AGREEMENT AND PLAN OF MERGER
BETWEEN
NAVIDEC, INC.
AND
TOUCHSOURCE, INC.
This Agreement and Plan of Merger is entered into effective as of the
30th day of June, 1997, between Navidec, Inc., a Colorado corporation
("Navidec"); TouchSource, Inc., a Colorado corporation ("TouchSource"); and
all of the shareholders of TouchSource listed on the signature page (the
"Shareholders").
RECITALS
A. The Common Stock of Navidec is listed on the Nasdaq SmallCap
Market and Navidec is engaged in the distribution of computer equipment and
internet/intranet solutions.
B. TouchSource, a privately owned company, is engaged in the
distribution of touch screen hardware and software including Kiosks.
C. The Boards of Directors of Navidec and TouchSource believe it to
be in the best interest of each respective corporation and each corporation's
respective Shareholders that Navidec acquire all of the issued and outstanding
shares of TouchSource and in furtherance thereof, have approved this merger
subject to the terms and conditions of this Agreement whereby TouchSource will
be merged with and into Navidec and Navidec shall be the surviving entity.
D. Pursuant to the merger, among other things, all the outstanding
shares of Common Stock of TouchSource, $.01 par value per share (the
"TouchSource Stock"), will be converted into an aggregate of 207,000 shares of
Navidec no par value Common Stock.
In order to consummate this Plan of Merger, the parties hereto, in
consideration of the mutual agreements and on the basis of the representations
and warranties hereinafter set forth, do hereby agree as follows:
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ARTICLE 1
THE MERGER
Section 1.1 The Merger. TouchSource shall be merged with and into Navidec
(the "Merger"), and Navidec shall be the surviving corporation (the "Surviving
Corporation") effective upon the date when Articles of Merger are filed with
the Secretary of State of Colorado (the "Effective Date").
Section 1.2 Succession. On the Effective Date, Navidec shall continue its
corporate existence under the laws of the State of Colorado, and the separate
existence and corporate organization of TouchSource, except insofar as it may
be continued by operation of law, shall be terminated and cease.
Section 1.3 Transfer of Assets and Liabilities. On the Effective Date
retroactive to June 30, 1997, the rights, privileges, powers and franchises,
both of a public as well as of a private nature, of each of the Constituent
Corporations shall be vested in and possessed by the Surviving Corporation,
subject to all of the disabilities, duties and restrictions of or upon each of
the Constituent Corporations; and all singular rights, privileges, powers and
franchises of each of the Constituent Corporations, and all property, real,
personal and mixed, of each of the Constituent Corporations, and all debts due
to each of the Constituent Corporations on whatever account, and all things in
action or belonging to each of the Constituent Corporations shall be
transferred to and vested in the Surviving Corporation; and all property,
rights, privileges, powers and franchises, and all and every other interest,
shall be thereafter the property of the Surviving Corporation as they were of
the Constituent Corporations, and the title to any real estate vested by deed
or otherwise in either of the Constituent Corporations shall not revert or be
in any way impaired by reason of the Merger; provided, however, that the
liabilities of the Constituent Corporations and of their stockholders,
directors and officers shall not be affected and all rights of creditors and
all liens upon any property of either of the Constituent Corporations shall be
preserved unimpaired, and any claim existing or action or proceeding pending
by or against either of the Constituent Corporations may be prosecuted to
judgments as if the Merger had not taken place except as they may be modified
with the consent of such creditors and all debts, liabilities and duties of or
upon each of the Constituent Corporations shall attach to the Surviving
Corporation, and may be enforced against it to the same extent as if such
debts, liabilities and duties had been incurred or contracted by it.
Section 1.4 Manner of Accomplishing Merger. The Merger shall be accomplished
by way of the exchange of 100% (207,000 shares) of the issued and outstanding
shares of TouchSource for common stock of Navidec, at the ratio of one share
of Navidec for each one share of TouchSource outstanding on the Effective Date
of the Merger (1 for 1). The transfer agent will automatically be instructed
to issue new certificates of Navidec, based on the above ratio, to each of the
Shareholders, at the address listed in the register of TouchSource. No
fractional shares will be issued, but each fractional share will be rounded up
to the next share and a certificate for Navidec will be issued to each record
holder of TouchSource accordingly. The exchange will be accomplished pursuant
to an exemption from registration provided by Section 4(2) of the Securities
Act of 1933, as amended (the "1933 Act").
ARTICLE 2
CLOSING
Subject to the terms and conditions hereof, the Closing shall be held at
the offices of Xxxxx Xxxxx & Xxxxx Professional Corporation in Denver,
Colorado at 10:00 a.m., on or before July 30, 1997 ("Closing Date"). At the
Closing and on the Closing Date the Shareholders of TouchSource shall receive
in exchange for their shares of TouchSource Common Stock the consideration
described in Section 1 as set forth in Schedule 2 attached hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties by TouchSource. Except as set
forth on the TouchSource Schedule of Exceptions attached hereto as Schedule
3.1, TouchSource represents and warrants to Navidec, as a material inducement
to Navidec to execute and perform its obligations under this Agreement, as
follows:
(1) Organization and Standing of TouchSource. TouchSource is a
corporation duly organized and validly existing and in good standing under the
laws of the State of Colorado. It has all requisite corporate power and
authority to carry on its business as now being conducted, to enter into this
Agreement and to carry out and perform the terms and provisions of this
Agreement. TouchSource has no subsidiaries and, further, has no direct or
indirect interest, either by way of stock ownership or otherwise, in any other
firm, corporation, association, or business.
(2)(a) Capitalization and Indebtedness for Borrowed Moneys.
TouchSource is duly and lawfully authorized by its Articles of Incorporation
to issue 50,000,000 shares of TouchSource Common Stock, of which 207,000
shares of Common Stock are validly issued and outstanding on the date of this
Agreement. TouchSource has no shares of treasury stock. All of the
outstanding shares of TouchSource's Common have been duly authorized, validly
issued, are fully paid and nonassessable.
