STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT is made and entered into as of this 28th day
of December 1997, among TYCO INTERNATIONAL LTD., a Bermuda company ("Parent"),
T9 ACQUISITION CORP., a Delaware corporation and an indirect, wholly owned
subsidiary of Parent ("Purchaser"), and the other parties signatory hereto
(each, a "Stockholder").
WHEREAS each Stockholder desires that XXXXXX PROTECTION GROUP, INC., a
Delaware corporation (the "Company"), Parent and Purchaser enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "Merger Agreement") with respect to the merger of
Purchaser with and into the Company (the "Merger"); and
WHEREAS each Stockholder is executing this Agreement as an inducement
to Parent to enter into and execute, and to cause Purchaser to enter into and
execute, the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and Purchaser of the Merger Agreement and the mutual covenants,
conditions and agreements contained herein and therein, the parties agree as
follows:
SECTION 1. Representations and Warranties. Each Stockholder severally,
and not jointly, represents and warrants to Parent and Purchaser as follows:
(a) Such Stockholder (individually or together with such other
Stockholders as indicated on Schedule A hereto) has voting and dispositive power
over the number of shares of Common Stock, par value $.01 per share, of the
Company (the "Company Common Stock"), set forth opposite such Stockholder's name
in Schedule A hereto (as may be adjusted from time to time pursuant to Section
5, such Stockholder's "Shares"). Except for such Stockholder's Shares and any
other shares of Company Common Stock subject hereto, such Stockholder does not
have dispositive or voting power over any other shares of Company Common Stock.
(b) Such Stockholder's Shares and the certificates
representing such Shares are now and at all times during the term hereof will be
held by such Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or proxies arising
hereunder.
(c) Such Stockholder understands and acknowledges that Parent
is entering into, and causing Purchaser to enter into, the Merger Agreement in
reliance upon such Stockholder's execution and delivery of this Agreement. Such
-1-
Stockholder acknowledges that the irrevocable proxy set forth in Section 4 is
granted in consideration for the execution and delivery of the Merger Agreement
by Parent and Purchaser.
SECTION 2. Agreement to Tender. Each Stockholder hereby severally
agrees that it shall tender its Shares into the Offer (as defined in the Merger
Agreement) and that it shall not withdraw any Shares so tendered unless the
Offer (i) is withdrawn in accordance with the terms of the Merger Agreement or
(ii) expires and the conditions set forth in Annex I to the Merger Agreement
shall not have been satisfied or waived by Parent or Purchaser.
SECTION 3. Covenants. Each Stockholder severally, and not jointly,
agrees with, and covenants to, Parent and Purchaser as follows:
(a) Such Stockholder shall not, except as contemplated by the
terms of this Agreement, (i) transfer (the term "transfer" shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of such
Stockholder's Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of such Shares or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to such
Shares, (iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any other
action that would in any way restrict, limit or interfere with the performance
of its obligations hereunder or the transactions contemplated hereby.
(b) Such Stockholder shall not, nor shall it permit any
investment banker, attorney or other adviser or representative of such
Stockholder acting on its behalf to, directly or indirectly, (i) solicit,
initiate or encourage the submission of, any Company Takeover Proposal (as
defined in the Merger Agreement) or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any Company
Takeover Proposal, provided that the foregoing restrictions shall not be
applicable in any case to the extent that, pursuant to the Merger Agreement,
such restrictions would not be applicable to the Company.
SECTION 4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably (except in accordance
with the provisions of Section 8) grants to, and appoints, Parent and Xxxx
Xxxxxxxx, Xxxxx Xxxxxx and any other individual who shall hereafter be
designated by Parent, such Stockholder's proxy and attorney-in-fact (with full
power of substitution), for and in the name, place and stead of such
-2-
Stockholder, to vote such Stockholder's Shares, or grant a consent or approval
in respect of such Shares, at any meeting of stockholders of the Company or at
any adjournment thereof or in any other circumstances upon which their vote,
consent or other approval is sought, against (i) any merger agreement or merger
(other than the Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, joint venture, recapitalization,
dissolution, liquidation or winding up of or by the Company and (ii) any
amendment of the Company's Articles of Incorporation or By-laws or other
proposal or transaction (including any consent solicitation to remove or elect
any directors of the Company) involving the Company or any of its subsidiaries
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under or with respect to, the Offer, the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement (each of the
foregoing in clause (ii) or (iii) above, a "Competing Transaction").
