STOCK REGISTRATION AGREEMENT
THIS STOCK REGISTRATION AGREEMENT (the "Agreement") is made and entered
into as of _________________, 1999, by and between POMEROY SELECT INTEGRATION
SOLUTIONS, INC., a Delaware corporation (the "Company") and POMEROY COMPUTER
RESOURCES, INC., a Delaware corporation ("PCR"), the parent of the Company (PCR
is sometimes also referred to herein as the "Holder").
RECITALS
A. Upon the completion of the initial public offering (the "Offering") of
shares of Class A common stock, par value $0.01 per share ("Class A Common
Stock"), of the Company, the Company will cease to be a wholly-owned subsidiary
of the Holder. PCR has informed the Company that it has no current plan or
intention other than to hold its shares of Class B Common Stock, par value $.01
per share, ("Class B Common Stock") for the foreseeable future. After the
Offering, PCR may consider other options regarding its interest in the Company
including: (i) whether to sell all or a portion of its shares of Class B Common
Stock to the public in another public offering (in which case the Class B Common
Stock would automatically convert to Class A Common Stock) or to a strategic
investor or (ii) to distribute pro rata to PCR's stockholders its remaining
shares in a tax-free or taxable distribution (the "Distribution").
B. In connection with the Offering, the Company is preparing to file a
registration statement with the Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "Securities Act") for the sale
of shares of Class A Common Stock.
C. Following the Offering, the Class A Common Stock will be registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
D. The Holder may desire to register its shares of Class B Common Stock
under the Securities Act and other applicable securities laws.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. As used in this Agreement, "Restricted
Stock" shall mean all shares of Class B Common Stock owned by the Holder as of
the date of the consummation of the Offering, together with any securities
issued or
issuable by the Company or any successor thereto with respect to any such Class
B Common Stock by way of stock dividend or in connection with a stock split,
combination of shares, recapitalization, merger, consolidation, reorganization
or otherwise. As to any particular outstanding shares of Restricted Stock, such
securities shall cease to be Restricted Stock when (i) a registration statement
with respect to the offer and sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) such securities shall
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) such securities shall have been
distributed to the Holder's stockholders in the Distribution, (iv) such
securities shall have otherwise become freely distributable by the Holder
thereof in a public offering or otherwise without the necessity of registration
or qualification of such securities under the Securities Act or any similar
state law then in force or compliance with the volume and manner of sale or
similar limitations under Rule 144 (or any successor provision) under the
Securities Act, (v) such securities shall have ceased to be outstanding, or (vi)
the Holder thereof shall agree in writing that such Restricted Stock shall no
longer be Restricted Stock. The Holder and any permitted assignee of the
Holder's rights hereunder are referred to herein as "Holders" and a Holder
selling or distributing Restricted Stock pursuant hereto is referred to herein
as a "Selling Holder." Subject to the provisions of Section 4 hereof, at any
time and from time to time any Holder or Holders holding in the aggregate 50% or
more of the shares of the Restricted Stock then outstanding may make a written
request for registration under the Securities Act of all or part of its or their
Restricted Stock pursuant to this Section 1 (a "Demand Registration"), provided
that (i) the Restricted Stock shall be converted to Class A Common Stock prior
to or upon the sale of the Restricted Stock pursuant to said registration, and
(ii) the number of shares of Restricted Stock proposed to be sold or distributed
pursuant to such registration shall be equal to 20% or more of the aggregate
number of shares of Restricted Stock then outstanding, but (if fewer than all
outstanding shares of Restricted Stock are proposed to be so sold or
distributed) in no event less than 5% of the initial aggregate number of shares
of Restricted Stock (subject to appropriate adjustment for any stock dividend,
stock split, combination, recapitalization, merger, consolidation,
reorganization or other occurrence affecting the number of shares of Restricted
Stock then outstanding). Such request will specify the aggregate number of
shares of Restricted Stock proposed to be sold or distributed and will also
specify the intended method of disposition thereof. Within 10 business days
after receipt of such request, the Company will give written notice of such
registration request to any other Holders of Restricted Stock and, subject to
Section 1(b), include in such registration all Restricted Stock with respect to
which the Company has received written requests for inclusion therein within 15
business days after the date on which such notice is so given. Each such request
will also specify the number of shares of Restricted Stock to be registered and
the intended method of disposition thereof. No party other than a Holder or the
Company shall be permitted to include securities in any
Demand Registration unless the Holder or Holders of 66-2/3% of the shares of
Restricted Stock to be included therein shall have consented thereto in
writing.
