SUBSCRIPTION AND STOCKHOLDERS AGREEMENT
AGREEMENT dated as of July 2, 1986 (the "Agreement") by and among
SED HOLDING COMPANY, INC., a Delaware corporation ("Holding"), ZS SED L.P., a
Delaware limited partnership ("ZS/SED"), ZS SOUTHERN L.P. a Delaware limited
partnership ("ZS Southern"), and SED Associates, a Georgia general partnership
(the "Diamond Partnership") (ZS/SED, ZS Southern and the Diamond partnership
are herein sometimes referred to collectively as the "Subscribers").
WHEREAS, SED Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Holding ("Newco"), and Holding have entered into an
Asset Purchase Agreement dated as of June 27, 1986 (the "Purchase Agreement")
with Southern Electronics Distributors, Inc., a Georgia corporation ("SED"),
and the shareholders of SED, providing for the purchase by Newco of
substantially all of the assets, properties, rights and business of SED; and
WHEREAS, the authorized capital stock of Holding consists of
1,000,000 shares of Common Stock, par value $0.01 per share (the "Common
Stock"), and 129,500 shares of 6% Cumulative Preferred Stock, par value $1.00
per share (the "Preferred Stock"); and
WHEREAS, Holding intends to issue and sell to the Diamond
Partnership 39,900 shares of Common Stock, to ZS/SED 30,100 shares of Common
Stock and 70,707 shares of Preferred Stock and to ZS Southern 30,000 shares of
Common Stock and 58,793 shares of Preferred Stock, upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase of Shares.
1.1. Issuance of Stock. At the Closing, Holding shall sell
to:
(a) Each Subscriber, and each Subscriber shall
purchase from Holding, that number of shares of Common Stock set forth
opposite such Subscriber's name on Schedule I to this Agreement (the
"Subscription Amount") at a purchase price of $21.05263 per share of Common
Stock payable in cash except that ZS Southern shall purchase said shares of
the Common Stock for consideration to include a promissory note in the
principal amount of $105,263.00 bearing interest at the rate of 7-1/4% per
annum made in favor of Holding;
(b) ZS/SED, and ZS/SED shall purchase from Holding,
70,707 shares of Preferred Stock for an aggregate purchase price of $1,092,559
payable in cash; and
(c) ZS Southern, and ZS Southern shall purchase from
Holding, 58,793 shares of Preferred Stock for an aggregate purchase price of
$907,441 payable in cash.
1.2. Definition of "Shares". The shares of Common Stock to
be acquired by the Subscribers pursuant to this Agreement are hereinafter
sometimes referred to as the "Common Shares". The shares of Preferred Stock
to be acquired by ZS/SED and ZS Southern pursuant to this Agreement are
hereinafter sometimes referred to as the "Preferred Shares". The Common
shares and the Preferred Shares are hereinafter sometimes collectively
referred to as the "Shares".
2. Closing; Time and Date. The issuance and delivery of the
Common Shares to the Subscribers and the Preferred Shares to ZS/SED and ZS
Southern and all other transactions contemplated hereby and by the Purchase
Agreement shall take place at a closing (the "Closing") at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & White, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 A.M. New
York time, on June 30, 1986, or at such other place or such other time or date
as Holding and the Subscribers may agree in writing. The time and date upon
which the Closing occurs is herein called the "Closing Date".
3. Representations and Warranties of Holding. Holding represents
and warrants to the Subscribers that:
3.1. Business of Holding; Newco. At the time of the
Closing, Holding will own all of the issued and outstanding shares of stock of
Newco. Neither Holding nor Newco will have any liabilities of any nature
whatsoever at the time of the Closing, except for (i) the expenses which each
has paid or incurred in connection with its incorporation, organization and
financing, and for legal and audit services and any other miscellaneous
expenses incident to its pre-operating period; (ii) the liabilities of Newco
and Holding under the Purchase Agreement; and (iii) the liability of Holding
to repay indebtedness evidenced by Notes issued to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Incorporated (or an affiliate thereof) ("DBL"), and other certain investors
selected by DBL. Neither Holding nor Newco owns as of the date hereof any
real or tangible personal property and neither of them has entered into, or
intends to enter into before or at the Closing, any material contract or
agreement other than this Agreement and the agreements and instruments
described above in this Section 3.1 or provided for in such agreements or
instruments or contemplated thereby.
3.2. Due Incorporation. Each of Holding and Newco is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and each of them has all requisite corporate
power and authority to effectuate the transactions contemplated by this
Agreement.
3.3. Subscriptions, Options, Etc. Other than as provided in
this Agreement, no subscription, warrant, option or other right to purchase or
acquire any shares of any class of stock of Holding, any security convertible
into or exchangeable for any such shares, is outstanding or will be
outstanding on the Closing Date.
3.4. Authority to Execute and Perform Agreement. Holding
has full power.and authority to (i) enter into this Agreement, (ii) issue and
deliver the Shares and (iii) incur and perform fully the obligations provided
for herein, all of which have been duly authorized by all necessary corporate
action. This Agreement has been duly executed and delivered and is the valid
and binding obligation of Holding enforceable in accordance with its terms,
except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally and by principles of equity regarding the
availability of remedies. The execution and delivery of this Agreement and
the performance by Holding of this Agreement in accordance with its terms and
conditions will not: (x) require the approval or consent of any governmental
or regulatory body or the approval or consent of any other person except for
approvals or consents required pursuant to securities laws of any State within
the United States or any jurisdiction outside of the United States; or
(y) conflict with or result in any breach or violation of any of the terms and
conditions of, or constitute (or with notice or lapse of time or both
constitute) a default under, any certificate of incorporation, by-law,
statute, regulation, order, judgment or decree of or applicable to Holding, or
any instrument, contract or other agreement to which Holding is a party or by
or to which Holding is bound or subject.
