SHAREHOLDER'S AGREEMENT
SHAREHOLDER'S AGREEMENT (the "Agreement"), dated as of August 26, 1998,
by and between Xxxxxxx X. Xxxxxx 1997 Trust (the "Shareholder") and DRS
Technologies, Inc., a Delaware corporation ("Acquiror").
W I T N E S S E T H :
WHEREAS, Acquiror, DRS Merger Sub, Inc., a New York corporation and a
direct wholly owned subsidiary of Acquiror ("Merger Sub"), and NAI Technologies,
Inc., a New York corporation (the "Company"), are parties to an Agreement and
Plan of Merger, dated as of August 26, 1998 (the "Merger Agreement"), which
provides, among other things, for the merger of Merger Sub with and into the
Company (the "Merger"), with the Company as the surviving corporation;
WHEREAS, the transactions contemplated by the Merger Agreement,
including without limitation the Merger, must be approved by holders of record
of a majority of the outstanding shares of common stock, par value $0.10 per
share, of the Company entitled to vote (such shares of common stock, the
"Company Common Stock") at a special meeting of the Company's shareholders (the
"Special Meeting") called for the purpose of approving the transactions
contemplated by the Merger Agreement, all in accordance with the requirements of
the New York Business Corporation Law, the Company's Certificate of
Incorporation and the Company's By-Laws;
WHEREAS, as of the date hereof, each of the Shareholder and any other
shareholders affiliated or associated with the Shareholder(1) has or may be
deemed as a beneficial owner (including without limitation as a custodian) to
have sole or shared voting power or dispositive power or both over the number
of shares (the "Shares") of Company Common Stock, the number of Warrants to
Purchase Common Stock of the Company (the "Company Warrants") and the principal
amount of 12% Convertible Subordinated Promissory Notes of the Company (the
"Company Convertible Notes") (collectively, the "Controlled Securities") set
forth under such Shareholder's name(s) on Schedule A hereto; and
WHEREAS, as a condition to Acquiror's entering into the Merger
Agreement, Acquiror has requested that the Shareholder execute and deliver to
Acquiror this Agreement;
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(1) For purposes of this Agreement, the term "Shareholder" shall include such
shareholders affiliated or associated with the Shareholder.
NOW, THEREFORE, the parties agree as follows:
1. Agreement to Vote Shares. The Shareholder agrees to vote the Shares and
any other shares of Company Common Stock which he, she or it, directly or
indirectly, controls and is able to direct the voting thereof at the Special
Meeting or at any other meeting of the shareholders of the Company, however
called, and in any action by consent of the shareholders of the Company (a) in
favor of the Merger, (b) in favor of the Merger Agreement, and (c) against any
amendment of the Company's Certificate of Incorporation or By-Laws or any other
proposal or transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under or with respect to, the Merger, the Merger Agreement or any of the other
transactions contemplated by the Merger Agreement.
2. Agreement to Exchange Warrants and Convertible Notes. The Shareholder
agrees to exchange, in accordance with the procedures contemplated in the Merger
Agreement, any Company Warrants or Company Convertible Notes over which such
Shareholder has dispositive control (with the exception of, in the case of
Xxxxxxx X. Xxxxxx and the Shareholder, the Company Warrants that Xx. Xxxxxx and
the Shareholder will surrender as part of the purchase price for Wilcom, Inc.
("Wilcom") pursuant to the Stock Purchase Agreement (the "Wilcom Agreement") to
be entered into among Wilcom Acquisition Corp., as Buyer, and the Company, as
Seller), for comparable securities issued by Acquiror.
3. Covenants. The Shareholder agrees with respect to himself, herself or
itself and the Controlled Securities that:
(a) Such Shareholder shall not, except consistent with the terms of this
Agreement, (i) transfer (which term shall include, without limitation, for the
purposes of this Agreement, any sale, gift, pledge or other disposition), or
consent to any transfer of, any or all of the Controlled Securities or any
interest therein (with the exception of, in the case of Xxxxxxx X. Xxxxxx and
the Shareholder, the Company Warrants that Xx. Xxxxxx and the Shareholder will
surrender as part of the purchase price for Wilcom pursuant to the Wilcom
Agreement), (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of the Controlled
Securities or any interest therein (with the exception of, in the case of
Xxxxxxx X. Xxxxxx and the Shareholder, the Company Warrants that Xx. Xxxxxx and
the Shareholder will surrender as part of the purchase price for Wilcom pursuant
to the Wilcom Agreement), (iii) take any other action that would in any way
restrict, limit or interfere with the performance of his, her or its obligations
hereunder or the transactions contemplated hereby, or (iv) grant any proxies or
powers of attorney with respect to any of the Shares, deposit any of the Shares
into a voting trust or enter into a voting agreement with respect to such
Shares.
(b) Such Shareholder will not enter into any transaction, take any
action, or directly or indirectly cause any event to occur that would result in
any of such Shareholder's representations or warranties herein contained not
being true and correct at and as of the time immediately after the occurrence of
such transaction, action or event.
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(c) Such Shareholder has no present intention to sell the common stock,
par value $0.01 per share, of Acquiror (the "Acquiror Common Stock") acquired by
him, her or it pursuant to the Merger. Such Shareholder agrees that he, she or
it will not sell, transfer or otherwise dispose of (i) any Company Common Stock
for the consecutive 62-day period ending on the effective date of the Merger and
(ii) any Acquiror Common Stock received by him, her or it pursuant to the Merger
for a period of 18 months following the effective date of the Merger.
