Document:

EXHIBIT 10.1

 

SHAREHOLDERS
AGREEMENT

 

This Shareholders Agreement (this “Agreement”),
is entered into as of December 16, 2005, by and between SL Industries, Inc.,
a New Jersey corporation (“Purchaser”), and Lakers Acquisition Corp., a
Minnesota corporation and wholly-owned subsidiary of Purchaser (“Merger Sub”),
on the one hand, and each of the shareholders of Ault Incorporated, a Minnesota
corporation (the “Company”) set forth on Schedule 1 hereto (each a “Shareholder”
and collectively, the “Shareholders”), on the other hand.  Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Merger
Agreement (as defined below).

 

RECITALS

 

WHEREAS, each Shareholder is, as of the date
hereof, the record and beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of (i) the
number of shares of common stock, no par value, of the Company (together with
any associated preferred stock or other rights issued pursuant to the Rights
Agreement, dated as of February 13, 1996, between the Company and Norwest
Bank Minnesota, N.A. as the same has been amended through the date hereof, the “Common
Stock”); and (ii) the number of options to acquire Common Stock (the “Company
Options”) set forth opposite the name of such Shareholder on Schedule 1
hereto; and

 

WHEREAS, Purchaser, Merger Sub and the
Company have entered into an Agreement and Plan of Merger, dated as of the date
hereof (the “Merger Agreement”), which provides, among other things, for (a) Merger
Sub to commence a tender offer for all of the issued and outstanding shares of
Common Stock (the “Offer”) and (b) the merger of Merger Sub with and into
the Company with the Company continuing as the surviving corporation (the “Merger”),
in each case upon the terms and subject to the conditions set forth in the
Merger Agreement; and

 

WHEREAS, as a condition to the willingness of
Purchaser and Merger Sub to enter into the Merger Agreement and as an
inducement and in consideration therefor, the Shareholders have agreed to enter
into this Agreement.

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements set forth herein and in the
Merger Agreement, and intending to be legally bound hereby, the parties hereto
agree as follows:

 

Section 1.  Representations and Warranties of the
Shareholders.  Each Shareholder hereby represents and
warrants to Purchaser, severally and not jointly, as set forth below:

 

(a)   Such Shareholder is the record and beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of the shares of Common Stock set forth
opposite his or its name on Schedule 1 to this Agreement (such shares of
Common Stock, together with any Common Stock 
acquired by the Shareholder after the date of this Agreement, whether
such Shares are acquired by way of exercise of Company Options or other rights
to purchase Common Stock or by way of

 

 

dividend, distribution, exchange, merger,
consolidation, grant of proxy or otherwise, but excluding shares owned by other
Shareholders, all as may be adjusted from time to time pursuant to Section 8
hereof, the “Shares”).  Schedule 1
to this Agreement lists separately all Company Options issued to such
Shareholder.  Such Shareholder is the
record and beneficial owner of the Company Options set forth opposite such
Shareholder’s name on Schedule 1 to this Agreement.

 

(b)   Such Shareholder has voting power and power to agree to all of the
matters regarding such Shareholder set forth in this Agreement, in each case
with respect to all of the Shares, with no limitations, qualifications or
restrictions on such right.  Such
Shareholder is not the record or beneficial owner of any securities of the
Company on the date hereof other than the Shares and the Company Options set
forth on Schedule 1.

 

(c)   Such Shareholder has the legal capacity to execute and deliver
this Agreement and to consummate the transactions contemplated hereby regarding
such Shareholder.

 

(d)   This Agreement has been validly executed and delivered by such
Shareholder and, assuming due and valid authorization, execution and delivery
thereof by Purchaser and Merger Sub, constitutes the legal, valid and binding
obligation of such Shareholder, enforceable against such Shareholder in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, and (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable defenses and would be subject
to the discretion of the court before which any proceeding therefor may be
brought.

 

(e)   Neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will result in a violation of, or
constitute (with or without due notice or lapse of time or both) a default
under, or conflict with, or give rise to any right of termination, cancellation
or acceleration under any contract, trust, note, bond, mortgage, indenture,
license, agreement, or material contractual restriction or obligation of any
kind to which such Shareholder is a party or by which such Shareholder or his
or its Shares are bound, which singularly or in the aggregate, would prevent or
adversely affect the ability of such Shareholder to perform his or its
obligations under this Agreement.  The
consummation of the transactions contemplated hereby will not violate, or
require any consent, approval or notice (except those required under applicable
securities laws) under, any provision of any judgment, order, injunction,
decree, statute, law, rule or regulation applicable to such Shareholder
which, singularly or in the aggregate, would prevent or adversely affect the
ability of such Shareholder to perform his or its obligations under this
Agreement.

 

(f)    The Shares owned by such Shareholder are now, and at all times
during the term hereof will be, held by such Shareholder or by a nominee or
custodian for the benefit of such Shareholder, free and clear of all liens,
claims, security interests, proxies, voting trusts, agreements, options,
rights, understandings or arrangements or any other encumbrances whatsoever on
title, transfer or exercise of any rights of a Shareholder in respect of such
Shares (collectively, “Encumbrances”), except for any such Encumbrances arising
hereunder, and the transfer of the Shares held by such Shareholder hereunder
will effectively vest in Merger Sub valid and marketable title to such Shares,
free and clear of any Encumbrances.

