STOCKHOLDER AGREEMENT
Dated
March 13, 1996
By and Between
EXIDE ELECTRONICS GROUP, INC. ("Company")
and
FISKARS OY AB ("Stockholder")
TABLE OF CONTENTS
1. CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Board Membership . . . . . . . . . . . . . . . . . . . 1
1.2. Voting of Company Securities . . . . . . . . . . . . . 2
1.3. Restrictions on Other Actions of Stockholder . . . . . 3
2. RESTRICTIONS ON ACQUISITIONS AND OWNERSHIP OF COMPANY
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1. First Tier Limitations . . . . . . . . . . . . . . . . 5
2.2. Second Tier Limitations . . . . . . . . . . . . . . . 5
3. RESALE OF COMPANY SECURITIES . . . . . . . . . . . . . . . . . . 5
3.1. Open Market Sales . . . . . . . . . . . . . . . . . . 5
3.2. Private Sales . . . . . . . . . . . . . . . . . . . . 6
3.3. Right of First Refusal . . . . . . . . . . . . . . . . 6
3.4. Tender Offers . . . . . . . . . . . . . . . . . . . . 7
3.5. Restrictions Following Offerings . . . . . . . . . . . 9
3.6. Registration Rights . . . . . . . . . . . . . . . . . 9
3.7. Indemnification in Connection with
Registration Statements . . . . . . . . . . . . . . . 11
3.8. Filings with the Securities and Exchange
Commission . . . . . . . . . . . . . . . . . . . . . . 13
4. REPRESENTATIONS, WARRANTIES AND INDEMNITIES . . . . . . . . . . 13
4.1. Representations and Warranties . . . . . . . . . . . . 13
4.2. Indemnification . . . . . . . . . . . . . . . . . . . 14
5. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1. Press Releases . . . . . . . . . . . . . . . . . . . . 14
5.2. Confidentiality . . . . . . . . . . . . . . . . . . . 15
5.3. Specific Performance . . . . . . . . . . . . . . . . . 15
5.4. Notices . . . . . . . . . . . . . . . . . . . . . . . 15
5.5. Invalid or Unenforceable Provisions . . . . . . . . . 16
5.6. Benefit and Burden . . . . . . . . . . . . . . . . . . 16
5.7. Gender . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8. Changes; Waiver . . . . . . . . . . . . . . . . . . . 16
5.9. Entire Agreement . . . . . . . . . . . . . . . . . . . 16
5.10. Governing Law; Forum for Disputes . . . . . . . . . . 17
5.11. Headings . . . . . . . . . . . . . . . . . . . . . . . 17
5.12. Term of Agreement . . . . . . . . . . . . . . . . . . 17
5.13. Obligations in the Event of Certain Breaches . . . . . 17
STOCKHOLDER AGREEMENT
This Stockholder Agreement (the "Agreement") is dated the 13th
day of March, 1996, by and between EXIDE ELECTRONICS GROUP, INC. (the
"Company"), a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with its principal place
of business at 0000 Xxx Xxxxx Xxxx, Xxxxxxx, Xxxxx Xxxxxxxx, and FISKARS
OY AB, a Finnish corporation, having its principal place of business at
Xxxxxxxxxxxxxxx 00 X, 00000 Xxxxxxxx 10 Finland (the "Stockholder").
WHEREAS, the Company has sold to the Stockholder 1,875,000
shares of its Common Stock (such shares together with any shares received
by the Stockholder with respect to such shares are collectively referred
to herein as the "Shares") pursuant to a Stock Purchase Agreement entered
into as of November 16, 1995 (the "Purchase Agreement"); and
WHEREAS, the Company agreed to sell the Shares to the
Stockholder, and to amend its Shareholder Rights Plan, dated as of
November 25, 1992, by and between the Company and First Union National
Bank of North Carolina (the "Shareholder Rights Plan"), to permit the
Stockholder's purchase of the Shares, on the express condition that the
Stockholder agree to certain restrictions on its control, voting, transfer
and acquisition rights.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. CONTROL
1.1. Board Membership
(a) Election of Directors. The Stockholder shall
designate two (2) persons (the "Stockholder Representatives") to be
elected as members of the Company's Board of Directors (the "Board"), and
the Company shall nominate each Stockholder Representative for election as
a director of the Company, and use its best efforts to cause each
Stockholder Representative to be so elected. In the event a Stockholder
Representative's position as a director is terminated for any reason (a
"Terminated Stockholder Director"), such Terminated Stockholder Director's
position on the Board, and any committees thereof, shall be filled
promptly by a successor Stockholder Representative nominated by
Stockholder and approved in accordance with the Company's Bylaws and
Certificate of Incorporation. The rights of Stockholder set forth herein
will be limited to one Stockholder Representative at any time that the
number of shares of Company Common Stock beneficially owned by the
Stockholder, when combined with the number of shares of Company Common
Stock that could be obtained upon conversion of the Company Series G
Convertible Preferred Stock beneficially owned by Stockholder (such
combined number defined as the "Imputed Common Stock Ownership"), equals
less than ten percent (10%) of the Company Common Stock that would be
outstanding upon such conversion without taking into consideration any
warrants, options, stock or other equity issued in connection with the
Anticipated Financing (as defined in Article 9 of the Purchase Agreement,
as amended) except for Company Common Stock issued pursuant to warrants,
options or other rights exercisable at a price at least equal to the
market value of such Common Stock on the date of exercise (the "Financing
Equity"), and the Stockholder shall have no right to a Stockholder
