Exhibit 2
EXECUTION COPY
STOCKHOLDERS AGREEMENT dated as of August 8, 2002 (this "Agreement"), among
L-3 COMMUNICATIONS CORPORATION, a Delaware corporation having its principal
office at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 ("Parent"), BLUE ACQUISITION
CORP., a Nevada corporation and a wholly owned subsidiary of Parent having its
principal office at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 ("Sub"), WESTWOOD
CORPORATION, a Nevada corporation having its principal office at 00000 X. 00xx
Xxxxxx, Xxxxx, XX 00000 (the "Company"), and each of THE INDIVIDUALS AND OTHER
PARTIES LISTED ON SCHEDULE A ATTACHED HERETO (together with any person as
hereafter may become a party hereto pursuant to Section 5, each, a "Stockholder"
and, collectively, the "Stockholders").
WHEREAS, contemporaneously herewith, Parent and Sub are entering into an
Agreement and Plan of Merger with the Company, dated as of the date hereof (as
the same may be amended or supplemented, the "Merger Agreement"), providing,
among other things, for the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in the Merger
Agreement; capitalized and other defined terms used herein but not otherwise
defined herein shall have the respective meanings set forth in the Merger
Agreement, whether or not such Merger Agreement shall be in effect from time to
time;
WHEREAS, each Stockholder owns (of record or beneficially) the number and
type of shares of Company Common Stock set forth opposite such Stockholder's
name on Schedule A hereto (such shares of Company Common Stock beneficially
owned or owned of record being referred to herein as such Stockholder's "Subject
Shares"); and
WHEREAS as a condition to the willingness of Parent and Sub to enter into
the Merger Agreement, Parent and Sub have required that each Stockholder enter
into this Agreement, and in order to induce Parent and Sub to enter into the
Merger Agreement, each Stockholder has agreed, severally and not jointly, to
enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, each party hereto agrees as follows:
SECTION 1. Representations and Warranties of Each Stockholder. Each
Stockholder hereby, severally and not jointly, only as to itself, represents and
warrants to Parent and Sub as follows:
(a) Organization; Authority; Execution and Delivery; Enforceability. With
respect to each Stockholder that is not a natural person, such Stockholder (i)
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and (ii) has all requisite corporate or other
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to comply with the terms hereof. With
respect to each Stockholder that is a natural person, such Stockholder has all
requisite power, authority and legal capacity to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to comply with
the terms hereof. The execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the
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transactions contemplated hereby and the compliance by such Stockholder with the
terms hereof have been duly authorized by all necessary corporate or other
action on the part of such Stockholder and no other corporate or other
proceedings on the part of such Stockholder are necessary to authorize this
Agreement or to consummate the transactions contemplated by this Agreement. This
Agreement has been duly executed and delivered by such Stockholder and, assuming
due execution by Parent and Sub, constitutes a legally valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby and compliance with the provisions hereof
do not and will not conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of, or result in termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation of
any Lien in or upon any of the properties or assets of such Stockholder under,
or give rise to any increased, additional, accelerated or guaranteed rights or
entitlements under, any provision of (A) with respect to each Stockholder that
is not a natural person, any certificate of incorporation or bylaws, partnership
agreement or limited liability company agreement (or similar organizational
documents) of such Stockholder, (B) any Contract to which such Stockholder is a
party or any of the properties or assets of such Stockholder is subject, or (C)
subject to the governmental filings and other matters referred to in the
following sentence, any Applicable Law. No Consent is required by or with
respect to such Stockholder in connection with the execution and delivery of
this Agreement by such Stockholder or the consummation by such Stockholder of
the transactions contemplated by this Agreement or the compliance by such
Stockholder with the provisions of this Agreement, except for (1) filings under
applicable competition, merger control, antitrust or similar laws or
regulations, (2) filings with the SEC of such reports under the Exchange Act as
may be required in connection with this Agreement and the transactions
contemplated hereby.
(b) The Subject Shares. Such Stockholder is the record or beneficial owner
of the number and type of Subject Shares of such Stockholder set forth opposite
his or its name on Schedule A hereto, and if such Stockholder is a record owner
of Subject Shares such Stockholder has good and marketable title to such Subject
Shares, free and clear of any Share Encumbrances, except as set forth on Section
3.02(d) of the Company Disclosure Schedule to the Merger Agreement. Such
Stockholder does not own beneficially or of record any shares of capital stock
or other securities of the Company or any of its Subsidiaries other than the
Subject Shares as set forth opposite his or her or its name on Schedule A
hereto. Such Stockholder has the sole right to vote and, except as set forth in
the Pledge Agreements in the case of the Pledged Shares (as such terms are
defined below in this Section 1(b)), to Transfer (as defined in Section 2(c))
the Subject Shares owned by such Stockholder, and none of the Subject Shares
owned by such Stockholder is subject to any voting trust or other agreement,
arrangement or restriction with respect to the voting or the Transfer of the
Subject Shares, except, in the case of the voting of the Subject Shares, as set
forth in Sections 2 and 3 and, in the case of the Transfer of the Subject
Shares, as set forth in Section 2 and, in the case of the Pledged Shares, the
Pledge Agreements.
