AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered as of the 9th day of June, 2000, by and among Merisel, Inc., a
Delaware corporation (the "Company"), Merisel Americas, Inc., a Delaware
corporation and wholly owned subsidiary of the Company (the "Subsidiary") and
Phoenix Acquisition Company II, L.L.C., a Delaware limited liability company
("Investor").
WHEREAS, on September 19, 1997, the Company and Subsidiary
entered into a Stock and Note Purchase Agreement (the "Stock and Note Purchase
Agreement") with Investor pursuant to which Investor purchased (the "Purchase")
from the Company 4,901,316 shares of the Company's Common Stock (as defined
herein) and a Convertible Note for $137,100,000 (the "Convertible Note").
WHEREAS, as a condition to the obligations of the parties
under the Stock and Note Purchase Agreement, the parties hereto entered into a
Registration Rights Agreement as of September 19, 1997 (the "Original
Registration Rights Agreement"), which provided for registration rights for the
Common Stock and Convertible Note purchased pursuant to the Stock and Note
Purchase Agreement and for the shares of Common Stock into which the Convertible
Note was convertible.
WHEREAS, on and prior to December 19, 1997, the Convertible
Note was converted into an aggregate of 45,098,684 shares of Common Stock as a
result of which the Convertible Note was no longer outstanding.
WHEREAS, on June 2, 2000, the Company entered into a
Subscription Agreement (the "Subscription Agreement") with Investor pursuant to
which Investor purchased from the Company 150,000 shares of the Company's
Convertible Preferred Stock (as defined herein) which is convertible into shares
of Common Stock (as defined herein).
WHEREAS, pursuant to the Stock and Note Purchase Agreement and
the Subscription Agreement, the parties hereto agreed to amend the Original
Registration Rights Agreement to provide for registration rights for the
Convertible Preferred Stock and the shares of Common Stock into which the
Convertible Preferred Stock is convertible;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Investor and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
SECTION 1.01 Definitions. As used in this Agreement the
following terms shall have the following respective meanings:
"Affiliate" with respect to any person, shall mean any other
person who, directly or indirectly, controls, is controlled by or is under
common control with such first person.
"Commission" shall mean the United States Securities and
Exchange Commission, or any other United States federal agency at the time
administering the Securities Act or the Exchange Act, as applicable.
"Common Stock" shall mean common stock, par value $0.01 per
share, of the Company.
"control" when used with respect to any person, shall mean
the power to direct management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Conversion Common Stock" shall mean the shares of Common
Stock received by Investor upon the conversion of the Convertible Preferred.
"Convertible Preferred Stock" shall mean shares of Convertible
Preferred Stock, par value $0.01 per share, of the Company, together with any
shares of Convertible Preferred Stock issued as a dividend or other distribution
with respect to, or in replacement of, the Convertible Preferred Stock.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
"Holder" shall mean Investor or any transferee or assignee to
which the rights under this Agreement are assigned in accordance with the
provisions of Section 6.03 hereof.
"person" shall mean a corporation, association, partnership,
organization, group (as such term is used in Rule 13d-5 under the Exchange Act),
individual, governmental agency or other entity.
"Purchased Common Stock" shall mean the shares of Common Stock
purchased by Investor pursuant to the Stock and Note Purchase Agreement and the
shares of Common Stock issued upon conversion of the Convertible Note.
"Registrant" shall mean the Company and/or the Subsidiary, as
applicable.
"Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act and the declaration or
ordering of effectiveness of such registration statement or document.
"Registrable Convertible Shares" shall mean shares of
convertible preferred stock on terms and conditions substantially identical to
those of the Convertible Preferred Stock to the extent that transfer and other
provisions of the Convertible Preferred Stock may be amended for purposes of the
registration of such convertible preferred stock in accordance herewith.
"Registrable Securities" shall mean collectively, the
Registrable Convertible Shares and the Registrable Shares.
