AGREEMENT
AGREEMENT
THIS
AGREEMENT (this “Agreement”) is made and entered into as of this 8th day of
August 2007, by and among each of Wynnefield Partners Small Cap Value, L.P.,
Wynnefield Partners Small Cap Value, L.P. I, Wynnefield Small Cap Value Offshore
Fund, Ltd., Channel Partnership II L.P., Wynnefield Capital Management LLC,
Wynnefield Capital Inc., Xxxxxx Xxxx, and Xxxxxx Xxxxxx on the one hand
(collectively, the “Wynnefield Persons”), and each of Xxxxxxxxx & Xxxxxx
Incorporated, Xxxxxxxxx & Xxxxxx Asset Management LLC, Xxxxxxxxx &
Xxxxxx Capital Appreciation LLC, Xxxxxx X. Xxxxxxxxx, Xxx X. Xxxxxx and Xxxxxx
X. Xxxx on the other hand (collectively, the “G&H Persons” together with the
Wynnefield Persons, each a “Reporting Person”, and collectively, the “Reporting
Persons”).
WHEREAS,
the Reporting Persons entered into a Voting Agreement dated April 2, 2007
and as
further amended on May 16, 2007 (collectively, the “Voting Agreement”), pursuant
to which the Reporting Persons agreed, among other things, to (i) vote at
the
2007 Annual Meeting of Breeze-Eastern Corporation (“Breeze-Eastern”) all of the
shares of stock of Breeze-Eastern which the parties and their respective
affiliates beneficially own (the “Shares”) for four director nominees (the
“Nominees”) to be agreed to by the parties; and (ii) to file with the Securities
and Exchange Commission a joint Schedule 13D reporting that such parties
have
formed a group for the primary purpose of voting the Shares in favor of the
Nominees;
WHEREAS,
the Reporting Persons entered into a Joint Filing Agreement dated April 2,
2007
and as further amended on May 16, 2007 (collectively, the “Joint Filing
Agreement”), pursuant to which the Reporting Persons agreed, among other things,
to prepare jointly and file timely (or otherwise to deliver as appropriate)
all
filings on Schedule 13D and Schedule 13G (the “Filings”) required to be filed by
them pursuant to Section 13(d) or 13(g) under the Securities Exchange Act
of
1934, as amended, with respect to their respective ownership of the common
stock
of Breeze Eastern that are required to be reported on any Filings. Each party
to
this Agreement further agrees and covenants to the other parties that it
will
fully cooperate with such other parties in the preparation and timely filing
(and other delivery) of all such Filings;
WHEREAS,
the Reporting Persons have reached a settlement with Breeze-Eastern pursuant
to
which the Nominees have been nominated for election to its board of directors;
and
WHEREAS,
each of the Wynnefield Persons and the G&H the Reporting Persons desire to
enter into an agreement granting each other a right of first refusal with
respect to proposed sales or transfers of the Shares beneficially owned by
the
respective Reporting Persons.
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
1. Termination
of Agreements.
Each of
the Reporting Persons hereby agrees to terminate each of the Voting Agreement
and the Joint Filing Agreement and confirms that, as of the date hereof,
such
agreements have been terminated and cease to be of further effect.
2. Release
and Discharge.
Each of
the Reporting Persons hereby mutually and unconditionally releases and
discharges each other from all of its obligations under each of the Voting
Agreement and the Joint Filing Agreement.
3. Right
of First Refusal.
Each of
the Wynnefield Persons and the G&H Persons agree that prior to seeking to
sell, gift or otherwise transfer, in each case to an unaffiliated entity
(a
“Transfer”),
whether in one or more transactions, any of the Shares or any rights (including,
but not limited to voting rights) thereto they respectively own (the
“Offered
Interests”),
the
Wynnefield Persons or the G&H Persons, as the case may be (the “Selling
Party”), shall either obtain a bona fide written offer or memorandum of the
Transfer of such Offered Interests stating the terms and conditions on which
the
Transfer is to be made (the “Bona
Fide Offer”)
or, if
no Bona Fide Offer has been obtained, at the Market Price (as hereinafter
defined). Each Selling Party agrees to thereupon give prompt written notice
(the
“Sale
Notice”)
to the
non-selling party (the “Non-Selling
Party”)
of its
intention to sell the Offered Interests, together with a copy of the Bona
Fide
Offer and the name of the party making such Bona Fide Offer, if any. The
Non-Selling Party shall have the right (a “Right
of First Refusal”)
to
collectively purchase all of the Offered Interests proposed to be sold by
such
Selling Party at the price and on the terms set forth in the Bona Fide Offer
or,
if no Bona Fide Offer has been made, at the Market Price, by giving notice
to
the Selling Party within three (3) business days after receiving the Sale
Notice
(the “Acceptance
Period”).
If
the Non-Selling Party gives timely written notice to the Selling Party of
its
desire to exercise this Right of First Refusal, the closing shall take place
on
the later of the date set forth for closing in the Bona Fide Offer, if set
forth, or within three (3) business days after the Non-Selling Party notifies
the Selling Party of its intention to exercise this Right of First Refusal.