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For purposes of this Agreement, "Pledge Agreements" means, collectively,
(i) the Chattel, Pledge and Security Agreement, dated December 18, 2001, between
Xxxxxx X. XxXxx and Stillwater Bank and Trust Company, Stillwater, Oklahoma (the
"Bank"), in respect of the pledge (the "Pledge") of 750,000 shares (the "Pledged
Shares") of Company Common Stock held by Xxxxxx X. XxXxx to the Bank, (ii) the
Assignment of Investment Property/Securities Agreement dated as of March 1,
2002, between Xxxxxx X. XxXxx and the Bank, and (iii) the Letter Agreement dated
as of the date hereof, between Xxxxxx X. XxXxx and the Bank.
(c) Private Offering. Such Stockholder has not, nor has any Affiliate of
such Stockholder nor has anyone acting on behalf of such Stockholder, issued,
sold or offered any security of the Company to any person under circumstances
that would cause the sale, if any, of the Subject Shares of any Stockholder to
Parent (or its designee or assignee) as contemplated by Section 2(i) to be
subject to the registration or qualification requirements of the Securities Act
or any applicable state securities laws. The sale and delivery, if any, of the
Subject Shares of such Stockholder hereunder are exempt from the registration
and prospectus delivery requirements of the Securities Act and from the
registration and qualification requirements of any applicable state securities
laws.
SECTION 2. Covenants of Each Stockholder. Each Stockholder, severally and
not jointly, only as to itself, covenants and agrees as follows:
(a) At any meeting of the stockholders of the Company called to vote upon
the Merger Agreement, the Merger or any of the other transactions contemplated
by the Merger Agreement, or at any adjournment thereof, or in any other
circumstances upon which a vote, consent, adoption or other approval (including
by written consent solicitation) of such stockholders with respect to the Merger
Agreement, the Merger or any of the other transactions contemplated by the
Merger Agreement is sought, such Stockholder shall vote (or cause to be voted)
all the Subject Shares of such Stockholder in favor of, and shall consent to (or
cause to be consented to), the adoption of the Merger Agreement and the approval
of the terms thereof and of the Merger and each of the other transactions
contemplated by the Merger Agreement.
(b) During the term of this Agreement, at any meeting of the stockholders
of the Company or at any adjournment thereof or in any other circumstances upon
which a vote, consent, adoption or other approval (including by written consent
solicitation) of such stockholders is sought, such Stockholder shall vote (or
cause to be voted) all the Subject Shares of such Stockholder against, and shall
not consent to (and shall cause not to be consented to in respect of the Subject
Shares), any of the following (or any agreement to enter into, effect,
facilitate or support any of the following): (i) any Takeover Proposal (as
defined in Section 5.02(a) of the Merger Agreement); (ii) any amendment of the
Company's Articles of Incorporation or Bylaws, except with the prior written
consent of Parent as provided in, and in accordance with, Section 5.01(a) of the
Merger Agreement; or (iii) any other proposal, action or transaction involving
the Company or any of its Subsidiaries or any of its stockholders, which other
proposal, action or transaction could reasonably be expected to prevent or
materially impede or delay the consummation of the Merger or any of the other
transactions contemplated by the Merger Agreement or the consummation of any of
the transactions contemplated by this Agreement or to dilute in any material
respect the benefits to Parent of the Merger and the other transactions
contemplated by the Merger Agreement or the transactions contemplated by this
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Agreement, or change in any manner the voting rights of the Company Common Stock
(collectively, "Frustrating Transactions").
(c) During the term of this Agreement, such Stockholder shall not: (i)
sell, transfer, pledge, assign, tender or otherwise dispose of (including by
gift) (collectively, "Transfer"), or, except as may be required under the Pledge
Agreements, consent to or permit any Transfer of, any Subject Shares of such
Stockholder or any interest therein, or enter into any Contract, option or other
arrangement with respect to the Transfer (including any profit sharing or other
derivative arrangement) of any such Subject Shares or any interest therein, to
any person other than pursuant to this Agreement or the Merger Agreement; or
(ii) enter into any voting arrangement, whether by proxy, voting agreement or
otherwise, in connection with, directly or indirectly, any Takeover Proposal (as
defined in Section 5.02(a) of the Merger Agreement) or Frustrating Transaction
with respect to any Subject Shares of such Stockholder, other than pursuant to
this Agreement.
