Document:

Exhibit 10.1

 

SERVICES AGREEMENT — 2012

 

THIS SERVICES AGREEMENT — 2012 (this “Agreement”) is made and entered into as of the 1st day of July 2012 by and between COLT DEFENSE LLC, a Delaware limited liability company (“Colt Defense”), and COLT’S MANUFACTURING COMPANY LLC, a Delaware limited liability company (“CMC”).

 

RECITALS:

 

A.            CMC and Colt Defense share a common facility located at 545-547 New Park Avenue, West Hartford, Connecticut (the “Facility”).

 

B.            CMC wishes to procure certain services from Colt Defense at the Facility (collectively, the “Services”).

 

C.            Colt Defense and CMC believe it to be in their mutual interest to memorialize in a written agreement the Services that Colt Defense will provide and the basis on which Colt Defense is to be compensated for such Services.

 

D.            It is the intent of Colt Defense and CMC that this Agreement supersede and replace, in its entirety, that certain Intercompany Services Agreement between the parties, dated as of June 26, 2007, as amended.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants of the parties as set forth herein, the parties do hereby agree as follows:

 

ARTICLE I. TERM

 

1.1 Effective Date.  This Agreement shall become effective as of July 1, 2012.

 

1.2 Term.  This Agreement shall continue in effect until October 27, 2013.  Subject to Section 5.11, at the conclusion of the initial term of this Agreement and at the conclusion of each subsequent year that this Agreement remains in effect following October 27, 2013, this Agreement shall be deemed to have been extended automatically for an additional term of one year, unless either party shall have given the other party at least three months prior written notice that it does not wish or intend to extend this Agreement at the end of the then-current term.

 

1.3 Early Termination.  Notwithstanding Section 1.2, the parties may, by mutual written agreement, terminate this Agreement at any time.

 

 

ARTICLE II.  SERVICES

 

2.1 Services to be Provided. The Services shall consist of Consolidated Services, Factory Electricity Services, Heat Treat Services and, to the extent agreed to, Special Services.

 

2.2 Consolidated Services.  Colt Defense shall provide the Services described in this Section 2.2 (“Consolidated Services”) to CMC as required by CMC.  Unless otherwise agreed by the parties, such Consolidated Services shall be substantially the same such services as have been provided by Colt Defense to CMC prior to the date of this Agreement and in approximately the same quantities.

 

(a) Municipal water service.

 

(b) Maintenance services including trash removal, restroom cleaning, clearing of aisles, attending to tramp oil bins.

 

(c) Administrative services including medical, cafeteria and firearms control.

 

(d) Data processing/information technology services, including personnel, access to enterprise financial software currently licensed by Colt Defense and currently made available to CMC.

 

(e) Factory overhead services consisting of safety and environmental, materials management and capital projects management.

 

(f) Office and mailroom services, including printers, mailroom and postage, phones and Internet, miscellaneous services, engineering software and support, and subscriptions.

 

(g) Financial data processing services.

 

(h) Natural gas supply for factory heaters. 

 

(i)  Environmental waste disposal services. 

 

(j) Factory oil and lubricants supply.

 

(k) Building and grounds maintenance services. 

 

(l) Security services.

 

(m) Overtime shipping department services.

 

(n) Administration building electricity service. 

 

(o)  Accounts receivable accounting services.

 

For purposes of clarification, it is agreed that CMC will continue to be responsible for purchasing, and shall retain ownership of, its own information technology (computers, etc.) and telephony (iPhones, iPads, etc.) equipment, software and third-party support, as well as

 

 

any CMC-specific software licenses required to be purchased, including licenses for software already installed that has not previously been purchased by either Colt Defense or CMC.

 

The charge to CMC for the Consolidated Services for a twelve-month period is $1,766,376 and for each month is $147,198.

