COMPANY STOCKHOLDERS AGREEMENT
THIS COMPANY STOCKHOLDERS AGREEMENT (this "Agreement") is entered into
this _______ of December, 1999, by and among The Titan Corporation, a Delaware
corporation ("Acquiror"), A T Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Acquiror ("Merger Sub"), and each other Person listed
on the signature page hereof who is a stockholder (each a "Stockholder" and
collectively, the "Stockholders") of Advanced Communication Systems, Inc., a
Delaware corporation (the "Company").
WHEREAS, the Stockholders own of record and beneficially the shares of
common stock, par value $.01 per share of the Company ("Company Common Stock")
set forth opposite their respective names on SCHEDULE A hereto (the "Shares")
and desire to enter into this Agreement with respect to such shares of Company
Common Stock;
WHEREAS, Acquiror, Merger Sub and the Company have contemporaneously
with the execution of this Agreement entered into an Agreement and Plan of
Merger (the "Merger Agreement"), dated as of the date hereof, which provides,
among other things, for the merger (the "Merger") of the Merger Sub with and
into the Company pursuant to the terms and conditions thereof; capitalized terms
used herein and not otherwise defined shall have the meanings given to such
terms as in the Merger Agreement;
WHEREAS, as an essential condition and inducement to Acquiror and
Merger Sub entering into the Merger Agreement, Acquiror has required that the
Stockholders agree, and the Stockholders have agreed, to enter into this
Agreement; and
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements contained herein and in the Merger Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which hereby are acknowledged, and intending to be legally bound hereby, agree
as follows:
SECTION 1. VOTING
(a) Each Stockholder hereby agrees to appear, or to cause the holder
of record on any applicable record date (the "Record Holder") to appear, in
person or by proxy, for the purpose of obtaining a quorum at any annual or
special meeting of stockholders of the Company and at any adjournment thereof at
which matters relating to the Merger, Merger Agreement or any transaction
contemplated thereby are considered; and
(b) Each Stockholder further agrees that, it shall vote, or cause the
Record Holder to vote, in person or by proxy all of the Shares, and any other
voting interests in the Company owned or hereafter acquired beneficially or of
record by such Stockholder:
(i) in favor of the Merger and the adoption of the Merger
Agreement and the transactions contemplated thereby (including any amendments or
modifications of the terms thereof approved by the Board of Directors of the
Company and by Acquiror) in
connection with any meeting of, or solicitation of consents from, the
stockholders of the Company at which or in connection with which the Merger and
the Merger Agreement are submitted for the consideration and vote of the
stockholders of the Company;
(ii) against approval or adoption of resolutions which would
have the effect of preventing or materially delaying consummation of the Merger
or otherwise preventing or materially delaying the Company from performing its
obligations under the Merger Agreement; and
(iii) against any action which would constitute a material
breach of any provision of the Merger Agreement.
To the extent inconsistent with the foregoing provisions of this
Section 1, each Stockholder revokes any and all previous proxies with respect to
Shares owned beneficially or of record by such Stockholder and agrees not to
grant any proxy with respect to and any other voting interests in the Company
owned or hereafter acquired beneficially or of record by such Stockholder.
SECTION 2. PROXY; FURTHER ASSURANCES
(a) Contemporaneously with the execution of this Agreement: (i) each
Stockholder has delivered to Acquiror a proxy in the form attached to this
Agreement as Exhibit A, which shall be coupled with an interest and irrevocable,
with respect to the shares referred to therein (the "Proxy"); and (ii) each
Stockholder has caused to be delivered to Acquiror an additional proxy (in the
form attached hereto as Exhibit A) executed on behalf of the record owner of any
outstanding shares of Company Common Stock that are owned beneficially (within
the meaning of Rule 13d-3 under the Exchange Act), but not of record, by such
Stockholder, which proxy shall be irrevocable to the fullest extent permitted by
law and to the extent provided therein, with respect to the shares referred to
therein.
(b) Each Stockholder shall, at Acquiror's expense, perform such
further acts and execute such further documents and instruments as may
reasonably be required to vest in Acquiror the power to carry out and give
effect to the provisions of this Agreement. Without limiting the generality of
the foregoing, none of the parties hereto shall enter into any agreement or
arrangement (or alter, amend or terminate any existing agreement or arrangement)
or transaction if such action would materially impair or materially interfere
with the ability of any party to effectuate, carry out and comply with all of
the terms of this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Each Stockholder hereby, severally and not jointly, represents and
warrants to Acquiror as follows:
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(a) Such Stockholder has the legal capacity and all other power and
authority necessary to enter into this Agreement, to perform the obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by such Stockholder and, assuming due
authorization, execution and delivery of this Agreement by Acquiror, Merger Sub
and the other parties hereto, constitutes a legal, valid and binding obligation
of such Stockholder, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditor's rights generally and by the application of general
principles of equity.