3.5. Authorized Capital Stock. The authorized capital stock
of Holding at the time of Closing will consist of 1,000,000 shares of Common
Stock, 100,000 of which will be issued at the Closing pursuant hereto, and
129,500 shares of Preferred Stock, 129,500 of which will be issued at the
Closing pursuant hereto. The Common Stock and the Preferred Stock shall have
the rights and preferences set forth in the Certificate of Incorporation of
Holding (including the Certificate of Designation, Powers, Preferences and
Rights of the Preferred Stock), a copy of which, together with the By-Laws of
Holding, is attached as Exhibit A hereto.
3.6. Valid Issuance. The Shares, when issued and delivered
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable.
3.7. Proceedings. There is no action, proceeding or
investigation pending or, to the knowledge of Holding, threatened, nor is
there any basis, to its knowledge, for any action, proceeding or
investigation, against it or any of its properties or assets.
3.8. Compliance with Laws. Holding and Newco are in
compliance with all applicable laws, rules and regulations other than laws,
rules or regulations the failure to comply with which cannot reasonably be
expected to have consequences which would materially and adversely affect the
business, operations or condition (financial or otherwise) of Holding and
Newco, taken as a whole.
3.9. Confidential Memorandum, etc. The Confidential
Memorandum was prepared, and each amendment or supplement to the Confidential
Memorandum (as defined in Section 4.2.4), will be prepared, with reasonable
care on the basis set forth therein. The Confidential Memorandum does not
contain, and no amendment or supplement thereto will contain, any untrue
statement of a material fact, and does not omit, and no amendment or
supplement thereto will omit, to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading (it being understood that no representation or
warranty is made concerning any financial projections contained therein except
that such projections were reasonably based upon past financial performance
and reasonable estimates and assumptions at the time made as to future
performance). Subsequent to the date of the Confidential Memorandum, there
has been no material adverse change in the financial conditions, business or
operation of Holding or Newco.
4. Representations and Warranties of Subscribers.
Each Subscriber for itself represents and warrants to Holding that:
4.1. Securities Act Restrictions. Such Subscriber will not
sell, assign, transfer, pledge or otherwise dispose of any of the Shares
acquired by such Subscriber hereunder unless and until the same are registered
under the Securities Act of 1933, as amended (the "Securities Act"), or unless
an exemption from such registration is available and until Holding shall have
received a written opinion of counsel satisfactory to Holding that the
disposition is in compliance with the requirements of the Securities Act and
any applicable state securities laws.
4.2. Investor Status
4.2.1. Such Subscriber is fully aware that the
Shares subscribed for hereunder have not been registered under the Securities
Act, or under any applicable State securities laws. Such Subscriber further
understands that the Shares being sold to him are being sold in reliance on
the exemptions from the registration requirements of the Securities Act
provided by Section 4(2) thereof, or Regulation D promulgated thereunder, and
in reliance on exemptions from the registration requirements of certain State
securities laws, on the grounds that the offering involved has been limited to
a limited number of sophisticated potential investors, thirty-five or fewer of
which do not qualify as accredited investors under the requirements of
Section 501(a) of Regulation D. If so indicated on Schedule I hereto such
Subscriber is such an accredited investor under Section 501(a).
4.2.2. Such Subscriber is acquiring the Shares for
his own account as principal and not with a view to resale or distribution in
violation of applicable securities laws.
4.2.3. Such Subscriber is able to bear the economic
risk of the investment in the Shares and has such knowledge and experience in
financial and business matters, and knowledge of the business of Holding and
Newco after giving effect to the transactions contemplated by the Purchase
Agreement, as to be capable of evaluating the merits and risks of the
prospective investment.
4.2.4. Such Subscriber:
(i) has been furnished, has carefully read, and
has relied solely (except as indicated in
subparagraph (ii) below) on the information
contained in the Memorandum Relative to the
Purchase of Southern Electronics Distributors,
Inc. dated June, 1986 (including all exhibits
and all amendments or supplements thereto, if
any) (the "Confidential Memorandum"); and
(ii) has been given the opportunity to ask
questions of, and receive answers from, officers of
Holding concerning the terms and conditions of the
offering and to obtain such additional information which
Holding possesses or can acquire without unreasonable
effort or expense that is necessary to verify the
accuracy of the information contained in the
Confidential Memorandum or information that was
otherwise provided, and he has not been furnished any
offering literature or prospectus other than the
Confidential Memorandum.
4.2.5. Such Subscriber has received all information
he has requested.
4.2.6. Such Subscriber recognizes that the purchase
of the Shares involves substantial risks, including those set forth in the
Confidential Memorandum. In deciding whether to purchase the Shares
subscribed for herein, such Subscriber has weighed these risks against the
potential return. Considering all relevant factors in his financial and
personal circumstances, such Subscriber is able to bear the economic risk of
the investment. Such Subscriber has adequate means of providing for his
current needs and possible personal contingencies and has no need in the
foreseeable future for liquidity of his investment in the Shares.
4.2.7. Such Subscriber has sought such accounting,
legal and tax advice as he has considered necessary to an informed investment
decision with respect to his investment in the Shares.
4.2.8. Such Subscriber is aware that no Federal or
State agency has (i) made any finding or determination as to the fairness of
any aspect of the investment in the Shares or (ii) passed on or endorsed the
merits of the offering of the Shares as contemplated by the Confidential
Memorandum or the accuracy or adequacy of the Confidential Memorandum.
4.2.9. Such Subscriber understands that transfer of
the Shares is further restricted by the provisions of Section 5.3.
4.3. Legend, Etc. Such Subscriber acknowledges and agrees
that (i) the certificates representing the Shares will contain the legend
referred to in Section 5.1, (ii) that, except as provided in Section 9, such
Subscriber will have no right to require registration of the Shares and must
bear the economic risks of such Subscriber's investment for an indefinite
period of time, and (iii) that there is not now and there may never be any
public market for the Shares and such Subscriber cannot now and may never be
able to avail itself of the benefits of Rule 144 adopted by the Securities and
Exchange Commissi on with respect to the resale of the Shares.
