THIS VOTING AGREEMENT (this Agreement) is made and entered into as of September 22, 2019, by and among Argonaut Intermediate, Inc., a Delaware corporation (Parent), Arotech Corporation, a Delaware corporation (the Company), and each of the undersigned stockholders of the Company (each, a Holder).
Pursuant to an Agreement and Plan of Merger, dated as of the date hereof (the Merger Agreement), by and among Parent, Argonaut Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (Merger Sub), and the Company, Merger Sub is merging with and into the Company (the Merger) and the Company, as the surviving corporation of the Merger, will thereby become a wholly-owned subsidiary of Parent. Concurrently with the execution and delivery of the Merger Agreement and as a condition and inducement to Parent and Merger Sub to enter into the Merger Agreement, Parent has required that Holder enter into this Agreement. Holder is the beneficial owner (within the meaning of Rule 13d-3 of the Exchange Act) of such number of shares of the outstanding common stock, par value $0.01 per share, of the Company as is indicated beneath Holders signature on the last page of this Agreement (the Shares).
Capitalized terms used herein but not defined shall have the meanings ascribed to them in the Merger Agreement.
The parties agree as follows:
1. Agreement to Retain Shares.
(a) Transfer. During the period beginning on the date hereof and ending on the earlier to occur of (i) the Effective Time and (ii) the Expiration Date (as defined in Section 4), (1) except as contemplated by the Merger Agreement, and except as provided in Section 1(b), Holder agrees not to, directly or indirectly, sell, transfer, exchange or otherwise dispose of (including by merger, consolidation or otherwise by operation of law) the Shares or any New Shares (as defined below), and (2) Holder agrees not to, directly or indirectly, grant any proxies or powers of attorney, deposit any of the Shares into a voting trust or enter into a voting agreement with respect to any of the Shares, or enter into any agreement or arrangement providing for any of the actions described in this clause (2) (other than as required to comply with Section 2(a)).
(b) Permitted Transfers. Section 1(a) shall not prohibit a transfer of Shares or New Shares (as defined below) by Holder (i) for the net settlement of Holders restricted stock units (including performance-based restricted stock units) settled in shares of common stock of the Company (to pay any tax withholding obligations), (ii) for the receipt upon settlement of Holders restricted stock units, and the sale of a sufficient number of such shares of common stock of the Company acquired upon settlement of such restricted stock units as would generate sales proceeds sufficient to pay the taxes payable by Holder as a result of such settlement,