 

2.3 Factory Electricity. It is the intent of the parties that CMC will receive electricity in the factory through a separate metered substation or service delivery point, to be installed by CMC at its sole expense, no later than September 1, 2012.  Effective as of the date such meter begins metering CMC separately, CMC shall pay to Colt Defense each month (or for such other period covered by Colt Defense’s invoice that includes the CMC delivery point) the amount set forth in the invoice for such separate delivery point, grossed up by such factor as is agreed to by CMC and Colt Defense so that the grossed up number approximates CMC’s true utilization of factory electricity.  For the period from July 1, 2012 until the commencement of separate metering, Colt Defense will bill CMC on the same cycle as it is billed for electricity by its electricity provider.  CMC shall pay Colt Defense for electricity used by CMC in the factory at an annual rate of $420,000 for the actual number of days from July 1, 2012 until the commencement of separate metering. The charge for electricity provided to CMC in the administration building is included in the fee for Consolidated Services.  All the electricity provided by Colt Defense to CMC pursuant to this paragraph is referred to in this Agreement as “Factory Electricity Services.”

 

2.4 Heat Treat.  CMC will contract with Colt Defense by purchase order for such heat treat services (“Heat Treat Services”) as CMC may require during the term of this Agreement.  All such Heat Treat Services as Colt Defense agrees to provide shall be deemed to have been provided pursuant to this Agreement.

 

2.5 Special Services. The parties recognize that the need may arise for CMC to obtain additional services from Colt Defense during the term of this Agreement that have not been expressly contemplated by this Agreement, and that Colt Defense may require services from CMC (“Special Services”).  Each party agrees to consider any such request in good faith and, to the extent possible without disruption to its business, to accommodate such request.  To the extent that either party agrees to accommodate a request by the other party for any such Special Services, and the other party agrees in advance to pay for such Special Services, they shall be paid for as agreed. A party may refuse to provide such Special Services if the parties cannot agree on the price or any other aspect of the arrangement.

 

2.6 Payment for Services. Except to the extent that Colt Defense and CMC otherwise expressly agree in writing, CMC shall pay Colt Defense for Consolidated Services on a monthly basis in arrears, on or before the last day of each month.  Electricity Services will be paid for within 15 days of CMC’s receipt of an invoice provided pursuant to Paragraph 2.3.  Payment for Heat Treat Services or Special Services shall be as separately agreed to by Colt Defense and CMC with respect to the particular Services in question.

 

2.7 Delivery of Services.  All Services provided by Colt Defense shall be performed by and under the sole control of Colt Defense in a reasonably prompt manner and, to the

 

 

extent relevant to a particular Service, by the staff group that performed such services for CMC prior to the date of this Agreement, subject to the availability of personnel. 

 

ARTICLE III. DEFAULT; REMEDIES

 

3.1 Default by Colt Defense.  In the event of any default by Colt Defense in the performance of its obligations under this Agreement, CMC’s sole remedy shall be to recover from Colt Defense the direct damages incurred by CMC as a result of such default by Colt Defense.  In no event shall CMC be entitled to withhold payment under this Agreement as a result of any such default, nor shall CMC be entitled to recover indirect, special, punitive or consequential damages.

 

3.2 Default by CMC.  In the event of a material default by CMC in the performance of its obligations under this Agreement, Colt Defense shall be entitled to cease providing all Services under this Agreement and, in addition thereto, Colt Defense shall be entitled to recover from CMC its direct damages incurred as a result of such default by CMC.  Before exercising any default remedies, Colt Defense shall provide written notice to CMC specifying the default in question and CMC shall have fifteen (15) calendar days after delivery of such notice to cure such default; provided that Colt Defense shall not be obligated to provide such notice of default and opportunity to cure more than twice in any twelve-month period.  In no event shall Colt Defense be entitled to recover indirect, special, punitive or consequential damages.

 

ARTICLE IV INFLATION ADJUSTMENT

 

4.1 Proration upon Early Termination.  In the event of early termination of this Agreement pursuant to Section 1.3, all fees payable hereunder shall be prorated for the period in which termination occurs.

 

4.2 Inflation Adjustment. The fee referred to in Section 2.2 of this Agreement shall increase by 2.0% per year during each year in which this Agreement is in effect, such increase to be effective as of the anniversary of the Effective Date of this Agreement.

 

4.3 Out-of-Pocket Expenses. It is not contemplated that Colt Defense shall incur any out-of-pocket expenses solely for the benefit of CMC in connection with the performance of this Agreement, but in the event that it elects to do so, at CMC’s specific request, in order to provide CMC with the benefits of this Agreement, CMC shall either pay such expenses directly itself or reimburse Colt Defense promptly upon receipt of an invoice for any such out-of-pocket expenses incurred by Colt Defense; provided, however, that Colt Defense shall not incur any out-of-pocket expenses in excess of $10,000 without the prior written consent of CMC.

