<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
AMERIQUEST TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
03070P 10-3
--------------------
(CUSIP Number)
LISTEN GROUP PARTNERS, LLC
C/O ALEXANDER C. KRAMER
AMERIQUEST TECHNOLOGIES, INC.
425 PRIVET ROAD
HORSHAM, PENNSYLVANIA 19044
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
JULY 20, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
NOTE: Schedules filed in paper format shall include a signed original and give
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 8 pages)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 03070P 10-3 PAGE 2 OF 8
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
LISTEN GROUP PARTNERS, LLC (23-2966874)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS
2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF SHARES
BENEFICIALLY 36,349,878
OWNED ----------------------------------------------------------
BY EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 0 SHARES
----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
36,349,878 SHARES
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,349,878 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!!
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CUSIP NO. 03070P 10-3 PAGE 3 OF 8
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ALEXANDER C. KRAMER
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS
2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
PENNSYLVANIA
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF SHARES 26,882
BENEFICIALLY ----------------------------------------------------------
OWNED 8 SHARED VOTING POWER
BY EACH 36,349,878 SHARES
REPORTING ----------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
26,882
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
36,349,878 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,376,760 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 54%
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!!
<PAGE> 4
CUSIP NO. 03070P 10-3 PAGE 4 OF 8
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JON D. JENSEN
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS
2(d) or 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
PENNSYLVANIA
- --------------------------------------------------------------------------------
NUMBER 7 SOLE VOTING POWER
OF SHARES 0 SHARES
BENEFICIALLY ----------------------------------------------------------
OWNED 8 SHARED VOTING POWER
BY EACH 36,349,878 SHARES
REPORTING ----------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0 SHARES
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
36,349,878 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
36,349,878 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!!
<PAGE> 5
CUSIP NO. 03070P 10-3 PAGE 5 OF 8
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $0.01 per
share (the "Common Stock"), of AmeriQuest Technologies, Inc., a Delaware
corporation (the "Issuer"). The principal executive offices of the Issuer are
located at 425 Privet Road, Horsham, Pennsylvania 19044.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed by (i) Listen Group Partners,
LLC, a Delaware limited liability company ("Listen Group"), (ii) Alexander C.
Kramer and (iii) Jon D. Jensen (collectively, the "Filing Persons").
(b) The business address of each of the Filing Persons is c/o
AmeriQuest Technologies, 425 Privet Road, Horsham, Pennsylvania 19044.
(c) Mr. Kramer is the President and Chief Executive Officer of
the Issuer and Mr. Jensen is the Chief Financial Officer and Chief Operating
Officer of the Issuer. The Issuer is a national value-added wholesale
distributor of micro, mini and mid-range computers and related products to
value-added resellers and systems integrators. Messrs. Kramer and Jensen are
co-presidents of Listen Group.
(d) During the last five years, none of the Filing Persons have
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) During the last five years, none of the Filing Persons have
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which he was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Each of Messrs. Kramer and Jensen are United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS.
Listen Group purchased the shares with funds contributed by Messrs.
Kramer and Jensen; such purchase was not effected with the proceeds of any
borrowings.
ITEM 4. PURPOSE OF TRANSACTION.
The Filing Persons acquired beneficial ownership of the shares of
Common Stock to which this Statement relates for investment.
(a) Listen Group has an understanding with a former executive
officer of the Company to sell such former officer and persons affiliated with
him 4,500,000 shares of Common Stock.
In addition, the Filing Persons may acquire additional shares
of Common Stock or other securities of the Company or sell or otherwise dispose
of any or all of the shares of Common Stock or other securities of the Company
beneficially owned by such persons. Inasmuch as each of the Filing Persons may
have different investment goals, action taken by any one Filing Person may be
different from the action or inaction of the other Filing Persons. The Filing
Persons may take any other action with respect to the Company or any of its
debt or equity securities in any manner permitted by law.
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CUSIP NO. 03070P 10-3 PAGE 6 OF 8
(d) As a result of the transaction consummated pursuant to the
Agreement (as defined and more fully described in Item 6), Computer 2000 AG's
representatives on the Company's Board of Directors, Harry Krischik, Manfred H.
Guenzel, Richard Obermaier and Anton Roedl, resigned. There are no
arrangements or understandings with respect to the election of replacement
directors, other than an expectation that Mr. Jensen will promptly be elected
to fill one of the vacancies.
Except as provided above, none of the Filing Persons has any plans
or proposals which relate to, or could result in, any of the matters referred
to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Listen Group is the beneficial owner of 36,349,878 shares of
Common Stock, which constitutes approximately 54% of the Common Stock
outstanding as of July 20, 1998.
Mr. Kramer is the beneficial owner of 36,376,760 shares of
Common Stock (including options to purchase 26,882 shares of Common Stock),
which constitutes approximately 54% of the Common Stock outstanding as of July
20, 1998.
Mr. Jensen is the beneficial owner of 36,349,878 shares if
Common Stock, which constitutes approximately 54% of the Common Stock
outstanding as of July 20, 1998.
(b) Listen Group has sole voting power and power to dispose of
the shares of Common Stock beneficially owned by it.
Messrs. Kramer and Jensen each have shared voting power and
shared power to dispose of the 36,349,878 shares of Common Stock held by Listen
Group of which each is a member. Pursuant to the Operating Agreement of Listen
Group, dated as of June 1, 1998, as amended (the "Listen Group Agreement")
Listen Group's members have the exclusive right to manage Listen Group's
business; furthermore the Listen Group Agreement provides that the act of one
or more members holding more than 50% of the Units of Listen Group shall be the
act of the members.
Mr. Kramer has sole voting power and power to dispose of the
26,882 shares of Common Stock beneficially owned by him (consisting solely of
options to purchase 26,882 shares of Common Stock).
(c)
ITEM 6. CONTRACT, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
On July 2, 1998, Listen Group, the Issuer, and Computer 2000 AG, a
German corporation, and Computer 2000, Inc., a Delaware corporation and a
wholly-owned subsidiary of Computer 2000 AG (together with Computer 2000 AG,
"Computer 2000"), entered into a Disposition and Reorganization Agreement (the
"Agreement"). The Agreement provides for, among other things, the sale to
Listen Group of 36,349,878 shares Common Stock, owned by Computer 2000 for
$1.00. In addition, pursuant to the Agreement:
- Computer 2000 contributed to the capital of the Company
approximately $28 million in intercompany debt and an
additional $3 million in cash;
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CUSIP NO. 03070P 10-3 PAGE 7 OF 8
- the Company redeemed and canceled 300,000 shares of Series H
Cumulative Convertible Preferred Stock (the "Preferred
Stock"), which are convertible into 41,958,042 shares of
Common Stock, held by Computer 2000;
- the Company canceled the achievement warrants equivalent to
7,035,280 shares of Common Stock and a maintenance option
equivalent to 2,357,235 shares of Common Stock, held by
Computer 2000;
- as a result of the Transaction, the number of outstanding
shares of Common Stock, on a fully diluted basis, was reduced
from approximately 118 million to approximately 67 million;
- a total of 6.7 million additional shares of Common Stock was
reserved for issuance to AmeriQuest employees as incentive
compensation;
- Listen Group and the Company obtained the release of Computer
2000 from all guarantees of the Company's obligations;
- Computer 2000's representatives on the Company's Board of
Directors, Harry Krischik, Manfred H. Guenzel, Richard
Obermaier and Anton Roedl, resigned, and there are no
arrangements or understandings with respect to the election
of replacement directors, other than an expectation that Jon
Jensen will promptly be elected to fill one of the vacancies;
- Listen Group and the Company jointly and severally
indemnified Computer 2000 and its director designees against
any damages arising following the closing of the Transaction
due to actions taken with respect to AmeriQuest prior to the
closing;
- Listen Group paid approximately $220,000 for transaction
related expenses, including a D&O insurance tail policy
covering Computer 2000 and the current directors of
AmeriQuest and the $1 direct consideration which was funded
with capital contributions by Messrs. Kramer and Jensen to
Listen Group;
- Messrs. Kramer and Jensen waived the change of control
provisions in their respective employment agreements with the
Company with respect to the Transaction; and
- the Company entered into a $10 million asset-backed line of
credit with Fleet Capital Corporation replacing the Company's
prior line of credit with IBM Credit Corporation.
