EXCHANGE
AGREEMENT, dated September 4, 2008 (this
“Agreement”), is among LCC International, Inc., a
Delaware corporation (the “Company”), the Investors
listed on the signature pages hereto (collectively, the
“Investors”) and the Guarantors (as defined
below).
WHEREAS, the
Investors currently hold shares of the Company’s
Series A Convertible Preferred Stock, par value $0.01 per
share (the “Series A Preferred Stock”) as set
forth on Schedule 1 attached hereto, convertible into the
Company’s Class A Common Stock, par value $0.01 per
share (the “Common Stock”); and
WHEREAS, the
Company and the Investors are party to that certain Registration
Rights Agreement, dated as of April 19, 2007, as amended (the
“Registration Rights Agreement”), pursuant to which,
among other things, the Company agreed to register the shares of
Common Stock into which the Preferred Stock is convertible with the
Securities and Exchange Commission (the “SEC”) for
resale pursuant to the Securities Act of 1933, as amended (the
“Act”); and
WHEREAS, the
Company and Bank of America, N.A. (“Lender”) are party
to that certain Amended and Restated Credit Agreement, dated as of
May 29, 2007, as amended (the “Credit Agreement”);
and
WHEREAS, Lender
has agreed to provide a new $9,000,000 term loan tranche (the
“Tranche”) of the existing Credit Agreement ranking
pari passu with the current obligations under the Credit Agreement
in exchange for a limited guaranty (the “Guaranty”) by
affiliates of the Investors (the “Guarantors”) in an
amount up to $9,000,000 and a deposit of cash by the Investors as
collateral for the Guaranty in the amount of $9,000,000 (the
“Deposit”), which amount of cash will be pledged to
Lender; and
WHEREAS, as an
incentive for the Investors to cause the Guarantors to provide the
Guaranty and the Deposit for the benefit of the Company, the
Company will, among other things, issue certain warrants to the
Guarantors and exchange the Investors’ existing Series A
Preferred Stock specified on Schedule 1 attached hereto
for shares of the Company’s Series B Convertible
Preferred Stock, par value $0.01 per share (the
“Series B Preferred Stock”) in the amount or
amounts specified on Schedule 1 attached hereto, all on
the terms and subject to the conditions provided herein.
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, and
intending to be legally bound, the parties hereto agree as
follows:
Section 1.
Exchange . At the Closing (as defined below), the Company
shall exchange the existing Series A Preferred Stock specified
on Schedule 1 attached hereto owned by each Investor
for shares of the Series B Preferred Stock in the amount or
amounts specified on Schedule 1 attached hereto, such
Series B Preferred Stock to have the relative rights,
preferences and designations set forth in Exhibit B
attached hereto (the “Series B Certificate of
Designations”). In accordance with the terms of the
Series B Certificate of Designations, the Series B
Preferred Stock shall be convertible into or otherwise exchangeable
for Common Stock of the Company to the extent specified therein.
The Company shall file a contemporaneous amendment and restatement
of the Certificate of Designations, Preferences and Rights of
Series A Convertible Preferred Stock (the “Amended and
Restated Series A Certificate of Designations”) in the
form attached hereto as Exhibit A to make the
Series A Preferred Stock rank pari passu with the
Series B Preferred Stock and effect certain other amendments
to the terms of such Series A Preferred Stock.
Section 2.
Warrants . Contemporaneously with the execution of the
Guaranty by the Guarantors and the delivery thereof to the Lender
and the provision of the Deposit to the Lender, the Company shall
issue to each Guarantor a warrant to purchase shares of the
Company’s Series C Preferred Stock, par value $0.01 (the
“Series C Preferred Stock”) in the form attached
hereto as Exhibit D (each, a “Warrant”), and in
the amount as set forth on Schedule 1 attached hereto.
The exercise price per share for such Warrant shall be as set forth
in the Warrant and on the terms and subject to the conditions set
forth therein. The Series C Preferred Stock shall have the
rights, preferences and designations set forth in the Certificate
of Designations, Preferences and Rights of Series C Preferred
Stock (the “Series C Certificate of Designations,”
together with the Amended and Restated Series A Certificate of
Designations and the Series B Certificate of Designations, the
“Certificate of Designations”) in the form attached
hereto as Exhibit C .
Section 3.
Additional Agreements .
(a) On the
date hereof, the Company shall notify Nasdaq that it is voluntarily
delisting its Common Stock from The Nasdaq Global Market exchange,
and shall thereafter take any and all actions required to
accomplish such delisting as promptly as practicable, and in any
event by no later than September 30, 2008;
(b) On or
prior to the Closing, the Company shall have duly filed the
Certificate of Designations with the Secretary of State of the
State of Delaware;
(c) The
Company shall take any and all actions necessary or desirable on
its part to complete the exchange of Series A Preferred Stock
for Common Stock described in Section 8(a)(vi)
;
(d) The
Company shall take any and all actions necessary or desirable on
its part to enter into the amendment to the Credit Agreement
described in Section 8(a)(vii) ;
(e) The
Company shall cause its counsel to deliver the legal opinion
required pursuant to Section 8(a)(x) ;
(f) The
Investors shall take any and all actions necessary or desirable on
their part to cause the Guarantors to deliver the Guaranty to the
Lender and to provide the Deposit to the Lender; and
(g) The
Investors shall, in their capacity as holders of Series A
Preferred Stock, consent to the amendments set forth in the Amended
and Restated Series A Certificate of Designations.
