EXHIBIT 99.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
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into the 19th day of September, 1997, by and among Merisel, Inc., a Delaware
corporation (the "Company"), Merisel Americas, Inc., a Delaware corporation and
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wholly owned subsidiary of the Company (the "Subsidiary") and Phoenix
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Acquisition Company II, L.L.C., a Delaware limited liability company ("Lender").
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WHEREAS, the Company and Subsidiary have agreed to enter into a Stock and
Note Purchase Agreement (the "Stock and Note Purchase Agreement") with Lender
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pursuant to which Lender is to purchase (the "Purchase") from the Company
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4,901,316 shares of the Company's Common Stock (as defined herein) and purchase
from the Company and the Subsidiary a convertible promissory note (the "Note")
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which is convertible into shares of Common Stock.
WHEREAS, it is a condition to the obligations of the parties under the
Stock and Note Purchase Agreement that the parties hereto enter into this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Lender and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
SECTION 1.01 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
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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
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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, (i) prior to the Reverse Stock Split,
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common stock, par value $.01 per share, of the Company and (ii) from and
after the Reverse Stock Split, common stock, par value $.05 per share, of
the Company.
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"control" when used with respect to any person, shall mean the power
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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
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received by Lender upon the conversion of the Note.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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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 Lender or any transferee or assignee to which the
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rights under this Agreement are assigned in accordance with the provisions
of Section 6.03 hereof.
"person" shall mean a corporation, association, partnership,
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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
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purchased by Lender pursuant to the Stock and Note Purchase Agreement.
"Registrant" shall mean the Company and/or the Subsidiary, as
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applicable.
"Register," "registered" and "registration" shall refer to a
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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 Debt Securities" shall mean the debt securities on terms
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and conditions substantially identical to those of the Note except to the
extent that transfer and other provisions of the Note may be amended for
purposes of the registration of such debt security in accordance herewith.
"Registrable Securities" shall mean collectively, the Registrable Debt
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Securities and the Registrable Shares.
"Registrable Shares" shall mean (i) the shares of Purchased Common
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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
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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.
"Reverse Stock Split" shall mean the one-for-five stock split of the
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Company's common stock, par value $.01 per share.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
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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
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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 Lender. Lender hereby
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represents and warrants to each Registrant that Lender 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 Lender have been duly authorized by Lender and no other proceedings on the
part of Lender are necessary to authorize this Agreement and the transactions
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by Lender and, assuming the due execution hereof by each
Registrant, constitutes the legal, valid and binding obligation of Lender,
enforceable against Lender in accordance with its terms.
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SECTION 2.02 Representations and Warranties of each Registrant. Each
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Registrant hereby represents and warrants to Lender 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 Lender,
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
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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
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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.
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ARTICLE IV
REGISTRATION PROVISIONS
SECTION 4.01 Demand Registration of Registrable Debt Securities. (a)
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Except as provided for in Section 6.03, at any time, and from time to time,
after the earlier of (i) the occurrence of an event that will result in the
Termination Fee (as defined in the Stock and Note Purchase Agreement) being
payable pursuant to Section 6.05 of the Stock and Note Purchase Agreement and
(ii) January 31, 1998, but not more than three times, the Holders of at least
10% of the Registrable Debt Securities issued (the "Securities Initiating
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Holders") may request in a written notice that the Registrant file a
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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 Debt Securities 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
Debt Securities 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 Debt Securities 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 Debt Securities 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 Debt
Securities in such registration shall be conditioned upon such Holder's
participation in such underwritten offering and the inclusion of such Holder's
Registrable Debt Securities 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 Debt Securities 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)
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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 Debt Securities, (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 Debt Securities,
and (iii) that no Securities Initiating Holder or any such Holder
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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 Debt Securities 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 Debt Securities disapproves of the terms of the
underwriting, such Holder may elect to withdraw all its Registrable Debt
Securities 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
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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
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best efforts to file such registration statement shall be deferred for a
period not to exceed ninety (90) days (the "Delay Period"); provided, that
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(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
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as provided for in Section 6.03, at any time following the earlier of (i)
January 31, 1998, (ii) the occurrence of an event that will result in the
Termination Fee being payable pursuant to Section 6.05 of the Stock and Note
Purchase Agreement and (iii) the Conversion Date 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
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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
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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
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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;
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provided, that the Registrant shall actively employ in good faith all
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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,
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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
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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 to not
less than one-third of the total number of shares in such offering; provided
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that in the case of an offering of Registrant securities on the Registrant's
behalf the Registrant shall be entitled to reduce the number of Registerable
Shares 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
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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
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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
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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,
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however, that the Registrant shall not be required in connection therewith
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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
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Registrable Securities in any jurisdiction in which the securities
regulatory authority requires that any Holder
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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
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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
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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
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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
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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
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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
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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
13
(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
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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
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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
14
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
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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
15
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.
16
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.
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
17
of Lender (other than Affiliates of Lender) 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
18
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.
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
MERISEL, INC.
By: /s/ XXXXXX X. XXXXXXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title:Chief Executive Officer
Address: 000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
------------------------------
Telecopier:(000) 000-0000
------------------------------
MERISEL AMERICAS, INC.
By: /s/ XXXXXX X. XXXXXXXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title:Chief Executive Officer
Address: 000 Xxxxxxxxxxx Xxxxxxxxx
Xx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
------------------------------
Telecopier:(000) 000-0000
------------------------------
PHOENIX ACQUISITION
COMPANY II, L.L.C.
by: Stonington Capital Appreciation 1994
Fund, L.P., as a 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
------------------------------