The closing of the transactions contemplated by the Agreement took
place on July 20, 1998.
This summary description of the Agreement and the Transactions
contemplated thereby does not purport to be complete and is qualified in its
entirety by reference to the Agreement which appears as an exhibit hereto
Listen Group has an understanding with a former executive officer
of the Company to sell such former officer and persons affiliated with him
4,500,000 shares of Common Stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A: Disposition and Reorganization Agreement, dated as of
July 2, 1998, between Listen Group Partners, LLC,
AmeriQuest, Inc., Computer 2000 AG and Computer 2000,
Inc.
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CUSIP NO. 03070P 10-3 PAGE 8 OF 8
SIGNATURE
We, the undersigned:
1. Agree that this statement is filed on behalf of the
undersigned.
2. After reasonable inquiry and to the best of our knowledge and
belief, certify that the information set forth in this
statement is true, complete and correct.
LISTEN GROUP PARTNERS, LLC
By: /s/ Jon D. Jensen
Jon D. Jensen
Co-President
/s/ Alexander C. Kramer
Alexander C. Kramer
/s/ Jon D. Jensen
Jon D. Jensen
Date: July 28, 1998
<PAGE> 9
DISPOSITION AND REORGANIZATION AGREEMENT
THIS DISPOSITION AND REORGANIZATION AGREEMENT
("Agreement"), dated the 2nd day of July, 1998, by and among AMERIQUEST
TECHNOLOGIES, INC., a Delaware corporation (the "Company"); COMPUTER 2000 AG, a
German corporation ("Computer 2000"); COMPUTER 2000, INC., a Delaware
corporation and wholly owned subsidiary of Computer 2000 ("Seller"); and THE
LISTEN GROUP PARTNERS LLC, a Delaware limited liability company ("Purchaser"),
W I T N E S S E T H :
WHEREAS, Seller is the record and beneficial owner of (a)
36,349,878 shares of the issued and outstanding shares of common stock, par
value $0.01 per share of the Company (the "Common Stock") representing
approximately 54% of the issued and outstanding shares of Common Stock; (b)
300,000 shares of Series H Cumulative Convertible Preferred Stock, par value
$0.01 per share, convertible into 41,958,042 shares of Common Stock (the
"Preferred Stock") representing 100% of the issued and outstanding shares of
Preferred Stock; (c) achievement warrants equivalent to 7,035,280 shares of
Common Stock (the "Achievement Warrants"); and (d) a maintenance option
equivalent to 2,357,235 shares of Common Stock; and
WHEREAS, Computer 2000 has agreed to forgive certain intercompany
indebtedness by means of a contribution of such indebtedness to the capital of
the Company, subject to the terms and conditions set forth herein;
WHEREAS, Computer 2000 has agreed to make a cash contribution to
the capital of the Company in the amount of Three Million U.S. Dollars
($3,000,000), subject to the terms and conditions set forth herein;
WHEREAS, Seller has agreed to contribute all of its shares of
Preferred Stock to the capital of the Company, subject to the terms and
conditions set forth herein;
WHEREAS, Seller has agreed to waive all rights to receive any
dividends payable or accrued as of the Closing Date with respect to the
Preferred Stock, subject to the terms and conditions set forth herein;;
WHEREAS, Seller has agreed, as of the Closing Date, to contribute
all of its Achievement Warrants and the Maintenance Option to the capital of
the Company, and the Company has agreed to cause the Achievement Warrants and
the Maintenance Option to be cancelled as of the Closing Date, subject to the
terms and conditions set forth herein;
WHEREAS, Seller desires to sell to Purchaser 36,349,878 shares of
Common Stock, constituting 54% of the issued and outstanding Common Stock of
the Company (the
<PAGE> 10
"Shares") and Purchaser desires to purchase the Shares, subject to the terms
and conditions set forth herein;
WHEREAS, in partial consideration for the purchase of the Shares,
Purchaser shall purchase a Six-Year Run-Off Insurance Policy (as defined below)
with a premium amount of approximately Two Hundred Thousand Dollars ($200,000)
(the "Insurance Payment");
WHEREAS, the Company and Purchaser have agreed to cause Computer
2000 to be released from certain guarantees as of the Closing Date, subject to
the terms and conditions set forth herein; and
WHEREAS, the Company has retained L.H. Friend, Weinress, Frankson &
Presson, Inc. as its financial advisor (the "Financial Adviser") to deliver an
opinion as to the viability of the Company subsequent to the consummation of
the transactions contemplated herein (the "Comfort Letter"),
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company, Computer 2000, Seller and Purchaser,
intending to be legally bound, hereby agree as follows:
SECTION 1. SALE OF THE SHARES.
Subject to the terms and conditions hereof, at the Closing (as
hereafter defined), Seller shall sell, convey and assign to Purchaser, and
Purchaser shall purchase from Seller, good and marketable title to all of the
Shares.
SECTION 2. THE CLOSING.
2.1. Closing; Closing Date. The closing of the transactions
contemplated hereby (the "Closing") shall be held at 10:00 a.m. on July 16,
1998 at the offices of Rogers & Wells LLP, 200 Park Avenue, New York, New York
10166, or at such other time and date as the parties may mutually agree in
writing (the "Closing Date").
2.2. Payment for Shares. At the Closing, Purchaser shall (i)
pay to Seller the aggregate purchase price of One U.S. Dollar ($1.00) and (ii)
make, on behalf of Seller, the Insurance Payment to the insurance company
providing such insurance coverage, which payments together shall constitute
Purchaser's aggregate purchase price for the Shares.
2.3. Delivery of Shares. At the Closing, Seller shall deliver
to Purchaser a certificate or certificates evidencing the Shares, with stock
powers duly executed and attested, sufficient to vest in Purchaser good and
marketable title to the Shares, free and clear of any and all liens and
encumbrances.
2.4. Preferred Stock; Warrants; Option. At the Closing, Seller
shall deliver to the Company certificates or other proper documentation
evidencing the Preferred Stock,
2
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Achievement Warrants and the Maintenance Option, in each case, free and clear
of any and all liens and encumbrances, to be deemed a contribution to the
capital of the Company.
2.5. Seller's Contribution to Capital. At the Closing, Computer
2000 shall pay to the Company or for the benefit of the Company Three Million
U.S. Dollars ($3,000,000) by wire transfer of immediately available funds to
such account or accounts as the Company shall specify, such payment to be
deemed a contribution to the capital of the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents, warrants and covenants to Computer 2000, Seller and
Purchaser as follows:
3.1. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
The Company has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
3.2. Authority. The execution and delivery by the Company of
this Agreement, and the performance by the Company of its obligations
hereunder, have been duly and validly authorized by the Board of Directors of
the Company, no other corporate action on the part of the Company or its
stockholders being necessary. This Agreement has been duly and validly
executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, moratorium, reorganization and other similar laws
relating to or affecting the enforcement of creditors' rights generally.
3.3. No Conflicts. The execution and delivery by the Company of
this Agreement do not, and the performance by the Company of its obligations
under this Agreement and the consummation of the transactions contemplated
hereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the certificate of incorporation
or by-laws or other comparable corporate charter document of the Company;
(b) conflict with or result in a violation or breach of
any term or provision of any Law or Order applicable to the Company or any of
its assets; or
(c) conflict with or result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
any Contracts or Other Agreements to which the Company is a party or by which
any of its assets are bound.