4.4. Authority to Execute and Perform Agreement. Such
Subscriber has the full legal right and power and all authority and approval
required to enter into, execute and deliver this Agreement and to perform
fully his obligations hereunder. This Agreement has been duly executed and
delivered and is the valid and binding obligation of such Subscriber enforce-
able in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally and by principles of equity regarding the availability of remedies.
The execution and delivery of this Agreement and the performance by such
Subscriber of this Agreement in accordance with its terms and conditions will
not: (i) require the approval or consent of any governmental or regulatory
body or the approval of or consent of any other person; or (ii) conflict with
or result in any breach or violation of any of the terms and conditions of, or
constitute (or with notice or lapse of time or both constitute) a default
under, any, statute, regulation, order, judgment or decree of or applicable to
such Subscriber, or any instrument, contract or other agreement to which such
Subscriber is a party or by or to which such Subscriber is bound or subject.
5. Transfer of Shares.
5.1. Securities Act Legend. Each stock certificate
evidencing the Shares, including any such stock certificate representing
shares issued to subsequent transferees as permitted hereunder, shall (unless
otherwise permitted by this Agreement) be stamped or otherwise imprinted with
a legend in substantially the following form:
"The securities represented hereby have not been
registered under the Securities Act of 1933, as amended,
or under the securities laws of any State; and may not
be sold, assigned, transferred, pledged or otherwise
disposed of except in compliance with the requirements
of such Act or such laws and until the Corporation shall
have received the written opinion of counsel to the
Corporation to that effect."
5.2. Securities Act Compliance. Each Subscriber and
subsequent transferee of a Subscriber who is a holder of a stock certificate
evidencing the Shares which bears the restrictive legend set forth in
Section 5.1 above (the "Restricted Shares"), and who proposes to transfer any
Restricted Shares, shall give written notice to Holding of such Subscriber's
intention to effect such transfer. Each such notice shall describe the manner
and circumstances of the proposed sale or other disposition in sufficient
detail and may be accompanied by an opinion of counsel to the Subscriber.
Promptly upon receipt of such notice, Holding shall present a copy thereof
(together with any accompanying opinion of counsel to the Subscriber) to its
counsel, and, subject to Section 5.3, the following provisions shall apply:
5.2.1. If, in the opinion of counsel to such
Subscriber, satisfactory in form and substance to Holding and its counsel, or
if such notice was not accompanied by an opinion of counsel to the Subscriber,
then, if, in the opinion of counsel to Holding, the proposed sale or other
disposition may be effected without registering the Restricted Shares involved
under the Securities Act or under State securities laws, such Subscriber shall
be entitled to transfer such Restricted Shares in accordance with the terms of
the notice delivered to Holding. Holding will advise the Subscriber, within
10 business days after submission of such notice, whether such Subscriber is
entitled to so transfer the Restricted Shares. If the Subscriber is entitled
to so transfer, he shall submit the stock certificates or certificates
evidencing the Restricted Shares to be transferred to Holding in proper form
for transfer and accompanied by appropriate instruments of transfer.
Restricted Shares thus transferred (and each of the stock certificates
evidencing any untransferred balance of the Shares not so transferred) shall
bear the restrictive legend set forth in Section 5.1, unless, in the opinion
of both such counsel (or counsel to Holding if the Subscriber did not present
an opinion of his counsel), such legend is not required by the applicable
provisions of the Securit ies Act or State securities laws; and
5.2.2. If in the opinion of either of such counsel
(or counsel to Holding if the Subscriber did not present an opinion of his
counsel), the proposed sale of other disposition cannot be effected without
registering the Shares involved under the Securities Act or State securities
laws, such Subscriber shall not offer to sell, sell or otherwise dispose of
such Restricted Shares unless and until such Restricted Shares have been
registered under the Securities Act or State securities laws for such purpose.
5.3. Restrictions on Transfer; Legend. No Subscriber shall
transfer any Common Shares to any person unless such transfer is made: (i) to
a Permissible Transferee in accordance with the terms and provisions of
Section 5.4; (ii) in accordance with the terms and provisions of Section 9; or
(iii) in accordance with the terms and provisions of Sections 6, 7 and 8. Any
transferee of Common Shares who receives Common Shares pursuant to
Section 5.4, Section 6, Section 7 or Section 8 shall take and hold such Common
Shares subject to this Agreement and to all the obligations and restrictions
upon the transferor Subscriber, shall observe and comply with this Agreement
and with such obligations and restrictions and shall, as a condition of
transfer, execute and deliver to Holding an agreement in form and substance
satisfactory to Holding pursuant to which such transferee agrees to be bound
by all of the provisions hereof. Each certificate evidencing Common Shares
shall bear a legend in substantially the following form:
"The securities represented hereby are subject to
restrictions on transfer contained in a Subscription and
Stockholders Agreement dated as of July 2, 1986, a copy
of which is on file at the principal office of the
Corporation."
5.4. Permissible Transfers. Notwithstanding any provision
to the contrary contained in this Agreement:
5.4.1. Any Subscriber (which term includes
Permissible Transferees) may transfer Restricted Shares to: (i) a spouse or
any lineal ancestor or descendant; (ii) the trustee or trustees of a trust or
trusts at any time established for the primary benefit of any one or more of
the Subscribers, any limited or general partner of any of the Subscribers or
the spouse or any lineal ancestor or descendant of such Subscriber or any
limited or general partner of such Subscriber, provided that each and every
trustee who may vote any Restricted Shares shall be such Subscriber or a
person referred to in this Section 5.4.1 or a bank or trust company in its
capacity as a trustee permitted hereunder; (iii) a partnership or
partnerships, all of the general and limited partners of which are
Subscribers, limited or general partners of the Subscribers and/or one or more
of the persons referred to in this Section 5.4.1 (other than a bank or trust
company in its capacity as a trustee permitted hereunder); or (iv) any other
Subscriber; provided, that (x) any such trust or partnership shall have no
terms inconsistent with the obligations of a Subscriber under this Agreement,
and (y) as a condition of transfer, the Permissible Transferee executes and
delivers to Holding an agreement in form and substance reasonably satisfactory
to Holding pursuant to which such Permissible Transferee agrees to be bound by
all of the provisions hereof. Any person receiving any Restricted Shares in a
transaction pursuant to this Section 5.4.1 is herein referred to as a
"Permissible Transferee" with respect to such transaction. If any Restricted
Shares are transferred to a Permissible Transferee, such Permissible
Transferee shall take and hold such Restricted Shares, and such Restricted
Shares shall be, subject to this Agreement and to the rights, obligations and
restrictions provided herein with respect to the original Subscriber of such
Restricted Shares as of the date of this Agreement, as if such Permissible
Transferee were such original Subscriber.
