SHAREHOLDER VOTING AGREEMENT AND PROXY
THIS SHAREHOLDER VOTING AGREEMENT AND PROXY (this "Agreement")
is entered into effective as of December 28, 2000, by and among EBIZ
Enterprises, Inc., a Nevada corporation ("EBIZ"), and those shareholders of EBIZ
listed on the signatures pages hereto (the "Shareholders" and each a
"Shareholder").
R E C I T A L S
WHEREAS, EBIZ, Jones Business Systems, Inc., a Texas
corporation ("JBSI"), and JBSI Acquisition, Inc., a Texas corporation ("Merger
Sub"), entered into an Agreement and Plan of Merger dated November 17, 2000, as
amended (the "Merger Agreement"), pursuant to which EBIZ will acquire all of the
outstanding capital stock and equity interests of JBSI by means of a merger (the
"Merger") of JBSI and Merger Sub with JBSI being the survivor;
WHEREAS, the respective obligations of EBIZ and JBSI under the
Merger Agreement are conditioned upon the execution and delivery of this
Agreement;
WHEREAS, to induce JBSI to enter into the Merger Agreement and
to consummate the Merger contemplated thereby, EBIZ and the Shareholders desire
to enter into this Agreement; and
WHEREAS, certain of the Shareholders are parties to existing
voting agreements and proxies regarding EBIZ capital stock which must be
superceded by this agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing premises and
certain other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following definitions
shall apply:
(a) "Stock" shall mean any and all shares of the capital stock of EBIZ
which a Shareholder currently holds or may hereafter acquire, including
any and all shares of the common stock of EBIZ, par value $.001 per
share ("EBIZ Common Stock"), any and all Preferred Shares (as defined
in Section 1(b) below), and any and all other shares of the capital
stock of EBIZ issued as a distribution with respect to or in
replacement of any of the foregoing.
(b) "Preferred Shares" shall mean the shares of EBIZ Series A 10%
Convertible Preferred Stock and any hereafter acquired shares of EBIZ's
preferred stock, regardless of series, and any shares of Stock issued
upon conversion of any such series of preferred stock.
(c) "Existing Voting Agreements" shall mean all of the following
collectively:
(i) Shareholder Voting Agreement and Proxy dated September 15, 2000 entered
into by Caldera Systems, Inc., a Delaware corporation ("Caldera"), for
the benefit of EBIZ and Caldera;
(ii) Shareholder Voting Agreement and Proxy dated October 5, 2000 entered
into by Caldera for the benefit of EBIZ and LinuxMall.com, Inc., a
Delaware corporation ("LinuxMall");
(iii) Shareholder Voting Agreement and Proxy dated October 5, 2000 entered
into by Jeffrey I. Rassas for the benefit of EBIZ and LinuxMall;
(iv) Shareholder Voting Agreement and Proxy dated October 5, 2000 entered
into by Stephen C. Herman for the benefit of EBIZ and LinuxMall;
(v) Shareholder Voting Agreement and Proxy dated October 5, 2000 entered
into by Mark Bolzern for the benefit of EBIZ and LinuxMall and
(vi) Shareholder Voting Agreement and Proxy dated October 5, 2000
entered into by Dave Shaw for the benefit of EBIZ and LinuxMall.
(d) "JBSI Group" shall mean the group of Shareholders comprised of Bruce
Parsons, Steve Shadle, Scott Shadle, Nick Futter, Don Young, Dave
Colesante and Mike Colesante, except if at any time any such
Shareholder does not have any beneficial interest in shares of Stock,
then such Shareholder shall automatically cease to be a member of the
JBSI Group.
(e) "LinuxMall Group" shall mean the group of Shareholders comprised of
Dave Shaw and Mark Bolzern, except if at any time any such Shareholder
does not have any beneficial interest in shares of Stock, then such
Shareholder shall automatically cease to be a member of the LinuxMall
Group.
(f) "Original EBIZ Group" shall mean the group of Shareholders comprised
of Jeffrey I. Rassas and Stephen C. Herman, except if at any time any
such Shareholder does not have any beneficial interest in shares of
Stock, then such Shareholder shall automatically cease to be a member
of the Original EBIZ Group.
(g) "Nonaffiliated Party" shall mean any transferee of Stock in which the
Shareholder making such transfer does not have any of the following:
(i) an ownership interest, beneficial interest, membership interest or
partnership interest, (ii) a position as an employee or consultant,
(iii) a position as an officer, director, general partner, managing
partner, managing member or limited partner, or (iv) any family
relationship.