 

ARTICLE V.  MISCELLANEOUS

 

5.1 Personnel. During the term of this Agreement, neither CMC nor Colt Defense shall, without the prior written consent of the other, solicit for employment or a contractual relationship, or hire, or interfere in any way with the employment or other contractual relationship with, any individual who is, or within the previous three-month period (as long as not terminated for cause) had been, an employee of the other company.  For purposes of

 

 

clarification, it is understood that this clause applies only to non bargaining unit employees.

 

5.2 Sublease and Commercial Rifle MOU. Nothing set forth in this Agreement shall affect in any way the respective rights or obligations of either Colt Defense or CMC under (i) that certain First Amended and Restated Sublease Agreement, dated as of October 26, 2005 (“Sublease”), or (ii) that certain Memorandum of Understanding Regarding Distribution of Colt Law Enforcement and Commercial Rifles, dated 1 May 2011, both of which agreements remain in full force and effect in accordance with their respective terms.

 

5.3 Sales Taxes.  In addition to the amounts otherwise specified in this Agreement, CMC shall remit to Colt Defense, with each payment required under this Agreement, the appropriate amount of any sales or use tax that Colt Defense is required to collect from CMC pursuant to applicable Connecticut law, as communicated to CMC by Colt Defense.

 

5.4 Relationship of the Parties.  Nothing set forth in this Agreement shall be construed as (a) an assumption by Colt Defense of any obligation to increase the sales or profits of CMC or otherwise to guarantee the success of CMC’s operations; (b) an assumption by Colt Defense of any financial obligation of or to CMC or commitment by Colt Defense to provide any financing for or investment in CMC; (c) the creation of any relationship of employment between CMC and any employee of or consultant to Colt Defense; or (d) an assumption by Colt Defense of any responsibility for the work performed by outside vendors engaged by Colt Defense to perform any Service hereunder.

 

5.5 Ownership of Technology.  Nothing set forth in this Agreement shall give Colt Defense any ownership or other rights in any patents, copyrights, trade secrets, or other property rights arising out of work performed by Colt Defense employees for the primary benefit of CMC pursuant to this Agreement and all such intellectual property shall be the sole property of CMC.

 

5.6 Notices.  Any notices required or permitted to be given pursuant to this Agreement shall be given in hand, or in writing and forwarded charges prepaid, by first- class mail, recognized overnight express courier, or by facsimile confirmed by confirmation receipt, and addressed as follows:

 

	
 
    	
If   to Colt Defense:
    	
Colt   Defense LLC 
    
	
 
    	
 
    	
P.O. Box   118
    
	
 
    	
 
    	
Hartford,   CT 06141
    
	
 
    	
 
    	
547   New Park Avenue (if by courier) 
    
	
 
    	
 
    	
West   Hartford, CT 06110
    
	
 
    	
 
    	
Attn:   President and CEO
    
	
 
    	
 
    	
(860)   244-1335
    	
(facsimile)
    
	
 
    	
 
    	
 
    
	
 
    	
If   to CMC:
    	
Colt’s   Manufacturing Company LLC 
    
	
 
    	
 
    	
P.O. Box   1868
    
	
 
    	
 
    	
Hartford,   CT 06144-1868
    
	
 
    	
 
    	
545   New Park Avenue (if by courier) 
    
	
 
    	
 
    	
West   Hartford, CT 06110
    
	
 
    	
 
    	
Attn:   President and CEO
    
	
 
    	
 
    	
(860)   244-1481
    	
(facsimile)
    

 

 

Either party may give written notice of a change of address in accordance with the provisions of this Section 5.6 and, thereafter, any notice or request to be given hereunder shall be forwarded to the new address so provided.  All notices given hereunder shall be deemed to have been received by the party to whom addressed (a) immediately upon personal delivery; (b) one (1) business day after notice given by facsimile; or (c) three (3) business days after the date of posting of notice sent by mail.

