==============================================================================
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
-----------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 1, 1998
TECH DATA CORPORATION
(Exact name of registrant as specified in its charter)
---------------------------------------------------------
Florida 0-14625 59-1578329
(State or other (Commission File Number) (I.R.S.
jurisdiction Employer
of Identification No.)
incorporation)
5350 Tech Data Drive, Clearwater, Florida 33760
(Address of principal executive offices)
-------------------------
Registrant's telephone number, including area code: (727) 539-7429
Not applicable
(Former name or former address, if changed since last report.)
===============================================================================
===============================================================================
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On July 1, 1998, Tech Data Corporation (the "Company") completed the acquisition
of approximately 80% of the voting common stock of Computer 2000 AG ("Computer
2000"), Europe's leading technology products distributor. The Company acquired
the outstanding voting stock of Computer 2000 from its parent company, Klockner
& Co. AG, based in Duisburg, Germany. Klockner & Co. is a subsidiary of
Munich-based conglomerate VIAG AG. The acquisition was completed through an
exchange of approximately 2.2 million shares of Tech Data Corporation common
stock and $300 million of 5% convertible subordinated notes due 2003, for a
combined total value of $394 million. In a separate cash transaction on July 1,
1998, Tech Data also acquired an additional stake of approximately 3% of
Computer 2000's shares from an institutional investor.
Computer 2000 AG serves more than 75,000 resellers in Europe and other parts of
the world, with operations in Argentina, Austria, Belgium, Bulgaria, Chile,
Czech Republic, Denmark, Ireland, Estonia, Finland, France, Germany, Great
Britain, Hungary, Iceland, Italy, Latvia, Lithuania, Netherlands, Norway, Peru,
Poland, Portugal, Russia, Slovakia, Spain, Sweden, Switzerland, United Arab
Emirates and Urguay. In its most recent fiscal year ended September 30, 1997,
Computer 2000 reported sales and operating profits of DM8.2 billion ($4.9
billion) and DM110.0 million ($65.9 million), respectively.
Item 7. Financial Statements and Exhibits.
(a) & (b) It is currently not feasible to provide financial statements
pro forma or historical which conform with U.S. GAAP, required
pursuant to Regulation S-K in connection with the acquisition
identified in Item 2 above. This Report will be amended within 60
days from the date this Report is filed to include such financial
statement information.
(c) Exhibits
2-A* Share Purchase Agreement between Klockner & Co. AG and Tech Data
Corporation dated April 14, 1998 and amended June 30, 1998.
---------
* Document contains certain confidential information which has been
omitted from the attached Exhibit 2-A and has been filed separately
with the Securities and Exchange Commission.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TECH DATA CORPORATION
Dated: July 15, 1998 By: /s/ Jeffery P. Howells
-------------------------
Jeffery P. Howells
Executive Vice President
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
2-A* Share Purchase Agreement between
Klockner & Co. AG and Tech Data
Corporation dated April 14, 1998 and
amended June 30, 1998.
* Document contains certain confidential information which has been omitted and
has been filed separately with the Securities and Exchange Commission.
SHARE PURCHASE AGREEMENT
between
Klockner & Co. AG
and
Tech Data Corporation
regarding the sale of certain shares in Computer 2000 AG
dated April 14, 1998
and amended June 30, 1998
* Document contains certain confidential information which has been omitted and
has been filed separately with the Securities and Exchange Commission.
<PAGE>
This Share Purchase Agreement is made and entered into this fourteenth day of
April, 1998, by and between Klockner & Co. AG, Duisburg, Germany, a stock
corporation incorporated under German law (the "Seller"), and Tech Data
Corporation, Clearwater, Florida, a stock corporation incorporated under the
laws of the State of Florida, USA (the "Purchaser").
Recitals:
1. The Seller is the owner of 1.070.742 shares, with a nominal amount of
DM 50 per share, of the issued capital stock of Computer 2000
Aktiengesellschaft Entwicklung, Fertigung und Vertrieb von
Computer-Peripherieprodukten (the "Company"), a stock corporation
incorporated under the laws of Germany with its principal place of
business in Munich, Germany, and registered with the commercial
registry of the local court of Munich under number HR B 81532. The
shares owned by the Seller represent 79.88% of the aggregate issued
capital of the Company of 1.340.409 shares with a nominal amount of DM
67,020,450.
2. According to its Articles of Association ("Satzung"), the purpose of
the Company is the development, manufacturing and distribution of
peripheral EDP equipment. The Company owns shares in certain
subsidiaries (the "Subsidiaries"), as listed in Schedule 1 (the
"Disclosure Schedule"). The shares of the Company are listed on the
stock exchanges of Munich, Frankfurt am Main and Vienna.
3. The Seller wishes to sell all its shares of the Company as described in
clause 1 above, (the "Sold Shares") to
<PAGE>
the Purchaser and the Purchaser wishes to acquire the Sold Shares from
the Seller.
Now, therefore, subject to and on the terms and conditions set forth herein, the
Parties agree as follows:
ARTICLE 1
Sale and Transfer of Shares
1.1 Agreement to Sell and Purchase
On the terms and conditions set forth herein, the Seller hereby sells
to the Purchaser and the Purchaser hereby purchases from the Seller the
Sold Shares.
1.2 Transfer, Closing Date
The Seller shall transfer the Sold Shares, upon settlement of the
consideration in accordance with Article 2, on the fourteenth day after
the satisfaction of all of the conditions precedent contained in
Sections 8.1, 8.3 and 8.4 hereof, or at such other time as the Parties
hereto may mutually agree (the "Closing Date"). The delivery of the
Sold Shares and the other transactions contemplated by this Agreement
shall take place at the offices of Hengeler Mueller Weitzel Wirtz in
Dusseldorf, Germany, or any other place as the Parties hereto may
mutually agree.
<PAGE>
1.3 Dividend Rights
Without prejudice to the accounting treatment of the transaction under
US GAAP, the Sold Shares are sold with dividend rights since October 1,
1997, 0:00 hours (the "Effective Date").
ARTICLE 2
Consideration
2.1 Base Purchase Price and Final Purchase Price
The purchase price to be paid for the Sold Shares shall be DM
717,397,140.00 (in words: Deutsche Mark Seven Hundred Seventeen Million
Three Hundred Ninety Seven Thousand One Hundred Forty) (the "Base
Purchase Price", based on a price of DM 670 per share) minus any
adjustment, if any, under Article 3. The Base Purchase Price as
adjusted pursuant to Article 3 shall be hereinafter referred to as the
"Final Purchase Price".
2.2 Consideration
The Base Purchase Price shall be paid to Seller by Purchaser by
delivery at the Closing Date of:
(a) Three Hundred Million U.S. Dollars of Convertible Subordinated
Notes in the form of, and having the terms and conditions
attached hereto as Schedule 2.2 (a) (the "Notes"); and
<PAGE>
b) The remainder of the Base Purchase Price in shares of common
stock of Tech Data Corporation (the "Tech Data Shares").