3.4. Legal Proceedings. There are no Actions or Proceedings
pending or, to the Knowledge of the Company, threatened relating to or
affecting the Company or any of its
3
<PAGE> 12
assets which question the legality or validity of this Agreement or the
transactions contemplated herein, or any action taken or to be taken in
connection herewith, or which seeks to prevent the consummation of any
transaction contemplated hereby by restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated herein.
3.5. Corporate Approval. This Agreement and the transactions
contemplated hereby have been approved by the disinterested Directors of the
Company in accordance with Section 144(a) of the Delaware General Corporation
Law.
3.6. Representations and Warranties. The representations and
warranties of the Company contained in this Section 3 shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF COMPUTER 2000.
Computer 2000 hereby represents, warrants and covenants to the Company and
Purchaser as follows:
4.1. Organization. Computer 2000 is a corporation duly
organized, validly existing and in good standing under the Laws of the Federal
Republic of Germany. Computer 2000 has full corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
4.2. Authority. The execution and delivery by Computer 2000 of
this Agreement, and the performance by Computer 2000 of its obligations
hereunder, have been duly and validly authorized by the Vorstand and
Aufsichtsrat of Computer 2000, no other corporate action on the part of
Computer 2000 or its stockholders being necessary. This Agreement has been
duly and validly executed and delivered by Computer 2000, and constitutes a
legal, valid and binding obligation of Computer 2000, enforceable against
Computer 2000 in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium, reorganization and other similar
laws relating to or affecting the enforcement of creditors' rights generally.
4.3. No Conflicts. The execution and delivery by Computer 2000
of this Agreement do not, and the performance by Computer 2000 of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the Satzung or other corporate
charter documents of Computer 2000;
(b) conflict with or result in a violation or breach of
any term or provision of any Law or Order applicable to Computer 2000 or any of
its assets; or
4
<PAGE> 13
(c) conflict with or result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
any Contracts or Other Agreements to which Computer 2000 is a party or by which
any of its assets are bound.
4.4. Legal Proceedings. There are no Actions or Proceedings
pending or, to the Knowledge of Computer 2000, threatened relating to or
affecting Computer 2000 or any of its assets which question the legality or
validity of this Agreement or the transactions contemplated herein, or any
action taken or to be taken in connection herewith, or which seeks to prevent
the consummation of any transaction contemplated hereby by restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated herein.
4.5. Title. The endorsement and delivery by Seller in
accordance with the provisions of this Agreement of a certificate or
certificates evidencing the Shares will vest in Purchaser good title to the
Shares, free and clear of all liens and encumbrances.
4.6. No Other Company Securities. Following the consummation of
the transactions contemplated under this Agreement, neither Computer 2000 nor
any Affiliate of Computer 2000 will own any debt or equity securities of the
Company or any options, warrants or other rights to acquire equity securities
of the Company.
4.7. Representations and Warranties. The representations and
warranties of Computer 2000 contained in this Section 4 shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made
and as of the Closing Date.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER.
5.1. Organization. Seller is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
Seller has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
5.2. Authority. The execution and delivery by Seller of this
Agreement, and the performance by Seller of its obligations hereunder, have
been duly and validly authorized by the board of directors of Seller, no other
corporate action on the part of Seller or its stockholders being necessary.
This Agreement has been duly and validly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium, reorganization and other similar
laws relating to or affecting the enforcement of creditors' rights generally.
5.3. No Conflicts. The execution and delivery by Seller of this
Agreement do not, and the performance by Seller of its obligations under this
Agreement and the consummation of the transactions contemplated hereby will
not:
5
<PAGE> 14
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the certificate of incorporation
or by-laws or other comparable corporate charter document of Seller;
(b) conflict with or result in a violation or breach of
any term or provision of any Law or Order applicable to Seller or any of its
assets; or
(c) conflict with or result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
any Contracts or Other Agreements to which Seller is a party or by which any of
its assets are bound.
5.4. Legal Proceedings. There are no Actions or Proceedings
pending or, to the Knowledge of Seller, threatened relating to or affecting
Seller or any of its assets which question the legality or validity of this
Agreement or the transactions contemplated herein, or any action taken or to be
taken in connection herewith, or which seeks to prevent the consummation of any
transaction contemplated hereby by restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated herein.
5.5. Title. The endorsement and delivery by Seller in
accordance with the provisions of this Agreement of a certificate or
certificates evidencing the Shares will vest in Purchaser good title to the
Shares, free and clear of all liens and encumbrances.
5.6. No Other Company Securities. Following the consummation of
the transactions contemplated under this Agreement, neither Seller nor any
Affiliate of Seller will own any debt or equity securities of the Company or
any options, warrants or other rights to acquire equity securities of the
Company.
5.7. Representations and Warranties. The representations and
warranties of Seller contained in this Section 5 shall be true and correct in
all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made and as of
the Closing Date.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents, warrants and covenants to the Company, Computer 2000 and
Seller as follows:
6.1. Organization. Purchaser is a limited liability company
duly organized, validly existing and in good standing under the Delaware
Limited Liability Company Act. Purchaser has full power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
6.2. Authority. The execution and delivery by Purchaser of this
Agreement, and the performance by Purchaser of its obligations hereunder, have
been duly and validly authorized by the Purchaser, no other action on the part
of Purchaser being necessary. This
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Agreement has been duly and validly executed and delivered by Purchaser and
constitutes a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, moratorium, reorganization and other
similar laws relating to or affecting the enforcement of creditors' rights
generally.
6.3. No Conflicts. The execution and delivery by Purchaser of
this Agreement do not, and the performance by Purchaser of its obligations
under this Agreement and the consummation of the transactions contemplated
hereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the certificate of formation,
limited liability agreement or other comparable documents of Purchaser;
(b) conflict with or result in a violation or breach of
any term or provision of any Law or Order applicable to Purchaser or any of its
assets; or
(c) conflict with or result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
any Contracts or Other Agreements to which Seller is a party or by which any of
its assets are bound.
6.4. Legal Proceedings. There are no Actions or Proceedings
pending or, to the Knowledge of Purchaser, threatened relating to or affecting
Purchaser or any of its assets which question the legality or validity of this
Agreement or the transactions contemplated herein, or any action taken or to be
taken in connection herewith, or which seeks to prevent the consummation of any
transaction contemplated hereby by restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated herein.
6.5. Purchaser's Knowledge and Experience. Purchaser represents
that its knowledge and experience in financial and business matters are such
that it is capable of evaluating the merits and risks of its purchase of the
Shares, as contemplated by this Agreement.
6.6. Representations and Warranties. The representations and
warranties of Purchaser contained in this Section 6 shall be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made and as of
the Closing Date.
SECTION 7. COVENANTS OF THE COMPANY AND PURCHASER.
7.1. Cooperation. From the date hereof through the Closing
Date, the Company agrees that it will:
(a) do or cause to be done all things necessary to ensure
that the Company's representations and warranties will be true and correct at
and as of the Closing Date as though made on and as of the Closing Date; and
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(b) promptly advise Computer 2000 and Purchaser in writing
of any event, condition or circumstance occurring from the date hereof through
the Closing Date that would constitute a violation or breach of this Agreement,
or constitute the failure of any condition to the obligations of the Company.
7.2. Governmental Permits and Approvals. The Company shall use
its best efforts to obtain all permits and approvals from any Governmental
Authority or Regulatory Body required to be obtained by the Company for the
lawful consummation of the Closing.