 

2

 

(g)   If Shareholder’s Shares are subject to community property
interests under the laws of any jurisdiction, such Shareholder has agreed to
have executed and delivered to Purchaser such consents, waivers and approvals
as are necessary for the execution of this Agreement and the approval and
consummation of the transactions contemplated hereby regarding such
Shareholder.

 

(h)   Such Shareholder understands and acknowledges that Purchaser and
Merger Sub are entering into the Merger Agreement in reliance upon such
Shareholder’s execution and delivery of this Agreement.

 

Section 2.  Representations and Warranties of Purchaser
and Merger Sub.  Each of Purchaser and Merger Sub hereby
represents and warrants to the Shareholders, jointly and severally, as follows:

 

(a)   Each of Purchaser and Merger Sub is a corporation duly organized
and validly existing under the laws of the State of New Jersey and the State of
Minnesota, respectively, has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement.

 

(b)   This Agreement has been duly authorized, executed and delivered by
each of Purchaser and Merger Sub and, assuming due and valid authorization,
execution and delivery thereof by a Shareholder, constitutes the legal, valid
and binding obligation of each of Purchaser and Merger Sub, enforceable by such
Shareholder against each of them in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) the availability of the remedy of specific performance
or injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought.

 

(c)   Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will result in a violation
of, or constitute (with or without due notice or lapse of time or both) a
default under, or conflict with, or give rise to any right of termination,
cancellation or acceleration under any material contract, trust, note, bond,
mortgage, indenture, license, agreement or contractual restriction or
obligation of any kind to which Purchaser and Merger Sub is a party which,
singularly or in the aggregate, would prevent or adversely affect the ability
of Purchaser and Merger Sub to perform its obligations under this
Agreement.  The consummation of the
transactions contemplated hereby will not violate, or require any consent,
approval or notice (except those required under applicable securities laws)
under, any provision of any judgment, order, injunction, decree, statute, law, rule or
regulation applicable to Purchaser and Merger Sub which, singularly or in the
aggregate, would prevent or materially adversely affect the ability of
Purchaser and Merger Sub to perform its obligations under this Agreement.

 

3

 

Section 3.  Tender of the Shares.

 

(a)   Each Shareholder hereby agrees that, subject to the terms and
conditions of Section 10 hereof, (a) such Shareholder shall validly
tender, or cause to be validly tendered, pursuant to and in accordance with the
terms of the Offer, his or its Shares into the Offer as promptly as
practicable, and in any event no later than the fifth business day following
the commencement of the Offer pursuant to Section 1.1 of the Merger
Agreement and receipt of the applicable tender offer documentation and (b) such
Shareholder shall not withdraw any Shares so tendered unless this Agreement is
terminated or otherwise terminates in accordance with its terms under Section 10
hereof or otherwise or the Offer is terminated or has expired without Merger
Sub purchasing all Shares validly tendered in the Offer and not withdrawn.  Notwithstanding the foregoing, each
Shareholder may decline to tender, or may withdraw, any and all of such
Shareholder’s Shares if, without the consent of such Shareholder, Merger Sub
amends the Offer to (i) reduce the Offer Price, (ii) reduce the
number of Shares subject to the Offer, (iii) change the form of
consideration payable in the Offer or (iv) amend or modify any term or
condition of the Offer in a manner adverse to the Shareholders of the Company
(other than insignificant changes or amendments or other than to waive any
condition other than the Minimum Condition which the parties agree cannot be
waived or reduced).  Each Shareholder shall
give Merger Sub at least two (2) business days’ prior notice of any
withdrawal of its Shares pursuant to the immediately preceding proviso.

 

(b)   Notwithstanding the foregoing, at no time and in no event shall
the total number of shares restricted pursuant to Section 3(a) hereof
exceed nineteen and nine-tenths percent (19.9%) of the outstanding capital
stock of the Company, including but not limited to the Shares (the “Maximum
Restricted Amount”).  In the event that
the total number of Shares exceeds the Maximum Restricted Amount, Merger Sub may,
in its sole and absolute discretion determine which Shares shall be restricted
pursuant to Section 3(a).  Merger
Sub, in its sole and absolute discretion, shall make the determination of
whether Shares subject to restriction pursuant to this Section 3 have
equaled or exceeded the Maximum Restricted Amount.

 

Section 4.  Transfer of the Shares.

 

(a)   Prior to the termination of this Agreement and except as otherwise
provided herein, each of the Shareholders agrees that it shall not: (i) transfer,
assign, sell, gift-over, pledge, hypothecate, encumber or otherwise dispose of,
or consent to any of the foregoing (“Transfer”), any or all of the Shares,
Company Options or other rights to acquire Common Stock or any right or
interest therein; (ii) enter into any contract, option or other agreement,
arrangement or understanding with respect to any Transfer; (iii) grant any
proxy, power-of-attorney or other authorization or consent with respect to any
of the Shares; (iv) deposit any of the Shares into a voting trust, or
enter into a voting agreement or arrangement with respect to any of the Shares
or (v) take any other action that would in any way restrict, limit or
interfere with the performance of such Shareholder’s obligations hereunder or
the transactions contemplated hereby or make any representation or warranty of
such Shareholder untrue or incorrect.