The total number of Tech Data Shares to be delivered pursuant to Clause
(b) above shall be determined as follows:
(i) The Base Purchase Price shall be converted to U.S. Dollars
using the average exchange rate as shown in The Wall Street
Journal for the 60 days prior to March 12, 1998 (the
"Valuation Period") as calculated on Schedule 2.2. (b). This
calculation is DM 717,397,140.00 / 1.8161 = US$ 395,020,726.00
(the "Final Dollar Purchase Price");
(ii) subtracting the US$ 300,000,000 in Notes from the Dollar
Purchase Price. This calculation is US$ 395,020,726.00 - US$
300,000,000.00 = US$ 95,020,726.00 (the "Equity Remainder");
and
(iii) dividing the Equity Remainder by the average Tech Data Closing
Share Price showing in The Wall Street Journal for the
Valuation Period as shown on Schedule 2.2. (b). This
calculation is US$ 95,020,726.00 / 43.271 = 2,195,945 Tech
Data Shares.
<PAGE>
2.3 Registration Rights
(a) Registration
Within 75 calendar days after the Closing Date, the Purchaser
shall file with the U.S. Securities and Exchange Commission
(the "SEC") a shelf registration statement or statements (the
"Registration Statement") on Form S-3 or other appropriate
form under Rule 415 under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), relating to the offer and sale
by the Seller or VIAG AG or any subsidiary of VIAG from time
to time of (i) any Tech Data Shares delivered to the Seller
pursuant to Section 2.2 of this Agreement; (ii) any Notes
delivered to the Seller pursuant to Section 2.2 of this
Agreement and any Tech Data Shares issued upon conversion of
any Notes; and (iii) any securities that may be issued or
distributed or be issuable in respect of any Registrable
Securities by way of stock dividend, stock split or other
distribution, merger, consolidation, exchange offer,
recapitalization or reclassification or similar transaction
(collectively, the "Registrable Securities") and, thereafter,
shall use its reasonable best efforts to cause such
Registration Statement to be declared effective under the
Securities Act as soon as practicable after such filing. The
Purchaser shall keep the Registration Statement continuously
effective and shall take any and all other actions necessary
in order to maintain the registration of the Registrable
Shares including, without limitation, the actions set forth in
<PAGE>
Schedule 2.3 (a) hereto, until the earlier of the date as of
which (A) the Seller, VIAG AG and the subsidiaries of VIAG AG
have sold all the Registrable Securities covered by the
Registration Statement (but in no event prior to the
applicable period referred to in Section 4 (3) of the
Securities Act and Rule 174 thereunder), or converted or
repaid in accordance with their terms, or (B) VIAG AG is no
longer entitled to management's support of its representation
on the Purchaser's Board of Directors under this Agreement and
the holders of the Registrable Securities are permitted to
sell without restriction their Registrable Securities under
Rule 144 under the Securities Act or other relevant provision
under the U.S. securities laws (such period of effectiveness
being the "Shelf Period"). Each holder of Registrable
Securities agrees to cooperate with the Purchaser as necessary
to enable the Purchaser to comply with the provisions of this
Agreement, including, without limitation, furnishing
information as set forth in Schedule 2.3 (a). So long as
Seller or VIAG AG or any subsidiary of VIAG AG holds all of
the Notes then outstanding, any failure of Purchaser to file
or to keep continuously effective the Registration Statement
as set forth in this Section 2.3 (a) shall be considered for
all intents and purposes as an Event of Default within the
meaning of Section 5.1 of the Indenture.
<PAGE>
(b) Registration Expenses
All expenses incident to the Purchaser's performance of or
compliance with Section 2.3 (a) will be paid by the Purchaser
(and, in the case of the filing of a Registration Statement,
regardless of whether such Registration Statement becomes
effective); provided that the Purchaser shall not be required
to pay any fees and disbursements of underwriters not
customarily paid by the issuers or sellers of securities,
including underwriting discounts and commissions and transfer
taxes, if any, attributable to the sale of Registrable
Securities, the fees and expenses of counsel to the
underwriters, or fees and expenses of accountants and counsel
to the Purchaser in connection with the delivery of comfort
letters or opinions in connection with an underwritten sale of
Registrable Securities under the Registration Statement.
(c) Delay of Registration
For a period not to exceed ninety (90) days, the Purchaser
shall not be obligated to prepare and file, or be prevented
from delaying or abandoning, the Registration Statement to be
filed pursuant to Section 2.3 (a) at any time when the
Purchaser in its good faith judgment with advice of counsel (a
copy of which advice it shall provide), reasonably believes
that:
(i) (A) The filing thereof at the time set forth in
Section 2.3 (a), or the offering of the Registrable
<PAGE>
Shares pursuant thereto, would materially and
adversely affect (1) a pending acquisition, merger,
recapitalization, consolidation, reorganization,
material sale of assets, financing or similar
transaction by or of the Purchaser; (2) or pre-
existing and continuing negotiations, discussions or
pending proposals with respect to any of the
foregoing transactions; or (3)the financial condition
of the Purchaser in view of the disclosures of any
pending or threatened litigation, claim, assessment
or governmental investigation which may be required
thereby; or (B) the Purchaser is in possession of
material information that it seems advisable not to
disclose in the Registration Statement; and
(ii) the failure to disclose any material information with
respect to the foregoing would cause a violation of
the Securities Act.
(d) Indemnification
The Purchaser agrees to indemnify and hold harmless, to the
full extent permitted by law, each holder of Registrable
Securities, its affiliates and their respective officers,
directors, shareholders, employees, advisors, and agents and
each Person who controls (within the meaning of the Securities
Act or the Exchange Act) such Persons (collectively, the
"Seller Indemnified Parties") as provided in Schedule 2.3 (b).
<PAGE>
In the event of Registration of any securities of the
Purchaser under the Securities Act pursuant to Section 2.3
(a), each selling holder of Registrable Securities agrees
(severally and not jointly) to indemnify and hold harmless, to
the full extent permitted by law, the Purchaser, its directors
and officers and each Person who controls the Purchaser
(within the meaning of the Securities Act and the Exchange
Act) (collectively, the "Purchaser Indemnified Parties") as
provided in Schedule 2.3 (b).
2.4 No Set-Off
Without prejudice to the direct enforcement of claims under this
Agreement, neither Party shall be entitled to exercise a right of
set-off or a retention right with respect to its obligations under this
Article 2 and Section 3.7.
ARTICLE 3
Interim Financial Statements
3.1 Preparation
The Seller shall cause the Company to prepare and deliver, without
undue delay , the consolidated interim financial statements of the
Company as of March 31, 1998, including the balance sheet and income
statement of the Company (the "Interim Financial Statements").
<PAGE>
3.2 Accounting Principles
The Interim Financial Statements shall be prepared in accordance with
the generally accepted accounting principles applicable in Germany
("GAAP"), applied on a basis consistent with the consolidated financial
statements of the Company for the fiscal year ended on September 30,
1997 (the "1997 Financial Statements").
3.3 Audit by KPMG and Delivery of Audited Interim Financial Statements
The Seller shall make best efforts to cause the auditors of the
Company, KPMG Hartkopf + Rentrop Treuhand KG
Wirtschaftsprufungsgesellschaft and AWT Allgemeine Wirtschaftstreuhand
GmbH Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft (the
"Company's Auditors") to audit the Interim Financial Statements and to
deliver such statements to the Seller and the Purchaser together with
their audit report thereon as soon as practicable.
3.4 Review by the Parties
The Parties and their respective advisors shall have four weeks after
the receipt of the Interim Financial Statements as audited by the
Company's Auditors, to review the Interim Financial Statements. For
that purpose, the Parties shall use all reasonable efforts to cause the
Company to give the Seller and the Purchaser and their respective
advisors access to all books, records and employees of the Company to
<PAGE>
the extent such access may reasonably be requested by a party in order
to review the Interim Financial Statements.
3.5 Objection
If the net equity ("Eigenkapital" within the meaning of Sections 266
(3) A, 272 German Commercial Code) shown on the Interim Financial
Statements (the "Net Equity")is lower than DM[*] or if either Party
concludes that the Interim Financial Statements have not been prepared
in accordance with GAAP, such Party may notify the other Party thereof.
Such notice shall set forth a description of the objection in
reasonable detail and the adjustment of the net equity which the
objecting party believes should be made. Any objection may only be made
within the four week period set forth in Section 3.4 above.
[* Document contains certain confidential information which has been
omitted and has been filed separately with the Securities and Exchange
Commission.]
3.6 Dispute Resolution
If the Parties do not resolve all of their disagreements with respect
to the Interim Financial Statements within four weeks following the
receipt of any objection pursuant to Section 3.5, either Party may
refer the remaining differences to BDO Deutsche Warentreuhand
Aktiengesellschaft Wirtschaftsprufungsgesellschaft (the "Auditor"). If
the Auditor cannot or will not serve within four weeks following
appointment, an Auditor, who is independent of the Parties, shall be
appointed, upon request of either Party, by the Institute of Chartered
Accountants in Dusseldorf, Germany. The Auditor shall, with respect to
the remaining differences submitted to it, determine on the basis of
<PAGE>
the standards set forth in Section 3.2 and within the limits of the
positions of both Parties, whether and to what extent the Net Equity
requires adjustment. The Parties shall instruct the Auditor to deliver
its written opinion to them as soon as practicable after the remaining
differences have been referred to it. For the purpose of its opinion,
the Parties will make all reasonable efforts to cause the Company to
make available to the Auditor all relevant books and records and allow
the Auditor interviews with the employees of the Company. The decision
of the Auditor shall be conclusive and binding on the Parties within
the limits provided by Section 319 German Civil Code. The fees and
disbursements of the Auditors shall be shared equally by the Parties.
3.7 Purchase Price Adjustment
If the Net Equity, as mutually agreed between the Parties or determined
by the Auditor, is lower than DM [*] by more than DM [*] million the
Base Purchase Price shall be adjusted by DM [*] for each DM [*] that
the Net Equity is less than DM [*]. Any difference between the Final
Purchase Price as determined in accordance with this Article 3 and the
Base Purchase Price paid in accordance with Section 2.2 shall be paid
by re-transferring the Convertible Notes issued as a consideration for
the Sold Shares by the Purchaser to an extent which covers the
difference as determined. The amount of Convertible Notes to be
retransferred shall be determined by application of the same
US$/Deutsche Mark exchange rate as used in Section 2.2. Seller agrees
that until the expiration of all periods described in Article 3 and the
[* Document contains certain confidential information which has been
omitted and has been filed separately with the Securities and Exchange
Commission.]
<PAGE>
determination of the Final Purchase Price, Seller will not sell,
transfer or encumbrance at least DM [*](or DM [*]if Section 3.9 is
applicable) of the Convertible Notes delivered to Seller by Purchaser
under Section 2.2, provided, however, that transfers to VIAG or a
wholly-owned subsidiary of VIAG are permitted hereunder to the extent
that VIAG or the wholly-owned subsidiary of VIAG joins the undertaking
given in this Section 3.7.
3.8 Should the necessary cooperation and support of the Company and/or the
Company's Auditors be denied, or not be sufficiently provided, the
Parties hereto shall agree in good faith on an appropriate extension of
the time periods stipulated in this Article 3.
3.9 If the Interim Financial Statements have not been delivered to Seller
and Purchaser by June 30, 1998, the Parties agree that, throughout the
Agreement, the Interim Financial Statements shall be replaced by the
Financial Statements as of September 30, 1998. For the purposes of the
purchase price adjustment, if any, under this Article 3, in this case
the Net Equity target figure shall be DM [*] instead of DM [*].
[* Document contains certain confidential information which has been
omitted and has been filed separately with the Securities and Exchange
Commission.]
ARTICLE 4
Representations
The Seller represents ("gewahrleistet") to the Purchaser as of the day hereof as
set forth in this Article 4, except as otherwise disclosed in the Disclosure
Schedule:
<PAGE>
4.1 Recitals, Share Capital of the Company
The Recitals contained in this Agreement are true and correct and are
incorporated as representations of Seller by this reference. The share
capital of the Company consists of 1,340,409 ordinary shares. The
Company has no other shares or securities of any kind outstanding. The
Company has no outstanding or authorized options, warrants, calls,
rights, commitments or any other agreement of any kind obliging it to
issue any shares of its share capital or any other securities. Other
than this Agreement, there are no other agreements or understandings
with respect to the voting, sale or transfer of the Company's shares to
which the Company is a party. The Company has not declared or paid or
committed itself to declare or pay any dividend or other distribution
in respect of the Company's shares.
4.2 Organization, Qualification and Authority of the Company
The Company is a stock corporation duly organized, validly existing and
in good standing under the laws of Germany and each other jurisdiction
where the character of its assets or the nature of its business
requires registration, if any, and has all corporate power and
authority to own its assets and carry on its business as currently
conducted.
<PAGE>
4.3 Ownership of Shares
The Sold Shares represent all of the shares in the Company held or
controlled by the Seller and are validly issued and fully paid. The
Seller is the sole and unrestricted owner of the Sold Shares, free and
clear of any liens, encumbrances or other rights of third parties.
Except for this Agreement, there are no pre-emptive rights, rights of
first refusal, options or other rights to vote, purchase or acquire any
of the Sold Shares.
4.4 Authority to Sell; Consents
The Seller has the corporate power and authority to sell the Sold
Shares and to enter into this Agreement. Except as required by merger
control laws, no consent, waiver or authorization is required to be
obtained by the Seller with any governmental authority in connection
with the execution, delivery and performance by the Seller of this
Agreement.
The execution, performance and delivery by Seller of this Agreement,
except as set forth in Section 8.3 of this Agreement, will not (i)
conflict with or breach any provisions of the Satzung of Seller or the
Company; (ii) violate or breach any provision of, or constitute a
material default (or an event which, with notice or lapse of time or
both, would constitute a material default), under any of the terms,
covenants, conditions or provisions of, or, to Seller's best knowledge,
give rise to a right to terminate or accelerate or increase the amount
of payment due under any note, bond, mortgage, indenture, deed of
<PAGE>
trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which the Company is a party,
or by which the Company or its properties or assets may be bound except
to the extent consent to the transaction has been obtained; (iii)
conflict with, result in a breach or violation of, or constitute a
default under any agreement applicable to the Company, the Sold Shares
or by which the Company or Seller may be bound or affected; (iv) result
in the creation of any lien in the assets of the Company pursuant to
the provisions of any of the foregoing; or (v) violate any order, writ,
injunction, decree, judgement or ruling of any court of governmental
authority, applicable to Seller or the Company.
4.5 Subsidiaries
The shareholdings of the Company in all subsidiaries are correctly
described in the Disclosure Schedule. The Company does not own,
directly or indirectly, any equity interest in any other company or
partnership. Each of the subsidiaries listed in the Disclosure Schedule
is duly established, validly existing and in good standing under the
laws of the jurisdiction of its domicile and each other jurisdiction
where the character of its assets or the nature of its business
requires registration and each has the corporate power and authority to
own its properties and to conduct its business as presently conducted.