7.3. Comfort Letter. At the Company's sole expense, the Company
shall retain the Financial Adviser, which shall be a reputable investment bank
satisfactory to Computer 2000 and Purchaser. The Company shall use its best
efforts to cause the Financial Adviser to deliver the Comfort Letter, which
shall set forth the opinion of the Financial Advisor that the Company is
reasonably likely to remain a viable business for at least one year subsequent
to the consummation of the transactions contemplated herein. The Comfort
Letter shall be satisfactory in form and substance to Computer 2000 and it
shall be expressly stated therein that the Company's Board of Directors,
Computer 2000 and Seller may rely upon such Comfort Letter.
7.4. Releases. The Company and Purchaser agree to use their
best efforts to obtain, prior to the Closing, the release of Computer 2000
and/or Seller from any and all liabilities, debts and obligations, guarantees
and suretyships, including but not limited to those relating to the $5,000,000
guarantee from Computer 2000 in support of the Company's line of credit with
IBMCC and Computer 2000's guarantee of certain amounts to the Company's
vendors, in each case as more fully described in Schedule 7.4 (collectively,
the "Releases"). The Company's obtaining of all Releases, and the delivery to
Computer 2000 prior to the Closing of evidence of such Releases, in form and
substance satisfactory to Computer 2000, shall be a condition precedent to the
obligation of Computer 2000 and Seller to proceed to Closing.
7.5. Indemnification of Computer 2000 Designees.
(a) At all times after the Closing, the Company and
Purchaser agree, jointly and severally, to the fullest extent permitted by Law,
to indemnify, defend and hold harmless Computer 2000 and Seller (and their
respective Affiliates and their respective shareholders, directors, officers,
employees, counsel, consultants, agents and representatives) and each of Dr.
Harry Krischik, Manfred Gunzel, Richard Obermaier or Anton Rodl (collectively,
the "Computer 2000 Designees"), from and against all Losses that arise out of
or are based upon any action taken, or any omission to take action, prior to
the Closing Date, by any of the Computer 2000 Designees in his capacity as a
Director of the Company.
(b) The Company shall not, and Purchaser shall not cause
the Company to, amend or repeal any provision of the Company's articles of
incorporation or bylaws, as in the effect as of the date of this Agreement,
that purports to indemnify or otherwise provide legal protection to the
Company's Directors, including but not limited to the Computer 2000 Designees.
7.6. Indemnification of Computer 2000 and Seller.
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<PAGE> 17
(a) At all times after the Closing, the Company and
Purchaser agree, jointly and severally, to the fullest extent permitted by Law,
to indemnify, defend and hold harmless Computer 2000 and Seller (and their
respective Affiliates and their respective shareholders, directors, officers,
employees, counsel, consultants, agents and representatives) from and against
all Losses that arise out of or are based upon any action taken, or any
omission to take action, after the Closing by the Company, by any officer or
Director of the Company, or by Purchaser (or any of their respective Affiliates
and their respective shareholders, directors, officers, employees, counsel,
consultants, agents and representatives).
(b) For a period of no less than six years after the
Closing, the Purchaser shall cause the Company to maintain in effect a
liability run-off policy, as described in Schedule 7.6, or equivalent insurance
with substitute insurers (the "Six-Year Run-Off Policy").
7.7. Cancellation. The Company shall cause all of the
Achievement Warrants and the Maintenance Option to be cancelled upon delivery
thereof by Computer 2000, effective as of the Closing.
7.8. No Common Stock Repurchase. For a period of 18 months
after the Closing Date, the Company shall not, by means of open-market
transactions or private purchases or in any other manner, repurchase or
otherwise acquire any shares of Common Stock from any stockholder of the
Company unless all of the Unaffiliated Directors, by resolution, determine in
advance of such repurchase or acquisition that the transaction would be
entirely and intrinsically fair to the Company and to the minority
stockholders, taken as a whole.
7.9. Preferred Stock. Upon Seller's contribution to the Company
of the shares of Preferred Stock pursuant to this Agreement, the Company shall
reserve the equivalent of 6,700,000 shares of Common Stock issuable upon the
conversion of of such Preferred Stock for reissuance to employees pursuant to
stock or stock-based benefit plans to be established by the Company after the
Closing.
SECTION 8. COVENANTS OF COMPUTER 2000 AND SELLER.
8.1. Cooperation. From the date hereof through the Closing
Date, each of Computer 2000 and Seller agrees that it will:
(a) do or cause to be done all things necessary to ensure
that the respective representations and warranties of Computer 2000 and Seller
will be true and correct at and as of the Closing Date as though made on and as
of the Closing Date; and
(b) promptly advise Purchaser and the Company in writing
of any event, condition or circumstance occurring from the date hereof through
the Closing Date that would constitute a violation or breach of this Agreement,
or constitute the failure of any condition precedent to the respective
obligations of Computer 2000 or Seller
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8.2. Governmental Permits and Approvals. Each of Computer 2000
and Seller shall use its best efforts to obtain all permits and approvals from
any Governmental Authority or Regulatory Body required to be obtained by
Computer 2000 or Seller for the lawful consummation of the Closing.
8.3. Resignation of Computer 2000 Designees. Computer 2000
shall cause each of the Computer 2000 Designees to resign from the Company's
Board of Directors, effective as of the Closing.
8.4. Forgiveness of Intercompany Debt. Computer 2000 and Seller
shall cause all intercompany loans and receivables against the Company,
including accrued interest, to be forgiven, effective as of the Closing.
8.5. Waiver of Accrued Dividends. Computer 2000 shall cause all
of the Preferred Stock, Achievement Warrants and the Maintenance Option to be
delivered at the Closing to the Company. Computer 2000 and Seller shall waive
all rights to receive any dividends payable or accrued as of the Closing Date
with respect to the Preferred Stock.
8.6. Capital Contribution. The $3,000,000 capital contribution
by Computer 2000 shall promptly be wire transferred to a United States bank
account for contribution to the Company on the Closing Date.
SECTION 9. ADDITIONAL COVENANTS OF PURCHASER.
9.1. Cooperation. From the date hereof through the Closing
Date, Purchaser agrees that it will:
(a) do or cause to be done all things necessary to ensure
that Purchaser's representations and warranties will be true and correct at and
as of the Closing Date as though made on and as of the Closing Date; and
(b) promptly advise Computer 2000 and the Company in
writing of any event, condition or circumstance occurring from the date hereof
through the Closing Date that would constitute a violation or breach of this
Agreement, or constitute the failure of any condition to the obligations of
Purchaser.
9.2. Governmental Permits and Approvals. Purchaser shall use
its best efforts to obtain all permits and approvals from any Governmental
Authority or Regulatory Body required to be obtained by Purchaser for the
lawful consummation of the Closing.
9.3. Unaffiliated Directors. For a period of two years after
the Closing, Purchaser shall use its best efforts to cause no fewer than two
persons who are not Affiliates of Purchaser or the Company or their respective
Affiliates or any officer or employee of any of them
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to be nominated and elected to the Board of Directors of the Company (each, an
"Unaffiliated Director").
9.4. Voting Arrangements. For a period of two years after the
Closing Date, in all director elections, Purchaser and its Affiliates shall
vote all of their Common Stock and any other voting securities in all Board
elections in such a way as to cause no fewer than two Unaffiliated Directors to
be serving on the Company's Board at all times.
9.5. Standstill Provisions.
(a) Except as otherwise expressly permitted by this
Section 9.5, Purchaser and its Affiliates shall not for a period of two years
after the Closing Date, acquire, directly or indirectly, any additional Common
Stock or other voting securities of the Company beyond the Permitted
Percentage. As used in this Agreement, the "Permitted Percentage" at any given
time shall be equal to the percentage of all voting securities of the Company
that were held by Purchaser as of the Closing; provided, however, that
notwithstanding this Section 9.5(a), Preferred Stock may be reissued to
employees pursuant to stock or stock-based benefit plans of the Company, as
provided in Section 7.9 of this Agreement.