(b) PRIORITY ON DEMAND REGISTRATION. If the Holders of a majority of
the shares of the Restricted Stock to be included in a Demand Registration so
elect, the offering of such Restricted Stock pursuant to such Demand
Registration shall be in the form of an underwritten offering. In such event, if
the managing underwriter or underwriters of such offering advise the Company and
the Holders in writing that in their opinion the aggregate amount of Restricted
Stock requested to be included in such offering is so large that it will
materially and adversely affect the success of such offering, the Company will
include in such registration the aggregate number of shares of Restricted Stock
which in the opinion of such managing underwriter or underwriters can be sold
without any such material adverse effect, and such number of shares shall be
allocated pro rata among the Holders of Restricted Stock on the basis of the
number of shares of Restricted Stock requested by such Holders to be included in
such registration. To the extent that 10% or more of the Restricted Stock so
requested to be registered is excluded from the registration, then the Holders
of such excluded Restricted Stock shall have the right to one additional Demand
Registration under this Section 1 with respect to such Restricted Stock,
provided that the failure of such Restricted Stock to be registered is through
no fault of such Holders, and provided, further, that such right to one
additional Demand Registration applies only to the first time that shares of
Restricted Stock are so excluded.
(c) SELECTION OF UNDERWRITERS AND COUNSEL. If any Demand Registration
is in the form of an underwritten offering, the Company will select and obtain
the services of the managing underwriter or underwriters that will administer
the offering and the counsel to such managing underwriter or underwriters;
provided that such managing underwriter or underwriters and counsel must be
reasonably satisfactory to the Holders of a majority of the shares of Restricted
Stock to be registered.
2. PIGGYBACK REGISTRATION. If the Company proposes to file a registration
statement under the Securities Act with respect to an offering for its own
account of any class of its equity securities (other than a registration
statement on Form S-8 (or any successor form) or any other registration
statement relating solely to employee benefit plans or filed in connection with
an exchange offer, a transaction to which Rule 145 (or any successor provision)
under the Securities Act applies or an offering of securities solely to the
Company's existing stockholders), then the Company shall in each case give
written notice of such proposed filing to the Holders as soon as practicable
(but no later than 20 business days) before the anticipated filing date, and
such notice shall offer each Holder the opportunity to register such number of
shares of Restricted Stock as such Holder may request. Each Holder desiring to
have Restricted Stock included in such registration statement shall so advise
the Company in writing within 10 business
days after the date on which the Company's notice is so given, setting forth the
number of shares of Restricted Stock for which registration is requested. If the
Company's offering is to be an underwritten offering, the Company shall, subject
to the further provisions of this Agreement, use its reasonable best efforts to
cause the managing underwriter or underwriters to permit the Holders of the
Restricted Stock requested to be included in the registration for such offering
to include such Restricted Stock in such offering on the same terms and
conditions as any similar securities of the Company included therein. The right
of each Holder to registration pursuant to this Section 2 in connection with an
underwritten offering by the Company shall, unless the Company otherwise
assents, be conditioned upon such Holder's participation as a seller in such
underwritten offering and its execution of an underwriting agreement with the
managing underwriter or underwriters selected by the Company. Notwithstanding
the foregoing, if the managing underwriter or underwriters of such offering
deliver a written opinion to the Company that either because of (a) the kind of
securities that the Company, the Holders and any other persons or entities
intend to include in such offering or (b) the size of the offering that the
Company, the Holders and any other persons or entities intend to make, the
success of the offering would be materially and adversely affected by inclusion
of the Restricted Stock requested to be included, then (i) in the event that the
size of the offering is the basis of such managing underwriter's opinion, the
number of shares of Restricted Stock to be registered and offered for the
accounts of Holders shall be reduced pro rata on the basis of the number of
securities requested by such Holders to be registered and offered to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing underwriter or underwriters
(provided that if securities are being registered and offered for the account of
other persons or entities in addition to the Company, such reduction shall not
be proportionally greater than any similar reductions imposed on such other
persons or entities) and (ii) in the event that the combination of securities to
be offered is the basis of such managing underwriter's opinion, (x) the
Restricted Stock to be included in such registration and offering shall be
reduced as described in clause (i) above or (y) if such actions would, in the
judgment of the managing underwriter, be insufficient to substantially eliminate
the adverse effect that inclusion of the Restricted Stock requested to be
included would have on such offering, such Restricted Stock will be excluded
entirely from such registration and offering. Any Restricted Stock excluded from
an underwriting shall, if applicable, be withdrawn from registration and shall
not, without the consent of the Company, be transferred in a public distribution
prior to the earlier of 90 days (or such other shorter period of time as the
managing underwriter may require) after the effective date of the registration
statement or 150 days after the date the Holders of such Restricted Stock are
notified of such exclusion.
