EXHIBIT 1
SCHEDULE 8.5
December 19, 1996
Mr. Xxxxxxx Xxxxx
c/o Xx. X. Xxxxxxxx
Rechtsanwalte Xx. Xxxxxx pp.
Postfach 5560
30055 Hannover
Germany
Re: CHS Electronics, Inc. ("CHS")
Dear Xxxxx:
As you know, CHS intends to acquire all of the outstanding capital
stock in Xxxxx & Xxxxxx Computer GmbH ("F&W"), pursuant to a Stock Exchange
Agreement (the "Agreement"), dated as of the date hereof, by and between CHS and
you ("Xxxxx"). The undersigned ("Shareholders") are the prlncipal shareholders
of CHS, and will receive substantial benefits from the acquisition of F&W by CHS
(the "Acquisition").
In order to induce Xxxxx to consummate the Acquisition, each of the
Shareholders hereby agrees that, effective as of the Closing (as defined in the
Agreement), and so long as Xxxxx is the record and beneficial owner of at least
five percent (5%) of the outstanding shares of the Common Stock of CHS:
1. The Shareholders shall vote their shares of the Common Stock of CHS
in favor of your election as a director of CHS, at the first shareholders
meeting held in 1997 (which shall be on or before July 31, 1997), and thereafter
at any other shareholders meeting or meetings held to elect directors (and in
any written consent executed in lieu of such a meeting). Notwithstanding the
foregoing, Shareholders shall not have any obligation to vote their shares to
elect you as a director of CHS if you are the subject of, or meet, any of the
disqualification conditions set forth in 17 C.F.R. ss. 230.262(b)(1)-(5) (or any
successor regulation witH substantially similar requirements).
2. If the Shareholders propose to request CHS to register (a
"Registration") any of their shares of CHS Common Stock (the "Comtrad Shares")
under the Securities Act of 1933 (the "l933 Act"), the Shareholders shall also
request that certain of your shares of CHS Common Stock (the "Xxxxx Xxxxxx") be
registered under the 1933 Act at the same time and on the same terms, as
provided herein. The Shareholders shall not permit CHS to register any of the
Comtrad Shares unless Xxxxx at the same time has certain of the Xxxxx Xxxxxx
registered as provided herein or has elected not to have Xxxxx Xxxxxx registered
pursuant to Section 2(a) below. Any demand by a pledgee of
Mr. Xxxxxxx Xxxxx
December 19, 1996
Page 2
the Shareholders to register Comtrad Shares shall be deemed a request
by the Shareholders for purposes of this Agreement.
(a) The Shareholders shall provide Xxxxx advance written
notice ("Registration Notice") with a copy to Xxxxx's counsel (Xxxxxx X.
Xxxxxxx, Xxxxx & XxXxxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX
00000, telefax: 312/861-2899) of any proposed Registration of the Comtrad
Shares, which notice shall state the number of Comtrad Shares to be registered
and the other terms of the offering. Xxxxx shall have a period of 20 days after
receipt of Comtrad's Registration Notice to elect to participate in the
Registration. Such election shall be exercised by written notice to the
Shareholders ("Election Notice"), which notice shall: (i) specify the number of
Xxxxx Xxxxxx which Xxxxx elects to register, and (ii) be delivered to the
Shareholders within such 20 day period. Xxxxx's failure to deliver such notice
shall be deemed an election to not participate in the Registration.
(b) The parties shall have a period of 7 days after the
Shareholders' receipt of Xxxxx's Election Notice to agree on the number of
shares to be registered by each party. If the parties fail to agree, then: (i)
the Shareholders shall have the right to register the number of shares shown in
the Registration Notice; and (ii) Xxxxx shall have the right to register a
portion of the Xxxxx Xxxxxx then owned by Xxxxx equal to: (1) the number of
Comtrad Shares to be registered in the Registration, divided by (2) the
aggregate number of Comtrad Shares then owned by the Shareholders.
(c) If the number of shares determined pursuant to subsection
(b) above must be reduced, because of market conditions, decision of the
underwriter, or any other reason, such reduction shall be applied to the parties
on a pro-rata basis, based on the number of shares each party originally
proposed to include in the Registration.
(d) Nothing contained herein shall require either of the
parties hereto to register or sell any of their CHS Common Stock at any time. It
shall be a condition precedent to the obligations of the Shareholders to take
any action pursuant to this Agreement with respect to the Xxxxx Xxxxxx that
Xxxxx shall furnish to CHS such information regarding himself, the Xxxxx Xxxxxx
and the intended method of disposition of such securities as shall be required
to effect the registration of such securities.
(e) Xxxxx shall not any right to obtain or seek an injunction
restraining or otherwise delaying any registration by CHS as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement; provided, however, that the provisions of this
subsection (e) shall not prohibit Xxxxx from (i) obtaining an injunction
ordering the Shareholders to cause CHS to register the Xxxxx Xxxxxx as provided
herein, (ii) obtaining an injunction prohibiting the Shareholders from
registering Comtrad Shares until they have complied with their obligations
hereunder, or (iii) obtaining money damages against Shareholders arising from a
default by Shareholders hereunder.
Mr. Xxxxxxx Xxxxx
December 19, 1996
Page 3
3. Notwithstanding anything to the contrary contained in Section 2
above, Xxxxx shall have no right to request or seek registration of any Xxxxx
Shares which are subject to resale restrictions under Section 9.5.2 of the
Agreement.
4. Xxxxx's rights under this Agreement may not be assigned. This letter
shall (i) be governed and construed in accordance with the laws of Florida; and
(ii) be binding and effective for all purposes when a signed copy has been
transmitted to you by telecopier.
Very truly yours,
COMTRAD, INC.
By:
--------------------------------
Title:
-----------------------------
COMTRAD HOLDINGS, INC.
By:
--------------------------------
Title:
-----------------------------
ACCEPTED AND AGREED:
--------------------
------------------------
Xxxxxxx Xxxxx