This representation is not given for such matters which do not have
alone or together with claims of comparable source or cause an adverse
effect of more than DM 1,000,000.00 on the consolidated financial
<PAGE>
situation of the Company (a "Material Adverse Effect").
4.6 Financial Statements
The 1997 Financial Statements have been prepared by the Company in
accordance with the statutory provisions concerning annual accounts
applicable in Germany and with GAAP applied on a basis consistent with
the consolidated financial statements for the previous fiscal year
(except as disclosed therein). In particular, the 1997 Financial
Statements have been prepared in accordance with Sec. 264 para. 2 of
the German Commercial Code regarding the presentation of the financial
condition and the results of operations of the Company.
4.7 Litigation; Administrative Proceedings
To the knowledge of the Seller, neither the Company nor any of the
Subsidiaries are involved in any lawsuit or other governmental
proceeding pending against it before any state court, arbitral tribunal
or governmental agency which involves an amount (disregarding costs and
fees), alone or together with claims with comparable source or cause,
in excess of DM 500,000.00 or the equivalent thereof in any other
currency or may otherwise have a Material Adverse Effect. To the
knowledge of the Seller, no such lawsuit or proceeding has been
threatened against the Company or any Subsidiary. Neither the Company
nor, to Seller's knowledge, any Subsidiary is subject to any order or
decree that would materially limit its ability to operate its business
in the ordinary course.
<PAGE>
4.8 Assets
The Company or, to the Seller's knowledge, its Subsidiaries are the
owners of, and have good and valid title to, all their assets (real and
moveable, tangible and intangible) reflected in the 1997 Financial
Statements, without any undisclosed mortgages, pledges, liens or other
encumbrances, rights or interests of third parties, except for (i)
assets sold after September 30, 1997, within the ordinary course of
business, (ii) customary retention of title rights or liens of
suppliers in any supplied goods created in the ordinary course of
business, (iii) statutory liens and other security rights in favor of
tax authorities or any other governmental entities, and (iv) rights
granted to third parties as security for any debt reflected in the 1997
Financial Statements or disclosed in this Agreement. The Company and
its Subsidiaries own no real estate except for the property listed in
the Disclosure Schedule.
Each lease of real property by the Company and, to the Seller's
knowledge, the Subsidiaries, is valid and in full force and effect and
is enforceable by the Company or Subsidiaries in accordance with its
terms and, except as set forth in the Disclosure Schedule, no consent
of the landlord thereunder is required in connection with the
transactions contemplated by this Agreement. Neither the Company nor,
to the Seller's knowledge, the Subsidiaries, are in material default
under any lease and no event, act or omission has occurred which (with
or without notice, lapse of time or both) would result in a material
default under any lease.
<PAGE>
4.9 Governmental Approvals, Compliance with Laws
The Company and, to Seller's knowledge, the Subsidiaries have obtained
all governmental permits or approvals required under the laws of
Germany to conduct their business as presently conducted and - to the
Seller's knowledge - required under any foreign jurisdiction except
where the failure to obtain a permit or approval does not have a
Material Adverse Effect. To the Seller's knowledge, the Company and the
Subsidiaries are in compliance with all laws, regulations and
governmental orders or decrees presently in effect other than any
non-compliance which would not have a Material Adverse Effect.
4.10 Environment
The Seller is not aware of any contamination of the properties
(including soil and buildings) owned or used by the Company or any
Subsidiary which would require, under the environmental laws in effect
on the date hereof applicable to the present conduct of the Company's
and its Subsidiaries' business and the present use of the property of
the Company and its Subsidiaries, any clean-up or other remedial
measures. To the knowledge of the Seller, neither the Company nor any
Subsidiary is in material violation of or has been notified by any
governmental authority of any material breach of any environmental laws
in effect on the date hereof. To the Seller's knowledge, with respect
to environmental matters, all reports, returns and submissions required
to be filed by the Company and its Subsidiaries with any governmental
<PAGE>
agency have been filed. The Company, and to the Seller's knowledge, the
Subsidiaries have obtained, with respect to environmental matters, all
governmental permits, licenses and registrations which are material for
the conduct of the business as presently conducted including those
related to toxic waste and hazardous waste.
4.11 Taxes and Social Security Contributions
The Company and its Subsidiaries have filed, in a timely fashion, all
tax and social security returns due to be filed with all competent
governmental authorities or entities for all periods prior to the date
hereof, including but not limited to, federal, state, foreign, local,
income, sales, use, VAT, license, franchise, excise, stamp, notarial,
asset, payroll, real and personal property, employment, withholding and
other taxes. The 1997 Financial Statements and the Interim Financial
Statements reflect or will reflect, in accordance with GAAP, adequate
reserves for all taxes and social security contributions payable by the
Company for periods ended prior to September 30, 1997 or March 31, 1998
or if Section 3.9 applies September 30, 1998 - respectively.
4.12 Key Employees
The Disclosure Schedule contains a list of all employees of the Company
who receive an annual fixed salary (excluding bonuses, incentive
payments and the like) of DM 250,000 or more. None of the employees
listed therein has a stipulated right (other than any right which is
<PAGE>
given anyway under applicable law) to receive a severance, golden
parachute or similar payment triggered as a result of the transactions
contemplated hereby.
4.13 Labor Matters; Collective Bargaining Agreements
The Disclosure Schedule contains a complete list of all social plans,
collective bargaining agreements and all material agreements with the
workers' council by which the Company or, to Seller's knowledge, any of
its Subsidiaries are bound. There are no strikes, stoppages or material
slowdowns pending or, to the Seller's knowledge, threatened against the
Company or any of its Subsidiaries. To the Seller's knowledge, there
are not, nor have there been for a period of 5 years prior to the date
of this Agreement any, (i) material violations by the Company or its
Subsidiaries of any federal, state and local laws, rules and
regulations affecting employment and employment practices, including
terms and conditions of employment and wages and hours; (ii) unfair
labor practices committed by the Company or any of its Subsidiaries;
(iii) pending or threatened formal complaints or proceedings against
the Company or any of its Subsidiaries in connection with the business
before any governmental labor office or any similar state or local
labor agency; (iv) pending or threatened formal complaints of a trade
union; or (v) pending or threatened arbitration proceedings arising out
of or under any labor agreement.
