PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated October 21, 1998, by and among LogiMetrics,
Inc., a Delaware corporation (the "Company"), and the purchasers listed on the
signature pages hereto (collectively, the "Purchasers").
W I T N E S S E T H:
WHEREAS, on the terms and subject to the conditions set forth herein,
the Company desires to sell to the Purchasers, and the Purchasers desire to
purchase from the Company, $2,666,667 in aggregate principal amount of the
Company's Class C 13% Convertible Senior Subordinated Debentures due September
30, 1999 (the "Debentures") convertible into an aggregate of up to 8,602,151
shares of Common Stock, par value $.01 per share (the "Common Stock" and,
together with the Debentures, the "Securities"), of the Company, subject to
adjustment in certain circumstances (the Debentures to be in substantially the
form of Exhibit A hereto);
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and intending to be legally bound, the parties hereto agree as follow:
Article I
Purchase and Sale of Securities
Section 1.1. Purchase and Sale of Securities. Upon the terms and
subject to the conditions of this Agreement, on the date hereof the Company
shall issue and sell to the Purchasers, and such Purchasers shall purchase from
the Company, $2,666,667 in aggregate principal amount of the Debentures at an
aggregate purchase price of $2,000,000 (the "Purchase Price"). The amount of
Debentures to be purchased by each Purchaser pursuant to this Section 1.1 and
the aggregate Purchase Price allocable to each Purchaser is set forth on Exhibit
B attached hereto.
Section 1.2. Closing. The closing of the transactions contemplated by
Section 1.1 above (the "Closing") shall take place at the offices of the Company
at 10:00 a.m. on the date hereof, or at such other time and place as the parties
hereto may mutually agree. The time and date of the Closing is hereinafter
referred to as the "Closing Date." At the Closing, the Purchasers shall pay the
Purchase Price in immediately available funds by wire transfer to an account
previously designated by the Company. In exchange for the payment of the
Purchase Price, the Company shall execute, issue and deliver to the Purchasers
the Debentures registered in the name of the respective Purchasers as specified
in Exhibit B attached hereto.
Article II
Representations and Warranties of the Company
The Company represents and warrants to the Purchasers as follows:
Section 2.1. Organization and Qualification. Each of the Company and
mmTech, Inc. ("mmTech") is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to own or lease its property and assets and to
carry on its business as presently conducted, and is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the failure to be so qualified and in good standing would result in a
material adverse change in the business, financial condition, results of
operations or prospects (financial and other) of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Change"). The Company has
previously provided to the Purchasers true and complete copies of (i) its
Certificate of Incorporation of and all amendments thereto and (ii) its by-laws
as currently in effect. Other than mmTech and LogiMetrics FSB, Inc., the Company
does not own any material amount of any shares of stock of any corporation or
any equity interest in a partnership, joint venture or other business entity,
and the Company does not control or have the right (whether or not presently
exercisable) to control any other corporation, partnership, joint venture or
other business entity by means of ownership, management contract or otherwise.
Section 2.2. Authorization. (a) The Company has the corporate power and
authority to execute and deliver this Agreement, the Registration Rights
Agreement, dated of even date herewith (the "Registration Rights Agreement"),
among the Company and the Purchasers and the Debentures (collectively, the
"Transaction Documents") and to perform its obligations hereunder and
thereunder, all of which have been duly authorized by all requisite corporate
action. Each of this Agreement and the Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and constitutes a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(b) The Debentures have been duly authorized and, when issued in accordance
with the terms hereof, will have been duly executed, issued and delivered and
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles. The Company has sufficient authorized and unissued shares of Common
Stock reserved for issuance upon the conversion of the Debentures in accordance
with their terms. The shares of Common Stock issuable upon the conversion of the
Debentures will, when issued in accordance with the terms of the Debentures, be
duly authorized, validly issued, fully paid and non-assessable.
(e) Except as described in Schedule 2.2, the issuance or conversion of the
Debentures will not (i) require the Company to issue any shares of its capital
stock or any security exercisable for or convertible or exchangeable into shares
of its capital stock to any person, or (ii) require any
adjustment in the exercise price or number of shares of the Company's capital
stock issuable upon the exercise of the Company's outstanding securities.
Section 2.3. Non-contravention. Except as set forth in Schedule 2.3,
neither the execution and delivery of this Agreement and the other Transaction
Documents by the Company nor the performance by the Company of its obligations
hereunder and thereunder will (i) contravene any provision contained in the
Company's Certificate of Incorporation or by-laws, (ii) violate or result in a
breach (with or without the lapse of time, the giving of notice or both) of or
constitute a default under (A) any contract, agreement, commitment, indenture,
mortgage, lease, pledge, note, license, permit or other instrument or obligation
or (B) any judgment, order, decree, law, rule or regulation or other restriction
of any governmental authority, in each case to which the Company is a party or
by which it is bound or to which any of its assets or properties are subject,
(iii) result in the creation or imposition of any lien, claim, charge, mortgage,
pledge, security interest, equity, restriction or other encumbrance
(collectively, "Encumbrances") on any of the Company's assets or properties, or
(iv) result in the acceleration of, or permit any person to accelerate or
declare due and payable prior to its stated maturity, any material obligation of
the Company.
