EXHIBIT 99.1
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STOCKHOLDERS VOTING AGREEMENT
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THIS STOCKHOLDERS VOTING AGREEMENT ("Agreement") is entered into as of
February 19, 2003, by and among Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxx X.
Xxxxxxxx, M.D. ("Xxxxxxxx"), Emerald Advisers, Inc. ("Emerald") and ETC Asset
Management, LLC ("ETC," and together with Xxxxxxxx, Xxxxxxxx and Emerald,
collectively, the "Stockholders"), and X.X. Xxxxxxx ("Xxxxxxx").
BACKGROUND
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A. ENVIRONMENTAL TECTONICS CORPORATION, a Pennsylvania corporation (the
"Corporation"), has conducted negotiations with PNC Bank, National Association
("PNC"), with respect to the Corporation's request that PNC establish a credit
facility in the maximum, aggregate principal amount of $19,800,000, including
(i) a revolving credit facility in the maximum, aggregate principal amount of
$12,000,000 to be used for the Corporation's working capital purposes, repayment
of debt of the Corporation existing on the date hereof and general corporate
purposes directly related to the growth of the business, (ii) a cash
collateralized line of credit facility in the aggregate amount of $2,800,000 for
the issuance of standby and trade letters of credit, and (iii) a standby letter
of credit not to exceed $5,100,000 to secure outstanding variable rate revenue
bonds issued by the Corporation pursuant to a Trust Indenture, dated as of March
15, 2000 between the Corporation and Wachovia Bank, National Association,
formerly known as First Union National Bank, as Trustee, all in accordance with
the terms of a Credit Agreement to be entered into between the Corporation and
PNC (the "Credit Agreement").
B. As a condition to closing the transaction contemplated by the Credit
Agreement, PNC is requiring the Corporation to procure subordinated financing in
an amount not less than $10,000,000.
C. The Corporation has conducted negotiations with Xxxxxxx with respect
to the Corporation's request to establish subordinated financing in the
principal amount of $10,000,000 to be used for the Corporation's working capital
purposes, repayment of debt of the Corporation existing on the date hereof and
general corporate purposes directly related to the growth of the business (the
"Subordinated Financing").
D. The terms and conditions of the Subordinated Financing have been
agreed upon and incorporated in a draft of the proposed Convertible Note and
Warrant Purchase Agreement to be entered into between the Corporation and
Xxxxxxx (the "Purchase Agreement"), including provision for the Corporation's
tender of a 10% senior subordinated convertible note payable to Xxxxxxx, in the
principal amount of Ten Million and No/100 Dollars ($10,000,000), which is
convertible into shares of the Corporation's Common Stock, par value $.05 per
share, of the Corporation (the "Common Stock") representing in excess of 18% of
the issued and outstanding shares of the Common Stock (the "Convertible Note").
E. In connection with the Subordinated Financing, the Corporation is
issuing to Xxxxxxx warrants (the "Warrants") to purchase up to 10% of the issued
and outstanding shares of the Common Stock, on a fully-diluted basis, at an
exercise price per share determined on the date of exercise (the Subordinated
Financing, including the issuance of the Convertible Note and the Warrants in
connection therewith, shall be referred to hereinafter as the "Transaction").
F. Pursuant to the rules of the American Stock Exchange, stockholders
owning a majority of the issued and outstanding shares of voting stock of the
Corporation must approve any transaction in which the Corporation issues shares
of, or securities convertible or exercisable into shares of, Common Stock
representing 20% or more of the presently issued and outstanding Common Stock
for less than the greater of book or market value of the Common Stock.
G. As of the date hereof, each of the Stockholders is the record holder
and beneficial owner (as defined in Rule 13d-3 under the Securities Act of 1934,
as amended) and/or has voting power with respect to such number of shares of
Common Stock indicated next to his or its signature on the final page of this
Agreement (the "Shares").
H. In the aggregate, the Stockholders own a majority of the issued and
outstanding shares of Common Stock and have agreed to vote their Shares in favor
of the consummation of the Transaction.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties, intending to be legally bound, hereby agree as follows:
1. AGREEMENT TO VOTE SHARES. From and after the date of this Agreement
and ending on the Expiration Date (as defined in Section 5 c. below), each
Stockholder agrees that, at any meeting of the stockholders of the Corporation,
however called (the "Meeting"), he or it shall vote all of his or its respective
Shares (a) in favor of the Transaction and (b) against any action or agreement
that would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Corporation made in connection with the
Transaction.
