS THEN
OBTAINABLE OR THROUGH PRIVATELY NEGOTIATED TRANSACTIONS. NO PERIOD OF
TIME HAS BEEN FIXED WITHIN WHICH THE OFFERED SECURITIES COVERED BY THIS
PROSPECTUS MAY BE OFFERED OR SOLD. SEE "PLAN OF DISTRIBUTION."
The Company will receive no part of the proceeds of any sales of the
Offered Securities except for the exercise price of the Warrants. The
Company will pay all expenses with respect to this Offering, except for
underwriting discounts, brokerage fees and commissions and transfer taxes
for the Selling Shareholders, which will be borne by the Selling
Shareholders.
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK.
SEE "RISK FACTORS."
The Company's Common Stock is traded in the national over-the-counter
market and prices are quoted by the National Association of Securities
Dealers Automated Quotation ("Nasdaq") National Market System under the
symbol LOGC. On November 20, 1996, the last reported sale price of the
Common Stock, as reported by the Nasdaq National Market System,
was $ 2 1/4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
THE DATE OF THIS PROSPECTUS IS , 1996
<PAGE>
No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this
Prospectus in connection with the Offered Securities and, if given or
made, such information and representations must not be relied upon as
having been authorized by the Company or the Selling Shareholders.
Neither the delivery of this Prospectus nor any sale made under this
Prospectus shall under any circumstances create any implication that there
has been no change in the affairs of the Company since the date hereof or
since the date of any documents incorporated herein by reference. This
Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the securities to which it relates,
or an offer or solicitation in any state to any person to whom it is
unlawful to make such offer in such state.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company may
be examined without charge at, or copies obtained upon payment of
prescribed fees from, the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and are
also available for inspection and copying at the regional offices of the
Commission located at 75 Park Place, 14th Floor, New York, New York 10007
and at Citicorp Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661-2511.
The Company has filed with the Commission, 450 Fifth Street N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-3 under the
Securities Act, and the rules and regulations promulgated thereunder, with
respect to the Common Stock offered pursuant to this Prospectus. This
Prospectus, which is part of the Registration Statement, does not contain
all of the information, exhibits and undertakings set forth in the
Registration Statement, certain portions of which are omitted as permitted
by the Rules and Regulations of the Commission. For further information
concerning the Company and the Common Stock offered hereby, reference is
made to the Registration Statement and the exhibits filed therewith, which
may be examined without charge at, or copies obtained upon payment of
prescribed fees from, the Commission and its regional officers at the
locations listed above. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and, in each
instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Commission are incorporated by
reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K and Form 10-K/A for the
year ended December 31, 1995 (File No. 0-17187);
(2) all other reports filed pursuant to Section 13(a) of the Exchange
Act since the end of the fiscal year covered by the Annual Report referred
to in (1) above.
(3) the description of the Company's Common Stock contained in its
Registration Statement on Form S-18, as amended (File No. 33-23763-LA).
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of this Offering shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents (such documents, and the
documents enumerated above, are hereinafter referred to as "Incorporated
Documents"). Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this Prospectus and
the Registration Statement of which it is a part to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document or in an accompanying prospectus supplement modifies or
supersedes such statement. Any such statement so modified or superseded
should not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus or the Registration Statement.
The Company will, without charge, provide to each person (including
any beneficial owner) to whom this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the
Incorporated Documents (not including exhibits unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such information should be
directed to the Chief Financial Officer at the address and telephone
number set forth under "The Company."
RISK FACTORS
Investment in the Common Stock involves a high degree of risk.
Prospective investors should carefully consider the following risk factors
in evaluating the Company and its business before investing in the Common
Stock.
DEPENDENCE ON NEW PRODUCTS AND TECHNOLOGIES. The Company's future
success will depend, in large part, upon its ability to successfully
develop and market new products, and to have access to leading edge
semiconductor wafer fabrication process technology. The Company serves a
number of small or niche markets which each require constant monitoring
and evaluation by the Company. Semiconductor design and process
technologies are subject to rapid technological change, requiring a high
level of expenditure for research and development. Further, even if
successfully developed, the success of new product introductions is
dependent on several factors, including proper new product selection,
timely product introduction, achievement of acceptable production yields
and market acceptance. There can be no assurance that the Company will
successfully develop new products that can be introduced on a timely or
cost-effective basis or that will achieve market acceptance.
DEPENDENCE ON OUTSIDE WAFER FOUNDRIES AND TECHNOLOGY. The Company is
dependent on outside silicon foundries, two located in Japan, one located
in Taiwan, one located in Germany and one located in the U.S., for its
silicon wafer fabrication. While the Company can obtain wafers used in
many of its current products from any of these five sources, each source
uses a different technological process. During 1992, the Company
redesigned its static random access memories ("SRAM") product line and
initiated product designs with two of its current foundries as a result of
the termination of a guaranteed supply arrangement with a domestic
supplier, and during the end of 1995 and the beginning of 1996, the
Company redesigned its Digital Signal Processing ("DSP") product line and
initiated product designs with another of its current foundries as a
result of the Company's inability to obtain adequate quantities of
processed wafers. While the Company regularly evaluates the availability
of additional sources of processed wafers, there can be no assurance that
other foundries will be available or, if available, will be able to supply
wafers on a timely basis or provide a process which is technologically
comparable or as cost-effective as the process used by the Company's
current foundries. Other semiconductor companies pursuing outside wafer
fabrication may enter into supply contracts which guarantee certain
capacity to the semiconductor company, but require minimum purchase
commitments. To date, the Company has not committed itself to minimum
purchases although it does have supply contracts with two of its current
foundries. The Company's reliance on outside foundries involves several
other risks, including reduced control over delivery schedules, quality
assurance and costs.
It is not unusual in the semiconductor industry to experience
disruptions in the supply of processed wafers due to quality or yield
problems. For this reason the Company has historically maintained a high
inventory level of processed wafers. There can be no assurance that such
a material disruption in supply will not occur. Further, if the Company's
foundries are unable or unwilling to produce adequate supplies of
processed wafers, the Company's business would be adversely affected. In
such an event the Company would incur delay and expense to redesign its
circuits to be compatible with a new manufacturer's complementary metal-
oxide-silicon ("CMOS") process.
CYCLICAL NATURE OF SEMICONDUCTOR INDUSTRY. The semiconductor industry
has historically been characterized by repeated and severe business
cycles. The industry is characterized by a number of factors, including
fluctuation in user demand, price volatility, variations in manufacturing
capacity and efficiencies, rapid technological change and significant
process and product development. The Company expects that as it
introduces a broader range of products, including more standard or
commodity products, the cyclical nature of the semiconductor industry may
have greater impact on the Company's business and operating results in the
future and may cause greater fluctuations in the Company's period-to-
period performance.
COMPETITION. The semiconductor industry is intensely competitive and
is characterized by rapid technological change, product obsolescence,
fluctuations in both demand and capacity and price erosion. These factors
can render obsolete the processes and products currently utilized or
produced by the Company. In such cases, the Company will be required to
develop products utilizing new processes and may be required to establish
new foundry relationships. The Company faces competition from other
manufacturers of high-performance integrated circuits, many of which have
advanced technological capabilities, are currently increasing their
participation in the high-performance CMOS market and have internal wafer
fabrication capabilities. The ability of the Company to compete in this
rapidly evolving environment depends on elements both within and outside
the control of the Company. These elements include: the Company's
ability to develop new products in a timely manner; the cost effectiveness
of its manufacturing; successful introduction to and acceptance by
customers of new products; the speed at which customers incorporate the
Company's products into their systems; continued access to advanced
semiconductor foundries and leading edge CMOS process technology; the
number and capabilities of the Company's competitors as well as general
economic conditions. The Company experiences competition from a number of
domestic and international companies, most of which have substantially
greater financial, technical, manufacturing and marketing resources than
the Company. Emerging companies also are attempting to obtain a share of
the existing market. To the extent that the Company's products achieve
market acceptance, other manufacturers may seek to offer competitive
products or embark on pricing strategies which could have adverse effects
on the Company's operating results.
