Exhibit 2
SHAREHOLDERS AGREEMENT
This Shareholders Agreement, dated as of June 6, 2001 (this
"Agreement"), is made and entered into among TRW Inc., an Ohio corporation
("Parent"), NSI Systems Inc., a Rhode Island corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and each other party listed on the
signature pages hereof (each, a "Shareholder").
WHEREAS, as of the date hereof, each Shareholder owns (beneficially
and of record) the number of shares of common stock, par value $.10 per share,
of Network Six, Inc., a Rhode Island corporation (the "Company"), set forth
opposite such Shareholder's name on Exhibit A hereto (all such shares so owned
and which may hereafter be acquired by the Shareholders prior to the termination
of this Agreement, whether upon the exercise of Company Options or by means of
purchase, dividend, distribution or otherwise, being referred to herein as the
"Shares") and is the holder of the number of Company Options, if any, set forth
opposite such Shareholder's name on Exhibit A hereto;
WHEREAS, immediately prior to the execution and delivery of this
Agreement, Parent, Merger Sub and the Company have entered into an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger Agreement"), which
provides, upon the terms and subject to the conditions set forth therein, for
the merger of the Merger Sub with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Parent and Merger Sub
to enter into the Merger Agreement, Parent and Merger Sub have required that the
Shareholders agree, and in order to induce Parent and Merger Sub to enter into
the Merger Agreement, each Shareholder has agreed, severally and not jointly, to
enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
ARTICLE I.
TRANSFER AND VOTING OF SHARES
1.1. Voting of Shares. Each Shareholder hereby agrees that from the
date hereof until the termination of this Agreement pursuant to Section 4.2
hereof ("the Term"), at any meeting of the shareholders of the Company, however
called, and in any action by consent of the shareholders of the Company, such
Shareholder shall vote its Shares (i) in favor of the Merger and the Merger
Agreement (as amended from time to time; provided that no amendment shall reduce
the consideration payable with respect to each share of the Company's common
stock or change the nature of such consideration), (ii) against any Takeover
Proposal and (iii) in favor of any other matter which the board of directors of
the Company proposes or the grounds that it is necessary for consummation of the
transactions contemplated by the Merger Agreement which is considered at any
such meeting of shareholders or in such consent, and in connection therewith to
execute any documents which are necessary or appropriate in order to effectuate
the foregoing, including the ability for Merger Sub or its nominees to vote the
Shares directly.
1.2. Disposition or Encumbrance of Shares. Each Shareholder hereby
agrees that, during the Term, it shall not, and shall not offer or agree to,
sell, transfer, tender, assign, pledge, hypothecate or otherwise dispose of, or
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create or permit to exist any Encumbrance (as hereinafter defined) on any of
such Shareholder's Shares.
1.3. Proxy. Each Shareholder hereby revokes any and all prior
proxies or powers of attorney in respect of any Shares and constitutes and
appoints Merger Sub and Parent, or any nominee of Merger Sub and Parent, with
full power of substitution and resubstitution, at any time during the Term, as
its true and lawful attorney and proxy (its "Proxy"), for and in its name, place
and stead, to demand that the Secretary of the Company call a special meeting of
the shareholders of the Company for the purpose of considering any matter
referred to in Section 1.1 and to vote each of such Shares as its Proxy, at
every annual, special, adjourned or postponed meeting of the shareholders of the
Company, including the right to sign its name (as Shareholder) to any consent,
certificate or other document relating to the Company that the law of the State
of Rhode Island may permit or require as provided in Section 1.1. This proxy is
limited to, and subject to the conditions set forth in Section 1.1.
THE FOREGOING PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN
INTEREST THROUGHOUT THE TERM.
1.4. No Solicitation. Each Shareholder covenants and agrees that,
during the Term, it shall not, directly or indirectly through any officer,
director, agent or other representative, solicit, initiate or encourage any
inquiries or the making of any proposal from any person (other than Parent,
Merger Sub and any of their affiliates) relating to (i) any acquisition of all
or any of the such Shareholder's Shares or (ii) any transaction that constitutes
a Takeover Proposal. Each Shareholder immediately shall cease and cause to be
terminated all existing discussions or negotiations of such Shareholder and its
officers, directors, agents or other representatives with any person conducted
heretofore with respect to any of the foregoing. Each Shareholder shall notify
Parent and Merger Sub promptly if any such proposal or offer, or any inquiry or
contact with any person with respect thereto, is made and shall, in any such
notice to Parent and Merger Sub, indicate in reasonable detail the identity of
the person making such proposal, offer, inquiry or contact and the terms and
conditions of such proposal, offer, inquiry or contact.