3. REGISTRATION PROCEDURES. Whenever, pursuant to Section 1 or 2 hereof,
Holders of Restricted Stock have requested that any Restricted Stock be
registered, the
Company shall, subject to the provisions of Section 4 hereof, use its reasonable
best efforts to effect the registration and the sale or distribution of such
Restricted Stock in accordance with the intended method of disposition thereof
as promptly as practicable, and in connection with any such request, the Company
shall:
(a) in connection with a request pursuant to Section 1 hereof,
prepare and file with the SEC, not later than 60 days after receipt of such a
request, a registration statement on any form for which the Company then
qualifies and which counsel for the Company shall deem appropriate and which
form shall be available for the sale or distribution of such Restricted Stock in
accordance with the intended method of distribution thereof, and use its
reasonable best efforts to cause such registration statement to become
effective; provided that, if the Company shall furnish to the Holders making
such a request a certificate signed by either the Chief Executive Officer or the
Chief Financial Officer of the Company stating that in his or her good faith
judgment it would be significantly disadvantageous to the Company for such a
registration statement to be filed on or before the date filing would otherwise
be required hereunder and explaining the reasons therefor, the Company shall
have an additional period of not more than 90 days within which to file such
registration statement; and, provided further, that (i) before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to one counsel selected by the Holders of a majority of
the shares of Restricted Stock covered by such registration statement copies of
all such documents proposed to be filed, which documents will be subject to the
review and comment of such counsel and (ii) after the filing of the registration
statement, the Company shall promptly notify each Selling Holder of Restricted
Stock of any stop order issued or, to the knowledge of the Company, threatened
by the SEC and take all reasonable actions to prevent the entry of such stop
order or to remove it if entered;
(b) in connection with a request pursuant to Section 1 hereof,
prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than 90 days or such shorter period as shall terminate when the distribution of
all Restricted Stock covered by such registration statement shall have
terminated (but not before the expiration of the 90-day period referred to in
Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable) and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the Selling Holders
thereof set forth in such registration statement;
(c) as soon as reasonably practicable, furnish to each Selling
Holder, prior to filing a registration statement, copies of such registration
statement as proposed
to be filed and thereafter furnish to such Selling Holder such number of copies
of such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such Selling Holder may reasonably
request in order to facilitate the disposition of the Restricted Stock owned by
such Selling Holder;
(d) use its reasonable best efforts to register or qualify such
Restricted Stock under such other securities or blue sky laws of such
jurisdictions within the United States and Canada as any Selling Holder
reasonably (in light of such Selling Holder's intended plan of distribution)
requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Selling Holder to consummate the
disposition in such jurisdictions of the Restricted Stock owned by such Selling
Holder; provided that the Company shall not be required to (i) qualify generally
to do business or file a general consent to service of process in any
jurisdiction or (ii) take any action that would subject itself to taxation in
any such jurisdiction;
(e) promptly notify each Selling Holder of such Restricted Stock, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the occurrence of any event known to the Company
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers or recipients of such Restricted
Stock, such prospectus will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and promptly make available to each
Selling Holder any such supplement or amendment;
(f) in connection with a request pursuant to Section 1 hereof, enter
into an underwriting agreement in customary form, the form and substance of such
underwriting agreement being subject to the reasonable satisfaction of the
Company and a majority in interest of the Selling Holders;
(g) make available for inspection by any Selling Holder, any
underwriter participating in any sale or distribution pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such Selling Holder or underwriter (collectively, the "Inspectors") all
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers and employees to supply all information reasonably requested for such
purpose by any such Inspector in connection with such registration statement)
provided that the Company shall have no obligation to permit such access to the
Records or its officers or employees in a manner that would unreasonably disrupt
the normal conduct of its business operations. Each such Selling Holder and
Inspector that actually reviews Records supplied by the Company that
include information that the Company identifies, in good faith, as being
confidential or proprietary ("Confidential Information") shall be required at
the Company's option, prior to any such review, to execute an agreement with the
Company providing that such Inspector shall not publicly disclose any
Confidential Information unless such disclosure is required by applicable law or
legal process and shall not use such information for any purpose other than the
limited purpose contemplated by this subsection (g). Each such Selling Holder
and Inspector shall be required further to agree that it shall, upon learning
that disclosure of Confidential Information is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of the Confidential
Information;
(h) in the event such sale is pursuant to an underwritten offering,
use its reasonable best efforts to obtain a comfort letter or letters from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by comfort letters as the managing
underwriter reasonably requests; and
(i) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement complying with
the provisions of Section 11(a) of the Securities Act (including, at the option
of the Company, pursuant to Rule 158 (or any successor provision) under the
Securities Act).
