FORM OF STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of ______, 2000 (the "Agreement") is
made by and among Sunrise Capital Partners, L.P., a Delaware limited
partnership ("Sunrise") and each of The John R. Allard Revocable Trust of
1993, Kim A. Socha, The Michael E. Allard Revocable Trust of 1994, Lisa A.
Dibrigida, Gerald R. Allard, The Samy Nazarian Trust, The David and Angella
Nazarian Family Trust, Younes Nazarian, Richard A. Beyer and Michael Foster
(each a "Holder" and, together with the Original Holder, the
"Holders")(collectively, the "Holders").
RECITALS
WHEREAS, Sunrise and the other Holders own shares of Parent Stock (as
defined below);
WHEREAS, the execution and delivery of this Agreement is a condition
to the transactions contemplated by that certain Convertible Note
Agreement, dated as of the July 31, 2000, by and among Sunrise, WPI Group,
Inc. ("Parent") and its subsidiaries (the "Convertible Note Agreement");
and
WHEREAS, the Holders have agreed to enter into this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Representations and Warranties of the Holders. Each Holder
represents and warrants to Sunrise as follows:
(a) Ownership of Securities. The Holder is the record and beneficial
owner of the number of shares of WPI Group, Inc. Common Stock ("Parent
Stock") set forth on the signature page to this Agreement (the "Existing
Securities," and, together with any shares of Parent Stock or other
securities of the Parent hereafter acquired by the Holder, the "Subject
Securities"). As of the date hereof, the Holder is also the record and
beneficial owner of options to purchase the number of shares of Parent
Stock as are set forth on the signature page to this Agreement (the
"Options"). The Holder does not own any capital stock or other securities
of the Parent (including any options, warrants, rights, commitments,
preemptive right or agreements of any kind for the issuance or sale of, or
outstanding securities convertible into any shares of capital stock, of any
class, of Parent stock, or outstanding warrants, options or other rights to
acquire any such convertible securities or stock appreciation rights or
other instrument whose value is derived from the Stock) on the date of this
Agreement other than (i) the Existing Securities, (ii) the Options and
(iii) warrants and convertible debt instruments issued by Parent pursuant
to the Convertible Note Agreement. The Holder has sole voting power and
sole power to issue instructions with respect to the voting of the Existing
Securities, sole power of disposition, sole power of exercise or conversion
and the sole power to demand appraisal rights, in each case with respect to
all of the Existing Securities. On the date of the annual meeting of
stockholders of the Parent or, if applicable, on the effective date of the
written consent in lieu of a meeting, at which or pursuant to which the
Charter Amendment (as defined in the Convertible Note Agreement) and the
election of directors of parents are to be considered, the Holder will have
sole voting power and sole power to issue instructions with respect to the
voting of all of the Subject Securities, sole power of disposition, sole
power of exercise or conversion and the sole power to demand appraisal
rights, in each case with respect to all of the Subject Securities.
(b) Power; Binding Agreement. The Holder has full power and
authority to enter into and perform all of the Holder's obligations under
this Agreement. The execution by Holder of this Agreement and the
performance of its obligations hereunder have been duly authorized by all
necessary corporate or partnership action on the part of Holder and no
other action on the part of Holder is required in connection therewith.
This Agreement has been duly and validly executed and delivered by the
Holder and constitutes a valid and binding agreement of the Holder,
enforceable against the Holder in accordance with its terms.
(c) No Conflicts. No filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by the Holder and the
consummation by the Holder of the transactions contemplated hereby and
neither the execution and delivery of this Agreement by the Holder nor the
consummation by the Holder of the transactions contemplated hereby nor
compliance by the Holder with any of the provisions hereof shall conflict
with or result in any breach of any applicable organizational documents of
the Company applicable to the Holder or, if applicable, any organizational
documents of the Holder (including without limitation any charter documents
or partnership agreement), result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or
give rise to any third-party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which the Holder is a party or by which the
Holder's properties or assets may be bound or violate any order, writ,
injunction, decree, judgment, order, statute, rule or regulation applicable
to the Holder or any of the Holder's properties or assets.
(d) No Liens. The Existing Securities are now and, at all times
during the term hereof, the Subject Securities will be held by the Holder,
or by a nominee or custodian for the benefit of such Holder, free and clear
of all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever.