(d) During the term of this Agreement, such Stockholder shall not request
that the Company register the Transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of the Subject Shares of
such Stockholder, other than, in the case of the Pledged Shares, as may be
required under the Pledge Agreements, unless such Transfer is made in compliance
with this Agreement (including the provisions of Sections 2(h) and 2(i)).
The Company shall ensure that no Transfer in violation of this
Agreement shall be made or recorded on the books of the Company and any such
Transfer shall be void and of no force and effect.
(e) Subject to the following paragraph of this Section 2(e), such
Stockholder shall not, nor shall such Stockholder permit any of its Affiliates
to, or authorize or permit any director, officer, employee, partner or agent of
such Stockholder or any of its Affiliates, or any investment banker, attorney or
other advisor or representative of such Stockholder or any of its Affiliates to,
directly or indirectly, (i) solicit, initiate or encourage, or take any other
action knowingly to facilitate, any Takeover Proposal (as defined in Section
5.02(a) of the Merger Agreement) or Frustrating Transaction, (ii) enter into any
agreement with respect to any Takeover Proposal (as defined in Section 5.02(a)
of the Merger Agreement) or Frustrating Transaction, or (iii) enter into,
continue or otherwise participate in any discussions or negotiations regarding,
or furnish to any Person any information with respect to, or otherwise cooperate
in any way with, or assist or participate in any effort or attempt by any Person
with respect to, any Takeover Proposal (as defined in Section 5.02(a) of the
Merger Agreement) or Frustrating Transaction.
Notwithstanding the preceding paragraph of this Section 2(e) and
notwithstanding Section 2(f), nothing in this Agreement shall limit or restrict
a Stockholder that is a director of the Company or limit or restrict a partner
or an employee or agent of a Stockholder that is a director of the Company from
acting in his or her or its capacity as a member of the Board of Directors of
the Company to the extent that such Board of Directors is engaging in activities
expressly and specifically permitted under Section 5.02 of the Merger Agreement.
(f) (i) During the term of this Agreement, such Stockholder shall take, or
cause to be taken, all actions, and do, or cause to be done, and assist and
cooperate with the other
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parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement and the Merger Agreement. Such Stockholder shall
not commit or agree to take any action inconsistent with the transactions
contemplated by this Agreement or the transactions contemplated by the Merger
Agreement.
(ii) During the term of this Agreement, such Stockholder shall not,
and such Stockholder shall not permit any of its Affiliates to, or authorize or
permit any director, officer, employee, partner or agent of such Stockholder or
any of Affiliates or any investment banker, attorney or other advisor or
representative of such Stockholder or any of its Affiliates to, directly or
indirectly, issue any press release or make any other public statement with
respect to the Merger Agreement, this Agreement, the Merger or any other
transactions contemplated by the Merger Agreement or any of the transactions
contemplated by this Agreement without the prior written consent of Parent,
except as may be required by Applicable Law or as expressly contemplated by
Section 6.06 of the Merger Agreement.
(g) Such Stockholder hereby waives any rights of appraisal in connection
with, or rights to dissent from, the Merger that such Stockholder may have.