5.4.2. Any transfer of Restricted Shares otherwise
permitted by this Section 5.4 shall not be made unless in compliance with all
applicable laws, including, without limitation, the securities laws of the
United States and the States thereof.
5.5. Failure to Comply. No purported transfer of any
Restricted Shares in violation of this Agreement shall be of any force or
effect, and no such transfer shall be made or recorded on the books of
Holding.
6. Rights of First Refusal.
6.1. Right of First Refusal. Except as provided in
Section 5.3 and until Holding shall have become a reporting company pursuant
to Section 12 or Section 15 of the Securities Exchange Act of 1934, as amended
(the "1934 Act") (hereinafter referred to as a "Reporting Company"), no
Subscriber shall transfer, or accept an offer to transfer any Common Shares to
any person unless :
6.1.1. The proposed transferor Subscriber shall have
received a bona fide offer in writing from a third party (a "Bona Fide
Offer"), which Bona Fide Offer shall provide for the purchase of the
transferor Subscriber's Common Shares in exchange for cash or notes or a
combination of both, and shall have first given written notice (the "Transfer
Notice") to Holding and the non-selling Subscribers stating (i) such
Subscriber's intention to transfer all or a portion of his Common Shares,
(ii) the number of Common Shares that such Subscriber proposes to transfer,
(iii) the name and address of the proposed transferee, and (iv) the offered
purchase price per share of the Common Shares to be transferred, expressed
solely as a dollar amount, and the manner of payment thereof. If the proposed
transferor Subscriber fails to give the Transfer Notice with respect to any
such proposed transfer of his Common Shares, then any such purported transfer
shall be void and shall not be made or recorded on the books of Holding.
6.1.2. Subject to Section 6.1.4, upon the giving of
a Transfer Notice, Holding shall have the irrevocable and exclusive option,
but not the obligation, to purchase all or less than all of the Common Shares
to be transferred. Such option shall be exercised by so notifying the
proposed transferor Subscriber, with copies to all other Subscribers, within
30 days of the delivery of the Transfer Notice.
6.1.3. Subject to Section 6.1.4, in the event that
Holding shall fail to give a notice provided for in Section 6.1.2 or Holding
shall elect to purchase less than all of the Common Shares to be transferred,
each non-selling Subscriber shall have the irrevocable and exclusive option,
but not the obligation, to purchase the Common Shares to be transferred which
Holding shall not have elected to purchase (the "Remaining Common Shares").
Such option shall be exercised by notifying the proposed transferor Subscriber
as to such number of the Remaining Common Shares which the notifying
Subscriber intends to purchase, with copies to all other Subscribers, within
60 days of the delivery of the Transfer Notice. If the non-selling
Subscribers shall have elected to purchase a number of the Remaining Common
Shares which, in the aggregate, exceeds the number of the Remaining Common
Shares available, such Remaining Common Shares shall be allocated, pro rata,
in the same proportion that the number of Common Shares owned by each such
non-selling Subscriber bears to the total number of Common Shares owned by all
such non-selling Subscribers on the date of delivery of the Transfer Notice;
provided, however, that no non-selling Subscriber shall be required or
entitled to purchase a number of the Remaining Common Shares greater than the
number of the Remaining Common Shares which such non-selling Subscriber shall
have elected to purchase pursuant to the notice required to be delivered under
this Section 6.1.3. Failure by any non-selling Subscriber to deliver the
notice required by this Section 6.1.3 shall be deemed an election not to
purchase the Remaining Common Shares.
6.1.4. In the event that the parties hereto fail to elect to
purchase all of the Common Shares to be transferred by the proposed transferor
Subscriber in accordance with Section 6.1.2 and Section 6.1.3, the elections,
if any, made pursuant to said Sections shall be void and shall have no force
and effect; whereupon, subject to Sections 7 and 8, the proposed transferor
Subscriber may accept the Bona Fide Offer and effect the proposed transfer
with respect to said Common Shares on the terms of such Bona Fide Offer within
a period of 90 days following the delivery of the Transfer Notice (the "Third
Party Closing Date"). If the proposed transfer is not completed on or before
the Third Party Closing Date, then the Bona Fide Offer shall be deemed
withdrawn and no transfer shall be effected except pursuant to a new Bona Fide
Offer and other wise in accordance with this Section 6.
6.1.5. Unless the transferor Subscriber and the
party or parties hereto exercising an option to purchase the Common Shares
otherwise agree, if the Common Shares to be transferred are purchased by a
party hereto pursuant to this Section 6, then such purchase or purchases shall
be completed (the "Section 6 Closing") at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & White
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M. local time on the
date 90 days following the delivery of the Transfer Notice or at such other
time as agreed in writing by all parties to the Agreement (the "Section 6
Closing Date").
6.2. First Refusal Price. Any Common Shares purchased by a
party hereto pursuant to this Section 6 shall be purchased at a purchase price
per share equal to the purchase price per share set forth in the proposed
transferor Subscriber's Bona Fide Offer.