 

5.7 Assignment.  CMC may assign this Agreement to any purchaser of all or substantially all of its assets and any such purchaser shall be deemed to have succeeded to CMC’s rights and obligations hereunder.  This Agreement may not otherwise be assigned by CMC without the express written consent of Colt Defense and any purported assignment without such consent shall be null and void. Colt Defense shall assign this Agreement to any purchaser of all or substantially all of its assets and any such purchaser shall be deemed to have succeeded to Colt Defense’s rights and obligations hereunder whether or not a formal assignment agreement is executed.

 

5.8 Payment Obligations.  All of CMC’s payment obligations hereunder are expressly conditioned on its continued occupation of the premises currently subleased by it at 545 New Park Avenue, West Hartford, Connecticut.  In the event that, for any reason, CMC ceases to occupy the premises, Colt Defense shall continue to provide such Services as may be requested in writing by CMC for a transition period of up to 60 days in order to facilitate an orderly move from the premises by CMC.  Such transition Services shall be provided on the terms and at the rates set forth in this Agreement, appropriately pro-rated and adjusted to reflect the level of Services actually provided. CMC shall pay for such Services promptly and in any event within 30 days of receipt of the applicable invoices from Colt Defense.

 

5.9 Entire Agreement. Except to the extent expressly contemplated by Sections 2.4 and 2.5 above, this Agreement constitutes the entire agreement between the parties with respect to the Services described herein to be provided by Colt Defense to CMC and supersedes all previous negotiations, commitments and writings, if any, including without limitation that certain Intercompany Services Agreement dated as of June 26, 2007, as amended.  This Agreement may not be modified or amended, nor may any provision hereof be waived, except by a writing duly signed by an authorized representative of the party against whom such modification, amendment or waiver is charged.

 

5.10         Applicable Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut.

 

5.11         Lease Extension. If the term of the Net Lease dated October 26, 2005, between NPA Hartford LLC and Colt Defense (the “Master Lease”) is extended beyond October 25, 2012 (whether by amendment, replacement or otherwise), then (a) the term of the First Amended and Restated Sublease Agreement dated October 26, 2005, between CMC and Colt Defense (the “Sublease”), pursuant to which CMC subleases from Colt Defense a portion of the Facility leased by Colt Defense under the Master Lease shall automatically be extended until the earlier of (i) the termination of this Agreement and (ii) the expiration of the Master Lease (as so extended); (b) the rent payable by CMC under the Sublease for each month during such extended term shall in no event be more than 35% of

 

 

the monthly Fixed Rent paid by Colt Defense for the Facility for the same period under the Master Lease (as so extended); (c) all other direct and indirect economic terms of the Sublease (including, without limitation, real estate taxes, insurance costs and security deposits) shall be proportional and consistent with Colt Defense’s obligations under the Master Lease; and (d) all other terms of the Sublease shall continue in full force and effect with no changes that are adverse to CMC.  For purposes of clarification, it is understood that the extended or amended sublease shall not require CMC to assume greater environmental liabilities than it has assumed under the Sublease and will not alter the responsibility of either company for environmental obligations and liabilities that were effectuated by the Asset Contribution Agreement dated as of November 4, 2002, as amended or supplemented prior to the date hereof.  Colt Defense will promptly notify CMC in writing of any extension, amendment, replacement or other modification of the Master Lease and, if the Sublease is extended as provided above, the parties shall promptly execute and deliver an amendment to the Sublease giving effect to the foregoing.

 

 

IN WITNESS WHEREOF, Colt Defense and CMC have caused this Agreement to be executed by their respective duly authorized representatives in the manner legally binding upon them as of the date first above written.

 

 

	
 
    	
COLT   DEFENSE LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gerald R. Dinkel
    
	
 
    	
 
    	
Gerald   R. Dinkel
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
COLT’S   MANUFACTURING COMPANY LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   LtGen Wm M. Keys
    
	
 
    	
 
    	
LtGen   Wm M. Keys USMC (Ret.) 
   President and Chief Executive OfficerExhibit 10.1

 

SHARE REPURCHASE AGREEMENT

 

THIS SHARE REPURCHASE AGREEMENT (this “Agreement”) is made and entered into as of this 17th day of August, 2012, by and among T2 Accredited Fund, L.P., a Delaware limited partnership (“T2 Accredited Fund”), T2 Qualified Fund, L.P., a Delaware limited partnership (“T2 Qualified Fund”) and Tilson Offshore Fund, Ltd., a Cayman Islands limited company (“Tilson Offshore Fund” and, together with T2 Accredited Fund and T2 Qualified Fund, the “Seller”), and MRV Communications, Inc. a Delaware corporation (the “Purchaser”).