<PAGE>
4.14 Material Agreements
The Disclosure Schedule contains a complete list of all of the
following written contracts and agreements to which the Company or - to
the Seller's knowledge - any Subsidiary is a party and which have not
yet been fully fulfilled on the date hereof (the "Material
Agreements"):
(a) agreements on the acquisition or sale of interests in the
Subsidiaries or other companies;
(b) joint venture, partnership or similar agreements relating to
the conduct of a material part of the business of the Company
and its Subsidiaries, taken as a whole;
(c) rental and lease agreements relating to real estate which
provide (per item) for annual payments in excess of DM
500,000.00 or more or which last for a term of more than five
(5) years from the date of this Agreement;
(d) loan agreements entered into with shareholders, affiliated
companies of shareholders, banks or other financial
institutions, or bonds, notes or any instruments of debt
excluding bills of exchange supplied by customers in the
ordinary course of business issued, by the Company or any
other Subsidiary other than agreements on debt reflected in
the 1997 Financial Statements or the Interim Financial
Statements;
<PAGE>
(e) guarantees or suretyships issued by the Company or any
Subsidiary involving, alone or together with a series of
comparable debts, an amount of DM 1,000,000.00 (or the
equivalent thereof in any other currency) or more;
(f) agreements which provide for the right of the other party to
obtain a lien on assets or terminate the agreement in case of
a change of control of the Company, if the termination would
have a Material Adverse Effect;
(g) agreements entered into with a shareholder or key employee of
the Company or any Subsidiary;
(h) agreements granting authority to third parties to enter into
Material Agreements on behalf of the Company or a Subsidiary;
(i) agreements materially restricting the Company or any
Subsidiary from carrying on its business as presently
conducted anywhere in the world or from bringing on new
product lines;
(j) agreements with the Seller or persons related to or controlled
by the Seller or a parent or affiliated entity of the Seller
(except for shipments and services in the ordinary course of
business);
(k) agreements for capital expenditures of over DM 2,000,000.00.
<PAGE>
To the knowledge of the Seller, each Material Agreement is in full
force and effect and neither the Company, a Subsidiary nor any third
party are in material default under any such agreement.
4.15 Conduct of Business since September 30, 1997
Except for any transactions contemplated by or any facts or events
disclosed in this Agreement, since September 30, 1997 - to the
knowledge of the Seller - the business of the Company and the
Subsidiaries have been operated in the ordinary course in a manner
consistent with past practice.
4.16 Systems Operations
To the knowledge of the Seller, the Company's and Subsidiaries'
computer hardware and software systems are fully operational and
capable of handling the anticipated growth in transactions and business
operations over the eighteen (18) months following the Closing Date. To
the knowledge of the Seller, the Company and its Subsidiaries have
planned for the Year 2000 and EURO currency changes necessary for the
Company's and Subsidiaries' computer systems and the computer hardware
and software systems will be capable of handling all transactions in
EURO currency and dates ending in the year 2000 or after.
<PAGE>
4.17 Patents, Trademarks, Franchises, Licenses, Permits, Etc.
To the Seller's knowledge, except for those of the matters referred to
below which are dealt with in lease and licence agreements, the Company
and its Subsidiaries have the right to use free and clear of any claims
or rights of any third party, all trade secrets, customer lists,
know-how and any other confidential information required for or used in
the sale by the Company and its Subsidiaries of its products and
services. To the Seller's knowledge, neither the Company nor any
Subsidiaries are in any way making any unlawful or wrongful use of any
trade secrets, customer lists, know-how or any other confidential
information of any third party including, without limitation, any
former employer or any present or past employee of the Company or its
Subsidiaries.
ARTICLE 5
Covenants and Indemnities
5.1 Corporate Status
The Seller covenants and agrees that, during the period from the date
hereof to the Closing, it will not (unless previously agreed between
the Parties)
(a) amend the articles of association of the Company;
(b) effect or approve any merger, transformation or similar change
in the corporate organization of the Company or any Subsidiary
<PAGE>
(except for AmeriQuest Technologies Inc., Pennsylvania, USA,
hereinafter "AQS" and the entity in Saudi Arabia);
(c) issue, sell, transfer, pledge or otherwise dispose of any
shares of the capital stock of the Company;
(d) resolve the distribution of, or otherwise cause the Company to
pay, any dividends on the Company's shares;
(e) allow the Company or any Subsidiary to cancel any material
debt or any claims or waive rights of substantial value
except for fair consideration in the ordinary course of
business (it being understood that intra company debt in the
area of approximately US$ [*] owed by AQS may be cancelled);
[* Document contains certain confidential information which has been
omitted and has been filed separately with the Securities and Exchange
Commission.]
(f) except as required by law, governmental regulation or
collective bargaining agreement, approve or take action to put
into effect any general increase in any compensation or
benefits payable to any class or group of employees of the
Company or its Subsidiaries, any increase in the
compensation payable or to become payable to any director,
officer or key employee or any payment, grant or accrual to or
for the benefit of any director, officer or key employee of
any bonus, service award, percentage compensation or other
benefit, or any adoption or amendment of any employee pension
benefit plan, employee welfare benefit plan or foreign
employee benefit plan, or any severance agreement or
<PAGE>
employment contract to which any director or officer of the
Company or any Subsidiary is a party;
(g) approve any material change in any accounting principles or
method or election for income tax purposes used by the
Company;
(h) approve capital expenditures or commitments to make additions
to property, equipment or intangible capital assets; or
(i) approve any guarantee, indemnity or other obligation of the
Company causing the Company to be liable for the obligations
or liabilities of another.
Purchaser is aware that there are only certain approval requirements
and these are for the benefit of the Supervisory Board of the Company
only.
5.2 Conduct of Business by the Company
During the period from the date hereof to the Closing Date, except as
set forth in the Disclosure Schedule or contemplated by this Agreement
or previously agreed between the Parties, the Seller will use all
reasonable efforts to ensure that the Company and its subsidiaries,
with the exception of AQS and the entity in Saudi Arabia, will conduct
their business in the ordinary course, consistent with past practice
and, in particular, not sell, transfer or otherwise dispose of any
shareholdings in the Subsidiaries (except for AQS).
<PAGE>
5.3 Covenant not to Compete
Seller recognizes and acknowledges that the list of the Company's
customers and vendors, as they exist at the Closing Date, are valuable,
special, and unique assets of the Company's business. Seller will not
disclose the list of Company's customers or vendors or any part
thereof, to any person, firm, corporation, association or other entity
not a party to this Agreement for any reason or purpose whatsoever
except as required by law, rule, regulation or court order. For a
period of three (3) years after Closing, Seller shall not, in a
competitive manner related to the business as presently conducted, call
on or solicit, either for Seller or any person, firm, corporation,
association, or other entity, or any affiliate thereof, any customers
of or vendors to the Company. For a period of three (3) years after
Closing, Seller shall not induce or attempt to induce any customer of
or vendor to the Company to terminate their relationship with the
Company or Purchaser.
For a period of three years after the Closing Date, the Seller shall
not, either for itself or through a company controlled by it within the
meaning of Section 17 of the German Stock Corporation Act, own, manage,
operate, control, act as an agent for, participate in, or acquire a
majority interest (equity or votes) in a business which is engaged in a
business which competes with the business as presently conducted by the
Company and its Subsidiaries. Nothing contained in this Section 5.3
shall be interpreted to prohibit Seller from owning stock in (i)
<PAGE>
publicly traded corporations which may compete with the Company
provided such stock ownership does not represent a majority or
controlling interest in such operations or (ii) the warehousing and
logistic service businesses operated by the Kuhne & Nagel Group as
presently conducted. Nothing in this Section 5.3 shall prohibit the
sale of technologies related to telecommunication by businesses like
e.g. VIAG Intercom.
If an acquisition is made of an entity that has operations which would
violate the covenant not to compete, the breach is cured if the
competing activity is disposed of within 12 months.
In the event Seller violates any of the provisions of this Section 5.3,
in addition to any injunctive relief to which the Purchaser may be
entitled, the Purchaser shall be entitled to recover from the Seller,
at Purchaser's choice, either (i) damages or (ii) liquidated damages in
the amount of net income earned by Seller or the violating entity in
the competing activity. Purchaser's right to recover liquidated damages
under this Section 5.3 shall not be limited by any other provision of
this Agreement.