"Registrable Shares" shall mean (i) the shares of Purchased
Common Stock and shares of Conversion Common Stock, together with any shares of
Common Stock issued as or issuable upon the conversion or exercise of any
warrant, right, option or other convertible security which is issued as a
dividend or other distribution with respect to, or in exchange for, or in
replacement of, the Purchased Common Stock or the Conversion Common Stock, as
the case may be, and (ii) any shares of Common Stock issued by way of a stock
split of the Purchased Common Stock, the Conversion Common Stock or the Common
Stock referred to in clause (i) of this paragraph. For purposes of this
Agreement, any Registrable Shares shall cease to be Registrable Shares when (v)
a registration statement covering such Registrable Shares shall have been
declared effective and such Registrable Shares have been disposed of pursuant to
such effective registration statement, (w) such Registrable Shares are sold by a
person in a transaction in which the rights under the provisions of this
Agreement are not assigned, (x) such Registrable Shares are sold pursuant to
Rule 144 under the Securities Act, (y) such securities are distributable under
Rule 144(k) under the Securities Act or (z) such Registrable Shares cease to be
outstanding.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
SECTION 1.02 Headings. The descriptive headings of the
Sections and paragraphs of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Representations and Warranties of Investor.
Investor hereby represents and warrants to each Registrant that Investor has all
requisite limited liability company power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Investor have been duly authorized by
Investor and no other proceedings on the part of Investor are necessary to
authorize this Agreement and the transactions contemplated by this Agreement.
This Agreement has been duly and validly executed and delivered by Investor and,
assuming the due execution hereof by each Registrant, constitutes the legal,
valid and binding obligation of Investor, enforceable against Investor in
accordance with its terms.
SECTION 2.02 Representations and Warranties of each
Registrant. Each Registrant hereby represents and warrants to Investor that it
has the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by each Registrant and the consummation by the
Registrant of the transactions contemplated hereby have been duly authorized by
the Board of Directors of such Registrant, no other corporate proceedings on the
part of such Registrant are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each Registrant and, assuming the due execution hereof
by Investor, constitutes the valid and binding obligation of each Registrant,
enforceable against each Registrant in accordance with its terms.
ARTICLE III
NOTICE OF TRANSFER
SECTION 3.01 Notice of Proposed Transfer. Prior to any
proposed transfer of any Registrable Securities (other than under the
circumstances described in Sections 4.01, 4.02 or 4.03), the Holder thereof
shall give written notice to the Registrant of its intention to effect such
transfer. Each such notice shall describe the manner of the proposed transfer
and, if requested by the Registrant, shall be accompanied by an opinion of
counsel reasonably satisfactory to the Registrant to the effect that the
proposed transfer may be effected without registration under the Securities Act,
whereupon the Holder of such stock shall be entitled to transfer such stock in
accordance with the terms of its notice; provided, however, that no such opinion
of counsel shall be required for a transfer to an Affiliate of a transferor.
Each certificate or other instrument evidencing shares of Registrable Securities
transferred as above provided shall bear a legend setting forth that the
security has not been registered under the Securities Act and may not be
transferred unless it has been registered under the Securities Act or an
exemption from registration is available, except that such certificate or other
instrument shall not bear such legend if (i) such transfer is in accordance with
the provisions of Rule 144 (or any other rule permitting public sale without
registration under the Securities Act) or (ii) the opinion of counsel referred
to above is to the further effect that the transferee and any subsequent
transferee (other than an Affiliate of the Registrant) would be entitled to
transfer such securities in a public sale without registration under the
Securities Act.
ARTICLE IV
REGISTRATION PROVISIONS
SECTION 4.01 Demand Registration of Registrable Convertible
Shares. (a) Except as provided for in Section 6.03, at any time and from time to
time, but not more than three times, the Holders of at least 10% of the
Registrable Convertible Shares issued (the "Securities Initiating Holders") may
request in a written notice that the Registrant file a registration statement
under the Securities Act (or a similar document pursuant to any other statute
then in effect corresponding to the Securities Act) covering the registration of
any or all Registrable Convertible Shares held by such Securities Initiating
Holders in the manner specified in such notice, provided that there must be
included in such registration at least 10% of the Registrable Convertible Shares
issued (or any lesser percentage if the anticipated aggregate offering price
would exceed $5 million). Following receipt of any notice under this Section
4.01, the Registrant shall (x) within ten days notify any other Holders of such
request in writing and (y) use its best efforts to cause to be registered under
the Securities Act all Registrable Convertible Shares that the Securities
Initiating Holders and any such other Holders have, within ten (10) days after
the Registrant has given such notice, requested be registered in accordance with
the manner of disposition specified in such notice by the Securities Initiating
Holders.