(b) Such Stockholder represents that any proxies heretofore
given in respect of such Stockholder's Shares are not irrevocable, and that any
such proxies are hereby revoked.
(c) Such Stockholder hereby affirms that the irrevocable proxy
set forth in this Section 4 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Stockholder under this Agreement. Such
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked (except in accordance with
the provisions of Section 8). Such Stockholder hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212 of the Delaware General
Corporation Law (the "DGCL").
SECTION 5. Certain Events. Each Stockholder agrees that this Agreement
and the obligations hereunder shall attach to such Stockholder's Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including without limitation such Stockholder's heirs, guardians, administrators
or successors. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of the
Company affecting the Company Common Stock, or the acquisition of additional
shares of Company Common Stock or other securities or rights of the Company by
any Stockholder, the number of Shares listed on Schedule A beside the name of
-3-
such Stockholder shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares of Company Common
Stock or other securities or rights of the Company issued to or acquired by such
Stockholder.
SECTION 6. Stop Transfer. The Company agrees with, and covenants to,
Parent that the Company shall not register the transfer of any certificate
representing any Stockholder's Shares, unless such transfer is made to Parent or
Purchaser or otherwise in compliance with this Agreement. Each Stockholder
acknowledges that its Shares will be placed by the Company on the "stop-transfer
list" maintained by the Company's transfer agent until this Agreement is
terminated pursuant to its terms.
SECTION 7. Further Assurances. Each Stockholder shall, upon request of
Parent or Purchaser execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Parent or Purchaser to be
necessary or desirable to carry out the provisions hereof and to vest the power
to vote such Stockholder's Shares as contemplated by Section 4 in Parent and the
other irrevocable proxies described therein.
SECTION 8. Termination. This Agreement, and all rights and obligations
of the parties hereunder and the proxy provided in Section 4, shall terminate
upon the earlier of (a) the date upon which the Merger Agreement is terminated
in accordance with its terms or (b) the date that Parent or Purchaser shall have
purchased and paid for the Shares of each Stockholder pursuant to Section 2.
SECTION 9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in the
Merger Agreement.
(b) All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to Parent or
Purchaser, to the address set forth in Section 8.5 of the Merger Agreement; and
(ii) if to a Stockholder, to the address set forth on Schedule A hereto, or such
other address as may be specified in writing by such Stockholder.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective (even without the signature of any other Stockholder) as
-4-
to any Stockholder when one or more counterparts have been signed by each of
Parent, Purchaser and such Stockholder and delivered to Parent, Purchaser and
such Stockholder.
(e) This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the state of New York and, to the extent expressly
provided herein, the DGCL, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except by laws of descent. Any assignment in
violation of the foregoing shall be void.
(h) If any term, provision, covenant or restriction herein, or
the application thereof to any circumstance, shall, to any event, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(i) Each Stockholder agrees that irreparable damage would
occur and that Parent and Purchaser would not have any adequate remedy at law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that Parent and Purchaser shall be entitled to an injunction
or injunctions to prevent breaches by any Stockholder of this Agreement and to
enforce specifically the terms and provisions of this Agreement. Each of the
parties hereto (i) consents to submit such party to the personal jurisdiction of
any Federal court located in the State of New York in the event any dispute
arises out of this Agreement or any of the transactions contemplated hereby,
(ii) agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (iii)
agrees that such party will not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than a Federal
court located in the State of New York. The prevailing party in any judicial
-5-
action shall be entitled to receive from the other party reimbursement for the
prevailing party's reasonable attorneys' fees and disbursements, and court
costs.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in writing and
signed by such party.
IN WITNESS WHEREOF, Parent, Purchaser and the Stockholders
have caused this Agreement to be duly executed and delivered as of the date
first written above.
TYCO INTERNATIONAL LTD.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President and Chief Financial
Officer
T9 ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
HP PARTNERS L.P.
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxx
Title: General Partner
ACKNOWLEDGED AND AGREED
TO AS TO SECTION 6:
XXXXXX PROTECTION GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
-6-
Schedule A
Number of Shares of
Name and Address of Stockholder Common Stock Owned
------------------------------- ------------------
HP Partners L.P. 2,201,600
c/o HP Management, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000