Exhibit 3
LETTER AGREEMENT
LETTER AGREEMENT dated as of August 8, 2002 (this "Agreement"), between
Xxxxxx X. XxXxx ("Pledgor") and Stillwater National Bank and Trust Company,
Stillwater, Oklahoma (the "Bank").
Recitals
A. Reference is made to (i) that certain Merger Agreement dated as of the
date hereof (the "Merger Agreement"), among L-3 Communications Corporation, a
Delaware corporation ("L-3"), Blue Acquisition Corp., a Nevada corporation and a
wholly owned subsidiary of L-3 ("Sub"), and Westwood Corporation, a Nevada
corporation (the "Company") , and (ii) that certain Stockholders Agreement dated
as of the date hereof (the "Stockholders Agreement"), among L-3, Sub, the
Company and each of the individuals and other parties listed on Schedule A
attached thereto (including Pledgor). Reference also is made to (A) that certain
Chattel Pledge and Security Agreement dated as of December 18, 2001, between
Pledgor and the Bank (the "Credit Facility Pledge Agreement"), and (B) that
certain Assignment of Investment Property/Securities Agreement dated as of March
1, 2002, between Pledgor and the Bank (the "Personal Loan Pledge Agreement",
and, together with the Credit Facility Pledge Agreement, the "Pledge
Agreements").
B. The execution and delivery of this Agreement is a condition to and an
inducement for Parent and Sub to enter into the Merger Agreement.
C. Capitalized and other defined terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the Merger
Agreement or the Stockholders Agreement, as applicable.
D. These Recitals shall be construed as part of this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby agree as follows:
1. Stockholders Agreement.
(a) The Bank hereby irrevocably and forever: (i) consents to the
execution, delivery and performance by the parties to the Stockholders Agreement
of the Stockholders Agreement and all the transactions contemplated thereby; and
(ii) waives any provision of any instrument or agreement to which the Bank is a
party (including the Pledge Agreements) that conflicts with, or restricts the
ability of the parties to the Stockholders Agreement to execute, deliver or
perform, the Stockholders Agreement or any of the transactions contemplated
thereby.
(b) In connection with any Option Exercise pursuant to Section 2(i) of
the Stockholders Agreement: (i) effective immediately prior to the consummation
of the purchase and sale of those Pledged Shares that are subject to such Option
Exercise (the "Option Shares"), the Bank hereby agrees that all Share
Encumbrances in favor of the Bank in respect of the
Option Shares are released and terminated automatically and without any further
action of the parties hereto; (ii) prior to the consummation of the purchase and
sale of the Option Shares, the Bank will deliver to L-3 (or its designees or
assignees) all certificates in its possession representing the Option Shares
duly endorsed in blank for transfer to L-3 or accompanied by stock powers for
the Option Shares duly executed in blank, in proper form for transfer; (iii)
effective immediately prior to the consummation of the purchase and sale of the
Option Shares, Pledgor hereby assigns to the Bank all his right, title and
interest in and to the aggregate purchase price to be paid by L-3 in respect of
the Option Shares; and (iv) the Bank shall apply such purchase price as follows:
first, to the payment of all amounts owed by Pledgor to the Bank under the
Personal Loan Pledge Agreement (it being understood and agreed that Pledgor
shall continue to remain liable for any such amounts remaining unpaid after such
application); and second, any remaining portion of such purchase price shall be
paid over to Pledgor.
(c) In connection with an Offer pursuant to Section 2(j) of the
Stockholders Agreement: (i) effective immediately prior to the consummation of
the Offer, the Bank hereby agrees that all Share Encumbrances in favor of the
Bank in respect of the Pledged Shares are released and terminated automatically
and without any further action of the parties hereto; (ii) prior to the date
that is 10 business days after the date on which L-3 or one of its Affiliates
commences the Offer, the Bank will deliver to L-3 (or its designees or
assignees) all certificates in its possession representing the Pledged Shares
duly endorsed in blank for transfer to L-3 (or its designee(s) or assignee(s))
or accompanied by stock powers for the Pledged Shares duly executed in blank, in
proper form for transfer; (iii) effective immediately prior to the consummation
of the Offer, Pledgor hereby assigns to the Bank all his right, title and
interest in and to the aggregate purchase price to be paid by L-3 in respect of
the Pledged Shares; and (iv) the Bank shall apply such purchase price as
follows: first, to the payment of all amounts owed by Pledgor to the Bank under
the Personal Loan Pledge Agreement (it being understood and agreed that Pledgor
shall continue to remain liable for any such amounts remaining unpaid after such
application); and second, any remaining portion of such purchase price shall be
paid over to Pledgor.
2. Merger Agreement. In connection with the consummation of the Merger
pursuant to the Merger Agreement: (i) effective immediately prior to the
Effective Time, the Bank hereby agrees that (A) all Share Encumbrances in favor
of the Bank in respect of the Pledged Shares are released and terminated
automatically and without any further action of the parties hereto, and (B) the
Assignment of Life Insurance Policy dated October 25, 2002 relating to the
assignment by Pledgor to the Bank of its life insurance policy number 41885856
from Transamerica Occidental Life Insurance Company shall be terminated and of
no force and effect automatically and without any further action of the parties
hereto; (ii) prior to the Effective Time, the Bank will deliver to L-3 (or its
designees or assignees) all certificates in its possession representing the
Pledged Shares duly endorsed in blank or accompanied by stock powers for the
Pledged Shares duly executed in blank, in proper form for transfer; (iii)
effective immediately prior to the Effective Time, Pledgor hereby assigns to the
Bank all his right, title and interest in and to the aggregate purchase price to
be paid by L-3 in respect of the Pledged Shares; and (iv) the Bank shall apply
such purchase price as follows: first, to the payment of all amounts owed by
Pledgor to the Bank under the Personal Loan Pledge Agreement (it being
understood and agreed that Pledgor shall continue to remain liable for any such
amounts remaining unpaid after such
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application); and second, any remaining portion of such purchase price shall be
paid over to Pledgor.
3. Further Assurances. Each of the Bank and Pledgor agrees promptly to
execute and deliver such additional and further documents or instruments as may
be reasonably required or requested by either party or by L-3 or Sub to
effectuate the intent of this Agreement.
4. Third-Party Beneficiaries. Each of the Bank and Pledgor hereby
acknowledges and agrees that (a) L-3 and Sub are entering into the Merger
Agreement and the Stockholders Agreement in reliance upon the execution and
delivery of Agreement, and (b) L-3 and Sub (and their respective successors and
assigns) are third-party beneficiaries of this Agreement.
5. Amendments. This Agreement may not be amended by the parties without the
prior written consent of L-3 and Sub.
6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA.
7. Pledge Agreements. Each of the Bank and Pledgor hereby acknowledges and
agrees that true, complete and correct copies of the Pledge Agreements are
attached hereto as Schedule A.
STILLWATER NATIONAL BANK AND TRUST
COMPANY, STILLWATER, OKLAHOMA
By: /s/ Xxx X. Xxxxxxx
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Name: Xxx X. Xxxxxxx
Title: Senior Vice President
/s/ Xxxxxx X. XxXxx
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XXXXXX X. XXXXX
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