SETTLEMENT AND ASSET SALE AGREEMENT
by and between
LOGIMETRICS, INC.,
Seller,
AND
SIGNAL TECHNOLOGY CORPORATION,
Buyer.
Dated November 21, 2000
SETTLEMENT AND ASSET SALE AGREEMENT dated November 21, 2000, by and
between LOGIMETRICS, INC., a Delaware corporation with offices at c/o L-3
Communications Corporation ("L-3"), Narda Microwave Division, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("LogiMetrics"), and SIGNAL TECHNOLOGY CORPORATION a
Delaware corporation, with offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Signal").
R E C I T A L S :
WHEREAS, LogiMetrics owns an unincorporated subdivision with a product
line which formerly manufactured traveling wave tube amplifiers at its former
Bohemia, New York location (the "TWTA Business");
WHEREAS, on or about the 17th day of February, 2000, the parties
entered into and/or executed certain documents including a Management Agreement,
Loan Agreement, Letter of Intent, Promissory Note, and other documents related
to the proposed acquisition of LogiMetrics by Signal under which Signal was
granted the right to operate and manage the TWTA Business pending its proposed
acquisition of LogiMetrics, and was also given the right under certain
circumstances to purchase the TWTA Business and/or to retain LogiMetrics (the
"Signal Documents"); and
WHEREAS, Signal did not purchase LogiMetrics; and
WHEREAS, certain disagreements have arisen under the Signal Documents,
which the parties are desirous of resolving including Signal's claim that during
Signal's operation of the TWTA Business, it incurred expenses and invested sums
of money, for which it claims it is entitled to be reimbursed; and
WHEREAS, as a part of that resolution, subject to the terms and
conditions set forth herein, Signal is desirous of exercising its right to
purchase the TWTA Business from LogiMetrics, and LogiMetrics is desirous of
selling the TWTA Business to Signal, subject to the terms and
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conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, covenants, representations and warranties made herein, and other
good and valuable consideration the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
I. SALE AND PURCHASE OF THE ASSETS; EXCLUDED ASSETS
A. Sale of Assets. Subject to the terms and conditions of this
Agreement, at Closing (as defined herein), other than Excluded Assets
(as defined below), LogiMetrics will sell and Signal will purchase all
of LogiMetrics' right, title and interest in and to the assets,
tangible and intangible, utilized in and relating to the TWTA Business
previously delivered to Signal, including, accounts receivable,
inventories (including raw materials, work in process, supplies,
samples, prototypes, and finished goods), machinery, equipment, tools,
supplies, booths, displays, materials, plans and schematics,
intellectual property, customer lists and all substitutions,
replacements, and proceeds thereof (collectively, the "Acquired
Assets") all as listed on Schedule A.
B. Receipt Acknowledged. Signal acknowledges that it has previously
received all of the assets that are being transferred under this
Agreement.
C. Excluded Assets. Excluded from the transfer of assets to be made
hereunder are:
(1) all accounts receivable due and owing if any, from any of
the claims listed on Schedule B hereto;
(2) any cause of action of any kind or nature which
LogiMetrics:
a. may have against any of the Persons (as defined
herein) listed on Schedule B, hereto; and
b. may have now or in the future against a third party
in connection with any claim LogiMetrics is required
to indemnify Signal for hereunder.
II. ASSUMPTION OF LIABILITIES
A. Assumption of Liabilities. Subject to the terms and conditions set
forth herein, at Closing, other than Excluded Liabilities (as defined
below), LogiMetrics shall assign and Signal shall assume and agree to
pay, honor and discharge when due, all debts, claims, obligations,
contracts, purchase orders, sales orders,
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commitments, and liabilities of any kind, character or description
whether accrued, absolute, contingent (whether known or unknown) or
otherwise relating to the TWTA Business (collectively, the "Assumed
Liabilities"), other than the Excluded Liabilities.
B. Excluded Liabilities.
(1) Excluded from the liabilities to be assumed by Signal
hereunder (collectively the "Excluded Liabilities") are all
debts, claims, obligations, contracts, purchase orders, sale
orders, commitments, and liabilities of any kind, character or
description whether accrued, absolute, or contingent (whether
known or unknown):
a. listed on Schedule B;
b. that arise prior to March 31, 2001, provided that if
any claim involves product shipped or services
performed ( a "Warranty Claim"), then only
i) to the extent that such Warranty Claim
relates to product shipped or services
performed, in each case in their entirety,
prior to February 17, 2000;
ii) which Warranty Claims are based solely upon
any action or inaction taken or not taken by
LogiMetrics;
iii) where the cost ("Direct Factory Cost" as
defined below) to repair hardware (i.e., the
approximate cost of economical repair)
subject to the Warranty Claim (the
"hardware") in question exceeds seventy
percent (70%) the replacement cost of a new
item; or
c. relating to any environmental claim with respect to
any real estate owned and/or leased by LogiMetrics
prior to February 17, 2000, ERISA (as defined herein)
or other employee-related (including, without
limitation, hiring, termination and retirement)
matters, or claims relating to Taxes (as defined
herein), in each case to the extent arising out of
the operation of the TWTA Business prior to February
17, 2000.