(b) If the Securities Initiating Holders intend to have the
Registrable Convertible Shares distributed by means of an underwritten offering
and notify the Registrant of such intent the Registrant shall include such
information in the written notice referred to in clause (x) of Section 4.01(a).
In such event, the right of any Holder to include its Registrable Convertible
Shares in such registration shall be conditioned upon such Holder's
participation in such underwritten offering and the inclusion of such Holder's
Registrable Convertible Shares in the underwritten offering (unless otherwise
mutually agreed by a majority in interest of the Securities Initiating Holders
and such Holder) to the extent provided below. All Holders proposing to
distribute Registrable Convertible Shares through such underwritten offering
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters. Such underwriter or underwriters shall be selected
by a majority in interest of the Securities Initiating Holders and shall be
approved by the Registrant, which approval shall not be unreasonably withheld,
provided, (i) that all of the representations and warranties by, and the other
agreements on the part of, the Registrant to and for the benefit of such
underwriters shall also be made to and for the benefit of the Securities
Initiating Holders and such Holders of Registrable Convertible Shares, (ii) that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement shall be conditions precedent to the
obligations of the Securities Initiating Holders and such Holders of Registrable
Convertible Shares, and (iii) that no Securities Initiating Holder or any such
Holder shall be required to make any representations or warranties to or
agreements with the Registrant or the underwriters other than representations,
warranties or agreements regarding such Holder, the Registrable Convertible
Shares of such Holder and such Holder's intended method of distribution and any
other representations required by law or reasonably required by the underwriter.
If any Holder of Registrable Convertible Shares disapproves of the terms of the
underwriting, such Holder may elect to withdraw all its Registrable Convertible
Shares by written notice to the Registrant, the managing underwriter and the
Securities Initiating Holders. The securities so withdrawn shall also be
withdrawn from registration.
(c) Notwithstanding any provision of this Agreement to the contrary:
(i) the Registrant shall not be required to effect a
registration pursuant to this Section 4.01 during the period starting
with the date of filing by the Registrant of, and ending on a date one
hundred twenty (120) days following the effective date of, a
registration statement pertaining to a public offering of securities
for the account of the Registrant; provided, that the Registrant shall
actively employ in good faith all reasonable efforts to cause such
registration statement to become effective as soon as possible; and
(ii) if the Registrant shall furnish to such Holders
a certificate signed by the president of the Registrant stating that in
the good faith opinion of the board of directors of the Registrant such
registration would interfere with any material transaction then being
pursued by the Registrant (a "Delay Notice"), then the Registrant's
obligation to use its best efforts to file such registration statement
shall be deferred for a period not to exceed ninety (90) days (the
"Delay Period"); provided, that (i) any Delay Period shall earlier
terminate upon public disclosure of any such material transaction and
(ii) in no event may the Registrant furnish more than one Delay Notice
to the Holders during any twelve (12) month period.
SECTION 4.02 Demand Registration of Registrable Shares. (a)
Except as provided for in Section 6.03, at any time and from time to time, but
not more than twice within any twelve month period, the Holders of at least 10%
of the Registrable Shares issued (the "Initiating Holders") may request in a
written notice that the Registrant file a registration statement under the
Securities Act (or a similar document pursuant to any other statute then in
effect corresponding to the Securities Act) covering the registration of any or
all Registrable Shares held by such Initiating Holders in the manner specified
in such notice, provided that there must be included in such registration at
least 10% of the Registrable Shares issued (or any lesser percentage if the
anticipated aggregate offering price would exceed $5 million). Following receipt
of any notice under this Section 4.02, the Registrant shall (x) within ten days
notify any other Holders of Registrable Shares of such request in writing and
(y) use its best efforts to cause to be registered under the Securities Act all
Registrable Shares that the Initiating Holders and any such other Holders have,
within ten (10) days after the Registrant has given such notice, requested be
registered in accordance with the manner of disposition specified in such notice
by the Initiating Holders.
