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EXHIBIT 1
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AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
Dated as of April 11, 2000
Among
EPLUS INC.
AND CERTAIN OF ITS STOCKHOLDERS
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TABLE OF CONTENTS
PAGE
Section 1. DEFINITIONS. ..................................................................-1-
Section 2. Voting Arrangements.............................................................-5-
(a) ELECTION OF DIRECTORS...........................................................-5-
(b) REMOVAL OF DIRECTORS............................................................-5-
(c) VACANCIES.......................................................................-6-
(d) RIGHTS UNIMPAIRED...............................................................-6-
(e) COMMITTEES......................................................................-6-
(f) STOCK PURCHASE WARRANT..........................................................-6-
(g) INITIAL ▇▇▇▇▇▇ DIRECTORS........................................................-6-
(h) FIDUCIARY DUTIES UNCHANGED......................................................-6-
(i) ELECTION OF SUBSIDIARIES' DIRECTORS.............................................-6-
Section 3. Legend..........................................................................-7-
(a) 1933 ACT LEGEND.................................................................-7-
(b) REMOVAL OF LEGENDS..............................................................-7-
Section 4. Registration Rights.............................................................-7-
(a) SHELF REGISTRATION..............................................................-7-
(b) DEMAND REGISTRATION.............................................................-7-
(c) INCIDENTAL REGISTRATION.........................................................-8-
(d) HOLDBACK AGREEMENTS.............................................................-9-
(e) REGISTRATION AND MAINTENANCE PROCEDURES........................................-10-
(f) REGISTRATION EXPENSES..........................................................-13-
(g) INDEMNIFICATION; CONTRIBUTION..................................................-13-
(h) RULE 144 SALES.................................................................-16-
(i) UNDERWRITTEN REGISTRATIONS.....................................................-17-
(j) NO INCONSISTENT AGREEMENTS.....................................................-17-
(k) S-3 DEMANDS....................................................................-17-
Section 5. Redemption.....................................................................-18-
Section 6. Amendment and Waiver...........................................................-18-
Section 7. Severability...................................................................-18-
Section 8. Entire Agreement...............................................................-19-
Section 9. Successors and Assigns.........................................................-19-
Section 10. Counterparts...................................................................-19-
Section 11. Remedies.......................................................................-19-
Section 12. Notices. ......................................................................-19-
Section 13. Governing Law..................................................................-20-
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Section 14. Descriptive Headings...........................................................-21-
Section 15. Survival; Termination..........................................................-21-
Section 16. Other Registration Rights......................................................-21-
Section 17. Effectiveness of this Agreement................................................-21-
SCHEDULES AND EXHIBITS:
Schedule I -- Other Management Stockholders
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AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this
"AGREEMENT") is dated as of April 11, 2000 among (i) EPLUS INC., formerly MLC
Holdings, Inc., a Delaware corporation (the "COMPANY"), (ii) TC Plus, LLC,
formerly TC Leasing, LLC, a Delaware limited liability company ("▇▇▇▇▇▇") and
(iii) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇ and the other Persons listed
on Schedule I hereto (collectively, the "MANAGEMENT STOCKHOLDERS" and
collectively with ▇▇▇▇▇▇, the "STOCKHOLDERS").
Subject to Section 17 hereof, the parties hereto amend and restate
the initial stockholders agreement dated as of October 23, 1998 in its entirety
and hereby agree as follows:
SECTION 1. DEFINITIONS. For purposes of this Agreement,
the following terms have the indicated meanings:
"AFFILIATE" of a Person means any other Person controlling,
controlled by or under common control with such Person, whether by ownership of
voting securities, by contract or otherwise, and in the case of ▇▇▇▇▇▇ shall
include ▇▇▇▇▇▇ Equity Investors III, L.P. and any of its partners or Affiliates,
and in the case of a natural Person shall include any member of such Person's
Family Group.
"AGREEMENT" is defined in the preface.
"BOARD" means the Company's Board of Directors.
"COMMON SHARES" means shares of the Company's Common Stock.
"COMMON STOCK" means, collectively, the Company's common stock,
par value $.01 per share, and any other class or series of authorized capital
stock of the Company which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"COMMON STOCK PURCHASE AGREEMENT" means the Common Stock Purchase
Agreement, dated as of October 23, 1998, by and between the Company and ▇▇▇▇▇▇.
"COMPANY" is defined in the preface.
"CO-REDEMPTION NOTICE" is defined in Section 5.
"DEMAND REGISTRATION" is defined in Section 4(b)(i).
"DEMAND RIGHT" is defined in Section 4(b)(i).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FAMILY GROUP" means such Person's spouse and lineal descendants
(whether natural or adopted) and any trust formed and maintained solely for the
benefit of such Person, such Person's spouse or such Person's lineal
descendants.
"INCIDENTAL REGISTRATION" is defined in Section 4(c)(i).
"INCIDENTAL REGISTRATION STATEMENT" is defined in Section 4(c)(i).
"INDEMNIFIED COMPANY" is defined in Section 4(g)(ii).
"INDEMNIFIED PARTIES" is defined in Section 4(g)(ii).
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"INDEMNIFIED STOCKHOLDER" is defined in Section 4(g)(i).
"INDEMNIFYING PARTY" is defined in Section 4(g)(iii).
"INDEPENDENT DIRECTORS" is defined in Section 2(a).
"LOSSES" is defined in Section 4(g)(i).
"MANAGEMENT DIRECTORS" is defined in Section 2(a).
"MANAGEMENT SHARES" means Stockholder Shares held by the
Management Stockholders and their Affiliates.
"MANAGEMENT STOCKHOLDERS" is defined in the preface.
"MARKET VALUE" means, with respect to any security on any date,
(x) if such security is quoted on NASDAQ or listed on a national securities
exchange, the average daily closing sales price of such security on NASDAQ or a
national securities exchange, as applicable, for the 20 trading days prior to
such date, and (y) if such security is not quoted on NASDAQ or listed on a
national securities exchange, the fair value per share determined jointly by the
Company and ▇▇▇▇▇▇, provided that if the Company and ▇▇▇▇▇▇ are unable to reach
an agreement within a reasonable period of time, such fair value shall be
determined by a recognized investment banking firm jointly selected by the
Company and ▇▇▇▇▇▇, whose determination shall be final and binding upon the
Company and ▇▇▇▇▇▇ (and the fees and expenses of such recognized investment
banking firm shall be paid by the Company).
