AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ELTRAX SYSTEMS, INC.,
FOUR CORNERS ACQUIRING CORP.,
FOUR CORNERS TECHNOLOGY, INC.,
XXXXXX X. XXXXXX,
XXXX X. XXXXXXXXXXXX
AND
XXXXX XXXXX
JULY 1, 1997
TABLE OF CONTENTS
PAGE
ARTICLE 1. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. The Merger.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Surviving Corporation. . . . . . . . . . . . . . . . . . . . . . . . 1
1.3. Merger Consideration.. . . . . . . . . . . . . . . . . . . . . . . . 1
1.4. Conversion of Shares.. . . . . . . . . . . . . . . . . . . . . . . . 2
1.5. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6. Articles of Incorporation. . . . . . . . . . . . . . . . . . . . . . 2
1.7. Bylaws.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8. Directors and Officers.. . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF FOUR CORNERS AND THE
SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1. Corporate Organization.. . . . . . . . . . . . . . . . . . . . . . . 3
2.2. Capitalization.. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4. Non-Contravention. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5. Financial Statements.. . . . . . . . . . . . . . . . . . . . . . . . 4
2.6. Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7. Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8. Investigations; Litigation.. . . . . . . . . . . . . . . . . . . . . 4
2.9. Absence of Certain Changes.. . . . . . . . . . . . . . . . . . . . . 5
2.10. Title to Property; Condition. . . . . . . . . . . . . . . . . . . . 5
2.11. Tax Returns.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.12. Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.13. Benefit Plans.. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.14. Contracts and Commitments; No Default.. . . . . . . . . . . . . . . 6
2.15. Labor Matters.. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.16. Intellectual Property Rights. . . . . . . . . . . . . . . . . . . . 7
2.17. Hazardous Substances and Hazardous Wastes.. . . . . . . . . . . . . 7
2.18. Brokers.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.19. Shareholders' Representations.. . . . . . . . . . . . . . . . . . . 8
2.20. Accuracy of Information.. . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF PARENT . . . . . . . . . . . . 9
3.1. Organization.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2. Authority and Validity of Agreement. . . . . . . . . . . . . . . . . 9
3.3. Consents and Approvals.. . . . . . . . . . . . . . . . . . . . . . . 10
3.4. Capitalization.. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5. Non-Contravention. . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6. Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 4. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1. Four Corners' Agreements as to Specified Matters.. . . . . . . . . . 10
4.2. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3. Further Assurances; Cooperation; Notification. . . . . . . . . . . . 11
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4.4. Registration Rights. . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 5. CONDITIONS TO OBLIGATION OF PARENT AND ACQUIRING SUB . . . . . . 11
ARTICLE 6. CONDITIONS TO THE OBLIGATIONS OF FOUR CORNERS AND
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 7. TERMINATION AND ABANDONMENT. . . . . . . . . . . . . . . . . . . 12
7.1. Methods of Termination.. . . . . . . . . . . . . . . . . . . . . . . 12
7.2. Procedure Upon Termination.. . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 8. SURVIVAL AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . 13
8.1. Survival.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.2. Indemnification by Parent. . . . . . . . . . . . . . . . . . . . . . 13
8.3. Indemnification by Shareholders. . . . . . . . . . . . . . . . . . . 13
8.4. Limitation on Indemnification. . . . . . . . . . . . . . . . . . . . 14
8.5. Indemnification De Minimis Threshold.. . . . . . . . . . . . . . . . 14
8.6. Claims for Indemnification.. . . . . . . . . . . . . . . . . . . . . 14
8.7. Shareholder Payment of Indemnification Claims of Parent. . . . . . . 15
ARTICLE 9. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 15
9.1. Expenses.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.2. Amendment and Modification.. . . . . . . . . . . . . . . . . . . . . 15
9.3. Waiver of Compliance; Consents.. . . . . . . . . . . . . . . . . . . 15
9.4. No Third Party Beneficiaries.. . . . . . . . . . . . . . . . . . . . 16
9.5. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.6. Assignment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.7. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.8. Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.9. Headings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.10. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.11. Injunctive Relief.. . . . . . . . . . . . . . . . . . . . . . . . . 18
9.12. Arbitration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.13. Attorneys Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.14. Knowledge of Four Corners and Shareholders. . . . . . . . . . . . . 18
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 1, 1997 (the
"Agreement"), is by and among ELTRAX SYSTEMS, INC., a Minnesota corporation
(the "Parent"), FOUR CORNERS ACQUIRING CORP., an Arizona corporation and a
wholly owned subsidiary of Parent ("Acquiring Sub"), FOUR CORNERS TECHNOLOGY,
INC., an Arizona corporation ("Four Corners"), and Xxxxxx X. Xxxxxx, Xxxx X.