(b) If the Initiating Holders intend to have the Registrable
Shares distributed by means of an underwritten offering and notify the
Registrant of such intent the Registrant shall include such information in the
written notice referred to in clause (x) of Section 4.02(a). In such event, the
right of any Holder to include its Registrable Shares in such registration shall
be conditioned upon such Holder's participation in such underwritten offering
and the inclusion of such Holder's Registrable Shares in the underwritten
offering (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided below. All Holders
proposing to distribute Registrable Shares through such underwritten offering
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters. Such underwriter or underwriters shall be selected
by the Holders of a majority of the Registrable Shares to be included in such
registration statement and shall be approved by the Registrant, which approval
shall not be unreasonably withheld, provided, (i) that all of the
representations and warranties by, and the other agreements on the part of, the
Registrant to and for the benefit of such underwriters shall also be made to and
for the benefit of the Holders of such Registrable Shares, (ii) that any or all
of the conditions precedent to the obligations of such underwriters under such
underwriting agreement shall be conditions precedent to the obligations of the
Holders of such Registrable Shares, and (iii) that no Initiating Holder or any
such Holder shall be required to make any representations or warranties to or
agreements with the Registrant or the underwriters other than representations,
warranties or agreements regarding such Holder, the Registrable Shares of such
Holder and such Holder's intended method of distribution and any other
representations required by law or reasonably required by the underwriter. If
any Holder of Registrable Shares disapproves of the terms of the underwriting,
such Holder may elect to withdraw all its Registrable Shares by written notice
to the Registrant, the managing underwriter and the Initiating Holders. The
securities so withdrawn shall also be withdrawn from registration.
(c) Notwithstanding any provision of this Agreement to the contrary:
(i) the Registrant shall not be required to effect a
registration pursuant to this Section 4.02 during the period starting
with the date of filing by the Registrant of, and ending on a date one
hundred twenty (120) days following the effective date of, a
registration statement pertaining to a public offering of securities
for the account of the Registrant or on behalf of the selling
stockholders under any other registration statement which the Holders
have been entitled to join pursuant to Section 4.03; provided, that the
Registrant shall actively employ in good faith all reasonable efforts
to cause such registration statement to become effective as soon as
possible; and
(ii) if the Registrant shall furnish to such Holders
a Delay Notice, then the Registrant's obligation to use its best
efforts to file such registration statement shall be deferred for the
Delay Period; provided, that (A) any Delay Period shall earlier
terminate upon public disclosure of any such material transaction and
(B) in no event may the Registrant furnish more than one Delay Notice
to the Holders during any twelve (12) month period.
SECTION 4.03 Incidental Registration. Subject to Section 4.08,
if at any time the Registrant determines that it shall file a registration
statement under the Securities Act (other than a registration statement on a
Form S-4 or S-8 or filed in connection with an exchange offer or an offering of
securities solely to the Registrant's existing stockholders) on any form that
would also permit the registration of the Registrable Shares and such filing is
to be on its behalf and/or on behalf of selling holders of its securities for
the general registration of its Common Stock to be sold for cash, the Registrant
shall each such time promptly give each Holder written notice of such
determination setting forth the date on which the Registrant proposes to file
such registration statement, which date shall be no earlier than thirty (30)
days from the date of such notice, and advising each Holder of its right to have
Registrable Shares included in such registration. Upon the written request of
any Holder received by the Registrant no later than fifteen (15) days after the
date of the Registrant's notice, the Registrant shall use its best efforts to
cause to be registered under the Securities Act all of the Registrable Shares
that each such Holder has so requested to be registered. If, in the written
opinion of the managing underwriter (or, in the case of a non-underwritten
offering, in the written opinion of the Registrant), the total amount of such
securities to be so registered, including such Registrable Shares, will exceed
the maximum amount of the Registrant's securities which can be marketed (i) at a
price reasonably related to the then current market value of such securities, or
(ii) without otherwise materially and adversely affecting the entire offering,
then the Registrant shall be entitled to reduce the number of Registrable Shares
that each such Holder has so requested to be registered to that number which in
the written opinion of the managing underwriter would permit all such Registrant
securities to be so marketed. Such reduction shall be allocated among all such
Holders in proportion (as nearly as practicable) to the amount of Registrable
Shares owed by each Holder at the time of filing the registration statement.