(b) Notwithstanding any other provision of this Agreement,
Purchaser and its Affiliates may acquire additional shares of Common Stock or
other voting securities of the Company at any time if, and only if, all of the
Unaffiliated Directors, by resolution, determine in advance of such acquisition
that the transaction would be entirely and intrinsically fair to the Company
and to the minority stockholders, taken as a whole.
9.6. Concerning the Shares. After the Closing Date, Purchaser
will hold the Shares indefinitely unless they are subsequently registered under
the Securities Act of 1933, as amended, or an exemption from registration is
available.
SECTION 10. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.
The obligations of the Company hereunder are, at the option of the Company,
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
10.1. Representations and Warranties on Closing Date. All
representations and warranties of the other parties contained in this Agreement
or in any document or certificate delivered by any party to the Company
pursuant to this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as though such
representations and warranties had been made and as of the Closing Date.
10.2. Terms, Covenants and Conditions. All the terms, covenants
and conditions of this Agreement to be complied with and performed by each of
the other parties on or prior to the Closing Date shall have been complied with
and performed in all material respects.
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10.3. Consents, Approvals, Etc. All consents, permits,
approvals, authorizations or orders of any court or Governmental Authority or
Regulatory Body necessary for the lawful consummation of the transactions
contemplated hereby shall have been obtained.
10.4. Officer's Certificates. Each of the other parties to this
Agreement shall have delivered to the Company certificates, dated the Closing
Date, executed by its respective authorized executive officer, stating that as
of the Closing Date all of the respective representations and warranties of
such party contained in this Agreement are true and correct in all material
respects, that such party has performed all of its respective obligations and
covenants to be performed by it hereunder, and that all of the conditions
precedent to the obligations of such party hereunder have been satisfied or
waived by such party in writing.
10.5. Litigation. No action, suit or proceeding shall have been
instituted by or before any court or Governmental Authority or Regulatory Body,
or instituted or threatened by any Governmental Authority or Regulatory Body,
to restrain, or to modify in any material respect, or to prevent the carrying
out of the transactions contemplated by this Agreement, or to seek damages or a
discovery order in connection with such transactions.
10.6. Opinions of Counsel.
(a) The Company shall have received an opinion of J.
Britton Gourley, Jr., counsel to the Purchaser, dated the Closing Date,
substantially in the form appended hereto as Exhibit A.
(b) The Company shall have received an opinion of Rogers &
Wells LLP, counsel to Computer 2000 and Seller, dated the Closing Date,
substantially in the form appended hereto as Exhibit B.
10.7. Comfort Letter. The Financial Advisor shall have delivered
the Comfort Letter, dated as of the Closing Date, in form and substance
satisfactory to the Company.
10.8. Computer 2000 Contribution to Capital. Computer 2000 shall
have paid to or for the benefit of the Company Three Million U.S. Dollars
($3,000,000) by wire transfer of immediately available funds to an account or
accounts specified by the Company.
10.9. Insurance Payment. Purchaser shall have made the Insurance
Payment.
10.10. Forgiveness of Indebtedness. Computer 2000 and Seller
shall have caused all intercompany loans and receivables against the Company,
including accrued interest, to be forgiven, effective as of the Closing Date,
and Computer 2000 and Seller shall have delivered to the Company evidence of
all such forgiveness, in form and substance satisfactory to the Company.
Seller shall have waived all rights to receive any dividends payable or accrued
as of the Closing Date with respect to the Preferred Stock.
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10.11. Delivery of Certificates. Seller shall have delivered to
the Company a certificate or certificates or other proper documentation
evidencing the Preferred Stock, Achievement Warrants and the Maintenance
Option, in each case, free and clear of any and all liens and encumbrances, to
be deemed a contribution to the capital of the Company.
10.12. Employment Agreements. Alexander C. Kramer and Jon D.
Jensen shall have waived the change-of-control provisions of their respective
Employment Agreements with respect to the transactions contemplated by this
Agreement.
SECTION 11. CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPUTER
2000 AND SELLER
The obligations of Computer 2000 and Seller hereunder are, at the option of
Computer 2000 and Seller, respectively, subject to the satisfaction on or prior
to the Closing Date of the following conditions:
11.1. Representations and Warranties on Closing Date. All
representations and warranties of the other parties contained in this Agreement
or in any document or certificate delivered by any party to Computer 2000 or
Seller pursuant to this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made and as of the Closing Date.
11.2. Terms, Covenants and Conditions. All the terms, covenants
and conditions of this Agreement to be complied with and performed by each of
the other parties on or prior to the Closing Date shall have been complied with
and performed in all material respects.
11.3. Consents, Approvals, Etc. All consents, permits,
approvals, authorizations or orders of any court or Governmental Authority or
Regulatory Body necessary for the lawful consummation of the transactions
contemplated hereby shall have been obtained.
11.4. Officer's Certificates. Each of the other parties to this
Agreement shall have delivered to Computer 2000 and Seller certificates, dated
the Closing Date, executed by its respective authorized executive officer,
stating that as of the Closing Date all of the respective representations and
warranties of such party contained in this Agreement are true and correct in
all material respects, that such party has performed all of its respective
obligations and covenants to be performed by it hereunder, and that all of the
conditions precedent to the obligations of such party hereunder have been
satisfied or waived by such party in writing.
11.5. Litigation. No action, suit or proceeding shall have been
instituted by or before any court or Governmental Authority or Regulatory Body,
or instituted or threatened by any Governmental Authority or Regulatory Body,
to restrain, or to modify in any material respect, or to prevent the carrying
out of the transactions contemplated by this Agreement, or to seek damages or a
discovery order in connection with such transactions.
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11.6. Opinions of Counsel.
(a) Computer 2000 and Seller shall have received an
opinion of J. Britton Gourley, Jr., counsel to the Purchaser, dated the
Closing Date, substantially in the form appended hereto as Exhibit A.
(b) Computer 2000 and Seller shall have received an
opinion of Morgan, Lewis & Bockius LLP, counsel to the Company, dated the
Closing Date, substantially in the form appended hereto as Exhibit C.
11.7. Director Nominations. As of the Closing Date, no fewer
than two Unaffiliated Directors shall then be serving on the Company's Board of
Directors.
11.8. Comfort Letter. The Financial Advisor shall have delivered
the Comfort Letter, dated as of the Closing Date, in form and substance
satisfactory to Computer 2000.
11.9. Releases. Computer 2000 and Seller and their respective
Affiliates shall have been released from any and all liabilities, debts and
obligations, guarantees and suretyships relating to the business or assets of
the Company. The Company shall have delivered to Computer 2000 and Seller
evidence of all Releases, in form and substance satisfactory to Computer 2000.
11.10. Insurance Payment. Purchaser shall have made the Insurance
Payment.
11.11. Payment for Shares. Purchaser shall have paid the sum of
One U.S. Dollar ($1.00) to Seller in payment for the purchase of the Shares.
11.12. Cancellation. The Company shall have caused the
Achievement Warrants and the Maintenance Option to be cancelled, effective as
of the Closing Date.
11.13. Six-Year Run-Off Policy. The Company shall have caused the
Six-Year Run-Off Policy to be in place, effective as of the Closing.
SECTION 12. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser hereunder are, at the option of Purchaser, subject
to the satisfaction on or prior to the Closing Date of the following
conditions:
12.1. Representations and Warranties on Closing Date. All
representations and warranties of the other parties contained in this Agreement
or in any document or certificate delivered by any party to Purchaser pursuant
to this Agreement shall be true and correct in all material respects on and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made and as of the Closing Date.
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12.2. Terms, Covenants and Conditions. All the terms, covenants
and conditions of this Agreement to be complied with and performed by each of
the other parties on or prior to the Closing Date shall have been complied with
and performed in all material respects.