4. Representations and Warranties. The Shareholder represents and warrants
with respect to himself, herself or itself and the Controlled Securities that:
(a) Such Shareholder is the record or beneficial owner of, or has voting
power or dispositive power or both over, the Controlled Securities set forth on
Schedule A under such Shareholder's name and, except for the Shares, such
Shareholder is not the record or beneficial owner of any other shares of Company
Common Stock.
(b) This Agreement has been duly executed and delivered by the
Shareholder and constitutes the legal, valid and binding obligation of the
Shareholder, enforceable against the Shareholder in accordance with its terms.
The Shareholder has all necessary power and authority to execute and deliver
this Agreement, to perform his, her or its obligations hereunder and to
consummate the transactions contemplated hereby. Neither the execution and
delivery of this Agreement nor the consummation by the Shareholder of the
transactions contemplated hereby will result in a violation of, or a default
under, or conflict with, any contract, trust, commitment, agreement,
understanding, arrangement or restriction of any kind to which the Shareholder
is a party or bound or to which the Controlled Securities are subject which
would materially impair the ability of the Shareholder to perform hereunder.
Consummation by the Shareholder of the transactions contemplated hereby will not
violate, or require any consent, approval, or notice under, any provision of any
judgment, order, decree, statute, law, rule or regulation applicable to the
Shareholder or the Controlled Securities, except for any filing under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the filing
of an amendment to the Schedules 13D or Forms 4, if any, filed by the
Shareholder with respect to the Company Common Stock.
(c) The Controlled Securities owned by the Shareholder and the
certificates representing such Controlled Securities are now and at all times
during the term hereof will be held by the Shareholder or by a nominee or
custodian for his, her or its benefit, free and clear of all liens, claims,
security interests, proxies, voting trusts or agreements, understandings or
arrangements or any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder and except for any general fiduciary
obligations imposed by law.
(d) No broker, investment banker, financial adviser or other person is
entitled to any broker's fee, finder's fee, financial adviser's fee or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Shareholder.
5. Certain Events. The Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Controlled Securities and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Controlled Securities shall pass, whether by
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operation of law or otherwise, including without limitation such person's heirs,
guardians, administrators or successors. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Company Common Stock, or the
acquisition of additional shares of Company Common Stock by the Shareholder,
whether as a result of exercising the Company Warrants, converting the Company
Convertible Notes or otherwise, this Agreement and the obligations hereunder
shall attach to any additional shares of Company Common Stock or other voting
securities of the Company issued to or acquired by the Shareholder. In the event
of a stock dividend or distribution, or any change in Company Common Stock by
reason of any stock dividend, split-up, recapitalization, combination, exchange
of shares or the like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Shares may be changed or exchanged.
6. Specific Enforcement of this Agreement. The Shareholder expressly
acknowledges and agrees that irreparable damage would occur and that Acquiror
would not have an adequate remedy at law, including without limitation damages
alone, in the event that 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 Acquiror shall be entitled as a matter of right to
injunctive relief to prevent breaches by the Shareholder of this Agreement and
to enforce specifically the terms and provisions of this Agreement in any court
of competent jurisdiction with respect to any actual or threatened breach by the
Shareholder of the provisions of this Agreement, in addition to any other remedy
to which it may be entitled at law or in equity. In addition, each of the
parties hereto (i) consents to submit such party to the personal jurisdiction of
any Federal court located in the State of New York or any New York state court
located in New York County in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the State
of New York or a New York state court located in New York County.
7. Termination. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate upon the first to occur of (a) the
consummation of the Merger or (b) the date of termination of the Merger
Agreement in accordance with its terms by any of the parties thereto.
8. Miscellaneous.
(a) All communication under this Agreement shall be in writing and shall
be deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to Acquiror:
DRS Technologies, Inc.
0 Xxxxxx Xxx
0
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
If to the Shareholder:
Xxxxxxx X. Xxxxxx 1997 Trust
000 Xxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx XxXxxxxx and Xxxxx Xxxxx Xxxxxx, Trustees
Facsimile: (000) 000-0000
With a copy to:
c/o NAI Technologies, Inc.
000 Xxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(b) 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.
(c) This Agreement constitutes the entire agreement relating to the
subject matter covered herein, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(d) 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 THE SHAREHOLDER WITHOUT THE PRIOR WRITTEN
CONSENT OF ACQUIROR.
(e) The construction and performance of this Agreement will be governed
by the laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
(f) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated and shall be
enforced to the fullest extent permitted by law.
(g) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
(h) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or
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more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
SHAREHOLDER
Xxxxxxx X. Xxxxxx 1997 Trust
By: /s/ Xxxxxx XxXxxxxx
_________________________
Name: Xxxxxx XxXxxxxx
Title: Trustee
DRS TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxx
_________________________
Name: Xxxx X. Xxxx
Title: Exec V.P. Secretary
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SCHEDULE A
Shareholder: Xxxxxxx X. Xxxxxx 1997 Trust
Xxxxxx XxXxxxxx and Xxxxx Xxxxx Xxxxxx, as Trustees
Shares: 219,000 shares of common stock
Warrants: 157,000 warrants with an exercise price of $2.50 per share
expiring February 15, 2002
Convertible Notes: 0
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