Section 2.4. No Consents. No notice to, filing with, or authorization,
registration, consent or approval of any governmental authority or other person
is necessary for the execution, delivery or performance of this Agreement or the
other Transaction Documents by the Company or the consummation of the
transactions contemplated hereby or thereby by the Company, except (i) for such
consents and approvals as have previously been obtained and are in full force
and effect, and (ii) for such filings and registrations as may be required under
applicable securities laws. Assuming that the representations and warranties
contained in Article III hereof are true and correct in all respects, the offer
and sale of the Securities as contemplated hereby does not require registration
under the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities or "blue sky" laws.
Section 2.5. Capitalization of the Company. The Company's authorized
capital stock consists solely of 100,000,000 authorized shares of Common Stock,
of which 28,470,430 shares were issued and outstanding as of the date hereof;
and 200 shares of Preferred Stock, par value $.01 per share, of which, 28
shares, designated as Series A 12% Cumulative Convertible Redeemable Preferred
Stock, stated value $50,000 per share, were issued and outstanding as of the
date hereof. No shares of the Company's capital stock are held as treasury
shares. In addition, as of the date hereof 39,428,429 shares of Common Stock
were reserved for issuance upon the exercise or conversion of outstanding
securities of the Company. Except as set forth on Schedule 2.5, the Company does
not have (i) any shares of Common Stock or Preferred Stock reserved for
issuance, or (ii) any outstanding option, warrant, right, call or commitment
relating to its capital stock or any outstanding securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire from it, any shares of its capital stock (collectively,
"Company Securities"). There are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any Company Securities. There are no
pre-emptive or other subscription rights with respect to any shares of the
Company's capital stock or any securities convertible into or exchangeable for
shares of the Company's capital stock and all of
the issued and outstanding shares of capital stock of the Company have been duly
authorized, validly issued, are fully paid and are nonassessable. All of the
Company's outstanding securities were offered, issued, sold and delivered by the
Company in compliance with all applicable state and federal securities laws.
None of such securities were issued in violation of any pre-emptive or
subscription rights of any person.
Section 2.6. SEC Reports. (a) The Company has made available to the
Purchasers true and complete copies of each report, schedule and registration
statement, including the exhibits thereto (but excluding exhibits incorporated
therein by reference), filed by the Company with the Securities and Exchange
Commission (the "Commission") since January 1, 1997, which, except for the
filing of an Annual Report on Form 10-KSB for the fiscal year ended June 30,
1998, are all the documents that the Company was required to file with the
Commission since that date and through the date hereof (all of such documents as
amended as of the date hereof collectively, the "SEC Documents"). Schedule 2.6
sets forth a true and complete list of the SEC Documents as of the date hereof.
As of their respective dates, the SEC Documents (as amended as of the date
hereof) complied as to form in all material respects with the requirements of
the Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, and the rules and regulations of the
Commission thereunder. As of their respective dates, except to the extent that
information contained therein has been revised or superseded by a later filed
SEC Document, none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto, have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments) the financial position of the Company as of the dates thereof and
the results of its operations and cash flows for the periods then ended.
Section 2.7. [reserved]
Section 2.8. Absence of Certain Developments. Except as disclosed in
Amendment No. 1 to the Company's Registration Statement on Form SB-2 (File No.
333-51459) filed with the SEC on July 10, 1998 or as disclosed in Schedule 2.8,
since March 31, 1998, there has not been any Material Adverse Change. Except for
this Agreement and the transactions contemplated hereby, since March 31, 1998
the Company has conducted its business in the ordinary and usual course
consistent with past practices.
Section 2.9. Governmental Authorizations; Licenses; Etc. Except as
disclosed in Schedule 2.9, the business of each of the Company and mmTech has
been operated in compliance with applicable laws, rules, regulations, codes,
ordinances, orders, policies and guidelines of all governmental authorities
(excluding Environmental Laws which are specifically covered in Section 2.13
hereof), except for violations which, individually or in the aggregate, would
not
result in a Material Adverse Change. Except as disclosed in Schedule 2.9, each
of the Company and mmTech has all permits, licenses, approvals, certificates and
other authorizations, and has made all notifications, registrations,
certifications and filings with all governmental authorities, necessary or
advisable for the operation of their respective businesses as currently
conducted. Except as disclosed in Schedule 2.9, to the Company's best knowledge
there is no action, case or proceeding pending or overtly threatened by any
governmental authority with respect to (i) any alleged violation by the Company,
mmTech or their respective affiliates of any law, rule, regulation, code,
ordinance, order, policy or guideline of any governmental authority, or (ii) any
alleged failure by the Company, mmTech or their respective affiliates to have
any permit, license, approval, certification or other authorization required in
connection with the operation of its business.