"NASDAQ" means National Association of Securities Dealers
Automated Quotations National Market System.
"NORTON" is defined in the preface.
"OPTIONS" means any options to purchase Common Stock granted by
the Company.
"OTHER REDEEMERS" is defined in Section 5.
"OWNERSHIP PERCENTAGE" means, with respect to any Stockholder, a
percentage equal to the product of (a) a fraction, the numerator of which is the
sum of (i) the number of Common Shares owned by such Stockholder, and (ii) the
number of Common Shares issuable upon the exercise of any Stock Purchase Warrant
or Option owned by such Stockholder, and the denominator of which is the sum of
(x) the number of shares of the Company's outstanding Common Shares, and (y) the
number of Common Shares issuable upon the exercise of all Stock Purchase
Warrants or Options owned by any of the Stockholders, multiplied by (b) 100.
"PERSON" means any individual, corporation, partnership, firm,
joint venture, association, limited liability company, joint-stock company,
trust, unincorporated organization, governmental or regulatory body or other
legal entity.
"PROCEEDING" is defined in Section 4(g)(iii).
"PUBLIC OFFERING" means a sale of Common Stock to the public in an
offering pursuant to an effective registration statement filed with the SEC
pursuant to the Securities Act, as then in effect, provided that a Public
Offering shall not include an offering made in connection with a business
acquisition or combination or an employee benefit plan.
"PUBLIC SALE" means a sale of Common Stock pursuant to a Public
Offering or a Rule 144 Sale.
"REDEEMABLE SHARES" is defined in Section 5.
"REDEMPTION NOTICE" is defined in Section 5.
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"REFUSED SECURITIES" is defined in Section 5(d).
"REGISTRABLE SECURITIES" means any Common Shares, except Common
Shares which have been Transferred in a Public Sale.
"REGISTRATION NOTICE" is defined in Section 4(b)(i).
"REGISTRATION REQUEST" is defined in Section 4(b)(i).
"REGISTRATION STATEMENT" means any registration statement of the
Company under which any of the Registrable Securities are included therein
pursuant to the provisions of this Agreement, including the prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement. The Shelf shall be deemed a Registration Statement.
"REQUESTING HOLDERS" is defined in Section 4(b)(i).
"RULE 144 SALE" means a sale of Common Stock to the public through
a broker, dealer or market-maker pursuant to the provisions of Rule 144 adopted
under the Securities Act (or any successor rule or regulation).
"S-3 DEMAND REGISTRATION" is defined in Section 4(k)(i).
"S-3 REGISTRATION NOTICE" is defined in Section 4(k)(i).
"S-3 REGISTRATION REQUEST" is defined in Section 4(k)(i).
"S-3 REQUESTING HOLDERS" is defined in Section 4(k)(i).
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHELF" is defined in Section 4(a).
"STOCKHOLDERS" is defined in the preface.
"STOCK OPTION PLANS" means the 1998 Long-Term Incentive Plan, the
Employee Share Purchase Plan and any other plan of the Company pursuant to which
the Company issues options, stock appreciation rights, restricted stock or other
stock based compensation to officers, employees, directors or consultants of the
Company or any of its Subsidiaries.
"STOCK PURCHASE WARRANT" means, collectively, the Stock Purchase
Warrant, dated as of October 23, 1998, by the Company in favor of ▇▇▇▇▇▇, and
any subsequent stock purchase warrant or stock purchase warrants in favor of
▇▇▇▇▇▇ or any of its Affiliates issued pursuant to or in connection with the
Stock Purchase Warrant, dated as of October 23, 1998, by the Company in favor of
▇▇▇▇▇▇.
"STOCKHOLDER SHARES" means (i) all shares of Common Stock now
owned or in the future acquired by the Stockholders, including all shares of
Common Stock acquired pursuant to the exercise of Options or the Stock Purchase
Warrant, and (ii) all shares of Common Stock or other securities issued or
issuable directly or indirectly with respect to the securities referred to in
clause (i) by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. Stockholder Shares shall cease to be such when Transferred in a
Public Sale or to the Company.
"SUBSIDIARY" means, with respect to any Person, any other Person
of which at least a majority of the outstanding
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shares or other equity interests having ordinary voting power for the election
of directors or comparable managers of such Person are owned, directly or
indirectly, by the first Person or one or more Subsidiaries of such first
Person.
"▇▇▇▇▇▇" is defined in the preface.
"▇▇▇▇▇▇ DIRECTORS" is defined in Section 2(a).
"▇▇▇▇▇▇ SHARES" means Stockholder Shares held by the ▇▇▇▇▇▇ and
its permitted transferees. ▇▇▇▇▇▇ Shares shall cease to be such when they cease
to be Stockholder Shares.
"TRANSFER" means, with respect to any Stockholder Shares, the
gift, sale, assignment, transfer, pledge, hypothecation or other disposition
(whether for or without consideration and whether voluntary, involuntary or by
operation of law) of such Stockholder Shares or any interest therein.
"WARRANT SHARES" means the Common Shares issued in connection with
the exercise of the Stock Purchase Warrant, so long as such Common Shares
continue to be Stockholder Shares.
SECTION 2. VOTING ARRANGEMENTS.