(h) (i) If (A) (1) the Merger Agreement is terminated (x) by either Parent
or the Company pursuant to Section 8.01(b)(iii) of the Merger Agreement, (y) by
Parent pursuant to Section 8.01(c) of the Merger Agreement, or (z) by the
Company pursuant to Section 8.01(f) of the Merger Agreement, (2) an Acquisition
Agreement with respect to any Takeover Proposal (as defined in Section
8.03(b)(i)(B) of the Merger Agreement) is entered into by the Company or any of
its Subsidiaries within 12 months after such termination of the Merger
Agreement, and (3) such Takeover Proposal (as defined in Section 8.03(b)(i)(B)
of the Merger Agreement) is consummated within 24 months of such termination, or
(B) a Parent Takeover Proposal (as defined in Section 2(h)(vi)) made by Parent
(including any amendment of the Merger Agreement) which provides for Transaction
Consideration (as defined in Section 2(h)(iii)) in excess of $2.30 (as such
amount may be adjusted from time to time for any of the events referred to in
the last sentence of Section 6, the "Deal Price") per share is consummated (any
Takeover Proposal or Parent Takeover Proposal referred to in clause (A) or (B)
above is referred to herein as a "Transaction"), then such Stockholder shall pay
to Parent an amount in cash equal to such Stockholder's Profit (as defined in
Section 2(h)(ii)); provided, however, that if all or any part of the Transaction
Consideration which such Stockholder is entitled to receive is not cash, then
such Stockholder's Profit shall be paid to Parent in each type of consideration
paid to such Stockholder and in the same proportions as the types of
consideration comprising the Transaction Consideration which such Stockholder is
entitled to receive, in each case determined at the close of business on the
date of the consummation of the Transaction, such that (1) in respect of
Transaction Consideration to be paid to such Stockholder in cash, Parent shall
be paid Profits by such Stockholder in cash in an amount equal to the aggregate
Transaction Consideration to be paid to such Stockholder in cash multiplied by a
fraction (x) the numerator of which is equal to such Stockholder's Profit and
(y) the denominator of which is equal to the aggregate Transaction Consideration
to be received by such Stockholder (such fraction, the "Profit Percentage"), (2)
in respect of Transaction Consideration to be paid to such Stockholder in the
form of securities, Parent shall be paid Profits by such Stockholder, for each
type of securities to be so paid, in the form of that number of such securities
that is equal to the total
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number of such securities to be paid to such Stockholder multiplied by the
Profit Percentage, and (3) in respect of Transaction Consideration to be paid to
such Stockholder in consideration of a type other than cash or securities,
Parent shall be paid Profits by such Stockholder in the form of such type of
consideration and in an amount equal to the aggregate fair market value of such
consideration to be paid to Stockholder, with such fair market value determined
as of the date of the consummation of the relevant transaction, multiplied by
the Profit Percentage; provided further, however, that all such determinations
shall be made as of the close of business on the date of the consummation of the
relevant Transaction without any regard to any events or circumstances occurring
thereafter (such as changes in the trading price of any securities). Such
Profits shall be paid to Parent, for each type of consideration, within three
business days after the receipt by such Stockholder of such consideration. Any
payment of Profit under this Section 2(h) shall (AA) if paid in cash, be paid by
wire transfer of same day funds to an account designated by Parent, and (BB) if
paid through the transfer of securities or other non-cash consideration, be paid
through the delivery of such securities or other non-cash consideration,
suitably endorsed or otherwise documented for transfer (if applicable), to
Parent at its address set forth in Section 9.02 of the Merger Agreement.
(ii) The "Profit" of such Stockholder shall mean, as of the close of
business on the date of consummation of a Transaction, the amount (if a positive
number) equal to (A) the product of (1) the Transaction Consideration (as
determined at such time) minus the Deal Price multiplied by (2) the number of
Subject Shares held by such Stockholder on the date of termination of this
Agreement in accordance with Section 8 (other than any Subject Shares sold,
transferred and delivered to Parent or its designee pursuant to Section 2(i)),
minus (B) any Profit Taxes (as defined in Section 2(h)(v)).
(iii) "Transaction Consideration" shall mean, with respect to any
Transaction, the fair market value of the consideration which such Stockholder
(or its transferees) is entitled to receive (including any residual interest in
the Company retained immediately following consummation of a Transaction) in
respect of each share of Company Common Stock of such Stockholder (or its
transferees) in such Transaction, determined as of the close of business on the
date of the consummation of such Transaction; provided, however, that if
different types or amounts of consideration are to be paid (or retained) in a
Transaction, the "Transaction Consideration" shall be determined by dividing (1)
the aggregate fair market value of all the consideration (determined as of the
close of business on the date of the consummation of such Transaction received
or receivable by (including any residual interest in the Company retained by)
such Stockholder (or its transferees) (assuming for purposes of this calculation
that such Stockholder (or his transferees) has converted, exercised or exchanged
all convertible securities owned by any of them prior to the consummation of
such Transaction) by (2) the number of Subject Shares held by such Stockholder
(or its transferees) on the date of termination of this Agreement in accordance
with Section 8 (other than any Subject Shares sold, transferred and delivered to
Parent or its designee pursuant to Section 2(i)).
