EXHIBIT 10.42
December 19, 1996
Mr. Xxxxxxx Xxxxx
c/o Xx. X. Xxxxxxxx
Rechtsanwalte Xx. Xxxxxx pp.
Xxxxxxxx 0000
00000 Xxxxxxxx
Xxxxxxx
RE: CHS ELECTRONICS, INC. ("CHS")
Dear Xx. 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 principal 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 or meet,
any of the disqualification conditions set forth in 17 C.F.R. /section/
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 "1933 Act"), the Shareholders shall also
request that certain of your shares of CHS Common Stock (the "Xxxxx Shares") be
registered under the 1933 Act at the same time and on the same terms, as
provided
Mr. Xxxxxxx Xxxxx
December 19, 1996
Page 2
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 Shares
registered as provided herein or has elected not to have Xxxxx Shares registered
pursuant to Section 2(a) below. Any demand by a pledgee of 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 Frank'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 Shares which Xxxxx elects to
register, and (ii) be delivered to the Shareholders within such 20 day period.
Frank'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 Frank'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 Shares 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
Mr. Xxxxxxx Xxxxx
December 19, 1996
Page 3
respect to the Xxxxx Shares that Xxxxx shall furnish to CHS such information
regarding himself, the Xxxxx Shares and the intended method of disposition of
such securities as shall be required to effect the registration of such
securities.
(e) Xxxxx shall not have 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 Shares 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.
3. Notwithstanding anything to the contrary contained in Section 2 above,
Xxxxx shall have no right to request or seek registration of any Frank Shares
which are subject to resale restrictions under Section 9.5.2 of the Agreement.
4. Frank'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: /s/ XXXXXXX XXXXXX
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Title: President
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COMTRAD HOLDINGS, INC.
By: /s/ XXXXXXX XXXXXX
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Title: President
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ACCEPTED AND AGREED:
