REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered into
as of __________ __, 1997, by and between ▇▇▇▇▇▇▇ COMPUTER RESOURCES, INC., a
Delaware corporation (the "Company") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, ("Pomeroy").
The Company and Pomeroy are parties to an Employment Agreement dated March
12, 1992, as amended. In consideration of Company and ▇▇▇▇▇▇▇ entering into a
Sixth Amendment to Employment Agreement effective January 6, 1997, the Company
has agreed to provide the registration rights set forth in this Agreement
concerning shares of the Company's common stock (the "Shares") now owned or
hereafter owned by ▇▇▇▇▇▇▇ in the event of a Change in Control, as hereinafter
defined, of Company
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. DEFINITIONS.
"AUTHORIZED HOLDER" shall mean the Holder designated in a Request for
the purpose of signing any Certificates of the Holder and who shall be deemed an
agent for service of any notices required to be given under this Agreement to
the Holder.
"CERTIFICATE OF HOLDER" shall mean (i) in the case of a registration
pursuant to Section 2 hereof, a resolution signed and certified by the
Authorized Holder or (ii) in the case of a registration pursuant to Section 3
hereof, a resolution signed by ▇▇▇▇▇▇▇.
"CHANGE IN CONTROL" shall mean and shall occur upon any of the
following: (a) if any individual or group (as such term is used in Rule 13d-5
promulgated under the Securities Act of 1934, as amended) acquires 30% or more
of the combined voting power of the Company's outstanding securities of persons
other than the holders of the combined voting power of the Company's outstanding
shares on January 6, 1997; (b) if continuing directors (defined as directors of
the Company as of January 6, 1997 (including ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ if he is hereinafter
nominated as a director of Company) and any successor to any director who was
nominated by a majority of the directors in office at the time of his nomination
or selection and who is not associated in any way with an individual or group
who is a beneficial owner of more than ten percent of the combined voting power
of the Company's outstanding securities other than ▇▇▇▇▇▇▇ or his affiliates)
cease to constitute at least a majority of the board of directors; or (c) if the
board of directors approves the sale of all or substantially all of the
Company's assets, or any merger, consolidation or similar business combination
or reorganization of the Company.
"HOLDER" shall mean (i) in the case of a registration pursuant to
Section 2 hereof, ▇▇▇▇▇▇▇ signing a Request to register and sell some or all of
his Shares pursuant to such Request, or (ii) in the case of a registration
pursuant to Section 3 hereof, ▇▇▇▇▇▇▇ requesting inclusion of Shares in such
registration whose Shares will be included in such registration.
"▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, his successors, heirs and
assigns.
"REQUEST" shall mean a request to register up to thirty-three and
one-third percent (33 1/3%) of the Shares then held collectively by the Holder
pursuant to Section 2 hereof and signed by the Holder of such Shares and
containing any and all information required by Sections 2 and 4 hereof,
PROVIDED, HOWEVER, that in no case may the Company be required to register
shares under Section 2 of this Agreement more than once per year.
"SHARES" shall mean (i) any shares of common stock, par value $.01
(the "Common Stock") held as of the date hereof or subsequently owned by ▇▇▇▇▇▇▇
and (ii) any shares of Company Common Stock issuable to ▇▇▇▇▇▇▇, his successors
and assigns with respect to the Common Stock referred to in clause (i) by way of
a stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, provided it
shall not mean any securities previously sold to the public.
2. DEMAND REGISTRATION RIGHTS.
2.1 At any time after a Change in Control, upon receipt of a
Request on or before three (3) years from the date of the Change in Control, the
Company will prepare and file with The Securities and Exchange Commission (the
"Commission"), promptly after such Request and in no case more than ninety (90)
days after receipt of such Request, and thereafter will use its best efforts to
cause to become effective a registration statement ("Registration Statement") on
such form selected by the Company and complying with the Securities Act of 1933,
as amended (the "Act"). If, for any reason other than the Holder's failure to
perform his obligations under Section 4 hereof, the Registration Statement does
not become effective, the Request shall be withdrawn and shall not count as a
"Request" made pursuant to this Agreement. Notwithstanding the foregoing, the
number of shares with respect to which ▇▇▇▇▇▇▇ may exercise his demand
Registration Rights shall be as follows:
(i) after the Change in Control, but prior to the first year
anniversary of the Change in Control, one-third (1/3) of the Shares;
(ii) after the first year anniversary of the Change in
Control, but prior to the second year anniversary of the Change in Control, any
Shares not previously registered plus one-third (1/3) of the Shares;
(iii) after the second year anniversary of the Change in
Control, but prior to the third year anniversary of the Change in Control, any
Shares not previously registered plus one-third (1/3) of the Shares.