(a) ELECTION OF DIRECTORS. Each Stockholder
agrees that such Person will vote, or cause to be voted, all voting securities
of the Company over which such Person has the power to vote or direct the
voting, and will take all other necessary or desirable action within such
Person's control, and the Company will take all necessary and desirable actions
within its control, to cause the authorized number of directors for the Company
to be established at six directors, and to elect or cause to be elected to the
Board and cause to be continued in such offices as follows: (i) two individuals
designated by ▇▇▇▇▇▇ (the "▇▇▇▇▇▇ DIRECTORS"), (ii) two individuals designated
by the Management Stockholders (the "MANAGEMENT DIRECTORS") and (iii) two
individuals who are not employees of the Company or its Subsidiaries or
Affiliates, designated by a nominating committee comprised of one individual
designated by the Management Stockholders and one individual designated by
▇▇▇▇▇▇ (the "INDEPENDENT DIRECTORS"); provided that for so long as the Board is
divided into three classes, the "Class I" directors shall consist of one ▇▇▇▇▇▇
Director and one Independent Director, the "Class II" directors shall consist of
one ▇▇▇▇▇▇ Director and one Independent Director and the "Class III" directors
shall consist of two Management Directors.
(b) REMOVAL OF DIRECTORS. If at any time ▇▇▇▇▇▇
shall notify the other Stockholders of its desire to remove, with or without
cause, any individual designated by ▇▇▇▇▇▇ pursuant to Section 2(a) or 2(i) from
a directorship, or if at any time the Management Stockholders shall notify the
other Stockholders of their desire to remove, with or without cause, any
individual designated by the Management Stockholders pursuant to Section 2(a)
above from a directorship, all such Persons so notified will vote, or cause to
be voted, all voting securities of the Company or any Subsidiary of the Company,
as applicable, over which they have the power to vote or direct the voting, and
will take all other necessary or desirable action within such Person's control,
and the Company will take all necessary and desirable actions within its
control, to cause the removal of such director.
(c) VACANCIES. If at any time any director ceases
to serve on the board of directors of the Company or any Subsidiary of the
Company (whether due to resignation, removal or otherwise), then ▇▇▇▇▇▇ or the
Management Stockholders, as applicable, shall be entitled to designate a
successor director to fill the vacancy created thereby on the terms and subject
to the conditions of Section 2(a) or 2(i), as applicable. Each Stockholder
agrees that he, she or it will vote, or cause to be voted, all voting securities
of the Company or any Subsidiary of the Company over which such Person has the
power to vote or direct the voting, and shall take all such other actions
promptly as shall be necessary or desirable to cause the successor designated by
▇▇▇▇▇▇ or the Management Stockholders, as applicable, to be elected to fill such
vacancy.
(d) RIGHTS UNIMPAIRED. Nothing in this Agreement
shall be construed to impair any rights that the stockholders of the Company or
any Subsidiary of the Company may have to remove any director for cause. No
removal for cause of an individual designated pursuant to this Section 2 shall
affect the right of ▇▇▇▇▇▇ or the Management Stockholders, as applicable, to
designate a different individual pursuant to this Section 2 to fill the
directorship from which such individual was removed.
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(e) COMMITTEES. The Compensation Committee of
the Board shall at all times grant all awards under the Stock Option Plans. The
Compensation Committee shall consist of four members, two of which shall be
Independent Directors and two of which shall be ▇▇▇▇▇▇ Directors. All other
committees of the Board shall at all times consist of at least one ▇▇▇▇▇▇
Director.
(f) STOCK PURCHASE WARRANT. Each Stockholder
agrees that such Person will vote, or cause to be voted, all voting securities
of the Company over which such Person has the power to vote or direct the
voting, and will take all other necessary or desirable action within such
Person's control, and the Company will take all necessary and desirable actions
within its control, so that ▇▇▇▇▇▇ (or any Person designated by ▇▇▇▇▇▇) may
exercise its rights under the Stock Purchase Warrant pursuant to the terms
thereof.
(g) INITIAL ▇▇▇▇▇▇ DIRECTORS. ▇▇▇▇▇▇ hereby
designates ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ as the initial "Class II" ▇▇▇▇▇▇ Director and ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇ as the initial "Class I" ▇▇▇▇▇▇ Director.
(h) FIDUCIARY DUTIES UNCHANGED. Nothing in this
Agreement shall be construed to limit, change or eliminate any fiduciary duties
a director of the Company or any Subsidiary of the Company may have to the
stockholders of the Company or any Subsidiary of the Company under Delaware law.
(i) ELECTION OF SUBSIDIARIES' DIRECTORS. The
Company will take all necessary and desirable actions within its control to
elect or cause to be elected to the respective boards of directors of each of
the Company's domestic Subsidiaries, and cause to be continued in such offices,
at least one ▇▇▇▇▇▇ Director. ▇▇▇▇▇▇ hereby designates ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ as the
initial ▇▇▇▇▇▇ Director for the purposes of this Section 2(i).
SECTION 3. LEGEND.
(a) 1933 ACT LEGEND. The certificates
representing Stockholder Shares shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION THEREUNDER,
or a similar legend indicating that such Stockholder Shares may not be
Transferred in violation of the Securities Act. Unless the above legend or a
similar legend in already on the certificate representing such Stockholder
Shares, then each holder of Stockholder Shares shall provide the Company
promptly after the date hereof (and in no event later than 14 days after the
date hereof) with his or her certificates representing Stockholder Shares so
that such legend can be placed thereon.
(b) REMOVAL OF LEGENDS. Whenever the
restrictions described above cease to be applicable to any Stockholder Shares,
the holder thereof shall be entitled to receive from the Company, without
expense to the holder, a new certificate not bearing a legend stating such
restriction. The holders of Stockholder Shares with a legend referencing that
certain Stockholders Agreement, dated as of October 23, 1998, among the Company
and certain of its stockholders shall be entitled to receive from the Company,
without expense to the holder, a new certificate not bearing such legend.
SECTION 4. REGISTRATION RIGHTS.
(a) SHELF REGISTRATION. ▇▇▇▇▇▇ shall have the right at any time
to demand that the Company include any and all Stockholder Shares owned by
▇▇▇▇▇▇ or its Affiliates in the Company's shelf registration statement in effect
as of the date hereof (the "SHELF").
(b) DEMAND REGISTRATION.
