SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of the 12 day of May , 1997 (the
"Agreement"), between the undersigned holder (the "Holder") of shares of the
common stock, $0.10 par value (the "Company Common Stock"), of Inbrand
Corporation, a Georgia corporation (the "Company"), and Tyco International Ltd.,
a Massachusetts corporation ("Parent").
RECITALS
The Company, Parent and T5 Acquisition Corp., a Georgia corporation and
a direct, wholly-owned subsidiary of Parent ("Merger Sub"), propose to enter
into an Agreement and Plan of Merger dated the date hereof (the "Merger
Agreement"; capitalized terms not otherwise defined herein being used herein as
therein defined), pursuant to which Merger Sub would be merged (the "Merger")
with and into the Company, and the outstanding shares of Company Common Stock
would be converted into the right to receive shares of New Tyco Common Stock;
and
The Holder is the beneficial owner of the number of shares of Company
Common Stock (together with any shares of Common Stock hereafter acquired by the
Holder, and any options, warrants or other rights to acquire shares of Common
Stock now owned or hereafter acquired by the Holder, the "Subject Shares") set
forth on the signature page to this Agreement; and
As a condition of its entering into the Merger Agreement, Parent has
requested the Holder to agree, and the Holder has agreed, to enter into this
Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. Agreement to Vote Shares. At every meeting of the shareholders of the
Company called with respect to any of the following, and at every adjournment
thereof, and on every action or approval by written consent of the shareholders
of the Company with respect to any of the following, the Holder shall vote all
the Subject Shares that he or it beneficially owns at the time of any such vote:
(i) in favor of approval of the Merger Agreement and the Merger and any matter
necessary to facilitate the Merger and (ii) against (x) approval of any
Acquisition Proposal made in opposition to or in competition with the Merger,
(y) any merger (including, without limitation, an Alternative Transaction),
consolidation, sale of assets requiring shareholder approval, reorganization or
recapitalization of the Company, with any other person other than Parent or its
affiliates, and (z) any liquidation or winding up of the Company (each of the
foregoing in this clause (ii) is hereinafter referred to as an "Opposing
Proposal").
2. Representations and Warranties of Holder. The Holder hereby
represents and warrants to Parent that:
The Holder knows of no plan or intention on the part of the holders of
shares of capital stock of the Company to engage in any sales, exchanges,
transfers, pledges, dispositions, any other transactions which would result in a
reduction in the risk of ownership, by short sale or otherwise, or consent to
any sales, exchanges, transfer, pledges or other disposition (any such
transaction, a "Transfer") of a number of the share of New Tyco Common Stock to
be received in the Merger which would, in the aggregate, constitute more than
50% of the value of the capital stock of the Company outstanding immediately
prior to the Merger. The Holder hereby represents and shall be deemed to
represent at the Effective Time that as of the Effective Time he or it has no
present plan or intention to engage in any Transfer of share of New Tyco Common
Stock to be received in the Merger. Shares of capital stock of the Company with
respect to which a Transfer occurs prior to the Merger shall be treated for
these purposes as if such shares of capital stock of the Company were exchanged
for shares of New Tyco Common Stock and shares of New Tyco Common Stock were
disposed of in a Transfer.
3. Agreement Not to Solicit. Prior to the earlier to occur of the
Effective Time of the Merger or the Termination Date (as hereinafter defined),
the Holder will not, and will not permit any entity under his or its control to:
(1) solicit proxies or become a "participant" in a "solicitation" (as such terms
are defined in Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) with respect to an Opposing Proposal or otherwise
encourage or assist any person in taking or planning any action that would
constitute an Opposing Proposal; or (2) initiate a shareholders' vote or action
by written consent of the Company's shareholders with respect to an Opposing
Proposal.
4. Agreement Not to Transfer Shares. (a) From and after the date hereof
until the earlier to occur of 30 days prior to the Effective Time of the Merger
and the Termination Date, the Holder will not effect a sale, exchange, pledge,
disposition or other transfer or encumbrance (a "Sale") of any of the Subject
Shares to or in favor of any person, unless, prior to any such Sale, such person
shall have agreed in a writing, in form and substance reasonably acceptable to
Parent, for the benefit of and delivered to Parent, to be bound by all
provisions of this Agreement applicable to the Holder.