(2) Direct Factory Cost shall be defined as the direct and
indirect costs of repairing the hardware subject to the
Warranty Claim, excluding Selling, General and Administrative
Expense, and Profit (as defined herein).
(3) Selling, General, and Administrative Expense and Profit
shall be defined in accordance
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with Generally Accepted Accounting Principles consistently
applied and in accordance with Signal's past practices.
(4) For the purposes of Paragraph B(1) of Section II, a claim
shall be deemed to arise upon the receipt by either
LogiMetrics or Signal of a written notification by a third
party asserting a claim.
(5) For the purposes of Paragraph B(1)(c) of Section II:
a. Excluded Liabilities include any severance or like
payments owing to employees of the TWTA Business
whose employment LogiMetrics terminated either prior
to or after February 17, 2000;
b. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended; and
c. "Taxes" shall mean (i) any federal, state, local or
foreign net income, gross income, gross receipts,
windfall profit, severance, property, production,
sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add-on minimum,
ad valorem, value-added, transfer, stamp, or
environmental (including taxes under Code Section
59A) tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed
by an Governmental Body; and (ii) any liability for
the payment of amounts with respect to payments of a
type described in clause (i) as a result of being a
member of an affiliated, consolidated, combined or
unitary group, or as a result of any obligation under
any tax sharing arrangement or tax indemnity
agreement.
(6) Excluded Liabilities shall not include liabilities that
may arise in connection with the employment by LogiMetrics of
▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") or ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") for the
TWTA Business after February 17, 2000 and prior to the date on
which Messrs. ▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇ became full-time employees
of Signal.
III. CONSIDERATION; ADJUSTMENTS AND ALLOCATION
A. Payment to Signal. In consideration of Signal's delivering the TWTA
Business backlog at a loss and Signal's agreement to retain the TWTA
Business, LogiMetrics agrees to pay Signal the sum of
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$2,090,000.00 (the "Purchase Price"), in full satisfaction of any
monies that might otherwise be due and owing under or by virtue of the
Signal Documents.
B. Allocation of Purchase Price. The parties agree to allocate the
aggregate of the Purchase Price over the Acquired Assets and the
Assumed Liabilities, in accordance with Section 1060 of the Internal
Revenue Code as mutually agreed to by the parties, within ninety (90)
days of Closing Date and to prepare and file consistent Internal
Revenue Service Forms 8594 with their respective federal income tax
returns for the taxable year in which the sale contemplated hereunder
occurs reflecting such allocation of the Purchase Price over the
Acquired Assets and the Assumed Liabilities. All such mutually agreed
to allocations shall be used by each party in preparing any filings
required pursuant to Section 1060 of the Internal Revenue Code or any
similar provisions of state or local law and all relevant income and
franchise tax returns. Neither Signal nor LogiMetrics will take any
position before any taxing authority or in any judicial proceeding that
is inconsistent with such mutually agreed to allocations without the
prior consent of the other party. The parties shall in good faith
exercise reasonable efforts to support such reported allocations in any
audit proceedings initiated by any taxing authority.
IV. THE CLOSING
The Closing of the transactions contemplated by Section VIII hereof
(the "Closing") shall take place simultaneously with the execution of this
Agreement at the offices of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates, P.C. with offices at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The time and
the date of the Closing is hereinafter referred to as the "Closing Date".
V. CONSENTS OF THIRD PARTIES
A. If any novation, consent or approval to transfer a portion of the
TWTA Business is not obtained on or prior to the Closing Date, then
LogiMetrics shall continue to use reasonable commercial efforts for six
(6) months from the Closing Date to:
(1) obtain any such novation, consent or approval after the
Closing Date without any third party cost to LogiMetrics or
payment of any consideration therefor by LogiMetrics;
(2) cooperate with Signal in any lawful arrangement, without
any third party cost to LogiMetrics or payment of any
consideration therefor by LogiMetrics, to provide that Signal
shall receive the benefits under any such governmental
approval, instrument, contract, commitment, order, license,
lease or permit or other agreement or arrangement, including
performance by LogiMetrics, as agent; and
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(3) enforce and perform for the account of and the expense of
Signal any rights of LogiMetrics arising from such government
approval, instrument, contract, commitment, order, license,
lease, permit or other agreement or arrangement; provided that
Signal shall pay or satisfy the corresponding obligations and
liabilities for the enjoyment of any such benefits to the
extent Signal would have been responsible therefor if such
novation, consent or approval had been obtained.
VI. REPRESENTATIONS AND WARRANTIES OF LOGIMETRICS
LogiMetrics represents and warrants to Signal as follows:
A. Corporate Status. LogiMetrics is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction, and has the corporate power and authority to carry on its
business and to own or lease property and to operate its business in
the places where its business is conducted, and is duly qualified to do
business and is in good standing in each jurisdiction where the failure
to be so qualified or be in good standing could materially affect its
performance under this Agreement.