5.4 Solicitation of Employees
The Seller shall, for a period of three years after the Closing Date,
not induce any employee of the Company or of any Subsidiary to
terminate their employment with the Company or any Subsidiary and
assume employment with the Seller or any company controlled by it.
<PAGE>
5.5 AmeriQuest Technologies Inc.
(a) Seller hereby indemnifies and holds harmless the Company, Computer 2000,
Inc. and the Purchaser from and against any and all costs, actions
("Klagen"), causes of action ("Klageanspruche"), expenses, claims, damages
or other liabilities arising out of or in connection with the Company's
relationship with, share ownership, management of AQS and for any future
action by Seller with respect to AQS and any minority shareholders' actions
against AQS, the Company or the Purchaser. The indemnification and hold
harmless claim according to the preceding sentence shall be limited to the
extent the AQS Reserves, as defined in Section 5.5 (b) below, are applied
by the Company prior to full payment by Purchaser to Seller under 5.5 (b).
(b) For a period of one (1) year following the Closing Date (the "Initial
Period"), the Company will first apply the amounts of the provisions
("Ruckstellungen") specifically made in respect of the risks related to AQS
("AQS Reserves") against any claims and expenses arising related to AQS.
The AQS Reserves in the 1997 Financial Statements has been accrued by the
Company only for book purposes, but no tax deduction or tax loss has been
claimed by the Company for the AQS Reserves. Within 30 days following the
end of the Initial Period, the Company shall prepare a reconciliation of
the AQS Reserves (the "Reconciliation Report"), based upon the advice of
the Company's Auditors (or such other auditor or auditors as may then be
serving as the Company's auditors) and the advice of the Company's outside
U.S. counsel Rogers & Wells LLP, or such other U.S. law firm as the Company
<PAGE>
shall select, provided, that the selection of such U.S. law firm by the
Company shall be subject to the prior approval of the Seller, which
approval shall not be unreasonably withheld (the "Company's U.S. Counsel").
The Reconciliation Report shall identify: (i) all amounts applied by the
Company against claims and expenses from the AQS Reserve; (ii) all
liquidated amounts that must be paid out of the AQS Reserve; and (iii) all
unliquidated amounts that the Company and the Company's Auditors (or such
other auditor or auditors as may then be serving as the Company's auditors)
reasonably believe, based upon the advice of the Company's U.S. Counsel, is
necessary in order to cover any potential claims and expenses with respect
to AQS (the unliquidated amounts referred to in this clause (iii) shall be
referred to as the "Contingent Reserve"). Within one (1) week following
delivery of the Reconciliation Report, Purchaser shall pay to Seller an
amount by which the AQS Reserve exceeds the amount stated on the
Reconciliation Report (net of any tax disadvantage incurred by Purchaser or
Purchaser's parent and the parent's subsidiaries (versus the tax deduction
that would be available if the payment were to be deducted by the
Company)). With regard to the Contingent Reserve, the Purchaser shall be
entitled to either: (i) pay an amount equal to the Contingent Reserve to
Seller; or (ii) retain the Contingent Reserve in which case Purchaser shall
pay semiannually to Seller interest on the amount of the Contingent
Reserve, that remains unliquidated, from the date of the delivery of the
Reconciliation Report until the Contingent Reserve or the unliquidated
remainder thereof is paid to Seller by Purchaser. The interest rate shall
<PAGE>
be the commercial rate of interest paid by the Company from time to time
(or an equivalent rate to be applied by mutual agreement). The remainder of
the Contingent Reserve shall be paid to Seller upon reversal ("Auflosung"),
be it in part or in full, of the Contingent Reserve. Seller and Purchaser
shall have the same rights to review the Reconciliation Report and the
payments referred to therein as provided for the Interim Financial
Statements in Article 3. Nothing contained in this paragraph (b) of Section
5.5 shall be deemed to limit the obligation of Seller under the paragraph
(a) of this Section 5.5.
5.6 Confidentiality
To the Closing Date and for a period of three years thereafter, the
Seller shall keep confidential and not disclose to any third party any
business or trade secret of the Company or the Subsidiaries, other than
those which become publicly known through no fault of the Seller.
5.7 Board of the Company
On the Closing Date, the Seller will deliver to the Purchaser the
resignations, effective as of the Closing Date, of Messrs. Ardelt,
Burmester, Hutten, and Schipporeit as members of the supervisory board
<PAGE>
("Aufsichtsrat") of the Company. VIAG AG shall be entitled to nominate
a person, to be mutually agreed upon with Purchaser (it being
understood that VIAG AG makes a proposal and that Purchaser's consent
shall not be unreasonably withheld), to be elected as member of the
supervisory board of the Company and the Purchaser shall use its
influence to have this person elected.
5.8 Board of Purchaser
So long as Seller or VIAG AG owns and maintains ownership of equity
and/or convertible notes which represent, or when converted would
represent, at least 6,000,000 common shares of Purchaser (adjusted for
any share splits and similar adjustments) following the Closing Date,
Purchaser's management will propose for election and will use all
commercially reasonable efforts to support the nomination to the
Purchaser's Board of Directors of Maximilian Ardelt or of another
mutually agreed upon representative of VIAG AG (it being understood
that VIAG AG makes a proposal and that Purchaser's consent shall not be
unreasonably withheld).
ARTICLE 6
Representation and Agreements of Purchaser
Purchaser represents to Seller that:
<PAGE>
6.1 Organisation, Qualification and Authority of the Purchaser
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida and has all corporate
power and authority to own its assets and carry on its business, to
enter into and perform its obligations under this Agreement and to
issue the Notes and the Tech Data Shares to be delivered pursuant to
Section 2.2.
6.2 Authorization of Notes
The Notes have been duly authorized by all necessary corporate action
of Purchaser and, upon delivery pursuant to Section 2.2, will be duly
executed and delivered and will constitute legal, valid and binding
obligations of Purchaser enforceable in accordance with their terms.
6.3 Authorization of Shares
The Tech Data Shares to be delivered pursuant to Section 2.2 or upon
conversion of the Notes in accordance with their terms have been duly
authorized by all necessary corporate action of Purchaser and all such
Tech Data Shares, upon such delivery or conversion, will have been
validly issued and will be fully paid and non-assessable.
<PAGE>
6.4 Consents
The issuance of the Notes and the Tech Data Shares pursuant to the
Agreement and the performance by Purchaser of its obligations hereunder
and thereunder (i) do not require any consent, approval, registration
or qualification of our with any governmental authority in the United
States (except as contemplated in Schedule B hereto), (ii) will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any agreement or instrument to which
Purchaser is a part, except where consent has been obtained, the
Articles of Incorporation or By-Laws of Purchaser or any judgment,
decree or order of any court or governmental authority and (iii) are
not subject to any pre-emptive rights to subscribe for the Notes or
such Tech Data Shares.
6.5 No Restrictions on Payment
Purchaser is not, and will not become, a party to any agreement or
instrument containing any restriction on the payment of interest on the
Notes or the principal of the Notes at maturity.