Each
Selling Party understands that if, and only if, the Non-Selling Party does
not
timely exercise the Right of First Refusal, and provided that each of the
other
terms hereof have been satisfied, such Selling Party shall thereupon be entitled
to consummate the Transfer of the Offered Interests to the party making the
Bona
Fide Offer: (i) on the terms set forth in the Bona Fide Offer or at a price
and
terms which are more favorable to the Selling Party, or (ii) at the Market
Price
on the date the Shares are sold in a market transaction during the ten day
period , if no Bona Fide Offer has been obtained by the Selling Party, only
within the ten (10) day period following the expiration of the Acceptance
Period. Notwithstanding the foregoing, each party hereto understands and
agrees
that (a) if a Selling Party does not consummate the sale of the Offered
Interests to the party described in, and pursuant to the other terms of,
the
Bona Fide Offer delivered to Non-Selling Party within such ten (10) day period
or (b) the terms of the Transfer of the Offered Interests are modified to
be
less favorable to the Selling Party after delivery of the Sales Notice where
a
Bona Fide Offer has been obtained by the Selling Party, such Sales Notice
shall
be of no force and effect and the Selling Party shall not Transfer the Offered
Interests without again complying with the terms of this Section 3, including,
without limitation, providing Non-Selling Party with a new Sales Notice pursuant
to the terms hereof. For purposes of this Agreement, “Market
Price”
shall
mean the closing “bid” price of the Shares on the principal exchange (including
the Nasdaq Global Market or Nasdaq Capital Market) on which such Shares trade,
on the date the Sale Notice is sent to the Non-Selling Party (except as
otherwise provided herein), or if such Shares do not then trade on an exchange,
the last closing bid price quoted on the OTC or Bulletin Board, as the case
may
be. Each of the Wynnefield Persons and the G&H Persons expressly acknowledge
and agree that any transfer or sale of Shares to any of their respective
affiliated entities shall not be deemed a Transfer of Offered Interests and
will
not be subject to the provisions of this Section 3.
2
4. Representations
and Warranties.
Each of
Reporting Person represents and warrants to each other party to this Agreement
that the execution, delivery and performance by each Reporting Person to
this
Agreement has been duly authorized by any necessary action and constitutes
the
legal, valid and binding obligation of such party. Each Reporting Person
represents and warrants to the other parties hereto that they are not now
a
party to any agreement, or other restriction which restricts such party from
entering into this Agreement.
5.
Termination.
This
Agreement shall terminate on the earlier of (i) written agreement of the
Reporting Persons; and (ii) the second anniversary of the date of this
Agreement.
6.
Miscellaneous.
(a)
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York applicable to contracts executed and to be fully performed
therein. This Agreement shall be binding upon and enforceable by the successors
and/or assigns of the parties hereto.
(b)
This
Agreement constitutes the entire agreement between the parties in connection
with the matters set forth herein and cannot be amended, supplemented or
changed, and no provision hereof can be waived, except by a written instrument
making specific reference to this Agreement and signed by the party against
whom
enforcement of any such amendment, supplement, modification or waiver is
sought.
(c)
If
any
provision of this Agreement is held to be void or unenforceable by a court
of
competent jurisdiction, the remaining provisions of this Agreement shall
nevertheless be binding upon the parties with the same force and effect as
though the void or unenforceable part had been severed and deleted.
(d)
This
Agreement may be executed in any number of counterparts, which together shall
constitute one agreement.
(e) All
notices, correspondence and information related to this Agreement should
be sent
to the parties at the addresses set forth below:
if
to
the Wynnefield Persons:
Wynnefield
Partners Small Cap Value, L.P.
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxx
3
Attention:
Xxxxxx Xxxx
if
to
the G&H Persons:
Xxxxxxxxx
& Xxxxxx Incorporated
00
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxxx
In
all
cases with a copy to:
Xxxx
Xxxxxxx, P.C.
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
[signature
pages follow]
4
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date
first set forth above.
|
Wynnefield
Partners Small Cap Value, L.P.
By:
Wynnefield Capital Management LLC, its General Partner
By:
/s/ Xxxxxx Xxxx
Xxxxxx
Xxxx, Co-Managing
Member
|
Wynnefield
Partners Small Cap Value, L.P. I
By:
Wynnefield Capital Management LLC, its General Partner
By:
/s/ Xxxxxx Xxxx
Xxxxxx
Xxxx, Co-Managing
Member
|
|
Wynnefield
Small Cap Value Offshore Fund, Ltd.
By:
Wynnefield Capital, Inc.
By:
/s/ Xxxxxx Xxxx
Xxxxxx
Xxxx, President
|
Wynnefield
Capital Management, LLC
By:
/s/
Xxxxxx
Xxxx
Xxxxxx
Xxxx, Co-Managing
Member
|
|
Wynnefield
Capital, Inc.
By:
/s/ Xxxxxx Xxxx
Xxxxxx
Xxxx, President
|
Channel
Partnership II, L.P.
By:
/s/ Xxxxxx Xxxx
Xxxxxx
Xxxx, General
Partner
|
|
/s/
Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx
|
/s/
Xxxxxx Xxxx
Xxxxxx
Xxxx
|
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date
first set forth above.
| XXXXXXXXX & XXXXXX INCORPORATED | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |
|
Xxxxxx X. Xxxxxxxxx, Chairman |
||
| XXXXXXXXX & XXXXXX ASSET MANAGEMENT, LLC | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |
|
Xxxxxx X. Xxxxxxxxx, Managing Director |
||
| XXXXXXXXX & XXXXXX CAPITAL APPRECIATION, LLC | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxxxx | |
|
Xxxxxx X. Xxxxxxxxx, Managing Director |
||
| /s/ Xxxxxx X. Xxxxxxxxx | ||
|
Xxxxxx X. Xxxxxxxxx |
||
| /s/ Xxx X. Xxxxxx | ||
|
Xxx X. Xxxxxx |
||
| /s/ Xxxxxx X. Xxxx | ||
|
Xxxxxx X. Xxxx |
||
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