B. Authorization.
(1) LogiMetrics has the requisite power and authority
(corporate or otherwise) to execute and deliver this
Agreement, to perform fully its obligations hereunder and to
consummate the transactions contemplated hereby. The execution
and delivery by LogiMetrics of this Agreement, the performance
by LogiMetrics of its obligations hereunder and the
consummation of the transactions contemplated hereby have been
duly authorized by all requisite corporate action of
LogiMetrics.
(2) This Agreement constitutes the legal, valid and binding
obligation of LogiMetrics, enforceable against it in
accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting generally the enforcement of
creditors' rights and as the same may be limited by general
principles of equity.
C. No Conflicts. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, do not conflict with and will not result in a violation or
breach of or a default under (with or without the giving of notice or
the lapse of time or both), or result in the acceleration of or give
rise to any party the right to terminate, modify or cancel under, or
result in the loss of any rights, privileges, options or alternatives
under, or result in the creation of any lien on LogiMetrics or any of
its properties or assets under (i) the certificate of incorporation or
by-laws of
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LogiMetrics, (ii) any law applicable to LogiMetrics or any of its
properties, assets or businesses, or (iii) with respect to contracts
entered into prior to February 17, 2000, any contract to which
LogiMetrics is a party or by which the TWTA Business is bound, except
for violations and defaults that, individually or in the aggregate,
have not impaired and could not reasonably be expected to impair, in
any material way, the operation of the TWTA Business or the ability of
LogiMetrics to perform its obligations under this Agreement.
D. Title Representations. The assets being transferred hereunder as
part of the TWTA Business shall be conveyed free and clear of all
liens, encumbrances, licenses and other interests of any nature
whatsoever. To the extent that there are any outstanding liens,
encumbrances, licenses or other interests on the Closing Date,
LogiMetrics shall remove said liens, encumbrances, licenses or other
interests as soon as practicable thereafter, except that LogiMetrics
shall have no obligation to remove or satisfy any liens, encumbrances,
licenses or other interests arising from any purchase money security
interest and/or lease.
E. Undisclosed Liabilities.
(1) To the best actual knowledge of any officer of
LogiMetrics, there are no liabilities arising out of the
operation of the TWTA Business prior to February 17, 2000 or
relating to the Acquired Assets as delivered by LogiMetrics to
Signal which have not been disclosed to Signal.
(2) For the purposes of this paragraph the officers of
LogiMetrics shall be defined as ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Brand,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Mega, and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
F. Disclaimer of Other Representations and Warranties; Knowledge;
Disclosure.
(1) The TWTA Business is being sold on an "as is, where is"
basis and, except as to the express warranties set forth in
Paragraphs D, E and G of this section, without any other
warranties, express or implied, in law or in fact, with
respect to the Acquired Assets and the Assumed Liabilities,
including warranties of merchantability and/or fitness for a
particular purpose; and
(2) Notwithstanding anything to the contrary contained in this
Agreement or in any of the Schedules, any information
disclosed in one Schedule shall be deemed to be disclosed in
all Schedules. Certain information set forth in the Schedules
are included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The
disclosure of any information shall not be deemed to
constitute an acknowledgment that such information is required
to be disclosed in connection with the representations and
warranties made by LogiMetrics in this Agreement or that it is
material, nor shall such information be deemed to
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establish a standard of materiality.
G. Disclosure of Claims. LogiMetrics represents and warrants that on or
prior to the Closing Date, it will have disclosed to Signal all of the
material information and documents in its possession or control
relating to the claims listed on Schedule B.
H. Trade Name. LogiMetrics has not received any written notification of
any challenge relating to the use of the name "LogiMetrics, Inc." prior
to February 17, 2000.
VII. REPRESENTATIONS AND WARRANTIES OF SIGNAL
A. Corporate Status. Signal is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction and
has the corporate power and authority to carry on its business and to
own or lease property and to operate its business in the places where
its business is conducted, and is duly qualified to do business and is
in good standing in each jurisdiction where the failure to be so
qualified or be in good standing could materially affect its
performance under this Agreement.
B. Authorization.
(1) Signal has the requisite power and authority (corporate or
otherwise) to execute and deliver this Agreement, to fully
perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery
by Signal of this Agreement, the performance by Signal of its
obligations hereunder and the consummation of the transactions
contemplated hereby, have been duly authorized by all
requisite corporate action of Signal.
(2) This Agreement constitutes the legal, valid and binding
obligation of Signal, enforceable against it in accordance
with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting generally the enforcement of
creditors' rights and as the same may be limited by general
principles of equity.
C. No Conflicts. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, do not conflict with and will not result in a violation or
breach of or a default under (with or without the giving of notice or
the lapse of time or both), or result in the acceleration of or give
rise to any party the right to terminate, modify or cancel under, or
result in the loss of any rights, privileges, options or alternatives
under, or result in the creation of any lien on Signal or any of its
properties or assets under (i) the certificate of incorporation or
By-Laws of Signal, (ii) any law applicable to Signal or any of its
properties, assets or businesses, or (iii) any contract to which Signal
is a party or by which the TWTA Business is bound, except for
violations and defaults that,
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individually or in the aggregate, have not impaired and could not
reasonably be expected to impair, in any material way, the ability of
Signal to perform its obligations under this Agreement.