(iv) For purposes of this Section 2(h), the "fair market value" of any
non-cash consideration consisting of:
(A) securities listed on a national securities exchange or traded
on the NASDAQ shall be equal to the average closing price per share of such
security as
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reported on such exchange or NASDAQ for the 10 trading days prior to the
date of determination; and
(B) consideration which is other than securities of the form
specified in Section 2(h)(iv)(A) shall be determined by a nationally
recognized independent investment banking firm mutually selected, within
three business days after the event requiring selection of such investment
banking firm, by Parent and the Stockholders, which determination shall be
made by such investment banking firm within 15 business days after the date
of such event; provided, however, that if Parent and the Stockholders do
not agree within three business days after the date of such event as to the
selection of an investment banking firm, then, by the end of the fifth
business day after the date of such event, each of Parent, on the one hand,
and the Stockholders, on the other hand, shall select a nationally
recognized investment banking firm, which two investment banking firms
shall jointly make such determination within 20 business days after the
date of such event, or, if such two investment banking firms are unable to
agree on such determination, the two investment banking firms shall, by the
end of the 20th business day after the date of such event, select a third
nationally recognized investment banking firm and notify such third
investment banking firm in writing (with a copy to Parent and each
Stockholder) of their respective determinations of the fair market value of
such non-cash consideration, following which such third investment banking
firm shall, within 15 business days after the date of its selection, notify
Parent and each Stockholder in writing of its selection of one or the other
of the two original determinations of the fair market value of such
non-cash consideration; provided further, however, that the reasonable and
customary fees and expenses of all such investment banking firms shall be
borne equally by Parent, on the one hand, and the Stockholders, on the
other hand. The determination of the investment banking firm shall be
binding upon the parties.
(v) The "Profit Taxes" of such Stockholder shall mean the net amount
of income taxes (U.S. federal, state and local) actually incurred by such
Stockholder solely as a result of the receipt of Profits by such Stockholder
determined taking into account any deduction, loss or offset against income
taxes attributable to the payment of Profits by such Stockholder to Parent in
accordance with the terms of this Agreement; provided, however, that solely for
the purposes of calculating Profit Taxes, clause (B) of the definition of
Profits contained in Section 2(h)(ii) shall be disregarded. Solely for purposes
of calculating Profit Taxes, in the case of a Stockholder that is treated as a
pass-through entity for U.S. federal, state or local income tax purposes, as the
case may be, the term "Stockholder" shall mean any direct member of such
pass-through entity and any indirect member of such pass-through entity that
owns its interest in such pass-through entity to the extent it owns such
interest through one or more other pass-through entities. For the purposes of
this clause, a "pass-through entity" includes without limitation, a partnership,
disregarded entity, trust, subchapter S corporation, controlled foreign
corporation, foreign person holding company or a passive foreign investment
company to the extent a qualifying electing fund election has been made with
respect to it.
(vi) A "Parent Takeover Proposal" means any inquiry, proposal or offer
from Parent or any of its Subsidiaries relating to any direct or indirect
acquisition, in one transaction or a series of transactions, including any
merger, consolidation, tender offer, exchange offer, stock acquisition, asset
acquisition, binding share exchange, business combination,
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recapitalization, liquidation, dissolution, joint venture or similar
transaction, of (A) assets or businesses that constitute or represent 40% or
more of the total revenue, operating income, EBITDA or assets of the Company and
its Subsidiaries, taken as a whole, or (B) 40% or more of the outstanding shares
of Company Common Stock, or 40% or more of the outstanding shares of capital
stock of, or other equity or voting interests in, any of the Company's
Subsidiaries directly or indirectly holding, individually or taken together, the
assets or businesses referred to in clause (A) above.
(vii) If any payment of any Stockholder's Profits described in this
Section 2(h) shall consist in whole or in part of a fractional share of
securities or other property, then the applicable Stockholder, in lieu of such
fractional share of securities or other property, shall pay to Parent a cash
adjustment in an amount equal to the fair market value of such fractional share
of securities or other property determined as of the close of business on the
date of the consummation of the Transaction to which such payment relates and
calculated pursuant to Section 2(h)(iv).
(viii) Payment of any Stockholder's Profits described in this Section
2(h) shall not be in lieu of (but shall be in addition to) the fees and expenses
(including any Termination Fee) that may become payable to Parent pursuant to
Section 8.03 of the Merger Agreement and/or damages incurred in the event of a
breach of this Agreement or the Merger Agreement.