ARTICLE 7
Liability of the Seller
7.1 Compensation for Damages
In the event of a breach of any representation, covenant or agreement
of the Seller contained in this Agreement, other than Sections 5.3 and
<PAGE>
5.5, the Seller shall pay to the Purchaser 80% of the amount necessary
to create the situation which the Company or a Subsidiary would be in
without such a breach, provided, however, that
(a) the Purchaser shall first notify the Seller and if the breach
is of a nature that Seller could reasonably cure such breach,
Purchaser shall give the Seller the opportunity to remedy the
breach within a reasonable period of time,
(b) the Purchaser shall use reasonable efforts to mitigate the
damages suffered as a result of the breach of a
representation, covenant or agreement, and
(c) the Seller's obligation shall be reduced by 80% of all actual
or potential advantages connected with such damages (including
a reduction of the taxable income of the respective company
benefiting it and tax refunds paid to, or assessed in favor
of, the Company or a Subsidiary (at the time the damage claims
are asserted in writing towards the Seller) resulting from, or
related to, the condition which caused the breach;
(d) the Seller shall not be responsible under this Article 7 for
damages for items that result in both a claim under this
Article 7 and a purchase price adjustment pursuant to the
provisions of Article 3;
<PAGE>
(e) for items related to the periods prior to March 31, 1998 and
which may be reflected in financial statements the purchase
price adjustment provisions of Article 3 shall exclusively
apply.
7.2 Provisions
The Seller shall be liable for a breach of any representation, covenant
or agreement hereunder only to the extent its claims arising from the
breach are higher than the sum of (i) any provisions and reserves
contained in the Interim Financial Statements - other than the AQS
Reserve which is exclusively dealt with in Section 5.5 - which are
related to, or may be used for, the matter for which a breach is
claimed (at the time the damage claims are asserted in writing towards
the Seller) or (ii) the payments on accounts receivable (at the time
the damage claims are asserted in writing towards the Seller) which
were written off, or for which excessive individual or lump-sum
adjustments have been made ("Einzel- und Pauschalwertberichtigungen"),
in the Interim Financial Statements.
7.3 Notice of Breach; Third-Party Claims
(a) If the Purchaser becomes aware of any fact which may result in
a liability of the Seller under Section 7.1, the Purchaser
shall without undue delay give the Seller written notice
thereof and shall use commercially reasonable efforts to
provide the Seller with the opportunity to investigate any
such matter.
<PAGE>
(b) If a third party asserts a claim against the Purchaser, the
Company or a Subsidiary which might result in a liability of
Seller under Section 7.1, the Purchaser shall give the Seller
the opportunity to defend, at its own cost, such claim. The
Seller, if it elects to tender a defense, shall have the sole
power to direct and control such defense. In particular,
without limitation, (i) the Purchaser shall allow the Seller
to participate in all material negotiations and correspondence
with such third party, (ii) no settlements, acknowledgements
or waivers shall be binding upon the Seller without the
consent of the Seller. The Purchaser shall provide the Seller
commercially reasonable assistance in the defense of any third
party claims for which indemnity is sought by the Purchaser.
In the event the Seller fails to tender a defense to a third
party claim which is properly covered by the indemnity
provisions of this 7, the Purchaser shall be entitled to
recover any and all costs and expenses of defending such
claims.
(c) The Purchaser shall promptly inform the Seller of any notice
of a tax audit or audit regarding social security
contributions relating to time periods before the Closing
Date, and shall permit the Seller or its representatives to
participate, at the Seller's expense, in such audits and
defend in good faith any tax assessment in accordance with
subparagraph (b) of this Section 7.3.
(d) The Purchaser's failure to comply with any of its obligations
under this Section 7.3 shall release the Seller from its
<PAGE>
obligations under Section 7.1 (solely as it relates to the
claim for which the failure is alleged to occur) to the extent
that the defense of Seller is affected by such failure.
7.4 Limitation Periods
All rights and claims of the Purchaser resulting from Section 7.1 shall
be time-barred 15 months after the Closing Date, provided, however,
that (i) any claims arising out of the representation contained in
Section 4.2 shall be subject to a limitation period of five years after
the date hereof, (ii) any claims with respect to taxes and social
security contributions under Section 4.11 shall be time-barred three
(3) months after the final and binding assessment of the relevant tax
or social security contribution.
7.5 Limitations in Amount
The Purchaser may assert claims based on Section 7.1 only if the
individual claim exceeds an amount of DM [*] and the aggregate amount
of all claims exceeds DM [*] it being understood that if any such
amount is exceeded, the Purchaser may only recover the excess amount.
The aforementioned amount of DM [*] shall be reduced by the amount, if
any, by which the Net Equity in the Interim Financial Statements
(Article 3) is below DM [*]. The Seller's aggregate liability under
Section 7.1 shall be limited to an amount of DM [*].
[* Document contains certain confidential information which has been
omitted and has been filed separately with the Securities and Exchange
Commission.]
<PAGE>
7.6 No Other Rights and Remedies
Except for the representations and covenants contained in Articles 4
and 5, the Seller makes no other representation or covenant, whether
explicit or implied. Furthermore, all other or further rights and
remedies which might be given under statutory law or otherwise in
addition to those contained in Section 7.1 are excluded except for
claims of specific performance ("Erfullungsanspruche") and except for
claims based upon wilful misconduct ("Vorsatz"). This applies to all
rights and remedies of any legal nature, in particular, without
limitation, to all rights and remedies based on a potential breach of a
duty to negotiate in good faith ("culpa in contrahendo") and, except
for the termination rights set forth in Section 8, to all rights and
remedies which would result in a cancellation, rescission or revocation
of this Agreement.
7.7 Knowledge
To the extent that the representations in Article 4 are based upon the
knowledge or awareness of the Seller, such knowledge or awareness shall
be limited to the knowledge or awareness of members of the management
board of the Seller on the date hereof and of the persons listed in
Schedule 7.7(after reasonable investigation and inquiry by them with
the management board of the Company).
<PAGE>
7.8. Disclosure Schedule
Without prejudice to any rights of the Parties under this Article 7,
the Seller shall be obliged to supplement the Disclosure Schedule (see
Article 4) between the date of this Agreement and the Closing Date.
7.9 Other Claims
This Article 7 shall not apply to claims arising under Sections 5.3 and
5.5 of this Agreement.
ARTICLE 8
Anti-Trust Clearance, Closing Condition
8.1 Anti-Trust Clearance
The obligation of the Seller to transfer the Sold Shares and the
obligation of the Purchaser to acquire the shares shall be subject to
the condition precedent that the consummation of the transitions
contemplated hereby is permissible pursuant to Article 7 of
EC-Regulation 4064/89 on the Control of Concentrations between
Undertakings and the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSR").
8.2 Notification to the Commission
The Purchaser shall ensure that the complete notification required
under EC-Regulation 4064/89 and HSR will be made as soon as possible
but in no event later than seven days after execution of this Agreement
<PAGE>
for Brussels and 30 days after this Agreement for HSR. The Seller shall
closely cooperate with the Purchaser in the preparation of such
notifications.
8.3 Approval of Supervisory Boards of Seller and VIAG AG
Approval of Board of Directors of Purchaser
The obligation of the Seller to transfer the Sold Shares and the
obligation of the Purchaser to purchase the Sold Shares shall be
subject to the conditions precedent that the Supervisory Boards
("Aufsichtsrat") of the Seller and of VIAG AG and the Board of
Directors of the Purchaser shall have approved this Agreement and the
transactions contemplated hereby.
8.4 Consent by Purchaser's Lenders
The obligation of the Seller to transfer the Sold Shares and the
obligation of the Purchaser to acquire the Sold Shares shall be subject
to the condition precedent that the Purchaser shall have obtained the
consent to this Agreement and the transactions contemplated hereby of
Purchaser's lenders/banks as is necessary for the fulfilment of
Purchaser's obligations under Purchaser's credit facilities with such
lenders/banks.
8.5 Additional Agreements
The Seller and the Purchaser agree to use their best efforts to take,
and/or cause to be taken all reasonable action, and to do, or cause to
be done, all things necessary, proper or advisable under applicable
laws and regulations, to consummate and make effective the transaction
<PAGE>
contemplated by this Agreement as expeditiously as practicable. The
Seller also agrees to use its best efforts to have the Company's
Auditors assist Purchaser and their accountants in the preparation of
financial statements for the Company in accordance with generally
accepted accounting and auditing principles as adopted in the United
States of America, and provide Consent Letters and such other
documentation as may be required to be filed under securities laws of
the United States of America. If at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of
this Agreement, the proper person, officers and directors of each of
the parties to this Agreement shall take or cause to be taken all such
necessary action including, without limitation, the execution and
delivery of such further instruments and documents as may be reasonably
requested by any party for such purposes or otherwise to complete or
perfect the transactions contemplated hereby.
8.6 Termination
This Agreement may be terminated at any time prior to the Closing Date:
(a) by mutual consent of the Purchaser and the Seller; or
(b) by either the Purchaser or the Seller if the Closing shall not
have occurred on or before December 31, 1998 other than as a
result of such party's willful breach of the Agreement or
<PAGE>
unwillingness to perform hereunder.
8.7 Effect of Termination
Upon the termination of this Agreement in accordance with Section 8.6,
this Agreement, other than the obligations of each party under the
Confidentiality Agreement dated the 20th day of February 1998 shall
forthwith become null and void, without any liability on the part of
any party hereto, or any subsidiaries or affiliate of, or any officers,
directors or employees of, any party. Except in the case of a mutually
agreeable termination under Section 8.6 (a) hereof, nothing contained
in this Section 8.7 shall relieve any party of any liability for the
breach of a covenant set forth in this Agreement.
ARTICLE 9
Miscellaneous
9.1 Company's Headquarters
Munich shall be the place of the European headquarters/ Seat of the
Company provided that no material tax disadvantages will result for the
Purchaser/the Company. The operational headquarters of the Company
shall be Munich for at least three (3) years, in any case.
<PAGE>
9.2 VIAG Loans
The Purchaser agrees that the loan in the amount of DM 100,000,000.00
granted to the Company by VIAG AG will be repaid, together with
interest accrued thereon, within thirty (30) days following the Closing
Date.
9.3 Notices
All notices or other communications hereunder shall be deemed to have
been duly made if in writing and personally delivered by hand delivery,
registered mail with return receipt or express courier service with
delivery receipt or sent by telecopier, provided that the telecopy is
promptly confirmed in writing, to the person at the address set forth
below, or such other address as may be designated in the same manner
hereafter:
To the Seller:
Dr. Wolf Roth
Klockner & Co. AG
Neudorfer Stra(beta)e 3-5
47057 Duisburg
Germany
Telecopier: (49) 203-307-5050
<PAGE>
To the Purchaser:
Mr. Jeffery P. Howells
Executive Vice President and CFO
Tech Data Corporation
5350 Tech Data Drive
Clearwater, Florida, USA 33760
Telecopier: (813) 538 5860
9.4 Assignment
The Purchaser may, prior to the Closing Date, assign all of its rights
and obligations under this Agreement to a wholly-owned subsidiary,
provided that the Purchaser shall remain jointly and severally liable
for all of its obligations assumed hereunder. The provisions of Section
2.3 shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties and the holders of the Registrable
Securities, including, without the need for an express assignment or
any consent by the Purchaser thereto, subsequent holders of Registrable
Securities, to the extent that such subsequent holders are any of the
Seller, VIAG or subsidiaries of VIAG and not third parties who have
purchased the Registrable Securities from any of the Seller, VIAG or
subsidiaries of VIAG.
9.5 Public Disclosure
Prior to the Closing, no Party shall make any press release or similar
public announcement with respect to this Agreement without the prior
written consent of the other Party, except as may be required to comply
with the requirements of any applicable laws or the rules and
regulations of any stock exchange upon which the securities of one of
<PAGE>
the Parties are listed. If disclosure is required by law, the Party
that is required to disclose shall notify the other Party prior to such
disclosure and use its best efforts to mutually agree upon the content
of the disclosure.
9.6 Taxes and Expenses
All transfer taxes, fees (including notarial fees), stamp duties and
charges payable in connection with the execution and implementation of
this Agreement shall be borne by the Purchaser. The Purchaser and the
Seller shall split the costs of the audit of the Interim Financial
Statements (Section 3.3) and the fees charged by the authorities in
connection with the Hart Scott Rodino filing in the US which are due to
the inclusion of AQS in this transaction. Each Party shall pay its own
expenses, including the fees of its advisers, incurred in connection
with this Agreement.
9.7 Entire Agreement
This Agreement (including all Schedules hereto) contains the entire
agreement between the Parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings with respect
thereto, except for the Confidentiality Agreement dated the 20th day of
February, 1998. This Agreement does supersede Sections 7 and 8 of the
Confidentiality Agreement.
<PAGE>
9.8 Amendments
This Agreement may only be amended by written instrument executed by
all Parties and explicitly referring to this Agreement.
9.9 Governing Law; Language
This Agreement shall be governed by, and construed in accordance with,
the laws of the Federal Republic of Germany, except that Section 2.3
(and the related Schedules) shall be governed by, and construed in
accordance with the laws of the State of Florida, applicable to
agreements made and to be performed within the state, without giving
effect to any provisions relating to conflicts of laws.
The English language version of this Agreement shall govern. Terms to
which a German translation has been added shall be interpreted
throughout this Agreement in the meaning assigned to them by the German
translation.
9.10 Arbitration
Any dispute arising out of or relating to this Agreement, or the
breach, termination or invalidity hereof, shall be finally settled,
under exclusion of any state court's competence, by arbitration in
accordance with the Arbitration Rules of the Deutsche Institution fur
Schiedsgerichtsbarkeit e.V. (DIS). The arbitral tribunal shall consist
of three arbitrators. Each arbitrator shall be eligible for the office
of a judge ("Befahigung zum Richteramt") in Germany. The place of
<PAGE>
arbitration shall be Frankfurt or any other place mutually agreed upon
by the parties hereto. The language to be used in the arbitral
proceeding shall be the English language, provided that no Party shall
be under an obligation to translate any documents in the German
language submitted to the arbitral tribunal.
9.11 Severability
Should any provision of this Agreement, or any provision to be
incorporated in the future, be or become invalid or unenforceable, the
validity of the balance of this Agreement shall not be affected
thereby. The same applies if this Agreement contains any omissions. In
lieu of the invalid or unenforceable provision or in order to complete
any omission, a fair provision shall apply which, to the extent legally
permissible, comes as close as possible to what the Parties had
intended or would have intended, according to the spirit and purpose of
this Agreement if they had considered the matter at the time this
Agreement was executed. The same applies if the provision is invalid
because of the stipulated scope of time period.
/S/
Klockner & Co. AG
By: ______________________
/S/
Tech Data Corporation
By: ______________________
Chairman and Chief Executive Officer