D. Due Diligence; Inspections. Prior to the execution of the Signal
Documents, continuously up through and including the Closing Date,
Signal has made such inspections, examinations and/or investigations of
the TWTA Business, the operation, income and expenses thereof, the
books and records relating thereto, and all other matters affecting or
relating to the TWTA Business as Signal has deemed necessary. Signal
has also had the opportunity to consult such professionals that Signal
has deemed necessary and/or desirable in connection with this
transaction. In entering into this Agreement, Signal acknowledges the
disclaimer by LogiMetrics contained in Paragraph F(1) of Section VI
hereof, and represents that it has not been induced by and has not
relied upon any representations, warranties or statements, whether
express or implied, made by LogiMetrics or any agent, employee or other
representative of LogiMetrics or by any broker or any other person
representing or purporting to represent LogiMetrics, which are not
expressly set forth in this Agreement, whether or not any such
representations, warranties or statements were made in writing or
orally.
E. Prior Performance by Signal. Signal represents and warrants that it
has timely made all payments to North Fork Bank required of it under
the Management Agreement, up through and including the Closing Date.
F. Disclosure of Scheduled Claims. Signal represents and warrants that
on or prior to the Closing Date, it will have disclosed to LogiMetrics
all of the material information and documents in its possession or
control relating to the claims listed on Schedule A and that, to the
best of Signal's knowledge, the Claim Documents to be delivered by it
to LogiMetrics under Paragraph B(3) of Section VIII shall be true and
complete in all material respects.
G. Disclosure of Other Claims. Other than as listed on Schedule B to
this Agreement, Signal:
(1) has received no notice of any other claim relating to or
arising out of the TWTA Business or any part of portion
thereof;
(2) has received no notice of any complaint of any nature
relating or arising out of to the TWTA Business or any part of
portion thereof; and
(3) has no actual knowledge which could reasonably be expected
to lead to any of the foregoing.
VIII. CLOSING DELIVERIES
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A. Deliveries to Signal. On or prior to the Closing Date, LogiMetrics
shall deliver to Signal the following in form and substance (unless the
form of which is already agreed to as an Exhibit or Schedule to this
Agreement) reasonably satisfactory to Signal's counsel:
(1) ▇▇▇▇ of Sale. A ▇▇▇▇ of Sale in the form annexed hereto as
Exhibit A;
(2) Officer's Certificate. A certificate of a corporate
officer, dated the Closing Date, to the effect that (i) each
of the representations and warranties made by LogiMetrics in
this Agreement and any other documents executed in connection
herewith that is qualified as to materiality is true, correct
and complete as of the Closing Date, and each such
representation and warranty that is not so qualified is true,
correct and complete in all material respects as of the
Closing Date, (ii) LogiMetrics has duly performed or complied
with, in all material respects, all of the covenants,
obligations, agreements and conditions to be performed or
complied with by it under the terms of this Agreement on or
prior to the Closing Date and (iii) all liens which have
existed at any time prior to the Closing Date on the Acquired
Assets have been or will be properly terminated, other than
any liens existing thereon by action of Signal on or after
February 17, 2000;
(3) Secretary's Certificate. A certificate of the Secretary of
LogiMetrics, 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
Signal may reasonably request;
(4) Payment. Payment in immediately available funds of the
consideration due under Paragraph A of Section III hereof;
(5) Customer Payments. Payment in immediately available funds
of any and all amounts received by LogiMetrics prior to the
Closing Date from customers of the TWTA Business in respect of
product shipped or services rendered by the TWTA Business on
or after February 17, 2000, other than the following:
Customer Name Invoice Date Invoice #
a. Intertek 1/24/00 #16546
b. SE Labs 1/15/00 #16564
c. Cisco 4/19/00 #66767
d. DFAS 1/19/00 #16545
(6) UCC-3's. Executed UCC-3s terminating any UCC-1 Financing
Statements previously filed by North Fork Bank or any other
lenders against the TWTA Business or the assets
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being transferred hereunder.
B. Deliveries to LogiMetrics. On or prior to the Closing Date, Signal
shall deliver to LogiMetrics the following in form and substance
(unless the form of which is already agreed to as an Exhibit or
Schedule to this Agreement) reasonably satisfactory to LogiMetrics'
counsel:
(1) Officer's Certificate. A certificate of a corporate
officer, dated the Closing Date, to the effect that (i) each
of the representations and warranties made by Signal in this
Agreement and any other documents executed in connection
herewith that is qualified as to materiality is true, correct
and complete as of the Closing Date, and each such
representation and warranty that is not so qualified is true,
correct and complete in all material respects as of the
Closing Date, and (ii) Signal has duly performed or complied
with, in all material respects, all of the covenants,
obligations, agreements and conditions to be performed or
complied with by it under the terms of this Agreement on or
prior to the Closing Date;
(2) Secretary's Certificate. A certificate of the Secretary of
Signal, dated the Closing Date, as to the incumbency of any
officer of Signal, executing this Agreement or any document
related thereto and covering such other matters as LogiMetrics
may reasonably request;
(3) Claim Documents. All correspondence, purchase orders,
purchase agreements, sales orders, sale agreements, test
reports, internal memoranda, return/repair authorization
acknowledgments, and any other documentation relating to any
claim listed on Schedule B.