(b) TouchSource is not presently liable on account of any indebtedness
for borrowed moneys, except as reflected in the TouchSource Financial
Statements (as defined in Section 3.1(5)).
(c) There are no outstanding subscriptions, options, warrants, calls,
contracts, demands, commitments, convertible securities, or other agreements
or arrangements of any character or nature whatever under which TouchSource is
or may be obligated to issue or purchase shares of its capital stock.
(3) Ownership of TouchSource's Common Stock. To the best of
TouchSource's knowledge after inquiry, (i) the shares of its Common Stock of
TouchSource are held by the persons set forth in Schedule 2 of this Agreement,
free and clear of all liens, claims, encumbrances, and restrictions of every
kind; and (ii) Schedule 2 of this Agreement contains a complete and accurate
list of all of the Shareholders of TouchSource and the shares of its Common
Stock held by each.
(4) TouchSource's Authority. The execution, delivery, and performance
of this Agreement shall have been duly authorized by all requisite corporate
action. This Agreement constitutes a valid and binding obligation of
TouchSource enforceable in accordance with its terms (except as limited by
bankruptcy, insolvency, or other laws affecting the enforcement of creditors'
rights). No provision of the Articles of Incorporation and any amendments
thereto, Bylaws and any amendments thereto, minutes or share certificates of
TouchSource, or of any contract to which TouchSource is a party or otherwise
bound, prevents the Shareholders from delivering good title to their shares of
such capital stock in the manner contemplated hereunder.
(5) Financial Statements. TouchSource has furnished Navidec with its
unaudited balance sheet as of June 30, 1997 and its statements of operations
and stockholders' equity for the period then ended (the "TouchSource Financial
Statements"). All of the TouchSource Financial Statements present fairly the
financial position of TouchSource as of the respective dates, and the results
of its operations for the respective periods therein specified.
(6) Present Status. Other than as described herein or in the Schedules
attached hereto, TouchSource has not, since June 30, 1997:
(a) Incurred any material obligations or liabilities, absolute,
accrued, contingent, or otherwise and whether due or to become due, except
current liabilities incurred in the ordinary course of business, none of which
materially adversely affects the business or prospects of TouchSource;
(b) Discharged or satisfied any material liens or encumbrances, or paid
any material obligation or liability, absolute, accrued, contingent, or
otherwise and whether due or to become due, other than (i) current liabilities
shown on the TouchSource Financial Statements and current liabilities incurred
since the close of business on the date of the TouchSource Financial
Statements, in each case, in the ordinary course of business and (ii) expenses
incurred in connection with the transactions contemplated by this Agreement
(including, without limitation, reasonable attorney fees and costs);
(c) Declared or made any payment or distribution to its stockholders or
purchased or redeemed, or obligated itself to purchase or redeem, any of its
shares of Common Stock or other securities;
(d) Mortgaged, pledged, or subjected to lien, or any other encumbrances
or charges, any of its assets, tangible or intangible;
(e) Sold or transferred any of its assets except for inventory sold in
the ordinary course of business or canceled any debt or claim;
(f) Suffered any damage, destruction, or loss (whether or not covered
by insurance) affecting the properties, licenses, business, or prospects of
TouchSource, or waived any rights of material value;
(g) Except with respect to this Agreement, entered into any material
transaction other than in the ordinary course of business;
(7) Litigation. Except as disclosed in Schedule 3.1, there are no
legal actions, suits, arbitrations, or other legal or administrative
proceedings pending or threatened against TouchSource which would materially
affect it, its properties, assets, or business; and TouchSource is not aware
of any facts which to its knowledge might result in any action, suit,
arbitration, or other proceeding which in turn might result in any material
adverse change in the business or condition (financial or otherwise) of
TouchSource or its properties or assets. TouchSource is not in default with
respect to any judgment, order, or decree of any court or any government
agency or instrumentality.
(8) Compliance With the Law and other Instruments. To the best of
TouchSource's knowledge, the business operation of TouchSource has been and is
being conducted in material compliance with all applicable laws, rules, and
regulations of all authorities the violation of which would have a material
adverse effect on TouchSource or its business. TouchSource is not in
violation of, or in default under, any term or provision of its Articles of
Incorporation, as amended, or its Bylaws, as amended, or of any license, lien,
mortgage, lease, agreement, instrument, order, judgment, or decree, or subject
to any restriction, contained in any of the foregoing, of any kind or
character which materially adversely affects in any way the business,
properties, assets, or prospects of TouchSource, or prevents consummation of
the exchange of securities contemplated by this Agreement.
(9) Title to Properties and Assets. TouchSource has good and
marketable title to all its properties and assets, including without
limitation those reflected in the TouchSource Financial Statements and those
used or located on property controlled by TouchSource in its business (except
assets sold or abandoned in the ordinary course of business), subject to no
mortgage, pledge, lien, charge, security interest, encumbrance, or restriction
except those which (a) are disclosed in the TouchSource Financial Statements
as securing specified liabilities; or (b) do not materially adversely affect
the use thereof.
(10) Creditor's Arrangements. TouchSource has not made any assignment
for the benefit of creditors, nor has any involuntary or voluntary petition in
bankruptcy been filed by or against TouchSource.
(11) Contracts and Other Obligations. Except with respect to this
transaction, TouchSource is not a party to, or otherwise bound by, any written
or oral contract or agreement not made in the ordinary course of business.
(12) Records. The books of account, minute books, stock certificate
books, and stock transfer ledgers of TouchSource are complete and correct, and
there have been no transactions involving the business of TouchSource which
properly should have been set forth in said respective books, other than those
set forth therein.
(13) Brokers or Finders. All negotiations on the part of TouchSource
relative to this Agreement and the transactions contemplated hereby have been
carried on by TouchSource without the intervention of any person or as the
result of any act of TouchSource in such manner as to give rise to any valid
claim against TouchSource or Navidec for a brokerage commission, finder's fee,
or other like payment.