1.5. Disclosure. Each Shareholder hereby authorizes Parent and
Merger Sub to publish and disclose in the Proxy Statement (including all
documents and schedules filed with the SEC), its identity and ownership of the
Shares and the nature of its commitments, arrangements and understandings under
this Agreement.
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ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE SHAREHOLDERS
Each Shareholder, severally and not jointly, hereby represents and
warrants to Parent and Merger Sub as follows:
2.1. Due Organization, Authorization, etc. Such Shareholder (if it
is a corporation, partnership or other legal entity) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization. Such Shareholder has all requisite power and authority to execute,
deliver and perform this Agreement, to appoint Merger Sub and Parent as its
Proxy and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement, the appointment of Merger Sub as
such Shareholders' Proxy and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of such
Shareholder. This Agreement has been duly executed and delivered by or on behalf
of such Shareholder and, assuming its due authorization, execution and delivery
by Parent and Merger Sub, constitutes a legal, valid and binding obligation of
such Shareholder, enforceable against such Shareholder in accordance with its
terms. There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which a Shareholder is trustee whose consent is
required for the execution and delivery of this Agreement of the consummation by
such Shareholder of the transactions contemplated hereby whose consent has not
been obtained.
2.2. No Conflicts; Required Filings and Consents. (a) The execution
and delivery of this Agreement by such Shareholder do not, and the performance
of this Agreement by such Shareholder will not, (i) conflict with or violate the
trust agreement, Certificate of Incorporation or Bylaws or other similar
organizational documents of such Shareholder (in the case of a Shareholder that
is a trust, corporation, partnership or other legal entity), (ii) conflict with
or violate any Law applicable to such Shareholder or by which such Shareholder
or any of such Shareholder's properties is bound or affected or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, acceleration or cancellation of, or result in the creation of a
lien or encumbrance on any assets of such Shareholder or (if such Shareholder is
a corporation, partnership or other legal entity) any of its subsidiaries,
including, without limitation, the Shares, pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Shareholder is a party or by which
such Shareholder or any of such Shareholder's assets is bound or affected.
(b) The execution and delivery of this Agreement by such Shareholder
do not, and the performance of this Agreement by such Shareholder will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
the performance by the Shareholder of such Shareholder's obligations under this
Agreement.
2.3. Title to Shares. Except as disclosed in any Schedule 13D filed
prior to the date hereof by such Shareholder pursuant to the Securities Exchange
Act of 1934, as amended, such Shareholder is the sole record and beneficial
owner of the Shares set forth opposite such Shareholder's name on Exhibit A
hereto, free and clear of any pledge, lien, security interest, mortgage, charge,
claim, equity, option, proxy, voting restriction, voting trust or agreement,
understanding, arrangement, right of first refusal, limitation on disposition,
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adverse claim of ownership or use or encumbrance of any kind ("Encumbrances"),
other than restrictions imposed by the securities laws or pursuant to this
Agreement and the Merger Agreement.
2.4. No Inconsistent Arrangements. Each Shareholder hereby covenants
and agrees that, except as contemplated by this Agreement and the Merger
Agreement, it shall not (i) transfer (which term shall include, without
limitation, any sale, gift, pledge or other disposition), or consent to any
transfer of, any or all of such Shareholder's Shares, Company Options or any
interest therein, (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of such shares, Company
Options or any interest therein, (iii) grant any proxy, power-of-attorney or
other authorization in or with respect to such Shares or Company Options, (iv)
deposit such Shares or Company Options into a voting trust or enter into a
voting agreement or arrangement with respect to such Shares or Company Options,
or (v) take any other action that would in any way restrict, limit or interfere
with the performance of its obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement.
2.5. No Finder's Fees. No broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of a
Shareholder. Each Shareholder, on behalf of itself and its affiliates, hereby
acknowledges that it is not entitled to receive any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated hereby or by the Merger Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF
MERGER SUB AND PARENT
Parent and Merger Sub hereby, jointly and severally, represent and
warrant to each Shareholder as follows:
3.1. Due Organization, Authorization, etc. Merger Sub and Parent are
corporations duly organized, validly existing and in good standing under the
laws of the States of Rhode Island and Ohio, respectively. Merger Sub and Parent
have all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by each of Merger Sub and Parent have been duly authorized
by all necessary corporate action on the part of Merger Sub and Parent,
respectively. This Agreement has been duly executed and delivered by each of
Merger Sub and Parent and, assuming its due authorization, execution and
delivery by each Shareholder, constitutes a legal, valid and binding obligation
of each of Merger Sub and Parent, enforceable against Merger Sub and Parent in
accordance with its terms.
