INACOM STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into as of
October 8, 1998 by and between InaCom Corp., a Delaware corporation ("Grantor"),
and Vanstar Corporation, a Delaware corporation ("Grantee").
RECITAL
Concurrently with the execution and delivery of this Agreement,
Grantor, Grantee, and Indigo Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Grantor ("Sub"), are entering into an Agreement and
Plan of Merger, dated as of October 8, 1998 (the "Merger Agreement"), which
provides for the merger of Sub with and into Grantee in accordance with the
terms of the Merger Agreement and the laws of the State of Delaware (the
"Merger"). As a condition and inducement to Grantee's willingness to enter into
the Merger Agreement, Grantee has requested that Grantor agree, and Grantor has
agreed, to grant to Grantee an option to acquire certain shares of Grantor's
authorized but unissued common stock (together with any associated rights,
"Grantor Common Stock"), on the terms and subject to the conditions set forth
herein.
NOW THEREFORE, to induce Grantee to enter into the Merger Agreement and
in consideration of the representations, warranties, covenants and agreements
contained herein and in the Merger Agreement, the parties hereto, intending to
be legally bound, hereby agree as follows. Capitalized terms used herein but not
defined herein shall have the meanings ascribed to them in the Merger Agreement.
AGREEMENT
Section 1. Grant of Option. Grantor hereby grants to Grantee an
irrevocable option (the "Grantor Option") to purchase a number
of shares of Grantor Common Stock equal to the Option Number
(as defined in Section 2(d)), on the terms and subject to the
conditions set forth below.
Section 2. Exercise and Termination of the Grantor Option.
Exercise. The Grantor Option may be exercised by Grantee, in
whole or in part, at any time or from time to time prior to
the termination of Grantee's right to exercise the Grantor
Option by the terms of this Agreement and upon and after the
occurrence of a "Trigger Event". For purposes of this
Agreement, a "Trigger Event" shall occur, if, and only if, all
of the following occur: (i) the Merger Agreement is terminated
and, as a result of such termination, a fee is payable by
Grantor to Grantee pursuant to Sections 8.2(b), (c) or (g)
thereof; (ii) prior to such termination an Acquisition
Proposal (as such term is defined in the Merger Agreement)
shall have been made for Grantor (other than made, directly or
indirectly, by Grantee or any affiliate thereof), and (iii)
either prior to, or within twelve (12) months following such
termination, the shareholders of Grantor approve -that
Acquisition Proposal. Notwithstanding the foregoing, the
Grantor Option may not be exercised if Grantee is in breach in
any material respect of any of its material representations,
warranties, covenants or agreements contained in this
Agreement, subject to reasonable notice and opportunity to
cure.
Exercise Procedure. In the event that Grantee wishes to
exercise the Grantor Option, Grantee shall deliver to Grantor
written notice (an "Exercise Notice") specifying the total
number of shares of Grantor Common Stock that Grantee wishes
to purchase (the "Option Shares"). To the extent permitted by
law and the Certificate of Incorporation, as amended, of
Grantor (the "Grantor Charter"), and provided that the
conditions set forth in Section 3 to Grantor's obligation to
issue the shares of Grantor Common Stock to Grantee hereunder
have been satisfied or waived, Grantee shall, upon delivery of
the Exercise Notice and tender of the applicable aggregate
Exercise Price (as defined in Section 2(e) below), immediately
be deemed to be the holder of record of the Option Shares,
notwithstanding that the stock transfer books of Grantor shall
then be closed or that certificates representing the Option
Shares shall not theretofore have been delivered to Grantee.
Each closing of a purchase of shares of Grantor Common Stock
hereunder (a "Closing") shall occur at a place, on a date, and
at a time designated by Grantee in an Exercise Notice
delivered at least two (2) business days prior to the date of
such Closing.
Termination of the Grantor Option. Grantee's right to exercise
the Grantor Option shall terminate upon the earliest to occur
of:
the Effective Time of the Merger;
the date on which the Merger Agreement is properly
terminated pursuant to Article VIII thereof other than under circumstances set
forth in Sections 2(a)(i) and 2(a)(ii); and
thirteen (13) months after the date on which the
Merger Agreement is terminated.
Notwithstanding the foregoing, with respect to clause (iii) in the immediately
preceding sentence, if the Grantor Option cannot be exercised by reason of any
applicable judicial or governmental judgment, decree, order, law or regulation,
the Grantor Option shall remain exercisable and shall not terminate until the
earlier of (x) the date on which such impediment shall become final and not
subject to appeal and (y) 5:00 p.m., Omaha, Nebraska time, on the tenth (10th)
business day after such impediment shall have been removed; provided, however,
that if such judgment, decree or order shall have been obtained at the request
of Grantor or any of its Affiliates or a party that has been made or is
proposing to make an Acquisition Proposal (as such term is defined in the Merger
Agreement) for Grantor, and such judgment, decree or order is vacated, set
aside, withdrawn, reversed or otherwise nullified, the time during which the
Grantor Option shall remain exercisable shall be extended for as long as such
judgment, decree, or order shall be in effect. The rights of Grantee and Grantor
set forth in Sections 7 (other than Section 7(a)(i), and 9 shall not terminate
upon termination of Grantee's right to exercise the Grantor Option with respect
to shares acquired prior to termination, but shall extend to the time provided
in such sections. Notwithstanding the termination of the Grantor Option, Grantee
shall be entitle to purchase the shares of Grantor Common Stock with respect to
which Grantee had exercised the Grantor Option prior to such termination.