 

(b)   Notwithstanding the foregoing, at no time and in no event shall
the total number of shares restricted pursuant to Section 4(a) hereof
exceed the Maximum Restricted Amount.  In
the event that the total number of Shares exceeds the Maximum Restricted
Amount, Merger Sub

 

4

 

may, in its sole and absolute discretion,
determine which Shares shall be restricted pursuant to Section 4(a).  Prior to any proposed Transfer restricted by Section 4(a) hereof,
each Shareholder shall provide written notice to Merger Sub at least
forty-eight (48) hours prior to the proposed Transfer.  Such notice shall include the number and
class of Shares (including Company Options) to be transferred, the price per
Share, and the proposed transferee.  If
the Shares so restricted have not yet exceeded the Maximum Restricted Amount,
then Merger Sub may restrict such proposed Transfer as provided herein.  If Shares upon which such restrictions have
already been imposed equal or exceed the Maximum Restricted Amount, then Merger
Sub may not enforce the restrictions on Transfer imposed by this Agreement.  Merger Sub, in its sole and absolute
discretion, shall make the determination of whether Shares subject to
restriction pursuant to this Section 4 have equaled or exceeded the
Maximum Restricted Amount.  Regardless of
whether the Maximum Restricted Amount has been reached, the notice provision of
this Section 4(b) shall apply until termination of this Agreement.

 

Section 5.  Option.

 

(a)   On the terms and subject to the conditions set forth herein, each
Shareholder hereby grants to each of Purchaser and Merger Sub an irrevocable
option to purchase all of the right, title and interest of such Shareholder in
and to the Shares owned by such Shareholder, as well as any other Shares of
Common Stock of which such Shareholder is the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) after the date hereof, if and to the extent that such
Shares are not validly tendered in the Offer pursuant to the terms of Section 3
hereof, at a price per share equal to the Offer Price (as defined in the Merger
Agreement) (the “Option”).  With
respect to any Shareholder, the Option may be exercised after Merger Sub shall
purchase and pay for Shares (as defined in the Merger Agreement) pursuant to
the Offer following satisfaction of the Minimum Condition and until the earlier
of (a) immediately preceding the Effective Time (as defined in the Merger
Agreement) or (b) the termination of the Merger Agreement in accordance
with its terms.  Purchaser or Merger Sub,
as the case may be, may exercise an Option in whole, but not in part.

 

(b)   In the event that Purchaser or Merger Sub desires to exercise an
Option, Purchaser or Merger Sub shall send a written notice in accordance with Section 13(a) hereof
to the relevant Shareholder prior to the termination of this Agreement
specifying the place and the date for the closing of such purchase, which date
may be the date of such notice and shall be not more than three business days
after the date of such notice and shall be prior to the termination of this
Agreement; provided that in the event that prior notification to, or
approval of, any Governmental Authority is required in connection with the
exercise of an Option or there shall be in effect any preliminary or final
injunction or other order issued by any Governmental Authority prohibiting the
exercise of an Option, the period of time during which the date of the closing
may be fixed shall be extended until the fifth business day following the last
date on which all required approvals shall have been obtained, all required
waiting periods shall have expired or been terminated and any such prohibition
shall have been vacated, terminated or waived.

 

(c)   At the closing of any purchase of a Shareholder’s Shares pursuant
to exercise of an Option, simultaneously with the payment by Purchaser or
Merger Sub of the purchase price for such Shareholder’s Shares, such
Shareholder shall deliver, or cause to be delivered, to Purchaser

 

5

 

or Merger Sub certificates representing such
Shares duly endorsed to Purchaser or Merger Sub or accompanied by stock powers
duly executed by the Shareholder in blank, together with any necessary stock
transfer stamps properly affixed, free and clear of all liens.

 

(d)   Notwithstanding the foregoing, at no time and in no event shall
the shares of the Company’s capital stock subject to this Section 5 exceed
the Maximum Restricted Amount.  In the
event that the total number of Shares exceeds the Maximum Restricted Amount,
then Merger Sub, in its sole and absolute discretion, shall determine which
Shares shall be subject to this Section 5. 
Merger Sub, in its sole and absolute discretion, shall make the
determination of whether Shares subject to restriction pursuant to this Section 5
have equaled or exceeded the Maximum Restricted Amount.

 

Section 6.  Voting Arrangements; Irrevocable Proxy.

 

(a)   Each Shareholder hereby agrees that, during the time this
Agreement is in effect, at any meeting of the Shareholders of the Company (a “Company
Shareholders Meeting”), however called, and at every adjournment or
postponement thereof, if and to the extent that his or her Shares are not
validly tendered pursuant to the terms of Section 3 hereof, he or she
shall: (i) appear at the meeting or otherwise cause his or her Shares to
be counted as present thereat for purposes of establishing a quorum; (ii) vote,
or execute proxies in respect of, his or her Shares, or cause his or her Shares
to be voted, or proxies to be executed in respect thereof, in favor of the
approval and adoption of the Merger Agreement (including any revised or amended
Merger Agreement that has been agreed to by the Board of Directors of the
Company) and the Merger, and any action required in furtherance thereof and (iii) vote,
or execute proxies in respect of, his or her Shares, or cause his or her Shares
to be voted, or proxies to be executed in respect thereof, against (A) any
agreement or transaction relating to any Company Takeover Proposal (other than
as proposed by Purchaser or Merger Sub) or (B) any amendment of the
Company’s Articles of Incorporation or Bylaws or other proposal, action or
transaction involving the Company or any of its subsidiaries or any of its
Shareholders, which amendment or other proposal, action or transaction could
reasonably be expected to prevent or materially impede or delay the consummation
of the Offer or Merger or the consummation of the transactions contemplated by
this Agreement or to deprive Purchaser of any material portion of the benefits
anticipated by Purchaser to be received from the consummation of the Merger or
the other transactions contemplated by this Agreement or change in any manner
the rights of the Common Stock presented to the Shareholders of the Company
(regardless of any recommendation of the Board of Directors of the Company) or
in respect of which vote or proxy of the Shareholder is requested or sought,
unless such transaction has been approved in advance by Purchaser or Merger
Sub.