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(i) So long as any ▇▇▇▇▇▇ Shares are not included
in the Shelf and/or the Shelf is not then effective, ▇▇▇▇▇▇ shall have the right
(the "DEMAND RIGHT") to request registration under the Securities Act of all or
any portion of the Registrable Securities held by ▇▇▇▇▇▇ and its Affiliates (in
each case, referred to herein as the "REQUESTING HOLDERS") by delivering a
written notice to the Company, which notice identifies the Requesting Holders
and specifies the number of Registrable Securities to be included in such
registration (the "REGISTRATION REQUEST"). The Company will give prompt written
notice of such Registration Request (the "REGISTRATION NOTICE") to all other
Stockholders and will thereupon use its reasonable best efforts to effect the
registration (a "DEMAND REGISTRATION") under the Securities Act on any form
available to the Company of:
(x) the Registrable Securities requested
to be registered by the Requesting Holders; and
(y) all other Registrable Securities which
the Company has received a written request from another
Stockholder to register within 30 days after the Registration
Notice is given.
The Company shall be obligated to effect three Demand Registrations.
(ii) A registration undertaken by the Company at
the request of the Requesting Holders will not count as a Demand Registration
if, pursuant to the applicable Demand Right, the Requesting Holders fail to
register and sell at least 50% of the Registrable Securities requested to be
included in such registration by the Requesting Holders.
(iii) If the sole or managing underwriter of a
Demand Registration advises the Company in writing that in its opinion the
number of Registrable Securities and other securities requested to be included
exceeds the number of Registrable Securities and other securities which can be
sold in such offering without adversely affecting the distribution of the
securities being offered, the price that will be paid in such offering or the
marketability thereof, the Company will include in such registration the
greatest number of Registrable Securities proposed to be registered by the
Stockholders which in the opinion of such underwriter can be sold in such
offering without adversely affecting the distribution of the securities being
offered, the price that will be paid in such offering or the marketability
thereof, ratably among the Stockholders proposing to register based on each such
Stockholder's Ownership Percentage; provided, however, that the Requesting
Holders shall have the right to receive priority over all other Stockholders in
the third Demand Registration.
(c) INCIDENTAL REGISTRATION.
(i) At any time the Company proposes to register
any Common Shares under the Securities Act (other than pursuant to Section 4(b)
or in connection with a business acquisition or combination or an employee
benefit plan), whether in connection with a primary or secondary offering, the
Company will give written notice to each Stockholder at least thirty (30) days
prior to the initial filing of such Registration Statement with the SEC of its
intent to file such Registration Statement and of such Stockholder's rights
under this Section 4(c). Upon the written request of any Stockholder made within
twenty (20) days after any such notice is given (which request shall specify the
Registrable Securities intended to be disposed of by such Stockholder), the
Company will use its reasonable best efforts to effect the registration (an
"INCIDENTAL REGISTRATION") under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the holders
thereof; provided, however, that if, at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
Registration Statement filed in connection with such Incidental Registration
(each an "INCIDENTAL REGISTRATION STATEMENT"), the Company shall determine for
any reason not to register or to delay registration of such securities, the
Company may, at its election, give written notice of such determination to each
Stockholder and, thereupon, (x) in the case of a determination not to register,
the Company shall be relieved of its obligation to register any Registrable
Securities under this Section 4(c) in connection with such registration (but not
from its obligation to pay the expenses incurred in connection therewith), and
(y) in the case of a determination to delay registration, the Company shall be
permitted to delay registering any Registrable Securities under this Section
4(c) during the period that the registration of such other securities is
delayed.
(ii) If the sole or managing underwriter of a
registration advises the Company in writing that in its opinion the number of
Registrable Securities and other securities requested to be included exceeds the
number of Registrable Securities and other securities which can be sold in such
offering without adversely affecting the distribution of the securities being
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offered, the price that will be paid in such offering or the marketability
thereof, the Company will include in such registration the Registrable
Securities and other securities of the Company in the following order of
priority:
(x) first, the greatest number of
securities of the Company proposed to be included in such
registration by the Company for its own account which in the
opinion of such underwriter can be so sold; and
(y) second, after all securities that the
Company proposes to register for its own account have been
included, the greatest amount of Registrable Securities requested
to be registered by the Stockholders of which in the opinion of
such underwriter can be sold in such offering without adversely
affecting the distribution of the securities being offered, the
price that will be paid in such offering or the marketability
thereof, ratably among the Stockholders proposing to register
based on each such Stockholder's Ownership Percentage.
(d) HOLDBACK AGREEMENTS.
(i) Each Stockholder agrees that if requested in
connection with an underwritten offering made pursuant to this Section 4 by the
managing underwriter or underwriters of such underwritten offering, such
Stockholder will not effect any Public Sale or distribution of any of the
securities being registered or any securities convertible or exchangeable or
exercisable for such securities (except as part of such underwritten offering),
during the period beginning 10 days prior to, and ending 180 days after, the
closing date of each underwritten offering made pursuant to such Registration
Statement (or for such shorter period as to which the managing underwriter or
underwriters may agree).
(ii) The Company agrees not to effect any Public
Sale or distribution of its Common Stock, or any securities convertible into or
exchangeable or exercisable for such Common Stock, during the seven days prior
to and during the 180-day period beginning on the effective date of any
underwritten Demand Registration (or for such shorter period as to which the
managing underwriter or underwriters may agree), except as part of such Demand
Registration or in connection with any employee benefit or similar plan, any
dividend reinvestment plan, or a business acquisition or combination.