Option Number. The aggregate number of shares of Grantor
Common Stock issuable upon exercise of this Grantor Option
(the "Option Number") shall initially be the number of shares,
rounded down to the nearest whole share, equal to nineteen and
nine-tenths percent (19.9%) of the total number of shares of
Grantor Common Stock issued and outstanding as of the date of
this Agreement, and shall be adjusted hereafter to reflect
changes in Grantor's capitalization occurring after the date
hereof in accordance with Section 10. Notwithstanding any
other provision, in no event shall the Option Number exceed
nineteen and nine-tenths percent (19.9%) of the total number
of shares of Grantor Common Stock issued and outstanding as of
the date of this Agreement, adjusted in accordance with
Section 10.
Exercise Price. The purchase price per share of Grantor Common
Stock pursuant to the Grantor Option (the "Exercise Price")
shall be payable in cash. The Exercise Price per share of
Grantor Common Stock, shall be a cash amount equal to $17 3/8.
Certain Limitations. In the event Grantee would otherwise
receive aggregate, cumulative Net Proceeds (as defined below)
of more than the Cap Amount (as defined below) in connection
with the sale (or other disposition) to any third party of the
shares of Grantor Common Stock acquired pursuant to the
Grantor Option, all Net Proceeds in excess of the Cap Amount
shall be remitted to Grantor promptly upon receipt. "Net
Proceeds" shall mean the aggregate proceeds of such sale or
disposition (less brokers commissions and discounts) in excess
of the product of the Exercise Price multiplied by the number
of shares of Grantor Common Stock included in such sale or
disposition. Cap Amount shall mean the amount by which $18
million exceeds the aggregate of the termination fees payable
by Grantor to Grantee pursuant to Section 8.2 of the Merger
Agreement. Notwithstanding anything in this Agreement or in
the Merger Agreement to the contrary, the maximum aggregate
amount payable by Grantor to Grantee and its affiliates
pursuant to this Agreement and the provisions of Section 8.2
of the Merger Agreement shall not exceed the sum of eighteen
million dollars ($18,000,000) plus, in the case of payments
pursuant to Section 7(a)(i)(y), 7(a)(ii), 7(b)(ii), 8(c) or
9(c) of this Agreement, the aggregate Exercise Price for the
shares of Grantor Common Stock repurchased by Grantor from
Grantee pursuant to this Agreement.
Section 3. Conditions to Closing. The obligation of Grantor to issue
the Option Shares to Grantee hereunder is subject to the conditions that (a) all
waiting periods, if any, under the Xxxx Xxxxx Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), applicable to the issuance of the Option
Shares hereunder shall have expired or have been terminated; (b) no preliminary
or permanent injunction or other order by any court of competent jurisdiction
prohibiting or otherwise restraining such issuance shall be in effect; and (c)
all consents, approvals, orders, authorizations and permits of any federal,
state, local and foreign governmental authority, if any, required in connection
with the issuance of the shares of Grantor Common Stock and the acquisition of
such shares by Grantee hereunder shall have been obtained.
Section 4. Closing. At any Closing: (a) Grantor shall deliver to
Grantee or its designee a single certificate in definitive form representing the
number of shares of Grantor Common Stock designated by Grantee in its Exercise
Notice, such certificate to be registered in the name of Grantee and to bear the
legend set forth in Section 11; and (b) Grantee shall deliver to Grantor the
aggregate Exercise Price for the shares of Grantor Common Stock so designated
and being purchased by wire transfer of immediately available funds to the
account or accounts specified in writing by Grantor. Effective at or prior to
the Closing, Grantor shall cause the shares of Grantor Common Stock being
delivered at the Closing to be approved for listing on The New York Stock
Exchange.
Section 5. Representations and Warrants of Grantor. Grantor represents
and warrants to Grantee as follows:
Organization and Standing. Grantor is a corporation duly
organized validly existing and in good standing under the laws
of the State of Delaware and has all corporate power and
authority required to enter into this Agreement and to carry
out its obligations hereunder.
Authority. The execution and delivery of this Agreement by
Grantor and the consummation by Grantor of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantor and no other corporate
proceedings on the part of Grantor and no action of Grantor
shareholders are necessary to authorize this Agreement or any
of the transactions contemplated hereby; this Agreement has
been duly and validly executed and delivered by Grantor and,
assuming the due authorization, execution and delivery hereby
by Grantee and the receipt of all required governmental
approvals, constitutes the valid and binding obligation of
Grantor, enforceable against Grantor in accordance with its
terms, except as may be limited by applicable bankruptcy,
insolvency reorganization or other similar laws affecting the
enforcement of creditor's rights generally, and except that
the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court
before which any proceeding therefor may be brought.