Representative at any time that its Imputed Common Stock Ownership is less
than five percent (5%) of the Company Common Stock that would be
outstanding upon conversion of the Series G Convertible Preferred Stock
beneficially owned by Stockholder without taking into consideration the
Financing Equity; provided, however, that the ownership of the Company's
Common Stock or Preferred Stock by an entity controlling, controlled by or
under common control with the Stockholder with the prior consent of the
Company (which consent shall not be unreasonably withheld), and which has
agreed in a writing delivered to the Company to be obligated as the
Stockholder hereunder (in the case of ownership of Common Stock), shall be
attributed to the Stockholder for purposes of this 1.1.(a). The initial
Stockholder Representatives shall be Xxxx Xxxxxxxx and Xxxx Xxxx. Upon
the Company's request following an event resulting in the limitation or
loss of Stockholder's rights to Stockholder Representative(s), the
Stockholder will cause one or both of the Stockholder Representatives, as
the case may be, to resign as a director. The Board, other than the
Stockholder Representatives, will have the right to approve any
Stockholder Representative nominated by the Stockholder, provided that
such approval will not be unreasonably withheld, and provided further that
in the event any Stockholder Representative is not so approved,
Stockholder shall continue to nominate Stockholder Representatives until
such approval is granted.
(b) Special Meetings of Board of Directors. The
Stockholder shall cause the Stockholder Representative not to call, and
not to participate in calling a special meeting of the Board, but once a
Special Meeting is called, the Stockholder Representative may participate
in such meeting subject to the terms of this Agreement.
1.2. Voting of Company Securities
(a) Election of Directors. The Stockholder shall vote the
Shares and all other securities of the Company owned or controlled by it
(whether acquired by open market purchase or otherwise) (the Shares and
all such other securities so owned or controlled being referred to
hereinafter collectively as "Company Securities") in favor of the election
of directors nominated by the Board.
(b) Stockholder Matters. On all matters on which a
stockholder vote or stockholder action is requested, the Stockholder shall
vote (or otherwise consent with respect to) all Company Securities in
accordance with the recommendations of the Board.
(c) Representation of Shares. The Stockholder will cause
all Company Securities to be present in person or by proxy and represented
at all meetings of the Company's stockholders called by the Board, and
will cause the Company Securities to be voted in accordance with the
provisions of this Agreement at all meetings of stockholders and on all
matters acted upon by stockholders of the Company by written consent.
1.3. Restrictions on Other Actions of Stockholder
(a) Special Meeting of Stockholders. The Stockholder will not
call or participate, directly or indirectly, in calling any special
meeting of stockholders which has not been called or approved by the
Board.
(b) Stockholder Proposals. The Stockholder will not submit,
directly or indirectly, any stockholder proposal for approval at any
meeting of stockholders or by consent of stockholders.
(c) Proxy Solicitation. The Stockholder will not initiate,
encourage or cooperate or participate, directly or indirectly, in any
proxy solicitation on behalf of any person other than the Company, the
Board or a person whose solicitation is supported by the Board.
(d) Corporate Transactions. Except as permitted by Article 2
of this Agreement, the Stockholder will not initiate, encourage or
cooperate or participate in, directly or indirectly, any proposal (i) to
acquire the Company; (ii) to acquire a substantial portion of the Company
assets; or (iii) to merge, restructure, combine or recapitalize the
Company, unless such proposal is supported by the Board.
(e) Formation of Exchange Act "Group". Except by reason of a
transfer or transfers to an entity controlling, controlled by or under
common control with the Stockholder as contemplated in Section 1.1(a)
hereof, the Stockholder will not form, join, or in any way participate,
directly or indirectly (other than with a wholly-owned subsidiary of the
Stockholder) in a "Group" within the meaning of Section 13(e)(3) of the
Securities Exchange Act of 1934, or any other similar or successor
provision with respect to any securities of the Company.
(f) Acquisition Financings. The Stockholder will not arrange,
or in any way participate in, the financing of any third party, the
proceeds of which will be used for the purchase of any voting securities
or securities convertible or exchangeable into or exercisable for any
voting securities or assets of the Company.
(g) Exercise of Control. The Stockholder will not otherwise
seek or propose to influence or control the Company's management or
policies (other than through the Stockholder Representatives or the voting
of Company Securities, in each case as contemplated by this Agreement).
(h) Communications with Employees. Other than through the
Stockholder Representatives' service on the Board, the Stockholder will
not seek to retain, hire or negotiate or influence the terms and
conditions of employment of, employees of the Company.