Upon receipt of any notice from the Company of the occurrence of any event
of the kind described in subsection (e) hereof, such Selling Holder shall
forthwith discontinue all offerings, sales and other dispositions of Restricted
Stock pursuant to the registration statement covering such Restricted Stock
until such Selling Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by subsection (e) hereof. In the event the Company shall
give any such notice, the Company shall extend the period during which such
registration statement shall be maintained effective pursuant to this Agreement
(including the period referred to in subsection (b) hereof) by the number of
days during the period from and including the date of the giving of such notice
pursuant to subsection (b) hereof to and including the first date on which each
Selling Holder of Restricted Stock covered by such registration statement shall
have received the copies of the supplemented or amended prospectus contemplated
by subsection (e) hereof. Each Selling Holder shall notify the Company if any
event relating to such Selling Holder occurs which would require the preparation
of a supplement or amendment to the prospectus so that such prospectus will not
contain 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.
4. CONDITIONS AND LIMITATIONS.
(a) The Company's obligations under Section 1 hereof shall be subject
to the following limitations:
(i) the Holder's (or Holders', if more than one) rights to
registration hereunder shall not become effective until the end of the 180 day
period immediately following the closing of the Offering and shall expire on the
tenth anniversary of the date of such closing; (ii) the Company need not file a
registration statement either (x) during the period starting with the date 60
days prior to the Company's estimated date of filing of, and ending 90 days
after the effective date of, any registration statement pertaining to securities
of the Company (other than a registration of securities on Form S-4 (or any
successor form) with respect to a transaction to which Rule 145 (or any
successor provision) under the Securities Act applies, or in an exchange offer,
or on Form S-8 (or any successor form) with respect to any employee benefit plan
or dividend reinvestment plan); provided that if such Company registration
statement is not filed within 90 days after the first date on which the Company
notifies a Holder of Restricted Stock that it will delay a Demand Registration
pursuant to this clause (x), the Company may not further postpone such Demand
Registration pursuant to this clause (x), or (y) during the period specified in
the first proviso of subparagraph (a) of Section 3 hereof;
(ii) except as provided in Section 1(b) hereof, the Company
shall not be required to cause to become effective more than three Demand
Registrations in total, and no more than two Demand Registration Statements
within any one year period; and
(iii) the Company shall have received the information and
documents specified in Section 5 hereof and each Selling Holder shall have
observed or performed its other covenants contained in Sections 5 and 7 hereof.
(b) The Company's obligation under Section 2 hereof shall be subject
to the limitations and conditions specified in such section and in clause (iii)
of subsection (a) of this Section 4, and to the condition that the Company may
at any time terminate its proposal to register equity securities for its own
account and discontinue its efforts to cause a registration statement to become
or remain effective as to any and all shares of Restricted Stock that would
otherwise have been eligible for inclusion in such registration.
5. INFORMATION FROM AND CERTAIN COVENANTS OF HOLDERS OF RESTRICTED STOCK.
Notices and requests delivered to the Company by Holders for whom Restricted
Stock is to be registered pursuant to this Agreement shall contain such
information regarding the Restricted Stock to be so registered, the Holder and
the intended method of disposition of such Restricted Stock as shall reasonably
be required in connection with the actions contemplated to be taken pursuant to
this Agreement. Any Holder whose
Restricted Stock is included in a registration statement pursuant to this
Agreement shall execute all consents, powers of attorney, registration
statements and other documents reasonably required to be executed by it in order
to cause such registration statement to became effective. Each Selling Holder
covenants that, in disposing of such Holder's shares, such Holder will comply
with Rule 10b-5 (or any successor rule) under the Exchange Act and all other
requirements of applicable law. Each Selling Holder agrees to enter into a
reasonable lockup agreement if requested by the managing underwriter.