DEPENDENCE ON KEY PERSONNEL. The Company's continued success is
dependent in part upon a number of key management personnel and technical
employees, the loss of one or more of whom could adversely affect the
Company. The Company believes that its future success will depend in part
on its ability to attract, retain and motivate highly skilled employees,
who are in great demand in the semiconductor industry. The Company does
not have any employment agreements with any of its key employees.
DEPENDENCE ON SUBCONTRACT ASSEMBLY. The Company is dependent on
outside subcontract assembly for the assembly of the Company's products.
The Company's products are assembled by several independent subcontractors
in the United States and the Far East. Shortages of raw materials or
disruption in the provision of services by the Company's assembly
subcontractors, or other circumstances that would require the Company to
seek alternative sources of supply, could lead to constraints or delays in
the timely delivery of the Company's products. Such constraints or delays
could result in the loss of customers, reductions in the Company's
revenue, or other adverse effects on the Company's operating results. The
Company's reliance on subcontract assembly involves several other risks,
including reduced control over delivery schedules, quality assurance and
costs.
DEPENDENCE ON FEW CUSTOMERS. In 1995, three customers each accounted
for 10% or more of net revenues. The loss of any major customer or a
substantial reduction in sales from such a customer could adversely affect
the Company.
DEPENDENCE UPON INDEPENDENT DISTRIBUTORS AND SALES REPRESENTATIVES.
Much of the Company's sales are generated by electronics distributors and
independent sales representatives that are not under the direct control of
the Company. See "The Company." These electronics distributors generally
represent product lines offered by several companies, including
competitive product lines, and thus could reduce their sales efforts
applied to the Company's products or terminate their representation of the
Company.
CONTROL BY SHAREHOLDERS. Certain of the Company's shareholders
currently are able to exert a significant measure of control over the
affairs and policies of the Company if they act together.
VOLATILITY OF STOCK PRICE. There has been significant volatility in
the market price of securities of electronics companies in general, and
semiconductor technology companies in particular, including the Company.
Various factors and events, including announcements or developments by the
Company or other companies engaged in the semiconductor or related
industries concerning, among other things, suppliers, customers, financial
results, product developments, patents, or proprietary rights may have a
significant impact on the Company's business and on the market price of
the Common Stock.
IMPACT OF FUTURE SALES ON MARKET PRICE OF COMMON STOCK. Based on
6,221,750 shares outstanding (assuming exercise of all currently
outstanding options and warrants), the number of shares of Common Stock
offered hereby represents approximately 31% of the total number of shares
of Common Stock outstanding. The Selling Shareholders own 1,919,014
shares of Common Stock, including shares obtainable through the exercise
of the Warrants, all of which shares are being registered for sale
hereunder. See "Selling Shareholders" and "Plan of Distribution." If the
Selling Shareholders or the Company's other shareholders, under Rule 144
or otherwise, were to make available for sale or sell a large amount of
Common Stock in the market at one time, the market price of the Common
Stock could be adversely affected. Furthermore, other sales of
substantial amounts of the Company's Common Stock in the public market, or
even the potential for such sales, could adversely effect prevailing
market prices for the Company's Common Stock.
INTERNATIONAL TRADE AND CURRENCY EXCHANGE. Many of the materials and
manufacturing steps in the Company's products are supplied by foreign
companies. Also, approximately 20%, 18% and 19% of the Company's net
sales in 1995, 1994 and 1993, respectively, were to international
customers. Accordingly, both manufacturing and sales of the Company's
products may be adversely affected by political or economic conditions
abroad. The Company's international sales are billed in United States
dollars and therefore settlements are not directly subject to currency
exchange fluctuations. However, changes in the relative value of the
dollar may create pricing pressures for the Company's products. In
addition, various forms of protectionist trade legislation have been
proposed in the United States and certain foreign countries. A change in
current tariff structures or other trade policies could adversely affect
the Company's international customers or decrease the cost of products
from the Company's international competitors.
PROTECTION OF PROPRIETARY INFORMATION. The Company has been awarded
one patent by the United States Patent Office and has acquired additional
patents as part of its acquisition of certain assets of Star Semiconductor
Corporation ("Star"); however, the Company relies primarily on its design
know-how and continued access to advanced CMOS process technology, rather
than on patents, to develop and maintain its competitive position. There
can be no assurance that the Company will continue to have access to
advanced semiconductor process technology or that others will not develop,
patent or gain access to similar know-how and technology, or reverse
engineer the Company's products. The Company attempts to protect its
trade secrets and other proprietary information through confidentiality
agreements with employees, consultants, suppliers and customers, but there
can be no assurance that those measures will be adequate to protect the
Company's interests. Others in the semiconductor industry have obtained
patents covering a variety of semiconductor designs and processes, and the
Company has from time to time received and may in the future receive
notices from third parties asserting that one or more aspects or uses of
the Company's products is infringing such third parties' patent rights.
Presently there are no such claims pending against the Company. Although
the Company does not believe that it infringes any known patents at this
time, if any such infringement exists, the Company may be liable for
damages and may find it necessary or desirable to obtain licenses under
third parties' patents. Based on industry practice, the Company believes
that, in most cases, any necessary licenses could be obtained on
conditions that would not materially adversely affect the Company, but
there can be no assurances that such licenses could be obtained or that
litigation would not occur. The inability of the Company to obtain such
licenses or the occurrence of litigation could adversely affect the
Company.
THE COMPANY
Logic Devices Incorporated (the "Company") designs and markets high-
performance digital integrated circuits. The Company's circuits address
applications which require high computational speeds, high-reliability,
high levels of circuit integration (complexity) and low power consumption.
The Company's products are incorporated into products manufactured by OEMs
and utilized in high-speed electronic computational applications in
computers and work stations, broadcast and medical video image processing,
and telecommunication systems. The Company's product strategy is to
develop and market industry standard circuits which offer superior
performance, as well as Company proprietary circuits to meet specific
customer needs.
The Company currently offers products in two areas: (1) DSP (digital
signal processing) circuits consisting of high-performance arithmetic
computational functions (multipliers, arithmetic-logic units "ALUs",
special math functions applicable to digital signal processing
computations and programmable DSP multiple processor units); and (2) high-
speed SRAMs (static random access memories) including FIFO (first in/first
out) Memories. As of December 31, 1995, the Company offered 45 catalog
products which are sold to a diverse customer base. With the multiplicity
of packaging and performance options, the 45 basic products result in
nearly 800 catalog items.
The Company's plug compatible catalog products are designed to replace
existing industry standard integrated circuits offering superior
performance, lower power consumption and reduced cost. Proprietary
catalog products are developed by the Company to address specific
functional application needs or performance levels that are not otherwise
commercially available. The Company seeks to provide related groups of
circuits that OEMs purchase for incorporation into high-performance
electronic systems.