Reservation of Shares. Grantor has taken all necessary
corporate action to authorize and reserve for issuance and to
permit it to issue, upon exercise of the Grantor Option, and
at all times from the date hereof through the expiration of
the Grantor Option will have reserved a number of authorized
and unissued shares of Grantor Common Stock not less than the
Option Number, such amount being subject to adjustment as
provided in Section 10, all of which, upon their issuance and
delivery in accordance with the terms of this Agreement, will
be duly authorized, validly issued, fully paid and
nonassessable.
No Liens. The shares of Grantor Common Stock issued to Grantee
upon the exercise of the Grantor Option will be, upon delivery
thereof to Grantee, free and clear of all claims, liens,
charges, encumbrances and security interests of any nature
whatsoever.
No Conflicts. The execution and delivery of this Agreement by
Grantor does not, and, subject to compliance with applicable
law, the consummation by Grantor of the transactions
contemplated hereby will not violate, conflict with, or result
in a breach of any provision of, or constitute a default (with
or without notice or lapse of time, or both) under, or result
in the termination of, or accelerate the performance required
by, or result in a right of termination, cancellation, or
acceleration of any obligation or the loss of a material
benefit under, or the creation of a lien, pledge, security
interest or other encumbrance on assets (any such violation,
conflict, breach, default, termination, acceleration, right of
termination, cancellation or acceleration, loss, or creation,
a "Violation") by Grantor or any of its Subsidiaries of (i)
any provision of the charter or the bylaws of Grantor or any
of its Subsidiaries, each as amended to date, (ii) any
material provision of any material loan or credit agreement,
note, mortgage, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession,
franchise or license or any subsequently adopted "shareholders
rights plan" (a "Material Contract") of Grantor or any of its
Subsidiaries or to which any of them is a party or by which
any of them or their properties or assets are bound or (iii)
except as contemplated by Sections 3.7 or 3.13 of the Merger
Agreement (or the schedules thereunder) or Section 5(f) below,
any judgment, order, decree, statue, law, ordinance, rule or
regulation applicable to Grantor or any of its subsidiaries or
any of their properties or assets.
Consents and Approvals. The execution and delivery of this
Agreement by Grantor does not, and (except for the
notifications required under the HSR Act and applicable
foreign laws, the expiration or early termination of waiting
periods under the HSR Act and applicable foreign laws, and the
receipt of approvals under applicable securities laws, and
except as contemplated by Section 9) the performance of this
Agreement by Grantor and the consummation of the transactions
contemplated hereby will not, require any consent, approval,
order authorization or permit of, filing with, or notification
to any governmental or regulatory authority, other than such
consents, approvals, orders, authorizations, permits, filings
and notifications which, in the aggregate, if not obtained or
made, could not reasonably be expected to have a Parent
Material Adverse Effect or a Company Material Adverse Effect
(as such terms are defined in the Merger Agreement) or a
material adverse effect on the ability of the parties to
consummate the transactions contemplated by this Agreement.
Section 6. Representations and Warranties of Grantee. Grantee
represents and warrants to Grantor as follows:
Organization and Standing. Grantee is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware and has all corporate power and
authority required to enter into this Agreement and to carry
out its obligations hereunder.
Authority. The execution and delivery of this Agreement by
Grantee and the consummation by Grantee of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee and no other corporate
proceedings on the part of Grantee and no action of Grantee
shareholders are necessary to authorize this Agreement or any
of the transactions contemplated hereby; this Agreement has
been duly and validly executed and delivered by Grantee and,
assuming the due authorization, execution and delivery hereby
by Grantee and the receipt of all required governmental
approvals, constitutes the valid and binding obligation of
Grantee, enforceable against Grantee in accordance with its
terms, except as may be limited by applicable bankruptcy,
insolvency reorganization or other similar laws affecting the
enforcement of creditor's rights generally, and except that
the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court
before which any proceeding therefor may be brought.
No Conflicts. The execution and delivery of this Agreement by
Grantee does not, and the consummation by Grantee of the
transactions contemplated hereby will not violate, conflict
with, or result in a Violation by Grantee or any of its
Subsidiaries, of (i) any provision of the Certificate of
Incorporation or Bylaws of Grantee, (ii) any material
provision of any Material Contract of Grantee or any of its
Subsidiaries or to which any of them is a party or by which
any of them or their properties or assets are bound, or (iii)
except as contemplated by Sections 4.7 or 4.13 of the Merger
Agreement (or the schedules thereunder) or Section 6(d) below,
any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Grantee or any of its Subsidiaries or
any of their properties or assets.