(4) Return of Promissory Note. Return of the Promissory Note
marked "paid".
(5) Cancellation of the Signal Documents. Copies of the Signal
Documents marked "cancelled" except as to any non-disclosure
agreements between Signal and LogiMetrics.
(6) UCC-3s. Executed UCC-3s terminating any UCC-1 Financing
Statements previously filed by Signal against LogiMetrics.
IX. SIGNS, LETTERHEAD, INVOICES, ETC.
Immediately after the Closing Date, and in no event later than fifteen
(15) days thereafter, Signal shall destroy any blank forms used by the
TWTA Business which in any way indicate that they originated from
LogiMetrics, its subsidiaries and/or affiliates, including, but not
limited to letterhead, invoices, purchase orders, statements of account
as well as any other such documents.
X. POST CLOSING OBLIGATION TO NOTIFY, MITIGATE, AND COOPERATE
A. From and after the Closing Date, Signal agrees to:
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(1) promptly notify LogiMetrics of any potential Warranty
Claim and/or other claim;
(2) take all reasonable steps to prevent or minimize any such
Warranty Claim and/or other claim; and
(3) cooperate with and assist LogiMetrics in the disposition
or resolution of
a. any potential Warranty Claim and/or other claim
and/or
b. all Excluded Liabilities,
B. With respect to subparagraph (3) above, LogiMetrics shall reimburse
Signal solely for all of its reasonably incurred out of pocket expenses
in connection therewith (e.g. travel and hotel expenses).
C. Subject to Paragraph A(5) of Section VIII, LogiMetrics agrees that,
from and after the Closing Date, in the event LogiMetrics receives any
payments from customers of the TWTA Business with respect to product
shipped or services rendered by the TWTA Business on or after February
17, 2000, LogiMetrics shall promptly remit such payments to Signal at
the address set forth for Signal in Paragraph A(1) of Section XVIII
hereof.
XI. INDEMNIFICATION
A. By LogiMetrics.
(1) Subject to the terms and conditions of Section XI,
LogiMetrics covenants and agrees, to defend, indemnify and
hold harmless Signal from and against, and pay or reimburse
Signal for any and all claims, liabilities, obligations,
losses, fines, expenses, costs, judgments, penalties,
proceedings, deficiencies or damages (collectively, "Losses"),
except to the extent that insurance proceeds have been
received in payment of any such Losses, arising out of,
resulting from, or relating to:
a. any misrepresentation or breach of any warranty of
LogiMetrics made or contained in this Agreement in an
aggregate amount not to exceed $2,090,000.00;
b. any failure of LogiMetrics to perform any covenant or
agreement made or contained in this Agreement or
fulfill any obligation in respect thereof in an
aggregate amount not to exceed $2,090,000.00; except:
(1) to the extent that any Acquired Assets being
transferred hereunder are subject to any
liens, encumbrances, licenses or other
interests LogiMetrics' obligation to remove
or satisfy such liens, encumbrances,
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licenses or other interests, shall be in an
amount equal to the aggregate of any amounts
necessary to remove or satisfy such liens,
in addition to any other limitation set
forth herein.
c. all Excluded Liabilities in an aggregate amount not
to exceed $2,090,000.00 except for those Excluded
Liabilities arising under Section II Paragraphs
B(1)(a) and B(1)(c) which shall be without
limitation; and
d. any liabilities or claims arising under New York Law
in connection with the failure to comply with any
laws regarding the bulk transfer or sale of assets.
B. By Signal.
(1) Subject to the terms and conditions of Section XI, Signal
covenants and agrees, to defend, indemnify and hold harmless
LogiMetrics from and against, and pay or reimburse LogiMetrics
for any and all Losses except to the extent that insurance
proceeds have been received in payment of any such Losses,
arising out of, resulting from, or relating to:
a. any misrepresentation or breach of any warranty of
Signal made or contained in this Agreement in an
aggregate amount not to exceed $2,090,000.00;
b. any failure of Signal to perform any covenant or
agreement made or contained in this Agreement or
fulfill any obligation in respect thereof in an
aggregate amount not to exceed $2,090,000.00;
c. the operation of the TWTA Business and/or the use of
the Acquired Assets, including, hardware and product
sold and services performed
(1) from February 17, 2000 and continuing
without limitation;
(2) prior to February 17, 2000 without
limitation other than with respect to
Excluded Liabilities;
d. all Assumed Liabilities; and
e. Signal's use of the name or service ▇▇▇▇ LogiMetrics,
Inc. or any derivation thereof.
