AMENDED AND RESTATED LIMITED WAIVER AGREEMENT
THIS AMENDED AND RESTATED LIMITED WAIVER AGREEMENT (the "Agreement") is
made and entered into as of the 7th day of July, 1998, by and between
Software Spectrum, Inc., a Texas corporation (the "Company") and Private
Capital Management, Inc., a Florida corporation (the "Shareholder"). Terms
used but not otherwise defined herein shall have the meanings assigned them
in the Rights Agreement, as defined in such agreement as referenced below.
WITNESSETH:
WHEREAS, the Company and ChaseMellon Shareholder Services, L.L.C., (the
"Rights Agent") (as successor to Keycorp Shareholder Services, Inc.), are
parties to that certain Rights Agreement, dated as of December 13, 1996 (the
"Rights Agreement"), which provides that, upon the event of any person or
entity becoming an "Acquiring Person" as defined therein (an "Event"),
shareholders of the Company may exercise certain Rights, defined therein to
be the rights to purchase from the Company certain shares of the preferred
stock of the Company having the rights and preferences set forth in the
Statement of Designation attached as Exhibit A to the Rights Agreement;
WHEREAS, the Company and the Shareholder mutually agreed that it was in
the best interest of each of the Company and the Shareholder that the Company
effect a certain 1997 Stock Repurchase Plan (the "1997 Plan") pursuant to the
terms of which the Company from time to time during the operation of the 1997
Plan repurchased, for an amount which did not exceed in the aggregate $2.5
Million, in the open market a certain number of shares of its common stock,
par value $.01 (the "Common Stock") (the "1997 Plan Repurchases");
WHEREAS, in order to preclude the 1997 Plan Repurchases from resulting
in the Shareholder owning a percentage of the Company's stock that would
result in an Event (the "Shareholder Event"), which Shareholder Event, upon
agreement of the Company and the Shareholder, would have had undesirable
consequences for each of the Company and the Shareholder, the Company and the
Shareholder executed and delivered that certain Limited Waiver Agreement
dated as of July 31, 1997 (the "Waiver Agreement");
WHEREAS, the Company and the Shareholder have mutually agreed that upon
completion of the 1997 Plan Repurchases, it is in the best interest of each
of the Company and the Shareholder that the Company effect a certain 1998
Stock Repurchase Plan (the "1998 Plan") pursuant to the terms of which the
Company will from time to time during the operation of the 1998 Plan
repurchase, for an additional amount not to exceed in the aggregate $2.5
Million, in the open market a certain number of shares of its Common Stock
(the "1998 Repurchases"); and
WHEREAS, the Company and the Shareholder have mutually agreed that it is
in the best interest of each of the Company and the Shareholder to amend and
restate the terms of the Waiver Agreement, expressly to effect the 1998 Plan;
NOW, THEREFORE, in order to facilitate the 1998 Repurchases pursuant to
the 1998 Plan and simultaneously to preclude the occurrence of the
Shareholder Event, the Company and the Shareholder, in consideration of the
mutual covenants and agreements herein contained, do hereby agree as follows:
1. CERTAIN DEFINITIONS.
"AFFILIATE(S)" shall mean any person or entity that directly, or
indirectly through one or more intermediaries, controls or is controlled
by, or is under common control with, the Shareholder. Furthermore, with
respect to the Shareholder, "Affiliate(s)" shall also mean any person or
entity for whom the Shareholder acts as an investment advisor or consultant
with respect to the Company.
"BENEFICIAL OWNERSHIP" shall have the meaning assigned to such term in
Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended as in effect on the date hereof.
"CONTROL" shall mean the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of the
Company, whether through ownership of the Common Stock, by contract, or
otherwise.
"CURRENT SHAREHOLDER POSITION" shall have the meaning assigned it in
Section 2 below.
"PROHIBITED ACTIVITY" shall mean: (i) any attempt by the Shareholder
or any of its Affiliates to gain Control of the Company; (ii) any
Prohibited Transaction, as hereinafter defined or (iii) any public action
on the part of the Shareholder or any of its Affiliates, acting
individually or in concert with other persons, which could reasonably be
construed: (a) as an attempt to effect a change of Control including, but
not limited to, the issuance of press releases or the filing of documents
with the Securities And Exchange Commission or any other Federal or State
governmental entity or (b) as an action contrary to the position of the
then current board of directors of the Company.
"PROHIBITED TRANSACTION" shall mean any transaction by the Shareholder
or any of its Affiliates which would result in the Beneficial Ownership by
the Shareholder or any of its Affiliates, either individually or as a
group, of the Common Stock in an amount in excess of the Current
Shareholder Position.
"STANDSTILL PERIOD" shall mean that time period commencing on the date
of this Agreement and ending with the date which is the second annual
anniversary of the date
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of this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDER.
A. The Company hereby represents and warrants to the Shareholder
that it (i) has duly authorized the 1998 Plan and, subject to relevant market
and other factors and conditions affecting the Company in the good faith
judgment of its Board of Directors, the Company will make bona fide efforts,
during the operation of the 1998 Plan, to effect the 1998 Repurchases
pursuant to the 1998 Plan and (ii) is currently authorized to spend up to
$2.5 Million on the 1998 Repurchases pursuant to the 1998 Plan.