(e) REGISTRATION AND MAINTENANCE PROCEDURES. In connection
with the registration of any Registrable Securities and/or the maintenance of
the Shelf and/or any other Registration Statement, the Company shall, to the
extent applicable, at its own expense, as promptly as reasonably possible:
(i) Prepare and file with the SEC a
Registration Statement or Registration Statements on a form
available for the sale of the Registrable Securities by the
holders thereof in accordance with the intended method of
distribution thereof, and use its reasonable best efforts to cause
each such Registration Statement to become effective;
(ii) Prepare and file with the SEC such
amendments and post-effective amendments to each Registration
Statement as may be necessary to keep such Registration Statement
continuously effective for a period ending on the earlier of (x)
90 days from the effective date and (y) such time as all of such
securities have been disposed of in accordance with the intended
method of disposition thereof; and cause the related prospectus to
be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply
with the provisions of the Securities Act, the Exchange Act and
the rules and regulations of the SEC promulgated thereunder
applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such
prospectus as so supplemented;
(iii) Notify the selling Stockholders
promptly (but in any event within two business days), and confirm
such notice in writing, (A) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (B) of the issuance
by the SEC of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending
the use of any preliminary prospectus, (C) if at any
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time when a prospectus is required by the Securities Act to be
delivered in connection with sales of Registrable Securities the
Company becomes aware that the representations and warranties of
the Company contained in any agreement (including any underwriting
agreement) contemplated by Section 4(e)(viii) cease to be true and
correct in all material respects, (D) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration
Statement or any of the Registrable Securities for offer or sale
in any jurisdiction, (E) if the Company becomes aware of the
happening of any event that makes any statement made in such
Registration Statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any
changes in such Registration Statement, prospectus or documents so
that, in the case of such Registration Statement, it will not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case
of the prospectus, it will not contain any untrue statement of a
material fact or omit to state any 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;
(iv) Use its reasonable best efforts to
prevent the issuance of any order suspending the effectiveness of
a Registration Statement or of any order preventing or suspending
the use of a prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Securities
for sale in any jurisdiction, and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest possible
moment;
(v) Deliver to each selling Stockholder
and the underwriters, if any, without charge, as many copies of
the prospectus or prospectuses (including each form of prospectus)
and each amendment or supplement thereto as such Persons may
reasonably request; and, the Company hereby consents to the use of
such prospectus and each amendment or supplement thereto by each
of the selling Stockholders and the underwriters or agents, if
any, in connection with the offering and sale of the Registrable
Securities covered by such prospectus and any amendment or
supplement thereto;
(vi) Prior to any public offering of
Registrable Securities, to use its reasonable best efforts to
register or qualify, and cooperate with the selling Stockholders,
the underwriters, if any, the sales agents and their respective
counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or
"blue sky" laws of such jurisdictions within the United States as
necessary;
(vii) Upon the occurrence of any event
contemplated by Section 4(e)(iii)(E), as promptly as practicable
prepare a supplement or post-effective amendment to the
Registration Statement or a supplement to the related prospectus
or any document incorporated or deemed to be incorporated therein
by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, such prospectus will not contain
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, in light of the circumstances under which they
were made, not misleading;
(viii) Enter into an underwriting agreement
in form, scope and substance as is customary in underwritten
offerings and take all such other actions as are reasonably
requested by the managing or sole underwriter in order to expedite
or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, (A) make such
representations and warranties to the underwriters, with respect
to the business of the Company and its Subsidiaries, and the
Registration Statement, prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in
each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings, and confirm the
same if and when requested; (B) obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the
managing underwriters), addressed to the underwriters covering the
matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be
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12
reasonably requested by underwriters; (C) obtain "cold comfort"
letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other
independent certified public accountants of any Subsidiary of the
Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings; and (D) if an
underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable to the
Stockholders than those set forth in Section 4(g) (or such other
provisions and procedures acceptable to holders of a majority of
the Registrable Securities covered by such Registration Statement
and the managing underwriters or agents) with respect to all
parties to be indemnified pursuant to Section 4(g). The above
shall be done at each closing under such underwriting agreement,
or as and to the extent required thereunder;
(ix) Comply with all applicable rules and
regulations of the SEC and make generally available to its
Stockholders earnings statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal
year) (x) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (y) if not
sold to underwriters in such an offering, commencing on the first
day of the first fiscal quarter of the Company after the
effectiveness of a Registration Statement, which statements shall
cover said 12-month periods; and
(x) Use its reasonable best efforts to
cause all such Registrable Securities covered by such Registration
Statement to be designated as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 or listed on the
principal securities exchange on which Common Stock is then listed
(if any).
The Company may require each Stockholder as to which any registration is being
effected to furnish to the Company such information regarding such Stockholder
and the distribution of such Registrable Securities as the Company may, from
time to time, reasonably request in writing; provided that such information
shall be used only in connection with such registration. The Company may exclude
from such registration the Registrable Securities of any Stockholder who
unreasonably fails to furnish such information promptly after receiving such
request. Each Stockholder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
4(e)(iii)(B), 4(e)(iii)(D) or 4(e)(iii)(E), such Stockholder will forthwith
discontinue disposition of such Registrable Securities covered by such
Registration Statement or prospectus until such Stockholder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 4(e),
or until such Stockholder is advised in writing by the Company that the use of
the applicable prospectus may be resumed, and has received copies of any
amendments or supplements thereto.
(f) REGISTRATION EXPENSES. All fees and expenses incident to
the performance of or compliance the Company with the provisions of Section 4
shall be borne by the Company, whether or not any Registration Statement is
filed or becomes effective, including, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses of compliance
with state securities or "blue sky" laws), (ii) reasonable messenger, telephone
and delivery expenses, (iii) fees and disbursements of counsel for the Company,
(iv) fees and disbursements of all independent certified public accountants
referred to in Section 4(e)(viii), (v) underwriters' fees and expenses
(excluding discounts, commissions, or fees of underwriters, selling brokers,
dealer managers or similar securities industry professionals relating to the
distribution of the Registrable Securities, which shall be paid by the selling
stockholders), (vi) Securities Act liability insurance, if the Company so
desires such insurance, (vii) internal expenses of the Company, (viii) the
expense of any annual audit, (ix) the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange,
and (x) the fees and expenses of any Person, including special experts, retained
by the Company. In connection with any Demand Registration or Incidental
Registration hereunder, the Company shall reimburse the holders of the
Registrable Securities being registered in such registration for the reasonable
fees and disbursements of not more than one counsel (together with appropriate
local counsel) chosen by ▇▇▇▇▇▇, if pursuant to a Demand Registration, or the
Company, in all other cases, and other reasonable out-of-pocket expenses of the
Stockholders incurred in connection with the registration of the Registrable
Securities.
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(g) INDEMNIFICATION; CONTRIBUTION.