C. Indemnification Procedures. In order for an indemnified party to be
entitled to any indemnification provided for under this Agreement in
respect of, arising out of or involving a claim made by any natural
person, firm, partnership, association, corporation, company, limited
liability company, trust, business trust or other entity, or any
Governmental Authority ("Person") against the indemnified party (a
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"Third Party Claim"), such indemnified party must notify the
indemnifying party in writing of the Third Party Claim promptly
following receipt by such indemnified party of written notice of the
Third Party Claim, such notice to contain the amount of the Loss
claimed or, in the event that such Loss is not then liquidated, a good
faith estimate thereof (if then available); but in any event no later
than thirty (30) days of the receipt of such written notice of the
Third Party Claim, provided, however, that failure to give such
notification shall not affect the indemnification provided hereunder
unless such failure shall prejudice the rights or the ability of the
indemnifying party to defend such claim. Thereafter, the indemnified
party shall deliver to the indemnifying party, promptly following the
indemnified party's receipt thereof, copies of all notices and
documents (including court papers) received by the indemnified party
relating to the Third Party Claim.
D. Limitations on Indemnification. Any indemnification under this
section shall be limited as follows:
(1) No indemnification shall be made for Losses arising out
of, resulting from or relating to any misrepresentation or
breach of any warranty, covenant or agreement which the party
seeking indemnification
a. had actual knowledge of as of the Closing Date;
and/or
b. with respect to which such party failed to notify the
other party and/or to prevent or minimize any
potential Warranty Claim, and/or other claim, or
Excluded Liability as required under Section X
hereof, provided that this Paragraph (b) shall only
apply in the event that such failure to notify
materially adversely affected the indemnifying party.
(2) Any indemnification shall be (i) net of any reasonably
anticipated federal or state income tax benefit specifically
arising from the facts or circumstances giving rise to the
Losses, realizable by the indemnified party (or any of its
affiliates) by a reduction in taxes payable, or by the receipt
of a refund of taxes, by the indemnified party (or such
affiliate); and (ii) net of any amounts recovered or
recoverable from any surety, insurance carrier or third party
obligor, including any customer (e.g., the government) which
shall not include the cost of maintaining any surety or
insurance policies, and no right of subrogation against the
indemnifying party shall accrue hereunder to or for the
benefit of any surety, insurance company or any third party.
The Indemnified Party shall submit in a timely manner to any
applicable surety, insurance carrier or third party obligor,
including any customer (e.g., the government) all claims for
indemnifiable
15
Losses for which it is reasonably likely that such entity
would have a payment obligation to any such Indemnified Party
(or its predecessors) and the Indemnifying Party shall be
subrogated to the rights of such Indemnified Party (or its
affiliates) to claim against such surety, insurance carrier or
third party; provided, however, that any failure to collect
any such amounts shall not constitute a defense to an
obligation to indemnify for any such Losses. Any tax benefit
shall be determined in good faith by the independent public
accountants of the indemnified party and shall apply to the
earliest year reasonably permissible.
(3) The term "Losses" shall not include (i) any incidental or
consequential damages which the indemnified party may suffer;
or (ii) any cost or expense previously counted in determining
any other Losses.
(4) LogiMetrics and Signal, as the case may be, shall take all
reasonable steps and shall give all reasonable assistance to
avoid or mitigate their Losses, which in the absence of such
mitigation may give rise to a defense or offset in respect of
any claim arising out of, resulting from, or related to this
Agreement.
(5) No indemnifying Party shall be liable for any Losses
pursuant to this Section XI unless a written claim for
indemnification therefor in accordance with Paragraph C of
this Section XI is given by the Indemnified Party to the
Indemnifying Party prior to the first (1st) anniversary of the
Closing Date, except that this time limitation shall not apply
to any Losses (i) with respect to claims related to or arising
directly or indirectly out of any inaccuracies in any
representation or warranty made in Paragraph D (title),
Paragraph E (undisclosed liabilities) or Paragraph G
(disclosure of other claims) of Section VI hereof; and/or (ii)
Paragraph D (due diligence), Paragraph E (North Fork
payments), Paragraph F (disclosure of scheduled claims) or
Paragraph G (disclosure of other claims) of Section VII
hereof; and/or (iii) payable with respect to claims for
indemnification under Paragraph A(1)(c) or (d) of this Section
XI or Paragraph B(1)(c),(d) or (e) of this Section XI, as to
which in each case the applicable statute of limitations shall
apply.
XII. BULK SALE
Signal waives compliance by LogiMetrics with any bulk sales law which
may be applicable to the transactions contemplated by this Agreement.
XIII. CHANGE OF NAME
A. Except for as provided in Paragraph B below, within fifteen (15)
days following the Closing Date,
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Signal shall cease all use of the name and design ▇▇▇▇ of LogiMetrics,
Inc. or any variation thereof.