Xxxxxxxxxxxx and Xxxxx Xxxxx, the shareholders of Four Corners (collectively,
the "Shareholders").
RECITALS
A. The Boards of Directors of Parent, Acquiring Sub and Four Corners
each have approved the merger of Acquiring Sub with and into Four Corners,
upon the terms and subject to the conditions set forth herein (the "Merger")
and deem it advisable and in the best interests of their respective
Shareholders that the foregoing merger be consummated; and
B. For federal income tax purposes, it is intended that the Merger
will qualify as a reorganization within the meaning of Section 368(a)(2)(E)
of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein, the parties hereto agree as
follows:
ARTICLE
1.
THE MERGER
1.1 THE MERGER.
Simultaneously with the Closing (defined below), the parties hereto will
effect the Merger by filing the required number of originals of the Articles
of Merger in the form of Exhibit 1.1. The Merger will become effective at
the time specified in the Articles of Merger (the "Effective Time").
1.2. SURVIVING CORPORATION.
At the Effective Time, Acquiring Sub will be merged with and into Four
Corners, in accordance with the applicable provisions of the Arizona Business
Corporation Act (the "ABCA"), whereupon the separate existence of Acquiring
Sub will cease and Four Corners will continue as the surviving corporation
(the "Surviving Corporation"). The identity, existence, rights, privileges,
powers, franchises, properties and assets of Four Corners shall continue
unaffected and unimpaired by the Merger, and all of the rights, privileges,
powers, franchises, properties, and assets of Acquiring Sub shall be vested
in the Surviving Corporation.
1.3. MERGER CONSIDERATION.
The aggregate consideration payable to the shareholders of Four Corners
(the "Shareholders") will be Three Hundred Fifty Thousand (350,000) shares of
Parent common stock, par value $.01 per share (the "Merger Consideration").
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1.4 CONVERSION OF SHARES.
At the Effective Time:
(a) Each share of Four Corners common stock outstanding
immediately prior thereto will, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive, one and one-sixth (1.16666) shares of Parent common stock (in the
aggregate, the "Parent Common Stock"), adjusted to the nearest whole
number, as set forth below:
Shareholder Merger Consideration
----------- --------------------
Xxxxxx X. Xxxxxx 145,833 shares of Parent Common Stock
Xxxx X. Xxxxxxxxxxxx 145,833 shares of Parent Common Stock
Xxxxx Xxxxx 58,334 shares of Parent Common Stock
(b) Each share of common stock of Acquiring Sub, no par value,
issued and outstanding immediately prior thereto will, by virtue of the
Merger and without any action on the part of the holder thereof, be
converted into one share of the common stock of the Surviving Corporation,
no par value.
(c) The Shareholders will cease to have any rights as Shareholders
of Four Corners, except such rights, if any, as they may have pursuant to
the ABCA.
1.5. CLOSING.
The closing of the Merger (the "Closing") will be held on or prior to
July 1, 1997, as determined by Parent, or on such later date as Parent may
decide (the "Closing Date"), but not later than July 15, 1997 (the "Termination
Date"). The Closing will be held at the offices of Four Corners, 0000 X. Xxxx
Xx., Xxxxxxxxxx, Xxxxxxx 00000, or such other location as determined by Parent.
