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EXHIBIT 10.1
PINNACLE MICRO, INC.
19 Technology Drive
Irvine, California 92618
December 8, 1996
Mr. Scott A. Blum
30282 Anamonte
Laguna Niguel, CA 92677
Mr. William F. Blum
28300 Alava
Mission Viejo, CA 92692
Re: Stand-still and Voting Agreement with Pinnacle Micro, Inc.
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Gentlemen:
1. The purpose of this letter is to confirm the agreements set forth
below between Pinnacle Micro, Inc. (the "Company") and each of Scott A. Blum,
William F. Blum, individually and as trustee and/or settler of certain
revocable trusts (individually a "Blum Family Trust" and collectively the "Blum
Family Trusts") (each a "Stockholder") relating to the Stockholders' ownership
of common stock of the Company ("Common Stock"), Board representation and
related matters.
2. Each Stockholder agrees not to acquire, agree to acquire or make
any proposal to acquire, directly or indirectly, any Common Stock, any other
securities issued by the Company, a material portion of the Company's assets or
property, any equity interest in the Company or any options or other rights to
purchase any such securities, assets, property or equity interest (other than
property transferred by the Company in the ordinary course of business), except
for
(a) Common Stock owned by it as of the date of this letter,
(b) with respect to Scott Blum, any options that may be granted
to him in connection with his proposed severance agreement with the
Company,
(c) Common Stock acquired pursuant to the exercise of options it
already owns; or
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EXHIBIT 10.1 (CONTINUED)
(d) transfers from one Stockholder to another. Sales under the
registration statement described below will not be limited by this
Agreement.
3. Each Stockholder further agrees that, without the prior written
approval of the Company's Board of Directors, it will not
(a) propose to enter into or negotiate or agree for the Company
to enter into, directly or indirectly, any merger or business combination
involving the Company or an agreement concerning the possible sale or
purchase of, directly or indirectly, a material portion of the assets of
the Company,
(b) make, or in any way participate, directly or indirectly, in
any "solicitation" of "proxies" (as such terms are used in the proxy rules
of the United States Securities and Exchange Commission) to vote, or seek
to advise or influence any person with respect to the voting of, any
voting securities of the Company,
(c) form, join or in any way participate in a partnership,
limited partnership, syndicate or a "group" (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) with respect
to any acquiring, holding, voting or disposing of securities of the
Company,
(d) otherwise act, alone or in concert with others, to seek to
change, control or influence the membership of the Board of Directors, the
management or policies of the Company or for the purpose of acquiring,
holding, voting or disposing of Common Stock or other securities, assets,
or property of the Company or an equity interest in the Company,
(e) without the consent of the Board of Director's seek to call
or assist any other person to call, a special meeting of the Company's
stockholders or
(f) advise, assist or encourage any other persons in connection
with any of the foregoing.
Actions by William Blum as a director will not be subject to these
restrictions.
4. Each Stockholder also agrees not to bind or obligate the Company
and not to sign any contracts, agreements or other documents or incur any
expense, liability or obligation or make any other commitments on behalf of the
Company, and not to negotiate or attempt to negotiate on behalf of the Company,
and not to solicit any person or entity for any possible sale of the Company.
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EXHIBIT 10.1 (CONTINUED)
5. Each Stockholder also agrees that until the earlier of (i) the
first anniversary of the date of this letter and (ii) the date on which the
Stockholder no longer owns, directly or indirectly, any Common Stock or options
to acquire Common Stock, the Stockholder will vote all shares of Common Stock
owned by it and all other shares of Common Stock the voting of which is in its
control in favor of the slate of directors recommended by the Company's Board
of Directors and on all matters, except those described in clause 3(a) above,
as recommended by the Company's Board of Directors. The Company agrees to
include on the slate up to two (2) director(s) to be recommended by the
Stockholders (acting through William F. Blum) that are reasonably acceptable to
the Company's Board of Directors and confirms that William F. Blum is
acceptable. Stockholders agree not to recommend any person related to any
Stockholder by birth or marriage except for William F. Blum. Any shares sold
under a "shelf" registration statement will not be subject to this voting
requirement after the sale.
6. In return for the agreements set forth above, the Company agrees
that within a reasonable time after it files its Form 10-K for the fiscal year
ending December 28, 1996, the Company will file with the Securities and
Exchange Commission a "shelf" registration statement providing for the orderly
sale, in the public market, of up to all shares of Common Stock owned by the
Stockholders (with the number of such shares to be specified by William F. Blum
on behalf of the Stockholders except that Scott Blum may require the inclusion
of up to all shares owned directly by him), pursuant to a registration rights
agreement to be entered into by the Company and the Stockholders. The
registration rights agreement will include customary terms (including customary
indemnification provisions and Company's agreement to keep the shelf
registration effective for one year) and will provide that all costs relating
to the registration customarily paid by stockholders in secondary offerings
will be borne by the Stockholders; provided however that the Stockholders will
not be required to reimburse the Company for the time spent by the Company's
directors, officers and other employees devoted to the preparation and filing
of the registration statement, or for any fees charged by the Company's outside
accountants except for a reasonable and customary fee for (i) consenting to the
inclusion of such accountants' opinion in the registration statement, or (ii)
furnishing a "cold comfort" letter requested by underwriters if Stockholders
decide to retain an underwriting firm.
7. Stockholders hereby agree that the Secretary of the Company and
the inspector of election at any meeting of the Company's stockholders may
treat this Agreement or a copy hereof as a valid proxy in favor of the proxy
holders named by the directors. Stockholders understand that the proxy hereby
granted is not revocable.
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EXHIBIT 10.1 (CONTINUED)
8. Stockholders will likely learn of material non-public information
regarding the Company. Accordingly, Stockholders agree to keep the information
confidential and agree not to use it to the detriment of the Company.
Stockholders are advised that receipt of such information may interfere with
their ability to trade in securities of the Company and other companies that
are the subject of the information.
9. Scott Blum resigns as a director of the Company and confirms he
has resigned as an officer and employee. He agrees he waived notice of and
consented to the holding of, a special meeting of the board of directors of the
Company on December 8, 1996.
10. Please confirm and acknowledge your agreement with all of the
provisions set forth above by executing and returning the copy of this letter
included herewith to Jonathan Eddison, Esq., Pinnacle Micro, Inc., 19
Technology Drive, Irvine 92618, via facsimile at (714) 789-3045 and followed
by mail or courier, with a copy to Peter J. Tennyson, Esq., Paul, Hastings,
Janofsky & Walker LLP, 695 Town Center Drive, Seventeenth Floor, Irvine
92626-1924 (facsimile 714-979-1921).
Sincerely,
/s/ DARYL WHITE /s/ KENNETH C. CAMPBELL
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Daryl White Kenneth C. Campbell
Chairman President
ACKNOWLEDGED, CONFIRMED AND AGREED
/s/ Scott A. Blum
/s/ William F. Blum
Scott Blum and William Blum hereby confirm that they are signing on
behalf of all trusts established by either of them for any stock now or
formerly held by either of them, and confirm that they have authority to do so,
and have not appointed any other trustees, agents or other representatives to
vote, control or sell any shares of Pinnacle Micro, Inc.