Consents and Approvals. The execution and delivery of this
Agreement by Grantee does not, and (except for the
notifications required under the HSR Act and applicable
foreign laws, the expiration or early termination of waiting
periods under the HSR Act and applicable foreign laws, and the
receipt of approvals under applicable securities laws, and
except as contemplated by Section 9) the performance of this
Agreement by Grantor and the consummation of the transactions
contemplated hereby will not, require any consent, approval,
order authorization or permit of, filing with, or notification
to any governmental or regulatory authority, other than such
consents, approvals, orders, authorizations, permits, filings
and notifications which, in the aggregate, if not obtained or
made, could not reasonably be expected to have an Parent
Material Adverse Effect or a Company Material Adverse Effect
(as such terms are defined in the Merger Agreement) or a
material adverse effect on the ability of the parties to
consummate the transactions contemplated by this Agreement.
Investment Purposes. Any shares of Grantor Common Stock
acquired by Grantee upon exercise of the Grantor Option will
be acquired for Grantee's own account, for investment purposes
only, and will not be, and the Grantor Option is not being,
acquired by Grantee with a view to the public distribution
thereof in violation of any applicable provision of the
Securities Act.
Section 7. Certain Repurchases. Upon written notice (a "Repurchase
Notice"):
(i) Grantee "Put". By Grantee to Grantor:
(x) during the time the Grantor Option is exercisable
pursuant to Section 2, Grantor and its successors in
interest shall repurchase from Grantee all or any
portion of the Grantor Option, as specified by
Grantee, to the extent not previously exercised, at
the Option Repurchase Price set forth in Section
7(b)(i), subject to and as limited by Section 2(f)
above; and
(y) at any time, during which Grantee holds Option
shares Grantor and its successors in interest shall
repurchase from Grantee all or any portion of the
shares of Grantor Common Stock purchased by Grantee
pursuant to the Grantor Option, as specified by
Grantee, at the Share Repurchase Price set forth in
Section 7(b)(ii) subject to and as limited by Section
2(f) above.
(ii) Grantor "Call." By Grantor to Grantee:
(x) Grantee shall sell to Grantor all, but not less
than all, of the Grantor Option, at the Option
Repurchase Price set forth in Section 7(b)(i),
subject to and as limited by Section 2(f) above; and
(y) at any time during which Grantee holds Option
Shares, Grantee and its successors in interest shall
sell to Grantor all or any portion of the Option
Shares, as specified by Grantor, at the Share
Repurchase Price as set forth in Section 7(b)(ii)
subject to and limited by Section 2(f) above.
Certain Definitions. For purposes of this Section 7, the
following definitions shall apply:
(i) Option Repurchase Price. "Option Repurchase
Price" shall mean (A) the amount (if any) by which
the Fair Market Value (as defined in Section
7(b)(iii)) of a single share of Grantor Common Stock
as of the date of the applicable Repurchase Notice
exceeds the per share Exercise Price multiplied by
(B) the number of shares of Grantor Common Stock
purchasable pursuant to the Grantor Option or the
portion thereof covered by the applicable Repurchase
Notice.
Share Repurchase Price. "Share Repurchase Price"
shall mean the product of (A) the greater of (I) the
Exercise Price paid by Grantee per share of Grantor
Common Stock acquired pursuant to the Grantor Option
and (II) the Fair Market Value (as defined in Section
7(b)(iii)) of a single share of Grantor Common Stock
as of the date of the applicable Repurchase Notice,
and (B) the number of shares of Grantor Common Stock
to be repurchased pursuant to this Section 7 as
covered by the applicable Repurchase Notice.
Fair Market Value. As used in this Agreement, "Fair
Market Value" shall mean, with respect to any
security, the per share average of the last reported
sale prices on the New York Stock Exchange (or such
other national stock exchange or national market
system as shall then be the primary trading market
for such security) for the ten (10) trading days
immediately preceding the applicable date or highest
price to be paid per share in an Acquisition
Proposal.
Payment and Redelivery of Grantor Options or Shares. In the
event that Grantee or Grantor exercises their respective
rights under Section 7(a), Grantor shall within ten (10)
business days thereafter, pay the required amount to Grantee
in immediately available and Grantee shall surrender to
Grantor the Grantor Option or the certificate or certificates
evidencing the shares of Grantor Common Stocksubject to the
applicable Repurchase Notice, and Grantee shall warrant that
it has sole beneficial ownership of the Grantor Option or such
shares and that the Grantor Option or such shares are then
free and clear of all claims, liens, charges, encumbrances and
security interests of any nature whatsoever.
Repurchase Price Reduced at Grantee's Option. In the event
that payment of the repurchase price specified in Section 7(a)
would subject the repurchase of the Grantor Option or the
shares of Grantor Common Stock purchased by Grantee pursuant
to the Grantor Option to a vote of the stockholders of Grantor
pursuant to applicable law, regulations, or requirements of a
national securities exchange or national market system or the
Grantor Charter, the Grantee may at its election, reduce the
repurchase price or the number of shares covered by the
Grantee repurchase request to an amount which would permit
such repurchase without the necessity for such vote.
Section 8. Restrictions on Transfer.