 

(b)   Subject to the provisions set forth in Section 10 hereof and
as security for the Shareholders’ obligations under Section 6(a), if and to
the extent the Shares are not validly tendered in the Offer pursuant to the
terms of Section 3 hereof, each of the Shareholders hereby irrevocably
constitutes and appoints Purchaser, Glen Kassan, James Taylor and its or his
designees as its or his attorney and proxy in accordance with the Minnesota
Business Corporation Act (the “MBCA”), with full power of substitution and
resubstitution, to cause the Shareholder’s Shares to be counted as present at
any Company Shareholders Meetings, to vote

 

6

 

his or its Shares at any Company Shareholders
Meeting, however called, and to execute consents in respect of his or its
Shares as and to the extent provided in Section 6(a).

 

(c)   Notwithstanding the foregoing, at no time and in no event shall
the Shares restricted pursuant to this Section 6 exceed the Maximum
Restricted Amount.  In the event that the
number of Shares subject to this Section 6 exceeds the Maximum Restricted
Amount, then the aforementioned attorney and proxy shall release the excess
Shares from the restrictions of this Section 6.  The attorney and proxy shall determine, in
their sole and absolute discretion, which Shares shall be released and, upon
such determination shall notify holders of released Shares.  Upon such release, such Shareholders shall be
entitled to vote such Shares or to direct the attorney and proxy to vote such
Shares at their direction.  Merger Sub,
in its sole and absolute discretion, shall make the determination of whether
Shares subject to restriction pursuant to this Section 6 have equaled or
exceeded the Maximum Restricted Amount.

 

(d)   Each Shareholder represents that any proxies heretofore given in
respect of the Shares, if any, are revocable, and have been revoked.  Each Shareholder hereby agrees not to grant
any subsequent proxy or power of attorney with respect to such Shareholder’s
Shares.

 

(e)   Each Shareholder hereby affirms that the proxy set forth in this Section 6
is given in connection with the execution of the Merger Agreement, and that
such proxy is given to secure the performance of the duties of such Shareholder
under this Agreement.  Such Shareholder
hereby further affirms that the proxy set forth in this Section 6 is
coupled with an interest and, except as set forth in this Section 6 or in Section 10,
is, subject to the terms and conditions contained herein, intended to be
irrevocable in accordance with the provisions of Section 302A.449 of the
MBCA.  Each Shareholder hereby agrees
that, if for any reason the proxy granted herein is not irrevocable (subject to
the terms of this Agreement), then such Shareholder agrees to vote his or its
Shares in accordance with Section 6(a) above as instructed by
Purchaser in writing.  The parties agree
that the foregoing is a voting agreement created under Section 302A.455 of
the MBCA.

 

Section 7.  Voting Provisions.  To the extent that a
Shareholder has dispositive power, but not voting power, over any of its shares
of Common Stock, Section 6 of this Agreement shall only apply to the shares
of Common Stock held by such Shareholder over which such Shareholder retains
voting power.

 

Section 8.  Certain Events.  In the
event of any change in the Common Stock by reason of a stock dividend, stock
split, split-up, recapitalization, reorganization, business combination,
consolidation, exchange of shares, or any similar transaction or other change
in the capital structure of the Company affecting the Common Stock or the
acquisition of additional shares of Common Stock or other securities or rights
of the Company by any Shareholder, this Agreement and the obligations hereunder
shall attach to any additional shares of Common Stock or other securities or
rights of the Company issued to or acquired by each of the Shareholders.

 

Section 9.  Further Assurances.  Each
Shareholder shall, upon request of Purchaser or Merger Sub, execute and deliver
any additional documents and take such further actions as may reasonably be
deemed by Purchaser or Merger Sub to be necessary or desirable to carry out the

 

7

 

provisions hereof and to vest in Purchaser
the power to vote the Shares as contemplated by Section 6.

 

Section 10.  Termination. 
This Agreement, and all rights and
obligations of the parties hereunder, shall terminate immediately upon the
termination of the Merger Agreement in accordance with its terms and no party
shall have any obligation to any other party to provide notice of such
termination as a condition to its effectiveness; provided, however, that Section 11
hereof shall survive any termination of this Agreement.

 

Section 11.  Expenses. 
All fees, costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such fees, costs and expenses.

 

Section 12.  Public Announcements.  Each of
the Shareholders agrees that it will not issue any press release or otherwise
make any public statement with respect to this Agreement or the transactions
contemplated hereby or by the Merger Agreement without the prior consent of
Purchaser; provided, however, that such disclosure may be made without
obtaining such prior consent if (i) the disclosure is required by law or
is required by any regulatory authority, including but not limited to any Governmental
Authority, or the Nasdaq Stock Market and any national securities exchange,
trading market or inter-dealer quotation system on which the Shares trade and (ii) the
Shareholder making such disclosure has first used all reasonable efforts to
consult with Purchaser about the form and substance of such disclosure.

