EXHIBIT 10.2
STANDSTILL AGREEMENT
by and among
DRS TECHNOLOGIES, INC.,
IDT HOLDING, L.L.C.,
THE VERITAS CAPITAL FUND, L.P.
VERITAS CAPITAL MANAGEMENT, L.L.C.
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
dated as of August 15, 2003
STANDSTILL AGREEMENT
This Standstill Agreement (this "Agreement") is entered into as
of August 15, 2003, by and among DRS Technologies, Inc., a Delaware
corporation ("Parent"), Veritas Capital Management, L.L.C., a Delaware limited
liability company ("Capital Management"), The Veritas Capital Fund, L.P., a
Delaware limited partnership of which Capital Management is the sole general
partner ("Capital Fund"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and IDT Holding, L.L.C.,
a Delaware limited liability company in which Capital Fund owns 86.4% of the
membership interests and is the sole manager ("XYZ Holding," and collectively
with Capital Management, ▇▇▇▇▇▇ and Capital Fund, the "Stockholders").
Capitalized terms used but not defined herein shall have the meanings set
forth in the Agreement and Plan of Merger (the "Merger Agreement"), dated as
of August 15, 2003, among Parent, MMC3 Corporation, a Delaware corporation and
wholly-owned subsidiary of Parent ("Merger Sub"), and Integrated Defense
Technologies, Inc., a Delaware corporation (the "Company")
W I T N E S S E T H:
WHEREAS, simultaneously herewith, Parent, Merger Sub, and the
Company are entering into the Merger Agreement, pursuant to which Merger Sub
will merge with and into the Company, with the Company surviving as a
wholly-owned subsidiary of Parent (the "Merger") and stockholders of the
Company shall receive in the Merger cash and shares of common stock, par value
$0.01 per share, of Parent (the "Parent Stock"); and
WHEREAS, the Stockholders are stockholders of the Company and
shall be entitled to receive Parent Stock pursuant to the Merger (such shares
of Parent Stock, together with any other shares of Parent Stock the voting
power over which is directly or indirectly currently held by any Stockholder
or acquired between the date hereof and the termination of this Agreement
pursuant to the terms hereof, are collectively referred to herein as the
"Subject Shares")
WHEREAS, the parties hereto desire to establish certain
principles in connection with the Stockholders' ownership of the Subject
Shares; and
WHEREAS, as a condition to the willingness of Parent to enter
into the Merger Agreement, and as an inducement and in consideration therefor,
the Stockholders are executing this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, representations, warranties, covenants and agreements
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Other Definitions. For purposes of this Agreement:
(a) "Affiliate" means, with respect to any specified Person, any
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified. With respect to the Stockholders, the term "Affiliate" shall not
include Parent and the Persons that directly, or indirectly through one or
more intermediaries, are controlled by Parent.
(b) "Person" means an individual, corporation, limited liability
company, general or limited partnership, association, trust, unincorporated
organization, other entity or group.
(c) "Representative" means, with respect to any particular Person,
any director, officer, employee, accountant, consultant, legal counsel,
investment banker, advisor, agent or other representative of such Person.
ARTICLE II
STANDSTILL
Section 2.1 Standstill. The Stockholders hereby agree that, from
and after the date hereof, the Stockholders and their Affiliates shall not,
directly or indirectly, unless specifically requested by Parent or expressly
contemplated by the Merger Agreement:
(a) unless otherwise agreed to by Parent's Board of Directors,
acquire, offer to acquire, or agree to acquire, directly or indirectly, by
purchase or otherwise (including through a merger proposal, tender offer or
exchange offer), any shares of Parent Stock, any securities or direct or
indirect rights to acquire Parent Stock or any other securities of Parent, or
any assets of Parent or any subsidiary or division thereof, other than any
acquisition of options to acquire Parent Stock by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as
compensation for his services as a director of Parent;
(b) make, or in any way participate in, directly or indirectly,
any "solicitation" of "proxies" (as such terms are used in the rules of the
SEC) to vote (including by consent), or seek to advise or influence any person
or entity with respect to the voting of, any voting securities of Parent
(including, without limitation, by making publicly known your position on any
matter presented to stockholders), other than to recommend that stockholders
of the Company vote in favor of the Merger and the Merger Agreement;
(c) submit to Parent any stockholder proposal under Rule 14a-8
under the Exchange Act;
(d) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction (including a merger or form of reorganization) involving Parent or
its securities or assets;
(e) form, join or in any way participate in a "group" (as defined
in Section 13(d)(3) under the Exchange Act) in connection with any of the
foregoing;
(f) seek in any way, directly or indirectly, to have any provision
of this Section 2.1 amended, modified or waived; or
(g) otherwise take, directly or indirectly, any actions with the
purpose or effect of avoiding or circumventing any provision of this Section
2.1 or which could reasonably be expected to have the effect of preventing,
impeding, interfering with or adversely affecting its ability to perform its
obligations under this Agreement.