(i) Efforts to Amend Agreement. The Stockholder will not (i)
request the Company directly or indirectly to amend or waive any provision
of Articles 1, 2 or 3 of this Agreement or (ii) take any action designed
to or which can reasonably be expected to require the Company to make a
public announcement regarding its discussions with the Stockholder or its
position regarding a possible merger or other extraordinary transaction
involving the Company.
(j) Actions by Third Parties. The Stockholder will not enter
into any discussions, negotiations, arrangements or understandings with or
advise, assist, encourage or cooperate with any third party with respect
to any of the acts specified in Article 1 of this Agreement or take,
assist, encourage or cooperate in any other action that is inconsistent
with the terms of this Agreement.
(k) Actions Regarding Shareholder Rights Plan. After the date
hereof, the Stockholder will not make any request to the Company, or take
any other action with the intent and for the purpose of causing the
Company to amend the Shareholder Rights Plan (other than through the
Stockholder Representatives or the voting of Company Securities, in each
case as contemplated by this Agreement).
(l) Actions by Stockholder Representatives. Stockholder shall
cause the Stockholder Representatives not to vote or take any other action
that would approve, ratify or otherwise further any transaction or action
which the Stockholder is prohibited or restricted from taking under this
Agreement.
2. RESTRICTIONS ON ACQUISITIONS AND OWNERSHIP OF COMPANY SECURITIES
2.1. First Tier Limitations
For a period of five (5) years from the date of this Agreement,
neither the Stockholder nor any of its affiliates shall directly or
indirectly, through one or more transactions or acting in concert with
other persons, companies or other entities, offer to acquire or acquire
any securities of the Company, except for such securities the acquisition
of which is contemplated by this Agreement or results solely from action
by the Board (with the Stockholder Representatives abstaining), or results
solely from the provisions of the Company's Certificate of Incorporation
or Bylaws.
2.2. Second Tier Limitations
For a period commencing on the date the restrictions in Section
2.1 of this Agreement expire, and for as long as the Stockholder or any of
its affiliates owns or holds any Company Securities, in addition to the
circumstances under which the Stockholder may acquire securities under
Section 2.1, the Stockholder will be permitted to offer to acquire or
acquire additional securities of the Company only with the prior approval
of the Board (with the Shareholder Representatives abstaining), and only
if the following conditions are met: (i) such acquisition is made pursuant
to an offer to acquire all of the Company's equity securities; (ii) the
purchase price therefor is supported by a written fairness opinion,
addressed to the Board, from a recognized investment banking firm selected
by the Company; and (iii) the acquisition is conditioned upon the
acceptance of the offer by not less than eighty percent (80%) of the
outstanding shares of Common Stock not held by the Stockholder and its
affiliates.
3. RESALE OF COMPANY SECURITIES
3.1. Open Market Sales
For a period of five (5) years from the date of this Agreement,
the Stockholder will make open market sales of Company Securities only (i)
pursuant to a registration statement filed by the Company in accordance
with the rules and regulations of the Securities Act of 1933 (the
"Securities Act") or (ii) in volumes not exceeding the limitations set
forth in Rule 144(e)(1) under the Securities Act (whether or not the
Stockholder's sales of Company Securities are then subject to Rule 144)
and, in the case of this clause (ii), otherwise in accordance with Rule
144 under the Securities Act to the extent applicable.
3.2. Private Sales
For a period of five (5) years from the date of this Agreement,
and subject to Section 3.4 of this Agreement, the Stockholder may Transfer
(as defined below) Company Securities in transactions other than in the
open market only upon receipt of a bona fide written offer (a "Third Party
Offer") from someone who is not affiliated with the Stockholder
("Offeror"), and only after first offering such Company Securities to the
Company in accordance with the provisions of Section 3.3 of this
Agreement.
3.3. Right of First Refusal
(a) Offer to Company. If the Stockholder receives from an
Offeror a Third Party Offer for any or all of the Company Securities, then
before accepting such Third Party Offer, the Stockholder shall first offer
to the Company the Company Securities proposed to be Transferred at an
offering price that shall be the same as, and on the same terms and
conditions as, those contained in the Third Party Offer, or if the Third
Party Offer provides for non-cash consideration or other terms and
conditions not practically obtainable by the Company, then for
consideration and upon terms and conditions substantially equivalent to
those contained in the Third Party Offer. The offer shall be made by a
written offer notice to the Company, which offer notice shall be
accompanied by a copy of the Third Party Offer and shall describe the
identity and background of the Offeror. The Company shall have thirty
(30) days after the date of receipt of such offer notice (the "Election
Period") within which to elect to purchase all of the Company Securities
proposed to be Transferred. Such election shall be made by a written
notice of election given to the Stockholder by or on behalf of the
Company. In such notice of election, the Company shall set a closing date
not more than thirty (30) days after expiration of the Election Period.