(14) Absence of Certain Changes or Events. Since December 31, 1996
there has not been any material adverse change in, or event or condition
materially and adversely affecting, the condition (financial or otherwise),
properties, assets, liabilities, or the business of TouchSource.
(15) Taxes. TouchSource has duly filed all federal, state, county and
local income, franchise, excise, real and personal property and other tax
returns and reports (including, but not limited to, those relating to social
security, withholding, unemployment insurance, and occupation (sales) and use
taxes) required to have been filed by TouchSource up to the date hereof. All
of the foregoing returns are true and correct in all material respects and
TouchSource has paid all taxes, interest and penalties shown on such returns
or reports as being due. TouchSource has paid or made adequate provision in
the TouchSource Financial Statements or its books and records for all taxes
payable in respect of all periods ending on or before the date hereof.
TouchSource has no material liability for any taxes, interest or penalties of
any nature whatsoever, except for those taxes which may have arisen up to the
date hereof in the ordinary course of business and which are properly accrued
on the books of TouchSource.
(16) Environmental Matters. There are no actions, proceedings or
investigations pending or, to the actual knowledge of TouchSource, threatened
before any federal or state environmental regulatory body, or before any
federal or state court, alleging noncompliance by TouchSource with the
Comprehensive Environmental Response, Compensation and Liability Act of 1990
("CERCLA") or any other Environmental Laws. To the actual knowledge of
TouchSource: (i) there is no reasonable basis for the institution of any
action, proceeding or investigation against TouchSource under any
Environmental Law; (ii) TouchSource is not responsible under any Environmental
Law for any release by any person at or in the vicinity of real property of
any hazardous substance (as defined by CERCLA), caused by the spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of any such hazardous substance into
the environment; (iii) TouchSource is not responsible for any costs of any
remedial action required by virtue of any release of any toxic or hazardous
substance, pollutant or contaminant into the environment including, without
limitation, costs arising from security fencing, alternative water supplies,
temporary evacuation and housing and other emergency assistance undertaken by
any environmental regulatory body; (iv) TouchSource is in compliance with all
applicable Environmental Laws; and (v) no real property used, owned, managed
or controlled by TouchSource contains any toxic or hazardous substance
including, without limitation, any asbestos, PCBs or petroleum products or
byproducts in any form, the presence, location or condition of which (a)
violates any Environmental Law, or (b) otherwise would pose any significant
health or safety risk unless remedial measures were taken. For purposes of
this Agreement, "Environmental Laws" shall mean any federal, state, local or
municipal statute, ordinance or regulation, or order, ruling or other decision
of any court, administrative agency, or other governmental authority
pertaining to the release of hazardous substances (as defined in CERCLA) into
the environment.
Section 3.2 Representations and Warranties by Navidec. Except as set forth
on Navidec Schedule of Exceptions attached hereto as Schedule 3.2, Navidec
represents and warrants to TouchSource, as a material inducement to
TouchSource to execute and perform its obligations under this Agreement, as
follows:
(1) Organization and Standing of Navidec. Navidec is a corporation
duly organized and validly existing and in good standing under the laws of the
State of Colorado. It has all requisite corporate power and authority to
carry on its business as now being conducted, to enter into this Agreement and
to carry out and perform the terms and provisions of this Agreement. Navidec
has no direct or indirect interest, either by way of stock ownership or
otherwise, in any other firm, corporation, association, or business.
(2)(a) Capitalization and Indebtedness for Borrowed Moneys. Navidec is
duly and lawfully authorized by its Articles of Incorporation, as amended, to
issue 20,000,000 shares of Common Stock, no par value per share (the "Navidec
Common Stock"), of which 2,804,721 shares are issued and outstanding as of the
date hereof. Navidec has no treasury stock and no other authorized series or
class of stock. Additionally, there are warrants and options outstanding to
purchase 1,449,126 shares of Navidec's Common Stock. All the outstanding
shares of Navidec Common Stock have been duly authorized, validly issued, are
fully paid and nonassessable, and free of preemptive rights.
(b) Navidec is not presently liable on account of any indebtedness for
borrowed moneys, except as reflected in the financial statements described in
subparagraph (4), below.
(3) Navidec's Authority. The execution, delivery, and performance of
this Agreement shall have been duly authorized by all requisite corporate
action. This Agreement constitutes a valid and binding obligation of Navidec
enforceable in accordance with its terms (except as limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights). No
provision of the Articles of Incorporation and any amendments thereto, Bylaws
and any amendments thereto, minutes or share certificates of Navidec, or of
any contract to which Navidec is a party or otherwise bound, prevents Navidec
from delivering good title to its shares of such capital stock in the manner
contemplated hereunder.
(4) Financial Statements. Navidec has furnished to TouchSource its
audited balance sheet as of December 31, 1996 and its statements of
operations, stockholders' equity and cash flows for the year then ended, and
its unaudited balance sheet as of March 31, 1997 and its statements of
operations and cash flows for the three months then ended (collectively, the
"Navidec Financial Statements"). All of Navidec Financial Statements present
fairly the financial position of Navidec as of the respective dates, and the
results of its operations for the respective periods therein specified,
Navidec Financial Statements were prepared in accordance with generally
accepted accounting principles applied upon a basis consistent with prior
accounting periods, and the audited Navidec Financial Statements were audited
in accordance with generally accepted auditing standards.
