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EXHIBIT 4.6
STOCKHOLDER AGREEMENT
DATED
MARCH , 1996
BY AND BETWEEN
EXIDE ELECTRONICS GROUP, INC. ("COMPANY")
AND
FISKARS OY AB ("STOCKHOLDER")
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TABLE OF CONTENTS
PAGE
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1. CONTROL..............................................................................
1.1. Board Membership.............................................................
1.2. Voting of Company Securities.................................................
1.3. Restrictions on Other Actions of Stockholder.................................
2. RESTRICTIONS ON ACQUISITIONS AND OWNERSHIP OF COMPANY SECURITIES.....................
2.1. First Tier Limitations.......................................................
2.2. Second Tier Limitations......................................................
3. RESALE OF COMPANY SECURITIES.........................................................
3.1. Open Market Sales............................................................
3.2. Private Sales................................................................
3.3. Right of First Refusal.......................................................
3.4. Tender Offers................................................................
3.5. Restrictions Following Offerings.............................................
3.6. Registration Rights..........................................................
3.7. Indemnification in Connection with Registration Statements...................
3.8. Filings with the Securities and Exchange Commission..........................
4. REPRESENTATIONS, WARRANTIES AND INDEMNITIES..........................................
4.1. Representations and Warranties...............................................
4.2. Indemnification..............................................................
5. MISCELLANEOUS........................................................................
5.1. Press Releases...............................................................
5.2. Confidentiality..............................................................
5.3. Specific Performance.........................................................
5.4. Notices......................................................................
5.5. Invalid or Unenforceable Provisions..........................................
5.6. Benefit and Burden...........................................................
5.7. Gender.......................................................................
5.8. Changes; Waiver..............................................................
5.9. Entire Agreement.............................................................
5.10. Governing Law; Forum for Disputes............................................
5.11. Headings.....................................................................
5.12. Term of Agreement............................................................
5.13. Obligations in the Event of Certain Breaches.................................
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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 8521 Six Forks
Road, Raleigh, North Carolina, and FISKARS OY AB, a Finnish corporation, having
its principal place of business at Mannerheimintie 14 A, 00101 Helsinki 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 Stig Stendahl and Ralf Boer. 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
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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).
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(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.
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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.
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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.
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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
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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)
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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
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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, 8521 Six Forks Road, Suite 300,
Raleigh, North Carolina 27615 USA, Attention: Nicholas J. Costanza, 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
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If to the Stockholder, at Mannerheimintie 14 A, 00101 Helsinki 10 Finland,
Attention: Stig Stendahl, 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 Foley & Lardner, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, Attention: Ralf R. Boer.
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.
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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.
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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: By:
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Title: Title:
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[Corporate Seal]
FISKARS OY AB
By:
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Title:
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And:
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Title:
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