STOCKHOLDER TENDER AND SUPPORT AGREEMENT
This
Stockholder Tender and Support Agreement (this “Agreement”) is dated
as of October 21, 2009 between GenNx360 GVI Holding, Inc., a Delaware
corporation (“Parent”), GenNx360 GVI Acquisition Corp., a Delaware corporation
and wholly-owned subsidiary of Parent (“Merger Sub”), GVI Security Solutions,
Inc., a Delaware corporation (the “Company”), and the parties listed on
Annex I (each, a “Stockholder”), each in the capacity as an owner of common
stock, par value $.001 per share (“Common Stock”), options to purchase Common
Stock (“Options”), and/or warrants to purchase Common Stock (“Warrants”) of the
Company.
WHEREAS, as of the date
hereof, each Stockholder is the holder of the number of shares of Common Stock,
Options and Warrants set forth opposite such Stockholder’s name on Annex I,
which, together with any Shares that are hereafter issued to or otherwise
acquired or owned by any Stockholder prior to the termination of this Agreement,
including pursuant to any exercise of Options or Warrants, acquisition by
purchase, or stock dividend, distribution, split-up, recapitalization,
combination or similar transaction are collectively referred to herein as, the
“Covered Shares”;
WHEREAS, as a condition to the
willingness of Parent and Merger Sub to enter into the Agreement and Plan of
Merger (the “Merger Agreement”) dated as of the date hereof among Parent, Merger
Sub and the Company, Parent and Merger Sub have required that each Stockholder
enter into this Agreement, and in order to induce Parent and Merger Sub to enter
into the Merger Agreement each Stockholder has agreed to enter into this
Agreement; and
WHEREAS, capitalized terms
used but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Merger Agreement, and the other interpretative
provisions set forth in Section 9.4 of the Merger Agreement shall apply
hereto as if such provisions were set forth herein.
NOW, THEREFORE, in
consideration of the foregoing and the respective representations, warranties,
covenants and agreements set forth below, Parent, Merger Sub, the Company and
each Stockholder hereto agree as follows:
ARTICLE
1
AGREEMENT
TO TENDER
Section
1.01Agreement to Tender. (a)
Each Stockholder, solely in such Stockholder’s capacity as a holder of the
Covered Shares, agrees to validly tender or cause to be tendered in the Offer
all of such Stockholder’s Covered Shares pursuant to and in accordance with the
terms of the Offer. As promptly as practicable, but in any event no
later than three Business Days after receipt by such Stockholder of the letter
of transmittal and related materials pursuant to the terms of the Offer, each
Stockholder shall: (i) deliver to the depositary designated in the
Offer (the “Depositary”) a letter of transmittal with respect to its Covered
Shares complying with the terms of the Offer, all certificates representing such
Covered Shares, or such other evidence of transfer as the Depositary may
reasonably request in the case of a book-entry transfer of any uncertificated
Covered Shares, and all other documents or instruments required to be delivered
by other stockholders of the Company pursuant to the terms of the Offer, and/or
(ii) instruct the Stockholder’s broker or such other Person that is the holder
of record of any Covered Shares beneficially owned by such Stockholder to tender
such Covered Shares pursuant to and in accordance with the terms of the
Offer. Each Stockholder agrees that once its Covered Shares are
tendered by such Stockholder that such Stockholder will not withdraw any of such
Covered Shares from the Offer unless and until the Offer shall have been
terminated by Merger Sub in accordance with the terms of the Merger Agreement or
this Agreement shall have been terminated in accordance with
Section 4.03.