The Company relies on third party silicon foundries to process silicon
wafers, each wafer having up to several hundred integrated circuits of a
given Company design, from which finished products are then assembled.
The Company's strategy is to outsource wafer processing to third party
foundries in order to avoid the substantial investment in capital
equipment required to establish a wafer fabrication facility. The Company
works closely with the foundries in order to take advantage of their
processing capabilities and continues to explore and develop additional
foundry relationships in order to minimize its dependence on any single
relationship.
The Company markets its products worldwide through its own direct
sales force, a network of 34 national and international independent sales
representatives and 20 international and domestic distributors. In 1995,
approximately 45% of the Company's net revenues were derived from OEMs,
while sales through foreign and domestic distributors accounted for
approximately 55% of net revenues. Among the Company's OEM customers are
Bull HN, Solectron Corporation, Loral Systems, Inc., Abekas Video Systems,
Inc., IBM Corporation, General Dynamics Corporation, DSC Communications
Corporation, Advanced Technology Laboratories, Inc. and Acuson
Corporation. Approximately 80% of the Company's net revenues have
historically been derived from the United States and approximately 20%
have been derived from foreign sales.
The Company was incorporated under the laws of the State of California
in April 1983. The Company's principal offices are located at 628 East
Evelyn Avenue, Sunnyvale, California 94086, and its telephone number is
(408) 737-3300.
SUBSEQUENT EVENTS
The following events have occurred since December 31, 1995, which
updates information contained in the Company's Annual Report on Form 10-K
and Form 10-K/A for the fiscal year ended December 31, 1995 (the "1995
Annual Report"):
GRANT, EXERCISE AND TRANSFER OF WARRANTS. On February 15, 1995, the
non-employee directors of the Company were granted warrants to purchase an
aggregate of 220,000 shares of Common Stock. The grants were ratified by
shareholders of the Company at the Company's 1995 annual meeting of
shareholders held June 13, 1995. The warrants have an exercise price of
$2.5625 per share, which was the last reported transaction price of the
Common Stock on February 15, 1995, and expire on February 15, 2000. Two
of the Warrants representing an aggregate of 120,000 shares of Common
Stock were exercised in July, 1996 and the remaining Warrant has been
transferred to a non-director. The Company extended recourse loans for
the exercise price of the Warrants to the parties exercising the Warrants.
The shares of Common Stock received on the exercise also have been pledged
as security on such loans. The shares of Common Stock issued on exercise
of these Warrants and the shares underlying the remaining Warrant are
being registered herein. Certain other Warrants to purchase an aggregate
of 34,350 shares of Common Stock were issued by the Company in connection
with private placements conducted in August and September of 1995,
respectively. Under one transaction, a Warrant giving the holder the
right to purchase from the Company up to 31,850 shares of Common Stock at
an exercise price equal to $12.625 per share (the last reported
transaction price on August 21, 1995) was issued. The Warrant was
exercisable immediately upon its issuance and expires on August 21, 1998.
Under the other transaction, Warrants giving the holders the right to
purchase from the Company up to an aggregate of 2,500 shares of Common
Stock at an exercise price equal to $11.875 per share (the closing bid
price on September 14, 1995) were issued. These Warrants were exercisable
immediately upon their issuance and expire on September 19, 1998. The
shares underlying each of these Warrants are being registered herein. All
of the Warrants granted in these transactions are transferable by the
holders thereof in accordance with applicable securities laws.
ELECTION OF DIRECTORS. At the Company's annual meeting of
shareholders held August 1, 1996, a Board of five Directors was elected:
Howard L. Farkas, Burton W. Kanter, Bruce B. Lusignan, Albert Morrison,
Jr. and William J. Volz. Dr. Lusignan is a new member to the Company's
Board of Directors and is Director of the Communications Satellite
Planning Center, a research laboratory of Stanford University's Electrical
Engineering Department. The other four members have been Directors since
1983 and Mr. Volz is the Company's President and Chief Operating Officer.
LEASE OF SPACE. The Company recently signed a lease with respect to
premises located at 1320 Orleans Drive, Sunnyvale, California and expects
to take possession of the premises on December 2, 1996. The lease has a
six year term beginning upon the Company taking possession of the
premises. The premises consist of approximately 21,500 square feet and
will house the Company's main corporate offices and facilities for the
Company's research and development efforts, engineering, testing and
assembly of its semiconductor products. The lease is triple net and the
monthly base rent will be approximately $26,300.00 for each of the first
12 months of the lease increasing thereafter in accordance with the
Consumer Price Index on the basis set forth in the lease. The Company
believes that the premises will be sufficient to meet its needs both
currently and for the term of the lease.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of any of the
Offered Securities by the Selling Shareholders. The Company will receive
proceeds from the sale of Common Stock issuable upon exercise of the
Warrants if such Warrants are exercised, but only in an amount equal to
the exercise price thereof multiplied by the number of shares purchased
upon the exercise of the Warrants. If all the Warrants are exercised, the
Company would receive net proceeds of $688,043.75. The Company expects to
use any such proceeds for working capital and general corporate purposes.
SELLING SHAREHOLDERS
The following table sets forth additional information as of November
21, 1996, regarding the Selling Shareholders' ownership of Common Stock:
NUMBER OF
NUMBER SHARES SHARES
OF COVERED NOT COVERED
NAME OF SHARES BY THIS BY THIS
RECORD OWNER OWNED PROSPECTUS PROSPECTUS
Aries Peak, Inc.(1) 1,250(2) 1,250 0
BRT Partnership(3) 319,482 319,482 0
CIBC Trust Company (Bahamas)
Limited, as Trustee 100,000(2) 100,000 0
Farkas, Howard(4) 100,000 100,000 0
First Bermuda Securities
Limited(1) 31,850(2) 31,850 0
Hellerstein, Stephen,
as Trustee(5) 749,305 749,350 0
Kanter Family Foundation(6) 50,000 50,000 0
Morrison, Albert, Jr.(7) 20,877 20,877 0
Pacific Miners Ltd.(1) 1,250(2) 1,250 0
Walnut Capital Corp.(8) 45,000 45,000 0
Windy City, Inc.(9) 500,000 500,000 0
TOTAL 1,919,014 1,919,014 0
(1) Placement agent for certain shares of Company common stock
during 1995.
(2) Represents shares obtainable through Warrant exercise.
(3) An Illinois general partnership, the partners of which are 25
irrevocable trusts of which Solomon A. Weisgal is the sole
trustee, held for the benefit of various members of Burton
Kanter's extended family but excluding Mr. Kanter. Mr. Kanter is a
director of the Company.
(4) Mr. Farkas is a director of the Company.
(5) Mr. Hellerstein is the Trustee of 15 irrevocable trusts, the
beneficiaries of which consist of Mr. Farkas and members of
his family.
(6) The Kanter Family Foundation is a non-profit, charitable
foundation, the directors of which are Mr. Morrison, a
director of the Company, and sons of Mr. Kanter and the
officers of which are members of Mr. Kanter's family.
(7) Mr. Morrison is a director of the Company.
(8) Mr. Kanter is a director and the Chief Executive Officer of
Walnut Capital Corp.
(9) The BRT Partnership owns 100% of the outstanding common
stock of Windy City, Inc. which constitutes all of the
currently outstanding voting stock of Windy City, Inc.