12.3. Consents, Approvals, Etc. All consents, permits,
approvals, authorizations or orders of any court or Governmental Authority or
Regulatory Body necessary for the lawful consummation of the transactions
contemplated hereby shall have been obtained.
12.4. Officer's Certificates. Each of the other parties to this
Agreement shall have delivered to Purchaser certificates, dated the Closing
Date, executed by its respective authorized executive officer, stating that as
of the Closing Date all of the respective representations and warranties of
such party contained in this Agreement are true and correct in all material
respects, that such party has performed all of its respective obligations and
covenants to be performed by it hereunder, and that all of the conditions
precedent to the obligations of such party hereunder have been satisfied or
waived by such party in writing.
12.5. Litigation. No action, suit or proceeding shall have been
instituted by or before any court or Governmental Authority or Regulatory Body,
or instituted or threatened by any Governmental Authority or Regulatory Body,
to restrain, or to modify in any material respect, or to prevent the carrying
out of the transactions contemplated by this Agreement, or to seek damages or a
discovery order in connection with such transactions.
12.6. Opinion of Counsel.
(a) The Purchaser shall have received an opinion of
Morgan, Lewis & Bockius LLP, counsel to the Company, dated the Closing Date,
substantially in the form appended hereto as Exhibit C.
(b) The Purchaser shall have received an opinion of Rogers
& Wells LLP, counsel to Computer 2000 and Seller, dated the Closing Date,
substantially in the form appended hereto as Exhibit B.
12.7. Computer 2000 Contribution to Capital. Computer 2000 shall
have paid to or for the benefit of the Company Three Million U.S. Dollars
($3,000,000) by wire transfer of immediately available funds to an account or
accounts specified by the Company.
12.8. Director Resignations. Each of the Computer 2000 Designees
then sitting on the Board of Directors of the Company shall have submitted his
written resignation to the Company, effective as of the Closing, conditional
upon nothing other than the consummation of the transactions contemplated
hereby.
12.9. Delivery of Shares. Computer 2000 shall have delivered to
Purchaser a certificate or certificates evidencing the Shares, with stock
powers duly executed and attested, sufficient to vest in Purchaser good and
marketable title to the Shares, free and clear of any and all liens and
encumbrances.
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12.10. Delivery of Certificates. Computer 2000 shall have
delivered to the Company a certificate or certificates or other proper
documentation evidencing the Preferred Stock, Achievement Warrants and the
Maintenance Option, in each case, free and clear of any and all liens and
encumbrances, to be deemed a contribution to the capital of the Company.
12.11. Forgiveness of Indebtedness. Computer 2000 shall have
caused all intercompany loans and receivables against the Company, including
accrued interest, to be forgiven, effective as of the Closing Date, and
Computer 2000 shall have delivered to Purchaser evidence of all such
forgiveness, in form and substance satisfactory to Purchaser.
12.12. Cancellation. The Company shall have caused the
Achievement Warrants and the Maintenance Option to be cancelled, effective as
of the Closing Date. Seller shall have waived all rights to receive any
dividends payable or accrued as of the Closing Date with respect to the
Preferred Stock.
SECTION 13. INDEMNIFICATION.
13.1. Indemnification by the Company.
(a) After the Closing, subject to the limitations set
forth in Section 13.4 below, the Company hereby agrees to indemnify, hold
harmless and defend Computer 2000, Seller and Purchaser and their respective
Affiliates against and in respect of any and all Losses arising out of or based
upon or relating or pertaining in any way to:
(i) the inaccuracy of any representation or warranty
made by the Company in this Agreement or in the officer's certificate delivered
pursuant hereto; and
(ii) the breach by the Company of any agreement or
covenant contained in this Agreement.
13.2. Indemnification by Computer 2000 and Seller.
(a) After the Closing, subject to the limitations set
forth in Section 13.4 below, Computer 2000 and Seller, jointly and severally,
hereby agree to indemnify, hold harmless and defend the Company and Purchaser
and their respective Affiliates against and in respect of any and all Losses
arising out of or based upon or relating or pertaining in any way to:
(i) the inaccuracy of any representation or warranty
made by Computer 2000 or Seller in this Agreement or in the officer's
certificate delivered pursuant hereto; and
(ii) the breach by Computer 2000 of Seller of any
agreement or covenant contained in this Agreement.
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13.3. Indemnification by Purchaser.
(a) After the Closing, subject to the limitations set
forth in Section 13.4 below, Purchaser hereby agrees to indemnify, hold
harmless and defend the Company, Computer 2000 and Seller and their respective
Affiliates against and in respect of any and all Losses arising out of or based
upon or relating or pertaining in any way to:
(i) the inaccuracy of any representation or warranty
made by Purchaser in this Agreement or in the officer's certificate delivered
pursuant hereto; and
(ii) the breach by Purchaser of any agreement or
covenant contained in this Agreement.
13.4. Limitations on Indemnification.
(a) Liability for any Indemnifying Party (as defined
below) to indemnify, hold harmless or defend any Indemnified Party (as defined
below) under this Agreement (collectively, "Indemnification") shall be
conditioned upon compliance with the following notification procedures:
(i) in the case of any Indemnification described in
Section 13.1(a)(i), Section 13.2(a)(i) or Section 13.3(a)(i) relating to a
breach of a representation or warranty contained herein, notice of such matter
on which such right to Indemnification is based shall be given in accordance
with the provisions of Section 13.5 below, but in no event later than 12 months
after the Closing Date;
(ii) in the case of any Indemnification described in
Section 13.1(a)(ii), Section 13.2(a)(ii) or Section 13.3(a)(ii) relating to a
breach of any agreement or covenant hereunder, other than (A) the Company's
covenants set forth in Section 7.4 (Releases), Section 7.5 (Indemnification of
Computer 2000 Designees), Section 7.6 (Indemnification of Computer 2000 and
Seller) or Section 7.8 (No Common Stock Repurchase), or (B) Purchaser's
covenants set forth in Section 9.3 (Unaffiliated Directors), Section 9.4
(Voting Arrangements) or Section 9.5 (Standstill Provisions), notice of such
matter on which such right to Indemnification is based shall be given in
accordance with the provisions of Section 13.5 below, but in no event later
than 36 months after the breach of such agreement or covenant; and
(iii) in the case of any Indemnification described in
(A) Section 13.1(a)(ii) relating to a breach of any covenant of the Company set
forth in Section 7.4 (Releases), Section 7.5 (Indemnification of Computer 2000
Designees), Section 7.6 (Indemnification of Computer 2000 and Seller) or
Section 7.8 (No Common Stock Repurchase), or (B) Section 13.3(a)(ii) relating
to a breach of any covenant of Purchaser set forth in Section 9.3 (Unaffiliated
Directors), Section 9.4 (Voting Arrangements) or Section 9.5 (Standstill
Provisions), notice of such matter on which such right to Indemnification is
based shall be given in accordance with the provisions of Section 13.5 below,
but in no event later ninety (90) days after the expiration of the period of
the applicable statute of limitations governing the right of any third
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<PAGE> 26
party or Governmental Authority or Regulatory Body, as the case may be, to
bring a claim relating or pertaining in any way to the matters described in
Section 7.4, Section 7.5, Section 7.6, Section 9.3, Section 9.4 or Section 9.5,
as the case may be, ignoring for such purposes any voluntary extension thereof
by an Indemnifying Person (as defined below).