(i) The Company shall, without limitation as to
time, indemnify and hold harmless, to the full extent permitted by law, each
Stockholder, the officers, directors, members, agents and employees of each of
them, each Person who controls each such Person (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act), the officers,
directors, agents and employees of each such controlling person and any
financial or investment adviser (each, an "INDEMNIFIED STOCKHOLDER"), to the
fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, actions or proceedings (whether commenced or threatened) reasonable
costs (including, without limitation, reasonable costs of preparation and
reasonable attorneys' fees) and reasonable expenses (including reasonable
expenses of investigation) (collectively, "LOSSES"), as incurred, arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, prospectus or form of prospectus or in
any amendment or supplements thereto or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except to the extent, but only to the extent, that such untrue or
alleged untrue statement is contained in, or such omission or alleged omission
is required to be contained in, any information so furnished in writing by the
Company to such Stockholder expressly for use in such Registration Statement or
prospectus and that such statement or omission was reasonably relied upon by
such Stockholder in preparation of such Registration Statement, prospectus or
form of prospectus; provided, however, that the Company shall not be liable in
any such case to the extent that the Company has furnished in writing to such
Stockholder within a reasonable period of time prior to the filing of any such
Registration Statement or prospectus or amendment or supplement thereto
information expressly for use in such Registration Statement or prospectus or
any amendment or supplement thereto which corrected or made not misleading,
information previously furnished to such Stockholder, and such Stockholder
failed to include such information therein; provided, further, however, that the
Company shall not be liable to any Person who participates as an underwriter in
the offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter(s) within the meaning of the Securities Act to the
extent that any such Losses arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if (A) such Person failed to send or deliver a copy of
the prospectus with or prior to the delivery of written confirmation of the sale
by such Person to the Person asserting the claim from which such Losses arise,
(B) the prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, and (C) the Company has complied
with its obligations under Section 4(e)(iii). Each indemnity and reimbursement
of costs and expenses shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Stockholder.
(ii) In connection with any Registration Statement
in which a Stockholder is participating, such Stockholder, or an authorized
officer of such Stockholder, shall furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
Registration Statement or prospectus and agrees, severally and not jointly, to
indemnify, to the full extent permitted by law, the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling persons
(each, an "INDEMNIFIED COMPANY", and together with the Indemnified Stockholders,
the "INDEMNIFIED PARTIES"), from and against all Losses, as incurred, arising
out of or based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, prospectus or form of prospectus or in
any amendment or supplements thereto or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except to the extent, but only to the extent, that such untrue or
alleged untrue statement is contained in, or such omission or alleged omission
is required to be contained in, any information so furnished in writing by such
Stockholder to the Company expressly for use in such Registration Statement or
prospectus and that such statement or omission was reasonably relied upon by the
Company in preparation of such Registration Statement, prospectus or form of
prospectus; provided, however, that such Stockholder shall not be liable in any
such case to the extent that such Stockholder has furnished in writing to the
Company within a reasonable period of time prior to the filing of any such
Registration Statement or prospectus or amendment or supplement thereto
information expressly for use in such Registration Statement or prospectus or
any amendment or supplement thereto which corrected or made not misleading,
information previously furnished to the Company, and the Company failed to
include such information therein. In no event shall the liability of any selling
Stockholder hereunder be greater in amount than the after-tax dollar amount of
the proceeds (net of payment of all expenses) received by such Stockholder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Company.
-10-
14
(iii) Any Indemnified Party shall give prompt
notice to the party or parties from which such indemnity is sought (the
"INDEMNIFYING PARTIES") of the commencement of any action, suit, proceeding or
investigation or written threat thereof (a "PROCEEDING") with respect to which
such Indemnified Party seeks indemnification or contribution pursuant hereto;
provided, however, that the failure to so notify the Indemnifying Parties shall
not relieve the Indemnifying Parties from any obligation or liability except to
the extent that the Indemnifying Parties have been prejudiced by such failure.
The Indemnifying Parties shall have the right, exercisable by giving written
notice to an Indemnified Party promptly after the receipt of written notice from
such Indemnified Party of such Proceeding, to assume, at the Indemnifying
Parties' expense, the defense of any such Proceeding, with counsel reasonably
satisfactory to such Indemnified Party; provided, however, that an Indemnified
Party or Indemnified Parties (if more than one such Indemnified Party is named
in any Proceeding) shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Indemnified
Parties unless: (x) the Indemnifying Parties agree to pay such fees and
expenses; (y) the Indemnifying Parties fail promptly to assume the defense of
such Proceeding or fail to employ counsel reasonably satisfactory to such
Indemnified Party or Indemnified Parties; or (z) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
or Indemnified Parties and the Indemnifying Parties, and there may be one or
more defenses available to such Indemnified Party or Indemnified Parties that
are different from or additional to those available to the Indemnifying Parties,
in which case, if such Indemnified Party or Indemnified Parties notifies the
Indemnifying Parties in writing that it elects to employ separate counsel at the
expense of the Indemnifying Parties, the Indemnifying Parties shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Parties, it being understood, however, that, unless there
exists a conflict among Indemnified Parties, the Indemnifying Parties shall not,
in connection with any one such Proceeding or separate but substantially similar
or related Proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (together with appropriate local counsel) at any
time for such Indemnified Party or Indemnified Parties. Whether or not such
defense is assumed by the Indemnifying Parties, such Indemnifying Parties or
Indemnified Party or Indemnified Parties will not be subject to any liability
for any settlement made without its or their consent (but such consent will not
be unreasonably withheld). The Indemnifying Parties shall not consent to entry
of any judgment or enter into any settlement which (A) provides for other than
monetary damages without the consent of the Indemnified Party or Indemnified
Parties (which consent shall not be unreasonably withheld or delayed) or (B)
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party or Indemnified Parties of a release, in form
and substance satisfactory to the Indemnified Party or Indemnified Parties, from
all liability in respect of such Proceeding for which such Indemnified Party
would be entitled to indemnification hereunder.