(i) During the term of this Agreement (taking into account the penultimate
sentence of Section 8), at the request of Parent or Sub, such Stockholder shall
exercise, exchange or convert, as the case may be, or cause to be exercised,
exchanged or converted, as the case may be, such number and type of convertible
securities (including Stock Options, Warrants and Convertible Notes)
beneficially owned by such Stockholder and then exercisable, exchangeable or
convertible, as the case may be, as Parent or Sub, as the case may be, may
request, in each case within two business days following the later of (i) such
request and (ii) the last to occur of (A) the expiration or termination of any
waiting period (and any extension thereof) applicable to the relating Option
Exercise referred to below under any applicable competition, merger control,
antitrust or similar law or regulation and (B) the receipt of any other
regulatory approvals applicable to such Option Exercise; provided, however, that
Parent or Sub, as the case may be, shall purchase, upon the terms and subject to
the conditions set forth in the next following sentence of this Section 2(i),
all the shares of Company Common Stock issued upon such exercise, exchange or
conversion, as the case may be, of convertible securities; provided further,
however, that such Stockholder shall not be obligated so to exercise, exchange
or convert, as the case may be, any convertible security (including any Stock
Option, Warrant or Convertible Note) if the exercise price, exchange price or
conversion price, as the case may be, per share of Company Common Stock in
respect of such convertible security is above the Deal Price. At the request of
Parent or Sub (an "Option Exercise"), such Stockholder shall sell, transfer and
deliver or cause to be sold, transferred and delivered to Parent or Sub (or
their respective designees or assignees), as the case may be, and Parent or Sub
(or their respective designees or assignees), as the case may be, shall purchase
from, such Stockholder, all or any portion (as specified by Parent or Sub, as
the case may be) of the Subject Shares that consist of Company Common Stock of
such Stockholder within four business days following the later of (1) such
request and (2) the last to occur of (x) the expiration or termination of any
waiting period (and any extension thereof) applicable to such sale and purchase
under any applicable competition, merger control, antitrust
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or similar law or regulation and (y) the receipt of any other regulatory
approvals applicable to such sale and purchase, for a purchase price per share
equal to the Deal Price.
(j) If, during the term of this Agreement (taking into account the
penultimate sentence of Section 8), Parent or one of its Affiliates offers to
purchase or otherwise acquire shares of Company Common Stock (the "Offer") in
connection with a Parent Takeover Proposal (including any amendment of the
Merger Agreement), then, at the request of Parent, each Stockholder hereby
agrees validly to tender (or cause the record owner of such shares, as
applicable, validly to tender), pursuant to and in accordance with the terms of
the Offer set forth in the acquisition agreement in respect of such Offer
(including any amendment of the Merger Agreement), but in no event later than
ten business days after the date on which Parent or such Affiliate commences the
Offer, all the Subject Shares and to not withdraw any of the Subject Shares so
tendered unless the Offer is terminated or has expired; provided, however, that
Parent (or such Affiliate) shall purchase all the Subject Shares so tendered at
a price per share of Company Common Stock equal to the Deal Price or any higher
price that may be paid in the Offer; provided further, however, that Parent's
(or such Affiliates') obligation to accept for payment and pay for the Subject
Shares in the Offer shall be subject to all the terms and conditions of the
Offer set forth in the acquisition agreement in respect of such Offer (including
any amendment of the Merger Agreement).
SECTION 3. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably grants to, and appoints, each of
Parent, Xxxxxxxxxxx X. Xxxxxxx, its Senior Vice President, Secretary and General
Counsel, and Xxxxxxx X. Xxxxxxxxx, its Senior Vice President of Finance, in
their respective capacities as designees of Parent, and any individual who shall
hereafter succeed to any such office of Parent, and each of them individually,
such Stockholder's proxy and attorney-in-fact (with full power of substitution),
for and in the name, place and stead of such Stockholder, to vote all of such
Stockholder's Subject Shares, or grant a consent or approval in respect of such
Subject Shares, (i) in favor of the adoption of the Merger Agreement and the
approval of the terms thereof and of the Merger and each of the other
transactions contemplated by the Merger Agreement, (ii) against any Takeover
Proposal or any Frustrating Transaction, and (iii) otherwise in accordance with
Section 2. The proxy granted in this Section 3 shall expire upon the earlier of
the termination of this Agreement pursuant to Section 8 or the date that is 24
months and three days following the date of the granting of such proxy pursuant
hereto.
(b) Each Stockholder represents and warrants that any proxies heretofore
given in respect of such Stockholder's Subject Shares were not irrevocable, and
that all such proxies hereby are revoked.
(c) Each Stockholder hereby affirms that the irrevocable proxy set forth in
this Section 3 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of such Stockholder under this Agreement. Each Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked.
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SECTION 4. Further Assurances. Each Stockholder shall, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as Parent may request for the
purpose of effectuating the matters covered by this Agreement, including the
grant of the proxies set forty in Section 3.