1.6. ARTICLES OF INCORPORATION.
The articles of incorporation of Four Corners as in effect immediately
prior to the Effective Time will be the articles of incorporation of the
Surviving Corporation until further amended in accordance with applicable law.
1.7. BYLAWS.
The bylaws of Four Corners as in effect immediately prior to the Effective
Time will be the bylaws of the Surviving Corporation until amended or repealed
in accordance with the articles of incorporation of the Surviving Corporation
and applicable law.
1.8. DIRECTORS AND OFFICERS.
Immediately after the Effective Time of the Merger, the directors and
officers of the Surviving Corporation will be as set forth below, and will serve
in such capacities until their respective successors are duly elected and
qualified:
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DIRECTORS OFFICERS
Clunet X. Xxxxx Xxxxxx X. Xxxxxx - President
Clunet X. Xxxxx - Secretary
Xxxxxxxx X. Ryett - Treasurer
ARTICLE
2.
REPRESENTATIONS AND WARRANTIES
OF FOUR CORNERS AND THE SHAREHOLDERS
Four Corners and each of the Shareholders, jointly and severally,
represent and warrant to Parent and to Acquiring Sub that the following
statements are true, complete and correct as of the date hereof and shall be
true, complete and correct as of the Closing Date:
2.1. CORPORATE ORGANIZATION.
Four Corners is a corporation duly organized, validly existing and in
good standing under the laws of Arizona, has full corporate power and
authority to carry on its business as it is now being conducted and to own,
lease and operate its properties and assets. Four Corners has heretofore
delivered to Parent complete and correct copies of its articles or
certificate of incorporation and bylaws, as presently in effect. Except as
set forth on Schedule 2.1, Four Corners is duly qualified or licensed to do
business as a foreign corporation and is in good standing in every
jurisdiction in which the character or location of the properties and assets
owned, leased or operated by it or the nature of the business conducted by it
requires such qualification or licensing, except where the failure to be so
qualified, licensed or in good standing in such other jurisdiction could not,
individually or in the aggregate, have a material adverse effect on the
business of Four Corners taken as a whole. Four Corners does not own or
control any interest in any corporation, partnership, joint venture or other
business association or entity.
2.2. CAPITALIZATION.
The authorized capital stock of Four Corners consists of 100,000 shares
of preferred non-voting stock, no par value, none of which is outstanding,
and 1,000,000 shares of common voting stock, no par value. A total of
300,000 shares of common voting stock will be issued and outstanding on or
prior to the Closing. All issued and outstanding shares of capital stock of
Four Corners are (or will be) duly authorized, validly issued, fully paid and
nonassessable and have not been issued in violation of, any preemptive
rights. There are no outstanding options, warrants, conversion privileges or
other rights to purchase or acquire any shares of capital stock or other
equity securities of Four Corners or any outstanding securities that are
convertible into or exchangeable for such shares, securities or rights.
There are no contracts, commitments, understandings, arrangements or
restrictions by which Four Corners or any of its Shareholders are bound to
issue or acquire any additional shares of its capital stock or other equity
securities or any options, warrants, conversion privileges or other rights to
purchase or acquire any capital stock or other equity securities of Four
Corners or any securities convertible into or exchangeable for such shares,
securities or rights.
2.3. AUTHORIZATION.
The Shareholders and the Board of Directors of Four Corners have taken
all action required by law, the articles or certificate of incorporation and
bylaws of Four Corners and otherwise to authorize the
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execution, delivery and performance of this Agreement and the consummation
of the transactions described herein (the "Transactions"). No other consent
or approval from any party is necessary to validly complete the Transactions.
This Agreement has been duly and validly executed and delivered by the
Shareholders and Four Corners, and is the valid and binding legal obligation
of the Shareholders and Four Corners, enforceable against each of them in
accordance with its terms, subject to the affect of applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and other laws
affecting the rights of creditors generally (the "Enforceability
Exceptions"), or the availability of specific performance, injunctive relief
and other equitable remedies and to general principles of equity (regardless
of whether such principles are considered in a proceeding in equity or at
law).