(iv) If the indemnification provided for in this
Section 4(g) is unavailable to an Indemnified Party or is insufficient to hold
such Indemnified Party harmless for any Losses in respect of which this Section
4(g) would otherwise apply by its terms, then each applicable Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall have a joint and
several obligation to contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of and relative benefit to the
Indemnifying Party, on the one hand, and such Indemnified Party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the
other hand, shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
taken by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any Proceeding, to the extent such party would have been
indemnified for such expenses if the indemnification provided for in Section
4(g)(i) or 4(g)(ii) was available to such party. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this Section
4(g)(iv) were determined by pro-rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in this Section 4(g)(iv). Notwithstanding the provisions of this Section
4(g)(iv), an Indemnifying Party that is a selling Stockholder shall not be
required to contribute any amount in excess of the amount by which the net
after-tax proceeds received by such Indemnifying Party exceeds the amount of any
damages that such Indemnifying Party has otherwise been required to pay by
reasons of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
-11-
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(h) RULE 144 SALES. The Company shall file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated thereunder, and will take such further action as any
Stockholder may reasonably request, all to the extent required from time to time
to enable such Stockholder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144. Upon the request of any Stockholder, the Company shall deliver to such
Stockholder a written statement as to whether it has complied with such
requirements.
(i) UNDERWRITTEN REGISTRATIONS. No Stockholder may participate
in any underwritten registration hereunder unless such Stockholder (x) agrees to
sell such Stockholder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (y) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
(j) NO INCONSISTENT AGREEMENTS. The Company has not and will
not, enter into any agreement with respect to the Company's securities that is
inconsistent with the rights granted to the Stockholders in this Section 4 or
otherwise conflicts with the provisions hereof.
(k) S-3 DEMANDS.
(i) So long as (A) any ▇▇▇▇▇▇ Shares are not
included in the Shelf and/or the Shelf is not then effective and (B) the Company
is permitted under Securities Act to register securities on Form S-3, ▇▇▇▇▇▇
shall have the right to request registration on Form S-3 of all or any portion
of the Registrable Securities held by ▇▇▇▇▇▇ and its Affiliates (in each case,
referred to herein as the "S-3 REQUESTING HOLDERS") by delivering a written
notice to the Company, which notice identifies the S-3 Requesting Holders and
specifies the number of Registrable Securities to be included in such
registration (the "S-3 REGISTRATION REQUEST"). The Company will give prompt
written notice of such S-3 Registration Request (the "S-3 REGISTRATION NOTICE")
to all other Stockholders and will thereupon use its reasonable best efforts to
effect the registration (a "S-3 DEMAND REGISTRATION") on Form S-3 of:
(x) the Registrable Securities requested
to be registered by the S-3 Requesting Holders; and
(y) all other Registrable Securities which
the Company has received a written request from another
Stockholder to register within 30 days after the S-3 Registration
Notice is given.
S-3 Demand Registrations shall constitute Demand Registrations.
(ii) If the sole or managing underwriter of a S-3
Demand Registration advises the Company in writing that in its opinion the
number of Registrable Securities and other securities requested to be included
exceeds the number of Registrable Securities and other securities which can be
sold in such offering without adversely affecting the distribution of the
securities being offered, the price that will be paid in such offering or the
marketability thereof, the Company will include in such registration the
greatest number of Registrable Securities proposed to be registered by the
Stockholders which in the opinion of such underwriter can be sold in such
offering without adversely affecting the distribution of the securities being
offered, the price that will be paid in such offering or the marketability
thereof, ratably among the Stockholders proposing to register based on each such
Stockholder's Ownership Percentage.
SECTION 5. REDEMPTION. Prior to redeeming, purchasing or
otherwise acquiring (contingent or otherwise), directly or indirectly, or
entering into any agreement for the redemption, purchase or acquisition
(contingent or otherwise), directly or indirectly, of any Common Shares from any
holder of Management Shares, the Company shall give at least thirty (30) days
prior written notice to ▇▇▇▇▇▇, which notice (for purposes of this Section 5,
the "REDEMPTION NOTICE") shall identify the type and amount of Common Shares to
be redeemed, describe the terms and conditions of such proposed redemption, and
identify each prospective transferor of the Common Shares to be redeemed (the
"OTHER REDEEMERS"). ▇▇▇▇▇▇ or any of its Affiliates may, within fifteen (15)
days after the receipt of the Redemption Notice, give written notice (each, a
"CO-REDEMPTION NOTICE") to the Company that such Person wishes to participate in
such proposed redemption upon the terms and conditions set forth in the
Redemption Notice, which
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Co-Redemption Notice shall specify the type and amount of Common Shares such
Person desires to redeem. If none of ▇▇▇▇▇▇ and its Affiliates give the Company
a timely Co-Redemption Notice, then the Company may redeem such Common Shares on
the terms and conditions set forth in the Redemption Notice of the Other
Redeemers at any time within ninety days after expiration of the fifteen-day
period for giving Co-Redemption Notices with respect to such redemption. Any
such Common Shares not redeemed by the Company during such ninety-day period
will again be subject to the provisions of this Section 9 upon a subsequent
redemption. If ▇▇▇▇▇▇ and/or its Affiliates give the Company a timely
Co-Redemption Notice, then the Company, at its option, shall (a) redeem all
Common Shares which ▇▇▇▇▇▇, its Affiliates and the Other Redeemers desire to
redeem, or (b) allocate the maximum number of each class of Common Shares that
the Company is willing to redeem (the "REDEEMABLE SHARES") among ▇▇▇▇▇▇, its
Affiliates and the Other Redeemers as follows:
(i) each Stockholder holding ▇▇▇▇▇▇ Shares shall
be entitled to redeem a number of Common Shares (not to exceed, for any
such Stockholder, the number of shares of such Common Shares identified
in such Stockholder's Co- Redemption Notice) equal to the product of (A)
the number of Redeemable Shares of such class of Common Shares and (B)
such Stockholder's Ownership Percentage of such class of Common Shares;
and
(ii) the Other Redeemers shall be entitled to
redeem all Redeemable Shares remaining after taking into account clause
(i) above (with the allocation among the Other Redeemers as decided by
the Company in its sole discretion).