SECTION 4.04 Registration on Form S-3. If at any time (i) any
Holder of Registrable Shares requests in writing that the Registrant file a
registration statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the Registrable Shares held by such requesting
Holder, the reasonably anticipated aggregate price to the public of which would
exceed $1,000,000, and (ii) the Registrant is a registrant entitled to use Form
S-3 or any successor thereto to register such shares, then the Registrant shall
use its best efforts to register under the Securities Act on Form S-3 or any
successor thereto, for public sale in accordance with the method of disposition
specified in such request, the number of Registrable Shares specified in such
request. Whenever the Registrant is required by this Section 4.04 to use its
best efforts to effect the registration of Registrable Shares, each of the
procedures and requirements of Section 4.02(b) and (c) (including but not
limited to the requirement that the Registrant notify all Holders of Registrable
Shares from whom a request has not been received and provide them with the
opportunity to participate in the offering), shall apply to such registration.
SECTION 4.05 Obligations of the Registrant. Whenever required
under Section 4.01, 4.02 or 4.04 to use its best efforts to effect the
registration of any Registrable Securities, the Registrant shall, as
expeditiously as possible:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become and remain effective for the
period of the distribution contemplated thereby determined as provided
hereafter;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such registration statement;
(c) furnish to the Holders such numbers of copies of the
registration statement and the prospectus included therein (including each
preliminary prospectus and any amendments or supplements thereto in conformity
with the requirements of the Securities Act) and such other documents and
information as they may reasonably request;
(d) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdiction within the United States and
Puerto Rico as shall be reasonably appropriate for the distribution of the
Registrable Securities covered by the registration statement; provided, however,
that the Registrant shall not be required in connection therewith or as a
condition thereto to qualify to do business in or to file a general consent to
service of process in any jurisdiction wherein it would not but for the
requirements of this paragraph (d) be obligated to do so; and provided further,
that the Registrant shall not be required to qualify such Registrable Securities
in any jurisdiction in which the securities regulatory authority requires that
any Holder submit any of its Registrable Securities to the terms, provisions and
restrictions of any escrow, lockup or similar agreement(s) for consent to sell
Registrable Securities in such jurisdiction unless such Holder agrees to do so;
(e) promptly notify each Holder for whom such Registrable
Securities are covered by such registration statement, 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 prospectus included
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 light of
the circumstances under which they were made, and at the request of any such
Holder promptly prepare and furnish to such 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 securities, 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 under which they
were made;
(f) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to Section 4.01, 4.02, 4.03 or
4.04, if the method of distribution is by means of an underwriting, on the date
that the Registrable Securities are delivered to the underwriters for sale
pursuant to such registration, or if such Registrable Securities are not being
sold through underwriters, on the date that the registration statement with
respect to such Registrable Securities becomes effective, (1) a signed opinion,
dated such date, of the independent legal counsel representing the Registrant
for the purpose of such registration, addressed to the underwriters, if any, and
if such Registrable Securities are not being sold through underwriters, then to
the Holders making such request, as to such matters as such underwriters or the
Holders holding a majority of the Registrable Securities included in such
registration may reasonably request and as would be customary in such a
transaction; and (2) letters dated such date and the date the offering is priced
from the independent certified public accountants of the Registrant, addressed
to the underwriters, if any, and if such Registrable Securities are not being
sold through underwriters, then to the Holders making such request and, if such
accountants refuse to deliver such letters to such Holders, then to the
Registrant (i) stating that they are independent certified public accountants
within the meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements and other financial data of the Registrant
included in the registration statement or the prospectus, or any amendment or
supplement thereto, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and (ii) covering such
other financial matters (including information as to the period ending not more