(b) From and after 30 days prior to the Effective Time of the Merger,
unless the Termination Date shall occur, the Holder shall not (i) transfer, sell
or otherwise dispose of any shares of Company Common Stock prior to the
Effective Time or (ii) sell or otherwise reduce the Holder's risk (within the
meaning of the Securities and Exchange Commission's Financial Reporting Release
No. 1, "Codification of Financial Reporting Policies," Section 201.01 [47 F.R.
21028] (April 15, 1982)) with respect to any shares of New Tyco Common Stock
until after such time (the "Publication Time") as consolidated financial
statements which reflect at least 30 days of post-merger combined operations of
New Tyco and the Company have been published by New Tyco, except as permitted by
Staff Accounting Bulletin No. 76 issued by the Securities and Exchange
Commission. The Holder
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understands that the certificates representing the shares of New Tyco Common
Stock received by the Holder in the Merger will be placed on the "stop-transfer
list" maintained by New Tyco's transfer agent and will remain so listed until
the Publication Time, and that there will be placed on the certificate(s)
representing such stock, or any certificate(s) delivered in substitution
therefor, a legend stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE SHAREHOLDER AGREEMENT, DATED AS
OF MAY 12, 1997 RELATING THERETO, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICES OF THE COMPANY.
(c) In the event that Parent or New Tyco is unable treat the Merger as a
"pooling of interests" for accounting purposes but Parent in its discretion
elects not to terminate the Merger Agreement, Parent shall promptly so inform
the Holder in writing, and, in such case, the provisions of subsection (b) above
shall terminate upon the giving of such notice; provided, however, that, in such
case, the provisions of subsection (a) above shall continue in effect until the
earlier to occur of the Effective Time and the Termination Date.
5. Covenants under Rule 145
(a) The Holder has been advised that the issuance of the shares of New
Tyco Common Stock to the Holder pursuant to the Merger will be registered under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
registration statement on Form S-4. The Holder has also been advised that the
undersigned will or may be deemed an "affiliate" of the Company at the time the
Merger is submitted to a vote of the shareholders of the Company, subject to
Rule 145 under the Securities Act. Accordingly, the Holder may not sell or
otherwise dispose of any shares of New Tyco Common Stock except in accordance
with Rule 145(d) or pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements of the
Securities Act.
(b) The Holder understands and agrees that:
i. Parent and New Tyco are under no obligation to register the sale,
transfer or other disposition of the shares of New Tyco Common Stock to be
received by the Holder in the Merger except as set forth in written agreements,
if any, with the Holder entered into by Parent or New Tyco.
ii. Stop transfer instructions will be given to the transfer agent of
New Tyco with respect to the shares of New Tyco Common Stock to be received by
the Holder in the Merger, and there will be placed on the certificate(s)
representing such stock, or any certificate(s) delivered in substitution
therefor, a legend stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933 (THE
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"ACT") APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
BE TRANSFERRED ONLY IN ACCORDANCE WITH RULE 145(D) OR PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM
REGISTRATION UNDER THE ACT."
iii. Unless the transfer by the Holder of the shares of New Tyco Common
Stock is a sale made in conformity with the provisions of Rule 145(d), or is
made pursuant to a registration statement under the Securities Act, New Tyco
shall have the right to put an appropriate Securities Act legend on the
certificate issued to a transferee.