6. REGISTRATION EXPENSES.
(a) All Registration Expenses (as defined herein) will be borne by
the Company. Underwriting discounts and commissions applicable to the sale of
Restricted Stock shall be borne by the Holder of the Restricted Stock to which
such discount or commission relates, and each Selling Holder shall be
responsible for the fees and expenses of any legal counsel, accountants or other
agents retained by such Selling Holder and all other out-of-pocket expenses
incurred by such Selling Holder in connection with any registration under this
Agreement.
(b) As used herein, the term Registration Expenses means all expenses
incident to the Company's performance of or compliance with this Agreement
(whether or not the registration in connection with which such expenses are
incurred ultimately becomes effective), including without limitation all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Restricted Stock), rating agency
fees, printing expenses, the fees and expenses incurred in connection with the
listing or admission for quotation of the securities to be registered on any
securities exchange or quotation system and fees and disbursements of counsel
for the Company and its independent certified public accountants (including the
expenses of any special audit or comfort letters required by or incident to such
performance), securities act liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special expert
retained by the Company in connection with such registration and the fees and
expenses of other persons retained by the Company.
7. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In connection with any offering
of Restricted Stock pursuant to this Agreement, the Company shall indemnify and
hold harmless each Selling Holder, its officers, directors and agents and each
person, if any, who controls such Selling Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable fees and
disbursements of counsel) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to Restricted Stock or in any amendment or
supplement thereto or in any preliminary prospectus relating to Restricted Stock
or arising out of or based upon any 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 light of the circumstances under which they
were made, except insofar as such losses, claims, damages, liabilities or
expenses arise out of, or are based upon, any such untrue statement or alleged
untrue statement or omission or alleged omission based upon information
furnished in writing to the Company by such Selling Holder or on such Selling
Holder's behalf expressly for use therein. In connection with any underwritten
offering of Restricted Stock registered pursuant to this Agreement, the Company
shall cause to be included in any underwriting agreement with the underwriters
of such offering provisions indemnifying and providing for contribution to such
underwriters and their officers and directors and each person who controls such
underwriters on substantially the same basis as the provisions of this Section 7
indemnifying and providing for contribution to the Selling Holders.
(b) INDEMNIFICATION BY HOLDERS OF RESTRICTED STOCK. In connection
with any offering of Restricted Stock pursuant to this Agreement, each Selling
Holder, severally and not jointly, shall indemnify and hold harmless the
Company, its officers, directors and agents and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, and, in accordance with industry
practice, in the case of any offering of Restricted Stock pursuant to this
Agreement, each underwriter of such Restricted Stock if requested by such
underwriter, from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable fees and disbursements of counsel) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
Restricted Stock or in any amendment or supplement thereto or in any preliminary
prospectus relating to Restricted Stock, or arising out of or based upon any
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
light of the circumstances under which they were made, provided that (i) such
losses, claims, damages, liabilities or expenses arise out of, or are based
upon, any such untrue statement or alleged untrue statement or omission or
alleged omission based upon information furnished in writing to the Company by
such Selling Holder or on such Selling Holder's behalf expressly for use therein
and (ii) no Selling Holder shall be liable for any indemnification under this
Section 7 in an aggregate amount which exceeds the total net proceeds received
by such Selling Holder from such offering. In connection with any underwritten
offering of Restricted Stock registered pursuant to this Agreement, each Selling
Holder shall cause to be included in any underwriting agreement with the
underwriters of such offering
provisions indemnifying and providing for contribution to such underwriters,
their officers and directors and each person who controls such underwriters on
substantially the same basis as the provisions of this Section 7 indemnifying
and providing for contribution to the Company.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any indemnified party hereunder in respect of which
indemnity may be sought from an indemnifying party hereunder, such
indemnifying party shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such indemnified party, and shall
assume the payment of all expenses. Such indemnified party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expenses of such indemnified party unless (i) the indemnifying party has
agreed to pay such fees and expenses, (ii) the indemnifying party shall have
failed to assume the defense of such action or proceeding and employ counsel
reasonably satisfactory to such indemnified party, or (iii) the named parties
to any such action or proceeding (including any impleaded parties) include
both such indemnified party and such indemnifying party, and such indemnified
party shall have been advised by counsel that there may be one or more legal
defenses available to such indemnified party which are different from or
additional to those available to the indemnifying party (in which case, if
such indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the defense of such
action or proceeding on behalf of such indemnified party; it being
understood, however, that the indemnifying party shall not, in connection
with any one such action or proceeding or separate but substantially similar
or related actions or proceedings in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for such indemnified party, which firm
shall be designated in writing by such indemnified party and reasonably
satisfactory to the indemnifying party). The indemnifying party shall not be
liable for any settlement of any such action or proceeding erected without
its written consent, but if settled with its written consent, or if there is
a final judgment for the plaintiff in any such action or proceeding, the
indemnifying party shall indemnify and hold harmless the indemnified party
from and against any loss or liability (to the extent stated above) by reason
of such settlement or judgment.