than five (5) business days prior to the date of such letters) with respect to
the registration in respect of which such letter is being given as such
underwriters or the Holders holding a majority of the Registrable Securities
included in such registration, as the case may be, may reasonably request and as
would be customary in such a transaction;
(g) provide reasonable cooperation to the selling Holders of
Registrable Securities and the managing or sole underwriter, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with The
Depository Trust Registrant; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing or sole
underwriter, if any, or Holders may reasonably request in writing at least two
business days prior to any sale of Registrable Securities in a firm commitment
underwritten public offering, or at least ten business days prior to any other
such sale;
(h) enter into customary agreements (including if the method
of distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(i) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later than eighteen
(18) months after the effective date of the registration statement, an earnings
statement covering the period of at least twelve (12) months beginning with the
first full month after the effective date of such registration statement, which
earnings statements shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(j) use its best efforts to list the Restricted Securities
covered by such registration statement with any securities exchange on which the
Common Stock of the Registrant is then listed.
For purposes of Sections 4.05(a) and 4.05(b), the period of distribution of
Registrable Securities in a firm commitment underwritten public offering shall
be deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable
Securities in any other registration shall be deemed to extend until the earlier
of the sale of all Registrable Securities covered thereby and six (6) months
after the effective date thereof.
SECTION 4.06 Furnish Information. It shall be a condition
precedent to the obligations of the Registrant to take any action pursuant to
this Agreement that the Holders shall furnish to the Registrant such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as the Registrant shall reasonably
request and as shall be required in connection with the action to be taken by
the Registrant.
SECTION 4.07 Expenses of Registration. All expenses incurred
in connection with each registration pursuant to Sections 4.01, 4.02, 4.03 and
4.04 of this Agreement, excluding underwriters' discounts and commissions, but
including without limitation all registration, filing and qualification fees,
word processing, duplicating, printers' and accounting fees (including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance), fees of the National Association of
Securities Dealers, Inc. or listing fees, messenger and delivery expenses, all
fees and expenses of complying with state securities or blue sky laws, fees and
disbursements of counsel for the Registrant, and the fees and disbursements of
one counsel for the selling Holders (which counsel shall be selected by the
Holders holding a majority in interest of the Registrable Securities being
registered), shall be paid by the Registrant; provided, however, that if a
registration request pursuant to Section 4.01, 4.02, 4.03 or 4.04 of this
Agreement is subsequently withdrawn at the request of the Holders of a number of
Registrable Securities such that the remaining Holders requesting registration
would not have been able to request registration under the provisions of such
Section such withdrawing Holders shall bear such expenses. The Holders shall
bear and pay the underwriting commissions and discounts applicable to securities
offered for their account in connection with any registrations, filings and
qualifications made pursuant to this Agreement.
SECTION 4.08 Underwriting Requirements. In connection with any
underwritten offering, the Registrant shall not be required under Section 4.03
to include Registrable Shares in such underwritten offering unless the Holders
of such Registrable Shares accept the terms of the underwriting of such offering
that have been reasonably agreed upon between the Registrant and the
underwriters selected by the Registrant.
SECTION 4.09 Rule 144 Information. With a view to making
available the benefits of certain rules and regulations of the Commission which
may at any time permit the sale of the Registrable Securities to the public
without registration, at all times after ninety (90) days after any registration
statement covering a public offering of securities of the Registrant under the
Securities Act shall have become effective, the Registrant agrees to:
(i) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Registrant under
the Securities Act and the Exchange Act; and
(iii) furnish to each Holder of Registrable Securities
forthwith upon request a written statement by the Registrant as to its
compliance with the reporting requirements of such Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Registrant, and such other reports and documents so
filed by the Registrant as such Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing such Holder to sell any
Registrable Shares without registration.
