LOCK-UP AGREEMENT
LOCK-UP AGREEMENT, dated as of December 23, 1996 (this "Agreement"), by
and among Security Systems Holdings, Inc., a Delaware corporation ("SSH"),
Triton Group Ltd., a Delaware corporation ("Triton"), and each of the other
persons set forth on the signature pages hereto (collectively, the "Lock-up
Stockholders").
W I T N E S S E T H:
WHEREAS, concurrently herewith, Triton Group Ltd., a Delaware
corporation ("Triton"), Triton Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of Triton ("Merger Sub"), and SSH are entering into
an Agreement and Plan of Merger (the "Merger Agreement", capitalized terms
used without definition herein having the meanings ascribed thereto in the
Merger Agreement);
WHEREAS, the Lock-up Stockholders are the beneficial and record owners of
the number of shares of Company Common Stock and Company Preferred Stock set
forth in Schedule I hereto (collectively, the "Shares"); and
WHEREAS, as a condition to its entering into the Merger Agreement, Triton
has required that SSH and the Lock-up Stockholders agree, and SSH and the
Lock-up Stockholders have agreed, to enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. Covenants of Lock-up Stockholders.
(a) During the term of this Agreement, the Lock-up Stockholders agree that
they shall not:
(i) sell, transfer, pledge, assign or otherwise dispose of, or enter
into any contract, option or other agreement with respect to the transfer,
pledge, assignment or other disposition of, any Shares;
(ii) enter into a voting agreement with respect to any Shares;
(iii) solicit or initiate any Acquisition Proposal, participate in
any negotiations with respect to any Acquisition Proposal, furnish to any
other person any confidential
information with respect to SSH or its business, or otherwise cooperate
in any way with or assist or participate in, or facilitate any
Acquisition Proposal. The Lock-up Stockholders shall promptly notify SSH
if any such Acquisition Proposal is made to any Lock-up Stockholder; or
(iv) otherwise take any action inconsistent with the Merger
Agreement or that would prevent any condition precedent to the Merger from
being satisfied at or prior to the Effective Time of the Merger.
(b) The Lock-up Stockholders hereby agree that at all times prior to
the Effective Time, they shall continue to own and exercise voting rights
with respect to the Shares.
(c) The Lock-up Stockholders hereby agree that at any meeting of the
stockholders of SSH, however called, and in any action by written consent of the
stockholders of SSH, they shall (i) vote the Shares in favor of the Merger and
the Merger Agreement; and (ii) vote the Shares against any action or agreement
which would result in a breach of any covenant, representation or warranty of
SSH under the Merger Agreement; provided, however, that no Lock-up Stockholder
shall be required to take the actions set forth above in clause (i) or (ii) of
this Section 1(c) in the event of any amendment to the Merger Agreement that
materially and adversely affects the interests of such Lock-up Stockholder.
(d) As soon as practicable after the execution of this Agreement, the
Lock-up Stockholders shall cause the following legend to be placed on the
certificates representing the Shares:
"The securities represented by this certificate are subject to a Lock-up
Agreement, dated as of December 23, 1996, with Security Systems Holdings,
Inc. which imposes, among other things, certain restrictions on the
transfer of such shares."
(e) To the extent inconsistent with the foregoing provisions of this
Section 1, each of the Lock-up Stockholders hereby revokes any and all previous
proxies or consents with respect to such Lock-up Stockholder's Shares or any
other voting securities of SSH.
2. Securities Act Covenants and Representations. Each of the Lock-up
Stockholders hereby agrees and represents to SSH as follows:
(a) Such Lock-up Stockholder has been advised that the offering, sale and
delivery of the shares of Parent Common Stock pursuant to the Merger will be
registered under the Securities Act on a Registration Statement on Form S-4.
Such Lock-up Stockholder has also been advised, however, that to the extent
such Lock-up Stockholder is an "affiliate" of SSH for purposes of the
Securities Act at the time the Merger Agreement is submitted for a vote of the
stockholders of SSH, any public offering or sale by such Lock-up Stockholders
of any shares of Parent Common Stock received by such Lock-up Stockholders in
the Merger will, under current law, require
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either (i) the further registration under the Securities Act of any shares of
Parent Common Stock to be sold by such Lock-up Stockholder, (ii) compliance
with Rule 145 promulgated by the SEC under the Securities Act or (iii) the
availability of another exemption from such registration under the Securities
Act.