(5) Present Status. Navidec has not, since March 31, 1997:
(a) Incurred any obligations or liabilities, absolute, accrued,
contingent, or otherwise and whether due or to become due, except current
liabilities incurred in the ordinary course of business, none of which
adversely affects the business or prospects of Navidec;
(b) Discharged or satisfied any liens or encumbrances, or paid any
obligation or liability, absolute, accrued, contingent, or otherwise and
whether due or to become due, other than current liabilities shown on the
Navidec Financial Statements and current liabilities incurred since the close
of business on the date of the Navidec Financial Statements, in each case, in
the ordinary course of business;
(c) Declared or made any payment or distribution to its stockholders or
purchased or redeemed, or obligated itself to purchase or redeem, any of its
shares of Common Stock or other securities;
(d) Mortgaged, pledged, or subjected to lien, or any other encumbrances
or charges, any of its assets, tangible or intangible;
(e) Sold or transferred any of its assets, or canceled any debt or
claim;
(f) Suffered any damage, destruction, or loss (whether or not covered
by insurance) affecting the properties, business, or prospects of Navidec, or
waived any rights of substantial value;
(g) Except with respect to this Agreement, entered into any transaction
other than in the ordinary course of business;
(6) Litigation. Except as disclosed in the Navidec Financial
Statements or in Schedule 3.2, there are no legal actions, suits,
arbitrations, or other legal or administrative proceedings pending or
threatened against Navidec which would affect it, its properties, assets, or
business; and Navidec is not aware of any facts which to its knowledge might
result in any action, suit, arbitration, or other proceeding which in turn
might result in any material adverse change in the business or condition
(financial or otherwise) of Navidec or its properties or assets. Navidec is
not in default with respect to any judgment, order, or decree, of any court or
any government agency or instrumentality, unless or except as set forth in the
Navidec Financial Statements.
(7) Compliance With the Law and Other Instruments. To the best of
Navidec's knowledge, the business operation of Navidec has been and is being
conducted in accordance with all applicable laws, rules, and regulations of
all authorities the violation of which would have a material adverse effect on
Navidec or its business. Navidec is not in violation of, or in default under,
any term or provision of its Articles of Incorporation, as amended, or its
Bylaws, as amended, or of any lien, mortgage, lease, agreement, instrument,
order, judgment, or decree, or subject to any restriction, contained in any of
the foregoing, of any kind or character which materially adversely affects in
any way the business, properties, assets, or prospects of Navidec, or which
would prohibit Navidec from entering into this Agreement or prevent
consummation of the exchange of securities contemplated by this Agreement.
(8) Title to Properties and Assets. Navidec has good and marketable
title to all its properties and assets, including without limitation those
reflected in the Navidec Financial Statements and those used or located on
property controlled by Navidec in its business (except assets sold in the
ordinary course of business), subject to no mortgage, pledge, lien, charge,
security interest, encumbrance, or restriction except those which (a) are
disclosed in the Navidec Financial Statements as securing specified
liabilities; or (b) do not materially adversely affect the use thereof.
(9) Contracts and Other Obligations. Navidec is not a party to or
otherwise bound by, any written or oral:
(a) Contract or agreement not made in the ordinary course of business;
(b) Contract with any labor union;
(c) Bonus, pension, profit-sharing, retirement, share purchase, stock
option, hospitalization, or similar plan providing employee benefits, except
its Stock Option Plan currently being developed and except as disclosed in its
filings with the Securities and Exchange Commission; and
(d) Deed of trust, mortgage, conditional sales contract, security
agreement, pledge agreement, trust receipt, or any other agreement or
arrangement whereby any of the assets or properties of Navidec are subjected
to a lien, encumbrance, charge, or other restriction.
Navidec has in all material respects performed all obligations required to be
performed by it to date and is not in material default under any of the
contracts, agreements, leases, documents, or other arrangements to which it is
a party or by which it is otherwise bound. To the best of Navidec's
knowledge, all parties with whom Navidec has contractual arrangements are in
compliance therewith and are not in default thereunder.
(10) Creditors Arrangements. Navidec has not made any assignment for
the benefit of creditors, nor has any involuntary or voluntary petition in
bankruptcy been filed by or against Navidec.
(11) Records. The books of account, minute books, stock certificate
books, and stock transfer ledgers of Navidec are complete and correct, and
there have been no transactions involving the business of Navidec which
properly should have been set forth in said respective books, other than those
set forth therein.
(12) Absence of Certain Changes or Events. Since March 31, 1997, there
has not been any material adverse change in, or event or condition materially
and adversely affecting, the condition (financial or otherwise), properties,
assets, liabilities or, to the knowledge of Navidec, the business or prospects
of Navidec.
(13) Taxes. Navidec has duly filed all federal, state, county and
local income, franchise, excise, real and personal property and other tax
returns and reports (including, but not limited to, those relating to social
security, withholding, unemployment insurance, and occupation (sales) and use
taxes) required to have been filed by Navidec up to the date hereof. All of
the foregoing returns are true and correct in all material respects and
Navidec has paid all taxes, interest and penalties shown on such returns or
reports as being due. Navidec has no liability for any taxes, interest or
penalties of any nature whatsoever, except for those taxes which may have
arisen up to the date hereof in the ordinary course of business and which are
properly accrued on the books of Navidec.
(14) Environmental Matters. There are no actions, proceedings or
investigations pending or, to the actual knowledge of Navidec, threatened
before any federal or state environmental regulatory body, or before any
federal or state court, alleging noncompliance by Navidec with CERCLA or any
other Environmental Laws. To the actual knowledge of Navidec: (i) there is no
reasonable basis for the institution of any action, proceeding or
investigation against Navidec under any Environmental Law; (ii) Navidec is not
responsible under any Environmental Law for any release by any person at or in
the vicinity of real property of any hazardous substance (as defined by
CERCLA), caused by the spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of
any such hazardous substance into the environment; (iii) Navidec is not
responsible for any costs of any remedial action required by virtue of any
release of any toxic or hazardous substance, pollutant or contaminant into the
environment including, without limitation, costs arising from security
fencing, alternative water supplies, temporary evacuation and housing and
other emergency assistance undertaken by any environmental regulatory body;
(iv) Navidec is in compliance with all applicable Environmental Laws; and (v)
no real property used, owned, managed or controlled by Navidec contains any
toxic or hazardous substance including, without limitation, any asbestos, PCBs
or petroleum products or byproducts in any form, the presence, location or
condition of which (a) violates any Environmental Law, or (b) otherwise would
pose any significant health or safety risk unless remedial measures were
taken.
