Exhibit 10.2
STANDSTILL AGREEMENT
This Standstill Agreement, by and among Technical
Communications Corporation, a Massachusetts corporation (the
"Company"), M. Mahmud Awan, an individual ("Awan"), Philip A. Phalon,
an individual ("Phalon"), Robert B. Bregman, an individual ("Bregman"),
William C. Martindale, an individual ("Martindale") is dated as of
November 19, 1998.
WHEREAS, Messrs. Awan, Phalon, Bregman, and Martindale
(together, the "13D Group")have been acting as a group in connection
with their stock ownership of the Company, as more fully described in
the Schedule 13D filed by them;
WHEREAS, the Company and the 13D Group have been in litigation
regarding certain matters, including the election of the Company's
Directors, and such litigation is being settled contemporaneously with
the execution of this Standstill Agreement; and
WHEREAS, the parties have determined that a settlement of
their differences and an agreement on voting going forward is in the
best interests of the Company.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Each of Messrs. Awan, Phalon, Bregman, Martindale agrees that from the
date hereof until after September 30, 2000, he will not, nor will he
permit any of his assigns, affiliates or associates (such terms as used
throughout this Standstill Agreement having the same meaning as
ascribed to them under the Exchange Act and the Securities Act,
including rules and regulations promulgated thereunder), from and after
the date that such person becomes an assign, affiliate or associate
unless in any such case specifically approved by the Board of Directors
of the Company to:
(a) participate in the formation or encourage the formation of,
or join, or in any way participate with, any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act
and Section 2(2) of the Securities Act of 1933 (the
"Securities Act"), such term to have such meaning throughout
this agreement) that owns or seeks to acquire record or
beneficial ownership of Company Common Stock or any
securities convertible into, exchangeable for or exercisable
for the Company's Common Stock (all such securities and the
Company Common Stock, collectively, "Company Voting
Securities");
(b) solicit, or participate in any "solicitation" of "proxies" or
become a "participant" in any "election contest" (as such
terms are defined or used in Regulation 14A under the Exchange
Act, these terms to have such meanings throughout this
agreement) with respect to the Company;
(c) initiate, propose or otherwise solicit stockholders for the
approval of one or more stockholder proposals with respect to
the Company or induce any other person to initiate any such
stockholder proposal;
(d) seek to place any person not nominated by the Board of
Directors on the Board of Directors of the Company or seek to
have called any meeting of the stockholders of the Company;
(e) deposit any Company Voting Securities in a voting trust or
subject them to a voting agreement or other agreement or
arrangement or arrangement with respect to the voting of such
Company Voting Securities;
(f) otherwise act, alone or in concert with others, to seek to
control or influence the management, Board of Directors,
policies or affairs of the Company or solicit, propose, seek
to effect or negotiate with any person with respect to any
form of transaction or investment, business combination or
other extraordinary transaction with the Company or any of its
subsidiaries or any restructuring, recapitalization, similar
transaction or other transaction not in the ordinary course of
business with respect to the Company or any of its
subsidiaries, or solicit, make or propose or negotiate with
any other person with respect to, or announce an intent to
make, any tender offer or exchange offer for any securities of
the Company or any of its subsidiaries unless requested to do
so by the Board of Directors of the Company, or publicly
disclose an intent, purpose, plan or proposal with respect to
the Company, any of its subsidiaries or any securities or
assets of the Company or any of its subsidiaries, that would
violate the provisions of this agreement, or assist,
participate in, facilitate or solicit any effort or attempt by
any person to do so or seek to do any of the foregoing;
(g) solicit any of the current officers or employees of the
Company or have any discussions with any employee regarding
cessation of employment with the Company, so long as they are
employed by the Company; or
(h) make any public request to waive any provision of this
Agreement or to permit the taking of any action specified
herein;
(i) provided, however, that nothing in this Agreement shall be
deemed to prevent Dr. Awan or Mr. Brown from taking such
actions as are within the scope of their roles as members of
the TCC Board of Directors as long as such actions are
consistent with any vote or direction of the TCC Board of
Directors.