(b) Acceptance by Company. At the closing of such purchase by
the Company, the Stockholder shall deliver to the Company certificates
evidencing the number of Company Securities being purchased, in valid form
for transfer with appropriate duly executed assignments, stock powers or
endorsements, bearing any necessary documentary stamps and accompanied by
such certificate of authority, tax releases, consents to transfer or other
instruments or evidences of the good title of Stockholder to such Company
Securities as may reasonably be requested by Company, and the Company
shall pay to the Stockholder the purchase price therefor in immediately
available funds or by certified check. Nothing in this Agreement shall be
deemed to create any obligation for the Company to elect to purchase
Company Securities under this Agreement.
(c) Non-Acceptance by Company. If the Company shall not elect,
pursuant to the terms of this Agreement, to purchase all of the Company
Securities proposed to be Transferred, or shall elect to purchase such
Company Securities but fail to close the purchase on the closing date,
then the Stockholder shall be free to a period of sixty (60) days after
expiration of the Election Period (or the failure to purchase on the
closing date, if applicable) to sell such Company Securities to the
Offeror under terms and conditions and at a price no less favorable to the
Stockholder than those contained in the Third Party Offer. If such
Company Securities are not so sold by the Stockholder within such 60-day
period, all rights of Stockholder to Transfer such Company Securities free
of the restriction in this Agreement shall thereupon terminate, and such
restrictions shall again apply to such Company Securities.
(d) Definition of "Transfer". For purposes of this Agreement,
the term "Transfer" shall include a sale, gift, assignment or other
disposition, whether direct or indirect (including without limitation
transfer of direct or indirect control over an entity holding Company
Securities), including a disposition under judicial order, legal process,
execution or attachment or enforcement of a pledge trust or other
encumbrance; provided that the term "Transfer" shall not include a
transfer or transfers to an entity controlling, controlled by or in common
control with the Stockholder as contemplated in Section 1.1(a) hereof.
3.4. Tender Offers
(a) For so long as the Stockholder shall own or hold any of the
Shares, the Stockholder will not tender any Company Securities in any
tender or exchange offer by a person or entity other than the Company or
any affiliate of the Company (the "Bidder") except under the following
circumstances:
(i) The Board (with Stockholder Representatives
abstaining) recommends that shareholders accept such tender or
exchange offer;
(ii) In connection with such tender or exchange offer, the
Board (with Stockholder Representatives abstaining) redeems the
outstanding rights under the Shareholder Rights Plan; or
(iii) During, prior to or in anticipation of, a tender or
exchange offer, the Board (with Stockholder Representatives
abstaining) exempts the Bidder from the operation of the
Shareholder Rights Plan.
(b) In the event (i) Stockholder is prohibited by Section
3.4(a) hereof from tendering or exchanging Company Securities into a
tender or exchange offer which is consummated without the favorable
recommendation of the Board ("Consummated Offer") and, as a result of the
Consummated Offer, the Bidder beneficially owns more than 50 percent (50%)
of the outstanding voting securities of the Company, and (ii) Stockholder
within ninety (90) days of the Consummated Offer sells or otherwise
disposes of Company Securities in a merger or other transaction in which
the Company or a successor or affiliate is a party for a per share or per
unit price which is less than the highest per share or other per unit
price offered by the Bidder in the tender or exchange offer, then within
thirty (30) days following such sale or other disposition, Company shall
pay to Stockholder an amount equal to (i) the difference between the
highest price per share or other per unit price offered by the Bidder in
the tender or exchange offer and the per share or per unit price for which
the Stockholder sold its Company Securities, multiplied by (ii) the number
of shares or other units of Company Securities sold or disposed of by
Stockholder within such ninety (90) day period.
(c) In the event (i) Stockholder is prohibited by Section
3.4(a) hereof from tendering or exchanging any Company Securities into a
tender or exchange offer which results in a Consummated Offer and, as a
result of the Consummated Offer, the Bidder beneficially owns more than
fifty percent (50%) of the outstanding voting securities of the Company
and (ii) the Stockholder has not sold all of its Company Securities within
ninety (90) days following the consummation of the Consummated Offer, then
within one hundred twenty (120) days following the consummation of the
Consummated Offer, Company shall pay to Stockholder in cash an amount
equal to (i) the sum of the highest per share or other per unit price paid
by the Bidder in the Consummated Offer, less the average of the last
reported sales price per share of Common Stock and/or other Company
Security if listed on The Nasdaq Stock Market or the average closing price
per share of Common Stock and/or other Company Security if listed on a
national securities exchange for the thirty (30) consecutive trading days
immediately preceding the fifth business day prior to the commencement of
the tender or exchange offer (or if such Shares or other Company
Securities subject to the tender or exchange offer are not listed on The
Nasdaq Stock Market or on a national securities exchange, the fair market
value of a share of Common Stock and/or unit of other Company Security
subject to the tender or exchange offer, calculated as of the fifth
business day immediately prior to the commencement of such tender or
exchange offer, as determined by an independent appraiser with an
established national reputation for appraising businesses selected by
mutual agreement of Company and Stockholder, or in the absence of such
mutual agreement, selected by Price Waterhouse LLP), multiplied by (ii)
the number of Shares and/or other Company Securities subject to the tender
or exchange offer held by Stockholder on the one hundred and twentieth
(120th) day following consummation of the Consummated Offer.