B. The Shareholder hereby represents and warrants to the Company
that, as of the date hereof, the total number of shares of Common Stock of
which the Shareholder or any of its Affiliates or Associates has Beneficial
Ownership is 861,854 shares (as such share ownership may be affected from
time to time by stock splits, stock dividends, reverse splits or any other
such matter affecting all shareholders equally, the "Current Shareholder
Position").
3. CERTAIN COVENANTS AND AGREEMENTS.
A. COVENANTS AND AGREEMENTS OF THE COMPANY.
a. The Company hereby agrees that, notwithstanding the fact
that the 1998 Repurchases pursuant to the 1998 Plan may result in the
Shareholder Event, if the Shareholder Event should occur solely by virtue of
the 1997 Plan Repurchases and/or the 1998 Repurchases pursuant to the 1998
Plan, such Shareholder Event shall be deemed not to have occurred, and the
Company hereby grants a limited waiver of any provision of the Rights
Agreement pursuant to the terms of which the Shareholder Event would be
considered to have occurred solely by virtue of the 1997 Plan Repurchases and
the 1998 Repurchases pursuant to the 1998 Plan.
b. The Company hereby acknowledges and agrees that, by
virtue of the operation of this Agreement, the Shareholder, alone or together
with its Affiliates and Associates, may have Beneficial Ownership of twenty
percent (20%) or more of the shares of Common Stock of the Company then
outstanding, provided that such circumstance occurs solely as a result of the
1997 Plan Repurchases and the 1998 Repurchases pursuant to the 1998 Plan, and
yet not be deemed to be an "Acquiring Person" for purposes of the Rights
Agreement.
c. The Company acknowledges and agrees that nothing in this
Agreement shall preclude the Shareholder from (i) effecting sales and
purchases of the Common Stock so long as the Current Shareholder Position is
not exceeded or (ii) subject to the provisions of paragraph 3(B)(a) below,
exercising the voting privileges commensurate with its ownership of the
Common Stock.
B. COVENANTS AND AGREEMENTS OF THE SHAREHOLDER.
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a. The Shareholder agrees that neither the Shareholder nor
any of its Affiliates shall engage in any Prohibited Activity (i) at any time
that the Shareholder, alone or together with its Affiliates has Beneficial
Ownership of 20% or more of the outstanding Common Stock of the Company as a
result of Repurchases pursuant to the Plan, or (ii) during the Standstill
Period.
b. The Shareholder acknowledges and agrees that this
Agreement constitutes only a limited waiver of the Rights Agreement and that
the waiver herein contained applies only to the occurrence of the Shareholder
Event as the result solely of the 1997 Plan Repurchases and the 1998
Repurchases pursuant to the 1998 Plan and not to any other circumstances or
conditions which may result in the occurrence of the Shareholder Event.
c. The Shareholder hereby further acknowledges that, should
the Shareholder Event occur as a result of or in connection with the purchase
or acquisition by the Shareholder of Common Stock of the Company which
results in an increase in the Current Shareholder Position, then this limited
waiver shall not apply and the Shareholder shall, in accordance with the
terms of the Rights Agreement, be deemed to be an "Acquiring Person."
C. COVENANTS AND AGREEMENTS OF THE COMPANY AND THE SHAREHOLDER.
The Company and the Shareholder acknowledge and agree that
this Agreement constitutes a limited waiver of the Rights Agreement; by
agreeing to this waiver, the Company has not agreed to waive any other
provisions of the Rights Agreement and the Company hereby expressly reserves
its right fully to enforce the Rights Agreement except as such enforcement
may be limited by the express terms of this Agreement.
4. GENERAL PROVISIONS.
A. VOIDABILITY. This Agreement shall become null and void if the
Company shall not have publicly announced its authorization of the 1998 Plan
on or before September 1, 1998.
B. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement by and among the parties with respect to the subject matter hereof.
C. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
D. ASSIGNABILITY. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the parties hereto; provided,
that neither this Agreement nor any right hereunder shall be assignable by
the Shareholder without the prior written consent of the Company and the
Rights Agent, but this Agreement shall be assignable by the Company to any
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successor by merger or otherwise to the Company and by the Rights Agent to
any successor without the consent of the Shareholder.
E. GOVERNING LAW. The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the State of Texas.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SOFTWARE SPECTRUM, INC.
By: /s/ Judy O. Sims
-------------------------------------
Name: Judy O. Sims
Title: Chairman and Chief Executive Officer
PRIVATE CAPITAL MANAGEMENT, INC.
By: /s/ Gregg J. Powers
-------------------------------------
Name: Gregg J. Powers
Title: Private Capital Management, Inc.
ACKNOWLEDGED AND ACCEPTED:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ Barbara J. Robbins
---------------------------------------
Name: Barbara J. Robbins
Title: Vice President and Regional Manager
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