(c) Parent represents and agrees as follows:
i. For so long as and to the extent necessary to permit the Holder (or
any transferee of shares of New Tyco Common Stock not in violation of this
Agreement (a "Permissible Transferee")) to sell the shares of New Tyco Common
Stock pursuant to Rule 145 and, to the extent applicable, Rule 144 under the
Securities Act, Parent shall use reasonable best efforts to cause New Tyco to
file, on a timely basis, all reports required to be filed with the SEC by it
pursuant to Section 13 of the Exchange Act, so long as it is subject to such
requirement, shall furnish to the Holder or any Permissible Transferee upon
request a written statement as to whether New Tyco has complied with such
reporting requirements during the 12 months preceding any proposed sale under
Rule 145 and shall otherwise use its reasonable best efforts to permit such
sales pursuant to Rule 145 and Rule 144. To the best knowledge of Parent, ADT
has filed, on a timely basis, all reports required to be filed with the SEC
pursuant to Section 13 of the Exchange Act during the preceding 12 months.
ii. Parent agrees that the stop transfer instructions and legends
referred to above shall be promptly terminated or removed if the Holder or any
Permissible Transferee shall have delivered to Parent or New Tyco a copy of a
letter from the staff of the SEC or an opinion of counsel with recognized
expertise in securities law matters, in form and substance reasonably
satisfactory to Parent and New Tyco, to the effect that such instructions and
legends are not required for the purposes of the Securities Act.
6. Xxxx-Xxxxx-Xxxxxx, etc. The Holder and Parent shall use all
reasonable efforts promptly to make all filings and applications with any
governmental or regulatory agencies required to be made in connection with the
acquisition by the Holder of shares of New Tyco Common Stock in the Merger,
including, without limitation, under the Xxxx-Xxxxx- Xxxxxx Antitrust
Improvements Act of 1976, and to furnish all information required to be
furnished in or in connection with any such filing or application.
7. Binding Agreement. This Agreement shall be binding upon, and shall
inure to the benefit of, the Holder, and his or its heirs, estate, personal
representatives and permitted assigns and Parent and New Tyco and their
successors and permitted assigns.
8. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
if and when
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delivered personally or by overnight courier or sent by electronic transmission,
with confirmation received, to the telecopy numbers specified below:
If to the Holder, at the address appearing on the signature page beneath
the Holder's name, with a copy to:
Inbrand Corporation
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Chairman
If to Parent or Merger Sub:
Tyco International Ltd.
Xxx Xxxx Xxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Chairman
With a copy to:
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
or to such other address or telecopy number as any party may have furnished to
the other parties in writing in accordance herewith.
9. Specific Performance. The parties hereto agree that irreparable harm
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were 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 court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
10. Amendment. (a) This Agreement may not be amended or modified, except
by an instrument in writing signed on behalf of each of the parties hereto.
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(b) This Agreement may not be waived by either party hereto, except by
an instrument in writing signed on behalf of the party granting such waiver.
11. Governing Law/Consent of Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent mandatorily governed by the laws of the State of
Massachusetts or Georgia. Each party hereto hereby irrevocably submits to the
jurisdiction of any New York State or Federal court sitting in the City of New
York in any action or proceeding arising out of or related to this Agreement,
and hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such State or Federal court. Each
party hereto hereby irrevocably consents to the service of process, which may be
served in any such action or proceeding by certified mail, return receipt
requested, by delivering a copy of such process to such party at its address
specified in Section 8 or by any other method permitted by law.
12. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
13. Termination. (a) This Agreement shall terminate if and when the
Merger Agreement is terminated according to its terms. The date and time at
which this Agreement is terminated in accordance with this Section 13 is
referred to herein as the "Termination Date."
(b) Upon any termination of this Agreement as provided in Section 13,
this Agreement shall thereupon become void and of no further force and effect,
and there shall be no liability in respect of this Agreement or of any
transactions contemplated hereby or by the Merger Agreement on the part of any
party hereto or any of his or its directors, officers, partners, shareholders,
employees, agents, advisors, representatives or affiliates; provided, however,
that nothing herein shall relieve any party from any liability for such party's
wilful breach of this Agreement; and provided further that nothing herein shall
limit, restrict, impair, amend or otherwise modify the rights, remedies,
obligations or liabilities of any person under any other contract or agreement,
including, without limitation, the Merger Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto, all as of the date first above written.
TYCO INTERNATIONAL LTD.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Vice President - Chief Financial Officer
THE HOLDER: XXXXXXX XXXXXXX XXXXXX 1993 TRUST
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx Xxxxxxx Xxxxx
Title: Trustee
Address:
The Navarre Company
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Number of Shares of Company
Common Stock: 189,562.10
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