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2. GRANT OF IRREVOCABLE PROXY. In order to ensure the voting of the
Stockholders in accordance with Section 1 of this Agreement, upon execution of
this Agreement by all parties, each Stockholder shall execute and deliver to
Xxxxxxxx an irrevocable proxy, in the form of Exhibit A hereto, granting to
Xxxxxxxx the right to vote in respect of all Shares now owned or hereafter
registered in the name of such Stockholder. It is understood and agreed that
such irrevocable proxy shall relate solely to voting in favor of the Transaction
or against any action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the
Corporation made in connection with the Transaction and shall not constitute the
grant of any rights to said proxy to vote as to any other matters.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the Stockholders
hereby represents, warrants and covenants to Xxxxxxx that he or it: (a) has full
power to enter into this Agreement, (b) has not, prior to the date of this
Agreement, granted and is not a party to, any proxy, voting trust or other
agreement which is inconsistent with or conflicts with the provisions of this
Agreement, and such party shall not grant any proxy or become party to any
voting trust or other agreement which is inconsistent with or conflicts with the
provisions of this Agreement, (c) upon completion of the Transaction will own,
directly or beneficially, at least the number of Shares set forth opposite such
party's name on Exhibit B hereto, and (d) will not take any action inconsistent
with the intent and provisions of this Agreement, including, without limitation,
the transfer, sale or other disposition of any Shares prior to the Expiration
Date, in each case, unless the proposed transferee agrees to execute a copy of
this Agreement and become bound by the terms hereof, and any attempted transfer,
sale or disposition without executing a copy of this Agreement shall be null and
void, provided, however, that this Section 3(d) shall not apply to Emerald.
4. ENFORCEABILITY. Each Stockholder expressly agrees that this
Agreement shall be specifically enforceable against him or it in any court of
competent jurisdiction in accordance with its terms.
5. GENERAL PROVISIONS.
a. All of the covenants and agreements contained in this
Agreement shall be binding upon, and enure to the benefit solely of, the parties
and their respective successors, assigns, heirs, executors, administrators and
other legal representatives, as the case may be, and nothing in this Agreement,
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express or implied, is intended to or shall confer upon any other person or
entity any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
b. This Agreement may be executed by facsimile transmission
and in one or more counterparts, each of which will be deemed an original but
all of which together shall constitute one and the same instrument.
c. The terms of Sections 1 and 3, and the proxies delivered
pursuant to Section 2 of this Agreement shall remain in effect until the earlier
of (i) June 18, 2003; and (ii) the day immediately following the date of the
Meeting or the date the Transaction is otherwise approved by a majority of the
stockholders of the Corporation (the "Expiration Date").
d. If any provision of this Agreement shall be declared void
or unenforceable by any court or administrative board of competent jurisdiction,
such provision shall be deemed to have been severed from the remainder of the
Agreement and this Agreement shall continue in all respects to be valid and
enforceable.
e. No waivers of any breach of this Agreement extended by any
party hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any subsequent breach.
f. Whenever the context of this Agreement shall so require,
the use of the singular number shall include the plural and the use of any
gender shall include all genders.
g. This Agreement may not be modified, amended, altered or
supplemented without the written agreement of each of the parties hereto.
h. From time to time, at the request of either Xxxxxxx or the
Corporation and without further consideration, the Stockholders shall execute
and deliver such additional documents and take all such further action as may be
reasonably necessary to consummate and make effective the transaction
contemplated by this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each Stockholder has caused this Agreement to be
duly executed as of the date first above written.
STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxxxx, M.D.
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Xxxx X. Xxxxxxxx, M.D.
Emerald Advisers, Inc.
By: /s/ Xxx Xxxxx
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Name: Xxx Xxxxx
Title: President
ETC Asset Management, LLC
By: /s/ T. Xxxx Xxxxxx, III
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Name: T. Xxxx Xxxxxx, III
Title: Manager
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IN WITNESS WHEREOF, Xxxxxxx has caused this Agreement to be duly
executed as of the date first above written.