(b) Such Lock-up Stockholder understands that stop transfer instructions
will be given to Triton's transfer agent with respect to shares of Parent Common
Stock and that a legend will be placed on the certificates for the shares of
Parent Common Stock issued to such Lock-up Stockholder, or any substitutions
therefor, to the extent such Lock-up Stockholder is considered an "affiliate" of
SSH for purposes of the Securities Act at the time the Merger Agreement is
submitted for a vote of the stockholders of SSH.
3. Registration Rights; Affiliate Agreements. At the Effective Time, the
Lock-up Stockholders set forth on Schedule II hereto shall enter into a
Registration Rights Agreement with Triton substantially in the form attached to
the Merger Agreement as Exhibit E. In addition, at or prior to the Effective
Time, each Lock-up Stockholder shall execute and deliver to Triton an Affiliate
Agreement substantially in the form attached to the Merger Agreement as Exhibit
C.
4. Additional Purchases. Each Lock-up Stockholder agrees that any New
Shares (as defined below) acquired or purchased by such Lock-up Stockholder
shall be subject to the terms of this Agreement. For purposes of this Agreement,
the term "New Shares" shall mean any shares of Company Common Stock or Company
Preferred Stock that each Lock-up Stockholder purchases, otherwise acquires
beneficial ownership of or acquires the right to vote or share in the voting of,
after the execution of this Agreement, including, without limitation, through
the exercise of any options, warrants or other rights to purchase Company Common
Stock or Company Preferred Stock.
5. Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of their obligations under this Agreement.
6. Representations and Warranties of SSH. SSH represents and warrants to
the Lock-up Stockholders as follows: Each of this Agreement and the Merger
Agreement (i) has been approved by the Board of Directors of SSH, (ii) has been
duly executed and delivered by a duly authorized officer of SSH and (iii)
constitutes a valid and binding agreement of SSH, enforceable against SSH in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
application which may affect the enforcement of creditors rights generally and
by general equitable principles.
7. Representations and Warranties of the Lock-up Stockholders. Each
Lock-up Stockholder represents and warrants to SSH as follows: This Agreement
has been duly authorized, executed and delivered by such Lock-up Stockholder and
constitutes the valid and binding agreement of such Lock-up Stockholder,
enforceable against such Lock-up Stockholder
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in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general application which may affect the enforcement of creditors' rights
generally and by general equitable principles. Such Lock-up Stockholder is the
record and beneficial owner of the Shares set forth opposite its respective
name on Schedule I to this Agreement, and at the Closing shall be the record
and beneficial owner of the Shares set forth opposite its respective name on
Schedule I to this Agreement, in each case free and clear of all claims, liens,
pledges, security interests, restrictions or encumbrances of any nature
whatsoever, with no restrictions on voting rights and other incidents of record
and beneficial ownership incident thereto. Neither the execution or delivery of
this Agreement nor the consummation by such Lock-up Stockholder of the
transactions contemplated hereby will violate (a) the certificate of
incorporation, by-laws or partnership agreement of any such Lock-up
Stockholder, or (b) any provisions of any law, rule or regulation applicable to
such Lock-up Stockholder or any contract or agreement to which such Lock-up
Stockholder is a party. Neither such Lock-up Stockholder nor any of its
affiliates is, or at any time within the preceding 12 months has been, directly
or indirectly, an affiliate of Triton or the beneficial owner of 5% or more of
the outstanding shares of Parent Common Stock.
8. Effectiveness and Termination. It is a condition precedent to the
effectiveness of this Agreement that the Merger Agreement shall have been
executed and delivered and be in full force and effect. This Agreement shall
automatically terminate and be of no further force or effect upon the earlier to
occur of (i) the termination of the Merger Agreement in accordance with its
terms or (ii) the Effective Time; provided, however, that, notwithstanding the
non-occurrence of the events set forth in clause (i) or (ii) above, this
Agreement shall terminate no later than April 15, 1997, unless the parties to
the Merger Agreement shall not have terminated the Merger Agreement, in which
event this Agreement shall terminate no later than April 30, 1997. Upon such
termination of this Agreement, except for any rights any party may have in
respect of any breach by any other party of its obligations or (subject to the
following proviso) representations or warranties hereunder, none of the parties
hereto shall have any further obligation or liability hereunder; provided,
however, that the representations and warranties hereunder shall survive for a
period of six months following the termination of this Agreement (and any party
breaching any such representation and warranty shall be liable to the non-
breaching party for any losses or damages arising out of such breach) if (x) the
Merger Agreement is terminated following, and in reliance upon, any breach of
any such representation and warranty hereunder, and (y) notice of such breach is
delivered to the breaching party within such six month period.