(d) In the event of an exchange offer or a tender offer other
than an all cash tender offer, the "highest per share or other per unit
price paid by the Bidder" as such phrase applies to non-cash consideration
paid by the Bidder, shall mean the fair market value of such non-cash
consideration calculated on a per share or per unit basis, as the case may
be, as of the time of the applicable payment, as determined by an
independent appraiser with an established national reputation for
appraising businesses selected by mutual agreement of the Company and
Stockholder, or in the absence of such mutual agreement, selected by Price
Waterhouse LLP.
3.5. Restrictions Following Offerings
For so long as the Stockholder shall own or hold any of the
Shares, the Stockholder will agree to reasonable and customary "lock-up"
restrictions on the resale of Company Securities during or following a
registered public offering of any securities of the Company, provided that
such restrictions do not apply for more than one hundred fifty (150) days
following the completion of such registered public offering and that such
restrictions are also agreed to by the Company and all of its affiliates,
directors and executive officers whose agreement is deemed necessary by
the underwriters of such offering.
3.6. Registration Rights
(a) Piggyback Registration. If at any time that the
Stockholder owns or holds Shares, the Company proposes to file a
registration statement under the Securities Act with respect to an
offering of Common Stock solely for cash (other than a registration
statement (i) on Form S-8 or any successor form to such form or in
connection with any employee or director welfare, benefit or compensation
plan; (ii) on Form S-4 or any successor form to such form or in connection
with an exchange offer; (iii) in connection with a rights offering
exclusively to existing holders of Common Stock; (iv) in connection with
an offering solely to employees of the Company or its Subsidiaries; or (v)
relating to a transaction pursuant to Rule 145 under the Securities Act),
whether or not for its own account, the Company shall give prompt written
notice of such proposed filing to the Stockholder. The notice referred to
in the preceding sentence shall constitute an offer by Company to the
Stockholder of the opportunity to register such number of Shares as the
Stockholder may request (a "Piggyback Registration"). The Company shall
include in the Piggyback Registration and in any underwriting in
connection therewith all Shares for which the request is received by the
Company within fifteen (15) calendar days after the notice referred to
above has been given by the Company. The Stockholder shall be permitted
to withdraw all or part of the Shares from a Piggyback Registration at any
time prior to the effective date of such Piggyback Registration or, if the
Piggyback Registration is for an underwritten offering prior to the
execution of an underwriting agreement by Stockholder and Company. If a
Piggyback Registration is an underwritten primary registration on behalf
of the Company and the managing underwriter advises the Company that the
total number of Shares requested to be included in such registration, when
combined with the shares of Common Stock that the Company otherwise
proposes to register, would create a substantial risk of materially
reducing the proceeds of the offering or price per share of the Common
Stock to be offered, the number of Shares requested to be included by
Stockholder in any such Piggyback Registration shall be reduced on a pro
rata basis among Stockholder and any other stockholder also requesting
participation in such Piggyback Registration.
(b) Demand Registration. Upon a written request of the
Stockholder, the Company shall file a registration statement with the
Securities and Exchange Commission within sixty (60) days of receipt of
such written request for registration under the Securities Act of all or
part of its Shares; provided, however, that the Company shall not be
obligated to file a registration statement hereunder until October __,
1996. Any such request by the Stockholder shall specify the aggregate
number of Shares proposed to be sold and shall also specify the intended
method of disposition thereof; provided, however, that the Stockholder's
demand shall be for registration of at least twenty-five percent (25%) of
the Shares owned by Stockholder as of the date hereof or three percent
(3%) of the Company's then outstanding shares of Common Stock, whichever
is less. The Company shall use its best efforts to keep the registration
statement effective until the earlier of six (6) months after the date of
effectiveness of the registration statement or until the Stockholder has
sold the number of Shares for which it requested registration. The
Stockholder shall not be entitled to make a demand pursuant to this
Section 3.6 more than two (2) times; provided, however, that if no
registration statement is declared effective with respect to a demand
which the Stockholder has made (other than because the Stockholder has
requested that the registration statement not be declared effective) that
demand shall not be counted for purposes of this limit. The Company may
defer filing a registration statement pursuant to this Section 3.6 for up
to ninety (90) days if in the good faith reasonable judgment of the Board
the filing of such registration statement would create a material adverse
effect on any material Company financing planned or contemplated or,
pursuant to a written opinion of Company's legal counsel, require the
Company to disclose non-public information, the disclosure of which would,
in the good faith reasonable judgment of the Board, have a material
adverse effect on the Company.
(c) Registration Procedures.