 

Section 13.  Miscellaneous.

 

(a)   Notices.  All notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by facsimile, receipt confirmed, or
on the next business day when sent by overnight courier or on the second
succeeding business day when sent by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

 

If to any of the Shareholders, to such
Shareholder at the following address:

 

c/o Ault Incorporated

7105 Northland Terrace

Minneapolis, MN  55428-1028

Facsimile: 763-592-1911

 

If to Purchaser or Merger Sub, to:

 

SL Industries Inc.

520 Fellowship Road

Suite A114

Mount Laurel, New Jersey  08054

Attention: James Taylor

Facsimile: 856-727-1683

 

8

 

With a copy (which shall not constitute
notice) to:

 

Olshan Grundman Frome
Rosenzweig & Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York  10022

Attention: Steven Wolosky, Esq.

Facsimile: (212) 451-2222

 

(b)   Headings.  The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.

 

(c)   Counterparts.  This
Agreement may be executed manually or by facsimile by the parties hereto in any
number of counterparts, each of which shall be considered one and the same
agreement.

 

(d)   Entire Agreement.  This
Agreement (together with the Merger Agreement and any other exhibits, annexes,
schedules, documents and instruments referred to herein and therein or
contemplated thereby or therein) constitutes the entire agreement among the
parties with respect to the subject matter hereof and thereof and supersedes
all other prior agreements and understandings, both written and oral, among the
parties or any of them with respect to the subject matter hereof and thereof.

 

(e)   Governing Law; Venue.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Minnesota, without giving effect to any conflict of laws principles
thereof that might require the application of the law of another jurisdiction.

 

(f)    Assignment.  Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties except that
Purchaser or Merger Sub may assign, in its sole discretion and without the
consent of any other party, any or all of its rights, interests and obligations
hereunder to each other or to one or more direct or indirect wholly owned subsidiaries
of Purchaser (each, an “Assignee”).  Any
such Assignee may thereafter assign, in its sole discretion and without the
consent of any other party, any or all of its rights, interests and obligations
hereunder to one or more additional Assignees. 
Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by, the parties and their respective
successors and assigns, and the provisions of this Agreement are not intended
to confer upon any person other than the parties hereto any rights or remedies
hereunder.

 

(g)   Severability of Provisions. 
If any term or provision of this Agreement is invalid, illegal or
incapable of being enforced by rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner adverse to any
party.  Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to

 

9

 

modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner
to the end that the transactions are fulfilled to the extent possible.

 

(h)   Specific Performance.  The
parties hereto acknowledge that money damages would be an inadequate remedy for
any breach of this Agreement by any party hereto, and that the obligations of
the parties hereto shall be enforceable by any party hereto through injunctive
or other equitable relief.

 

(i)    Amendment.  No amendment,
modification or waiver in respect of this Agreement shall be effective against
any party unless it shall be in writing and signed by such party.

 

(j)    Binding Nature.  This
Agreement is binding upon and is solely for the benefit of the parties hereto
and their respective successors, legal representatives and assigns.

 

[SIGNATURE PAGES FOLLOW]

 

10

 

IN WITNESS WHEREOF, Purchaser, Merger Sub and
the Shareholders have caused this Agreement to be duly executed and delivered
as of the date first written above.

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  SL INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ James C. Taylor

  	
   

  
	
   

  	
  Name:

  	
  James C. Taylor

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MERGER SUB:

  
	
   

  	
   

  
	
   

  	
  LAKERS ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ James C. Taylor

  	
   

  
	
   

  	
  Name:

  	
  James C. Taylor

  
	
   

  	
  Title:

  	
  President

  
						

 

[SIGNATURE PAGE TO
SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Frederick
  M. Green

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Frederick M. Green 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE
PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Carol
  A. Barnett

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Carol A. Barnett 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Brian
  T. Chang

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Brian T. Chang 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN WITNESS WHEREOF, Purchaser, Merger Sub and
the Shareholders have caused this Agreement to be duly executed and delivered
as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  John
  Colwell, Jr.

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  John Colwell, Jr.

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO
SHAREHOLDERS AGREEMENT]

 

 

IN WITNESS WHEREOF, Purchaser, Merger Sub and
the Shareholders have caused this Agreement to be duly executed and delivered
as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  John
  G. Kassakian

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  John G. Kassakian

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

 

[SIGNATURE PAGE TO
SHAREHOLDERS AGREEMENT]

 

 

 

IN WITNESS WHEREOF, Purchaser, Merger Sub and
the Shareholders have caused this Agreement to be duly executed and delivered
as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  David
  J. Larkin

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  David J. Larkin 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO
SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Marvonia
  Pearson Walker

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Marvonia Pearson Walker 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Gregory
  L. Harris

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Gregory L. Harris 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Xiaodong
  Wang

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Xiaodong Wang 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Leonidas
  Opportunity Fund L.P.

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/ 
  Lyron Bentovim 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
  Lyron
  Bentovim

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
  Managing
  Director

  
	
   

  	
   

  	
  General
  Partner

  
						

 

[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Leonidas
  Opportunity Offshore Fund Ltd.