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time by the Selling
Shareholders or their pledgees, donees, transferees or other successors in
interest in one or more transactions at a fixed offering price, at varying
prices determined at the time of sale or at negotiated prices. Such sales
may be made to purchasers directly by the Selling Shareholders (or their
pledgees, donees, transferees or other successors in interest) or,
alternatively, the Selling Shareholders (or their pledgees, donees,
transferees or other successors in interest) may offer the Offered
Securities, pursuant to Registration Statement of which this Prospectus is
a part or Rule 144 of the Securities Act, through underwriters, dealers,
brokers or agents, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling
Shareholders (or their pledgees, donees, transferees or other successors
in interest) and/or the purchasers of the Offered Securities for whom they
may act as agents. In effecting sales of Offered Securities, brokers or
dealers may arrange for other brokers or dealers to participate. Such
brokers or dealers and any other participating brokers or dealers may be
deemed to be underwriters within the meaning of the Securities Act in
connection with such sales. Sales of Common Stock may be made through
Nasdaq or otherwise at prices and at terms then prevailing or in
negotiated transactions.
The Company has agreed to indemnify the Selling Shareholders against
certain liabilities in connection with the distribution of the Offered
Securities, including liabilities under the Securities Act. Under
agreements that may be entered into by the Selling Shareholders, brokers
or dealers who participate in the distribution of the Offered Securities
may be entitled to indemnification by the Selling Shareholders and the
Company against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the Offered Securities has been passed upon by Barack,
Ferrazzano, Kirschbaum & Perlman, Chicago, Illinois.
EXPERTS
The financial statements and the related supplemental schedules
incorporated into this Prospectus by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, as amended, have
been so incorporated in reliance upon the report of Meredith, Cardozo &
Lanz LLP, independent accountants, given upon the authority of said firm as
experts in auditing and accounting.
<PAGE>
NO DEALER, SALESPERSON OR
OTHER INDIVIDUAL HAS BEEN
AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED
IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS.
IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN
OFFER TO BUY, THE COMMON STOCK
IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE ANY SUCH
OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT
BEEN ANY CHANGE IN THE FACTS
SET FORTH IN THIS PROSPECTUS
OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
Available Information 2
Documents Incorporated By
Reference 2
Risk Factors 3
The Company 6
Subsequent Events 7
Use of Proceeds 8
Selling Shareholders 8
Plan of Distribution 9
Legal Matters 9
Experts 9
LOGIC DEVICES
INCORPORATED
1,919,014 Shares of
Common Stock
___________________
PROSPECTUS
___________________
______________, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses for distribution to be
incurred in connection with the issuance and distribution of the
securities being registered.
Registration Fee $ 1,257.00
Legal Fees and Expenses $ 10,000.00
Accounting Fees and Expenses $ 500.00
Miscellaneous $ 234.00
Total $ 12,000.00
All expenses are estimated except the Registration Fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Articles of Incorporation and Bylaws require the
Registrant to indemnify officers and directors of the Registrant to the full
extent permitted by Section 317 of the California General Corporation Law.
Section 317 of the California General Corporation law makes provisions for
the indemnification of officers, directors and other corporate agents in
terms sufficiently broad to indemnify such persons, under certain
circumstances, for liabilities (including reimbursement of expenses incurred)
arising under the Securities Act.
ITEM 16. EXHIBITS
Exhibit
NO. DESCRIPTION
3.1* Articles of Incorporation of Logic Devices Incorporated,
as amended. Incorporated by reference to Ex. 3.1 of the
Registrant's Form S-18 Registration Statement (File No.
33-23763-LA)
3.2* Bylaws of Logic Devices Incorporated. Incorporated by
reference to Ex. 3.2 of the Registrant's Form S-18
Registration Statement (File No. 33-23763-LA)
4.1* Form of certificate for shares of the Company's Common
Stock. Incorporated by reference to Exhibit 1.1 of the
Amendment No. 1 on Form 8 to Application or Report Filed
Pursuant to Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934, dated October 4, 1988 (File No. 0-
17187)
5.1 Opinion Letter of Barack, Ferrazzano, Kirschbaum & Perlman
regarding the validity of the securities being registered
10.1 Assignment of Warrant to purchase an aggregate of 100,000
shares of Common Stock
10.2* Form of Warrant to purchase an aggregate of 31,850 shares
of Common Stock. Incorporated by reference to Exhibit 4.2
of the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995 (File No. 0-17187)
10.3* Form of Warrant to purchase an aggregate of 2,500 shares
of Common Stock. Incorporated by reference to Exhibit 4.1
of the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995 (File No. 0-17187)
10.4 Secured Promissory Note between Howard Farkas and the
Registrant
10.5 Secured Promissory Note between Albert Morrison, Jr. and
the Registrant
10.6* Real Estate Lease. Incorporated by reference to Exhibit
10.1 of the Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1996 (File No. 0-17187)
23.1 Consent of Barack, Ferrazzano, Kirschbaum & Perlman
(included in Exhibit 5.1)
23.2 Consent of Meredith Cardozo & Lanz LLP
24.1 Powers of Attorney (included on signature page)
* Previously filed
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sunnyvale, State of California, on November 21,
1996.
LOGIC DEVICES INCORPORATED
By:/S/ WILLIAM J. VOLZ
William J. Volz
President and Director
By:/S/ TODD J. ASHFORD
Todd J. Ashford
Chief Financial Officer
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears
below constitutes and appoints William J. Volz and Todd J. Ashford, and each
of them, his true and lawful attorney-in-fact and agent, each with full power
of substitution and re-substitution, for him and in his name, place and
stead, in any and all capacities (including in his capacity as a director or
officer of Logic Devices Incorporated) to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or any of them, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by each of following persons in the
capacities indicated on November 19, 1996.
SIGNATURE TITLE
/S/ HOWARD L. FARKAS Chairman of the Board
Howard L. Farkas
/S/ BURTON W. KANTER Director
Burton W. Kanter
/S/ ALBERT MORRISON, JR. Director
Albert Morrison, Jr.
/S/ BRUCE B. LUSIGNAN Director
Bruce B. Lusignan
/S/ WILLIAM J. VOLZ President and Director
William J. Volz (Principal Executive Officer)
/S/ TODD J. ASHFORD Chief Financial Officer (Principal
Todd J. Ashford Financial and Accounting Officer)
<PAGE>
LOGIC DEVICES INCORPORATED
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS SEQUENTIALLY
NUMBERED
PAGE OF
EXHIBIT
3.1* Articles of Incorporation of Logic Devices Incorporated, as amended.
Incorporated by reference to Ex. 3.1 of the Registrant's Form S-18
Registration Statement (File No. 33-23763-LA)
3.2* Bylaws of Logic Devices Incorporated. Incorporated by reference to
Ex. 3.2 of the Registrant's Form S-18 Registration Statement (File No.
33-23763-LA)
4.1* Form of certificate for shares of the Company's Common Stock.