Section 1.02Merger
Consideration. Parent
agrees to pay any amount of Merger Consideration paid for each Share in excess
of the Offer Price, promptly after the Effective Time to each Stockholder in
respect of such Stockholder’s Covered Shares.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF EACH STOCKHOLDER
Each
Stockholder represents and warrants to Parent and Merger Sub as to itself,
severally and not jointly, that:
Section
2.01Authorization; Binding Agreement. As
to each Stockholder who is a natural Person: he or she has full legal capacity;
the execution, delivery and performance by such Stockholder of this Agreement
and the consummation of the transactions contemplated hereby are within his or
her powers and authority; no other Person has any legal or equitable rights with
respect to the Covered Shares; and, if this Agreement is being executed in a
representative or fiduciary capacity, the Person signing this Agreement has full
power and authority to execute, deliver and perform this
Agreement. If such Stockholder is not a natural Person: such
Stockholder is a business entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and the execution,
delivery and performance by such Stockholder of this Agreement and the
consummation of the transactions contemplated hereby are within such
Stockholder’s corporate or organizational powers and have been duly authorized
by all necessary corporate or organizational actions on the part of such
Stockholder. This Agreement constitutes a valid and binding agreement
of each such Stockholder enforceable against such Stockholder in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium and other similar applicable Law affecting creditors’
rights generally and by general principles of equity.
Section
2.02Non-Contravention. The
execution, delivery and performance by such Stockholder of this Agreement and
the consummation of the transactions contemplated hereby do not and will
not: (i) violate any certificate of incorporation, bylaws or other
organizational documents of such Stockholder which is an entity, (ii) violate
any Law applicable to such Stockholder, (iii) require any consent or other
action by any Person under, constitute a default under, or give rise to any
right of termination, cancellation or acceleration or to a loss of any benefit
to which such Stockholder is entitled under any provision of any agreement or
other instrument binding on such Stockholder, or (iv) result in the imposition
of any Lien on any asset of such Stockholder which, in the case of each of
clauses (ii) through (iv), would impair or adversely affect such Stockholder’s
ability to perform its obligations hereunder. No governmental
licenses, authorizations, permits, consents or approvals are required in
connection with the execution and delivery of this Agreement by such Stockholder
or the consummation by such Stockholder of the transactions contemplated hereby,
except for applicable requirements, if any, under the Exchange Act and any other
applicable U.S. state or federal securities laws.
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Section
2.03Ownership of Covered Shares; Total Shares. As
of the date of this Agreement, such Stockholder is the record or beneficial
owner (as defined in Rule 13d-3 under the Exchange Act) of the number of Covered
Shares set forth opposite such Stockholder’s name on Annex I hereto, and,
as of the Acceptance Date, all of such Stockholder’s Covered Shares will be free
and clear of any Lien and any other limitation or restriction, including any
restriction on the right to vote or otherwise transfer such Covered Shares,
except as provided hereunder or pursuant to any applicable restrictions on
transfer under the Securities Act. As of the date hereof, such
Stockholder does not own, beneficially or otherwise, any equity securities, or
securities convertible into or exercisable for any equity securities of the
Company other than as set forth opposite such Stockholder’s name in
Annex I.
Section
2.04Voting
Power. Such
Stockholder has full voting power with respect to its Covered Shares, and full
power of disposition, full power to issue instructions with respect to the
matters set forth herein, and full power to agree to all of the matters set
forth in this Agreement, in each case with respect to all of such Stockholder’s
Covered Shares. None of such Stockholder’s Covered Shares are subject
to any voting trust or other agreement or arrangement with respect to the voting
of such shares, except as provided hereunder.
Section
2.05Broker’s Fees. Except
as provided in the Merger Agreement, no investment banker, broker, finder or
other intermediary is entitled to a fee or commission from the Company or any of
its Subsidiaries in connection with the transactions contemplated by the Merger
Agreement or this Agreement based upon any arrangement or agreement made by or
on behalf of such Stockholder.
Section
2.06Reliance by Parent and Merger Sub. Such
Stockholder understands and acknowledges that Parent and Merger Sub are entering
into the Merger Agreement in reliance upon such Stockholder’s execution and
delivery of this Agreement.