(d) CONTRIBUTION. If the indemnification provided for in this Section
7 is unavailable to the Company or the Selling Holders in respect of any losses,
claims, damages, liabilities or judgments referred to herein, then each such
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,
liabilities and judgments in such proportion as is appropriate to reflect the
relative fault of each such party in connection with such statements or
omissions or alleged statements or omissions, as well as any other relevant
equitable considerations. The relative fault of each such party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Selling Holders agree
that it would not be just and equitable if contribution pursuant to this Section
7(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 sentences. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding sentences shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claims. Notwithstanding the provisions of this
Section 7(d), no Selling Holder shall be required to contribute an amount in
excess of the amount by which the total price at which the Restricted Stock of
such Selling Holder was offered to the public exceeds the amount of any fee
which such Selling Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. 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 is not
guilty of such fraudulent misrepresentation.
8. MISCELLANEOUS.
(a) EFFECTIVENESS. This Agreement shall become effective on the date
on which the purchase and sale of shares of Common Stock pursuant to the
Offering first occurs.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned by either party hereto to
any other person without the prior written consent of the other party, except
that either party may assign this Agreement to any of its affiliates.
(c) NO THIRD-PARTY BENEFICIARIES. Nothing expressed or implied in
this Agreement shall be construed to give any person or entity other than the
parties hereto any legal or equitable rights hereunder.
(d) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof.
(e) AMENDMENT. This Agreement may not be amended except by an
instrument signed by the parties hereto.
(f) WAIVERS. Either party hereto may (i) extend the time for the
performance of any of the obligations or other act of the other party, (ii)
waive any inaccuracies in the representations and warranties contained herein,
or (iii) waive compliance with any of the agreements contained herein. No waiver
of any term shall be construed as a waiver of the same term, or a waiver of any
other term, of this Agreement. The failure of any party to assert any of its
rights hereunder will not constitute a waiver of any such rights.
(g) SEVERABILITY. If any provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, such
provision shall be deemed severable and all other provisions of this Agreement
shall nevertheless remain in full force and effect.
(h) HEADINGS. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
(i) NOTICES. All notices given in connection with this Agreement
shall be in writing. Service of such notices shall be deemed complete (i) if
hand delivered, on the date of delivery, (ii) if by mail, on the fourth business
day following the day of deposit in the United States mail, by certified or
registered mail, first-class postage prepaid, (iii) if sent by Federal Express
or equivalent courier service, on the next business day, or (iv) if sent by
telecopier facsimile, on the date of the confirmation of delivery. Such notices
shall be addressed to the parties at the following addresses or at such other
address for a party as shall be specified by like notice (except that notices of
change of address shall be effective upon receipt):
If to Holder: Pomeroy Computer Resources, Inc.
1020 Petersburg Road
Hebron, Kentucky 41048
Attn: President
Telecopy No.: (606) 586-4414
If to the Company: Pomeroy Select Integration Solutions, Inc.
1020 Petersburg Road
Hebron, Kentucky 41048
Attn: President
Telecopy No.: (606) 586-4414
(j) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to the principles of conflict of laws of such State.
(k) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
but one and the same instrument.
IN WITNESS WHEREOF, the Company and the Holder have caused this
Agreement to be executed on the date first above written.
POMEROY SELECT INTEGRATION
SOLUTIONS, INC.
By:
-----------------------------
Name:
Title: President
POMEROY COMPUTER RESOURCES, INC.
By:
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Name:
Title: President