Restrictions on Transfer. Prior to the fifth anniversary of
the date hereof (the "Expiration Date"), Grantee shall not,
directly or indirectly, by operation of law or otherwise,
sell, assign, pledge or otherwise dispose of or transfer any
Option Shares ("Restricted Shares"), other than (i) pursuant
to Section 7 or (ii) in accordance with Sections 8(b) or 9.
Permitted Sales. Following the termination of the Merger
Agreement, Grantee shall be permitted to sell any Restricted
Shares beneficially owned by it if such sale is made (i)
pursuant to a tender or exchange offer or other business
combination transaction or (ii) subject to Section 8(c) or (d)
as the case may be, to a person who, immediately following
such sale, would beneficially own (within the meaning of Rule
13d-3 promulgated under the Exchange Act), either alone or as
part of a "group" (as used in Rule 13d-5 under the Exchange
Act), not more than ten percent (10%) of such party's
outstanding voting securities, which person is a passive
institutional investor who would be eligible under Rule
13d-1(b)(1) under the Exchange Act to report such holdings of
Restricted Shares on Schedule 13G under the Exchange Act.
Grantor's Right of First Refusal. At any time after the first
occurrence of a Trigger Event and prior to the Expiration Date
if Grantee shall desire to sell, assign, transfer or otherwise
dispose of all or any of the shares of Grantor Common Stock or
other securities acquired by it pursuant to the Grantor
Option, it shall give Grantor written notice of the proposed
transaction (an "Grantee Offer Notice"), identifying the
proposed transferee, accompanied by a copy of a binding offer
to purchase such shares or other securities signed by such
transferee and setting forth the terms of the proposed
transaction. A Grantee Offer Notice shall be deemed an offer
by Grantee to Grantor, which may be acceptable within five (5)
business days of the receipt of such Grantee Offer Notice, on
the same terms and conditions and at the same price at which
Grantee is proposing to transfer such shares or other
securities to such transferee. The purchase of any such shares
or other securities by Grantor shall be settled within five
(5) business days of the date of the acceptance of the offer
and the purchase price shall be paid to Grantee in immediately
available funds. In the event of the failure or refusal of
Grantor to purchase all the shares or other securities covered
by a Grantee Offer Notice, Grantee may sell all, but not less
than all, of such shares or other securities to the proposed
transferee at no less than the price specified and on terms no
more favorable to the transferee than those set forth in the
Grantee Offer Notice as long as such sale is completed within
ninety (90) days of the receipt by Grantor of the applicable
Grantee Office Notice; provided that the provisions of this
sentence shall not limit the rights Grantee may otherwise have
in the event Grantor has accepted the offer contained in the
Grantee Offer Notice and wrongfully refuses to purchase the
shares or other securities subject thereto. The requirements
of this Section 8(c) shall not apply to (i) any disposition as
a result of which the proposed transferee would own
beneficially not more than three percent (3%) of the
outstanding voting power of Grantor, (ii) any disposition of
Grantor Common Stock or other securities by a person to whom
Grantee has assigned its rights under the Grantor Option with
the consent of Grantor, (iii) any sale by means of a public
offering registered under the Securities Act, or (iv) any
transfer to a wholly-owned subsidiary of Grantee which agrees
in writing to be bound by the terms hereof.
(d) Additional Restrictions. Prior to any permitted sales of
any Restricted Shares under Section 8(b)(ii), the holder
thereof shall give written notice to the issuer of such
Restricted Shares of its intention to effect such transfer.
Each such notice shall describe the manner of the proposed
transfer and, if required by the issuer of such Restricted
Shares, shall be accompanied by an opinion of counsel
satisfactory to such issuer (it being agreed that each of
Xxxxx & Xxxxxx LLP, a limited liability partnership, and
XxXxxxx, North, Xxxxxx & Xxxxx, P.C., shall be satisfactory)
to the effect that such sale may be effected without
registration under the Securities Act and any applicable state
securities laws. Each certificate for Restricted Shares
transferred as above provided shall bear the legend set forth
in Section 11, except that such certificate 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 would
be entitled to transfer such securities in a public sale
without registration under the Securities Act or any
applicable state securities laws. The restrictions provided
for in this Section 8(d) shall not apply to securities which
are not required to bear the legend prescribed in Section 11
in accordance with the provisions of this Agreement. The
foregoing restrictions on transferability set forth in this
Section 8(d) shall terminate as to any particular shares when
such shares shall have been effectively registered under the
Securities Act and any applicable state securities laws and
sold or otherwise disposed of in accordance with the
registration statement covering such shares.
Section 9. Registration Rights.