Incorporated by reference to Exhibit 1.1 of the Amendment No. 1 on
Form 8 to Application or Report Filed Pursuant to Section 12, 13 or
15(d) of the Securities Exchange Act of 1934, dated October 4, 1988
(File No. 0-17187)
5.1 Opinion Letter of Barack, Ferrazzano, Kirschbaum & Perlman regarding
the validity of the securities being registered
10.1 Assignment of Warrant to purchase an aggregate of 100,000 shares of
Common Stock
10.2* Form of Warrant to purchase an aggregate of 31,850 shares of Common
Stock. Incorporated by reference to Exhibit 4.2 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1995
(File No. 0-17187)
10.3* Form of Warrant to purchase an aggregate of 2,500 shares of Common
Stock. Incorporated by reference to Exhibit 4.1 of the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1995
(File No. 0-17187)
10.4 Secured Promissory Note between Howard Farkas and the Registrant
10.5 Secured Promissory Note between Albert Morrison, Jr. and the
Registrant
10.6* Real Estate Lease. Incorporated by reference to Exhibit 10.1 of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 (File No. 0-17187)
23.1 Consent of Barack, Ferrazzano, Kirschbaum & Perlman (included as part
of Exhibit 5)
23.2 Consent of Meredith Cardozo & Lanz LLP
24.1 Powers of Attorney (included on signature page)
* Previously filed
<PAGE>
Exhibit 5.1
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
333 WEST WACKER DRIVE, SUITE 2700
CHICAGO, ILLINOIS 60606
TELEPHONE: (312) 984-3100
FAX: (312) 984-3150
November 21, 1996
Logic Devices Incorporated
628 East Evelyn Avenue
Sunnyvale, California 94086
Ladies and Gentlemen:
We have acted as counsel to Logic Devices Incorporated (the "Corporation") in
connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement") to be filed on or about November 21, 1996, with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to 1,784,664 shares (the
"Securities") of common stock, no par value, of the Corporation and 134,350
shares of common stock underlying currently issued and outstanding warrants,
all of which are held by various parties as set forth in the Registration
Statement.
We have examined original or photostatic or certified copies of such records
of the Corporation, including its Restated Articles of Incorporation and
bylaws, certificates of officers of the Corporation and of public officials
and such other documents as we have deemed relevant and necessary as the
basis for the basis for the opinions set forth below. In such examination,
we have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as photostatic or certified copies and the
authenticity of the originals of such copies. We have also made inquiries of
officers and employees of the Corporation and of such others as deemed
necessary for purposes of this opinion.
While we have reviewed the California General Corporation Law, we call your
to the fact that our firm only requires lawyers to be qualified to practice
law in the State of Illinois and, in rendering the following opinions, we
assume such statute will be construed and interpreted in a fashion comparable
to that of the Illinois Business Corporation Act.
Based upon such examination and inquiries and subject to the assumptions
stated, we are of the opinion that the Securities are legally issued, fully
paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
BARACK, FERRAZZANO, KIRSCHBAUM & PERLMAN
<PAGE>
Exhibit 10.1
ASSIGNMENT OF WARRANT
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Burton W. Kanter ("ASSIGNOR") hereby grants, sells,
conveys, transfers, delivers and assigns to CIBC Trust Company (Bahamas)
Limited, as Trustee, whose address is P.O. N03933 Shirley Street Nassau,
Bahamas ("ASSIGNEE"), all of Assignor's right, title and interest in, to and
under that certain Warrant dated as of February 15, 1995, and hereby appoints
________________ and does hereby irrevocably constitute and appoint
__________ to transfer said Warrant on the books of the within named
Corporation with full power of substitution.
Dated: February 29, 1996
Burton W. Kanter
PAGE>
SECURED
PROMISSORY NOTE
$256,250.00 U.S.D. July 24, 1996
Sunnyvale, California
FOR VALUE RECEIVED, the undersigned promises to pay to the order of Logic
Devices Incorporated, a California corporation ("Payee"), in lawful money of
the United States of America or as provided in Section 1 of Paragraph B.
below, in the manner and at the times provided hereinafter, (i) Principal (as
hereinafter defined); (ii) Interest (as hereinafter defined) and Default
Interest (as hereinafter defined), if any; and (iii) all other amounts due
and payable pursuant to and in accordance with the terms of this Note.
A. DEFINITIONS.
The following terms as used herein shall have the following meanings:
1. "Default Interest" shall mean interest computed at the Reference Rate,
as defined below, plus two percent (2%) per annum, on (i) the entire
principal balance of this Note from time to time unpaid from and after such
amount becomes due and payable (whether by maturity, acceleration or
otherwise), and (ii) any and all other unpaid amounts due pursuant to the
terms and provisions of this Note (including, but not limited to, accrued but
unpaid Interest) from and after the respective date(s) on which those amounts
become due and payable, whether by maturity, acceleration, or otherwise; in
each case from and after any applicable grace period has expired. Default
Interest shall be adjusted concurrently with any change in the Reference
Rate. Default Interest shall be computed for the actual number of days
elapsed, predicated on a year consisting of three hundred and sixty (360)
days, and shall be payable on demand. Notwithstanding anything to the
contrary contained herein, for any period in which Default Interest is
accruing on the entire unpaid principal balance hereunder, Interest shall not
accrue.
2. "Interest" shall mean interest computed at a variable rate equal to
the Reference Rate on the entire principal balance of this Note from time to
time unpaid. Interest shall be adjusted concurrently with any change in the
Reference Rate. Interest shall be computed on the actual number of days
elapsed, predicated on a year consisting of three hundred and sixty (360)
days.
3. "Maturity Date" shall mean July 24, 1998.
4. "Principal" shall mean Two Hundred Fifty Six Thousand Two Hundred
Fifty and no/100 Dollars ($256,250.00) or so much thereof as may from time to
time be outstanding hereunder.
5. "Reference Rate" shall mean that rate which is quoted, published or
announced from time to time by Sanwa Bank California as its reference or
equivalent rate of interest.
B. MANNER OF PAYMENT; MATURITY.
1. MANNER OF PAYMENT. At the election of the undersigned, payment of
principal, Interest, Default Interest and any other amounts due hereunder can
be made: (a) in lawful money of the United States of America; or (b) by
surrendering to the Payee such number of shares of the Pledged Securities, as
defined in Paragraph D below, having a market value equal to the amount of
the payment; or (c) any combination thereof. Market value shall be
determined by reference to the average of the closing bid and ask prices for
the Pledged Securities over the five (5) trading days immediately prior to
the date of payment.
2. INTEREST ACCRUAL. Interest shall accrue commencing on the date hereof
on the Principal and shall be payable, in arrears, semi-annually on the first
day of February and August beginning February 1, 1997.
3. OTHER; MATURITY. Default Interest shall be payable on demand. All
outstanding and unpaid Principal and Interest shall be due and payable on the
Maturity Date, unless otherwise specified herein or unless accelerated in
accordance with the terms or provisions hereof.
C. PREPAYMENT.
This Note may be prepaid, in whole or in part, at any time by the
undersigned without premium or penalty. Any prepayment pursuant to this
Paragraph C shall be accompanied by payment of any Interest and Default
Interest, if any, accrued and unpaid through the date of such prepayment.
D. PLEDGED SECURITIES.
To secure payment of the obligations hereunder, the undersigned hereby
pledges to Payee and grants to Payee a security interest in, the securities
listed on EXHIBIT A attached hereto and made a part hereof (the "Pledged
Securities") and the certificates and instruments evidencing the Pledged
Securities, and all dividends, cash, payments, instruments and other property
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the Pledged Securities. All certificates or
instruments evidencing the Pledged Securities shall be delivered to and held
by or on behalf of Payee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignments in blank, all in form and substance satisfactory to
Payee. Payee shall have the right, but not the obligation, at any time to
exchange certificates or instruments representing or evidencing the Pledged
Securities for certificates or instruments distributed by issuer(s) thereof
to holders of its stock in exchange for certificates or instruments
representing such stock. Payee shall have the right, but not the obligation,
upon the occurrence of a default and without notice to the undersigned, to
transfer to or to register in the name of Payee or any of its nominees any or
all of the Pledged Securities, and, if it so elects and upon five (5)
business days prior written notice to the undersigned, the Payee shall retain
such number of Pledged Securities as have a market value, as calculated in
Section 1 of Paragraph B above, equal to the amount owed to the Payee by the
undersigned. If the aggregate market value of the Pledged Securities exceeds
the amount due to the Payee, the shares remaining, after retention by the
Payee of such number of the shares necessary to satisfy the obligations of
the undersigned to the Payee, will be promptly returned to the undersigned.