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/ 
  Lyron Bentovim  

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
  Lyron
  Bentovim

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
  Managing
  Director

  
	
   

  	
   

  	
  General
  Partner

  
						

 

[SIGNATURE PAGE TO SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Skiritai
  Capital LLC

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/ 
  Lyron Bentovim 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
  Lyron
  Bentovim

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
  Managing
  Director

  
						

 

[SIGNATURE PAGE TO
SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Russell
  R. Silvestri

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/ Russell R. Silvestri 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO
SHAREHOLDERS AGREEMENT]

 

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Shareholders have caused this
Agreement to be duly executed and delivered as of the date first written above.

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  Lyron
  L. Bentovim

  
	
   

  	
   

  
	
   

  	
  [Print
  Name of Shareholder]

  
	
   

  	
   

  
	
   

  	
   

  	
   /s/ Lyron L. Bentovim 

  
	
   

  	
  [Signature]

  
	
   

  	
   

  
	
   

  	
  If
  Shareholder is an entity:

  
	
   

  	
   

  
	
   

  	
  Name
  of Signatory: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title
  of Signatory: 

  	
   

  
					

 

[SIGNATURE PAGE TO
SHAREHOLDERS AGREEMENT]

 

 

Schedule 1

 

Shares
and Company Options Held

 

	
  Name of Shareholder

  	
   

  	
  Shares
  Held

  	
   

  	
  Company Options Held

  
	
  Frederick
  M. Green

  	
   

  	
  106,527

  	
   

  	
  282,500

  
	
  Carol
  A. Barnett

  	
   

  	
  1,000

  	
   

  	
  10,000

  
	
  Brian
  T. Chang

  	
   

  	
  -0-

  	
   

  	
  6,000

  
	
  John
  Colwell, Jr.

  	
   

  	
  -0-

  	
   

  	
  10,000

  
	
  John
  G. Kassakian

  	
   

  	
  19,000

  	
   

  	
  17,000

  
	
  David
  J. Larkin

  	
   

  	
  5,000

  	
   

  	
  14,000

  
	
  Marvonia
  Pearson Walker

  	
   

  	
  -0-

  	
   

  	
  10,000

  
	
  Gregory
  L. Harris

  	
   

  	
  -0-

  	
   

  	
  133,500

  
	
  Xiaodong
  Wang

  	
   

  	
  -0-

  	
   

  	
  51,000

  
	
  Leonidas
  Opportunity Fund L.P.

  Leonidas Opportunity Offshore Fund Ltd.

  Skiritai Capital LLC

  Russell R. Silvestri

  Lyron L. Bentovim

  	
   

  	
  719,098

  (in the aggregate)

  	
   

  	
  -0-

  

 

Note: 
Green share amount includes shares acquired under Stock Purchase Plan as
of May 30, 2005.EXHIBIT 10.2

 

STOCK OPTION AGREEMENT

 

This
Stock Option Agreement, is dated as of December 16, 2005, and entered into
by and among SL Industries, Inc., a New Jersey corporation (“Purchaser”),
Lakers Acquisition Corp., a Minnesota corporation and a wholly-owned subsidiary
of Purchaser (“Merger Sub”), and Ault Incorporated, a Minnesota corporation
(the “Company”).

 

WHEREAS,
the Company, Purchaser and Merger Sub are entering into an Agreement and Plan
of Merger (the “Merger Agreement”) of even date herewith providing for (a) a
cash tender offer to purchase any and all outstanding shares of common stock,
no par value, of the Company (the “Common Stock”) (such shares together with
any associated preferred stock or other rights issued pursuant to the Rights
Agreement, dated as of February 13, 1996, between the Company and Norwest
Bank Minnesota, N.A. as the same has been amended through the date hereof, the “Shares”)
at a price of $2.90 per Share, net to the seller in cash without interest
thereon, upon the terms and subject to the conditions set forth in the Merger
Agreement (the “Offer”); and (b) the merger (the “Merger”) of Merger Sub
with and into the Company; and

 

WHEREAS,
as a condition to the willingness of Purchaser and Merger Sub to enter into the
Merger Agreement and commence the Offer, Purchaser and Merger Sub have
requested, and the Company has agreed to grant to Merger Sub, the option to
purchase, as described herein, authorized but unissued shares of Common Stock.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, and for other good and valuable consideration the
sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.  Grant of Option.  On the terms and subject to the conditions of
this Agreement, the Company hereby grants to Merger Sub an irrevocable option
(the “Option”) to purchase for the Offer Price, as defined in the Merger
Agreement (the “Purchase Price”), shares of Common Stock, in such amounts as
shall be determined by Merger Sub in its discretion, up to such number of
shares which, upon exercise, would result in Merger Sub, Purchaser and
Purchaser Affiliates (as defined in the Merger Agreement) owning in excess of
ninety percent (90%) of the then-outstanding shares of Common Stock
(collectively, the “Optioned Shares”).