(a) Procedure. Following termination of the Merger Agreement,
Grantee (the "Holder") may by written notice (the
"Registration Notice") to the Grantor (the "Registrant")
request the Registrant to register under the Securities Act
all or any part of the Restricted Shares acquired by such
Holder pursuant to this Agreement (the "Registrable
Securities") in order to permit the sale or other disposition
of such shares pursuant to a bona fide commitment underwritten
public offering, in which the Holder and the underwriters
shall effect as wide a distribution of such Registrable
Securities as is reasonable practicable and shall use their
best efforts to prevent any person (including any "group" as
used in Rule 13d-5 under the Exchange Act) and its affiliates
from purchasing through such offering Restricted Shares
representing more than three percent (3%) of the outstanding
shares of common stock of the Registrant on a fully diluted
basis (a "Permitted Offering"). Any rights to require
registration hereunder shall terminate with respect to any
shares that may be sold pursuant to Rule 144(k) under the
Securities Act.
(b) Manager's Certificate. The managing underwriter shall be
an investment banking firm of nationally recognized standing,
and shall be selected by (i) the Registrant within ten (10)
business days after receipt of a Registration Notice, subject
to approval of the Holder (which approval shall not be
unreasonably withheld, delayed or conditioned), or (ii) if
Registrant fails to deliver notice (the "Registrant's
Designation Notice") to Holder of such selection within ten
(10) business days after receipt of a Registration Notice,
then by Holder subject to the reasonable approval of
Registrant (which approval shall not be unreasonable withheld,
delayed or conditioned) (the "Manager"), and Holder shall
deliver written notice (the "Holder's Designation Notice") of
such selection within ten (10) business days after expiration
of the ten (10) day period in which Registrant is entitle to
give notice. The Registrant's Designation Notice or the
Holder's Designation Notice, as the cause may be, shall state
that (i) the party delivering such notice and its proposed
Manager have a good faith intention to commence promptly a
Permitted Offering, and (ii) such proposed Manager in good
faith believes that, based on the then-prevailing market
conditions, it will be able to sell the Registrable Securities
to the public in a Permitted Offering within one hundred
twenty (120) days at a per share price equal to at least
eighty percent (80%) of the then Fair Market Value of such
shares.
(c) First Refusal Right. The Registrant (and/or any person
designated by the Registrant) shall thereupon have the option
exercisable by written notice delivered to the Holder within
five (5) business days after the receipt of the Registration
Notice proposed to be so sold for cash at a price equal to the
product of (i) the number of Registrable Securities to be so
purchased by the Registrant and (ii) the then Fair Market
Value of such shares, subject to Section 2(f) hereof.
(d) Closing. Any purchase of Registrable Securities by the
Registrant (or its designee) under Section 9(c) shall take
place at a closing to be held at the principal executive
offices of the Registrant or at the offices of its counsel at
any reasonable date and time designated by the Registrant
and/or such designee in such notice within twenty (20)
business days after delivery of such notice, and any payment
for the shares to be so purchased shall be made by delivery at
the time of such closing in immediately available funds.
(e) Certain Limitations. If the Registrant does not elect to
exercise its option pursuant to Section 9(c) with respect to
all Registrable Securities, it shall use its best efforts to
effect, as promptly as practicable, the registration under the
Securities Act of the unpurchased Registrable Securities
proposed to be sold; provided, however, that (i) holder shall
not be entitled to demand more than an aggregate of two (2)
effective registration statements hereunder, and (ii) the
Registrant will not be required to file any such registration
statement during any period of time (not to exceed sixty (60)
days after such request in the case of clause (A) below or
ninety (90) days after such request in the case of clauses (B)
and (C) below) when (A) the Registrant is in possession of
material non-public information which it reasonably believes
would be detrimental to be disclosed at such time and, in the
opinion of counsel to the Registrant such information would be
required to be disclosed if a registration statement was filed
at that time; (B) the Registrant is required under the
Securities Act to include audited financial statements for any
period in such registration statement and such financial
statements are not yet available for inclusion in such
registration statement; or (C) the Registrant determines, in
its reasonable judgement, that such registration would
interfere with any financing, acquisition or other transaction
involving the Registrant or any of its material subsidiaries
and that such transaction is material to the Registrant and
its subsidiaries taken as a whole. If consummation of the sale
of any Registrable Securities pursuant to the registration
hereunder does not occur within one hundred twenty (120) days
after the effectiveness of the initial registration statement,
the provisions of this Section 9 shall again be applicable to
any proposed registration.
(f) State Securities Laws. The Registrant shall use its
reasonable best efforts to cause any Registrable Securities
registered pursuant to this Section 9 to be qualified for sale
under the securities laws of such states as the Holder may
reasonably request and shall continue such registration or
qualification in effect in such jurisdiction; provided,
however, that the Registrant shall not be required to qualify
to do business in, or consent to general service of process
in, any jurisdiction by reason of this provision.
(g) Obligations of Registrant. The Registrant shall provide to
the underwriters such documentation (including certificates,
opinions of counsel and "comfort" letters from auditors) as is
customary in connection with underwritten public offerings as
such underwriters may reasonably require. The registration
rights set forth in this Section 9 are subject to the
condition that the Holder shall provide the Registrant with
such information with respect to its Registrable Securities,
the plans for the distribution thereof, and such other
information with respect to the Holder as, in the reasonable
judgement of counsel for the Registrant, is necessary to
enable the Registrant to include in such registration
statement all material facts required to be disclosed with
respect to a registration thereunder.