 

RECITALS

 

WHEREAS, after due consideration, the Board of Directors of the Purchaser (“Board”), has approved the Repurchase Transaction (as defined below).

 

WHEREAS, the Seller desires to sell shares of common stock, par value $0.0017 per share, of the Purchaser (“Common Shares”) to the Purchaser, and the Purchaser desires to purchase Common Shares from the Seller, on the terms and conditions set forth in this Agreement (the “Repurchase Transaction”).

 

NOW, THEREFORE, in consideration of the premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

 

SALE AND PURCHASE OF COMMON SHARES

 

Section 1.1                                      Purchase.  Subject to the terms and conditions of this Agreement, on August 17, 2012 or such other date as may be agreed by the parties in writing (the “Closing Date”), the Seller shall sell, assign, transfer, convey and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller, 5,843,420 Common Shares (the “Shares”).  The purchase price for the Shares shall be $0.48 per share, resulting in a total purchase price of $2,804,841.60 (the “Purchase Price”).

 

Section 1.2                                      Closing.  On the Closing Date, the Seller shall deliver or cause to be delivered to the Purchaser all of the Seller’s right, title and interest in and to the Shares by delivery of one or more certificates evidencing the Shares being repurchased, endorsed to the Purchaser or accompanied by duly executed stock powers or other instrument of assignment.  On the Closing Date, the Purchaser shall pay to the Seller the Purchase Price in cash by wire transfer of immediately available funds in accordance with the wire transfer instructions to be provided by the Seller to the Purchaser. Alternatively, upon the consent of all parties, the purchase and sale of the Shares may be effected through a broker.

 

Section 1.3                                      Condition to Closing.  The obligation of either party to proceed with the closing contemplated hereby shall be expressly conditioned on the absence of any judgment, injunction, judicial order or decree binding upon a party hereto that would prohibit such party from consummating the transactions contemplated hereby or any pending action, suit or proceeding which challenges the validity or legality of the transactions contemplated hereby or

 

 

seeks damages in connection therewith, provided that a failure of this condition shall not be asserted by a party if such failure is the direct or indirect result of such party’s breach of any representation or warranty contained in Article II or Article III, as applicable.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Seller hereby makes the following representations and warranties to the Purchaser, each of which is true and correct on the date hereof and the Closing Date and shall survive the Closing Date.

 

Section 2.1                                      Existence and Power.

 

(a)                                  Each of T2 Accredited Fund, T2 Qualified Fund and Tilson Offshore Fund has been duly formed and is existing as a limited partnership or limited company, as applicable, in good standing under the laws of the state or country, as applicable, of its formation and has the power, authority and capacity to execute and deliver this Agreement, to perform the Seller’s obligations hereunder, and to consummate the transactions contemplated hereby.

 

(b)                                 The execution and delivery of this Agreement by the Seller and the consummation by the Seller of the transactions contemplated hereby (i) do not require the consent, approval, authorization, order, registration or qualification of, or (except for filings pursuant to Section 16 or Regulation 13D under the Securities Exchange Act of 1934 (“Exchange Act”)) filing by the Seller with, any governmental authority or regulatory authority, including any stock exchange or self-regulatory organization, or court, or body or arbitrator having jurisdiction over the Seller; and (ii) except as would not have an adverse effect on the ability of the Seller to consummate the transactions contemplated by this Agreement, do not and will not constitute or result in a breach, violation or default, or cause the acceleration or termination of any obligation or right of the Seller or any other party thereto, under (A) any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license, whether written or oral, express or implied, to which the Seller is a party, (B) the Seller’s organizational documents or (C) any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative or regulatory body, including any stock exchange or self-regulatory organization, governmental authority, arbitrator, mediator or similar body.