9. Miscellaneous.
(a) Notices, Etc. All notices, requests, demands or other communications
required by or otherwise with respect to this Agreement shall be in writing and
shall be deemed to have been duly given to any party when delivered personally
(by courier service or otherwise), when delivered by telecopy and confirmed by
return telecopy, or seven days after being mailed by first-class mail, postage
prepaid in each case to the applicable addresses set forth below:
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If to SSH, to:
Security Systems Holdings, Inc.
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Chairman
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx Xxxx, Esq.
If to Triton, to:
Triton Group Ltd.
000 Xxxx "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: President
with a copy to:
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Xxxxxx & Xxxxxxx
000 "X" Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to Canaan Venture Limited Partnership or Canaan Venture Offshore
Limited Partnership, CV, to:
Canaan Partners
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
If to Triumph-Connecticut Limited Partnership, to:
Triumph-Connecticut Limited Partnership
Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
If to Coast Mezzanine Investments, Ltd.:
c/o HWR Services, Ltd.
Xxxxxxxxx Xxxxxxxx
X.X. Xxx 00
Xxxx Xxxx, Xxxxxxx, B.V.I.
with copies to:
Xxxxxxx Phleger & Xxxxxxxx LLP Coast Investment & Development Co.
1633 Broadway X.X. Xxx 00000 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 13128 Safat
Telecopier: (000) 000-0000 Kuwait
Telephone: (000) 000-0000 Attention: Mr. Khaled Ait Khalifa
Attention: Xxxxxx X. Xxxxxxx
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If to Alis & Co., Xxxxxx Xxxxxx Xxxxxxxxx 1988 Trust or Northern Trust
Company, as trustee of the Trust designated by the name of Xxxxxx Xxxxxx
Xxxxxxxxx under the will of Xxxxxx Donnelley, deceased, account #01-31219:
c/o Simpson Estates
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx, III
If to Xxxxx Capital, LLC, to:
Xxxxx Capital, LLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
If to BF Partners, Xxxxxx X. Xxxx or Xxxxxx X. Xxxx, as Custodian F.B.O.
Curren X. Xxxx, Xxxxx X. Xxxx and Xxx X. Xxxx, U.G.M.A. Connecticut:
c/o Innovative
0000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxx
If to Wiley X. Xxxxxxxx:
c/o Chetwood Investments, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
If to Xxxxxxx X. XxxXxxxxxx, Xxxxx Xxxxxxxxx or Xxxxxxx X. Xxxxxxxx:
c/o Security Systems Holdings, Inc.
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
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Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address as such party shall have designated by notice so given
to each other party.
(b) Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated except by an instrument
in writing, signed by each of the parties hereto.
(c) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, including without limitation, in the case of
any corporate party hereto any corporate successor by merger or otherwise.
Except with the prior written consent of the other parties hereto, no party may
assign any of its rights or obligations hereunder.
(d) Entire Agreement. This Agreement constitutes the entire agreement and
understanding among the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter. There are no representations, warranties or covenants by the parties
hereto relating to such subject matter other than those expressly set forth in
this Agreement. The parties hereto acknowledge and agree that SSH and Triton
have executed the Merger Agreement in reliance upon the representations,
warranties and agreements of the Lock-up Stockholders set forth in this
Agreement.
(e) Severability. If any term of this Agreement or the application
thereof to any party or circumstance shall be held invalid or unenforceable
to any extent, the remainder of this Agreement and the application of such
term to the other parties or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by applicable law,
provided that in such event the parties shall negotiate in good faith in an
attempt to agree to another provision (in lieu of the term or application
held to be invalid or unenforceable) that will be valid and enforceable and
will carry out the parties' intentions hereunder.
(f) Specific Performance. The parties acknowledge that money damages
are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any
violation hereof and, to the extent permitted by applicable law, each party
waives any objection to the imposition of such relief.
(g) Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any party shall not
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preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
(h) No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
(i) No Third Party Beneficiaries. This Agreement is not intended to be for
the benefit of and shall not be enforceable by any person or entity who or which
is not a party hereto.
(j) Jurisdiction. Each party hereby irrevocably submits to the exclusive
jurisdiction of the Court of Chancery in the State of Delaware in any action,
suit or proceeding arising in connection with this Agreement, and agrees that
any such action, suit or proceeding shall be brought only in such court (and
waives any objection based on forum non conveniens or any other objection to
venue therein); provided, however, that such consent to jurisdiction is solely
for the purpose referred to in this paragraph (j) and shall not be deemed to be
a general submission to the jurisdiction of said Court or in the State of
Delaware other than for such purposes. Each party hereto hereby waives any right
to a trial by jury in connection with any such action, suit or proceeding.