Section 2.10. Litigation. Except as disclosed in Schedule 2.10, there are
no lawsuits, actions, proceedings, claims, orders or investigations pending or,
to the Company's best knowledge, overtly threatened against the Company or
mmTech (i) relating to the Company, mmTech, their respective businesses or any
product alleged to have been manufactured or sold by either of them, (ii)
seeking to enjoin the transactions contemplated hereby, or (iii) which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Change.
Section 2.11. Undisclosed Liabilities. Other than those reflected in the
financial statements included in (i) the Company's Annual Report on Form 10-KSB
(as amended as of the date hereof), and (ii) the Company's Quarterly Reports on
Form 10-QSB for the fiscal quarters ended September 30, 1997, December 31, 1997
and March 31, 1998 (each as amended as of the date hereof), there are no
material liabilities of the Company or mmTech of any kind or nature whatsoever,
whether known or unknown, absolute, accrued, contingent or otherwise, or whether
due or to become due, which are required to be disclosed on financial statements
prepared in accordance with generally accepted accounting principles, other than
liabilities incurred in the ordinary course of business consistent with past
practices since March 31, 1998.
Section 2.12. Taxes. Except as disclosed in Schedule 2.12, all federal,
state, county, local and foreign tax returns and reports of the Company and
mmTech required to be filed have been duly filed. Except as disclosed in
Schedule 2.12, all federal, state, county, local, foreign and any other taxes
(including all income, withholding and employment taxes), assessments (including
interest and penalties), fees and other governmental charges with respect to the
employees, properties, assets, income or franchises of the Company and mmTech
have been paid or duly provided for, or are being contested in good faith by
appropriate proceedings as previously disclosed to the Purchaser in writing and
adequate reserves therefor have been established pursuant to generally accepted
accounting principles, or have arisen after the date hereof in the ordinary
course of business.
Section 2.13. Environmental Matters. Except as disclosed in Schedule 2.13,
to the Company's best knowledge (i) the business of each of the Company and
mmTech is being conducted in compliance with all applicable Environmental Laws,
(ii) the real property currently owned or operated by the Company or mmTech
(including, without limitation, soil, groundwater
or surface water on or under the properties and buildings thereon) (the
"Affected Property") does not contain any Regulated Substance other than as
permitted under applicable Environmental Laws, (iii) neither the Company nor
mmTech has received any notice from any governmental authority that the Company
or mmTech may be a "potentially responsible party" (as such term is defined
under the Comprehensive Environmental Response, Compensation and Control Act, 42
U.S.C. ss. 9601, et seq.) in connection with any waste disposal site or facility
used by the Company or mmTech, and (iv) the Company, mmTech and the Affected
Property are not presently subject to a suit or judgment arising under any
Environmental Law.
As used herein, "Environmental Laws" means any federal, state and local
law, statute, ordinance, rule, regulation, license, permit, authorization,
approval, consent, court order, judgment, decree, injunction, code, requirement
or agreement with any governmental authority, (x) relating to pollution (or the
cleanup thereof or the filing of information with respect thereto), human health
or the protection of air, surface water, ground water, drinking water supply,
land (including land surface or subsurface), plant and animal life or any other
natural resource, or (y) concerning exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production or disposal of Regulated Substances, in each case as amended and as
now or hereafter in effect. The term Environmental Law includes, without
limitation, (i) the Comprehensive Environmental Response Compensation and
Liability Act of 1980, the Water Pollution Control Act, the Clean Air Act, the
Clean Water Act, the Solid Waste Disposal Act (including the Resource
Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984), the Toxic Substances Control Act, the Insecticide,
Fungicide and Rodenticide Act, the Occupational Safety and Health Act of 1970,
each as amended and as now or hereafter in effect, and (ii) any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to or threatened as
a result of the presence of, exposure to, or ingestion of, any Regulated
Substance.
As used herein, "Regulated Substances" means pollutants, contaminants,
hazardous or toxic substances, compounds or related materials or chemicals,
hazardous materials, hazardous waste, flammable explosives, radon, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum products (including, but not limited to,
waste petroleum and petroleum products) as regulated under applicable
Environmental Laws.
Section 2.14. Proprietary Rights. Except as disclosed in Schedule 2.14,
each of the Company and mmTech owns and possesses all right, title and interest
in the patents, patent registrations, patent applications, trademarks, service
marks, trademark and service xxxx registrations and applications therefor,
copyrights, copyright registrations, copyrights applications, trade names,
corporate names, technology, inventions, computer software, data and
documentation (including electronic media), product drawings, trade secrets,
know-how, customer lists, processes, other intellectual property and proprietary
information or rights used in their respective businesses as presently
conducted; or owns or possesses permits, licenses or other agreements to or from
third parties regarding the foregoing (collectively, the "Proprietary
Rights"). Except as disclosed in Schedule 2.14, to the Company's best knowledge,
there is not pending or overtly threatened against the Company or mmTech any
claim by any third party contesting the validity, enforceability, use or
ownership of any Proprietary Right. Except as disclosed in Schedule 2.14, to the
Company's best knowledge, neither the Company nor mmTech has received any notice
of any infringement or misappropriation by, or conflict with, any third party
with respect to any of the Proprietary Rights.