ARTICLE V
INDEMNIFICATION
SECTION 5.01 Indemnification. In the event any Registrable
Securities are included in a registration statement under this Agreement:
(a) The Registrant shall indemnify and hold harmless each
Holder, such Holder's directors and officers, each person who participates in
the offering of such Registrable Securities, including underwriters (as defined
in the Securities Act), and each person, if any, who controls such Holder or
participating person within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or proceedings in respect thereof) arise out of
or are based on any untrue or alleged untrue statement of any material fact
contained in such registration statement on the effective date thereof
(including any prospectus filed under Rule 424 under the Securities Act or any
amendments or supplements 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 not misleading, and
shall reimburse each such Holder, such Holder's directors and officers, such
participating person or controlling person for any legal or other expenses
reasonably incurred by them (but not in excess of expenses incurred in respect
of one counsel for all of them unless there is an actual conflict of interest
between any indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 5.01(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Registrant (which consent
shall not be unreasonably withheld); provided, further, that the Registrant
shall not be liable to any Holder, such Holder's directors and officers,
participating person or controlling person in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements thereto,
in reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by any such Holder, such Holder's
directors and officers, participating person or controlling person; and
provided, further, that the indemnity agreement contained in this Section
5.01(a) shall not apply to any such loss, claim, damage, liability or action
arising from the use by such Holder of any prospectus during any period when the
Registrant has given notice to such Holder pursuant to Section 4.05(e) that the
use of such prospectus must be suspended. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
such Holder, such Holder's directors and officers, participating person or
controlling person, and shall survive the transfer of such securities by such
Holder.
(b) Each Holder requesting or joining in a registration
severally and not jointly shall indemnify and hold harmless the Registrant, each
of its directors and officers, each person, if any, who controls the Registrant
within the meaning of the Securities Act, and each agent and any underwriter for
the Registrant (within the meaning of the Securities Act) against any losses,
claims, damages or liabilities, joint or several, to which the Registrant or any
such director, officer, controlling person, agent or underwriter may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement on the effective date thereof
(including any prospectus filed under Rule 424 under the Securities Act or any
amendments or supplements 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 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 such
registration statement, preliminary or final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished by or on behalf of such Holder expressly for use in connection with
such registration; and each such Holder shall reimburse any legal or other
expenses reasonably incurred by the Registrant or any such director, officer,
controlling person, agent or underwriter (but not in excess of expenses incurred
in respect of one counsel for all of them unless there is an actual conflict of
interest between any indemnified parties, which indemnified parties may be
represented by separate counsel) in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 5.01(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld), and provided, further, that the liability of each
Holder hereunder shall be limited to the proportion of any such loss, claim,
damage, liability or expense which is equal to the proportion that the net
proceeds from the sale of the shares sold by such Holder under such registration
statement bears to the total net proceeds from the sale of all securities sold
thereunder, but not in any event to exceed the net proceeds received by such
Holder from the sale of Registrable Securities covered by such registration
statement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in and assume the defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified party;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with all fees and expenses thereof to be paid by such indemnified
party, and to be apprised of all progress in any proceeding the defense of which
has been assumed by the indemnifying party. The failure to notify an
indemnifying party promptly of the commencement of any such action, if and to
the extent prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
5.01, but the omission so to notify the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than under
this Section.
(d) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified party in connection with the actions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of material fact or omission or alleged omission to state a material fact, has
been made 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 such action. The amount paid
or payable by a party as a result of the losses, claims, damages or liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.01(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
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.
[Remainder of Page Intentionally Left Blank]
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 Limitation on Registration Rights.
Notwithstanding any other provisions of this Agreement to the contrary, the
Registrant shall not be required to register any Registrable Securities under
this Agreement with respect to any request or requests made by any Holder after
the tenth anniversary of the date hereof.