SECTION 6. AMENDMENT AND WAIVER. Except as otherwise
provided herein, no amendment or waiver of any provision of this Agreement shall
be effective against the Company or Stockholders unless such amendment or waiver
is approved in writing by the Company, ▇▇▇▇▇▇ and the holders of at least a
majority of the then-outstanding Management Shares. The failure of any party to
enforce any provision of this Agreement shall not be construed as a waiver of
such provision and shall not affect the right of such party thereafter to
enforce each provision of this Agreement in accordance with its terms.
SECTION 7. SEVERABILITY. If any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
SECTION 8. ENTIRE AGREEMENT. Except as otherwise
expressly set forth herein, this document embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
SECTION 9. SUCCESSORS AND ASSIGNS. Except as otherwise
provided in this Section 9, this Agreement shall bind and inure to the benefit
of and be enforceable by the Company and the Stockholders and their respective
permitted successors and assigns so long as such Stockholders and their
respective permitted successors and assigns hold Stockholder Shares. Any
assignee of a Stockholder shall be deemed a "Stockholder" and entitled to all
benefits of a "Stockholder" for all purposes hereunder, except that no assignee
of a Stockholder other than an Affiliate of such Stockholder (a) shall be bound
be the provisions of Section 2 hereof or (b) shall be entitled to the benefits
or suffer the burdens of Section 5 hereof, unless in each case the assignor and
assignee explicitly agree otherwise.
SECTION 10. COUNTERPARTS. This Agreement may be executed
in separate counterparts each of which shall be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 11. REMEDIES. The Company and the Stockholders
shall be entitled to enforce their rights under this Agreement specifically to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights existing in their favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any breach
of the provisions of this Agreement and that the Company or any Stockholder may
in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
a bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
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SECTION 12. NOTICES. Any notice provided for in this
Agreement shall be in writing and shall be either personally delivered, or sent
via facsimile, or mailed first class mail (postage prepaid) or sent by reputable
overnight courier service (charges prepaid) to such Person as follows:
if to the Company:
ePlus inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & Bird, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III, Esq.
if to ▇▇▇▇▇▇:
c/▇ ▇▇▇▇▇▇ Equity Investors III, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to a Management Stockholder:
at the address set forth below such Management
Stockholder's signature on the signature page hereto
if to any Person who is deemed a Stockholder for any purpose
hereunder:
at the address set forth in the Company's records
or at such address or to the attention of such other Person as the recipient
party has specified by prior written notice to the sending party. Notices will
be deemed to have been given hereunder when delivered personally or sent via
facsimile (against receipt therefor), five business days after deposit in the
U.S. mail and one business day after deposit with a reputable overnight courier
service.
SECTION 13. GOVERNING LAW. The corporate law of Delaware
shall govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this
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18
Agreement shall be governed by the internal law, and not the law of conflicts,
of Delaware.
SECTION 14. DESCRIPTIVE HEADINGS. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
SECTION 15. SURVIVAL; TERMINATION. Common Shares acquired
by the Stockholders after the date hereof shall be Stockholder Shares and hence
fully subject to the provisions of this Agreement. Stockholder Shares shall
cease to be such when Transferred in a Public Sale or to the Company. All rights
and obligations of the Stockholders and the Company shall terminate upon ▇▇▇▇▇▇
Shares constituting less than 5% of the issued and outstanding Common Shares,
and all rights and obligations of the Stockholders and the Company shall remain
terminated even if ▇▇▇▇▇▇, its Affiliates and any holders of ▇▇▇▇▇▇ Shares later
own in the aggregate 5% or more of the issued and outstanding Common Shares;
provided that the limited partners of ▇▇▇▇▇▇ Equity Investors III, L.P. shall
not be treated as Affiliates of ▇▇▇▇▇▇ or the holders of ▇▇▇▇▇▇ Shares for the
purposes of this Section 15.
SECTION 16. OTHER REGISTRATION RIGHTS. Each of the
Management Stockholders hereby agrees to waive any right to demand that the
Company register any Common Shares under the Securities Act or include any
Common Shares in the Shelf or other registration statement and any other
registration right of any kind granted by the Company to such Management
Stockholder under any agreement other this Agreement.
SECTION 17. EFFECTIVENESS OF THIS AGREEMENT.
Notwithstanding anything herein to the contrary, this Agreement shall only be
effective upon and if a sale of Common Stock pursuant to a Public Offering
occurs on or before May 15, 2000. If such sale of Common Stock pursuant to a
Public Offering does not occur on or before May 15, 2000, (a) this Agreement
shall be null and void and have no further force or effect, and (b) the initial
stockholders agreement of the Company and certain of its stockholders, dated as
of October 23, 1998, shall remain in full force and effect.
[END OF PAGE]
[SIGNATURE PAGES FOLLOW]
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19
IN WITNESS WHEREOF, the parties, which constitute the Company,
▇▇▇▇▇▇ and the holders of a majority of the outstanding Management Shares, have
executed this Amended and Restated Stockholders Agreement as of the date first
above written.
THE COMPANY:
EPLUS INC. (formerly MLC Holdings, Inc.)
By:
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive
Officer
▇▇▇▇▇▇:
TC PLUS, LLC (formerly TC Leasing, LLC)
By: ▇▇▇▇▇▇ EQUITY INVESTORS III, L.P., its
managing member
By: TC EQUITY PARTNERS, L.L.C., its general
partner
By:
---------------------------------------
Name:
Title:
HOLDERS OF A MAJORITY OF THE OUTSTANDING
MANAGEMENT SHARES:
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
-------------------------
-------------------------
-------------------------
FAX:
-------------------------
20
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Address:
-------------------------
-------------------------
-------------------------
FAX:
-------------------------
JAP INVESTMENT GROUP, L.P.
By: J.A.P., Inc., its general partner
By:
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
-------------------------
-------------------------
-------------------------
FAX:
-------------------------
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Address:
-------------------------
-------------------------
-------------------------
FAX:
-------------------------
21
SCHEDULE I
OTHER MANAGEMENT STOCKHOLDERS
JAP Investment Group, L.P.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
S-1