Section 2.15. Books and Records. The stock records of the Company fairly
and accurately reflect in all material respects the record ownership of all of
the outstanding shares of the Company's capital stock. The other books and
records of the Company and mmTech, including financial records and books of
account, are complete and accurate in all material respects and have been
maintained in accordance with sound business practices.
Section 2.16. Brokers. No person is or will be entitled to a broker's,
finder's, investment banker's, financial adviser's or similar fee from the
Company in connection with this Agreement or any of the transactions
contemplated hereby.
Section 2.17. Use of Proceeds. The Company will use the net proceeds of the
sale of the Securities for working capital and general corporate purposes.
Section 2.18. Absence of Questionable Payments. Neither the Company, mmTech
nor any affiliate, director, officer, employee, agent, representative or other
person acting on behalf of the Company or mmTech has: (i) used any corporate or
other funds for unlawful contributions, payments, gifts or entertainment, or
made any unlawful expenditures relating to political activities to government
officials or others, or (ii) accepted or received any unlawful contributions,
payments, gifts or expenditures.
Section 2.19. Accuracy of Representations. No representation or warranty
made by the Company in this Agreement or any document delivered, or to be
delivered, by or on behalf of the Company pursuant hereto contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading. Except as disclosed
in the SEC Documents or in the Schedules to this Agreement, there is no fact or
circumstance that the Company has not disclosed to the Purchasers in writing
that the Company presently believes has resulted, or could reasonably be
expected to result, in a Material Adverse Change or could reasonably be expected
to have a material adverse effect on the ability of the Company to perform its
obligations under this Agreement.
Article III
Representations and Warranties of the Purchasers
The Purchasers hereby, severally and not jointly, represent and warrant to
the Company as follows:
Section 3.1. Organization. Each Purchaser that is not an individual is
either a corporation, limited liability company, general partnership or limited
partnership, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Schedule 3.1 hereto sets forth the
type of entity and the jurisdiction of organization for each Purchaser that is
not an individual.
Except as set forth in Schedule 3.1, each of the Purchasers is a "U.S.
person" as such term is defined in Section 7701(a)(30) of the Code. Each
Purchaser that is a U.S. person has previously provided the Company with a
completed Form W-9 certifying that such Purchaser is not subject to back-up
withholding with respect to amounts payable to such Purchaser by the Company.
Each Purchaser that is not a U.S. person has previously provided the Company
with a completed Form W-8 certifying that such Purchaser is not subject to
certain U.S. information return reporting or back-up withholding with respect to
amounts payable to such Purchaser by the Company.
Section 3.2. Authorization. Each Purchaser that is not an individual has
the power and authority (corporate, limited liability company, partnership and
other) to execute and deliver this Agreement and to perform its obligations
hereunder, all of which have been duly authorized by all requisite corporate,
limited liability company or partnership action. Each Purchaser that is an
individual has the capacity to execute and deliver this Agreement and to perform
his or her obligations hereunder. Each such individual Purchaser is under no
impairment or other disability, legal, physical, mental or otherwise, that would
preclude or limit the ability of such Purchaser to perform his or her
obligations under this Agreement. This Agreement has been duly authorized,
executed and delivered by each Purchaser and constitutes a valid and binding
agreement of such Purchaser, enforceable against such Purchaser in accordance
with its terms.
Section 3.3. Access to Information. The Purchasers have received copies of
the SEC Documents or have otherwise examined copies of such SEC Documents to the
extent they deemed necessary or advisable to evaluate the risks and merits of an
investment in the Company. Any Purchaser formed for the purpose of investing in
the Securities or the Additional Securities (a "New Purchaser") has provided
access to such SEC Documents to each investor in such Purchaser (the
"Investors"). In addition, the Purchasers and their respective purchaser
representatives, if any, have had an opportunity to ask questions of and receive
answers from representatives of the Company concerning the business of the
Company, its condition and prospects (financial and other) and the terms and
conditions of the offering of the Securities.
Section 3.4. Accredited Investor. Each Purchaser is an "Accredited
Investor" as such term is defined in Rule 501 of the rules and regulations of
the Commission promulgated under the Securities Act. No offering or sale of
interests in any Purchaser or any other security of such Purchaser was made to
any person, other than such "Accredited Investors." Schedule 3.4 hereto sets
forth a list of the New Purchasers. Other than such New Purchasers, no Purchaser
was formed for the purpose of investing in the Securities.
Section 3.5. Investment Intent. (a) Each Purchaser is acquiring the
Securities for its own account for investment only and not for or with a view to
resale or distribution. No Purchaser
has entered into any contract, undertaking, agreement or arrangement with any
person to sell, transfer or pledge to such person or anyone else the Securities
and no Purchaser has any present plans or intentions to enter into any such
contract, undertaking, agreement or arrangement.