Section 2.2 Dividends, Distributions, Etc. In the event of a stock
dividend or distribution, or any change in the Parent Stock by reason of any
stock dividend or distribution, split-up, recapitalization, combination,
exchange of shares or the like, the term "Subject Shares" shall be deemed to
refer to and include the Subject Shares as well as all such stock dividends
and distributions and any securities into which or for which any or all of the
Subject Shares may be changed or exchanged or which are received in such
transaction.
Section 2.3 Quorum. The Stockholders agree their shares will be
represented in attendance at any meeting of Parent's stockholders, it being
understood that the Stockholders shall vote or abstain on any matter as they
so determine.
Section 2.4 Sales of Subject Shares. Following the consummation of
the Merger, nothing contained in this Agreement shall prohibit the sale of any
of the Subject Shares in accordance with applicable requirements of law;
provided, however, that the Stockholders agree that will not knowingly sell
Subject Shares to any person who is or would after such purchase be deemed to
beneficially own (as defined in Section 3.2 below) 5% or more of Parent Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders hereby represent and warrant, jointly and
severally, to Parent as follows:
Section 3.1 Due Organization, etc. Each corporate Stockholder is
duly organized and validly existing under the Laws of the jurisdiction of
formation. Each Stockholder has all necessary 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 Stockholder have been duly
authorized by all necessary action on the part of such Stockholder.
Section 3.2 Ownership of Shares. The Stockholders "beneficially own"
(as such term is defined in Section 13(d) of the Exchange Act) 11,750,992
shares of Company Common Stock as of the date hereof. Except with respect to
such shares of Company Common Stock, the Stockholders do not beneficially own
or have the right to acquire any shares of Parent Stock as of the date hereof.
Section 3.3 No Conflicts. (i) No filing with any Governmental Entity
and no authorization, consent or approval of any other Person is necessary for
the execution of this Agreement by the Stockholders and the consummation by
the Stockholders of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by the Stockholders, the consummation
by any Stockholder of the transactions contemplated hereby or compliance by
any Stockholder with any of the provisions hereof shall (A) conflict with or
result in any breach of the organizational documents of any Stockholder, (B)
result in, or give rise to, a violation or breach of or a default under any of
the terms of any material contract, understanding, agreement or other
instrument or obligation to which any Stockholder is a party or by which any
Stockholder or any of the Subject Shares or the Stockholder's assets may be
bound, or (C) violate any applicable Law, except for any of the foregoing does
not and could not reasonably be expected to impair any Stockholder's ability
to perform its obligations under this Agreement.
Section 3.4 Reliance by Parent. Each Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance
upon the execution and delivery of this Agreement by such Stockholder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Stockholders as follows:
Section 4.1 Due Organization, etc. Parent is a company duly organized
and validly existing under the Laws of the jurisdiction of its incorporation.
Parent has all necessary 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 Parent have been duly authorized by all
necessary action on the part of Parent.
Section 4.2 Conflicts. (i) No filing with any Governmental Entity,
and no authorization, consent or approval of any other Person is necessary for
the execution of this Agreement by Parent and the consummation by Parent of
the transactions contemplated hereby and (ii) neither of the execution and
delivery of this Agreement by Parent nor the consummation by Parent of the
transactions contemplated hereby shall (A) conflict with or result in any
breach of the organizational documents of Parent, (B) result in, or give rise
to, a violation or breach of or a default under any of the terms of any
material contract, understanding, agreement or other instrument or obligation
to which Parent is a party or by which Parent or any of its assets may be
bound, or (C) violate any Law, except for any of the foregoing as does not and
could not reasonably be expected to impair Parent's ability to perform its
obligations under this Agreement.
ARTICLE V
TERMINATION
Section 5.1 Termination.