(b) The execution and delivery of this Agreement and the consummation
of the transactions herein contemplated will not to the knowledge of such
Stockholder, (i) conflict with or violate any law, regulation, court order,
judgment or decree applicable to such Stockholder or by which the property of
such Stockholder is bound or affected, or (ii) conflict with or result in any
breach of or constitute a default under any contract or agreement to which such
Stockholder is a party or by which such Stockholder or such Stockholder's
property is bound or affected, which conflict, violation, breach or default
would materially impair or materially interfere with such Stockholder's ability
to perform its obligations under this Agreement.
(c) To the knowledge of such Stockholder, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not require any consent or other action by any Person under, any
provision of any agreement, contract or other instrument binding on such
Stockholder.
(d) The Shares reflected on SCHEDULE A as being owned by such
Stockholder are the only shares of voting capital stock of the Company or any
other voting interests in the Company owned beneficially or of record by such
Stockholder, and except as set forth in SCHEDULE A, such Stockholder does not
own any other options, warrants or rights to acquire shares of any class of
capital stock of the Company or any other voting interests in the Company. Such
Stockholder has the requisite power respecting voting and transfer of such
Stockholder's Shares. Except as set forth on SCHEDULE 3(d) hereto, the shares
and certificates representing such Shares held by such Stockholder are owned as
indicated on SCHEDULE A by such Stockholder, free and clear of all liens,
claims, security interests, proxies, options, warrants or other rights, voting
trusts or agreements, understandings or arrangements or any other Encumbrances
whatsoever, except for any such Encumbrances or proxies arising hereunder.
(e) No investment banker, broker, finder or other intermediary is
entitled to a fee or commission in respect of this Agreement based upon any
arrangement or agreement made by or on behalf of such Stockholder, except for
fees that may be payable by the Company or Acquiror in conjunction with the
transactions contemplated by the Merger Agreement.
SECTION 4. COVENANTS OF EACH STOCKHOLDER
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(a) From the date of this Agreement until the Effective Time or, if
earlier, the termination of this Agreement pursuant to Section 17 (Termination)
hereof, each Stockholder agrees severally and not jointly that such Stockholder
will not, and will use its "reasonable efforts" to not permit any of the
Representatives of the Company to, directly or indirectly, (i) initiate,
solicit, knowingly facilitate or encourage the submission of an Acquisition
Proposal for the Company; (ii) participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, or take any
other action knowingly to facilitate any inquiries or the making of any proposal
that constitutes an Acquisition Proposal for the Company; (iii) grant any waiver
or release under any standstill or similar agreement with respect to any class
of equity securities of the Company; or (iv) enter into any agreement with
respect to any Acquisition Proposal for the Company, other than with Acquiror,
or authorize or permit any of Stockholder's Representatives to take any such
action and, such Stockholder shall promptly notify Acquiror of any such
inquiries and proposals received by such Stockholder or, to such Stockholder's
knowledge, any of such Stockholder's Representatives, relating to any of such
matters. Each Stockholder severally and not jointly further agrees to use its
"reasonable efforts" as a stockholder to cause the Company to comply with the
obligations of the Company set forth in Section 7.8 of the Merger Agreement.
(b) Except pursuant to the terms of this Agreement, each Stockholder
agrees severally and not jointly that such Stockholder will not, without the
prior written consent of Acquiror or Merger Sub, directly or indirectly, grant
any proxies or enter into any voting trust or other agreement or arrangement
with respect to the voting of any capital stock or any options, warrants or
other rights to acquire stock of the Company.
(c) Each Stockholder agrees that, during the period from the date of
this Agreement through the Termination Date, such Stockholder shall not cause or
permit any transfer, assignment, conveyance or other disposition of his Shares,
or any other voting interests in the Company owned or hereafter acquired
beneficially or of record by such Stockholder, unless each Person to which any
Shares or any interest therein is or may be transferred shall have: (i) executed
a counterpart to this Agreement; and (ii) agreed to hold such Shares or any
interest therein subject to the terms and provisions of this Agreement.
SECTION 5 [RESERVED]
SECTION 6. SPECIFIC PERFORMANCE
Each Stockholder acknowledges and agrees that there would be no
adequate remedy at law for Acquiror or Merger Sub if such Stockholder fails to
perform any of such Stockholder's obligations hereunder, and accordingly agrees
that Acquiror and Merger Sub, in addition to any other remedy to which they may
be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of such Stockholder under this Agreement in
accordance with the terms and conditions of this Agreement in any court of the
United States or any State thereof having jurisdiction.