2. Each of Messrs. Awan, Phalon, Bregman, Martindale further agrees that, from
the date hereof until after September 30, 2000, he will vote all Company Voting
Securities owned or controlled, directly or indirectly, by him (of record,
beneficially or otherwise), whether currently or hereafter owned, acquired or
controlled, for and in favor of (i) all Board nominees, and (ii) all proposals
(or Company opposition to proposals), each as approved in advance by the
Company's Board of Directors, as the same are presented to stockholders from
time to time, whether or not at a meeting of stockholders. Nothing herein shall
apply to or for Company Voting Securities held by Martindale in or through
non-affiliate, third party investment or brokerage accounts controlled or
managed by Martindale as to which he does not have discretionary or appointive
voting authority, provided that Martindale shall not seek to influence the
beneficial owners of such Company Voting Securities to vote against any Board
nominees or Board-supported proposals (or Company opposition to proposals).
3. Each of Messrs. Awan, Phalon, Bregman, Martindale agrees that any action or
omission by any assign, affiliate, associate or representative of his which, if
committed by him, would constitute a breach hereof by him shall also constitute
a breach hereof by him for which he and such assign, affiliate, associate or
representative, as the case may be, shall be jointly and severally responsible.
4. Each of Messrs. Awan, Phalon, Bregman, Martindale acknowledges that the
Company and its affiliates will suffer immediate and irreparable harm in the
event of any breach of any of his obligations hereunder, including but not
limited to any breach by any assign, affiliate, associate or representative of
his attributable to him as provided herein, that monetary damages alone will not
be adequate in such an event and, accordingly, that the Company will be entitled
in such an event to appropriate equitable relief, including but not limited to
an injunction and an order of specific performance, in addition to all other
remedies available to the Company at law or in equity. Each of Awan, Phalon,
Bregman, Martindale hereby consents to the exclusive jurisdiction of the state
and federal courts located in Massachusetts, with regard to any dispute relating
to this agreement and he acknowledges that venue in any such court will be
proper and not inconvenient in the case of any such dispute. The provisions of
this agreement shall inure to the benefit of the Company.
5. No failure or delay by the Company or any affiliate of the Company in
exercising any of the Company's or such affiliate's right or remedies hereunder
shall operate as a waiver thereof, nor shall any waiver in any instance
constitute a waiver in any other instance. The provisions hereof are severable
and, in the event any provision hereof is determined in any circumstances to be
unlawful or unenforceable, such determination shall not affect any other
provision hereof or this agreement as a whole or the application of such
provision in any other circumstances.
6. The provisions hereof shall be governed by and construed in accordance with
the laws of Massachusetts without regard to principles of conflicts of laws that
would be otherwise applicable.
7. Each of Messrs. Awan, Phalon, Bregman, Martindale agrees that (i) the
provisions of this agreement shall irrevocably bind his heirs, successors, or
assigns, and (ii) he (or they) will execute such additional documents,
certificates, agreements, including but not limited to voting trusts or trust
agreements, as the Company deems reasonably necessary to effect further the
actions or intent of the parties as set forth above.
8. Each of the parties hereto has had the full and free opportunity to consult
with legal counsel concerning this Agreement including its legal effect and
interpretation. Each party represents and acknowledges that it or its duly
authorized representative has read this Agreement and is acting freely,
voluntarily, and without coercion.
9. This Agreement may be executed in counterparts, each of which shall be deemed
to be equally authentic and which collectively shall constitute this Agreement.
This Agreement, together with its attachments, represent the entire agreement
between the parties and may not be amended except in writing and signed by all
parties hereto.
10. This Agreement shall be deemed to be a sealed instrument for all purposes
and the execution by the parties hereto shall be deemed to be the application of
their seal for such purpose.
The parties hereto have confirmed their agreement to the terms set
forth above by signing below.
TECHHNICAL COMMUNICATIONS CORPORATION
By:
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Title:
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M. Mahmud Awan
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Philip A. Phalon
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Robert B. Bregman
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William C. Martindale