(15) SEC Filings. Navidec has filed with the SEC all reports and other
documents required to be filed by Navidec pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and the applicable rules and
regulations thereunder. As of their respective dates, each of such reports
and other documents complied in all material respects with the requirements of
the 1934 Act and the applicable rules and regulations thereunder, and such
reports and other documents contained, as of their respective dates, no untrue
statements of any material facts nor omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
Section 3.3. Representation and Warranties of Shareholders. Except as set
forth on Schedule 3.3, the Shareholders represent and warrant to Navidec as a
material inducement to Navidec to execute and perform its obligations under
this agreement, as follows:
All of the shares of Common Stock of TouchSource owned by the
Shareholders to be tendered at the closing are fully paid, duly issued and are
owned by the Shareholders listed in Schedule 2 of this agreement free and
clear of all liens, claims, encumbrances and restrictions of every kind and
said shares may be freely transferred and assigned to Navidec without the
consent or lien of any third party and without violating any agreement and
without being subject to any claim of any nature on behalf of any third party
whatsoever.
ARTICLE 4
ACTIONS AND OBLIGATIONS OF THE
ACQUIROR AND TOUCHSOURCE BEFORE AND
AFTER THE CLOSING AND SECURITIES ACT MATTERS
Section 4.1 Actions of TouchSource Pending Closing. TouchSource covenants
with Navidec that from the date hereof to and including the Closing Date:
(1) Correct as of Closing. Each representation and warranty of
TouchSource set forth in Paragraph 3.1 of this Agreement shall be true and
correct on and as of the Closing Date.
(2) Operations. TouchSource will:
(a) Conduct its affairs and business only in the ordinary course of
business;
(b) Not create or incur any material liabilities other than current
liabilities incurred in the ordinary course of business;
(c) Not create or incur, or suffer to exist, any mortgage, lien,
pledge, hypothecation, charge, encumbrance, or restriction of any kind which
is not otherwise disclosed in this Agreement;
(d) Not make any capital expenditures, or capital additions or
betterment, except as may be involved in ordinary repairs, maintenance, and
replacement;
(e) Except with regard to completion of the terms of this Agreement,
enter into any contract or commitment, except in the ordinary course of
business, pursuant to which it will be obligated to expend, or entitled to
receive, in excess of $10,000 annually;
(f) Maintain its assets and properties in good condition and repair
(taking into account their usage by TouchSource), and not sell, or otherwise
dispose of, any of its material assets or properties, except sales out of
inventory or abandonments in the ordinary course of business;
(g) Not declare or pay any dividend on, or make any other distribution
upon, or purchase, retire, or redeem, any shares of its Common Stock or set
aside any funds for any such purpose;
(h) Not issue or sell, or obligate itself to issue or sell any
additional shares of its Common Stock, whether or not such shares have been
previously authorized or issued, or issue or sell any warrants, rights, or
options to acquire any such shares, or acquire any stock of any corporation,
or any interest in any business enterprise;
(i) Not amend its Articles of Incorporation or Bylaws;
(j) Except for a $25,000 bonus payable to Xxxxxxx Xxxxxxxx declared on
June 30, 1997, not pay, or agree to pay, conditionally or otherwise, any
bonus, extra compensation, pension, or severance pay to any director,
stockholder, officer, consultant, agent, or employee under any pension plan or
otherwise, or increase the compensation paid by it at December 31, 1996 to any
officer, director, agent, consultant, or employee;
(k) Not discharge or satisfy any material lien, charge, or encumbrance,
nor pay any obligation or liability, absolute or contingent, except (i)
current liabilities shown on the TouchSource Financial Statements dated
December 31, 1996, or current liabilities incurred since said date in the
ordinary course of business, and (ii) expenses incurred in connection with the
transactions contemplated by this Agreement (including, without limitation,
reasonable attorneys' fees, accounting fees, and costs);
(l) Except with respect to this transaction, not merge or consolidate,
or obligate itself to do so, with, or into any other entity;
(m) Not enter into any transactions, or take any acts which if effected
or performed prior to the date of this Agreement, would constitute a breach of
the representations, warranties, and agreements contained herein;
(n) Not institute, settle, or agree to settle any action or proceeding
before any court or governmental body; and
(3) Access to Records. TouchSource will afford Navidec, its
representatives, counsel, agents, and employees, at all reasonable times, and
in a manner and under circumstances which will not cause unreasonable
interference with the operation of TouchSource's business, access to all of
the properties of TouchSource, and its books, files, records, insurance
policies, and other corporate books and records, for the purpose of audit,
inspection, and examination thereof, and will do, and cause TouchSource to do,
everything reasonably necessary to enable Navidec to make a complete
examination of the assets and properties of TouchSource, and the condition
thereof. No such examination, however, shall constitute a waiver or
relinquishment, on the part of Navidec, of its right to rely upon the
covenants, representations, and warranties made by TouchSource and the
Shareholders in the provisions of this Agreement.
(4) Consultation. TouchSource will use its reasonable best efforts to
keep Navidec materially apprized with respect to the operation and conduct of
TouchSource's business prior to the Closing Date.
Section 4.2 Actions of Navidec Pending Closing. Navidec covenants with
TouchSource that from the date hereof to and including the Closing Date:
(1) Correct as of Closing. Each representation and warranty of Navidec
set forth in Paragraph 3.2 of this Agreement shall be true and correct on and
as of the Closing Date.