(i) The Company shall have no obligation to include Shares
in a registration statement pursuant to this Section 3.6 unless
and until the Stockholder has furnished the Company with all
information and statements about or pertaining to the
Stockholder in such reasonable detail and on such timely basis
as is reasonably deemed by the Company to be necessary or
appropriate for the preparation of the registration statement.
(ii) The Company shall take such action to list the Shares
to be registered hereunder on any securities exchange on which
the Common Stock is registered.
(iii) In connection with any registration hereunder,
Company shall use its best efforts to register and qualify the
Shares to be registered under such other securities or blue sky
laws of such jurisdictions as Stockholder shall request,
provided, however, that the Company will not be required to do
any of the following: (i) qualify generally to do business in
any jurisdiction where it would not be required but for this
Section 3.6(c); (ii) subject itself to taxation in any such
jurisdiction; or (iii) file any general consent to service of
process in any such jurisdiction.
(iv) Company shall immediately notify Stockholder of the
happening of any event of which it has knowledge as a result of
which the prospectus included in a registration statement filed
pursuant to a Demand Registration or Piggyback Registration, as
then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
(v) Company shall take such other actions required to
register the Shares hereunder as Stockholder may reasonably
request.
(d) Registration Expenses. If Shares are included in a
registration statement filed by the Company, the Stockholder shall pay all
transfer taxes, if any, relating to the sale of the Shares, the fees and
expenses of its own counsel, and its pro-rata share of any underwriting
discounts or commissions or the equivalent thereof. Company shall pay all
other costs and expenses associated with any Demand Registration or
Piggyback Registration, including, without limitation, all registration
and filing fees, fees and expenses of compliance with Blue Sky laws,
printing expenses, messenger and delivery expenses, and fees and expenses
of counsel for the Company and all independent certified public
accountants and other persons retained by the Company.
3.7. Indemnification in Connection with Registration Statements
(a) In connection with any Demand Registration or any Piggyback
Registration pursuant to this Agreement, Stockholder shall indemnify and
hold harmless Company and any underwriters (as defined in the Securities
Act) of such offering and their respective officers, directors and
controlling persons (within the meaning of either the Securities Act or
the Securities Exchange Act of 1934, as amended) from any and all loss,
liability, claims, damages and expenses (including reasonable attorneys
fees and disbursements) incurred by them insofar as such losses,
liabilities, claims, damages and expenses arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement or prospectus covering the Shares
to be sold or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that
Stockholder shall only be liable in any such case to the extent that any
such loss arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with information relating to such
Stockholder as furnished in writing to Company or any underwriter by or on
behalf of Stockholder expressly for use in the registration statement or
prospectus covering the Shares to be sold. Except to the extent set forth
in the foregoing sentence, Company shall indemnify and hold harmless
Stockholder, its respective officers, directors, partners and controlling
persons (within the meaning of either the Securities Act or the Securities
Exchange Act of 1934, as amended) participating in the Demand Registration
or any Piggyback Registration from any and all loss, liability, claims,
damages and expenses (including reasonable attorneys' fees and
disbursements) incurred by them insofar as such losses, liabilities,
claims, damages and expenses arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact furnished by
Company for use in such registration statement or prospectus related
thereto or arise out of or are based upon the omission or alleged omission
to state therein a material fact pertaining to Company and required to be
stated therein or necessary to make the statements made therein, in light
of the circumstances in which they were made, not misleading. The
indemnification provided by this Section 3.7 shall be a continuing right
to indemnification and shall survive the registration and sale of any
securities by Stockholder or any other person entitled to indemnification
hereunder.
(b) If the indemnification provided for in Section 3.7 is held
by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other hand in connection with the statements or
omissions which resulted in such loss, liability, claims, damage or
expenses as well as any other relevant equitable considerations. The
relevant fault of the indemnifying party and the indemnified party shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. Notwithstanding the foregoing, the amount Stockholder shall
be obligated to contribute pursuant to this Section 3.7 shall be limited
to an amount equal to the proceeds to such Stockholder from the sale of
Shares sold pursuant to the registration statement which gives rise to
such obligation to contribute (less the aggregate amount of any damages
which Stockholder has otherwise been required to pay in respect of such
loss, claim, damage, liability or action or any substantially similar
loss, claim, damage, liability or action arising from the sale of such
Shares).
3.8. Filings with the Securities and Exchange Commission
With a view to making available the benefits of certain rules
and regulations of the Securities and Exchange Commission that may permit
the sale of the Shares to the public without registration, the Company
agrees to use its best efforts to: (a) remain subject to the reporting
requirements of Section 13 of the Securities Exchange Act of 1934, as
amended, and file with the Securities and Exchange Commission in a timely
manner all reports required of the Company thereunder; and (b) furnish to
the Stockholder upon written request a written statement by the Company as
to its compliance with the reporting requirements of Section 13 of the
Securities Exchange Act of 1934, as amended.