If the aggregate market value of the Pledged Securities does not exceed the
amount due to the Payee, the undersigned will remain liable to the Payee for
the difference between the aggregate market value and the amount due to the
Payee. The undersigned may, prior to expiration of the five (5) business
days written notice received from the Payee, repurchase same from Payee at a
price equal to all amounts then due from the undersigned to Payee.
SECPRONT.HLF
(ddx-logc)
<PAGE>
E. ACCELERATION.
Notwithstanding anything to the contrary contained herein, upon the
occurrence of any one or more of: (i) a default in the payment of any amounts
due hereunder and a failure to cure such default within seven (7) business
days (without the need for written or other notice of any sort of such
default from Payee to the undersigned), occurring on or prior to the Maturity
Date, or (ii) any other default hereunder, and the expiration of any grace
period applicable to any such default as set forth herein; then at the sole
option and discretion of Payee, and without further demand or notice of any
kind, the following shall become immediately due and payable:
1. the principal sum remaining unpaid hereunder;
2. unpaid Interest;
3. Default Interest; and
4. all other indebtedness evidenced by this Note.
F. DEFAULT.
The following shall constitute events of default hereunder: (i) a default
in the payment of any amounts due hereunder, and a failure to cure such
default within seven (7) business days (without the need for written or other
notice of any sort of such default from Payee to the undersigned), occurring
on or prior to the Maturity Date; (ii) the assignment for the benefit of
creditors by the undersigned; (iii) the application for the appointment of a
receiver for the undersigned or for property of the undersigned; (iv) the
filing of a petition in bankruptcy by or against the undersigned; (v) the
issuance of an attachment or the entry of a judgement against the
undersigned; (vi) a default by the undersigned with respect to any other
indebtedness due to Payee; (vii) if the undersigned is not a natural person,
the merger, consolidation, termination of existence, dissolution or
insolvency of the undersigned; or (viii) the good faith determination by
Payee that it deems itself insecure or that a material adverse change in the
financial condition of the undersigned has occurred since the date hereof and
that Payee's prospect of payment hereunder has been impaired.
G. REMEDIES.
If the undersigned fails to pay any amounts when due hereunder, whether by
maturity, acceleration or otherwise, or if there occurs any event which
entitles Payee to accelerate the indebtedness due under this Note and any
grace period applicable to any such failure to pay or event as set forth
herein expires, then Payee shall have all of the rights and remedies provided
to it at law or in equity. The remedies of Payee, as provided herein, shall
be cumulative and concurrent, and may be pursued singularly, successively, or
together, at the sole discretion of Payee, and may be exercised as often as
occasion therefor shall arise. Without limiting the foregoing, the Payee
may, at its option, resort to the remedy set forth in Paragraph D above (with
respect to retaining such number of shares of the Pledged Securities having a
market value equal to the amounts due hereunder). A waiver or release with
reference to any one event shall not be construed as continuing, as a bar to,
or as a waiver or release of, any subsequent right, remedy, or recourse as to
a subsequent event. Payee may resort for payment hereunder to any of the
security for, or any guaranty of, this Note whether or not Payee shall have
resorted for payment hereunder to any other security for or guaranty of this
Note. No act or omission of Payee, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of the same, such waiver or release to be effected only through a
written document executed by Payee and then only to the extent specifically
recited therein. If this Note is placed in the hands of an attorney for
collection or is collected on advice of counsel or through any legal
proceeding, the undersigned promises to pay, to the extent permitted by law,
court costs and reasonable attorneys' fees incurred by Payee. The
undersigned hereby waives presentment, demand, notice of dishonor or
nonpayment, protest and notice of protest in connection herewith.
H. MISCELLANEOUS.
1. If any provision of this Note is unenforceable, invalid or contrary to
law, or its inclusion herein would affect the validity, legality or
enforcement of this Note, such provision shall be limited to the extent
necessary to render the same valid or shall be excised from this Note, as the
circumstances require, and this Note shall be construed as if said provision
had been incorporated herein as so limited or as if said provision had not
been included herein, as the case may be.
2. Time is of the essence of this Note.
3. After the Maturity Date or following the occurrence of an event which
entitles Payee to accelerate the indebtedness evidenced hereby, all payments
received on account of the indebtedness evidenced hereby shall be applied, in
whatever order, combination and amounts as Payee, in its sole and absolute
discretion, decides, to all costs, expenses, and other indebtedness, if any,
owing to Payee by reason of this Note; Default Interest; Interest; and
principal.
4. This Note, and the terms and provisions hereof, shall be binding upon
the undersigned and his successors, administrators, and assigns, and shall
inure to the benefit of any holder hereof.
5. All amounts due hereunder shall be paid without deduction, set-off or
counterclaim, the undersigned expressly waiving any such rights to deduction,
set-off or counterclaim.
6. Notwithstanding any provision to the contrary contained in this Note
or in any of the other documents or instruments referred to in this Note, if
at any time or times the interest and any sums considered for such purpose to
be interest, payable under or by reason of this Note or any such other
documents or instruments, should exceed the maximum which, by the laws of the
State having jurisdiction, may be charged with respect to the loan evidenced
hereby, given the nature and all of the pertinent circumstances of such loan,
then all such sums in excess of such maximum shall be deemed not to be
interest, but rather to be payments on account of principal, and without
further agreement of the parties shall be so applied without regard to any
other provision of this Note, provided that Payee may elect instead that no
sums shall be payable in excess of such maximum, whereupon this Note and such
other documents and instruments shall be deemed amended accordingly without
further action by any party.
7. This Note shall inure to the benefit of Payee and its successors and
assigns. This Note has been negotiated and delivered at Sunnyvale,
California, and shall be governed by and construed in accordance with the
internal laws of the State of California without reference to (i) its
judicially or statutorily pronounced rules regarding conflict of laws or
choice of law; (ii) where any instrument is executed or delivered; (iii)
where any payment or other performance required by any such instrument is
made or required to be made; (iv) where any breach of any provision of any
such instrument occurs, or any cause of action otherwise accrues; (v) where
any action or other proceeding is instituted or pending; (vi) the
nationality, citizenship, domicile, principal place of business, or
jurisdiction or organization or domestication of any party; (vii) whether the
laws of the forum jurisdiction otherwise would apply the laws of a
jurisdiction other than the State of California; or (viii) any combination of
the foregoing. As a further inducement to Payee to advance funds as
contemplated hereby, the undersigned recognizes that Payee's principal office
is located in Sunnyvale, California and that Payee may be irreparably harmed
if required to institute or defend any actions against the undersigned in any
jurisdiction other than the Northern District of California or Santa Clara
County, California; therefore, the undersigned irrevocably (a) agrees that
any suit, action or other legal proceeding relating to this Note and/or the
loan evidenced hereby may be brought in state court in Santa Clara County or
in federal court in the Northern District of California, at Payee's option;
(b) consents to the jurisdiction of each such court in any such suit, action
or proceeding; (c) waives any objection which the undersigned may have to the
laying of venue in any such suit, action or proceeding in either such court;
(d) agrees to join Payee in any petition for removal to either such court
brought by Payee; (e) consents to service of process by U.S. mail; and (f)
expressly and voluntarily waives any right to trial by jury, whether arising
under the California constitution, any rules of the California Code of Civil
Procedure, common law or otherwise, in any such proceeding. The aforesaid
means of obtaining personal jurisdiction and perfecting service of process
are not intended to be exclusive but are cumulative and in addition to all
other means thereof or hereafter provided by applicable law.