SECTION 6.02 Lockup. Each Holder shall, in connection with any
registration of the Registrant's securities, upon the request of the Registrant
or the underwriters managing any underwritten offering of the Registrant's
securities, agree in writing not to effect any sale, disposition or distribution
of any Registrable Securities (other than that included in the registration)
without the prior written consent of the Registrant or such underwriters, as the
case may be, for such period of time not to exceed ninety (90) days from the
effective date of such registration as the Registrant or the underwriters may
specify; provided, however, that all executive officers and directors of the
Registrant shall also have agreed not to effect any sale, disposition or
distribution of any Registrable Securities under the circumstances and pursuant
to the terms set forth in this Section 6.02.
SECTION 6.03 Transfer of Registration Rights. The registration
rights of any Holder under this Agreement with respect to any Registrable
Securities may be transferred to (a) any transferee of such Registrable
Securities who acquires at least ten per cent (10%) of the Registrable
Securities (adjusted in the case of Registrable Shares for stock splits and
stock consolidations after the date of this Agreement) or any lesser percentage
if the anticipated aggregate offering price would exceed $5 million or (b) an
Affiliate of such Holder; provided, however, that (i) the transferring Holder
shall give the Registrant written notice at or prior to the time of such
transfer stating the name and address of the transferee and identifying the
securities with respect to which the rights under this Agreement are being
transferred; (ii) such transferee shall agree in writing, in form and substance
reasonably satisfactory to the Registrant, to be bound as a Holder by the
provisions of this Agreement; (iii) immediately following such transfer the
further disposition of such securities by such transferee is restricted under
the Securities Act; and (iv) the transferees of Registrable Shares of Investor
(other than Affiliates of Investor) may exercise their rights under Section 4.02
not more than ten (10) times in the aggregate during the term of this Agreement.
Except as set forth in this Section 6.03, no transfer of Registrable Securities
shall cause such Registrable Securities to lose such status.
SECTION 6.04 Successors and Assigns. Except as otherwise
expressly provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto. Except as expressly provided in this Agreement,
nothing in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement.
SECTION 6.05 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the state of New York.
SECTION 6.06 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 instrument.
SECTION 6.07 Titles. The titles of the Sections of this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
SECTION 6.08 Notices. Any notice required or permitted under
this Agreement shall be in writing and shall be delivered in person or mailed by
certified or registered mail, return receipt requested, directed to (a) the
Registrant at the address set forth below its signature hereof or (b) to a
Holder at the address therefor as set forth in the Registrant's records or, in
any such case, at such other address or addresses as shall have been furnished
in writing by such party to the others. The giving of any notice required
hereunder may be waived in writing by the parties hereto. Every notice or other
communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered, or on the date actually received, if sent by
mail or telex, with receipt acknowledged.
SECTION 6.09 Amendments and Waivers. Any provision of this
Agreement may be amended and the observance of any provision of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Registrant
and the Holders of at least a majority of the Registrable Securities issued. Any
amendment or waiver effected in accordance with this Section 6.09 shall be
binding upon each Holder of any securities subject to this Agreement at the time
outstanding (including securities into which such securities are convertible),
each future Holder and all such securities, and the Registrant.
SECTION 6.10 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provisions
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provisions were so excluded and shall be enforceable in
accordance with its terms.
SECTION 6.11 Entire Agreement. All prior agreements of the
parties concerning the subject matter of this Agreement are expressly superseded
by this Agreement. This Agreement contains the entire Agreement of the parties
concerning the subject matter hereof. Any oral representations or modifications
of this Agreement shall be of no effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
MERISEL, INC.
By:/s/Xxxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
Address: 000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
MERISEL AMERICAS, INC.
By:/s/Xxxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
Address: 000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
PHOENIX ACQUISITION COMPANY II, L.L.C.
by: Stonington Capital Appreciation 1994'
Fund, L.P., its sole member,
by: Stonington Partners, L.P., its
general partner,
by: Stonington Partners, Inc. II, its
general partner
By:/s/Xxxxxx X. Xxxxxxxxxxx III
------------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx III
Title: Partner
Address: 000 Xxxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx III
Telecopier: (000) 000-0000