(k) Governing Law. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the law of the State
of Delaware.
(l) Name, Captions. The name assigned to this Agreement and the section
captions used herein are for convenience of reference only and shall not affect
the interpretation or construction hereof.
(m) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
(n) Expenses. Each of the parties hereto shall bear its own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, except that in the event of a dispute concerning the terms or
enforcement of this Agreement, the prevailing party in any such dispute shall be
entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
SECURITY SYSTEMS HOLDINGS, INC.
By: /s/ Xxxxxxx X. XxxXxxxxxx
------------------------------------
Name: Xxxxxxx X. XxxXxxxxxx
Title: Chairman/President
TRITON GROUP LTD.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & CEO
CANAAN VENTURE LIMITED
PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: General Partner
CANAAN VENTURE OFFSHORE LIMITED
PARTNERSHIP, CV
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: General Partner
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TRIUMPH-CONNECTICUT LIMITED
PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
COAST MEZZANINE INVESTMENTS, LTD.
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
ALIS & CO.
By: /s/ Xxxxxxx X. Xxxxxxx, III
------------------------------------
Name: Xxxxxxxx X. Xxxxxxx, III
Title: General Partner
XXXXXX XXXXXX XXXXXXXXX 1994 TRUST
By: /s/ Xxxxxxx X. Xxxxxxx, III
------------------------------------
Name: Xxxxxxx X. Xxxxxxx, III
Title: Trustee
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NORTHERN TRUST COMPANY, as trustee of the
Trust designated by the name of Xxxxxx
Xxxxxx Xxxxxxxxx under the will of Xxxxxx
Donnelley, deceased, account #01-31219
By: /s/ Xxxxxxx X. XxXxxxxxx
------------------------------------
Name: Xxxxxxx X. XxXxxxxxx
Title: Vice President
XXXXX CAPITAL, LLC
By: /s/ Wiley X. Xxxxxxxx, III,
Attorney-in-fact for Xxxxxx Xxxxx
------------------------------------
Name:
Title:
BF PARTNERS
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: General Partner
/s/ Xxxxxx X. Xxxx
----------------------------------------
Xxxxxx X. Xxxx
/s/ Xxxxxx X. Xxxx
----------------------------------------
Xxxxxx X. Xxxx, as Custodian F.B.O.
Curren X. Xxxx, Xxxxx X. Xxxx and
Xxx X. Xxxx, U.G.M.A. Connecticut
/s/ Wiley X. Xxxxxxxx, III
----------------------------------------
Wiley X. Xxxxxxxx, III
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
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/s/ Xxxxxxx X. XxxXxxxxxx
-----------------------------------------
Xxxxxxx X. XxxXxxxxxx
0 Xxxxx Xxxx
Xxxxxx, XX 00000
/s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxx
0 Xxxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx
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SCHEDULE I
OWNERSHIP OF THE SHARES
Company Company
Name of Stockholder Preferred Stock Common Stock
------------------- --------------- ------------
Canaan Venture Offshore Limited 28,200 28,200
Partnership, CV
Canaan Venture Limited Partnership 11,800 11,800
Coast Mezzanine Investments, Ltd. 0 33,748 (Non-voting)
Triumph Capital Group, Inc. 30,750 64,498
Alis & Co. 12,250 23,196
Xxxxxx Xxxxxxxxx Trust 1988 2,500 2,500
Xxxxxx Donnelley Trust 4,000 6,820
c/o Northern Trust
Wiley X. Xxxxxxxx 3,500 3,500
Xxxxx Capital, LLC 3,000 3,000
Xxxxxx X. Xxxx, as Custodian for the benefit 2,500 4,159
of Curren X. Xxxx, Xxxxx X. Xxxx, Xxx X.
Xxxx; BF Partners
Xxxxxxx X. XxxXxxxxxx 500 19,750
Xxxxx Xxxxxxxxx 750 6,500
Xxxxxxx X. Xxxxxxxx 0 6,290
TOTAL: 99,750 213,921
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SCHEDULE II
LOCK-UP STOCKHOLDERS TO SIGN
THE REGISTRATION RIGHTS AGREEMENT
1. Canaan Venture Limited Partnership.
2. Canaan Venture Offshore Limited Partnership, CV
3. Triumph-Connecticut Limited Partnership
4. Alis & Co.
5. Xxxxxx Xxxxxx Xxxxxxxxx 1988 Trust.
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Exhibit A
REGISTRATION RIGHTS AGREEMENT
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