SECTION 5. Additional Purchases. Each Stockholder agrees that any shares of
capital stock of the Company ("New Subject Shares") that such Stockholder
acquires beneficial ownership thereof after the date of this Agreement and prior
to the date of termination of this Agreement in accordance with Section 8, shall
be subject to the terms and conditions of this Agreement to the same extent as
if they constituted Subject Shares. If, at any time or from time to time after
the date of this Agreement and prior to the date of termination of this
Agreement in accordance with Section 8, any Stockholder acquires beneficial
ownership of New Subject Shares, but is not the record owner of such New Subject
Shares, then, contemporaneously with such acquisition, such Stockholder shall
cause the holder of record of such New Subject Shares (if such holder of record
is not then a party to this Agreement) to execute and deliver to Parent a
joinder agreement to be bound by the provisions of, and to become a party to,
this Agreement as a "Stockholder", in form and substance satisfactory to Parent.
Upon the occurrence of any of the events referred to in this Section 5, Schedule
A hereto shall be adjusted appropriately.
SECTION 6. Certain Events. Each Stockholder agrees that this Agreement and
the obligations hereunder (including the obligations under Section 2(h)) shall
attach to such Stockholder's Subject Shares and shall be binding upon any Person
to which legal or beneficial ownership of such Subject Shares shall pass,
whether by operation of law or otherwise, including such Stockholder's heirs,
guardians, administrators or successors, and each Stockholder further agrees to
take all actions necessary to effectuate the foregoing. In the event of any
stock split, stock dividend, reclassification, merger, reorganization,
recapitalization or other change in the capital structure of the Company
affecting the capital stock of the Company, the number of Subject Shares listed
on Schedule A hereto opposite the name of each Stockholder shall be adjusted
appropriately and the Deal Price will be adjusted appropriately.
SECTION 7. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise, by any of the parties hereto without the
prior written consent of the other parties hereto, except that Parent may in its
sole discretion assign, in whole or in one or more parts, (a) any or all of its
rights, interests or obligations under this Agreement to any direct or indirect
wholly owned subsidiary of Parent, and (b) any of or all its rights, interests
and obligations under Section 2(h) or Section 2(i) to one or more third parties,
but no such assignment shall relieve Parent of any of its obligations under this
Agreement. Any purported assignment in violation of this Section 7 shall be
void. Subject to the preceding sentences of this Section 7, this Agreement shall
be binding upon, inure to the benefit of, and be enforceable by, the parties
hereto and their respective successors and assigns.
SECTION 8. Termination. This Agreement shall terminate upon the earlier of
(a) the Effective Time and (b) the termination of the Merger Agreement in
accordance with its terms; provided, however, that the proxy granted in Section
3 shall terminate as provided in Section 3(a); provided further, however, that
if the Merger Agreement is terminated pursuant to Section 8.01(b)(iii), Section
8.01(c) or Section 8.01(f) of the Merger Agreement, then Sections 1, 2(h), 4,
10
6, 7, 9, 10 and 11, as well as this Section 8, shall continue in full force and
effect for the duration of the Residual Period. The "Residual Period" means the
period beginning on the date of termination of the Merger Agreement and ending
12 months thereafter; provided, however, that if within such 12 month-period the
Company or any of its Subsidiaries enters into an Acquisition Agreement
contemplated under clause (i)(A)(2) of Section 2(h), then the Residual Period
shall not end until the date that is 24 months and three days after the
termination of the Merger Agreement. Notwithstanding the foregoing, this
Agreement shall not terminate (i) with respect to any Option Exercise made prior
to the date of termination of the Merger Agreement until the sale, transfer and
delivery of the Subject Shares with respect to such Option Exercise have been
effected, and (ii) with respect to Section 2(j) until the Offer is terminated or
has expired. No termination of this Agreement shall relieve any party hereto
from any liability for any breach of any provision of this Agreement prior to
termination.
SECTION 9. General Provisions.
(a) Amendments. This Agreement may not be amended, supplemented, waived or
otherwise modified or terminated, except upon the execution and delivery of a
written agreement executed by all the parties hereto.
(b) Notices. All notices, requests, demands, approvals, consents, waivers
and other communications required or permitted to be given under this Agreement
(each, a "Notice") shall be in writing and shall be (i) delivered personally,
(ii) mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, (iii) sent by next-day or overnight mail or
delivery, or (iv) sent by facsimile transmission, provided that the original
copy thereof also is sent by pre-paid, first class certified or registered mail
or by next-day or overnight mail or personal delivery, to Parent, Sub or the
Company in accordance with Section 9.02 of the Merger Agreement and to any of
the Stockholders at its or his respective address set forth on Schedule A hereto
(or at such other address for a party as shall be specified by like Notice),
with a copy to:
Xxxxxx & Xxxxxxx
A Professional Corporation
0000 Xxxxx Xxxxx Tower
00 X. 0xx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: C. Xxxxxxx Xxxxxx, Xx., Esq.
Any Notice shall be deemed effective and given upon receipt (or refusal of
receipt).