(h) Indemnification. In connection with any registration
effected under this Section 9, the parties agree (i) to
indemnify each other (and each other's directors and officers)
and the underwriters in the customary manner, (ii) to enter
into an underwriting agreement in form and substance customary
for transactions of such type with the Manager and the other
underwriters participating in such offering, and (iii) to take
all further actions which shall be reasonably necessary to
effect such registration and sale (including, if the Manager
deems it necessary, participating in road-show presentations).
(i) Inclusion of Additional Shares of Registrant. The
Registrant shall be entitled to include (at its expense)
additional shares of its common stock in a registration
effected pursuant to this Section 9 only if and to the extent
the Manager determines that such inclusion will not adversely
affect the prospects for success of such offering.
Section 10. Adjustment Upon Changes in Capitalization.
(a) Without limiting any restriction on Grantor contained in
this Agreement or in the Merger Agreement, in the event of any
change in Grantor Common Stock by reason of any stock
dividend, stock split, reclassification, merger (other than
the Merger), recapitalization, combination, exchange of shares
or any similar transaction, the type and number of shares or
securities subject to the Grantor Option, and the Exercise
Price per share provided herein, shall be adjusted
appropriately and proper provision shall be made in the
agreements governing such transaction so that Grantee shall
receive, upon exercise of the Grantor Option, the number and
class of securities or property that Grantee would have
received in respect of the shares of Grantor Common Stock
issuable to Grantee if the Grantor Option had been exercised
immediately prior to such event or the record date thereof, as
applicable.
(b) In the event that Grantor shall enter into an agreement:
(i) to consolidate with or merger into any person, other than
Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or
merger; (ii) to permit any person, other than Grantee or one
of its Subsidiaries, to merge into Grantor and Grantor shall
be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Grantor
Common Stock shall be changed into or exchanged for stock or
other securities of Grantor or any person or cash or any other
property; or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than
Grantee or one of its Subsidiaries, then, and in each such
case, the agreement governing such transaction shall make
proper provision so that the Grantor Option upon the
consummation of such transaction and upon the terms and
conditions set forth herein, be converted into, or exchanged
for, an option with identical terms appropriately adjusted to
acquire the number and class of shares or other securities or
property that Grantee would have received in respect of Common
Stock if Grantor Option had been exercised immediately prior
to such consoliation, merger, sale or transfer or the record
date therefor, as applicable and make any other necessary
adjustments subject to Section 2(f) hereof.
Section 11. Restrictive Legends. Each certificate representing Option
Shares shall include a legend in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES OR BLUE SKY LAWS, AND MAY BE REOFFERED OR
SOLD ONLY IF SO REGISTRERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO
ADDITONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE INACOM
STOCK OPTION AGREEMENT DATED AS OF OCTOBER 6, 1998, A COPY OF
WHICH MAY BE OBTAINED FROM THE ISSUER UPON REQUEST.
It is understood and agreed that (i) the reference to the resale restrictions of
the Securities Act and state securities or Blue Sky laws in the foregoing legend
shall be removed by delivery of substitute certificate(s) without such reference
if Grantee of Grantor, as the case may be, shall have delivered to the other
party a copy of a letter from the staff of the Securities and Exchange
Commission, or an opinion of counsel, in form and substance reasonably
satisfactory to the other party, to the effect that such legend is not required
for purposes of the Securities Act or such laws; (ii) the reference to the
provisions of this Agreement in the foregoing legend shall be removed by
delivery of substitute certificate(s) without such reference if the shares have
been sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law. Certificates
representing shares sold in a registered public offering pursuant to Section 9
shall not be required to bear the legend set forth in this Section 11.
Section 12. Binding Effect; No Assignment; No Third Party
Beneficiaries. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. Except
as expressly provided for in this Agreement, neither this Agreement nor the
rights or obligations of either party thereto are assignable, except by
operation of law, or with the written consent of the other party, and any such
attempted assignment in violation of this Agreement shall be void and of no
force or effect. Except as provided in Section 9(h)(i), nothing contained in
this Agreement, express or implied, is intended to confer upon any person other
than the parties hereto and their respective permitted assigns and rights or
remedies of any nature whatsoever. Any Restricted Shares sold by a party in
compliance with the provisions of Section 9 shall, upon consummation of such
sale, be free of the restrictions imposed and the benefits provided with respect
to such shares by this Agreement.
Section 13. Specific Performance. The parties hereto recognize and
agree that if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused for which money damages
would not be an adequate remedy. Accordingly, each party agrees that, in
addition to other remedies, whether at law or in equity, the other party shall
be entitled to an injunction to prevent or restrain any violation or threatened
violation of the provisions of this Agreement, and to enforce specifically the
terms and provisions hereof, in any court of the State of Delaware or of the
United States of America located in the State of Delaware. In the event that any
action should be brought in equity to enforce the provisions of this Agreement,
neither party will allege, and each party hereby waives the defense, that there
is an adequate remedy at law. Each party hereto irrevocably and unconditionally
consents and submits to the jurisdiction of the courts of the State of Delaware
for any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby, and waives any objection to
venue in any such court therein.
