EXHIBIT 99.1
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (the "Agreement") is made and entered into
as of March 22, 2004, between SAFLINK Corporation, a Delaware corporation
("Parent"), Spartan Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Parent ("Merger Sub"), and the undersigned
stockholder ("Stockholders") of SSP Solutions, Inc., a corporation existing
under the laws of Delaware ("Company").
RECITALS:
WHEREAS, pursuant to an Agreement and Plan of Merger and Reorganization
dated as of March 22, 2004, by and between Parent, Merger Sub and Company (such
agreement as it may be amended or restated is hereinafter referred to as the
("Merger Agreement"), the parties agreed that on the signing of the Merger
Agreement, Parent, Merger Sub and Stockholder would execute and deliver a
Stockholder Agreement containing the terms and conditions set forth in an
Exhibit to the Merger Agreement together with such other terms and conditions as
may be agreed to by the parties to the Merger Agreement acting reasonably;
WHEREAS, Parent has agreed to acquire the outstanding securities of
Company pursuant to a statutory merger of Merger Sub with and into Company (the
"Merger") effected in part through the conversion of each outstanding share of
capital stock of Company (the "Company Capital Stock"), into shares of common
stock of Parent (the "Parent Shares") at the rate set forth in the Merger
Agreement (the "Transaction");
WHEREAS, Stockholder is the registered and beneficial owner of such
number of shares of the outstanding Company Capital Stock as is indicated on the
signature page of this Agreement (the "Shares"); and
WHEREAS, in order to induce Parent to enter into the Transaction,
certain stockholders of Company have agreed not to transfer or otherwise dispose
of any of the Shares, or any other shares of Company Capital Stock acquired by
such stockholder hereafter and prior to the Expiration Date (as defined in
Section 1.1 below), and have agreed to vote the Shares and any other such shares
of Company Capital Stock so as to facilitate consummation of the Transaction.
NOW, THEREFORE, the parties agree as follows:
1. SHARE OWNERSHIP AND AGREEMENT TO RETAIN SHARES.
1.1 TRANSFER AND ENCUMBRANCE.
(a) Stockholder represents, warrants and covenants to
Parent that (i) Stockholder is the beneficial owner of that number of Shares of
Company Capital Stock set forth on the signature page hereto and, except as
otherwise set forth on the signature page hereto, has held such Company Capital
Stock at all times since the date set forth on such signature page; (ii) the
Shares constitute the Stockholder's entire interest in the outstanding Company
Capital Stock; (iii) no other person or entity not a signatory to this Agreement
has a beneficial interest in or a right to acquire the Shares or any portion of
the Shares; and (iv) the Shares are and will be at all times up until the
Expiration Date free and clear of any liens, claims, options, charges or other
encumbrances.
(b) Stockholder agrees not to transfer (except as may
be specifically required by court order or by operation of law), sell, exchange,
pledge or otherwise dispose of or encumber the Shares or any New Shares (as
defined below), or to make any offer or agreement relating thereto, at any time
prior to the Expiration Date. As used herein, the term "Expiration Date" shall
mean the earlier to occur of (i) the Effective Time (as defined in the Merger
Agreement) of the Transaction, and (ii) the termination of the Merger Agreement.
1.2 NEW SHARES. Stockholder agrees that any shares of Company
Capital Stock that Stockholder purchases or with respect to which Stockholder
otherwise acquires beneficial ownership after the date of this Agreement and
prior to the Expiration Date ("New Shares") shall be subject to the terms and
conditions of this Agreement to the same extent as if they constituted Shares.
2. AGREEMENT TO VOTE SHARES. Prior to the Expiration Date, at every
meeting of the stockholders of Company called with respect to any of the
following, and at every adjournment thereof, and on every action or approval by
written resolution of the stockholders of Company with respect to any of the
following, Stockholder shall vote the Shares and any New Shares (i) in favor of
approval of the Transaction and any matter that could reasonably be expected to
facilitate the Transaction and (ii) against any proposal for any
recapitalization, merger, sale of assets or other business combination (other
than the Transaction) between Company and any person or entity other than Parent
and Merger Sub.
3. IRREVOCABLE PROXY. Stockholder is hereby delivering to Parent a duly
executed proxy in the form attached hereto as EXHIBIT A (the "Proxy") with
respect to each meeting of stockholders (or written consent in lieu thereof) of
Company, such Proxy to cover the total number of Shares and New Shares in
respect of which Stockholder is entitled to vote at any such meeting. Upon the
execution of this Agreement by the Stockholder, the Stockholder hereby revokes
any and all prior proxies given by the Stockholder with respect to the Shares
and agrees not to grant any subsequent proxies with respect to the Shares or any
New Shares until after the Expiration Date.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF STOCKHOLDER.