ARTICLE
3
ADDITIONAL
COVENANTS OF THE STOCKHOLDERS
Each
Stockholder hereby covenants and agrees, severally and not jointly,
that:
Section 3.01Voting
of Covered Shares. (a)
At every meeting of the stockholders of the Company, and at every adjournment or
postponement thereof, such Stockholder shall, or shall cause the holder of
record on any applicable record date to, vote such Stockholder’s Covered Shares
(to the extent that any of such Stockholder’s Covered Shares have not been
purchased in the Offer): (i) in favor of the adoption of the Merger
Agreement and the transactions contemplated thereby; (ii) against any
agreement or arrangement related to any Takeover Proposal, any liquidation,
dissolution, recapitalization, extraordinary dividend or other significant
corporate reorganization of the Company or any of its Subsidiaries, or any other
transaction the consummation of which would reasonably be expected to impede,
interfere with, prevent or materially delay the Offer or the Merger, that would
reasonably be expected to cause the Company to be in a breach of its
representations, warranties or covenants set forth in the Merger Agreement, or
that would reasonably be expected to dilute materially the benefits to Parent of
the transactions contemplated by the Merger Agreement; and (iii) in favor of any
other matter necessary for consummation of the transactions contemplated by the
Merger Agreement, which is considered at any such meeting of stockholders, and
in connection therewith to execute any documents reasonably requested by Parent
which are necessary or appropriate in order to effectuate the
foregoing.
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(b) Each
Stockholder retains at all times the right to vote such Stockholder’s Covered
Shares in such Stockholder’s sole discretion and without any other limitation on
those matters other than those set forth in Section 3.01(a) that are at any
time or from time to time presented for consideration to the Company’s
stockholders generally.
Section
3.02Irrevocable Proxy. In
order to secure the performance of such Stockholder’s obligations under this
Agreement, by entering into this Agreement, such Stockholder hereby irrevocably
grants a proxy appointing each executive officer of Parent as such Stockholder’s
attorney-in-fact and proxy, with full power of substitution, for and in such
Stockholder’s name, to vote, express consent or dissent, or otherwise to utilize
such voting power in the manner contemplated by Section 3.01(a) as such
attorney-in-fact and proxy, in his or her sole discretion, deems proper with
respect to such Stockholder’s Covered Shares. Except as otherwise
expressly set forth in this Section 3.02, this Proxy is irrevocable
notwithstanding the death, legal incapacity, dissolution or other action of
Stockholder. The proxy granted by such Stockholder pursuant to this
Section 3.02 shall be revoked automatically, without any notice or other
action by any Person, upon termination of this Agreement in accordance with its
terms. Such Stockholder hereby revokes any and all previous proxies
granted with respect to its Covered Shares.
Section 3.03No
Transfers; No Inconsistent Arrangements. (a)
Except as provided hereunder or under the Merger Agreement, such Stockholder
shall not, directly or indirectly: (i) transfer, including any sale,
assignment, gift, pledge, hypothecation or other disposition, directly or
indirectly or by operation by law, or consent to or permit any such transfer of,
any or all of its Covered Shares, or any interest therein, or create or permit
to exist any Lien, other than any restrictions imposed by applicable Law or
pursuant to this Agreement, on any such Covered Shares, (ii) enter into any
contract or agreement with respect to any transfer of such Covered Shares or any
interest therein, (iii) grant or permit the grant of any proxy, power of
attorney or other authorization in or with respect to such Covered Shares, (iv)
deposit or permit the deposit of such Covered Shares into a voting trust or
enter into a voting agreement or arrangement with respect to such Covered
Shares, or (v) take or permit any other action that would in any way restrict,
limit or interfere with the performance of such Stockholder’s obligations
hereunder or the transactions contemplated hereby or otherwise make any
representation or warranty of such Stockholder herein untrue or
incorrect.