 

2.  Exercise of Option.  Subject to the condition in the immediately
succeeding sentence being satisfied, the Option may be exercised by Merger Sub
at any time in whole, but not in part, after Merger Sub has purchased Shares
pursuant to the Offer which, together with Shares otherwise held or acquired by
Merger Sub, Purchaser and Purchaser Affiliates, results in Merger Sub,
Purchaser and Purchaser Affiliates owning in the aggregate at least seventy-five
percent (75%) of the then-outstanding shares of Common Stock and until the
earlier of (a) the Closing Date (as defined in the Merger Agreement) and (b) the
termination of the Merger Agreement in accordance with its terms.  The exercise of the Option is conditioned
upon Merger Sub, Purchaser and Purchaser Affiliates owning in the aggregate,
immediately following such exercise, at least ninety percent (90%) of the
outstanding shares of Common Stock.  In
the event Merger Sub wishes to exercise the Option, Merger Sub shall give a
written notice (the “Notice”)

 

 

to the Company of its intention to exercise
the Option, specifying the number of Optioned Shares to be purchased and
providing the representation described in the second sentence of Section 4
hereof.  Such notice shall be delivered
to the Company in accordance with the requirements of Section 8(d), and
shall specify a date (which may be the date of such notice) not more than ten (10) business
days after the date such Notice is given for the purchase of the Optioned
Shares.  The closing (the “Closing”) of
the purchase of the Optioned Shares shall take place at the offices of Olshan
Grundman Frome Rosenzweig & Wolosky LLP, Park Avenue Tower, 65 East 55th Street, New York, New York 10022, or at such
other location as Merger Sub shall elect. 
If any decree, injunction, order, law or regulation shall not permit the
purchase of the Optioned Shares to be consummated on the date specified in such
Notice, the date for the Closing shall be as soon as practicable following the
cessation of such restriction on consummation, but in any event within two (2) business
days thereof.

 

3.  Payment and Delivery of Certificate(s).  At any Closing hereunder, (a) Merger Sub
shall deliver to the Company a Promissory Note substantially in the form
attached hereto as Exhibit A (the “Note”) for the aggregate price for the
Optioned Shares so purchased; and (b) the Company shall deliver to Merger
Sub a certificate or certificates representing the number of Optioned Shares so
purchased registered in the name of Merger Sub. 
Certificates for Optioned Shares delivered at the Closing may be
endorsed with a restrictive legend that shall read substantially as follows:

 

“THE
SECURITIES OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM.”

 

It
is understood and agreed that the reference to the resale restrictions of the
Securities Act of 1933, as amended (the “Act”), in the above legend shall be
removed by delivery of substitute certificate(s) without such reference if
Purchaser shall have delivered to the Company a copy of a letter from the staff
of the Securities and Exchange Commission, or an opinion of counsel or other
evidence reasonably satisfactory to the Company, to the effect that
registration of the future resale of the Optioned Shares is not required and
that such legend is not required for purposes of the Act.

 

4.  Covenant Regarding the Merger.  Purchaser covenants and agrees that promptly
following exercise of the Option it shall cause Purchaser, Merger Sub and the
Company to consummate the Merger in accordance with Minnesota Statutes, Section 302A.621.  In addition, Purchaser shall reaffirm this
covenant as a representation in its Notice hereunder and at the Closing
hereunder.

 

5.  Representations and Warranties of the
Company.  The Company hereby
represents and warrants (such representations and warranties being deemed
repeated at and as of any Closing hereunder) to Purchaser and Merger Sub as
follows:

 

2

 

(a) 
Due Incorporation.  The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota and has the requisite corporate power and
authority to enter into and perform this Agreement.

 

(b) 
Due Authorization, etc.  This Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company.  This Agreement has been duly executed and
delivered by a duly authorized officer of the Company and constitutes the valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.

 

(c) 
Company’s Capital Stock.  The Company has
taken all necessary corporate action to authorize and reserve for issuance upon
exercise of the Option the Optioned Shares, and at all times from the date
hereof through the date of termination of this Agreement will keep reserved for
issuance upon exercise of the Option that number of shares of Common Stock that
Merger Sub is then entitled to purchase pursuant to the Option.  The shares of Common Stock to be issued upon
due exercise, in whole or in part, of the Option shall, when issued, be validly
issued, fully paid and non-assessable, and shall be delivered free and clear of
all claims, liens, encumbrances and security interests, including any preemptive
right of any of the stockholders of the Company.  Upon closing of the Option, the Optioned
Shares will be deemed to be owned by Merger Sub for purposes of Section 302A.621
of the Minnesota Business Corporation Act.

 

6.  Representations and Warranties of Merger
Sub and Purchaser.  Purchaser and
Merger Sub hereby jointly and severally represent and warrant (such
representations and warranties being deemed repeated at and as of any Closing
hereunder) to the Company as follows:

 

(a) 
Due Incorporation.  Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New Jersey, and Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota, and each has the requisite corporate power and authority to enter
into and perform this Agreement.

 

(b) 
Due Authorization, etc.  This Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Merger Sub and
Purchaser.  This Agreement has been duly
executed and delivered by a duly authorized officer of Merger Sub and of
Purchaser, and constitutes the valid and binding obligation of Merger Sub and
of Purchaser, enforceable against each in accordance with its terms.

 

(c) 
Distribution.  Merger Sub acknowledges
and agrees that the Optioned Shares have not been registered, and that the
Company is under no obligation to register the Optioned Shares, under the Act
or any state securities laws.  Merger Sub
is acquiring the Option and will acquire the Optioned Shares to be purchased
upon exercise of the Option for its own account and not with a view to the
distribution thereof within the meaning of the Act.  The foregoing representation and warranty
shall be made by any assignee under Section 8(a) and shall be binding
upon such assignee.

 

3

 

7.  Adjustment Upon Changes in Capitalization.  In the event of any change in the shares of
the Company’s capital stock by reason of any stock dividend, stock split,
merger, recapitalization, combination, conversion, exchange of shares, issuance
of shares (or agreements or commitments to issue shares) or the like, the
number of Optioned Shares subject to the Option and the purchase price per
Optioned Share shall be appropriately and equitably adjusted.