(2) Operations. Navidec will:
(a) Conduct its affairs and business only in the ordinary course of
business;
(b) Not create or incur any liabilities other than current liabilities
incurred in the ordinary course of business;
(c) Not create or incur, or suffer to exist, any mortgage, lien,
pledge, hypothecation, charge, encumbrance, or restriction of any kind;
(d) Not make or become a party to any contract or commitment, or renew,
extend, amend, or modify any contract or commitment, except in the ordinary
course of business, except agreements related to the consummation of this
Agreement;
(e) Not make any capital expenditures or capital additions or
betterment except as may be involved in ordinary repairs, maintenance, and
replacement;
(f) Except with regard to completion of the terms of this Agreement,
not enter into any contract or commitment, except in the ordinary course of
business, pursuant to which it will be obligated to expend, or entitled to
receive, in excess of $100,000 in amount;
(g) Not declare or pay any dividend on or make any other distribution
upon, or purchase, retire or redeem, any shares of its Common Stock, or set
aside any funds for any such purpose;
(h) Except as necessary to accomplish the transactions contemplated
herein, not amend its Articles of Incorporation or Bylaws;
(i) Not discharge or satisfy any lien, charge or encumbrance, nor pay
any obligation or liability, absolute or contingent, except (i) current
liabilities shown on the Navidec Financial Statements dated March 31, 1997 or
current liabilities incurred since said date in the ordinary course of
business and (ii) expenses incurred in connection with the transactions
contemplated by this Agreement (including, without limitation, reasonable
attorneys' fees, accounting fees, and costs);
(j) Use reasonable commercial efforts to preserve its business
organization intact;
(k) Use reasonable commercial efforts to preserve the goodwill of its
suppliers, customers, and those having business relations with it;
(l) Not enter into any transactions or take any acts which if effected
or performed prior to the date of this Agreement, would constitute a breach of
the representations, warranties, and agreements contained herein; and
(m) Not institute, settle, or agree to settle any action or proceeding
before any court or governmental body.
(3) Access to Records. Navidec will afford TouchSource, its
representatives, counsel, agents, and employees, at all reasonable times and
in a manner and under circumstances which will not cause unreasonable
interference with the operation of Navidec's business, access to all of the
properties of Navidec and its books, files, records, insurance policies, and
other corporate books and records, for the purpose of audit, inspection, and
examination thereof, and will do, and cause Navidec to do, everything
reasonable necessary to enable TouchSource and the Shareholders to make a
complete examination of the assets and properties of Navidec and the condition
thereof. No such examination, however, shall constitute a waiver or
relinquishment on the part of TouchSource and the Shareholders of their right
to rely upon the covenants, representations, and warranties made by Navidec in
the provisions of this Agreement.
(4) Consultation. Navidec will endeavor to keep TouchSource apprized
with respect to the operation and conduct of Navidec's business prior to the
Closing Date.
Section 4.3 Undertakings of Navidec and TouchSource.
(1) Navidec and TouchSource each will hold, and will cause its
respective officers, directors, employees, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information concerning the parties furnished to any other party
in connection with the transactions contemplated by this Agreement, except to
the extent that such information can be shown to have been (i) previously
known on a non-confidential basis by the disclosing party; (ii) in the public
domain; or (iii) later lawfully acquired by the closing party from sources
other than as a result of the transactions contemplated herein; provided that
each party may disclose such information to its officers, directors,
employees, consultants, advisors and TouchSource Shareholders and agents in
connection with the transactions contemplated by this Agreement, so long as
such persons are informed of the confidential nature of such information and
are directed to treat such information confidentially in accordance herewith.
Each party's obligation to hold any such information in confidence shall be
satisfied if it exercises the same care with respect to such information as it
would take to preserve the confidentiality of its own similar information.
Subject to the foregoing and Section 4.3(2) below, each party shall keep
confidential the terms of this Agreement and of the transactions contemplated
hereby except to the extent such information is legally required to be
disclosed. If this Agreement is terminated, such confidence shall be
maintained and each party will, and will use its best efforts to cause its
officers, directors, employees, consultants, advisors and agents to, destroy
or deliver to each other party, upon request, all documents and other
materials, and all copies thereof, obtained by such party in connection with
this Agreement, that are subject to such confidence. The parties obligations
under this Section 4.3(1) shall terminate on the Closing Date.
(2) No press release or other public disclosure of matters related to
this Agreement or any of the transactions contemplated hereby shall be made by
Navidec or TouchSource unless the other parties shall have provided its
consent to the form and substance thereof; provided, however, that nothing
herein shall be deemed to prohibit any party hereto from making any disclosure
which its counsel deems necessary or advisable in order to fulfill such
party's disclosure obligations imposed by law.
(3) Each party shall provide the others with adequate opportunity to
conduct such reviews and examinations of the business, properties and
conditions (financial and otherwise) of the others as each party shall deem
prudent, provided that such investigations shall not interfere unreasonably
with the normal operations of the party being reviewed.
(4) The Navidec Common Stock to be issued to the Shareholders pursuant
to this Agreement will not be registered under the 1933 Act in reliance on the
exemption from registration set forth in Section 4(2) thereof and accordingly
will be issued with a restrictive legend. The Shareholders represent and
warrant by their respective signatures hereto that each (i) is receiving the
Navidec Common Stock for investment purposes and not with a view toward
further distributions; (ii) has been provided access to all material
information with respect to Navidec necessary to make an informed decision
concerning acquisition of the Navidec Common Stock; and (iii) has such
experience and sophistication that he/she is capable of evaluating the merits
and risks of an investment in the Navidec Common Stock.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.1 Conditions Precedent to Obligations of TouchSource. Except as
may be waived in writing by TouchSource, all of the obligations of TouchSource
under this Agreement are subject to the fulfillment, prior to or at the
Closing on the Closing Date, of each of the following conditions:
(1) Nasdaq Listing. Navidec shall have maintained its listing on the
Nasdaq SmallCap Market.
(2) SEC Reports Current. Navidec shall be current with respect to its
reporting obligations with the U.S. Securities Exchange Commission.
(3) Representations and Warranties True. The representations and
warranties of Navidec in Section 3.2 hereof shall be true and correct in all
material respects as of the Closing Date, subject to any changes contemplated
by this Agreement.
(4) Directors' Approval. Consummation of the transactions contemplated
herein shall have been approved by the Board of Directors of Navidec at
special meetings of the Board of Directors to be held for the purpose of
obtaining such approvals or by unanimous written consent.