(b) Each Purchaser has the financial ability to bear the economic risk of
losing its entire investment in the Securities, is prepared to bear the economic
risk of its investment therein for an indefinite time and can afford to sustain
a complete loss of its investment therein.
(c) The overall commitment of each Purchaser to investments which are not
readily marketable is not disproportionate to its net worth, and an investment
in the Securities will not cause such overall commitment to become excessive.
Each Purchaser's need for diversification in its investment portfolio will not
be impaired by an investment in the Company.
(d) Each Purchaser has adequate means of satisfying its short term needs
for cash and has no present need for liquidity which would require it to sell
its Securities or any interest therein.
(e) Each Purchaser has substantial experience in making investment
decisions of this type and/or is relying on its own advisors in making this
investment decision and, therefore, either alone or together with its advisors,
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Company.
(f) Each Purchaser understands that the Securities constitute restricted
securities within the meaning of Rule 144 promulgated under the Securities Act,
and that none of the Securities, or any interest therein, may be sold except
pursuant to an effective registration statement under the Securities Act or in a
transaction exempt from registration under the Securities Act, and understands
the meaning and effect of such restriction.
(g) Each Purchaser has considered and, to the extent such Purchaser
believed such discussion was necessary, discussed with its professional legal,
tax and financial advisers the suitability of an investment in the Company for
such Purchaser's particular tax and financial situation and each Purchaser has
determined that the Securities are a suitable investment for it.
(h) EACH PURCHASER UNDERSTANDS THAT AN INVESTMENT IN THE SECURITIES BEING
PURCHASED BY IT INVOLVES A HIGH DEGREE OF RISK, INCLUDING WITHOUT LIMITATION,
RISKS RELATING TO THE COMPANY's HISTORY OF LOSSES, RISKS RELATING TO THE RECENT
CHANGE IN THE COMPANY'S BUSINESS FOCUS, RISKS RELATING TO THE COMPANY'S
DEPENDENCE UPON THE DEVELOPMENT OF NEW MARKETS OF UNCERTAIN SIZE AND GROWTH
PROSPECTS, THE COMPANY's DEFAULTS UNDER SUBSTANTIALLY ALL OF ITS INDEBTEDNESS
AND OUTSTANDING PREFERRED STOCK, THE COMPANY'S CONTINUING NEED FOR ADDITIONAL
CAPITAL, THE Company's NEED FOR LIQUIDITY, THE EFFECTS OF COMPETITION, THE
COMPANY'S RELIANCE ON KEY PERSONNEL, THE COMPANY'S DEPENDENCE ON TECHNOLOGY AND
TECHNOLOGICAL INNOVATION, THE EFFECTS OF
GOVERNMENT REGULATION OF THE TELECOMMUNICATIONS INDUSTRY, THE RESTRICTIONS ON
TRANSFER OF THE SECURITIES, THE SUBORDINATION PROVISIONS OF THE DEBENTURES,
POTENTIAL CONFLICTS OF INTEREST AND RELATED PARTY TRANSACTIONS INVOLVING THE
COMPANY AND THE DIRECTORS AND OFFICERS OF THE COMPANY, and RISKS RELATING TO THE
SUCCESSFUL EXECUTION OF THE COMPANY'S BUSINESS AND OPERATING STRATEGY.
(i) Each New Purchaser has received representations and warranties from
each Investor in such New Purchaser similar to those contained in this Section
3.5, and such representations and warranties specifically authorize the Company
to rely thereon.
(j) The offer and sale of interests in each New Purchaser to the Investors
therein did not require registration under the provisions of the Securities Act
or any applicable state securities or "blue sky" laws. Each New Purchaser
complied in all material respects with the requirements of applicable state
securities or "blue sky" laws with respect to such offer and sale.
(k) The placement materials used by each New Purchaser or its agents in
connection with the offer and sale of interests in such New Purchaser did not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that no representation or warranty is made with respect to information regarding
the Company and mmTech provided to any such New Purchaser by the Company
expressly for use in such placement materials.
Section 3.6. Financial Resources. Each Purchaser has cash or credit
facilities presently available to meet all of its payment obligations hereunder.
Section 3.7. Brokers. No person is or will be entitled to a broker's,
finder's, investment banker's, financial adviser's or similar fee from any
Purchaser in connection with this Agreement or any of the transactions
contemplated hereby.
Section 3.8. Accuracy of Representations. No representation or warranty
made by the Purchaser in this Agreement or any document delivered, or to be
delivered, by it or on its behalf pursuant hereto contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
Article IV
Restrictions on Transfer; Other Covenants
Section 4.1. Limited Transferability. The Securities, including, without
limitation, the shares of Common Stock issuable upon the conversion of the
Debentures (the "Issuable Shares") shall not be transferable except in
accordance with the provisions of this Article IV, which provisions are intended
to insure compliance with the provisions of the Securities Act in respect of the
transfer of any of such securities.