4. REPRESENTATIONS, WARRANTIES AND INDEMNITIES
4.1. Representations and Warranties
(a) As a material inducement to the Company to enter in the
Purchase Agreement and sell the Shares to the Stockholder, the Stockholder
hereby represents and warrants to Company and agrees that neither
Stockholder nor any of its affiliates (i) intends to, directly or
indirectly, manage or control the affairs of or acquire a controlling
interest in the Company or any of its subsidiaries or affiliates (whether
through acquisition of stock, assets or otherwise) at this time or in the
future; (ii) will in the future seek to directly or indirectly, manage or
control the affairs of, or acquire a controlling interest in, the Company
or any of its subsidiaries or affiliates (whether through acquisition of
stock, assets or otherwise), except as expressly provided for in this
Agreement; and (iii) will, directly or indirectly, attempt to influence or
encourage any other person, company, other entity or group to seek to
manage or control the affairs of, or acquire a controlling interest in,
the Company or any of its subsidiaries or affiliates (whether through
acquisition of stock, assets or otherwise), except as expressly provided
for in this Agreement. The Stockholder hereby expressly acknowledges its
understanding that the Company would not have entered in the Purchase
Agreement or consummated the transactions contemplated thereby without
Stockholder's assurances and agreements set forth in this Article 4
relating to its present and future role in the Company's affairs.
(b) The Stockholder hereby represents and warrants to the
Company that the Stockholder's execution, delivery and performance of this
Agreement do not conflict with any provisions of its charter and
organizational instruments or its other governing corporate documents.
(c) Company hereby represents and warrants to the Stockholder
that the execution, delivery and performance of this Agreement do not
conflict with any provisions of the Company's Certificate of
Incorporation, By-laws or other governing corporate documents.
4.2. Indemnification
Each party hereto shall indemnify, defend and hold the other and
each of its directors, officers, affiliates and advisors harmless against
any and all liabilities, claims, damages or losses, together with all
reasonable costs and expenses related thereto (including legal fees and
expenses) arising from, relating to, or connected with such party's breach
of any of the foregoing representations and warranties or any other
provision of this Agreement. The indemnification obligations under this
Section 4.2 shall be limited to actual damages and shall not apply to
exemplary, special, consequential or incidental damages. This Section 4.2
shall operate in addition to, and not in lieu of, the indemnification
provisions of Section 3.7 hereof.
5. MISCELLANEOUS
5.1. Press Releases
All press releases relating to the investment pursuant to the
Purchase Agreement or this Agreement will be issued or approved in advance
by the Company and jointly agreed upon by the Company and the Stockholder,
subject to their respective obligations under foreign, federal and state
securities laws.
5.2. Confidentiality
The Stockholder shall, and will cause each of the Stockholder
Representatives to keep confidential and not disclose or divulge any
confidential, proprietary or secret information which any Stockholder
Representative may obtain from the Company pursuant to financial
statements, reports and other materials submitted by the Company to the
Stockholder or any Stockholder Representative or learned by the
Stockholder or any Stockholder Representative from the Board.
5.3. Specific Performance
Strict compliance shall be required with each and every
provision of this Agreement. The Stockholder agrees that money damages
would not be a sufficient remedy for any breach of this Agreement by the
Stockholder or its affiliates (including the Stockholder Representatives),
that such a breach would result in irreparable harm to the Company and its
stockholders, and that, in addition to all other remedies, the Company
shall be entitled to specific performance and injunctive or other
equitable relief for any such breach, and the Stockholder further agrees
to waive any requirement for the securing or posting of any bend in
connection with such remedy.
5.4. Notices
All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be delivered by hand or
airmailed by first class certified or registered airmail, return receipt,
postage prepaid or sent by express or overnight courier or by telecopier
(with acknowledgment of receipt):
If to the Company, at The Forum II, 0000 Xxx Xxxxx Xxxx, Xxxxx
000, Xxxxxxx, Xxxxx Xxxxxxxx 00000 XXX, Attention: Xxxxxxxx X. Xxxxxxxx,
Vice President, Chief Legal Counsel and Secretary, or at such other
address or addresses as may have been furnished in writing by the Company
to the Stockholder; or
If to the Stockholder, at Mannerheimintie 14 A, 00101 Helsinki
10 Finland, Attention: Xxxx Xxxxxxxx, or at such other address or
addresses as may have been furnished to the Company in writing by the
Stockholder. A copy of such notice shall be sent simultaneously to Xxxxx
& Xxxxxxx, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxx X. Xxxx.
Notices provided in accordance with this paragraph shall be
deemed delivered upon personal delivery or five (5) days after delivery to
a recognized overnight courier.
5.5. Invalid or Unenforceable Provisions
The invalidity or unenforceability of any particular provision
of this Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
5.6. Benefit and Burden
This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their successors and assigns and
other legal representatives.
5.7. Gender
The use of any gender herein shall be deemed to be or include
the other genders and the use of the singular herein shall be deemed to be
or include the plural, and vice versa, wherever appropriate.