(5) Third-Party Consents. On or before the Closing Date, all material
consents or approvals by any third party, if any, which are required to be
obtained by Navidec in connection with the execution, delivery or performance
of this Agreement or the consummation of the transactions contemplated herein
shall have been obtained.
(6) Compliance with Agreements. Navidec shall have performed and
complied with all agreements or conditions required by this Agreement to be
performed and complied with by it prior to or on the Closing Date.
(7) No Contracts Terminated. Navidec shall not have had any contract
or contracts, which in the aggregate would materially affect its business,
terminated prior to the Closing Date.
(8) No Damage to Assets. At the Closing Date the machinery, equipment,
inventory, or other tangible property of Navidec shall not have suffered loss
or damage on account of fire, flood, accident, act of war, civil commotion, or
any other cause or event beyond the reasonable power and control of Navidec
(whether or not similar to the foregoing), to an extent which substantially
affects the value of the properties and assets of Navidec. Loss or damage
shall be considered to affect substantially the value of said properties and
assets within the meaning of this paragraph if the book value of such
properties and assets so lost or damaged exceeds five percent (5%) in book
value of all such tangible properties and assets.
(9) Certificate of Officers. Navidec shall have delivered to
TouchSource a certificate dated the Closing Date, executed in its corporate
name by, and verified by, the oath of its President certifying to the
fulfillment of the conditions specified in this Section 5.1.
Section 5.2 Conditions Precedent to Obligations of Navidec. Except as may be
waived in writing by Navidec, all of the obligations of Navidec under this
Agreement are subject to fulfillment, prior to or at the Closing on the
Closing Date, of each of the following conditions:
(1) Representations and Warranties True. The representations and
warranties of TouchSource in Section 3.1 hereof shall be true and correct as
of the Closing Date, subject to any changes contemplated by this Agreement.
(2) Shareholder and Third-Party Consents. On or before the Closing
Date, all material consents or approvals by any third party, if any, which are
required to be obtained, including the Shareholders of TouchSource in
connection with the execution, delivery or performance of this Agreement or
the consummation of the transactions contemplated herein shall have been
obtained.
(3) Compliance With Agreement. TouchSource shall have performed and
complied with all agreements or conditions required by this Agreement to be
performed and complied with by them prior to or on the Closing Date.
(4) Certificate of Officers. TouchSource shall have delivered to
Navidec a certificate, dated the Closing Date, executed in its corporate name
by, and verified by, the oath of its President or any Vice President and its
Secretary or an Assistant Secretary, certifying to the fulfillment of the
conditions specified in this Section 5.2.
(5) No Contracts Terminated. TouchSource shall not have had any
contract or contracts, which in the aggregate would materially affect its
business, terminated prior to the Closing Date.
(6) No Damage to Assets. At the Closing Date the machinery, equipment,
inventory, or other tangible property of TouchSource shall not have suffered
loss or damage on account of fire, flood, accident, act of war, civil
commotion, or any other cause or event beyond the reasonable power and control
of TouchSource (whether or not similar to the foregoing), to an extent which
substantially affects the value of the properties and assets of TouchSource.
Loss or damage shall be considered to affect substantially the value of said
properties and assets within the meaning of this paragraph if the book value
of such properties and assets so lost or damaged exceeds five percent (5%) in
book value of all such tangible properties and assets.
(7) Employment Agreements. Xxxxxxx Xxxxxxxx shall be living on the
date of the Closing, shall not be incapacitated so as to render him
unavailable for employment by Navidec, and shall execute on or before the
Closing an Employment Agreement in the form attached hereto as Schedule
5.2(7).
ARTICLE 6
POST CLOSING COVENANTS
Section 6.1 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Shareholders of TouchSource the benefits of Rule 144
and 145 promulgated under the Act and any other rule or regulation of the SEC
that may at any time permit a Shareholder to sell securities of Navidec to the
public without registration, Navidec agrees to:
(1) make and keep public information available, as those terms are
understood and defined in Rule 144;
(2) file with the SEC in a timely manner all reports and other
documents required of Navidec under the Act and the 1934 Act; and
(3) furnish to any Shareholder, so long as the Shareholder owns any
Common Stock, forthwith upon request (i) a written statement by Navidec that
it has complied with the reporting requirements of Rule 144, the Act and the
1934 Act, (ii) a copy of the most recent annual report of Navidec and such
other reports and documents so filed by Navidec, and (iii) such other
information as may be reasonably requested in availing any Shareholder of any
rule or regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
Section 6.2 Communication Line Upgrade. Navidec shall install a T-1 or other
appropriate communication line upgrade into TouchSource's office in Lafayette,
Colorado where TouchSource shall maintain their offices until they can
conveniently be consolidated with those of Navidec. Xxxxxxx Xxxxxxxx shall be
a third party beneficiary for the purposes of this Section 6.2.
Section 6.3 Payoff of TouchSource Line of Credit. Within 15 business days of
closing, Navidec shall pay off TouchSource's line of credit Note payable to
the Bank of Boulder in an amount not to exceed $35,000 including principal and
interest. Xxxxxxx Xxxxxxxx shall be a third party beneficiary for the
purposes of this Section 6.3.