Section 4.2. Restrictive Legend. The Debentures and any certificates
representing the Issuable Shares shall (unless otherwise permitted by the
provisions of Section 4.4 below) be stamped or otherwise imprinted with the
following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND CANNOT BE SOLD OR TRANSFERRED
UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN
EXEMPTION UNDER SUCH ACT OR LAWS IS AVAILABLE. THE
TRANSFERABILITY OF THESE SECURITIES IS FURTHER SUBJECT
TO THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF
OCTOBER 21, 1998 AMONG THE COMPANY AND THE PURCHASERS
NAMED THEREIN.
For purposes of this Article IV, any references to "Debentures" or
"Issuable Shares" shall include any other securities issued in respect of any of
such securities.
Section 4.3. Restrictions on Transfer. (a) Subject to the provisions of
Section 4.4, the Debentures and the Issuable Shares shall not be transferred,
and the Company shall not be required to register any transfer thereof on the
books of the Company, unless such transfer is made pursuant to an effective
registration statement, in compliance with Rule 144, or pursuant to another
exemption under the Securities Act; provided, however, that the Company shall
not be required to register any transfer in the event any securities are offered
or sold otherwise than pursuant to an effective registration statement or
pursuant to Rule 144 unless the Company shall have received an opinion of
counsel to the Purchaser wishing to effect such transfer, reasonably
satisfactory to the Company, that such transfer does not require registration
under the Securities Act or applicable state securities laws. Notwithstanding
the foregoing, any Purchaser may freely transfer at any time or from time to
time the Debentures and/or the Issuable Shares, or any interest therein, to any
other Purchaser or any general partner of such Purchaser, any limited partner of
such Purchaser, any other fund, account or other entity managed, directly or
indirectly, by any general partner of such Purchaser and the respective
subsidiaries and affiliates of any of the foregoing (each, a "Permitted
Transferee") without complying with the provisions of this Article IV (a
"Permitted Transfer") and the Company shall, or shall cause any registrar or
transfer agent to, promptly register any such Permitted Transfer on the books of
the Company; provided,
however, that in connection with any such Permitted Transfer, the Permitted
Transferees shall acknowledge the restrictions on transferability under
applicable law and agree in writing to be bound by the provisions of this
Article IV.
(b) In addition to the restrictions set forth in paragraph (a) above, for a
period of 90 days after purchase (the "Restrictive Period"), no Purchaser shall
sell, assign, transfer or otherwise dispose of the Securities, or any interest
therein (a "Transfer") (other than a Permitted Transfer), without the prior
written consent of the Company which may be withheld by the Company in its sole
discretion; provided, however, that nothing contained herein shall prohibit any
Purchaser from converting a Debenture in accordance with the terms thereof.
Subject to the restrictions set forth in paragraph (a) above, from and after the
end of the Restrictive Period, a Purchaser may Transfer all or a portion of its
Securities, or any interest therein, without the consent of the Company.
Section 4.4. Registration Rights. The Purchasers shall be entitled to
registration rights with respect to the Debenture Shares as set forth in the
Registration Rights Agreement.
Article V
Right of First Refusal
Section 5.1. Right of First Refusal. (a) If the Company proposes to obtain
additional financing (a "Financing") prior to September 30, 1999 from a third
party, the Company shall first give to the Purchasers a notice (an "Offer
Notice") setting forth in reasonable detail the amount, structure and other
terms of the proposed Financing. The Purchasers shall thereafter have the
exclusive right (the "Refusal Right"), upon written notice given to the Company
by the holders of a majority of the outstanding principal amount of the
Debentures (the "Majority Holders") no later than ten business days after
receipt of the Offer Notice, to provide the Financing to the Company on the
terms set forth in the Offer Notice (an "Acceptance Notice"). An Acceptance
Notice shall constitute an irrevocable joint and several commitment by the
Purchasers executing such Acceptance Notice (the "Accepting Purchasers") to
provide the Company with the Financing on the terms specified in the Offer
Notice. The obligation to provide the Financing may be allocated among the
Accepting Purchasers, or any one or more of them, as the Accepting Purchasers
may determine in their sole discretion. The closing of the Financing shall take
place on such date, no less than ten and no more than thirty days after the date
of the Acceptance Notice, as the Company and the Accepting Holders may agree.
(b) If the Purchasers do not provide an Acceptance Notice within the ten
business-day period set forth in clause (a) above, the Company shall have the
right for up to 90 days thereafter to obtain a Financing on the terms specified
in the Offer Notice from one or more third parties (including on or more of the
Purchasers).
Section 5.2. Exceptions. The Refusal Right granted to the Purchasers in
Section 5.1 hereof shall not apply to (i) a Qualifying Offering, (ii) any
replacement, renewal, extension,
modification or amendment of the Company's current lending facility with North
Fork Bank provided, however, that the principal amount of such facility after
giving effect thereto shall not exceed $2.8 million, (iii) any trade credit
(whether or not evidenced by a note or other instruments), (iv) any receivables
financing arrangements, (v) the issuance of securities in connection with the
acquisition of the assets or stock of any other business, (vi) the exercise or
conversion of any security outstanding on the issuance date of the Debentures,
(vii) the issuance and exercise of awards made from and after the date hereof
pursuant to the Company's 1997 Stock Compensation Program (the "Plan"), or
(viii) pursuant to any other plan or arrangement approved by the Company's Board
of Directors or the Compensation Committee thereof 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).