Section 14. Validity.
(a) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability
of the other provisions of this Agreement, which shall remain
in full force and effect.
(b) In the event any court or other governmental or regulatory
authority holds any provisions of this Agreement to be null,
void or unenforceable, the parties hereto shall negotiate in
good faith the execution and delivery of an amendment to this
Agreement in order, as nearly as possible, to effectuate, to
the extent permitted by law, the intent of the parties hereto
with respect to such provision of the economic effect thereof.
(c) If for any reason any such court or other governmental or
regulatory authority determines that Grantee is not permitted
to acquire, or Grantor is not permitted to repurchase pursuant
to Section 7, the full number of shares of Grantor Common
Stock provided in this Agreement (as the same may be
adjusted), it is the express intention of Grantor to allow
Grantee to acquire or to require Grantor to repurchase such
lesser number of shares as may be permissible without any
other amendment or modification hereof.
(d) Each party agrees that, should any court or other
governmental or regulatory authority hold any provision of
this Agreement or part hereof to be null, void or
unenforceable, or order any party to take any action
inconsistent herewith, or not take any action required herein,
the other party shall not be entitled to specific performance
of such provision or part hereof or to any other remedy,
including but not limited to money damages, for breach hereof
or any other provision of this Agreement or part hereof as the
result of such holding or order.
Section 15. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if (a) delivered personally, or
(b) if sent by overnight courier service (receipt confirmed in writing), or (c)
if delivered by facsimile transmission (with receipt confirmed), (d) five (5)
days after being mailed by registered or certified mail (return receipt
requested) to the parties in each case to the following addresses (or at such
other address for a party as shall be specified by like notice):
If to Grantor, to: InaCom Corp.
00000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
With a copy to: XxXxxxx, North, Xxxxxx & Xxxxx, P.C.
0000 Xxx Xxxxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
Fax: (000) 000-0000
If to Grantee, to: Vanstar Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxxx 000, Xxxxx 0000
Xxxxxxx, Xxxxxxx
Attention: General Counsel
Fax: (000) 000-0000
With a copy to: Xxxxx & Xxxxxx, LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
Section 16. Governing Law. This Agreement shall be governed by and
construed, and any controversy arising out of or otherwise relating to this
Agreement shall be determined, in accordance with the laws of the State of
Delaware applicable to agreements made and to be performed entirely within such
state and without regard to its choice of law principles. Each party hereto
consents and subject to the exclusive jurisdiction of the courts of the State of
Delaware and the courts of the United States located in such state for the
adjudication of any action, suit, proceeding, claim or dispute arising out of or
otherwise relating to this Agreement.
Section 17. Interpretation. The headings contained in this Agreement
are for reference purposes and shall not affect in any way the meaning or
interpretation of the Agreement. When reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement, unless
otherwise indicated. Whenever the words "include," "includes," or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation." Whenever "or" is used in this Agreement it shall be
construed in the nonexclusive sense. The words "herein," "hereby," "hereof," and
"hereunder" and words of similar import refer to this Agreement.
Section 18. Counterparts; Effect. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
Section 19. Expenses. Grantor shall pay all expenses, and any and all
federal, state and local taxes and other charges, that may be payable in
connection with the preparation, issuance and delivery of Grantor stock
certificates under Section 4 and any stock listing or stock quotation
application required to be filed by Grantor with respect to such shares. A
registration effected under Section 9 shall be effected at the Registrant's
expense, except for underwriting discounts and commissions and the fees and the
expenses of counsel to the Holder. Subject to the foregoing and except as
otherwise expressly provided herein or in the Merger Agreement, all other costs
and expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
Section 20. Amendments; Waiver. This Agreement may be amended by the
parties hereto and the terms and conditions hereof may be waived only by an
instrument in writing signed on behalf of each of the parties hereto, or, in the
case of a waiver, by an instrument signed on behalf of the party waiving
compliance.
Section 21. Extension of Time Periods. The time periods for exercises
of certain rights hereunder shall be extended (but in no event by more than six
(6) months): (a) to the extent necessary to obtain all governmental approvals
for the exercise of such rights, and for the expiration of all statutory waiting
periods; and (b) to the extent necessary to avoid any liability or disgorgement
of profits under Section 16(b) of the Exchange Act by reason of such exercise.
Section 22. Further Assurances. Each party agrees to execute and
deliver all such further documents and instruments and take all such further
action as may be necessary in order to consummate the transactions contemplated
hereby.
IN WITNESS WHEREOF, Grantor and Grantee have caused this Agreement to
be duly executed and delivered on the day and year first above written.
GRANTOR
INACOM CORP.
By: /s/ Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: President and Chief Executive Officer
GRANTEE
VANSTAR CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