6.3. Payment, Delivery of Certificates, etc.
6.3.1. If any party hereto purchases any Common
Shares pursuant to the provisions of this Section 6, at the Section 6 Closing
such party shall pay the purchase price in the manner set forth in the Bona
Fide Offer as disclosed in the Transfer Notice (if notes are provided for in
the Bona Fide Offer then the notes shall be the notes of such party hereto).
6.3.2. At the Section 6 Closing, the transferor
Subscriber shall deliver to the party hereto, duly endorsed for transfer with
all required stock transfer tax stamps affixed thereto, certificates for all
of the Common Shares being purchased by such party and sold at such closing
and, in addition, such signature guarantees and other documents as may be
reasonably requested in order to confirm the transferor Subscriber's title to
such Common Shares and his authority to act in connection with the sale
thereof.
7. Tag-Along.
7.1. Transfers Subject Hereto. Except as provided in
Section 5.3 and until the date that Holding shall have become a Reporting
Company, no Subscriber shall voluntarily transfer any Common Shares to any
person unless such transfer is made in accordance with this Section 7.
7.2. Right of Tag-Along. In the event that any Subscriber
intends to transfer all or any portion of such Subscriber's Common Shares to
any person not a party hereto pursuant to a Bona Fide Offer in accordance with
Section 6:
7.2.1. The proposed transferor Subscriber shall
afford each of the other Subscribers (the "Other Subscribers") the opportunity
to sell, in the same transaction contemplated by the Bona Fide Offer, at the
same price and on the same terms, the same proportion of the number of Common
Shares being sold pursuant to the Bona Fide Offer as the total number of
Common Shares owned by each such Other Subscriber bears to the total number of
outstanding shares of Common Stock on such date.
7.2.2. The Other Subscribers shall, within 60 days
of the date of delivery of the Transfer Notice pursuant to Section 6, notify
the proposed transferor Subscriber of their election to sell their Common
Shares pursuant to Section 7.2.1. The failure by any of the Other Subscribers
to deliver a notice pursuant to this Section 7.2.2 shall be deemed an election
by such Other Subscriber not to sell the Common Shares owned by him.
8. Right of Approval.
8.1. Transfers Subject Hereto. Except as provided in
Section 5.3, during the period commencing on the date of Closing and ending on
the earlier of (i) the sixth anniversary thereof or (ii) the date that Holding
shall have become a Reporting Company, the Diamond Partnership shall not
voluntarily transfer any Common Shares to any person unless such transfer is
made in accordance with this Section 8.
8.2. Right of Approval. In the event that the Diamond
Partnership intends to transfer all or any portion of such Subscriber's Common
Shares to any person not a party hereto pursuant to a Bona Fide Offer in
accordance with Section 6, such transfer shall be subject to the prior written
consent and approval of Holding. The Diamond Partnership shall provide such
information regarding the proposed purchaser, including, without limitation,
such purchaser's financial status, as Holding may reasonably request. Holding
shall deliver a notice of consent and approval or denial of consent and
approval under this Section 8.2 to the Diamond Partnership within 70 days of
the date of delivery of the Transfer Notice pursuant to Section 6. The
failure by Holding to deliver a notice pursuant to this Section 8.2 shall be
deemed to be a consent and approval by Holding to the proposed transfer of
Common Shares with respect to which such notice is required. If Holding
delivers a notice of denial of consent and approval pursuant to this
Section 8.2, any purported transfer in violation thereof shall be void and
shall not be made or recorded on the books of Holding. For the purposes of
this Section 8, the term "Diamond Partnership" shall be deemed to include
Permissible Transferees of the party included in such term.
9. Registrations Under the Securities Act.
9.1. Registration by Holding. In the event that at any time
while Restricted Shares are outstanding, Holding proposes to file a
Registration Statement under the Securities Act registering shares of its
Common Stock of any class on a form other than Form S-4, Form S-8 or Form S-18
(or such other forms as the Securities Exchange Commission may hereafter
promulgate for registration of securities in transactions for which Form ▇-▇,
▇▇▇▇ ▇-▇ or Form S-18 may be used as of the date hereof), it will give written
notice to each holder of Common Shares at least 30 days prior to the date of
filing of the proposed Registration Statement. Upon written request by any
such holder within 15 days after receipt of such notice, Holding will include
in the securities to be registered by such Registration Statement all of the
Common Shares of Holding that such holder desires to sell, subject to the
following:
9.1.1. Holding will pay the expense of such
registration, except that each holder of Common Shares whose securities are
included in such registration shall pay all underwriting discounts and
commissions applicable to his securities and all legal fees and expenses of
his own counsel, if any; provided that if the expense of such registration is
being borne by a person other than Holding, each holder of Common Shares whose
securities are included in such registration shall pay his pro-rata share of
the incremental expense of his securities being included in such registration.
9.1.2. Holding shall have received (i) an opinion of
counsel to such holder or of counsel to Holding stating that, in connection
with a public sale of the securities proposed to be sold or otherwise disposed
of by the holder of Common Shares, registration under the Securities Act of
such securities is required as a matter of law or (ii) an opinion of an
underwriter of recognized national standing that, in order to effect the
proposed sale or disposition of the holder's securities, registration is
desirable even if not legally necessary.
9.1.3. If such Registration Statement is for a
prospective underwritten offering, the Subscriber agrees to sell his
securities, if Holding so requests, on the same basis as the other securities
of the same class covered by such Registration Statement are being sold.
9.1.4. Holding may withdraw any such Registration
Statement before it becomes effective or postpone the offering of securities
contemplated by such Registration Statement without any obligation to the
holder of any Restricted Shares. If such Registration Statement is for a
prospective underwritten offering by Holding for its own account and in the
reasonable opinion of the prospective underwriters or Holding the inclusion in
the Registration Statement of part or all of the securities requested by the
holder or holders of Common Shares would be detrimental to the proposed
offering, Holding may (i) reduce the amount of securities to be included from
all holders who requested to be included (in making such reduction, each
holder requesting inclusion shall have Common Shares owned by him included in
the Registration Statement in the same proportion that his total holdings at
the time of Common Shares bears to the total holdings of Common Shares of all
other holders requesting inclusion; provided, however, that such holder shall
not be required or entitled to have included in the Registration Statement a
number of Common Shares greater than the number of Common Shares which such
holder requested to be included pursuant to Section 9.1) or (ii) refuse to
include the securities held by all such holders.
9.2. Amendments. In connection with any Registration
Statement filed pursuant to Section 9.1, Holding shall file any post-effective
amendment or amendments to the Registration Statement which may be required
under the Securities Act during the period reasonably required to effect the
distribution contemplated thereby, provided that Holding shall not be required
to file any post-effective amendment to any Registration Statement described
in Section 9.1 more than 90 days after the effective date of the Registration
Statement.
9.3. Notification of Certain Events. During the period for
which Holding is required to file and keep effective a Registration Statement
pursuant to this Agreement, Holding shall furnish each selling security holder
with the number of copies of the Registration Statement (including exhibits)
and Prospectuses that he reasonably requests for the purposes contemplated by
the Securities Act. Holding shall notify each selling security holder selling
securities covered by such Registration Statement during the period such
Registration Statement is required to remain effective, or at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Registration
Statement or the Prospectus contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of circumstances then existing.
Each selling security holder agrees, upon receipt of such notice, forthwith to
cease making offers and sales of such securities pursuant to such Registration
Statement or deliveries of the Prospectus contained therein for any purpose
and to return to Holding the copies of such Prospectus not theretofore
delivered by such selling security holder. Subject to Section 9.2, at the
request of such selling security holder, Holding shall prepare and furnish to
such selling security holder a reasonable number of copies of any supplement
to or amendment of such Prospectus that may be necessary so that, as
thereafter delivered to the purchaser of such shares, such Prospectus shall
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the state-
ments therein not misleading in the light of circumstances then existing.
Holding shall promptly notify all selling security holders of any stop order
or similar proceeding initiated by state or federal regulatory bodies and,
subject to Section 9.2, use its best efforts to take all necessary steps
expeditiously to remove such stop order or similar proceeding.
9.4. Provision of Information. As a condition to Holding's
obligation under Section 9.1 and Section 9.2 to cause the Registration
Statement or an amendment to be filed or shares to be included in the
Registration Statement, the holders of any Common Shares that are to be
included in such Registration Statement shall provide such information and
execute such documents (including any customary agreement or undertaking
relating to expenses, indemnification or other matters contemplated by this
Agreement), as may reasonably be required by Holding in connection with such
registration.
9.5. Reports. After the first Registration Statement under
the Securities Act for any securities of Holding shall have become effective,
Holding will use its best efforts to file in timely fashion all reports
required to be filed by it pursuant to the 1934 Act and, upon the request of
any Subscriber, to furnish such Subscriber such information as may be
necessary to enable him to effect sales of his securities pursuant to Rule 144
of the Securities and Exchange Commission, as such rule may from time to time
be amended or supplemented.
9.6. New Certificates. As expeditiously as possible after
the effectiveness of any Registration Statement provided for in this
Section 9, Holding will deliver in exchange for any certificate evidencing
Common Shares so registered, new stock certificates not bearing the legends
set forth in Section 5.1 and Section 5.3 of this Agreement. In the event that
any of such securities remain unsold when such Registration Statement ceases
to be effective, the stock certificates not bearing such legends evidencing
such unsold securities shall be delivered to Holding in exchange for stock
certificates bearing such legends.
9.7. State Securities Laws. In connection with the offering
of any securities registered pursuant to this Section 9, Holding shall use its
best efforts to qualify or register the securities to be sold under the
securities or "Blue Sky" laws of such jurisdictions as may be reasonably
requested by the holder of any securities so registered; provided, however,
that Holding shall not be obligated to qualify as a foreign corporation to do
business under the laws of any such jurisdiction in which it is not then
qualified or to file any general consent to service of process. The expense
of such qualification or registration shall be borne by the party or parties
bearing the expenses of the related registration under the Securities Act.
9.8. Earnings Statement. Holding will, at its first
quarterly reporting date at which it can do so, make generally available to
its security holders an earnings statement covering a period of at least
twelve months beginning after the effective date of each Registration
Statement including any Common Shares.
9.9. Indemnification. In connection with any registration
of securities pursuant to this Agreement, to the extent permitted by law,
Holding shall indemnify the offering security holders and the offering
security holders shall indemnify Holding in the manner provided in this
Section 9.9.
9.9.1. Holding shall indemnify and hold harmless
each offering security holder, each officer, and each director, if any, of
such offering security holder, each underwriter, if any, for the sale or
distribution of such offering security holder's shares, and each person, if
any, who controls such offering security holder or underwriter within the
meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which such offering security holder,
officer, director, underwriter or controlling person may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, Prospectus or any amendment or supplement thereto,
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 the light of the circumstances under which they were
made, not misleading and, subject to Section 9.9.3 of this Agreement, Holding
shall reimburse each offering security holder, officer, director, underwriter
or controlling person for any legal or other expenses reasonably incurred by
such offering security holder, officer, director, underwriter or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Holding shall not be
required to indemnify and hold harmless or reimburse an offering security
holder, officer, director, underwriter or controlling person, as the case may
be, to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission in any document made in reliance upon and in
conformity with written information furnished to Holding by or on behalf of
such offering security holder, officer, director, underwriter or controlling
person for use in the preparation of such documents.
9.9.2. Each offering security holder shall indemnify
and hold harmless Holding, each of its directors and officers, each person, if
any, who controls Holding within the meaning of the Securities Act, and each
other offering security holder against all losses, claims, damages or
liabilities to which Holding or any such director or officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in any Registration Statement, Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the
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, in each case, to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with
information furnished to Holding by and on behalf of such offering security
holder for use in the preparation thereof; and subject to Section 9.9.3, such
offering security holder shall reimburse Holding for any legal or other
expenses reasonably incurred by Holding or any such director or officer or
controlling person in connection with investigating or defending against any
such loss, claim, damage, liability or action.
9.9.3. Promptly after receipt by an indemnified
party under Section 9.9.1 or Section 9.9.2, of notice of the commencement of
any action, the indemnified party shall notify the indemnifying party. The
failure to so notify the indemnifying party shall relieve the indemnifying
party from any liability hereunder with respect to the action if such failure
prevents the indemnifying party from contesting such action; provided,
however, that any such failure shall not relieve the indemnifying party from
any other liability which it may have to any other party. In case any such
action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to assume and control the defense of the action at its expense and
if the indemnifying party gives notice to such indemnified party of its
election to assume and control the defense, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense or investiga-
tion of the action.
9.9.4. If for any reason the indemnification
provided for in Sections 9.9.1 and 9.9.2 is unavailable to an indemnified
party as contemplated by said Sections, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of such loss, claim, damage or liability in such proportion as is appropriate
to reflect not only the relative benefits received by the indemnified party
and the indemnifying party, but also the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant equitable
considerations.
9.10. Standby.
9.10.1. Each of the Subscribers and Holding agree
that, with respect to any Registration Statement under the Securities Act that
Holding may file (other than on Form S-8), neither such Subscriber nor Holding
will sell any securities of Holding (whether or not such securities are
Restricted Shares, and however acquired) other than securities, if any, of
such Subscriber or Holding included in such Registration Statement, for a
period of at least 10 days before, and until 90 days after, the date such
Registration Statement is declared effective, provided that such Subscriber
shall be so limited only if notice of the effective date of such Registration
Statement has been given to such Subscriber.
9.10.2. Holding agrees that any registration rights
that it may grant with respect to its securities subsequent to the date of
this Agreement will provide that upon receipt of a request from a holder or
holders of Common Shares pursuant to Section 9.1 of this Agreement, Holding
shall not be obligated to file a Registration Statement under the Securities
Act at the request of any holder or holders of subsequently issued securities
of Holding until at least 90 days after the date on which the Registration
Statement filed pursuant to Section 9.1 of this Agreement becomes effective.
9.11. Mergers, etc. Holding agrees that, as a condition to
any merger, consolidation or the sale of all or substantially all of its
assets in exchange for securities of another company, it will use its
reasonable efforts in light of the circumstances then existing to require the
surviving, consolidated or purchasing corporation to enter into an agreement
to register the securities of such surviving, consolidated or purchasing
corporation, to be received by the Subscribers, on substantially the same
terms and provisions as are provided in this Agreement.
9.12. Assignment. The registration rights contained in this
Agreement shall be transferable by a Subscriber or transferee of a Subscriber
to any person who acquired Common Shares from such Subscriber or transferee
(including any pledgee but excluding any person who acquires such shares in a
transaction with respect to which a Registration Statement under the
Securities Act is effective at the time or in a sale complying with
Regulation A or Rule 144 of the Securities and Exchange Commission), provided
that (a) the transfer of the Common Shares was not in violation of this
Agreement and (b) such person agrees to be bound by the terms and provisions
of this Agreement.
10. Other Agreements.
10.1. Corporate Governance. The Board of Directors of
Holding (the "Board") shall consist of not less than three (3) directors, the
total of which shall at all times be an odd number (the "Directors"). The
Subscribers each agree that (i) so long as ZS/SED and ZS Southern together
continue to own shares of Common Stock in the aggregate representing at least
10 percent of the voting power of the capital stock of Holding, such number of
Directors as shall be the minimum necessary to constitute a majority of all
Directors shall be designees of ZS/SED and ZS Southern, (ii) so long as the
Diamond Partnership continues to own shares of Common Stock representing at
least 10 percent of the voting power of the capital stock of Holding, the
Directors other than the designees of ZS/SED and ZS Southern shall be
designees of the Diamond Partnership, (iii) the Subscribers will vote all
shares of capital stock of Holding held by them in favor of the designees of
ZS/SED and ZS Southern and the Diamond Partnership which each shall be
entitled to designate pursuant to the preceding clauses (i) and (ii), and
(iv) any executive committee of such Board will be constituted to give ZS/SED
and ZS Southern and the Diamond Partnership representation thereon at least
proportionate to their representation on the Board; provided, however, that
the agreement embodied in this Section 10 shall only be effective for a term
of 10 years commencing on the Closing Date. For the purposes of this
Section 10, the terms "ZS/SED", "ZS Southern", and "Diamond Partnership" shall
be deemed to include Permissible Transferees of the parties included in such
terms.
10.2. Employee Equity Incentive. Notwithstanding anything
to the contrary contained in this Agreement, the parties hereto acknowledge
and agree that as soon as practicable after the Closing Date, Holding will
establish an equity investment arrangement pursuant to which certain employees
of Holding and Newco designated by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be entitled to
purchase from Holding shares of Holding's Common Stock not to exceed 5% of the
sum of the aggregate number of shares of Holding's Common Stock issued to the
Subscribers on the Closing Date (the "Employee Common Stock"), and that in
connection therewith ZS Southern shall enter into an agreement with Holding on
or before the Closing Date pursuant to which Holding shall be entitled to
purchase from ZS Southern shares of Holding's Common Stock in an amount not to
exceed 5% of the sum of the aggregate number of shares of Holding's Common
Stock issued to the Subscribers on the Closing Date, such purchases to be
effected without compliance with any of the restrictions on transfer contained
in this Agreement. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ shall not be eligible to
receive Employee Common Stock.
10.3. Protection Against Dilution. Until Holding shall
have become a Reporting Company, Holding shall not, without the consent of the
holders of 85 percent of the outstanding shares of the Common Stock and the
Preferred Stock (considered as one class), issue any shares of its capital
stock other than (i) in a transaction pursuant to which Holding offers to each
holder of capital stock of Holding the right to participate proportionately
according to their Pro Rata Share (as hereinafter defined) as of the date of
such proposed issuance and on the same terms and conditions, (ii) at any time
in connection with the issuance of any capital stock of Holding under a
Registration Statement as provided for in Section 9, or (iii) at any time
pursuant to Section 10.2. Any right granted pursuant to clause (i) of the
preceding sentence shall be exercisable by written notice to Holding given
within 30 days after receipt by each holder of Common Stock of written notice
of such proposed issuance. If a holder of capital stock of Holding shall fail
to respond to Holding within the 30-day notice period, such failure shall be
deemed to be a rejection of his right to participate in the purchase of the
securities to be issued. "Pro Rata Share" shall mean the ratio of the number
of shares of capital stock of Holding held by each holder thereof to the
number of shares of all classes of stock of Holding (considered as one class).
11. Books, Records and Reports.
11.1. Holding shall cause to be kept on an appropriate
basis, and each stockholder of Holding shall have access to, appropriate
books, records and accounts. The books and records of Holding shall each be
audited as of the end of each calendar year by a firm of independent public
accountants of national standing selected by Holding.
11.2. Within 100 days of the end of each fiscal year,
Holding shall mail to each of its stockholders a report setting forth an
audited balance sheet as at the end of such fiscal year and audited statements
of income and source and use of funds for such fiscal year of Holding, and any
other information Holding deems necessary or desirable. Holding will furnish
quarterly financial statements to its stockholders as requested.
11.3. Holding also will furnish to each of its
stockholders such other non-confidential information as such stockholder may
from time to time reasonably request.
12. Conditions of Closing.
12.1. Conditions of Holding. The obligation of Holding to
issue and sell the Common Shares to the Subscribers and the Preferred Shares
to ZS/SED and ZS Southern pursuant to this Agreement is subject to the
fulfillment as of the Closing of the following conditions precedent:
12.1.1. At the Closing, the representations and
warranties of the Subscribers contained in Section 4 shall be true and correct
with the same effect as if such representations and warranties had been made
at and as of that time, and Holding shall have received a certificate to that
effect, dated the Closing Date, and signed by each of the Subscribers.
12.1.2. Simultaneously with the Closing, the
transactions contemplated by the Purchase Agreement shall have been
consummated.
12.2. Subscribers' Conditions. The obligation of the
Subscribers to purchase the Common Shares and ZS/SED and ZS Southern to
purchase the Preferred Shares pursuant to this Agreement is subject to the
fulfillment as of the Closing of the following conditions precedent:
12.2.1. At the Closing, the representations and
warranties of Holding contained in Section 3 shall be true and correct with
the same effect as though such representations and warranties had been made at
and as of that time, and each Subscriber shall have received a certificate to
that effect, dated the Closing Date, and signed by an officer of Holding.
12.2.2. Simultaneously with the Closing, the
transactions contemplated by the Purchase Agreement shall have been
consummated.
13. Expenses. Each party shall bear its own expenses in
connection with this Agreement and the transactions contemplated herein.
14. Notices. All notices, requests, demands and other
communications hereunder to a party hereto shall be in writing and shall be
deemed to have been duly given when delivered by hand or sent by telegram or
telex (which shall be confirmed in writing) to such party at his address set
forth below, or such person or address as such party may specify by similar
notice to the other parties hereto:
(a) If to the Diamond Partnership:
c/o SED Acquisition Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
Sixteenth Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: G. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
(b) If to Holding, ZS/SED or ZS Southern:
c/o ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., Inc.
1270 Avenue of the Americas
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & White
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
15. Entire Agreement. This Agreement sets forth the final and
entire agreement between the parties hereto with respect to its subject
matter, and may not be changed or terminated except by an agreement in
writing.
16. Gender and Person. Words used herein, regardless of the
number or gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine,
feminine or neuter, as the context shall require.
17. Governing Law; Jurisdiction. This Agreement (other than
Section 8 and Section 10.1) shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely within such State. Section 8 and Section 10.1 hereof shall
be governed by and construed in accordance with the laws of the State of
Delaware.
18. Sections. All references in this Agreement to Sections shall
be deemed to be references to sections or subsections of this Agreement unless
otherwise specifically stated.
19. Counterparts. This Agreement may be executed in
counterparts, and such counterparts shall constitute one and the same
agreement.
20. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the legal representative, successors and
permissible assigns of the parties hereto, whether so expressed or not, except
as specifically otherwise provided. In addition, whether or not any express
assignment shall have been made, the provisions of this Agreement shall also
be binding upon, for the benefit of, and enforceable by any subsequent holder
of any of the Common Stock other than a holder who acquired his shares (i) in
a transaction for which a Registration Statement under the Securities Act was
effective at the time or in a sale complying with Regulation A or Rule 144 of
the Securities and Exchange Commission or (ii) in contravention of the
provisions hereof.
21. Headings; Severability. Headings in this Agreement are
inserted for convenience of reference only and shall not affect the
interpretation hereof. Each and every provision of this Agreement shall be
treated as separate and distinct and, in the event of any provision hereof
being declared invalid, such invalid provision shall be deemed to be severable
and all other provisions hereof shall remain in full force and effect.
IN WITNESS WHEREOF, the several parties hereto have executed this
Agreement as of the day and year first above written.
SED HOLDING COMPANY, INC.
By:
Name:
Title:
ZS SED L.P.
By:
Name:
Title:
ZS SOUTHERN L.P.
By:
Name:
Title:
SED ASSOCIATES
By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, individually and as
Attorney-in-Fact for:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
SCHEDULE I
Name and address Section 4.2 Subscription Common
of Subscriber Investor Status Amount Shares
ZS SED L.P. unaccredited $633,684 30,100
c/o ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Co., Inc.
1270 Avenue of the Americas
Rockefeller Center, Suite 1400
New York, New York 10020
ZS Southern L.P. unaccredited $631,579 30,000
c/o ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Co., Inc.
1270 Avenue of the Americas
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
SED Associates unaccredited $840,000 39,900
c/o SED Acquisition Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