(b) Any
attempted transfer of Covered Shares, or any interest therein, in violation of
this Section 3.03 shall be null and void. In furtherance of this
Agreement, such Stockholder shall and hereby does authorize the Company, and the
Company hereby agrees, to notify the Company’s transfer agent that there is a
stop transfer restriction with respect to all of its Covered Shares and that
this Agreement places limits on the voting and transfer of such Stockholder’s
Covered Shares; provided that any such stop transfer restriction shall terminate
automatically, without any notice or other action by any Person, upon the
termination of this Agreement in accordance with Section 4.03 and, upon
such event, Parent or the Company shall promptly notify the Company’s transfer
agent of such termination.
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Section 3.04No
Solicitation; Other Offers. Such
Stockholder hereby agrees to comply with the obligations imposed on the Company
and its representatives pursuant to Section 6.7 of the Merger Agreement as
if a party thereto.
Section 3.05No
Exercise of Appraisal Rights. Such
Stockholder agrees not to exercise any appraisal rights or dissenter’s rights in
respect of its Covered Shares which may arise with respect to the
Merger.
Section
3.06Legends. If
so requested by Parent, such Stockholder agrees that its Covered Shares shall
bear a legend stating that they are subject to this Agreement; provided that the
Company shall remove such legend upon the termination of this Agreement in
accordance with Section 4.03.
Section
3.07Documentation and Information. Such
Stockholder: (i) consents to and authorizes the publication and
disclosure by Parent of the Stockholder’s identity and holding of Covered
Shares, the existence, terms and conditions of this Agreement, the nature of the
Stockholder’s commitments and obligations under this Agreement and any other
information, in each case, that Parent reasonably determines is required to be
disclosed by applicable Law in any press release, the Offer Documents, or any
disclosure document in connection with the Offer, the Merger, any transactions
contemplated by the Merger Agreement or this Agreement, and (ii) agrees promptly
to provide to Parent true and complete information as Parent may reasonably
require for the preparation of any such disclosure documents. Such
Stockholder agrees to promptly notify Parent of any required corrections with
respect to any written information supplied by Stockholder specifically for use
in any such disclosure document, if and to the extent that any shall have become
false or misleading in any material respect.
ARTICLE
4
MISCELLANEOUS
Section
4.01Notices. All
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile transmission) and shall be given,
if to
Parent or Merger Sub, to:
x/x
XxxXx000 Xxxxxxx Xxxxxxxx, X.X.
000 Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxx
Xxxxxxxx
Fax: (000)
000-0000
with a
copy (which shall not constitute notice) to:
Xxxxx
Peabody LLP
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxxxx
X. Xxxxxx
Xxxxx X. Xxxxxxxxx
Fax: (000)
000-0000
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if to the
Company, to:
GVI
Security Solutions, Inc.
0000
Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attention: Xxxxxx
X. Xxxxx
Fax:
(000) 000-0000
with a
copy (which shall not constitute notice) to:
Xxxxxx
Godward Kronish LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxxx
Xxxxxx
Fax: (000)
000-0000
if to any
Stockholder, to it at that address specified on Annex I, with copies to the
persons identified therein, or to such other address or facsimile
number as such party may hereafter specify for the purpose by notice to each
other party hereto. All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall
be deemed to have been received on the next succeeding Business Day in the place
of receipt.
Section 4.02Further
Assurances. Each
Stockholder shall, from time to time, execute and deliver, or cause to be
executed and delivered, such additional or further transfers, assignments,
endorsements and other instruments as Parent or Merger Sub may reasonably
request to carry out the transactions expressly set forth in this
Agreement.
Section
4.03Termination. (a)
This Agreement shall terminate automatically, without any notice or other action
by any Person, upon the earlier of (i) the termination of the Merger Agreement
in accordance with its terms, and (ii) the Effective Time.
(b) Notwithstanding
the foregoing, nothing set forth in this Section 4.03 or elsewhere in this
Agreement shall relieve any party hereto from liability, or otherwise limit the
liability of any party hereto, for any breach of this Agreement.
Section
4.04Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time as to any
Stockholder not in breach of this Agreement at such time.