2.2 If the Request so states, the offering or distribution of
Shares under this Section shall be pursuant to a firm underwriting. The
managing underwriter shall be a regionally recognized investment banking firm
selected by the Holder and evidenced in
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a Certificate of Holder but the selection shall be subject to the Company's
approval, which approval shall not be unreasonably withheld. The Company will
enter into an underwriting agreement containing representations, warranties and
agreements not substantially different from those customarily included by an
issuer in underwriting agreements with respect to secondary distributions;
PROVIDED, HOWEVER, that the Holder shall be entitled to negotiate and shall be
responsible to pay the underwriting discounts and commission and other fees of
such underwriter.
2.3 No securities to be sold by the Company or any security holder
of the Company other than ▇▇▇▇▇▇▇ shall be included in any Registration
Statement filed pursuant to this Section, unless (i) the Company shall have
received a Certificate of Holder consenting to the inclusion of such other
securities; (ii) in the case of a firm underwriting, the managing or principal
underwriter shall have consented to the inclusion of such other securities and
(iii) all the Shares requested to be included in the Request shall be so
included.
2.4 The Company shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed by it
pursuant to this Section if, at the time it receives a Request, counsel for the
Company is reasonably of the opinion (which opinion shall be expressed in
writing) that (i) such registration will require preparation of audited
financial information for the Company as of a date or for a period which
preparation will not otherwise be required or (ii) any material pending
transaction of the Company or any of its subsidiaries renders the effecting of
such Registration Statement inappropriate at the time; PROVIDED, that in the
case of an event referred to in clause (ii) above, the duration of such delay
shall not exceed 90 days from the date the Company became aware of such material
business information; PROVIDED FURTHER, that the Company shall promptly make
such filing as soon as the conditions which permit it to delay such filing no
longer exist and notwithstanding the time periods referred to in Section 2.1
above; and PROVIDED FURTHER that in the event of any such deferral, the Holder
shall have the right to withdraw the Request by way of a Certificate of Holder
and such withdrawn Request shall not be considered as a Request.
3. PIGGYBACK REGISTRATIONS.
3.1 If at any time prior to the third year anniversary of the
Change in Control, the Company shall propose to file a Registration Statement
for the purpose of a secondary offering for the Company or any security holder
under the Act, on form ▇-▇, ▇-▇ or S-3 or any equivalent general form for
registration of Common Stock under the Act with respect to a public offering of
Common Stock, the Company shall as promptly as practicable, but in no event
later than thirty (30) days prior to the proposed filing date, give notice of
such intention to ▇▇▇▇▇▇▇ and shall include in such Registration Statement all
Shares as such Holder shall request, within ten (10) days of the giving of such
notice, subject to the following limitations:
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3.1.1 If the offering to be made pursuant to this Section is
initiated by the Company, the Company shall not be obligated to register fewer
than the lesser of (i) Shares with a market value of $250,000, market value to
be measured as of that date of such notice to the Holder, or (ii) the aggregate
number of Shares still held by ▇▇▇▇▇▇▇, and the inclusion of such Shares may be
conditioned or restricted if, in the good faith opinion of the managing
underwriter (or underwriters) of the Common Stock to be sold (or in the absence
thereof, of the principal investment banker acting on behalf of the Company in
effecting such sale) for which such Registration Statement is being filed, such
inclusion will have a material adverse impact on the offering of the securities
being so registered. If the number of Shares is so restricted, then no shares
or securities of any other security holders shall be included in the offering
unless all securities being sold by the Company are included therein, and any
reduction required thereafter shall be made pro rata among the selling security
holders, including ▇▇▇▇▇▇▇.