2. Size and Composition of Board of Directors.
(a) As of the effective date of the Merger and through the term of this
Agreement, the EBIZ Board of Directors shall consist of no more than seven
directors. On the effective date of the Merger, EBIZ shall cause Bruce
Parsons or, subject to Section 5, such other substitute person designated
by a majority in number of the Shareholders comprising the JBSI Group, to
be elected to the EBIZ Board of Directors. Except as otherwise provided
herein, at all times during the term of this Agreement, EBIZ agrees,
subject to Section 5, to support the nomination of, and the EBIZ nominating
body or committee shall recommend to the EBIZ Board of Directors the
inclusion in the slate of nominees recommended by the EBIZ Board of
Directors to EBIZ shareholders for election as directors at each annual
meeting of the shareholders of EBIZ:
(i) Bruce Parsons or such other person as designated by a majority in
number of the Shareholders comprising the JBSI Group (the "JBSI
Director");
(ii) Ransom H. Love or such other person as designated by Caldera (the
"Caldera Director");
(iii) Dave Shaw and Mark Bolzern, or such other person or persons, as
the case may be, as designated by a majority in number of the
Shareholders comprising the LinuxMall Group (the "LinuxMall
Directors");
(iv) Alok Mohan or such other outside director as designated by
unanimous written agreement of all Shareholders comprising both
the LinuxMall Group and the Original EBIZ Group (the "Joint
Director"); and
(v) Jeffrey I. Rassas and Stephen C. Herman, or such other person or
persons, as the case may be, as designated by a majority in number
of the Shareholders comprising the Original EBIZ Group (the
"Original EBIZ Directors").
(b) Each Shareholder agrees that, for the term of this Agreement, in connection
with the election of directors of EBIZ, such Shareholder shall vote or
cause to be voted all shares of Stock (which are entitled to vote)
beneficially owned by such Shareholder (including all shares of Stock which
they are entitled to vote under any voting trust, voting agreement or
proxy) to elect those individuals nominated in accordance with Section
2(a).
(c) The right to participate in designating a substitute director as a
Shareholder in the JBSI Group, the LinuxMall Group or the Original EBIZ
Group pursuant to Sections 2(a)(i), (iii), (iv) and (v) is personal to each
such Shareholder and does not survive the death of such Shareholder.
(d) Except as set forth in Section 4 below, each Shareholder agrees not to
vote for the removal of any director described in Section 2(a) or appointed
pursuant to Section 3.
3. Vacancies. If any vacancy on the EBIZ Board of Directors (whether by death,
retirement, disqualification, removal from office or other cause) occurs prior
to a meeting of the EBIZ shareholders, the EBIZ Board of Directors shall
appoint, subject to Section 5 below, (i) a person designated by a majority in
number of the Shareholders comprising the JBSI Group to fill a vacancy created
by a JBSI Director ceasing to serve as a director, (ii) a person designated by
Caldera to fill a vacancy created by a Caldera Director ceasing to serve as a
director, (iii) a person designated by a majority in number of the Shareholders
comprising the LinuxMall Group to fill any vacancy created by a LinuxMall
Director ceasing to serve as a director, (iv) a person unanimously designated in
writing by all Shareholders comprising both the LinuxMall Group and the Original
EBIZ Group to fill a vacancy created by a Joint Director ceasing to serve as a
director, (v ) a person designated by a majority in number of the Shareholders
comprising the Original Ebiz Group to fill any vacancy created by an Original
EBIZ Director ceasing to serve as a director. The right to participate in
designating a substitute director as a Shareholder in the JBSI Group, the
LinuxMall Group or the Original EBIZ Group pursuant to clauses (i), (iii), (iv)
and (v) is personal to each such Shareholder and does not survive the death of
such Shareholder.
4. Removal. Each Shareholder agrees to vote all outstanding shares of Stock
(which are entitled to vote) beneficially owned by such Shareholder (including
all shares of Stock which they are entitled to vote under any voting trust,
voting agreement or proxy) for the removal of a director whenever (but only
whenever) there shall be presented to the Board of Directors the written
direction that such director be removed, signed by the requisite number of
applicable Shareholders who were required to designate such director pursuant to
Section 2(a) or Section 3.
5. Unqualified Designees for Director. Notwithstanding the provisions of
Sections 2 and 3, EBIZ shall not be required to nominate or appoint any person
to the EBIZ Board of Directors (or any committee thereof) in the event that EBIZ
receives a written opinion of its outside counsel that such person would not be
qualified under any applicable law, rule or regulation to serve as a director of
EBIZ or if EBIZ objects to such person because such person has been involved in
any of the events enumerated in Item 2(d) or (e) of Schedule 13D promulgated
under the Securities Exchange Act of 1934, as amended, or such person is
currently the target of an investigation by any governmental authority or agency
relating to felonious criminal activity or is subject to any order, decree, or
judgment of any court or agency prohibiting service as a director of any public
company or providing investment or financial advisory services and, in any such
event, the person designating such proposed director shall withdraw such
designation and designate a replacement therefor (which replacement designee
shall also be subject to the requirements of this Section 5). EBIZ shall use its
reasonable best efforts to notify the person designating a director of any
objection to such designee sufficiently in advance of the date on which proxy
materials are mailed by EBIZ in connection with such election of directors to
enable such designating person to propose a replacement designee in accordance
with the terms of this Agreement.