13.5. Indemnification Procedures. A party seeking
Indemnification pursuant to this Agreement (the "Indemnified Party") shall give
reasonably prompt notice to the party from whom such Indemnification is sought
(the "Indemnifying Party") of the assertion of any claim, or the commencement
of any action, suit or proceeding, in respect of which indemnity may be sought
hereunder, and shall give the Indemnifying Party such information with respect
thereto as the Indemnifying Party may reasonably request, but no failure to
give such notice shall relieve the Indemnifying Party of any liability
hereunder, except to the extent that the Indemnifying Party has suffered actual
prejudice thereby. The Indemnifying Party shall have the right to undertake
the defense of any such claim asserted by a third Person and the Indemnified
Party shall cooperate in such defense and make available all records and
materials requested by the Indemnifying Party in connection therewith at the
Indemnifying Party's expense. The Indemnified Party shall be entitled to
participate in such defense, but shall not be entitled to Indemnification with
respect to the costs and expenses of such defense if the Indemnifying Party
shall have assumed the defense of the claim with counsel reasonably
satisfactory to the Indemnified Party. The Indemnifying Party shall not be
liable for any claim settled without its consent, which consent may not be
unreasonably withheld. The Indemnifying Party may settle any claim without
the consent of the Indemnified Party, but only if the sole relief awarded is
monetary damages.
13.6. Survival. All representations and warranties contained in
this Agreement shall survive the Closing hereunder for a period of 12 months.
SECTION 14. TERMINATION OF AGREEMENT.
14.1. Termination. This Agreement may be terminated at any time
prior to the Closing as follows:
(a) by mutual written agreement of all of the parties
hereto;
(b) at the election of any party, if any legal proceeding
is commenced or threatened by any Governmental Authority or Regulatory Body or
other Person directed against the consummation of the Closing or any other
transaction contemplated under this Agreement and such party, reasonably and in
good faith deems it impractical or inadvisable to proceed in view of such legal
proceeding or threat thereof;
(c) at the election of the Company (i) if any one or more
of the conditions to the Company's obligations to close has not been fulfilled
as of the Closing Date in all material respects, (ii) if the Computer 2000,
Seller or Purchaser has breached any representation, warranty, covenant or
agreement contained in this Agreement or in any document or other papers
delivered pursuant to this Agreement in any material respect or (iii) if the
Closing shall not have taken place by July 31, 1998; and
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(d) at the election of Computer 2000, (i) if any one or
more of the conditions to Computer 2000's obligations to close has not been
fulfilled as of the Closing Date in all material respects, (ii) if the Company
or Purchaser has breached any representation, warranty, covenant or agreement
contained in this Agreement or in any document or other papers delivered
pursuant to this Agreement in any material respect or (iii) if the Closing
shall not have taken place by July 31, 1998; and
(e) at the election of Seller, (i) if any one or more of
the conditions to Seller's obligations to close has not been fulfilled as of
the Closing Date in all material respects, (ii) if the Company or Purchaser has
breached any representation, warranty, covenant or agreement contained in this
Agreement or in any document or other papers delivered pursuant to this
Agreement in any material respect or (iii) if the Closing shall not have taken
place by July 31, 1998; and
(f) at the election of Purchaser, (i) if any one or more
of the conditions to Purchaser's obligations to close has not been fulfilled as
of the Closing Date in all material respects, (ii) if the Company, Computer
2000 or Seller has breached any representation, warranty, covenant or agreement
contained in this Agreement or in any document or other papers delivered
pursuant to this Agreement in any material respect or (iii) if the Closing
shall not have taken place by July 31, 1998.
14.2. Effect of Termination. If this Agreement is terminated as
permitted by Section 14.1, then, except as set forth in Section 15.1 (Dispute
Resolution); Section 15.2 (Expenses); Section 15.4 (Brokers); Section 15.6
(Notices) and Section 15.9 (Governing Law), such termination shall be without
any liability or obligation of any party or any of its respective Affiliates to
any other party or any of its respective Affiliates; provided, however, that
nothing set forth in this Section 14 shall relieve any party from any material
breach of this Agreement.
SECTION 15. MISCELLANEOUS.
15.1. Dispute Resolution.
(a) Dispute resolution under the procedures provided in
this Section 15.1 shall be the exclusive remedy for all disputes between the
parties in respect of a breach of any term of this Agreement. Each party
agrees not to resort to any court, agency or private group with respect to such
disputes except in accordance with this Section 15.1.
(b) In any disputes arising out of or relating to the
performance of this Agreement the parties shall attempt reasonably to resolve
such disputes in good faith by negotiation between senior executives of each.
(c) If any such dispute has not been resolved by
negotiation by senior executives of the parties within a period of thirty (30)
calendar days (or such other reasonable amount of time as the parties may in
good faith agree is warranted by the circumstances), the dispute shall be
settled exclusively by arbitration as described in this Section 15.1 pursuant
to the
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applicable rules of the American Arbitration Association ("AAA"), such
arbitration to be conducted in New York, New York, U.S.A. If for any reason
certain claims or disputes are deemed to be non-arbitrable, the
non-arbitrability of those claims or disputes shall in no way affect the
arbitrability of any other claims or disputes. The parties may initiate the
arbitration procedures set forth in this Section 15.1 by providing notice to
the other party, as provided in this Section 15.1, and to the AAA of the
existence of a dispute to be arbitrated.
(d) Arbitration shall be conducted by one arbitrator to be
selected by the parties. The arbitrator shall not be an officer, director or
employee of either party or of any of their respective Affiliates. The
arbitrator shall be an attorney licensed to practice law and familiar with the
rules of evidence and shall be generally knowledgeable with respect to business
issues being submitted to arbitration that would reasonably be expected to
arise in relation to this Agreement. If the parties are unable to agree on an
arbitrator within fifteen (15) calendar days of the effective delivery of the
notice required by Section 15.1(c), then the AAA shall appoint the arbitrator.
The decision of the arbitrator shall be final and binding upon the parties.
The arbitrator shall provide reasoned written opinions for all decisions.
(e) All hearings that may be required shall be concluded
within sixty (60) calendar days (or such other reasonable amount of time as the
parties may in good faith agree is warranted by the circumstances) after the
selection of the arbitrator. The arbitrator shall render his or her award
within fifteen (15) calendar days after the last hearing.
(f) The parties may by written notice to one another and
to the arbitrator freely specify further controversies or claims to be
arbitrated upon until the day of any pre-hearing conference held by the
arbitrator for such purpose. Thereafter, additional controversies or claims
may be added only with the consent of the arbitrator.
(g) The arbitrator may make interim awards and may award
equitable and declaratory relief; provided, however, that the arbitrator may
not order the termination of this Agreement for any reason other than as
expressly set forth in Section 14.1 hereof.
(h) The costs and expenses of the arbitration (including
reasonable attorneys' fees) shall be allocated by the arbitrator between the
parties as the arbitrator sees fit.
(i) The arbitrator shall not consider, nor shall any award
include amounts for, punitive or exemplary damages.
(j) Notwithstanding any other provision of this Section
15.1, either party may seek from any U.S. federal or state court of competent
jurisdiction sitting in New York County, New York, U.S.A., interim relief,
including but not limited to temporary restraining orders, preliminary
injunctions and other interim equitable relief as the same may vary from
jurisdiction to jurisdiction, in aid of arbitration or to protect the rights of
a party pending the appointment of the arbitrator and the rendering of the
arbitration decision.
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(k) In addition to the available remedy or remedies
awarded by the arbitrator, in an action to enforce a decision of the
arbitrator, the prevailing party shall be entitled to its reasonable attorneys'
fees, expert fees, costs and expenses without regard to the local rules of the
court in which such action is brought.
15.2. Expenses. The parties to this Agreement shall, except as
otherwise specifically provided herein, bear their respective expenses incurred
in connection with the preparation, execution and performance of this Agreement
and the transactions contemplated hereby. The Company shall pay the fees due
to the Financial Advisor to render the Comfort Letter.
15.3. Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may reasonably be
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby. Each such party shall use its reasonable efforts to
fulfill or obtain the fulfillment of the conditions to the Closing, including,
without limitation, the execution and delivery of any document or other papers,
the execution and delivery of which are conditions precedent to the Closing.