ARTICLE IV.
MISCELLANEOUS
4.1. Definitions. Terms used but not otherwise defined in this
Agreement, including those defined in Section 8.10 of the Merger Agreement, have
the meanings assigned to such terms in the Merger Agreement.
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4.2. Termination. This Agreement shall terminate and be of no further
force and effect (i) by the written mutual consent of the parties hereto, (ii)
by Parent or any Shareholder (with respect to such Shareholder) if the Merger
shall not have been consummated on or before the 180th calendar day after the
date hereof or (iii) automatically and without any required action of the
parties hereto upon the termination of the Merger Agreement. No such termination
of this Agreement shall relieve any party hereto from any liability for any
breach of this Agreement prior to termination.
4.3. Expenses. All costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such costs and expenses.
4.4. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by facsimile, receipt confirmed, or on the next business day when sent by
overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
TRW Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Secretary
Telecopy: (000) 000-0000
with a copy to:
TRW Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Assistant General Counsel
Telecopy: (000) 000-0000
(b) If to a Shareholder, to the address of such Shareholder on the
signature pages hereto with a copy to:
Esanu Katsky Xxxxxx & Siger, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx P.C.
Telecopy: 000-000-0000
4.5. Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable in a jurisdiction, such provision shall
be modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.
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4.6. Entire Agreement; Assignment. This Agreement and the Merger
Agreement, as amended from time to time, constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect thereto. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by any of the
parties hereto (whether by operation of law or otherwise), provided, however,
that Parent or Merger Sub may, in its sole discretion, assign or delegate its
rights and obligations hereunder to any direct or indirect wholly-owned
subsidiary of Parent.
4.7. Parties in Interest. This Agreement shall be binding upon and
shall inure solely to the benefit of, and be enforceable by, the parties hereto
and their respective successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any person,
other than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities of any nature
whatsoever under or by reason of this Agreement.
4.8. Waiver of Appraisal Rights. Each Shareholder hereby waives any
rights of appraisal or rights to dissent from the Merger.
4.9. Further Assurance. From time to time, at the other party's request
and without consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transaction contemplated by this Agreement.
4.10. Stop Transfer. Each Shareholder agrees with, and covenants to,
Parent and Merger Sub that such Shareholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Shareholder's Shares, unless
such transfer is made in compliance with this Agreement.
4.11. Certain Events. Each Shareholder agrees that this Agreement and
the obligations hereunder shall attach to such Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including, without
limitation, such Shareholder's heirs, guardians, administrators, or successors.
Notwithstanding any transfer of Shares, the transferor shall remain liable for
the performance of all obligations under this Agreement.
4.12. No Waiver. The failure of any party hereto to exercise any right,
power, or remedy provided under this agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, any custom or practice of the parties at
variance with the terms hereof shall not constitute a waiver by such party of
its right to exercise any such or other right, power or remedy or to demand such
compliance.
4.13. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
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4.14. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable to contracts
executed in and to be performed in that state.
4.15. Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
4.16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.17. Shareholder Capacity. Notwithstanding anything herein to the
contrary, no person executing this Agreement who is, or becomes during the Term,
a director of the Company makes any agreement or understanding herein in his
capacity as such director, and the agreements set forth herein shall in no way
restrict any director or officer in the exercise of his or her fiduciary duties
as a director of the Company. The Shareholder has executed this Agreement solely
in its capacity as the beneficial holder of the Shares.
IN WITNESS WHEREOF, each of Parent and Merger Sub has caused this
Agreement to be executed by its officer thereunto duly authorized and each
Shareholder has caused this Agreement to be executed, or duly executed by an
authorized signatory, as of the date first written above.
TRW INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Title: Executive Vice President, General
Counsel and Secretary
NSI SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Vice President and Treasurer
ALLIANCE CAPITAL INVESTMENT CORP.
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx, President
Address: 000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
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JERICHO CAPITAL CORP. SEP F/B/O XXXXXXX XXXXXX
By: /s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx
Address: 000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx, Individually
Address: 000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
/s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx, Individually
Address: 000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
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EXHIBIT A
List of Shareholders
Name of Shareholder Number of Shares
Alliance Capital Investment Corp.* 150,696
Jericho Capital Corp. SEP FBO Xxxxxxx Xxxxxx** 34,000
* Beneficial Owner for purposes of Schedule 13D filings includes
Xxxxxx Xxxxxx
** Beneficial Owner for purposes of Schedule 13D filings includes
Xxxxxxx Xxxxxx
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