 

Section 2.2                                      Valid and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by the Seller and, assuming the due execution and delivery of this Agreement by the Purchaser, constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and general principles of equity.  The Seller has duly taken all necessary action to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

 

Section 2.3                                      Title to Shares.  The Seller has good and valid title to the Shares free and clear of any lien, encumbrance, pledge, charge, security interest, mortgage, title retention

 

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agreement, option, equity or other adverse claim, and has not, in whole or in part, (a) assigned, transferred, hypothecated, pledged or otherwise disposed of the Shares or its ownership rights in such Shares or (b) given any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to such Shares.

 

Section 2.4                                      Sophistication of the Seller.  The Seller acknowledges and agrees that, except as set forth in this Agreement, the Purchaser is not making any express or implied warranties in connection with the Repurchase Transaction.  The Seller has such knowledge and experience in financial and business matters and in making investment decisions of this type that it is capable of evaluating the merits and risks of making its investment decision regarding the Repurchase Transaction and of making an informed investment decision.  The Seller is not in possession of any material non-public information of the Purchaser.  The Seller and/or the Seller’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Purchaser concerning the Shares and the Purchaser and all such questions have been answered to the Seller’s full satisfaction.  The Seller is not relying on the Purchaser with respect to the tax and other economic considerations of the Repurchase Transaction, and the Seller has relied on the advice of, or has had the opportunity to consult with, the Seller’s own advisors.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser hereby makes the following representations and warranties to the Seller, each of which is true and correct on the date hereof and the Closing Date and shall survive the Closing Date.

 

Section 3.1                                      Existence and Power.

 

(a)                                  The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the power, authority and capacity to execute and deliver this Agreement, to perform the Purchaser’s obligations hereunder, and to consummate the transactions contemplated hereby.

 

(b)                                 The execution and delivery of this Agreement by the Purchaser and the consummation by the Purchaser of the transactions contemplated hereby (i) do not require, except as have been obtained prior to the date hereof, the consent, approval, authorization, order, registration or qualification of (except for filings pursuant to Sections 13 or 15(d) of the Exchange Act), or filing with, any governmental or regulatory authority, including any stock exchange or self-regulatory organization, or court, or body or arbitrator having jurisdiction over the Purchaser or any of its subsidiaries; and (ii) except as would not have an adverse effect on the ability of the Purchaser to consummate the transactions contemplated by this Agreement, do not and will not constitute or result in a breach, violation or default, or cause the acceleration or termination of any obligation or right of the Purchaser, any of the Purchaser’s subsidiaries or any other party thereto, under (A) any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license, whether written or oral, express or implied, to which the Purchaser or any of its subsidiaries is a party, (B) the Purchaser’s organizational documents or

 

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(C) any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative or regulatory body, including any stock exchange or self-regulatory organization, governmental authority, arbitrator, mediator or similar body.

 

Section 3.2                                      Valid and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by the Purchaser and, assuming the due execution and delivery of this Agreement by the Seller, constitutes a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and general principles of equity.  This Agreement and the purchase of the Shares contemplated hereby have been approved by each member of the Board (other than Glenn Tongue, who recused himself from the vote and deliberations), which has been duly authorized to so act and each member of which is disinterested with respect to this Agreement and the transactions contemplated hereby (the “Independent Committee”).  Such approval shall comply with Rule 16b-3 of the Exchange Act.  The Purchaser has duly taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

 

Section 3.3                                      Sophistication of the Purchaser.  The Purchaser acknowledges and agrees that, except as set forth in this Agreement, the Seller is not making any express or implied warranties in connection with the Repurchase Transaction.  The Purchaser has such knowledge and experience in financial and business matters and in making investment decisions of this type that it is capable of evaluating the merits and risks of making its investment decision regarding the Repurchase Transaction and of making an informed investment decision.  The Purchaser and/or the Purchaser’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Seller concerning the Shares and the Seller and all such questions have been answered to the Purchaser’s full satisfaction.  The Purchaser is not relying on the Seller with respect to the tax and other economic considerations of the Repurchase Transaction, and the Purchaser has relied on the advice of, or has had the opportunity to consult with, the Purchaser’s own advisors.