5.8. Changes; Waiver
No change or modification of this Agreement shall be valid
unless the same is in writing and signed by all the parties hereto. No
waiver of any provisions of this Agreement shall be valid unless in
writing and signed by the person against whom it is sought to be enforced.
The failure of any party at any time to insist upon strict performance of
any condition, promise, agreement or understanding set forth herein shall
not be construed as a waiver or relinquishment of the right to insist upon
strict performance of the same or any other condition, promise, agreement
or understanding at a future time.
5.9. Entire Agreement
This Agreement and the Purchase Agreement (including all
exhibits thereto) set forth all of the promises, agreements, conditions,
understandings, warranties and representations among the parties hereto
with respect to the Shares and any other matters set forth herein, and
there are no promises, agreements, conditions, understandings, warranties
or representations, oral or written, express or implied, among them with
respect to the Shares or such other matters except as set forth herein or
therein. Any and all prior agreements among the parties hereto with
respect to the Shares are hereby revoked. This Agreement and the Purchase
Agreement (including all exhibits thereto) are, and are intended by the
parties to be, an integration of any and all prior agreements or
understandings, oral or written, with respect to the Shares.
5.10. Governing Law; Forum for Disputes
This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware (without giving effect to conflict
of laws principles). No party may initiate litigation in a dispute
arising under or relating to this Agreement other than in a state or
federal court of competent jurisdiction in the United States of America.
Each of the Company and the Stockholder shall appoint and maintain its own
agent for service of summons or other legal process in the United States
of America, and shall provide the other party with evidence of such
appointment.
5.11. Headings
The headings, subheadings and other captions in this Agreement
are for convenience and reference only and shall not be used in
interpreting, construing or enforcing any of the provisions of this
Agreement.
5.12. Term of Agreement
This Agreement shall be effective as of the date first
hereinabove set forth and, unless otherwise provided elsewhere herein,
shall terminate upon the earlier of: (a) two (2) years after the first
date on which the Stockholder no longer owns or holds any Company
Securities, provided that such level of ownership or control shall not
have resulted from Transfers in violation of this Agreement; (b) such time
as (i) Company makes a general assignment for the benefit of creditors;
(ii) shall have been adjudicated bankrupt; (iii) shall have filed a
voluntary petition for bankruptcy or for reorganization or effectuated a
plan or other similar arrangement with creditors; (iv) shall have filed an
answer to a creditor's petition; (v) or if a petition is filed against
Company for an adjudication in bankruptcy or reorganization, the Company
shall have applied for or permitted the employment of a receiver or
trustee or custodian for any of its property or assets; or (c) mutual
written agreement of the parties hereto.
5.13. Obligations in the Event of Certain Breaches
In the event of a breach by the Company of its obligations under
Section 3.6 hereof (except for any breach by the Company of the last
sentence of each of Section 3.6(a) or (b)), which breach continues for a
period of thirty (30) days following delivery of notice thereof by the
Stockholder to the Company, then this Agreement shall terminate thirty
(30) days thereafter or, at the Company's option exercised by written
notice delivered to the Stockholder within such thirty-day period, the
Stockholder shall, for a period of thirty (30) days after such notice of
exercise, have the right to "put" all but not less than all of the Shares
owned by the Stockholder and/or its affiliates to the Company and the
Company shall have the right to "call" all but not less than
all of the Shares owned by the Stockholder and/or its affiliates, in
either case at a price payable to the Stockholder equal to the Fair Market
Value of the Shares to be acquired by the Company. For purposes of this
Section 5.13, "Fair Market Value" of the Shares to be acquired by the
Company shall be an amount equal to (i) if such Shares are listed on The
Nasdaq Stock Market, the average of the last reported sales price per
share or, if the Shares are then listed on a national securities exchange,
the average closing price per share, in either case for the thirty (30)
consecutive trading days immediately preceding the date that the
Stockholder provides notice to the Company of a breach as contemplated in
this Section 5.13, multiplied by (ii) the number of Shares to be acquired
by the Company; provided, however, that in the event the Shares are not
then traded on The Nasdaq Stock Market or a national securities exchange,
the Fair Market Value of the Shares to be acquired by the Company shall be
determined by an independent appraiser with an established national
reputation for appraising businesses selected by mutual agreement of the
Company and the Stockholder, or in the absence of such mutual agreement,
selected by Price Waterhouse LLP. The closing of the acquisition of
Shares pursuant to this Section 5.13 shall occur within thirty (30) days
following the determination of Fair Market Value. Payments made to the
Stockholder by the Company pursuant to this Section 5.13 shall be made in
immediately available funds or by certified check.
IN WITNESS WHEREOF, each of the Company and the Stockholder has
caused this Agreement to be executed and delivered by its duly authorized
officer, all as of the day and year first above written.
EXIDE ELECTRONICS GROUP, INC.
Attest:
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
Title: Vice President & Chief Title: Vice President, Chief
Financial Officer Administrative Officer and General
Counsel
[Corporate Seal]
FISKARS OY AB
By: /s/ Xxxx Xxxxxxxx
Title: President