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SECTION 7. GOVERNING LAW
This Agreement will be governed by and construed in accordance with
the laws of the State of Delaware without regard to principles of conflicts of
law.
SECTION 8. PARTIES IN INTEREST
This Agreement shall inure to the benefit of and shall be binding upon
the parties hereto and their respective heirs, legal representatives and
permitted assigns. If any Stockholder shall at any time hereafter acquire
ownership of, or voting power with respect to, any additional shares of capital
stock or any other voting interests in the Company in any manner, whether by the
exercise of any options or any securities or rights convertible into or
exchangeable for shares of capital stock or any other voting interests in the
Company, by operation of law or otherwise, such shares or other interests shall
be held subject to all of the terms and provisions of this Agreement. Without
limiting the foregoing, each Stockholder specifically agrees that the
obligations of such Stockholder hereunder shall not be terminated by operation
of law, whether by death or incapacity of such Stockholder or otherwise.
SECTION 9. AMENDMENT
This Agreement shall not be amended, altered or modified except by an
instrument in writing duly executed and delivered on behalf of each of the
parties hereto.
SECTION 10. SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent possible.
SECTION 11. WAIVER
Except as provided in this Agreement, no action taken pursuant to this
Agreement, including without limitation any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement. The waiver by any party hereto of a breach of any
provision hereunder shall not operate or be construed as a wavier of any prior
or subsequent breach of the same or any other provision hereunder.
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SECTION 12. NOTICES
All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered, mailed or transmitted, and shall be effective upon receipt,
if delivered personally, mailed by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the following addresses (or
at such other address for a party as shall be specified by like changes of
address) or sent by electronic transmission to the telecopier number specified
below:
If to a Stockholder:
To such Stockholder's address
or telecopier number as set forth
on SCHEDULE A attached hereto
with a copy to:
Venable, Baetjer, Xxxxxx & Xxxxxxxxx, LLP
0000 Xxx Xxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
If to Acquiror or Merger Sub:
The Titan Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq., General Counsel
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
XxXxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X.X. Xxxxxx, Esq.
SECTION 13. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties.
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SECTION 14. ASSIGNMENT
The Stockholders may not assign any of their rights or obligations
under this Agreement to any other Person, without the express written consent of
Acquiror. Acquiror may not assign any of its rights or obligations under this
Agreement to any other Person.
SECTION 15. HEADINGS
Section headings are included solely for convenience and are not
considered to be part of this Agreement and are not intended to be an accurate
description of the contents thereof.
SECTION 16. COUNTERPARTS
This Agreement may be executed and delivered in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.
SECTION 17. TERMINATION
This Agreement and all of the parties' rights and obligations
hereunder shall terminate on the earlier to occur of (a) the date on which the
Merger Agreement is validly terminated pursuant to the provisions thereof, or
(b) the Effective Time; as defined in the Merger Agreement, (the "Termination
Date").
SECTION 18. OFFICERS AND DIRECTORS; AFFILIATE AGREEMENTS
(a) Notwithstanding anything else herein to the contrary but subject
to the proviso set forth in this Section 19(a), (i) nothing set forth herein
shall be deemed to restrict or otherwise prohibit a Stockholder who is an
officer or director of the Company from exercising, in such individual's
capacity as an officer or director of the Company, what such Stockholder
believes in good faith to be his or her fiduciary duties as an officer or
director of the Company to the stockholders of the Company, and (ii) and no
action or inaction required hereby shall require a Stockholder who is an officer
or director of the Company to take any action or refrain from taking any action,
in such individual's capacity as an officer or director of the Company, that
such Stockholder believes in good faith is required by or would be a breach of
his or her fiduciary duties as an officer or director of the Company to the
stockholders of the Company; provided, however, that, notwithstanding the
foregoing, with respect to any matter set forth in Section 7.8 of the Merger
Agreement, each Stockholder who is an officer or director of the Company shall
exercise his or her fiduciary duties to the stockholders of the Company pursuant
to and in accordance with the provisions of Section 7.8 of the Merger Agreement.
(b) Each Stockholder who also executes and enters into an Affiliate
Agreement
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hereby agrees and acknowledges that, notwithstanding any other provisions of
this Agreement and in addition to any obligations of such Stockholder hereunder,
such Stockholder is and will be subject to all of the terms and provisions of
such Affiliate Agreement and the obligations of such Stockholder contained in
such Affiliate Agreement are and will be independent, separate and apart from
the obligations of such Stockholder hereunder.