Article VI
Deliveries at Closing
Section 6.1. Deliveries by the Company. At the Closing, the Company shall
deliver to the Purchasers the following in form and substance reasonably
satisfactory to the Purchasers' counsel:
(a) a certificate of the President or a Vice President of the Company,
dated the Closing Date, to the effect that (i) the person signing such
certificate is familiar with this Agreement, (ii) all representations and
warranties made by the Company in this Agreement are true, correct and complete
in all material respects as of the Closing, (iii) the Company has duly performed
or complied with, in all material respects, all of the covenants, obligations
and agreements to be performed or complied with by it under the terms of this
Agreement on or prior to or at the Closing, and (iv) except as disclosed
pursuant to this Agreement, there has been no Material Adverse Change or
prospective change which could reasonably be expected to result in a Material
Adverse Change since March 31, 1998;
(b) a certificate of the Secretary or Assistant Secretary of the Company,
dated the Closing Date, as to the incumbency of any officer of the Company
executing this Agreement or any document related thereto and covering such other
matters as the Purchasers may reasonably request;
(c) a certified copy of the resolutions of the Company's Board of Directors
authorizing the execution, delivery and consummation of this Agreement and the
transactions contemplated hereby;
(d) an executed counterpart of the Registration Rights Agreement;
(e) the Debentures, duly executed, issued and delivered by the Company and
registered in the names of the Purchasers as they may specify;
(f) an executed counterpart of the Stock Purchase Agreement, dated of
even date herewith (the "Stock Purchase Agreement") among Xxxxxxx X. Brand and
the Purchaser;
(g) executed undertaking letters from each of Francisco X. Xxxxxx, Xxxxxx
X. Xxxxxx and Xxxxxxx X. Xxxxxxxx; and
(h) such other documents or instruments as the Purchasers reasonably
request to effect the transactions contemplated hereby.
Section 6.2. Deliveries by the Purchasers. At the Closing, the Purchasers
shall deliver to the Company the following in form and substance reasonably
satisfactory to the Company's counsel:
(a) evidence that the Purchase Price has been paid in full;
(b) an executed counterpart of the Registration Rights Agreement;
(c) an executed counterpart of the Stock Purchase Agreement; and
(d) such other documents or instruments as the Company reasonably requests
to effect the transactions contemplated hereby.
ARTICLE VII
Survival, Amendment and Waiver
Section 7.1. Survival of Representations and Warranties. The
representations and warranties contained in this Agreement or any certificate
delivered in connection herewith shall survive the Closing, and shall apply with
respect to claims asserted in writing within one year thereof. The provisions of
this Section 7.1 shall not limit any covenant or agreement of the parties hereto
which, by its terms, contemplates performance after the applicable Closing.
Section 7.2. Amendments. This Agreement (including the provisions of this
Section 7.2) may not be amended or modified except by an instrument in writing
signed on behalf of all of the parties affected by such amendment or
modification.
Section 7.3. Extension; Waiver. The parties hereto may (i) extend the time
for performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties of the
other parties hereto contained herein or in any document delivered pursuant
hereto, and (iii) waive compliance with any of the agreements of the other
parties hereto or satisfaction of any of the conditions to such party's
obligations contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
The failure of a party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.
ARTICLE VIII
Miscellaneous
Section 8.1. Notices. All notices, requests, claims, demands, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, when delivered by courier, three days
after being deposited in the mail (registered or certified mail, postage
prepaid, return receipt requested), or when received by facsimile transmission
upon receipt of a confirmed transmission report, as follows:
If to the Company: 00 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Executive Officer
and if to the other parties at the address or facsimile transmission number
specified below its name on the signature pages hereto (or, in the case of
Persons who become parties hereto subsequently, at their last addresses or
facsimile transmission numbers shown on the record books of the Company). Any
party hereto, by notice given to the other parties hereto in accordance with
this Section 8.1 may change the address or facsimile transmission number to
which such notice or other communications are to be sent to such party.
Section 8.2. Expenses. The Company shall pay its own expenses incident to
this Agreement and the transactions contemplated herein. The Company shall be
responsible for and shall pay at the Closing the fees and disbursements of
counsel to the Purchasers incurred in connection with the negotiation, execution
and delivery of this Agreement and the other Transaction Documents and the
closing of the transactions contemplated hereby and thereby.
Section 8.3. Governing Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the internal laws of the State
of New York, without reference to the choice of law principles thereof. Each of
the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.
Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
Section 8.4. Assignment; Successors and Assigns; No Third Party Rights.