Section 6.4 Access to TouchSource Books and Records. After the Closing and
for a period of seven (7) years and sixty (60) days from April 15, 1998,
Navidec shall afford each of the Shareholders, and their respective
representatives, counsel or tax advisors, at all reasonable times, and in a
manner and under circumstances which will not cause unreasonable interference
with the operations of Navidec's business, access to any and all of the books,
records and files of TouchSource attributable to accounting or tax reporting
periods prior to the Effective Date (or for any period thereafter for which
any Shareholder is required to report any income, gain, loss, deduction or
credit related to such Shareholder's ownership interest in TouchSource under
Subchapter S of the Internal Revenue Code of 1986, as amended, or similar
provisions of Colorado law) in connection with any audit or assessment by any
tax authority of either TouchSource or any Shareholder with respect to
TouchSource's or such Shareholder's reporting of any item of income, gain,
loss, deduction or credit with respect to TouchSource or its business. Each
Shareholder shall have the right to make copies of any such books, records and
files (or any portion thereof) at their own cost and expense. If necessary
for proof or to comply with any service of process in connection with any
challenge to such audit or assessment, Navidec agrees to make the originals of
any such book, record or file available for such use, and Navidec agrees, at
no cost to Shareholders, to maintain all such books, records and files in a
place of safekeeping in a manner similar to that maintained for its own books,
records and files. Further, Navidec agrees not to destroy any of such books,
records or files until after the period of access set forth in this Section
6.4 shall have expired.
ARTICLE 7
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES:
All statements of fact contained herein, in any certificate or schedule
delivered by or on behalf of TouchSource or Navidec pursuant to the terms
hereof, shall be deemed representations and warranties made by TouchSource and
Navidec, respectively, to each other under this Agreement. The
representations and warranties of the parties shall not survive the Closing.
In the event a party shall discover a breach of any warranty or representation
by the other party (or parties) prior to the Closing, such party's only remedy
with respect thereto shall be to terminate this Agreement in which case no
party shall have any liability or obligation to any other party by reason of
such termination. If a party shall discover any breach of any warranty or
representation by the other party (or parties) after the Closing Date, such
party shall not have any remedy or claim against the party who breached such
warranty or representation unless such warranty and representation shall have
survived the Closing or except as may be provided by applicable securities
laws.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Amendment. This Agreement may be amended or modified at any time
and in all respects by an instrument in writing executed on behalf of each of
the parties hereto.
Section 8.2 Assignment. Neither this Agreement nor any right created hereby
shall be assignable by TouchSource (or their successors in interest) or
Navidec without the prior written consent of the others, except by the laws of
succession. Nothing in this Agreement, express or implied, is intended to
confer upon any person, other than the parties hereto and their respective
successors, assigns, heirs, executors, administrators, or personal
representations, any rights or remedies under or by reason of this Agreement.
Section 8.3 Notices. Any notice, communication, request, reply, or advice,
hereinafter severally and collectively called "notice," in this Agreement
provided or permitted to be given, made, or accepted by either party to the
other must be in writing and may be given or be served by depositing the same
in the United States mail, addressed to the party to be notified, postage
prepaid and registered or certified with return receipt requested, by
delivering the same in person to an officer of such party, or by sending the
same via facsimile transmission with the original deposited in the United
States mail in the manner herein above described. Notice given in the manner
herein above described shall be effective only if an when received by the
parties to be notified. For purposes of notice the addresses of the parties
shall, until changed as hereinafter provided, be as follows:
(1) If to Navidec:
Xxxxx Xxxxxx, President
Navidec, Inc.
00 Xxxxxxxxx Xxxxx Xxxx
Xxxxx X-000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxx Xxxxx & Xxxxx Professional Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
(2) If to TouchSource:
Xxxxxxx Xxxxxxxx, President
TouchSource, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xxxxx Xxxxx, Esq.
Xxxx and XxXxxxx, P.C.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
or at such other addresses as any party may have advised the others
in writing.
Section 8.5 Paragraph and Other Headings. Paragraph and other headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 8.6 Severability. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect other provisions of this
Agreement, but this Agreement shall be constructed as if such invalid,
illegal, or unenforceable provisions had never been contained therein.
Section 8.7 Governing Law. This Agreement shall be construed under and in
accordance with the laws of the State of Colorado.
Section 8.8 Attorney Fees. If any action at law or inequity, including an
action declaratory relief, is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover
reasonable attorney fees from the other party, which fees may be set by the
court in the trial of such on or may be enforced in a separate action brought
for that purpose, and which fees shall be in addition to any other relief
which may be awarded.
Section 8.9 Counterparts. This Agreement and all other copies of this
Agreement insofar as they relate to the rights, duties, and remedies of
parties, shall be deemed to be one agreement. This Agreement may be executed
concurrently in one or more counterparts by facsimile, each which shall be
deemed an original, but all which together shall constitute one and the same
instrument.
Section 8.10 Integrated Agreement. This Agreement constitutes the entire
agreement between the parties hereto, and there are no agreements,
understandings, restrictions, warranties, or representations between the
parties other than those set forth herein or herein provided for.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, this Agreement and Plan of Acquisition has been
executed the day and year set forth above.
NAVIDEC, INC.
By:__/s/Xxxxx Armijo______________
Xxxxx Xxxxxx, President
Attest:____________________________________
Its:____________________________________
TOUCHSOURCE, INC.
By:____/s/ Xxxxxxx Franklin____________
Xxxxxxx Xxxxxxxx, President
Attest:____________________________________
Its:____________________________________
TOUCHSOURCE, INC. SHAREHOLDERS
__/s/ Xxxxxxx Franklin_________________________
Xxxxxxx Xxxxxxxx
__/s/ Xxxxx Franklin___________________________
Xxxxx Xxxxxxxx
__/s/ Xxxxxxxxx Stakenborg_____________________
Xxxxxxxxx Xxxxxxxxxx
__/s/ Xxx Ives_________________________________
Xx. Xxx Xxxx
__/s/ Xxxxxxxx Ives____________________________
Xx. Xxxxxxxx Xxxx
__/s/ Xxxxxx Christiansen_______________________
Xxxxxx Xxxxxxxxxxxx
__/s/ Sahl Kharaka_____________________________
Xx. Xxxx Kharaka
__/s/ Xxxxxxx Prosser__________________________
Xx. Xxxxxxx Xxxxxxx
__/s/ Xxxxx Schneider__________________________
Xx. Xxxxx Xxxxxxxxx
__/s/_Erin _Huffaker_________________________
Xxxx Xxxxxxxx
__/s/_Alan Greene___________________________
Xxxx Xxxxxx
