EXHIBIT 10.4
SHAREHOLDER'S AGREEMENT
SHAREHOLDER'S AGREEMENT dated as of March 11, 1997 (the "Agreement"),
by and between CHECKPOINT SYSTEMS, INC., a Pennsylvania corporation ("Parent"),
and XXXXXX X. XXXXXX ("Shareholder").
RECITALS
A. Parent, CU Merger Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and Ultrak, Inc., a Delaware corporation
(the "Company"), are entering into an Agreement and Plan of Reorganization dated
as of the date hereof (the "Plan"). The Merger (as defined in the Plan) is
subject to certain conditions, including the approval of the Merger and the
approval and adoption of the Plan by the holders of a majority of the
outstanding shares of common stock, par value $0.10 per share of the Company
(the "Common Stock") and by the holders of a majority of the outstanding shares
of preferred stock, par value $5.00 per share, of the Company (the "Preferred
Stock").
B. Shareholder is the record and beneficial owner of 1,634,603 shares
of Common Stock (the "Shareholder Common Shares") and 195,351 shares of
Preferred Stock (the "Shareholder Preferred Shares") (the Shareholder Common
Shares and the Shareholder Preferred Shares, together with any shares of Common
Stock or Preferred Stock acquired by Shareholder after the date of this
Agreement and during the term of the Plan, are collectively referred to as the
"Shareholder Shares").
C. As a significant condition to the willingness of Parent to enter
into the Plan, and as a material inducement to it to do so, Shareholder has
agreed for the benefit of Parent as set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Plan.
ARTICLE 11
COVENANTS OF THE SHAREHOLDER
SECTION 2.01. Agreement to Vote. At any meeting of the shareholders of
the Company held prior to the Termination Date (as defined in Section 8.01 of
this Agreement), however called, and at every adjournment thereof prior to the
Termination Date, or in connection with any written consent of the shareholders
of the Company given prior to the Termination Date, Shareholder shall vote the
Shareholder Common Shares and the Shareholder Preferred Shares (a) in favor of
the approval of the Merger and each of the other transactions contemplated by
the Plan and in favor of the approval and adoption of the Plan, and any actions
required in
furtherance hereof and thereof; (b) against any action or agreement that would,
directly or indirectly, result in a breach in any material respect of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Plan; and (c) against any takeover proposal, business
combination or any other action or agreement that, directly or indirectly, is
inconsistent with or that is reasonably likely, directly or indirectly, to
impede, interfere with, delay, postpone or attempt to discourage the Merger or
any other transaction contemplated by the Plan. Shareholder shall not enter into
any agreement or understanding with any person prior to the Termination Date,
directly or indirectly, to vote, grant any proxy or give instructions with
respect to the voting of the Shareholder Shares in any manner inconsistent with
the preceding sentence.
SECTION 2.02. Proxies and Voting Agreements. (a) Shareholder hereby
revokes any and all previous proxies granted with respect to matters set forth
in Section 2.01 for the Shareholder Shares.
(b) Prior to the Termination Date, Shareholder shall not, directly or
indirectly, except as contemplated hereby, grant any proxies or powers of
attorney with respect to matters set forth in Section 2.01, deposit any of the
Shareholder Shares into a voting trust or enter into a voting agreement with
respect to any of the Shareholder Shares, in each case with respect to the
matters set forth in Section 2.01.
SECTION 2.03. Transfer of Shareholder Shares by Shareholder. Prior to
the Termination Date, Shareholder shall not, (a) place any Lien on any of the
Shareholder Common Shares or the Shareholder Preferred Shares, other than
pursuant to this Agreement or the Plan, or (b) sell, convey, transfer or
otherwise dispose of any Shareholder Shares other than a disposition (i) by
operation of law in connection with the Merger, (ii) in the event of the
Shareholder's death, by operation of law pursuant to a will or intestate
succession, or (iii) to a trust, partnership or limited liability company for
benefit of Shareholder or Shareholder's immediate family; provided, however,
that any such transferee shall be subject to the terms of this Agreement. "Lien"
shall mean any lien, encumbrance, encroachment, defect, mortgage, pledge,
liability, option, security interest, conditional sale or other title retention
agreement, assessment, license, covenant, charge, restriction, reservation,
claim, burden, rights or interest whatsoever of any third party.
SECTION 2.04. Dissenters' Rights. Shareholder shall not give notice
pursuant to Section 262 of the DGCL of Shareholder's intent to demand payment
for any of the Shareholder Shares, or take any other action to exercise
dissenters' rights under the DGCL, if the Merger is effectuated.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS OF SHAREHOLDER
Shareholder represents, warrants and covenants to Parent that:
SECTION 3.01. Ownership. Shareholder is as of the date hereof the sole
beneficial and record owner of the Shareholder Shares (other than the 148,851
owned in trust); Shareholder has the sole right to vote the Shareholder Shares,
including the sole right to vote 148,851 of the Shareholder Common Shares as are
held in trust for the benefit of Shareholder's family; and there are (a) no
restrictions on rights of disposition of the Shareholder Shares, (b) other than
respecting the Shareholder Common Shares identified in Exhibit "A" appended
hereto (the "Encumbered Shareholder Common Shares"), no Liens attaching to the
Shareholder Common Shares, or (c) no Liens encumbering the Shareholder Preferred
Shares. None of the Shareholder Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of the
Shareholder Shares.
SECTION 3.02. Authority and Non-Contravention. Shareholder has the
right, power and authority and has been duly authorized by all necessary action
(including consultation, approval or other action by or with any
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other person), to execute, deliver and perform this Agreement and consummate the
transactions contemplated hereby.