4. COVENANTS OF THE HOLDER.
Any Request shall specify the number of Shares as to which such Request
relates, express the Holder's present intention to offer such Shares for
distribution and contain an undertaking to provide all such information and
materials and take all such actions and execute all such documents as may be
required in order to permit the Company to comply with all applicable
requirements of the Commission or other regulatory authorities and to obtain
acceleration of the effective date of the Registration Statement. Any Request
shall designate an Authorized Holder and such Authorized Holder's address for
the purpose of delivering notices under this Agreement to the Holder. The
Request shall also contain any other information required to be set forth under
Section 2.
5. COVENANTS OF THE COMPANY.
So long as the Company is under an obligation pursuant to the provisions of
Section 2 or 3, the Company shall:
5.1 Prepare and file with the Commission such amendments and
supplements to such Registration Statements and any prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective for such period as shall be necessary to complete the marketing of the
Shares included therein, but in no event longer than 120 days after the
effective date of such Registration Statement;
5.2 Furnish to the Holder such number of copies of a prospectus,
including, without limitation, a preliminary prospectus, conforming with the
requirements of the Act, and such other documents as the Holder may reasonably
request in order to facilitate the public sale or other disposition of such
Shares;
5.3 Use its best efforts to register or qualify, not later than the
effective date of any Registration Statement filed pursuant to this Agreement,
the Shares covered by such Registration Statement under the securities or Blue
Sky laws of such jurisdictions
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within the United States as the Holder may reasonably request and do any and all
other acts or things which may be necessary or advisable to enable such Holder
to consummate the public sale or other disposition in such jurisdiction of such
Shares;
5.4 Promptly notify the Holder, at any time when a prospectus
relating to the Shares being distributed is required to be delivered under the
Act, of the happening of any event as a result of which the prospectus included
in such Registration Statement, as then in effect, includes an untrue statement
of material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing and, at the request of the Holder, evidenced by a
Certificate of the Holder, promptly prepare, file with the Commission and
furnish to the Holder a reasonable number of copies of a supplement to, or an
amendment of, such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
5.5 Use its best efforts to furnish, at the request of the Holder
or any underwriter of any distribution of the Shares, an opinion of legal
counsel to the Company, covering such matters as are typically covered by
opinions of issuer's counsel in underwritten offerings under the Act and are
similar in form and substance to that furnished in connection with the Company's
most recent underwritten public offering of Common Stock, as the Holder or the
underwriter of any distribution of the Shares request;
5.6 Use its best efforts to cause all of the Shares in the Request
to be listed on any recognized securities exchange, including, without
limitation, the National Association of Securities Dealers Automated Quotation
System, on which the Common Stock is then listed and to maintain the currency
and effectiveness of any such listings;
5.7 Enter into an agreement with the underwriters for such offering
in which the Company shall provide indemnities similar to those described in
Section 7 hereof to the underwriters and in which the Company shall make the
usual representations and warranties made by issuers of equity securities to
underwriters, similar in form and substance to those made to the underwriters of
the most recent underwritten public offering of Company Stock; and
5.8 Maintain its registration under Section 12 of the Securities
Exchange Act of 1934 and prepare and file on a timely basis all reports required
to be filed by the Company under Section 13 of the Securities Exchange Act of
1934.
6. COSTS AND EXPENSES.
Except for expenses referred to in the following sentence, the Company
shall bear the entire cost and expense of any registration made pursuant to
Section 2 or 3 of this Agreement, including, without limitation, all
registration and filing fees, printing
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expenses, the fees and expenses of the Company's counsel and its independent
accountants and all other out-of-pocket expenses of the Company incident to the
preparation, printing and filing under the Act of the Registration Statement and
all amendments and supplements thereto, the cost of furnishing copies of each
preliminary prospectus, each final prospectus and each amendment or supplement
thereto to underwriters, brokers and dealers and other purchasers of the
securities so registered, and the costs and expenses incurred in connection with
the qualification of the securities so registered under "blue sky" or other
state securities laws (all such expenses are herein called "Registration
Expenses"). Notwithstanding the foregoing, the Company shall not be liable or
responsible for the following fees: (i) the fees and expenses of counsel
and accountants of the Holder; (ii) all underwriting discounts and commission
attributable to Shares registered at the request of the Holder; and (iii) in any
registration made pursuant to Section 3 hereof, all filing fees attributable to
Shares registered at the request of the Holder. All such fees and expenses not
paid by the Company shall be paid by the Holder.