(c) Interpretation.
(i) When a reference is made in this Agreement to a Section or a
Schedule, such reference shall be to a Section of, or a Schedule to, this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder" and
11
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
term "or" is not exclusive. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms. Any
agreement or instrument defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement or instrument as from
time to time amended, modified or supplemented. References herein to a person
are also to its permitted successors and assigns. References herein to a gender
are also to all other genders. References herein to convertible securities also
shall include exchangeable securities and exercisable securities.
(ii) The parties hereto have participated jointly in the negotiation
and drafting of the Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
(d) Counterparts; Effectiveness. This Agreement may be executed (including
by facsimile transmission) with counterpart signature pages, or in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties hereto and delivered to the other parties.
(e) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties hereto with respect to the subject matter of
this Agreement, and (ii) is not intended to confer upon any person other than
the parties hereto (and the persons specified as proxies in Section 3) any
rights or remedies.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAWS OF SUCH STATE.
(g) 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 an acceptable manner and to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
(h) Definitions. For the purpose of this Agreement, "beneficially own" or
"beneficial ownership" or phrases of similar import with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing;
provided, however, that for purposes of determining beneficial ownership of a
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security under this Agreement, all vesting requirements or other waiting periods
with respect to the conversion, exercise or exchange of a security that is
convertible, exercisable or exchangeable shall be deemed to be fully satisfied.
SECTION 10. Enforcement. The parties agree that irreparable damage would
occur if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York or in any New York state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any court of the United States located in the State of
New York or of any New York state court if any dispute arises out of this
Agreement or the transactions contemplated by this Agreement, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that it will not bring any
action relating to this Agreement or the transactions contemplated by this
Agreement in any court other than a court of the United States located in the
State of New York or a New York state court.
SECTION 11. Waiver of Jury Trial. Each party hereto hereby waives, to the
fullest extent permitted by Applicable Law, any right it may have to a trial by
jury in respect of any suit, action or other proceeding directly or indirectly
arising out of, under or in connection with this Agreement. Each party hereto
(a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such party would not, in the event of
any action, suit or proceeding, seek to enforce the foregoing waiver, and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement, by, among other things, the mutual waiver and
certifications in this Section 11.
SECTION 12. Pledge Agreements. From the date hereof until the date of
termination of this Agreement with respect to all Option Exercises pursuant to
the penultimate sentence of Section 8, Xxxxxx X. XxXxx hereby agrees to not (a)
amend, supplement or modify, or (b) agree to amend, supplement or modify, any of
the Pledge Agreements without the prior written consent of Parent.
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IN WITNESS WHEREOF, each of the parties duly has executed this Agreement,
all as of the date first written above.
Parent:
L-3 COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Senior vice President, Secretary
and General Counsel
Sub:
BLUE ACQUISITION CORP.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
Company:
WESTWOOD CORPORATION
By: /s/ Xxxxxx X. XxXxx
-----------------------------------
Name: Xxxxxx X. XxXxx
Title: President
Stockholders:
/s/ Xxxxxx X. XxXxx
---------------------------------------
XXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXX
14
SCHEDULE A
Number and Type of Subject
Shares Owned
Name and Address of Stockholders of Record or Beneficially
-------------------------------- --------------------------------------
Xxxxxx X. XxXxx 1,932,277(1) shares of Common Stock(2)
0000 X. 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxx, M.D. 1,403,371(3) shares of Common Stock(4)
0000 Xxxxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
----------
(1) Includes options to acquire 174,924 shares of Company Common Stock pursuant
to Company Stock Plans, 258,750 shares of Company Common Stock issuable
upon conversion of the Convertible Notes, and Warrants to acquire 121,563
shares of Company Common Stock.
(2) All such Subject Shares are owned beneficially and of record by Xxxxxx X.
XxXxx.
(3) Includes options to acquire 100,000 shares of Company Common Stock pursuant
to Company Stock Plans, 368,750 shares of Company Common Stock issuable
upon conversion of the Convertible Notes, and Warrants to acquire 164,063
shares of Company Common Stock.
(4) All such Subject Shares are owned beneficially and of record by Xxxxxxx X.
Xxxxxxx, M.D.
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