/s/ X.X. Xxxxxxx
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X.X. Xxxxxxx
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EXHIBIT A
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IRREVOCABLE PROXY
The undersigned agrees to, and hereby grants Xxxxxxx X. Xxxxxxxx
("Xxxxxxxx") an irrevocable proxy pursuant to the provisions of the Pennsylvania
Business Corporation Law to vote, or to execute and deliver written consents or
otherwise act with respect to, all shares of capital stock of Environmental
Tectonics Corporation, a Pennsylvania corporation (the "Corporation"), now owned
or hereafter acquired by the undersigned (collectively, the "Shares") as fully,
to the same extent and with the same effect as the undersigned might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Pennsylvania corporation, as provided in Section 1 of that
certain Stockholders Voting Agreement, dated as of February 19, 2003 (the
"Stockholders Voting Agreement"), among Xxxxxxxx, Xxxx X. Xxxxxxxx, M.D.,
Emerald Advisers, Inc., ETC Asset Management, LLC and X.X. Xxxxxxx. The
undersigned hereby affirms that this irrevocable proxy is given as a condition
of the Stockholders Voting Agreement and, as such, is coupled with an interest
and is irrevocable. It is further understood by the undersigned that this
irrevocable proxy may be exercised by Xxxxxxxx for the period beginning the date
hereof and ending on the earlier of (i) June 18, 2003; and (ii) the day
immediately following the date of (A) any meeting of the stockholders of the
Corporation at which the stockholders of the Corporation vote to approve the
Transaction (as defined in the Stockholders Voting Agreement) or (B) the date on
which the Transaction is otherwise approved by a majority of the stockholders of
the Corporation.
THIS PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE
AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE SHARES.
Dated as of February 19, 2003 /s/
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[Name]
Stockholder
IRREVOCABLE PROXY
The undersigned agrees to, and hereby grants Xxxxxxx X. Xxxxxxxx
("Xxxxxxxx") an irrevocable proxy pursuant to the provisions of the Pennsylvania
Business Corporation Law to vote, or to execute and deliver written consents or
otherwise act with respect to, all shares of capital stock of Environmental
Tectonics Corporation, a Pennsylvania corporation (the "Corporation"), now owned
or hereafter acquired by the undersigned (collectively, the "Shares") as fully,
to the same extent and with the same effect as the undersigned might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Pennsylvania corporation, as provided in Section 1 of that
certain Stockholders Voting Agreement, dated as of February 19, 2003 (the
"Stockholders Voting Agreement"), among Xxxxxxxx, Xxxx X. Xxxxxxxx, M.D.,
Emerald Advisers, Inc., ETC Asset Management, LLC and X.X. Xxxxxxx. The
undersigned hereby affirms that this irrevocable proxy is given as a condition
of the Stockholders Voting Agreement and, as such, is coupled with an interest
and is irrevocable. It is further understood by the undersigned that this
irrevocable proxy may be exercised by Xxxxxxxx for the period beginning the date
hereof and ending on the earlier of: (i) June 18, 2003; and (ii) the day
immediately following the date of (A) any meeting of the stockholders of the
Corporation at which the stockholders of the Corporation vote to approve the
Transaction (as described in the Stockholders Voting Agreement) or (B) the date
on which the Transaction is otherwise approved by a majority of the stockholders
of the Corporation.
THIS PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE
AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE SHARES.
Dated as of February 19, 2003 /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
IRREVOCABLE PROXY
The undersigned agrees to, and hereby grants Xxxxxxx X. Xxxxxxxx
("Xxxxxxxx") an irrevocable proxy pursuant to the provisions of the Pennsylvania
Business Corporation Law to vote, or to execute and deliver written consents or
otherwise act with respect to, all shares of capital stock of Environmental
Tectonics Corporation, a Pennsylvania corporation (the "Corporation"), now owned
or hereafter acquired by the undersigned (collectively, the "Shares") as fully,
to the same extent and with the same effect as the undersigned might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Pennsylvania corporation, as provided in Section 1 of that
certain Stockholders Voting Agreement, dated as of February 19, 2003 (the
"Stockholders Voting Agreement"), among Xxxxxxxx, Xxxx X. Xxxxxxxx, M.D.,
Emerald Advisers, Inc., ETC Asset Management, LLC and X.X. Xxxxxxx. The
undersigned hereby affirms that this irrevocable proxy is given as a condition
of the Stockholders Voting Agreement and, as such, is coupled with an interest
and is irrevocable. It is further understood by the undersigned that this
irrevocable proxy may be exercised by Xxxxxxxx for the period beginning the date
hereof and ending on the earlier of: (i) June 18, 2003; and (ii) the day
immediately following the date of (A) any meeting of the stockholders of the
Corporation at which the stockholders of the Corporation vote to approve the
Transaction (as defined in the Stockholders Voting Agreement) or (B) the date on
which the Transaction is otherwise approved by a majority of the stockholders of
the Corporation.