B. LogiMetrics hereby grants Signal for eight (8) months from the
Closing Date a non-exclusive, non-transferable, limited right to use
the name LogiMetrics solely in connection with the manufacture and sale
of TWTA assemblies provided that:
(1) all TWTA assemblies produced and sold by Signal after the
Closing Date, and all catalogues, advertising, and public
relations material shall include the words "Product Line"
immediately any use of the name LogiMetrics;
(2) with each such use, Signal must also conspicuously publish
a disclaimer that Signal is in no way affiliated with
LogiMetrics, Inc; and
(3) the parties agree that all assemblies sold by Signal prior
to the Closing Date may be sold by Signal without the words
"Product Line" and the disclaimer as set forth in Paragraph
(1) and (2) above.
XIV. TRAINING
A. Subject to the limitations set forth in this paragraph, LogiMetrics
will use reasonable efforts to send personnel employed by L-3's ▇▇▇▇▇
Microwave Division ("▇▇▇▇▇") and who were previously employed by
LogiMetrics, to Florida to assist in training Signal personnel on TWTA
assemblies for a consecutive period no longer than two (2) weeks
("Training Session") provided that:
(1) such employees are still employed by ▇▇▇▇▇;
(2) such employees are willing to do so; and
(3) that the timing of the Training Session would not
adversely affect the operation of Narda's business.
B. Signal will pay travel expenses for the personnel involved, as well
as the employees hourly rate burdened for fringe benefits.
C. Signal will notify LogiMetrics in writing within four (4) weeks from
the Closing Date of the date(s) upon which it desires said Training
Session to commence. Said Training Session shall in no event, however,
take place no more than three (3) months after the Closing Date.
XV. PUBLIC ANNOUNCEMENTS
No party hereto shall have made any public announcement in respect of
this Agreement or the transactions contemplated hereby without the
prior written consent of the other parties except as required by
applicable law or the rules of any applicable stock exchange or stock
market (in which case the nature of the
17
announcement shall be described to the other parties and the other
parties shall be allowed reasonable time to comment prior to
dissemination to the public), provided that Signal shall be entitled to
disclose to its customers and representatives in the ordinary course of
business the fact that it has entered into this Agreement.
XVI. FURTHER ASSURANCES
The parties hereby agree that they will, at any time, and from time to
time after the Closing Date, upon the reasonable request of the other
party, use their reasonable best efforts to do, execute, acknowledge
and deliver, or will cause to be done, executed, acknowledged and
delivered, all such further reasonable acts, assignments, assumptions,
transfers, conveyances, powers of attorney and assurances as may be
reasonably required for more effectively carrying out the purposes of
this Agreement.
XVII. RELEASES
A. In consideration of all of the foregoing, except as to any dispute
arising under this Agreement or arising under any agreement,
instrument, or document executed in connection with this Agreement,
Signal hereby releases and discharges LogiMetrics and L-3, their
parents, subsidiaries, and affiliates, from all actions, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialities, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgements, expenses,
executions, claims, and demands whatsoever, in law, admiralty or
equity, of whatever kind and nature, known or unknown, which against
LogiMetrics and L-3, and their successors and assigns, Signal ever had,
now has or hereafter can, shall or may have, for, upon, or by reason of
any matter, cause or thing whatsoever, whether raised or which could
have been raised, from the beginning of the world to the day of the
date of this Agreement, arising out of, resulting from, or relating to
the Signal Documents or the TWTA Business, including:
(1) all assets tangible and intangible, being transferred
hereunder including but not limited to accounts receivable,
inventories (including raw materials, work in process,
supplies, samples, prototypes and finished goods), machinery,
equipment, tools, supplies, booths, displays, materials, plans
and schematics, intellectual property, customer lists and all
substitutions, replacements, and proceeds thereof;
(2) all liabilities of whatever kind and nature being assumed
hereunder including but not limited to all debts, claims,
obligations, contracts, purchase orders, sales orders,
commitments, and liabilities of any kind, character or
description whether accrued, absolute, contingent (whether
18
known or unknown);
(3) all monies invested and expenses incurred by Signal in
connection with its operation of the TWTA Business; and
(4) any monies loaned by Signal to LogiMetrics.
B. In consideration of all of the foregoing, except as to any dispute
arising under this Agreement or arising under any agreement,
instrument, or document executed in connection with this Agreement, and
except as to any dispute arising under any non-disclosure agreement
between Signal and LogiMetrics, LogiMetrics and L-3 hereby releases and
discharges Signal, its parents, subsidiaries and affiliates from all
actions, causes of action, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialities, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages,
judgements, expenses, executions, claims, and demands whatsoever, in
law, admiralty or equity, of whatever kind and nature, known or
unknown, which against Signal, its successors and assigns, LogiMetrics
or L-3 ever had, now has or hereafter can, shall or may have, for,
upon, or by reason of any matter, cause or thing whatsoever, whether
raised or which could have been raised, from the beginning of the world
to the day of the date of this Agreement, arising out of, resulting
from, or relating to the Signal Documents or the TWTA Business.