8. The undersigned will upon demand pay to Payee the amount of any and
all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which Payee may incur in connection
with (i) the administration of this Note, (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Securities, (iii) the exercise or enforcement of any of the rights of
Payee hereunder or (iv) the failure by the undersigned to perform or observe
any of the provisions hereof.
Signature
HOWARD L. FARKAS
Print Name
<PAGE>
EXHIBIT A
PLEDGED SECURITIES
100,000 shares of common stock, no par value, of Logic Devices
Incorporated.
<PAGE>
SECURED
PROMISSORY NOTE
$51,250.00 U.S.D. July 24, 1996
Sunnyvale, California
FOR VALUE RECEIVED, the undersigned promises to pay to the order of Logic
Devices Incorporated, a California corporation ("Payee"), in lawful money of
the United States of America or as provided in Section 1 of Paragraph B.
below, in the manner and at the times provided hereinafter, (i) Principal (as
hereinafter defined); (ii) Interest (as hereinafter defined) and Default
Interest (as hereinafter defined), if any; and (iii) all other amounts due
and payable pursuant to and in accordance with the terms of this Note.
A. DEFINITIONS.
The following terms as used herein shall have the following meanings:
1. "Default Interest" shall mean interest computed at the Reference Rate,
as defined below, plus two percent (2%) per annum, on (i) the entire
principal balance of this Note from time to time unpaid from and after such
amount becomes due and payable (whether by maturity, acceleration or
otherwise), and (ii) any and all other unpaid amounts due pursuant to the
terms and provisions of this Note (including, but not limited to, accrued but
unpaid Interest) from and after the respective date(s) on which those amounts
become due and payable, whether by maturity, acceleration, or otherwise; in
each case from and after any applicable grace period has expired. Default
Interest shall be adjusted concurrently with any change in the Reference
Rate. Default Interest shall be computed for the actual number of days
elapsed, predicated on a year consisting of three hundred and sixty (360)
days, and shall be payable on demand. Notwithstanding anything to the
contrary contained herein, for any period in which Default Interest is
accruing on the entire unpaid principal balance hereunder, Interest shall not
accrue.
2. "Interest" shall mean interest computed at a variable rate equal to
the Reference Rate on the entire principal balance of this Note from time to
time unpaid. Interest shall be adjusted concurrently with any change in the
Reference Rate. Interest shall be computed on the actual number of days
elapsed, predicated on a year consisting of three hundred and sixty (360)
days.
3. "Maturity Date" shall mean July 24, 1998.
4. "Principal" shall mean Fifty One Thousand Two Hundred Fifty and no/100
Dollars ($51,250.00) or so much thereof as may from time to time be
outstanding hereunder.
5. "Reference Rate" shall mean that rate which is quoted, published or
announced from time to time by Sanwa Bank California as its reference or
equivalent rate of interest.
B. MANNER OF PAYMENT; MATURITY.
1. MANNER OF PAYMENT. At the election of the undersigned, payment of
principal, Interest, Default Interest and any other amounts due hereunder can
be made: (a) in lawful money of the United States of America; or (b) by
surrendering to the Payee such number of shares of the Pledged Securities, as
defined in Paragraph D below, having a market value equal to the amount of
the payment; or (c) any combination thereof. Market value shall be
determined by reference to the average of the closing bid and ask prices for
the Pledged Securities over the five (5) trading days immediately prior to
the date of payment.
2. INTEREST ACCRUAL. Interest shall accrue commencing on the date hereof
on the Principal and shall be payable, in arrears, semi-annually on the first
day of February and August beginning February 1, 1997.
3. OTHER; MATURITY. Default Interest shall be payable on demand. All
outstanding and unpaid Principal and Interest shall be due and payable on the
Maturity Date, unless otherwise specified herein or unless accelerated in
accordance with the terms or provisions hereof.
C. PREPAYMENT.
This Note may be prepaid, in whole or in part, at any time by the
undersigned without premium or penalty. Any prepayment pursuant to this
Paragraph C shall be accompanied by payment of any Interest and Default
Interest, if any, accrued and unpaid through the date of such prepayment.
D. PLEDGED SECURITIES.
To secure payment of the obligations hereunder, the undersigned hereby
pledges to Payee and grants to Payee a security interest in, the securities
listed on EXHIBIT A attached hereto and made a part hereof (the "Pledged
Securities") and the certificates and instruments evidencing the Pledged
Securities, and all dividends, cash, payments, instruments and other property
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the Pledged Securities. All certificates or
instruments evidencing the Pledged Securities shall be delivered to and held
by or on behalf of Payee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignments in blank, all in form and substance satisfactory to
Payee. Payee shall have the right, but not the obligation, at any time to
exchange certificates or instruments representing or evidencing the Pledged
Securities for certificates or instruments distributed by issuer(s) thereof
to holders of its stock in exchange for certificates or instruments
representing such stock. Payee shall have the right, but not the obligation,
upon the occurrence of a default and without notice to the undersigned, to
transfer to or to register in the name of Payee or any of its nominees any or
all of the Pledged Securities, and, if it so elects and upon five (5)
business days prior written notice to the undersigned, the Payee shall retain
such number of Pledged Securities as have a market value, as calculated in
Section 1 of Paragraph B above, equal to the amount owed to the Payee by the
undersigned. If the aggregate market value of the Pledged Securities exceeds
the amount due to the Payee, the shares remaining, after retention by the
Payee of such number of the shares necessary to satisfy the obligations of
the undersigned to the Payee, will be promptly returned to the undersigned.
If the aggregate market value of the Pledged Securities does not exceed the
amount due to the Payee, the undersigned will remain liable to the Payee for
the difference between the aggregate market value and the amount due to the
Payee. The undersigned may, prior to expiration of the five (5) business
days written notice received from the Payee, repurchase same from Payee at a
price equal to all amounts then due from the undersigned to Payee.
E. ACCELERATION.
Notwithstanding anything to the contrary contained herein, upon the
occurrence of any one or more of: (i) a default in the payment of any amounts
due hereunder and a failure to cure such default within seven (7) business
days (without the need for written or other notice of any sort of such
default from Payee to the undersigned), occurring on or prior to the Maturity
Date, or (ii) any other default hereunder, and the expiration of any grace
period applicable to any such default as set forth herein; then at the sole
option and discretion of Payee, and without further demand or notice of any
kind, the following shall become immediately due and payable:
1. the principal sum remaining unpaid hereunder;
2. unpaid Interest;
3. Default Interest; and
4. all other indebtedness evidenced by this Note.