THIS PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE
AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE SHARES.
Dated as of February 19, 2003 /s/ Xxxx X. Xxxxxxxx, M.D.
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Xxxx X. Xxxxxxxx, M.D.
IRREVOCABLE PROXY
The undersigned agrees to, and hereby grants Xxxxxxx X. Xxxxxxxx
("Xxxxxxxx") an irrevocable proxy pursuant to the provisions of the Pennsylvania
Business Corporation Law to vote, or to execute and deliver written consents or
otherwise act with respect to, all shares of capital stock of Environmental
Tectonics Corporation, a Pennsylvania corporation (the "Corporation"), now owned
or hereafter acquired by the undersigned (collectively, the "Shares") as fully,
to the same extent and with the same effect as the undersigned might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Pennsylvania corporation, as provided in Section 1 of that
certain Stockholders Voting Agreement, dated as of February 19, 2003 (the
"Stockholders Voting Agreement"), among Xxxxxxxx, Xxxx X. Xxxxxxxx, M.D.,
Emerald Advisers, Inc., ETC Asset Management, LLC and X.X. Xxxxxxx. The
undersigned hereby affirms that this irrevocable proxy is given as a condition
of the Stockholders Voting Agreement and, as such, is coupled with an interest
and is irrevocable. It is further understood by the undersigned that this
irrevocable proxy may be exercised by Xxxxxxxx for the period beginning the date
hereof and ending on the earlier of: (i) June 18, 2003; and (ii) the day
immediately following the date of (A) any meeting of the stockholders of the
Corporation at which the stockholders of the Corporation vote to approve the
Transaction (as defined in the Stockholders Voting Agreement) or (B) the date on
which the Transaction is otherwise approved by a majority of the stockholders of
the Corporation.
THIS PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE
AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE SHARES.
Dated as of February 19, 2003 Emerald Advisers, Inc.
By: /s/ Xxx Xxxxx
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Name: Xxx Xxxxx
Title: President
IRREVOCABLE PROXY
The undersigned agrees to, and hereby grants Xxxxxxx X. Xxxxxxxx
("Xxxxxxxx") an irrevocable proxy pursuant to the provisions of the Pennsylvania
Business Corporation Law to vote, or to execute and deliver written consents or
otherwise act with respect to, all shares of capital stock of Environmental
Tectonics Corporation, a Pennsylvania corporation (the "Corporation"), now owned
or hereafter acquired by the undersigned (collectively, the "Shares") as fully,
to the same extent and with the same effect as the undersigned might or could do
under any applicable laws or regulations governing the rights and powers of
stockholders of a Pennsylvania corporation, as provided in Section 1 of that
certain Stockholders Voting Agreement, dated as of February 19, 2003 (the
"Stockholders Voting Agreement"), among Xxxxxxxx, Xxxx X. Xxxxxxxx, M.D.,
Emerald Advisers, Inc., ETC Asset Management, LLC and X.X. Xxxxxxx. The
undersigned hereby affirms that this irrevocable proxy is given as a condition
of the Stockholders Voting Agreement and, as such, is coupled with an interest
and is irrevocable. It is further understood by the undersigned that this
irrevocable proxy may be exercised by Xxxxxxxx for the period beginning the date
hereof and ending on the earlier of: (i) June 18, 2003; and (ii) the day
immediately following the date of (A) any meeting of the stockholders of the
Corporation at which the stockholders of the Corporation vote to approve the
Transaction (as defined in the Stockholders Voting Agreement) or (B) the date on
which the Transaction is otherwise approved by a majority of the stockholders of
the Corporation.
THIS PROXY SHALL REMAIN IN FULL FORCE AND EFFECT AND BE ENFORCEABLE
AGAINST ANY DONEE, TRANSFEREE OR ASSIGNEE OF THE SHARES.
Dated as of February 19, 2003 ETC Asset Management, LLC
By: /s/ T. Xxxx Xxxxxx, III
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Name: T. Xxxx Xxxxxx, III
Title: Manager
EXHIBIT B
Stockholder Shares
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Xxxxxxx X. Xxxxxxxx 1,624,398
Xxxx X. Xxxxxxxx, M.D. 682,600
Emerald Advisers, Inc. 865,550
ETC Asset Management, LLC 641,200