(a) This Agreement shall terminate and none of Parent or any
Stockholder shall have any rights or obligations hereunder and this Agreement
shall become null and void and have no effect upon the earliest to occur of:
(i) the termination by mutual written consent of Parent and the Stockholders,
or (ii) the seventh anniversary of the date hereof, or (iii) the termination
of the Merger Agreement in accordance with its terms.
(b) Notwithstanding the foregoing, (i) termination of this
Agreement shall not prevent any party hereunder from seeking any remedies (at
Law or in equity) against any other party hereto for such party's breach of
any of the terms of this Agreement, and (ii) Article 6 of this Agreement shall
survive the termination of this Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Further Actions. Each of the parties hereto agrees that
it will use its reasonable best efforts to do all things necessary to
effectuate this Agreement.
Section 6.2 Notices. All notices and other communications given or
made pursuant hereto shall be in writing (including facsimile or similar
writing) and shall be deemed to have been duly given or made as of the date of
receipt and shall be delivered personally or mailed by registered or certified
mail (postage prepaid, return receipt requested), sent by overnight courier or
sent by facsimile (but only if the appropriate facsimile transmission
confirmation is received), to the applicable party at the following addresses
or facsimile numbers (or at such other address or telecopy number for a party
as shall be specified by like notice):
If to Parent to:
DRS Technologies, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholders, to:
Veritas Capital Management, L.L.C.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Winston & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 6.3 Assignment; Binding Effect. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto, in whole or in part (whether by operation of Law or
otherwise), without the prior written consent of the other parties. Any
attempt to make any such assignment without such consent shall be null and
void, except that Parent may assign, in its sole discretion, any or all of its
rights, interests and obligations under this Agreement to any direct or
indirect wholly owned subsidiary of Parent without the consent of the Company,
but no such assignment shall relieve Parent of its obligations hereunder.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of and be enforceable by, the parties and their respective
successors and permitted assigns.
Section 6.4 Third Party Beneficiaries. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to or shall confer on any Person other than
the parties hereto or their respective permitted successors and assigns any
rights, benefits, remedies, obligations or liabilities whatsoever under or by
reason of this Agreement.
Section 6.5 Entire Agreement. This Agreement and the Merger
Agreement constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties, or any of them, with
respect thereto.
Section 6.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware without regard
to its rules of conflict of Laws. Each of Parent and Stockholders hereby
irrevocably and unconditionally: (i) consents to submit to the exclusive
jurisdiction of the Delaware Courts for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such courts),
(ii) waives any objection to the laying of venue of any such litigation in the
Delaware Courts and (iii) agrees not to plead or claim in any Delaware Court
that such litigation brought therein has been brought in an inconvenient
forum. Each of the parties hereto irrevocably waive any and all rights to
trial by jury in any proceedings arising out of or related to this Agreement
or the transactions contemplated hereby.
Section 6.7 Fee and Expenses. Except as otherwise provided herein,
whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses.
Section 6.8 Headings. Headings of the articles and sections of
this Agreement are for the convenience of the parties only, and shall be given
no substantive or interpretive effect whatsoever.
Section 6.9 Interpretation. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, words denoting any gender shall include all genders and
words denoting natural Persons shall include corporations and partnerships and
vice versa. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be understood to be followed by the words
"without limitation."
Section 6.10 Waivers. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
nor any failure or delay on the part of any party hereto in the exercise of
any right hereunder, shall be deemed to constitute a waiver by the party
taking such action of compliance of any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a
waiver of any prior or subsequent breach of the same or any other provision
hereunder.
Section 6.11 Severability. Any term or provision of this Agreement
that is invalid, illegal or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
Section 6.12 Enforcement of Agreement. 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 its specific terms or was
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 hereof in any Delaware
Court, this being in addition to any other remedy to which they are entitled
at Law or in equity.
Section 6.13 Counterparts. This Agreement may be executed by the
parties hereto in two or more separate counterparts, each of which, when so
executed and delivered, shall be deemed to be an original. All such
counterparts shall together constitute one and the same instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than
all, but together signed by all, of the parties hereto.
* * * * *
IN WITNESS WHEREOF, Parent and each Stockholder have caused
this Agreement to be duly executed as of the day and year first above written.
DRS TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman, President
and Chief Executive Officer
VERITAS CAPITAL MANAGEMENT, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
THE VERITAS CAPITAL FUND, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
IDT HOLDING, L.L.C.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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