This Agreement may not be assigned by operation of law or otherwise, and any
attempted assignment shall be null and void; provided, however, that any
Purchaser may assign this Agreement (or any interest herein) to one or more
Permitted Transferees so long as such Purchaser also assigns to such Permitted
Transferees its rights and obligations under the other Transaction Documents to
which it is a party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors, permitted
assigns and legal representatives. This Agreement shall be for the sole benefit
of the parties to this Agreement and their respective heirs, successors,
permitted assigns and legal representatives and is not intended, nor shall be
construed, to give any Person, other than the parties hereto and their
respective heirs, successors, assigns and legal representatives, any legal or
equitable right, remedy or claim hereunder.
Section 8.5. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original agreement, but all of which together
shall constitute one and the same instrument.
Section 8.6. Titles and Headings. The titles and headings in this Agreement
are for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 8.7. Entire Agreement. This Agreement and the other Transaction
Documents constitute the entire agreement among the parties with respect to the
matters covered hereby and thereby and supersede all previous written, oral or
implied understandings among them with respect to such matters, including,
without limitation, the term sheet, dated October 16, 1998.
Section 8.8. Severability. The invalidity of any portion hereof shall not
affect the validity, force or effect of the remaining portions hereof. If it is
ever held that any restriction hereunder is too broad to permit enforcement of
such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
Section 8.9. No Strict Construction. Each of the parties hereto acknowledge
that this Agreement has been prepared jointly by the parties hereto, and shall
not be strictly construed against either party.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
LOGIMETRICS, INC.
By: /s/Xxxxxx X. Xxxxxx
________________________
Name: Xxxxxx X. Xxxxxx
Title: President
/s/Xxxxxx Xxxxxx
_____________________________
Xxxxxx Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxx 00000
Tel: (000) 000-0000
(000) 000-0000
/s/Xxxxxx X. Xxxxxx
____________________________
Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxxxx X. Xxxxxxxxx
____________________________
Xxxxxx X. Xxxxxxxxx, Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM 1998 ENTERPRISE FUND, LLC
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.,
Its Managing Member
By: /s/Xxxxxx X. Xxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
A.C. ISRAEL ENTERPRISES, INC.
By: /s/Xxx Xxxxxx
_________________________
Name: Xxx Xxxxxx
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
CRM-EFO PARTNERS, L.P.
By: CRM-EFO Investments, LLC,
Its General Partner
By: CRM Management, Inc.,
Its Managing Member
By: /s/Xxxxxx X. Xxxxxxx
_________________________
Name: Xxxxxx X. Xxxxxxx, III
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
_______________________________
Xxxxxxx X. Xxxx, Xx.
By: Xxxxxx Xxxxxxxxx XxXxxxx, Inc.,
Attorney-in-Fact
By: /s/Xxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XXXXXX EQUITIES CORP.
By: /s/Xxxxxxx Xxxxxxxxxxx
_______________________________
Name: Xxxxxxx Xxxxxxxxxxx
Title: Vice President
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
WHITEHALL PROPERTIES, LLC
By: /s/Xxxxxxx Xxxxxxxxxxx
________________________
Name: Xxxxxxx Xxxxxxxxxxx
Title: Manager
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
KABUKI PARTNERS ADP, GP
By: /s/Xxxxxxx Xxxxxxxxxxx
__________________________
Name: Xxxxxxx Xxxxxxxxxxx
Title: General Partner
0 Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
XxXXXXX FAMILY PARTNERSHIP
By: /s/Xxxxxx X. XxXxxxx
` _______________________________
Name: Xxxxxx X. XxXxxxx
Title: General Partner
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxx X. Xxxxxx
______________________________________
Xxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxxxx X. Xxxxxxx
______________________________________
Xxxxxx X. Xxxxxxx, III
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
/s/Xxxxxxx X. Brand
______________________________________
Xxxxxxx X. Brand
00 Xxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
EXHIBIT A
FORM OF DEBENTURE
EXHIBIT B
LIST OF PURCHASERS AND ALLOCATION OF PURCHASE
Name of Purchaser Purchase Price Principal Amount
of Debentures
Xxxxxx X. Xxxxxx $181,976.00 $242,634.66
A.C. Israel Enterprises, Inc. 181,976.00 242,634.66
CRM 1998 Enterprise Fund, LLC 494,975.00 659,966.66
L.A.D. Equity Partners, L.P. 54,591.00 72,788.00
CRM-EFO Partners, L.P. 45,494.00 60,658.67
Xxxxxxx X. Xxxx, Xx. 27,297.00 36,396.00
XxXxxxx Family Partnership 18,197.00 24,262.67
Xxxxxx X. Xxxxxxxxx, Xxxxx 18,197.00 24,262.67
Xxxx X. Xxxxxx 18,197.00 24,262.67
Xxxxxx X. Xxxxxxx, III 9,100.00 12,133.34
Kabuki Partners ADP, GP 112,500.00 150,000.00
Xxxxxx Equities Corp. 198,750.00 265,000.00
Whitehall Properties, LLC 138,750.00 185,000.00
Xxxxxxx X. Brand 500,000.00 666,667.00
---------- ----------
Total $2,000,000.00 $2,666,667.00
============= =============