C. Section XVII, and the releases set forth therein do not apply to any
dispute arising under this Agreement or arising under any agreements,
instruments, or documents executed in connection with this Agreement.
XVIII. NOTICES
All notices, instructions, waivers or other communications required or
permitted to be given hereunder or necessary in connection herewith
shall be in writing and shall be deemed to have been duly delivered,
upon the delivery thereof, if delivered personally or upon the
transmission thereof, if sent by facsimile transmission, on the second
business day after delivery to a nationally recognized overnight
delivery service for express delivery, or on the fifth business day
after mailing, if mailed, postage prepaid, certified mail, return
receipt requested as follows:
(1) if to Signal, at the address shown below, or at such other
address as Signal may have furnished to LogiMetrics in
writing:
Signal Technology Corporation Keltec Operation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
19
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(2) if to LogiMetrics, at the address shown below, or at such
other address as LogiMetrics may have furnished to Signal in
writing:
L-3 Communications Corporation
Narda Microwave Division
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. Mega , President
With copies to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
V.P., Secretary and General Counsel
L3 Communications Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
XIX. SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties hereto. Neither
this Agreement nor any of the rights or obligations hereunder may be
assigned by LogiMetrics or Signal without the prior written consent of
the other party.
XX. ENTIRE AGREEMENT; AMENDMENT AND WAIVER
This Agreement sets forth the entire understanding among the parties
concerning the subject matter of this Agreement and incorporates all
prior negotiations and understandings and supersedes all prior letters
or memoranda of intent, agreements or understandings (whether written
or oral), among such parties relating to
20
the subject matter hereof. There are no covenants, promises,
agreements, conditions or understandings, either oral or written,
between them relating to the subject matter of this Agreement other
than those set forth herein. No representation or warranty has been
made by or on behalf of any party to this Agreement (or any officer,
director, employee or agent thereof) to induce any other party to enter
into this Agreement or to abide by or consummate any transactions
contemplated by any terms of this Agreement, except representations and
warranties expressly set forth herein. No alteration, amendment, change
or addition to this Agreement shall be binding upon any party unless in
writing and signed by the party to be charged.
XXI. COUNTERPARTS
This Agreement may be executed (including by facsimile transmission)
with counterpart signature pages or in any number of counterparts, each
of which when so executed and delivered shall be deemed an original,
and such counterparts together shall constitute only one instrument.
XXII. SURVIVAL OF WARRANTIES, ETC.
The representations and warranties of the parties hereto contained in
this Agreement or otherwise made in writing in connection with the
transactions contemplated hereby shall survive the execution and
delivery of this Agreement and the Closing Date. Such representations
and warranties shall expire on the last day, if any, that claims for
breaches of such representations or warranties may be made pursuant to
Section XI hereof, except that any such representation or warranty that
has been made the subject of a claim prior to such expiration date
shall survive with respect to such claim until the final resolution of
such claim pursuant to Section XI hereof.
XXIII. NO PRESUMPTION
The parties understand and agree that each and every term and condition
of this Agreement has been mutually negotiated, prepared and drafted,
and if at any time the parties desire or are required to interpret or
construe any such term or condition of this Agreement, no consideration
shall be given to the issue of which party actually prepared, drafted
or requested any such term or condition of this Agreement.
XXIV. GOVERNING LAW
This Agreement shall be governed in all respects, including as to
validity, interpretation and effect, by the internal laws of the State
of New York without giving effect to the conflict of laws rules
thereof.
XXV. JURISDICTION, VENUE AND PROCESS
Signal and LogiMetrics each hereby irrevocably submit to the
jurisdiction of the courts of the State of New York, County of Suffolk
and the Federal Courts of the United States of America located in the
Eastern
21
District of New York with respect to the interpretation and enforcement
of the provisions of this Agreement, the documents referred to herein
and any disputes arising directly or indirectly hereunder or
thereunder. Further, the parties hereby waive and agree not to assert
as a defense in any action, suit or proceeding that such party is not
subject to such jurisdiction or that such action, suit or proceeding
may not be brought or is not maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement or any of
such documents may not be enforced in or by said courts.
XXVI. SECTION HEADINGS
The headings of the sections and subsections of this Agreement are for
convenience only and shall not be deemed to constitute a part of this
Agreement.
XXVII. SEVERABILITY
If any provision of this Agreement, including any phrase, sentence,
clause, section or subsection, is inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable to any extent
whatsoever.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above first written.
LOGIMETRICS, INC.
/s/ ▇▇▇▇ ▇. Mega
-----------------------------------------
By: ▇▇▇▇ ▇. Mega
Name: President, Acting
Title: Logimetrics, Inc.
SIGNAL TECHNOLOGY CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: Chairman and CEO
Title: Signal Technology Corporation
L-3 COMMUNICATIONS CORPORATION
solely for purposes of Paragraph (B) of
Section XVII
/s/ ▇▇▇▇ ▇. Mega
-----------------------------------------
By: ▇▇▇▇ ▇. Mega
Name: Vice President of Microwave Group
Title: L-3 Communications Corporation
23