SECTION 3.03. Binding Effect. This Agreement has been duly executed and
delivered by Shareholder and is the valid and binding agreement of Shareholder,
enforceable against Shareholder in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and by equitable principles
to which the remedies of specific performance and injunctive and similar forms
of relief are subject.
SECTION 3.04. Total Shares. Other than shares of Common Stock which
Shareholder may acquire through the exercise of options or through the
conversion of Preferred Stock into shares of Common Stock, the Shareholder
Shares are the only shares of Common Stock and Preferred Stock of the Company
owned beneficially or of record as of the date hereof by Shareholder, and
Shareholder does not have any option to purchase or right to subscribe for or
otherwise acquire any securities of the Company and has no other interest in or
voting rights with respect to any other securities of the Company.
SECTION 3.05. Finder's Fees. No investment banker, broker or finder is
entitled to a commission or fee from the Company, Parent or Merger Sub in
respect of this Agreement based upon any arrangement or agreement made by or on
behalf of Shareholder, except as otherwise provided in the Plan.
SECTION 3.06. Consent to Agreement. Shareholder shall, not later than
April 11, 1997, using its reasonable best efforts, obtain the consent to this
Agreement of the holder of each of the Lien(s) affecting the Encumbered
Shareholder Common Shares.
SECTION 3.07. Investors Agreement. On or prior to the Closing Date,
Shareholder shall execute and deliver to Parent the Investors Agreement in the
form attached hereto as Exhibit B.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARENT
Parent represents, warrants and covenants to Shareholder that:
SECTION 4.01. Corporate Power and Authority. Parent has all requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and performance by Parent of this
Agreement and the consummation by Parent of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Parent.
SECTION 4.02. Binding Effect. This Agreement has been duly executed and
delivered by Parent and is a valid and binding agreement of Parent, enforceable
against Parent in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and by equitable principles to which the remedies of
specific performance and injunctive and similar forms of relief are subject.
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ARTICLE V
MISCELLANEOUS
SECTION 5.01. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense;
provided however, that the Company may pay the reasonable costs and expenses of
the Shareholder.
SECTION 5.02. Further Assurances. From time to time, at the request of
Parent, in the case of Shareholder, or at the request of Shareholder, in the
case of Parent, and without further consideration payable by Parent and without
additional payment by Shareholder, each party shall execute and deliver or cause
to be executed and delivered such additional documents and instruments and take
all such further action as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
SECTION 5.03. Specific Performance. Shareholder agrees that Parent
would be irreparably damaged if for any reason Shareholder fails to perform any
of Shareholder's obligations under this Agreement, and that Parent would not
have an adequate remedy at law for money damages in such event. Accordingly,
Parent shall be entitled to seek specific performance and injunctive and other
equitable relief to enforce the performance of this Agreement by Shareholder.
This provision is without prejudice to any other rights that Parent may have
against Shareholder for any failure to perform its obligations under this
Agreement.
SECTION 5.04. Amendments; Termination. This Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. The
representations, warranties, covenants and agreements set forth in Article II
and Sections 3.01 and 3.06 and Article IV shall terminate, except with respect
to liability for prior breaches thereof, upon the termination of the Plan in
accordance with its terms or, if earlier, the Effective Time of the Merger (the
"Termination Date").
SECTION 5.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective estates, heirs, successors and permitted assigns; provided, however,
that a party may not assign, delegate or otherwise transfer any of such party's
rights or obligations under this Agreement without the consent of the other
parties hereto and any purported assignment, delegation or transfer without such
consent shall be null and void and of no force and effect.
SECTION 5.06. Certain Events. Shareholder agrees that this Agreement
and the obligations hereunder shall attach to the Shareholder Shares
beneficially owned by Shareholder and shall be binding upon any person to which
legal or beneficial ownership of such shares shall pass, whether by operation of
law or otherwise.
SECTION 5.07. Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
SECTION 5.08. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), or mailed by registered or certified mail
(return receipt requested) to the parties at the addresses set forth in the Plan
or at such address for a party as shall be specified by like notice.
SECTION 5.09. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware.
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SECTION 5.10. Counterparts. This Agreement and any amendments hereto
may be executed in two counterparts, each of which shall be considered one and
the same Agreement and shall become effective when both counterparts have been
signed, it being understood that both parties need not sign the same
counterpart.
SECTION 5.11. Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
SECTION 5.12. Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision, and this Agreement will be reformed,
construed and enforced as if such invalid, illegal or unenforceable provision or
portion of any provision had never been contained herein. The parties shall
endeavor in good faith negotiations to replace any invalid, illegal or
unenforceable provision with a valid provision the effects of which come as
close as possible to those of such invalid, illegal or unenforceable provision.
SECTION 5.13. Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which such party may be
entitled.
SECTION 5.14. Due Diligence. In the event that Ultrak or Checkpoint
shall terminate the Plan pursuant to Section 8.1 (b)(iv) thereof, then this
Agreement shall immediately and automatically terminate and become null, void
and of no further force or effect.
IN WITNESS WHEREOF, Parent and Shareholder have caused this Agreement
to be duly executed as of the day and year first above written.
CHECKPOINT SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
The undersigned spouse of XXXXXX X. XXXXXX hereby joins in this
Agreement and consents and agrees to the undertakings, covenants and agreements
of the said XXXXXX X. XXXXXX made herein.
/s/ Xxxxxxx Xxxx Xxxxxx
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Dated: March 11, 1997 Xxxxxxx Xxxx Xxxxxx
EXHIBIT "A"
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ENCUMBERED SHAREHOLDER COMMON SHARES
No. of Shares Holders of Encumbrances
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500,000 - NationsBank of Texas, N.A.
(in the aggregate) - Texas Commerce Bank
- State Street Bank & Trust
- Xxxxx Xxxxxx
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