(h) The
Investors shall, in their capacity as holders of Common Stock and
Series A Preferred Stock, consent to any amendments to the
Company’s Restated Certificate of Incorporation required to
authorize additional shares of Common Stock in order to allow any
existing holders of Series A Preferred Stock to convert their
shares into Common Stock.
Section 4.
Registration Rights .
(a) Effective
at the Closing, the Registration Rights Agreement shall be amended
as follows:
(i) Section 1
shall be amended to include the following definitions:
“
Exchange Agreement ’ means the Exchange Agreement,
dated as of September 4, 2008, among the Company and the
Investors.”
“
Series A Preferred Stock ’ means the
Series A Convertible Preferred Stock, par value $0.01 per
share, issued pursuant to the terms of the Exchange and Settlement
Agreement.”
“
Series B Preferred Stock ’ means the
Series B Convertible Preferred Stock, par value $0.01 per
share, issued pursuant to the terms of the Exchange
Agreement.”
(ii) The
definition of “Preferred Stock” shall be deleted in its
entirety and replaced to read as follows:
“
Preferred Stock ’ shall mean the Series A
Preferred Stock and the Series B Stock, collectively or
separately as the context may require.”
(b) Except as
expressly modified hereby, the Registration Rights Agreement shall
remain in full force and effect.
Section 5.
Exchange and Settlement Agreement . Each of the Investors
hereby acknowledges and agrees that effective as of Closing, it
shall continue to comply with Section 10 of the Exchange and
Settlement Agreement (as defined in the Registration Rights
Agreement), as if the shares of Series B Preferred Stock were
Shares (as such term is defined in the Exchange and Settlement
Agreement).
Section 6.
Company Representations . The Company hereby represents and
warrants to each of the Investors and Guarantors as
follows:
(a) The
Company is duly organized and validly existing under the laws of
the State of Delaware and has full power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder, all of which have been duly authorized by all requisite
corporate action except for those approvals of stockholders which
are contemplated by this Agreement, which shall have been obtained
prior to Closing. This 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) 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
consummation of the transactions contemplated hereby or thereby by
the Company, except for filing the Certificate of Designations with
the Secretary of State of the State of Delaware, submitting notices
and filings in connection with the delisting of the Company’s
Common Stock from The Nasdaq Global Market exchange and customary
post-closing filings required pursuant to applicable securities
laws which will be made in the ordinary course.
(c) The
shares of Series B Preferred Stock to be issued hereunder have
been duly and validly authorized and, when issued pursuant to this
Agreement, will be validly issued, fully paid and nonassessable,
and shall be free and clear of all Encumbrances (other than those
created by the Investors) and will be entitled to the relative
rights, powers and preferences set forth in the Series B
Certificate of Designations. The Common Stock issuable upon the due
conversion or other exchange of the Series B Preferred Stock
in accordance with the Series B Certificate of Designations,
will, when issued, be validly issued, fully paid and nonassessable,
and shall be free and clear of all Encumbrances (other than those
created by the Investors).
(d) The
Warrants to be issued hereunder have been duly and validly
authorized and, will constitute, when executed and delivered, the
legal, valid and binding obligations of the Company, enforceable
against the Company 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 generally. Upon the exercise
of the Warrants and payment of the exercise price therefor, all in
accordance with the terms therein, the shares of Series C
Stock issuable upon such exercise shall be validly issued, fully
paid and nonassessable, and shall be free and clear of all
Encumbrances (other than those created by the Investors) and will
be entitled to the relative rights, powers and preferences set
forth in the Series C Certificate of Designations.
Section 7.
Investor and Guarantor Representations . Each of the
Investors and Guarantors hereby, severally and not jointly,
represents and warrants to the Company (as to itself only) as
follows:
(a) It is
duly organized and validly existing under the laws of its
jurisdiction of formation and has full power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder, all of which have been duly authorized by all requisite
corporate, partnership or limited liability company action, as
applicable. This Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding agreement,
enforceable against it in accordance with its terms.
(b) 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
consummation of the transactions contemplated hereby or thereby by
it.
(c) It is the
legal owner of the shares of Series A Preferred Stock listed
on Schedule 1 attached hereto as owned by it, free and clear
of all Encumbrances except those created pursuant to the
Registration Rights Agreement and those imposed generally by
applicable securities laws. It has the absolute and unrestricted
right, power and capacity to exchange the shares of Series A
Preferred Stock as contemplated hereby free and clear of any
Encumbrances (except for restrictions imposed generally by
applicable securities laws).
(d) It has
received from the Company all necessary information relating to the
Company and its
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