EXHIBIT 99.2
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;
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(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.
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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.
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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.
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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.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
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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
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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
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copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
* * * * *
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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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