Stockholder hereby represents, warrants and covenants to Parent as follows:
(a) Until the Expiration Date, the Stockholder will
not (and will use such Stockholder's reasonable best efforts to cause Company,
its affiliates, officers, directors and employees and any investment banker,
attorney, accountant or other agent retained by such Stockholder or them, not
to): (i) initiate or solicit, directly or indirectly, any proposal, plan of
offer to acquire all or any substantial part of the business or properties or
Company Capital Stock, whether by merger, purchase of assets, tender offer or
otherwise, or to liquidate Company or otherwise distribute to the Stockholders
of Company all or any substantial part of the business, properties or Company
Capital Stock (each, an "Acquisition Proposal"); (ii) initiate, directly or
indirectly, any contact with any person in an effort to or with a view towards
soliciting any Acquisition Proposal; (iii) furnish information concerning
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Company's business, properties or assets to any corporation, partnership, person
or other entity or group (other than Parent or Merger Sub, or any associate,
agent or representative of Parent or Merger Sub), under any circumstances that
would reasonably be expected to relate to an actual or potential Acquisition
Proposal; or (iv) negotiate or enter into discussions or an agreement, directly
or indirectly, with any entity or group with respect of any potential
Acquisition Proposal provided that, in the case of clauses (iii) and (iv), the
foregoing shall not prevent Stockholder, in Stockholder's capacity as a director
or officer (as the case may be) of Company, from taking any actions permitted
under Section 4.3 of the Merger Agreement. In the event the Stockholder shall
receive or become aware of any Acquisition Proposal subsequent to the date
hereof, such Stockholder shall promptly inform Parent as to any such matter and
the details thereof to the extent possible without breaching any other agreement
to which such Stockholder is a party or violating its fiduciary duties.
(b) Stockholder is competent to execute and deliver
this Stockholder Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Stockholder Agreement has
been duly and validly executed and delivered by Stockholder and, assuming the
due authorization, execution and delivery by Parent, constitutes a legal, valid
and binding obligation of Stockholder, enforceable against Stockholder in
accordance with its terms except that (i) the enforceability thereof may be
subject to applicable bankruptcy, insolvency or other similar laws, now or
hereinafter in effect affecting creditors' rights generally and (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject to
the discretion of the court before which any proceeding therefor may be brought.
(c) The execution and delivery of this Stockholder
Agreement by Stockholder does not, and the performance of this Stockholder
Agreement by Stockholder shall not result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance, on any of the Shares or New Shares pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Stockholder is a party or by which
Stockholder or the Shares or New Shares are or will be bound or affected.
5. ADDITIONAL DOCUMENTS. Stockholder hereby covenants and agrees to
execute and deliver any additional documents necessary or desirable, in the
reasonable opinion of Parent, to carry out the purpose and intent of this
Agreement.
6. CONSENT AND WAIVER. Stockholder hereby gives any consents or waivers
that are reasonably required for the consummation of the Transaction under the
terms of any agreement to which Stockholder is a party or pursuant to any rights
Stockholder may have.
7. TERMINATION. This Agreement and the Proxy delivered in connection
herewith shall terminate and shall have no further force or effect as of the
Expiration Date.
8. CONFIDENTIALITY. Stockholder agrees (i) to hold any information
regarding this Agreement and the Transaction in strict confidence, and (ii) not
to divulge any such information to any third person, until such time as the
Transaction has been publicly disclosed by Parent.
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9. MISCELLANEOUS.
9.1 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, then the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
9.2 BINDING EFFECT AND ASSIGNMENT. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
either of the parties without the prior written consent of the other. This
Agreement is binding upon Stockholder in Stockholder's capacity as a stockholder
of Company (and not in Stockholder's capacity as a director or officer, as the
case may be, of Company) and only with respect to the specific matters set forth
herein.
9.3 AMENDMENT AND MODIFICATION. This Agreement may not be
modified, amended, altered or supplemented except by the execution and delivery
of a written agreement executed by the parties hereto.
9.4 SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The parties
hereto acknowledge that Parent will be irreparably harmed and that there will be
no adequate remedy at law for a violation of any of the covenants or agreements
of Stockholder set forth herein. Therefore, it is agreed that, in addition to
any other remedies that may be available to Parent or Merger Sub upon any such
violation, Parent and Merger Sub shall have the right to enforce such covenants
and agreements by specific performance, injunctive relief or by any other means
available to Parent or Merger Sub at law or in equity and the Stockholder hereby
waives any and all defenses which could exist in its favor in connection with
such enforcement and waives any requirement for the security or posting of any
bond in connection with such enforcement.