F. DEFAULT.
The following shall constitute events of default hereunder: (i) a default
in the payment of any amounts due hereunder, and a failure to cure such
default within seven (7) business days (without the need for written or other
notice of any sort of such default from Payee to the undersigned), occurring
on or prior to the Maturity Date; (ii) the assignment for the benefit of
creditors by the undersigned; (iii) the application for the appointment of a
receiver for the undersigned or for property of the undersigned; (iv) the
filing of a petition in bankruptcy by or against the undersigned; (v) the
issuance of an attachment or the entry of a judgement against the
undersigned; (vi) a default by the undersigned with respect to any other
indebtedness due to Payee; (vii) if the undersigned is not a natural person,
the merger, consolidation, termination of existence, dissolution or
insolvency of the undersigned; or (viii) the good faith determination by
Payee that it deems itself insecure or that a material adverse change in the
financial condition of the undersigned has occurred since the date hereof and
that Payee's prospect of payment hereunder has been impaired.
G. REMEDIES.
If the undersigned fails to pay any amounts when due hereunder, whether by
maturity, acceleration or otherwise, or if there occurs any event which
entitles Payee to accelerate the indebtedness due under this Note and any
grace period applicable to any such failure to pay or event as set forth
herein expires, then Payee shall have all of the rights and remedies provided
to it at law or in equity. The remedies of Payee, as provided herein, shall
be cumulative and concurrent, and may be pursued singularly, successively, or
together, at the sole discretion of Payee, and may be exercised as often as
occasion therefor shall arise. Without limiting the foregoing, the Payee
may, at its option, resort to the remedy set forth in Paragraph D above (with
respect to retaining such number of shares of the Pledged Securities having a
market value equal to the amounts due hereunder). A waiver or release with
reference to any one event shall not be construed as continuing, as a bar to,
or as a waiver or release of, any subsequent right, remedy, or recourse as to
a subsequent event. Payee may resort for payment hereunder to any of the
security for, or any guaranty of, this Note whether or not Payee shall have
resorted for payment hereunder to any other security for or guaranty of this
Note. No act or omission of Payee, including specifically any failure to
exercise any right, remedy or recourse, shall be deemed to be a waiver or
release of the same, such waiver or release to be effected only through a
written document executed by Payee and then only to the extent specifically
recited therein. If this Note is placed in the hands of an attorney for
collection or is collected on advice of counsel or through any legal
proceeding, the undersigned promises to pay, to the extent permitted by law,
court costs and reasonable attorneys' fees incurred by Payee. The
undersigned hereby waives presentment, demand, notice of dishonor or
nonpayment, protest and notice of protest in connection herewith.
H. MISCELLANEOUS.
1. If any provision of this Note is unenforceable, invalid or contrary to
law, or its inclusion herein would affect the validity, legality or
enforcement of this Note, such provision shall be limited to the extent
necessary to render the same valid or shall be excised from this Note, as the
circumstances require, and this Note shall be construed as if said provision
had been incorporated herein as so limited or as if said provision had not
been included herein, as the case may be.
2. Time is of the essence of this Note.
3. After the Maturity Date or following the occurrence of an event which
entitles Payee to accelerate the indebtedness evidenced hereby, all payments
received on account of the indebtedness evidenced hereby shall be applied, in
whatever order, combination and amounts as Payee, in its sole and absolute
discretion, decides, to all costs, expenses, and other indebtedness, if any,
owing to Payee by reason of this Note; Default Interest; Interest; and
principal.
4. This Note, and the terms and provisions hereof, shall be binding upon
the undersigned and his successors, administrators, and assigns, and shall
inure to the benefit of any holder hereof.
5. All amounts due hereunder shall be paid without deduction, set-off or
counterclaim, the undersigned expressly waiving any such rights to deduction,
set-off or counterclaim.
6. Notwithstanding any provision to the contrary contained in this Note
or in any of the other documents or instruments referred to in this Note, if
at any time or times the interest and any sums considered for such purpose to
be interest, payable under or by reason of this Note or any such other
documents or instruments, should exceed the maximum which, by the laws of the
State having jurisdiction, may be charged with respect to the loan evidenced
hereby, given the nature and all of the pertinent circumstances of such loan,
then all such sums in excess of such maximum shall be deemed not to be
interest, but rather to be payments on account of principal, and without
further agreement of the parties shall be so applied without regard to any
other provision of this Note, provided that Payee may elect instead that no
sums shall be payable in excess of such maximum, whereupon this Note and such
other documents and instruments shall be deemed amended accordingly without
further action by any party.
7. This Note shall inure to the benefit of Payee and its successors and
assigns. This Note has been negotiated and delivered at Sunnyvale,
California, and shall be governed by and construed in accordance with the
internal laws of the State of California without reference to (i) its
judicially or statutorily pronounced rules regarding conflict of laws or
choice of law; (ii) where any instrument is executed or delivered; (iii)
where any payment or other performance required by any such instrument is
made or required to be made; (iv) where any breach of any provision of any
such instrument occurs, or any cause of action otherwise accrues; (v) where
any action or other proceeding is instituted or pending; (vi) the
nationality, citizenship, domicile, principal place of business, or
jurisdiction or organization or domestication of any party; (vii) whether the
laws of the forum jurisdiction otherwise would apply the laws of a
jurisdiction other than the State of California; or (viii) any combination of
the foregoing. As a further inducement to Payee to advance funds as
contemplated hereby, the undersigned recognizes that Payee's principal office
is located in Sunnyvale, California and that Payee may be irreparably harmed
if required to institute or defend any actions against the undersigned in any
jurisdiction other than the Northern District of California or Santa Clara
County, California; therefore, the undersigned irrevocably (a) agrees that
any suit, action or other legal proceeding relating to this Note and/or the
loan evidenced hereby may be brought in state court in Santa Clara County or
in federal court in the Northern District of California, at Payee's option;
(b) consents to the jurisdiction of each such court in any such suit, action
or proceeding; (c) waives any objection which the undersigned may have to the
laying of venue in any such suit, action or proceeding in either such court;
(d) agrees to join Payee in any petition for removal to either such court
brought by Payee; (e) consents to service of process by U.S. mail; and (f)
expressly and voluntarily waives any right to trial by jury, whether arising
under the California constitution, any rules of the California Code of Civil
Procedure, common law or otherwise, in any such proceeding. The aforesaid
means of obtaining personal jurisdiction and perfecting service of process
are not intended to be exclusive but are cumulative and in addition to all
other means thereof or hereafter provided by applicable law.
8. The undersigned will upon demand pay to Payee the amount of any and
all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which Payee may incur in connection
with (i) the administration of this Note, (ii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Securities, (iii) the exercise or enforcement of any of the rights of
Payee hereunder or (iv) the failure by the undersigned to perform or observe
any of the provisions hereof.
Signature
ALBERT MORRISON, JR.
Print Name
<PAGE>
EXHIBIT A
PLEDGED SECURITIES
20,000 shares of common stock, no par value, of Logic Devices
Incorporated.
<PAGE>
Exhibit 3.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Registration Statement on Form S-3, of
our report dated March 20, 1996, on our audit of the consolidated balance
sheets of Logic Devices Incorporated as of December 31, 1995 and December 31,
1994 and the related consolidated statements of income, shareholders' equity
and cash flows and related schedules for each of the years ended December 31,
1995, December 31, 1994 and December 31, 1993, which report appears in
the December 31, 1995 annual report on Form 10-K of Logic Devices Incorporated.
We also consent to the reference to our firm under the caption "Experts."
Meredith, Cardozo & Lanz LLP
San Jose, California
November 20, 1996