6. Legend. During the term of this Agreement, each certificate
representing shares of Stock held by parties hereto will bear a legend in
substantially the following form:
"THE SHARES REPRESENTED HEREBY AND THE VOTING THEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS AND AGREEMENTS CONTAINED IN A SHAREHOLDER VOTING
AGREEMENT AND PROXY AMONG THE HOLDER (OR THE PREDECESSOR IN INTEREST TO THE
SHARES), THE COMPANY AND CERTAIN OTHER SHAREHOLDERS OF THE COMPANY. THE COMPANY
WILL UPON WRITTEN REQUEST FURNISH A COPY OF THE SHAREHOLDER VOTING AGREEMENT AND
PROXY TO THE HOLDER HEREOF WITHOUT CHARGE."
EBIZ shall make a notation on its record and give instructions to any
transfer agent of such capital stock in order to implement the restrictions and
agreements contained in this Agreement. Notwithstanding any provisions to the
contrary contained in this Agreement, upon the transfer of Stock subject to this
Agreement by a Shareholder to a Nonaffiliated Party, the legend shall be removed
from the certificate and the restrictions and agreements herein shall be of no
force and effect with respect to the Stock transferred. It is presumed that a
transfer of Stock in a "brokers' transaction" or in a transaction directly with
a "market maker" under the manner of sale provisions of Rule 144 of the
Securities Act of 1933 would be a transfer to a Nonaffiliated Party.
7. Proxy. For the purpose of voting all Stock with respect to the matters
described herein, the undersigned hereby appoint, effective as of the effective
time of the Merger, Jeffrey I. Rassas, Dave Shaw, Bruce Parsons and Steve
Shadle, each as proxy to vote all Stock registered in the name of the
undersigned at a meeting of shareholders or by written consent, with all power
possessed by the undersigned, including full power of substitution thereof, for
the term of this Agreement but not to exceed two years, to be irrevocable during
such period. This proxy is coupled with an interest. This Agreement shall be
binding on the undersigned's successors and assigns. Notwithstanding the
foregoing provisions of this Section 7, any transfer of shares of Stock to a
Nonaffiliated Party shall terminate such proxy with respect to such transferred
shares of Stock.
8. Termination. This Agreement shall terminate on the second anniversary
of the date of this Agreement.
9. Miscellaneous.
(a) Equitable Relief. The parties recognize that the enforcement of this
Agreement is necessary to ensure continuity in the management of EBIZ, and
that the ascertainment of damages in the event of its breach would be
difficult. The parties therefore agree that, in addition to any other
available remedies, the parties shall be entitled to injunctive relief in
the event of a breach hereof.
(b) Binding Effect. In addition to any restriction on transfer that may be
imposed by any other agreement by which any party hereto may be bound, this
Agreement shall be binding upon the Shareholders and their respective
heirs, successors and assigns except for transfers to Nonaffiliated
Parties. For any transfer to a party other than a Nonaffiliated Party to be
deemed effective, the transferee shall have executed and delivered an
Adoption Agreement substantially in the form attached hereto as Annex A.
Upon the execution and delivery of an Adoption Agreement by any such
transferee, such transferee shall be deemed to be a party hereto as if such
transferee's signature appeared on the signature pages hereto. By their
execution hereof or of any Adoption Agreement, each of the parties hereto
appoints EBIZ as its attorney-in-fact for the purpose of executing any
Adoption Agreement which may be required to be delivered hereunder.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada, without regard to
conflicts of law principles thereof.
(d) Severability. If any provision of this Agreement should be held to be
invalid, illegal or unenforceable, the parties intend the remaining
provisions of this Agreement to be constructed as if such invalid, illegal
or unenforceable provision had never been contained herein.
(e) Entire Agreement. This Agreement is intended to be the sole agreement of
the parties as it relates to this subject matter and does hereby supersede
all other agreements, understandings, representations or warranties of the
parties, whether oral or written, relating to the subject matter hereof
including but not limited to, the Existing Voting Agreements.
(f) Amendments. This Agreement may be altered, amended or modified at any time
only upon approval of such alteration, amendment or modification (each, an
"Amendment") by the unanimous written consent of all the parties to this
Agreement.
(g) Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by commercial delivery
service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the
Shareholders at the address for such Shareholder set forth beneath such
Shareholder's name on the signature pages hereto (or at such other address
for a party as shall be specified by like notice) and, in the case of EBIZ:
EBIZ Enterprises, Inc.