 

ARTICLE IV

 

MISCELLANEOUS PROVISIONS

 

Section 4.1                                      Notice.  Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail (postage prepaid) with return receipt requested or sent by reputable overnight courier service (charges prepaid) to the address and to the attention of the person set forth in this Agreement.  Notices will be deemed to have been given hereunder when delivered personally, three business days after deposit in the U.S. mail postage prepaid with return receipt requested and two business days after deposit postage prepaid with a reputable overnight courier service for delivery on the next business day.

 

If to the Purchaser, to:

 

MRV Communications, Inc.

20415 Nordhoff Street

 

4

 

Chatsworth, CA 91311

Attn: General Counsel

 

with a copy to:

 

Fulbright & Jaworski, L.L.P.

666 Fifth Avenue

New York, NY 10103

Attn: Steven Suzzan

 

if to the Seller, to:

 

T2 Partners LLC

767 Fifth Avenue, 18th Fl.

New York, NY 10153

Attn: Whitney Tilson

 

Section 4.2                                      Entire Agreement.  This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior written and contemporaneous oral agreements, representations, warranties, contracts, correspondence, conversations, memoranda and understandings between or among the parties or any of their agents, representatives or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents.

 

Section 4.3                                      Assignment; Binding Agreement.  This Agreement and the various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns.

 

Section 4.4                                      Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which taken together shall constitute one and the same instrument.  Any counterpart or other signature hereupon delivered by facsimile, by electronic mail in PDF form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such party.

 

Section 4.5                                      Governing Law.  This Agreement shall in all respects be construed in accordance with and governed by the substantive laws of the State of Delaware, without giving effect to principles of conflicts of laws.  Each party hereto waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any action, suit or proceeding arising out of or relating to this Agreement or any transaction contemplated hereby.

 

Section 4.6                                      No Third Party Beneficiaries or Other Rights.  Nothing herein shall grant to or create in any person not a party hereto, or any such person’s dependents or heirs, any right to any benefits hereunder, and no such party shall be entitled to sue any party to this Agreement with respect thereto.

 

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Section 4.7                                      Waiver; Consent.  This Agreement and its terms may not be changed, amended, waived, terminated, augmented, rescinded or discharged (other than in accordance with its terms), in whole or in part, except by a writing executed by the parties hereto.

 

Section 4.8                                      No Broker.  Except as previously disclosed to each other party, no party has engaged any third party as broker or finder or incurred or become obligated to pay any broker’s commission or finder’s fee in connection with the transactions contemplated by this Agreement.

 

Section 4.9                                      Further Assurances.  Each party hereto hereby agrees to execute and deliver, or cause to be executed and delivered, such other documents, instruments and agreements, and take such other actions consistent with the terms of this Agreement as may be reasonably necessary in order to accomplish the transactions contemplated by this Agreement.

 

Section 4.10                                Costs and Expenses.  Each party hereto shall each pay its own respective costs and expenses, including, without limitation, any commission or finder’s fee to any broker or finder, incurred in connection with the negotiation, preparation, execution and performance of this Agreement.

 

Section 4.11                                Severability.  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

Section 4.12                                Captions.  The article and section captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.

 

Section 4.13                                Public Announcements.  Subject to each party’s disclosure obligations imposed by law or obligations pursuant to any listing agreement with any securities exchange or the requirements of any self-regulatory organization, each of the parties hereto will cooperate with each other party in the development and dissemination of all public news releases and other public information containing disclosures with respect to this Agreement and any of the transactions contemplated by this Agreement, and no party hereto will make any such news release or public disclosure without first consulting with each other party hereto and receiving such party’s consent (which shall not be unreasonably withheld, delayed or conditioned), and each party shall coordinate with each other party with respect to any such news release or public disclosure; provided, that no provision herein shall limit the Purchaser’s disclosure and filing obligations under applicable law and the rules promulgated by the Securities and Exchange Commission.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first above written.

 

 

	
THE PURCHASER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
MRV COMMUNICATIONS, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Barry Gorsun
    	
 
    	
 
    
	
 
    	
Name:
    	
Barry   Gorsun
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief   Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
THE SELLER:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
T2 Accredited Fund, L.P.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Whitney Tilson
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
T2 Qualified Fund, L.P.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Whitney Tilson
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Tilson Offshore Fund, Ltd.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Whitney Tilson
    	
 
    	
 
    

 

7

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