 

8.  Miscellaneous.

 

(a) 
Assignment.  This Agreement shall
not be assigned by Merger Sub, except to Purchaser or a wholly-owned subsidiary
of Purchaser, without the prior written consent of the Company.

 

(b) 
Amendments.  This Agreement may
not be modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto.

 

(c) 
Survival of Representations, etc. 
All representations, warranties and agreements in this Agreement shall
survive the Closing.

 

(d) 
Notices.  All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by facsimile, receipt confirmed, or on the
next business day when sent by overnight courier or on the second succeeding
business day when sent by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified by like notice):

 

If to the Company:

 

Ault
Incorporated

7105 Northland Terrace

Minneapolis, MN  55428-1028

Attention: Frederick Green

Facsimile: 763-592-1911

 

With a copy (which shall not
constitute notice) to:

 

Lindquist & Vennum
P.L.L.P.

4200 IDS Center

80 South Eight Street

Minneapolis, MN 55402-2205

Attention: Richard Primuth

Facsimile: (612) 371-3207

 

If to Purchaser or Merger Sub,
to:

 

SL Industries, Inc.

520 Fellowship Road

Suite A114

Mount Laurel, New Jersey  08054

Attention: James Taylor

Facsimile: 856-727-1683

 

4

 

With a copy (which shall not
constitute notice) to:

 

Olshan Grundman Frome
Rosenzweig & Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York  10022

Attention: Steven Wolosky, Esq.

Facsimile: (212) 451-2222

 

(e) 
Governing Law.  This Agreement
shall be governed by and construed in accordance with the substantive law of
the State of Minnesota without giving effect to any conflict of laws principles
thereof that might require the application of the law of another jurisdiction.

 

(f) 
Counterparts.  This Agreement may
be executed in several counterparts, each of which shall be an original, but
all of which together shall constitute one and the same agreement.

 

(g) 
Effect on Headings.  The Section headings
herein are for convenience only and shall not effect the construction hereof.

 

(h) 
Entire Agreement.  This Agreement
constitutes the entire agreement among the parties with respect to the matters
referred to herein and supersedes all prior agreements or understandings, both
written or oral, among the parties, or any of them, with respect to the subject
matter hereof.

 

(i) 
Specific Performance.  Merger Sub,
Purchaser and the Company each acknowledge and agree that the other would be
irreparably damaged in the event any of the provisions of this Agreement were
not performed by it in accordance with the specific terms or were otherwise
breached.  The Company agrees that if for
any reason the Company shall have failed to issue Optioned Shares or to perform
any of its other obligations under this Agreement, then Merger Sub and
Purchaser shall be entitled to specific performance and injunctive and other equitable
relief and the Company agrees to waive any requirement for the securing or
posting of a bond in connection with the obtaining of any such injunctive or
other equitable relief.  This provision
is without prejudice to any other rights Merger Sub and Purchaser may have
against the Company for any failure to perform its obligations under this
Agreement. Purchaser and Merger Sub agree that if for any reason Purchaser
shall have failed to fulfill the covenant specified in Section 4 above or
failed to perform any of their other obligations under this Agreement, then the
Company shall be entitled to specific performance and injunctive and other
equitable relief and Merger Sub and Purchaser agree to waive any requirement
for the securing or posting of a bond in connection with the obtaining of any
such injunctive or other equitable relief. 
This provision is without prejudice to any other rights the Company may
have against Merger Sub and Purchaser for any failure to perform their
obligations under this Agreement.

 

5

 

IN
WITNESS WHEREOF, Purchaser, Merger Sub and the Company have caused this Stock
Option Agreement to be duly executed on the day and year first above written.

 

	
   

  	
  SL INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James C. Taylor

  	
   

  
	
   

  	
  Name:

  	
  James C. Taylor

  
	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LAKERS ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James C. Taylor

  	
   

  
	
   

  	
  Name:

  	
  James C. Taylor

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AULT INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frederick M. Green

  	
   

  
	
   

  	
  Name:

  	
  Frederick M. Green

  
	
   

  	
  Title:

  	
  President and Chief Executive
  Officer

  

 

6

 

EXHIBIT A

 

NON-TRANSFERABLE PROMISSORY NOTE

 

FOR
VALUE RECEIVED, Lakers Acquisition Corp., a Minnesota corporation (“Maker”),
hereby promises to pay to Ault Incorporated, a Minnesota corporation, the
principal amount of
[               ]
($                    )],
with no interest, on                               
[six months after the date of exercise] by wire transfer of immediately available
funds to an account designated by the payee. 
The amount due hereunder shall be payable in money of the United States
of America lawful at such time for the payment of public and private debts.

 

Maker
hereby waives presentment, diligence, protest and demand, notice of protest,
demand, dishonor and nonpayment of this Note, and all other notices of any kind
in connection with the delivery, acceptance, performance, default or
enforcement of this Note.

 

This
Note shall be governed by and construed in accordance with the laws of the
State of Minnesota without giving effect to conflict of law principles thereof
that might require the application of the law of any other jurisdiction.

 

IN
WITNESS WHEREOF, the Maker has caused this Note to be executed as of the         day
of            200  .

 

	
   

  	
  LAKERS ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}]]