15.4. Brokers.
(a) The Company represents and warrants to the other
parties to this Agreement that no broker, finder, agent or similar intermediary
has acted on its behalf in connection with this Agreement or the transactions
contemplated hereby, and there are no brokerage commissions, finders' fees or
similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with the Company or any action taken by
the Company.
(b) Computer 2000 represents and warrants to the other
parties to this Agreement that no broker, finder, agent or similar intermediary
has acted on behalf of Computer 2000 in connection with this Agreement or the
transactions contemplated hereby, and that there are no brokerage commissions,
finders' fees or similar fees or commissions payable in connection therewith
based on any agreement, arrangement or understanding with Computer 2000, or any
action taken by Computer 2000.
(c) Seller represents and warrants to the other parties to
this Agreement that no broker, finder, agent or similar intermediary has acted
on behalf of Seller in connection with this Agreement or the transactions
contemplated hereby, and that there are no brokerage commissions, finders' fees
or similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with Seller, or any action taken by
Seller
(d) Purchaser represents and warrants to the other parties
to this Agreement that no broker, finder, agent or similar intermediary has
acted on its behalf in connection with this Agreement or the transactions
contemplated hereby, and there are no brokerage commissions, finders' fees or
similar fees or commissions payable in connection
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therewith based on any agreement, arrangement or understanding with Purchaser
or any action taken by Purchaser.
(e) Each party agrees to indemnify and save the harmless
the other parties hereto from any claim or demand for commissions or other
compensation by any broker, finder, agent or similar intermediary claiming to
have been employed by or on behalf of such party, and to bear the cost of legal
expenses incurred in defending against any such claim.
15.5. Certain Definitions. As used in this Agreement, the
following terms have the following meanings unless the context otherwise
requires:
(a) "Actions or Proceedings" means any action, suit,
proceeding, arbitration or investigation or audit by any Governmental Authority
or Regulatory Body.
(b) "Affiliate" with respect to any Person, means any
other Person controlling, controlled by or under common control with such
Person;
(c) "Contracts or Other Agreements" means all material
contracts, agreements, understandings, indentures, notes, bonds, loans,
instruments, leases, mortgages, franchises, licenses, commitments or other
binding arrangements, written or oral, express or implied;
(d) "Governmental Authority or Regulatory Body" means any
government or political subdivision thereof, whether foreign, U.S. federal,
state, provincial or local, or any agency or instrumentality of any such
government or political subdivision;
(e) "Knowledge" means the knowledge a party actually has
and the knowledge a party, after due inquiry, should have had. A party is
deemed to have knowledge of any matter as to which any officer or director of
such party has knowledge.
(f) "Law" means any law, statute, rule, regulation,
ordinance or other pronouncement having the effect of law in the United States
or in any other country, or in any state, providence, county, city or other
political subdivision thereof.
(g) "Loss" means any loss, liability, damages, deficiency,
cost or expense, including interest, penalties and reasonable attorneys' fees
and disbursements and other costs.
(h) "Order" means any writ, judgment, decree, injunction
or similar order of any Governmental Authority or Regulatory Body of the United
States or of any other country, or of any state, providence, county, city or
other political subdivision thereof (in each such case, whether preliminary or
final).
(i) "Person" means any individual, corporation,
partnership, firm, joint venture, association, joint-stock company, trust,
limited liability company, unincorporated organization, Governmental Authority
or Regulatory Body or other entity of any kind whatsoever.
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15.6. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, sent
by facsimile transmission or sent by certified, registered or express mail,
postage prepaid, or by an internationally recognized overnight courier such as
Federal Express. Any such notice shall be deemed given when so delivered
personally, or sent by facsimile transmission or, if mailed or sent by courier,
three days after the date of mailing or deliver to a courier service, as
follows:
(a) If to the Company to:
AmeriQuest Technologies, Inc.
425 Privet Road
Horsham, Pennsylvania 19044-0965
Attention: Chief Executive Officer
Facsimile: (215) 675-1824
with required copies to:
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103
Attention: Steven M. Cohen, Esq.
Facsimile: (215) 963-5299
(b) if to Computer 2000, to:
Computer 2000 AG
Wolfratshauser StraBe 84
D-81379 Munich
Federal Republic of Germany
Attention: Manfred Gunzel
Facsimile: 011-49-89-7427-4402
with required copies to:
Rogers & Wells LLP
Two Hundred Park Avenue
New York, NY 10166-0153
Attention: Klaus H. Jander, Esq.
Facsimile (212) 878-8375
(c) if to Seller to:
Computer 2000, Inc.
Wolfratshauser StraBe 84
D-81379 Munich
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Federal Republic of Germany
Attention: Manfred Gunzel
Facsimile: 011-49-89-7427-4402
with required copies to:
Rogers & Wells LLP
Two Hundred Park Avenue
New York, NY 10166-0153
Attention: Klaus H. Jander, Esq.
Facsimile (212) 878-8375
(d) If to Purchaser, to:
The Listen Group Partners LLC
c/o AmeriQuest Technologies, Inc.
425 Privet Road
Horsham, Pennsylvania 19044-0965
Attention: Alexander C. Kramer and Jon D. Jensen
Facsimile: (215) 675-1824
with required copies to:
J. Britton Gourley, Jr., Esq.
P.O. Box 1905
1003 West Ninth Avenue
King of Prussia, Pennsylvania 19406
Facsimile: (610) 265-2480
Any party may by notice given in accordance with this Section 15.6 to the other
parties designate another address or person for receipt of notices hereunder.
15.7. Entire Agreement. This Agreement and the agreements,
certificates and other documents delivered pursuant hereto or in connection
with the transactions contemplated hereby contain the entire agreement among
the parties with respect to the transactions described herein, and supersede
all prior agreements, written or oral, with respect thereto.
15.8. Waivers and Amendments; Preservation of Remedies. This
Agreement may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument signed by the parties
or, in the case of a waiver, by the party waiving compliance. No delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any such right, power or privilege, nor any single or partial exercise of any
such right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The rights and remedies
herein provided are cumulative and are not exclusive of any
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rights or remedies that any party may otherwise have at law or in equity. The
rights and remedies of any party based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representation, warranty,
covenant or agreement contained in this Agreement shall in no way be limited by
the fact that the act, omission, occurrence or other state of facts upon which
any claim of any such inaccuracy or breach is based may also be the subject
matter of any other representation, warranty, covenant or agreement contained
in this Agreement (or in any other agreement between the parties) as to which
there is no inaccuracy or breach.
15.9. Governing Law. This Agreement shall be exclusively
governed and construed exclusively in accordance with the laws of the State of
New York, without reference to its conflicts-of-law rules or principles.
15.10. Binding Effect; No Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and legal representatives. Except by operation of law, this
Agreement is not assignable without the consent of the parties and any
purported assignment without such consent shall be null and void.
15.11. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by
all of the parties hereto.
15.12. Headings. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
AMERIQUEST TECHNOLOGIES, INC.
By: /s/ Alexander C. Kramer, Jr.
Name: Alexander C. Kramer, Jr.
Title: President
COMPUTER 2000 AG
By: /s/ Dr. Harry Krischik
Name: Dr. Harry Krischik
Title: Member of the Executive Board
By: /s/ Manfred Gunzel
Name: Manfred Gunzel
Title: Member of the Executive Board
COMPUTER 2000, INC.
By: /s/ Martin E. Loffler By: /s/ Richard E. Obermaier
Name: Martin E. Loffler Name: Richard E. Obermaier
Title: President Title: Secretary
THE LISTEN GROUP PARTNERS LLC
By: /s/ Jon D. Jensen
Name: Jon D. Jensen
Title: Co-President