2. Agreement to Vote Shares. At every meeting of the stockholders of
the Parent called with respect to any of the following, and at every
postponement or adjournment thereof, and on every action or approval by
written consent of the stockholders of the Parent with respect to any of
the following, each Holder agrees that it shall vote all of the Subject
Securities that it owns beneficially and of record on the record date of
any such vote in favor of an amendment the Certificate of Incorporation of
the Parent to provide for an increase in the number of shares of common
stock permitted to be issued from 20,000,000 to 75,000,000 (the "Charter
Amendment Vote"). Each Holder further agrees that at any time that nominees
for the election to the Board of Directors of the Parent are submitted to
the stockholders of the Parent, or a proposal to remove any incumbent
member of the Board of Directors of the Parent is submitted to such
stockholders, the parties hereto agree to vote, or cause to be voted, all
Subject Securities then held by such party, whether beneficially or of
record, or any Subject Securities over which such party exercises voting
control, in favor of up to four nominees designated in writing by Sunrise.
In the event that any Sunrise nominee is unable to serve out his or her
term, resigns from the Board of Directors of Parent or declines to be
nominated for election, Sunrise shall have the right to designate in
writing a replacement nominee.
3. IRREVOCABLE PROXY. EACH OF THE HOLDERS HEREBY GRANTS TO, AND
APPOINTS SUNRISE AND ANY PRINCIPAL OF SUNRISE, IN ITS CAPACITY AS AN
OFFICER OF SUNRISE, AND ANY INDIVIDUAL WHO SHALL HEREAFTER SUCCEED TO ANY
SUCH OFFICE OF SUNRISE, AND ANY OTHER DESIGNEE OF SUNRISE, EACH OF THEM
INDIVIDUALLY, THE HOLDER'S PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF
SUBSTITUTION) TO VOTE OR ACT BY WRITTEN CONSENT WITH RESPECT TO THE
HOLDER'S SUBJECT SECURITIES IN ACCORDANCE WITH SECTION 2 HEREOF. THIS PROXY
IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE, AND EACH HOLDER WILL
TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE
NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY
PROXY PREVIOUSLY GRANTED BY IT WITH RESPECT TO THE SUBJECT SECURITIES.
4. Covenants of the Holder. Each of the Holders hereby agree and
covenant that:
(a) Restriction on Transfer, Proxies and Noninterference. The Holder
shall not, directly or indirectly: (i) until the earlier to occur of (x)
the Charter Amendment Vote or (y) ninety days from the date of this
Agreement, offer for sale, sell, transfer, tender, pledge, encumber, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for
sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of the Subject Securities; (ii) except as
contemplated by this Agreement, grant any proxies or powers of attorney,
deposit any such Subject Securities into a voting trust or enter into a
voting agreement with respect to any of the Subject Securities; or (iii)
take any action that would make any representation or warranty contained
herein untrue or incorrect or have the effect of preventing, restricting or
disabling such Holder from performing its obligations under this Agreement.
After the occurrence of the Charter Amendment Vote, any Holder which offers
for sale, sells, transfers, tenders, pledges, encumbers, assigns or
otherwise disposes of, or enters into any contract, option or other
arrangement or understanding with respect to or consents to the offer for
sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, any or all of the Subject Securities, shall, within five
(5) business days of such event, deliver to Sunrise (at the address set
forth in Section 7 hereof) written notice of the occurrence of such event.
Such notice shall set forth the number and class of Subject Securities
which were the subject of the transaction, the date of the transaction, and
the number of each class of Subject Securities owned by the Holder after
giving effect to the transaction.
6. Assignment; Benefits. The rights (but not the obligations) of
Sunrise hereunder may be assigned, in whole or in part, to any direct
wholly-owned subsidiary of Sunrise, to the extent and for so long as it
remains a direct wholly-owned subsidiary of Sunrise. Other than as
permitted in the preceding sentence, this Agreement may not be assigned by
any party hereto without the prior written consent of the other party. This
Agreement shall be binding upon, and shall inure to the benefit of, the
Holder, Sunrise and their respective successors and permitted assigns.
7. Notices. Any notice required to be given hereunder shall be in
writing and shall be sent by facsimile transmission (confirmed by any of
the methods that follow), courier service (with proof of service), hand
delivery or certified or registered mail (return receipt requested and
first-class postage prepaid) to the address of such party set forth on
Annex A hereto or to such other address as any party shall specify by
written notice so given, and such notice shall be deemed to have been
delivered as of the date so delivered.
8. Specific Performance. The parties hereto agree that irreparable
harm would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the
United States or any state thereof having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in
equity.
9. Amendment. This Agreement may not be amended or modified, except
by an instrument in writing signed by or on behalf of each of the parties
hereto. This Agreement may not be waived by either party hereto, except by
an instrument in writing signed by or on behalf of the party granting such
waiver.
10. Governing Law; Jurisdiction and Venue. This Agreement shall be
governed by, construed and enforced in accordance with the laws of the
State of New York, without regard to its rules regarding conflict of laws.
The parties hereto hereby irrevocably and unconditionally consent to and
submit to the exclusive jurisdiction of the courts of the State of New York
for any actions, suits or proceedings arising out of or relating to this
Agreement, the transactions contemplated hereby or any document referred to
herein (and the parties agree not to commence any action, suit or
proceeding related thereto except in such courts), and further agree that
service of any process, summons, notice or document by U.S. registered mail
to the respective addresses set forth on the signature pages hereto shall
be effective service of process for any such action, suit or proceeding
brought against any party in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby, in the courts of the State of New York or the United
States of America located in the State of New York, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding brought in any such
court has been brought in any inconvenient forum.
11. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
12. Defined Terms. Terms used herein but not otherwise defined shall
have the meanings set forth in the Convertible Note Agreement.
13. Termination. This Agreement shall terminate upon the termination
of the Convertible Note Agreement pursuant to its terms. Upon any
termination of this Agreement, this Agreement shall thereupon become void
and of no further force and effect, and there shall be no liability in
respect of this Agreement or of any transactions contemplated hereby or by
the Convertible Note Agreement on the part of any party hereto or any of
its directors, officers, partners, stockholders, employees, agents,
advisors, representatives or affiliates; provided, however, that nothing
herein shall relieve any party from any liability for such party's willful
breach of this Agreement; and provided further that nothing herein shall
limit, restrict, impair, amend or otherwise modify the rights, remedies,
obligations or liabilities of any person under any other contract or
agreement, including, without limitation, the Convertible Note Agreement.
[Remainder of this Page Intentionally Left Blank]
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf
of each of the parties hereto, all as of the date first above written
above.
SUNRISE CAPITAL PARTNERS, L.P.
By: Sunrise Advisors, LLC,
its General Partner
By:
---------------------------
Name:
Title:
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
HOLDERS:
THE JOHN R. ALLLARD REVOCABLE
TRUST OF 1993
By:_________________________
Name:
Title: Trustee
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
-------------------------------
KIM A. SOCHA
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
THE MICHAEL E. ALLARD
REVOCABLE TRUST OF 1994
By:_________________________
Name:
Title: Trustee
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
-------------------------------
LISA A. DIBRIDGIDA
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
------------------------------
GERALD R. ALLARD
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
THE SAMY NAZARIAN TRUST
By:_________________________
Name: David Nazarian
Title: Trustee
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
THE DAVID AND ANGELLA
NAZARIAN FAMILY TRUST
By:__________________________
Name: David Nazarian
Title: Trustee
By: _________________________
Name: Angella Nazarian
Title: Trustee
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
------------------------------------
YOUNES NAZARIAN
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
-------------------------------------
RICHARD A. BEYER
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
------------------------------------
MICHAEL FOSTER
Existing Securities:
-------------------
Class: _____________________
Number of Shares: ___________
Options:
Number of Underlying Shares: _____
ANNEX A
Notification Information for the Holders:
----------------------------------------
Sunrise Capital Partners, L.P. The Nazarian Family Trust
685 Third Avenue, 15th Floor c/o David and Angella Nazarian,
New York, NY 10017 Trustees
Attention: Joseph Julian 1206 Amalfi Drive
Telecopy: 212-582-3016 Pacific Palisades, CA 90272
The John R. Allard Revocable The Samy Nazarian Trust
Trust of 1993 c/o David Nazarian, Trustee
c/o John R. Allard, Trustee 1206 Amalfi Drive
96 Riverview Park Pacific Palisades, CA 90272
Manchester, NH 03012
Lisa A. Dibrigida Younes Nazarian
32 Puritan Drve 157 N. Delfern Drive
Bedford, NH 03110 Los Angeles, CA 90077
Kim M. Socha Richard Beyer
75 Riverview Park 11571 Lake Newport
Bedford, NH 03102 Reston, VA 20194
The Michael E. Allard Revocable Michael Foster
Trust of 1994 _________________
c/o Michael E. Allard _________________
89 Riverview Park _________________
Manchester, NH 03102
Gerald R. Allard
92 Riverview Park
Manchester, NH 03102