9.5 NOTICES. All notices, requests, demands or other
communications that are required or may be given pursuant to the terms of this
Stockholder Agreement shall be in writing and shall be deemed to have been duly
given if delivered by hand or mailed by registered or certified mail, postage
prepaid, as follows:
(a) If to the Stockholder, at the address set forth
below the Stockholder's signature at the end hereof.
(b) if to Parent or Merger Sub, to:
SAFLINK Corporation
000 000xx Xxxxxx XX, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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with a copy to:
Xxxx Xxxx Xxxx & Freidenrich LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: W. Xxxxxxx Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
(c) if to Company, to:
SSP Solutions, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address as any party hereto may designate for itself by notice
given as herein provided.
9.6 GOVERNING LAW. This Amendment shall be governed by,
construed and enforced in accordance with the laws of the State of Delaware.
9.7 ENTIRE AGREEMENT. This Agreement and the Proxy contain the
entire understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
9.8 COUNTERPART. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
9.9 EFFECT OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties have caused this Stockholder Agreement
to be executed as of the date first above written.
SAFLINK Corporation
By: ___________________________________ _____________________________________
(Signature)
Name: _________________________________
Title:_________________________________
SPARTAN ACQUISITION CORPORATION
By: ___________________________________
Name: _________________________________
Title:_________________________________
Total Number of Shares of Company Capital Stock owned on the date hereof:
Common Stock: _______________
[SIGNATURE PAGE TO STOCKHOLDER AGREEMENT]
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EXHIBIT A
IRREVOCABLE PROXY
TO VOTE STOCK OF
SSP SOLUTIONS, INC.
The undersigned stockholder of SSP Solutions, Inc., a Delaware
corporation ("Company"), hereby irrevocably (to the full extent permitted by the
Delaware General Corporation Law) appoints the members of the Board of Directors
of SAFLINK Corporation, a Delaware corporation ("Parent") , and each of them, or
any other designee of Parent, as the sole and exclusive attorneys and proxies of
the undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights (to the full extent that the undersigned
is entitled to do so) with respect to all of the shares of capital stock of
Company that now are or hereafter may be beneficially owned by the undersigned,
and any and all other shares or securities of Company issued or issuable in
respect thereof on or after the date hereof (collectively, the "Shares") in
accordance with the terms of this Irrevocable Proxy. The Shares beneficially
owned by the undersigned stockholder of Company as of the date of this
Irrevocable Proxy are listed on the final page of this Irrevocable Proxy. Upon
the undersigned's execution of this Irrevocable Proxy, any and all prior proxies
given by the undersigned with respect to any Shares are hereby revoked and the
undersigned agrees not to grant any subsequent proxies with respect to the
Shares until after the Expiration Date (as defined below).
This Irrevocable Proxy is irrevocable (to the extent provided in the
Delaware Corporations Code), is coupled with an interest, including, but not
limited to, that certain Stockholder Agreement dated as of even date herewith by
and among Parent, Spartan Acquisition Corporation ("Merger Sub") and the
undersigned, and is granted in consideration of Parent entering into that
certain Agreement and Plan of Merger and Reorganization between Company, Parent
and Merger Sub (the "Merger Agreement"), which agreement provides for the merger
of Merger Sub with and into Company (the "Merger"). As used herein, the term
"Expiration Date" shall mean the earlier to occur of (i) such date and time as
the Merger shall become effective in accordance with the terms and provisions of
the Merger Agreement, and (ii) the date of termination of the Merger Agreement.
This Irrevocable Proxy shall terminate on the Expiration Date.
The attorneys and proxies named above, and each of them are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting and other rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written
consents pursuant to the Delaware Corporations Code), at every annual, special
or adjourned meeting of the stockholders of Company and in every written consent
in lieu of such meeting as follows:
[X] In favor of approval of the Merger and the Merger
Agreement, in favor of any matter that could
reasonably be expected to facilitate the Merger and
against any proposal for any recapitalization,
merger, sale of assets or other business combination
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(other than the Merger) between Company and any
person or entity other than Parent and Merger Sub,
and against any other action or agreement that would
result in a breach of any covenant, representation or
warranty or any other obligation or agreement of
Company under an acquisition agreement in respect of
the Merger or which would result in any of the
conditions to the completion of the Merger not being
fulfilled.
The attorneys and proxies named above may not exercise this Irrevocable
Proxy on any other matter except as provided above. The undersigned stockholder
may vote the Shares on all other matters.
All authority herein conferred shall survive the death or incapacity of
the undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned.
[Signature page follows.]
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This Irrevocable Proxy is coupled with an interest as aforesaid and is
irrevocable.
Dated: _________________, 2004
_____________________________________
(Signature)
Shares beneficially owned:
______ shares of Company Common Stock
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