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Section
4.05Amendments and Waivers. (a)
Any provision of this Agreement may be amended or waived if such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party
to be bound thereby or, in the case of a waiver, by each party against whom the
waiver is to be effective.
(b) No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. No failure or delay to
exercise any right, power or privilege nor any waiver as to any Stockholder
shall operate as a waiver as to any other Stockholder. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by applicable Law.
Section
4.06Expenses. All
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense, provided that the Company shall pay
the legal expenses of the Stockholders associated with the negotiation and
preparation of this Agreement.
Section 4.07Binding
Effect; Benefit; Assignment. (a)
The provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns. No provision of this Agreement is intended to
confer any rights, benefits, remedies, obligations or liabilities hereunder upon
any Person other than the parties hereto and their respective successors and
assigns.
(b) No
Stockholder may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of Parent and Merger
Sub. Parent and Merger Sub may transfer or assign its rights and
obligations under this Agreement, in whole or from time to time in part, to one
or more of its Affiliates at any time.
Section
4.08Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, other than manditorily applicable provisions of the General
Corporation Law of the State of Delaware, without regard to the conflicts of law
rules of such State.
Section
4.09Jurisdiction. The
parties hereto agree that any proceeding seeking to enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought in any federal court located
in the State of New York and each of the parties hereby irrevocably consents to
the exclusive jurisdiction of such court (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that such Stockholder may
now or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. Process
in any such proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without
limiting the foregoing, each party agrees that service of process on such party
as provided in Section 4.01 shall be deemed effective service of process on
such party.
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Section 4.10Waiver
of Jury Trial. EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section
4.11Counterparts; Effectiveness. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective as to any
Stockholder upon signature by such Stockholder and Parent regardless of whether
any other Stockholder has or does execute this Agreement.
Section 4.12Entire
Agreement. This
Agreement constitutes the entire agreement between all of the parties hereto
with respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to its subject matter.
Section
4.13Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other Governmental Authority to be invalid,
void or unenforceable, 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 so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such a determination, this
Agreement shall be modified so as to affect the original intent of the parties
as closely as possible in an acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
Section
4.14Specific Performance. The
parties hereto agree that each of Parent and Merger Sub would be irreparably
damaged if for any reason any Stockholder fails to perform any of its
obligations under this Agreement, and that each of Parent and Merger Sub would
not have an adequate remedy at law for money damages in such
event. Accordingly, each of Parent and Merger Sub shall be entitled
to specific performance and injunctive and other equitable relief to prevent
breaches of this Agreement by a Stockholder or to enforce specifically the
performance of the terms and provisions hereof by each Stockholder, in addition
to any other remedy to which they are entitled at law or in equity.
Section
4.15Stockholder Capacity. Notwithstanding
any provision of this Agreement to the contrary, nothing in this Agreement shall
limit or restrict any Stockholder who is a director or officer of the Company
from acting in such capacity. This Agreement shall apply to each
Stockholder solely in each Stockholder’s capacity as a holder of the Covered
Shares.
Section
4.16Stockholder Obligations Several and not Joint. The
obligations of each Stockholder hereunder shall be several and not joint and no
Stockholder shall be liable for any breach of the terms of this Agreement by any
other Stockholder.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by the parties hereto on the dates set forth opposite such party’s
signature below to be effective as of the day and year first above
written.
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GVI
SECURITY SOLUTIONS, INC.
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By:
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| Name: | |
| Title: | |
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GENNX360
GVI HOLDING, INC.
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By:
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| Name: | |
| Title: | |
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GENNX360
GVI ACQUISITION CORP.
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By:
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| Name: | |
| Title: | |
[Signature
Page to Tender and Support Agreement]
[Signature
Page to Tender and Support Agreement]
ANNEX
I
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Stockholder
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Address for Notice
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Common Stock
owned as of
___________,
2009
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Options
owned as of
___________,
2009
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Warrants
owned as of
___________,
2009
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Total Covered
Shares
owned as of
___________, 2009
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