7. INDEMNIFICATION.
7.1 INDEMNITY TO THE HOLDER. The Company will indemnify the Holder
and each underwriter of the Shares against all claims, losses, damages,
liabilities and expenses resulting from any untrue statement or alleged untrue
statement of a material fact contained in a prospectus or in any related
Registration Statement, notification or similar filing under securities laws of
any jurisdiction or from any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been based upon
information furnished to the Company by the Holder or such underwriter expressly
for use therein.
7.2 INDEMNITY TO THE COMPANY. The Holder, (i) by requesting any
such registration pursuant to Section 2 or (ii) having his Shares included in a
registration pursuant to Section 3 hereof, agrees to furnish to the Company such
information concerning him as may be requested by the Company and which is
necessary in connection with any registration or qualification of the Shares and
to indemnify the Company against all claims, losses, damages, liabilities and
expenses resulting from the utilization of such information furnished in writing
to the Company expressly for use therein and used in accordance with such
writing.
7.3 INDEMNIFICATION PROCEDURES. If any action is brought or any
claim is made against any party indemnified pursuant to this Section 7 in
respect of which indemnity may be sought against the indemnitor pursuant to this
Section 7, such party shall promptly notify the indemnitor in writing of the
institution of such action or the making of such claim and the indemnitor shall
assume the defense of such action or claim, including the employment of counsel
and payment of expenses. Such party shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such party unless the employment of such counsel
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shall have been authorized in writing by the indemnitor by a resolution of the
Board of Directors of the Company or by a Certificate of Holder, whichever the
case may be, in connection with the defense of such action or claim or such
indemnified party or the parties shall have reasonably concluded that there are
defenses available to it or them which are in conflict with those available to
the indemnitor (in which case the indemnitor shall not have the right to
interpose such conflicting defense but otherwise shall retain control of such
action or claim on behalf of the indemnified party or parties), in any of which
events such fees and expenses of not more than one additional counsel for the
indemnified parties shall be borne by the indemnitor. Except as expressly
provided above, in the event that the indemnitor shall not previously have
assumed the defense of any such action or claim, at such time as the indemnitor
does not assume the defense of such action or claim, the indemnitor shall
thereafter be liable to any person indemnified pursuant to this Agreement for
any reasonable legal or other expenses subsequently incurred by such person in
investigating, preparing or defending against such action or claim. Anything in
this paragraph to the contrary notwithstanding, the indemnitor shall not be
liable for any settlement of any such claim or action effected without its
written consent.
8. RULE 144.
The Company shall take such action as such Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Shares without registration under the Act pursuant to and in accordance
with (x) Rule 144 under the Act, as such Rule may be amended from time to time,
or (y) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of such Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
9. TERMINATION.
The obligations of the Company hereunder shall terminate prior to the
expiration of three years from the date of a Change in Control as to each Share
subject to this Agreement at such time as such Share has been sold or
transferred pursuant to registration under the Securities Act of 1933, or in a
transaction exempt from such registration pursuant to Securities and Exchange
Commission Rule 144 or Rules of similar import.
10. MISCELLANEOUS.
10.1 NOTICES. Notices given under this Agreement shall be deemed
given when received at the addresses for the parties set forth below; PROVIDED,
that in the case of a notice given regarding a registration pursuant to Section
2 hereof notice shall be given as designated in a Request relating to such
registration, and may be delivered by telecopy or other telecommunications
device producing a document setting forth such notice.
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Pomeroy Computer Resources, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief Financial Officer
With a copy to:
▇▇▇▇▇▇▇▇▇ & Dreidame
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ III
If to ▇▇▇▇▇▇▇:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone:
Telecopy:
and to the Holder at the address set forth on the stock records of the Company
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
10.2 BINDING AGREEMENT. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
10.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Delaware.
10.4 ASSIGNABILITY. The rights and obligations of the Holder
hereunder may be assigned by him to any corporation or other legal entity
controlled by him.
10.5 SUCCEEDING SECURITIES. In the event the Shares are converted
into any other security of the Company or any other corporation, the terms of
this Agreement shall apply with full force and effect to any such other security
and the obligations of the Company to effect registration shall include such
other filings, qualifications, notices and similar acts as may be necessary to
enable the Holder to realize the benefits of registration provided by this
Agreement.
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10.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
▇▇▇▇▇▇▇ COMPUTER RESOURCES, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ CFO
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Its:
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
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