SECTION 19. SURVIVAL
The representations and warranties in this Agreement shall survive the
execution and delivery of this Agreement and expire on the Termination Date;
provided, however, that the covenants and agreements of the parties shall
survive the execution and delivery of this Agreement and terminate on the
earlier to occur of: (i) the Termination Date or (ii) the date on which the
parties' obligations under this Agreement are fully performed.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Company Stockholders Agreement, or have caused this Company Stockholders
Agreement to be executed and delivered on their behalf, as of the date first
above written.
THE TITAN CORPORATION
By: -------------------------
Name: -------------------------
Title: -------------------------
A T ACQUISITION CORP.
By: -------------------------
Name: -------------------------
Title: -------------------------
STOCKHOLDERS
By: -------------------------
Name: -------------------------
Address: -------------------------
By: -------------------------
Name: -------------------------
Address: -------------------------
By: -------------------------
Name: -------------------------
Address: -------------------------
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SCHEDULE A
[list each Stockholder's name, address and telecopier number]
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EXHIBIT A
Form of Irrevocable Proxy
The undersigned Stockholder of Advanced Communication Systems, Inc., a
Delaware corporation (the "Company"), hereby appoints and constitutes The Titan
Corporation, a Delaware corporation ("Acquiror"), the attorneys and proxies of
the undersigned, with full power of substitution and resubstitution, to the full
extent of the undersigned's voting rights with respect to (a) the outstanding
shares of common stock, par value $.01 per share, of the Company (the "Company
Common Stock") or any other capital stock of the Company (collectively with the
Company Common Stock, the "Capital Stock") owned of record by the undersigned as
of the date of this proxy, which shares are specified on the final page of this
proxy, and (b) any and all other shares of Capital Stock of the Company which
the undersigned may acquire on or after the date hereof, provided that this
proxy automatically shall be revoked with respect to any shares of Capital Stock
that are sold, transferred or otherwise disposed of by the undersigned in
accordance with the Company Stockholders Agreement (as hereinafter defined)
("Transferred Stock") effective as of the date of such sale, transfer or other
disposition ("Date of Disposition"). Upon the execution hereof, all prior
proxies given by the undersigned with respect to any of the Capital Stock are
hereby revoked, and the undersigned agrees that no subsequent proxy will be
given with respect to the voting of any of the Capital Stock (other than
Transferred Stock after the Date of Disposition given by the purchaser,
transferee or other beneficiary of such other disposition with respect to such
stock) except to the extent that such proxies do not prevent the voting of this
proxy in favor of the transactions described herein.
This proxy is coupled with an interest and irrevocable. This proxy is
granted (i) in connection with the execution and delivery of the Company
Stockholders Agreement, dated as of the date hereof, among Acquiror and the
undersigned (the "Company Stockholders Agreement") and (ii) in consideration of
Acquiror entering into the Agreement and Plan of Merger, dated as of the date
hereof, among Acquiror, A T Acquisition Corp., a Delaware corporation (the
"Merger Sub") and the Company (the "Merger Agreement").
The proxy named above (and its successors) will, prior to the
Termination Date (as hereinafter defined), be empowered, and may exercise this
proxy, to vote the Capital Stock at any meeting of the Stockholders of the
Company, however called, or in connection with any solicitation of written
consents from Stockholders of the Company, called or solicited, as the case may
be, for the purpose of voting on the Merger Agreement and the transactions
contemplated thereby in favor of the approval and adoption of the Merger
Agreement and the approval of the merger contemplated thereby, and in favor of
each of the other actions contemplated by the Merger Agreement. The undersigned
may vote the Capital Stock on all other matters.
This proxy shall be binding upon the representatives, successors and
permitted assigns of the undersigned.
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If any provision of this proxy or any part of any such provision is
held under any circumstances to be invalid or unenforceable in any jurisdiction,
then (a) such provision or part thereof shall, with respect to such
circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (b) the invalidity or unenforceability of such provision or part thereof
under such circumstances and in such jurisdiction shall not affect the validity
or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (c) the invalidity or
unenforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this proxy. Each provision of this
proxy is separable from every other provision of this proxy, and each part of
each provision of this proxy is separable from every other part of such
provision.
This proxy and the rights contained herein shall terminate upon the
termination of the Company Stockholders Agreement as provided therein (the
"Termination Date").
Date: ___________, 1999
-----------------------------------------
Stockholder's Name
Number of shares of common stock and other
capital stock of the Company owned of record
as of the date of this proxy:
-----------------------------------------
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