Attn: Jeffrey I. Rassas
15695 North 83rd Way
Arizona 85260
Fax: (480) 778-1001
Notice given by facsimile shall be confirmed by appropriate answer back
and shall be effective upon actual receipt if received during the
recipient's normal business hours, or at the beginning of the recipient's
next business day after receipt if not received during the recipient's
normal business hours. All notices by facsimile shall be confirmed promptly
after transmission in writing by certified mail or personal delivery. Any
party may change any address to which notice is to be given to it by giving
notice as provided above of such change of address.
(h) Counterparts. This Agreement may be executed in one or more counterparts by
original or facsimile signatures, each of which shall be deemed an
original, but all of which shall be one and the same document.
(i) Headings. The headings of this Agreement are for convenience only
and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Shareholder Voting
Agreement and Proxy to be executed and delivered as of the date first set forth
above.
EBIZ:
EBIZ Enterprises, Inc.
By: /s/
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
SHAREHOLDERS:
Caldera Systems, Inc.
By: /s/ Ransom H. Love
---------------------------------------
Ransom H. Love,
Chief Executive Officer
Address:
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Hayjour Family Limited Partnership
By: /s/ Jeffrey I. Rassas
---------------------------------------
Jeffrey I. Rassas,
General Partner
By: /s/ Debi S. Rassas
Debi S. Rassas,
General Partner
Address:
---------------------------
------------------------------
/s/ Jeffrey I. Rassas
Jeffrey I. Rassas
Address:
---------------------------
Kona Investments Limited Partnership
By: /s/ Stephen C. Herman
---------------------------------------
Stephen C. Herman,
General Partner
Address:
---------------------------
/s/ Stephen C. Herman
Stephen C. Herman
Address:
---------------------------
MV3LP, LLLP
By: /s/ Mark Bolzern
Mark Bolzern,
General Partner
Address:
-------------------------------
/s/ Mark Bolzern
Mark Bolzern
Address:
---------------------------
Bomar Shaw Family Trust, LLC
By: /s/ Marian Shaw
Marian Shaw,
General Partner
Address:
----------------------------
/s/ Dave Shaw
Dave Shaw
Address:
---------------------------
/s/ Bruce Parsons
Bruce Parsons
Address:
---------------------------
Shadle Trust
By: /s/ Steve Shadle
Steve Shadle,
Title: ____________________
Address:
--------------------------------
/s/ Steve Shadle
Steve Shadle
Address:
--------------------------------
/s/ Scott Shadle
Scott Shadle
Address:
--------------------------------
/s/ Nick Futter
Nick Futter
Address:
--------------------------------
/s/ Don Young
Don Young
Address:
--------------------------------
/s/ Dave Colesante
Dave Colesante
Address: ________________________
/s/ Mike Colesante
Mike Colesante
Address:
--------------------------------
<PAGE>
Annex A
ADOPTION AGREEMENT
THIS ADOPTION AGREEMENT ("Adoption Agreement") is executed by
the undersigned (the "Transferee") pursuant to the terms of that certain
Shareholder Voting Agreement and Proxy dated as of December ___, 2000 (the
"Agreement") by and among EBIZ Enterprises, Inc., a Nevada corporation ("EBIZ"),
and those shareholders of EBIZ listed on the signatures pages thereto.
Capitalized terms used but not defined herein shall have the respective meanings
ascribed to such terms in the Agreement. By the execution of this Adoption
Agreement, the Transferee agrees as follows:
1. Acknowledgement. Transferee acknowledges that Transferee is
acquiring certain shares of the capital stock of EBIZ (the "Shares"), subject to
the terms and conditions of the Agreement.
2. Agreement. As partial consideration for such transfer, Transferee
(a) agrees that the Shares acquired by Transferee shall be bound by and subject
to the terms of the Agreement, and (b) hereby adopts the Agreement with the same
force and effect as if Transferee were originally a party thereto.
3. Notice. Any notice required or permitted by the Agreement shall be
given to Transferee at the address listed below Transferee's signature below.
4. Joinder. The spouse of the undersigned Transferee, if applicable,
executes this Adoption to acknowledge its fairness and that it is in such
spouse's best interests and to bind to the terms of the Agreement such spouse's
community interest, if any, in the Shares.
EXECUTED AND DATED this ______ day of _________________, ______.
TRANSFEREE:
By:
--------------------------------
Name:
Title:
-----------------------------
Address:
----------------------
Facsimile:
----------------------
Spouse (if applicable):
By:
ACKNOWLEDGED AND ACCEPTED: Name: _____________________________
EBIZ ENTERPRISES, INC.
By:
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Name:
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Title:
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