2.4. NON-CONTRAVENTION.
Except as set forth on Schedule 2.4, neither the execution, delivery and
performance of this Agreement nor the consummation of the transactions
contemplated herein will: (i) violate or be in conflict with any provision
of the articles or certificate of incorporation or bylaws of Four Corners; or
(ii) be in conflict with, or constitute a default under, any instrument,
agreement or obligation to which Four Corners is a party.
2.5. FINANCIAL STATEMENTS.
Four Corners has furnished to Parent the unaudited balance sheet and
statement of earnings for Four Corners as of and for the fiscal years ended
December 31, 1995 and December 31, 1996 and for the 5 month period ended May
31, 1997 (the "Latest Balance Sheet") (collectively, the "Financial
Statements"). Except as set forth on Schedule 2.5, the Financial Statements:
(i) are in accordance with generally accepted accounting principles; (ii)
fairly present the financial position and the results of operations of Four
Corners; and (iii) accurately state the various account balances, as to the
periods covered.
2.6. ACCOUNTS RECEIVABLE.
Except as set forth on Schedule 2.6: (i) the accounts receivable which
are reflected in the Latest Balance Sheet or which arose subsequent thereto
were validly obtained in the ordinary course of business of Four Corners; and
(ii) except to the extent of applicable reserves shown in the Latest Balance
Sheet, all of the receivables owing to Four Corners constitute valid and
enforceable claims arising from bona fide arms-length transactions, and Four
Corners has not received any written or oral claims, defenses or refusals to
pay, or granted any rights of set-off with respect to any receivables.
2.7. LIABILITIES.
Except as set forth on Schedule 2.7, Four Corners has no liability or
obligation of any nature that is required to be set forth in accordance with
generally accepted accounting principles, whether asserted or unasserted,
accrued, absolute or contingent or otherwise, and whether due or to become
due, that is not reflected or reserved against on the Latest Balance Sheet,
except those that may have been incurred after the date of the Latest Balance
Sheet in the ordinary course of business and consistent with past practices.
2.8. INVESTIGATIONS; LITIGATION.
Except as described on Schedule 2.8, there are no claims or actions by
anyone against or affecting Four Corners that are pending or, to the
knowledge of Four Corners or any of the Shareholders,
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have been threatened. To the knowledge of Four Corners or any of the
Shareholders, there is no basis for any such claim or action.
2.9. ABSENCE OF CERTAIN CHANGES.
Except as set forth on Schedule 2.9 since May 31, 1997, Four Corners has
not suffered any adverse change in its condition (financial or otherwise),
working capital, assets, properties, liabilities, obligations, reserves or
businesses, or experienced any event or failed to take any action which could
reasonably be expected to have a material adverse effect on the business of
Four Corners.
2.10. TITLE TO PROPERTY; CONDITION.
Except as set forth on Schedule 2.10:
(a) Four Corners has good and marketable title in and to all of
the assets reflected in the Latest Balance Sheet and all of the assets
purchased or otherwise acquired since May 31, 1997 (except for such assets
as may have been sold or otherwise disposed of in the ordinary course of
business), subject to no lien of any kind or nature;
(b) Four Corners owns no real property;
(c) All inventory of Four Corners consists of a quality and
quantity usable and salable in the ordinary course of business.
2.11. TAX RETURNS.
Proper and accurate amounts have been and will be withheld by Four Corners
from its employees and properly deposited in appropriate accounts, for all
periods up to and through the Closing Date in full and complete compliance with
the tax withholding, deposit and payment provisions of applicable federal, state
and local laws. Four Corners has filed all federal, state and local, as well as
other returns and reports that were required to be filed for all periods for
which returns were due up to and through the Closing Date, and Four Corners has
made timely payments of all governmental taxes, levies, duties, license and
registration fees, charges or withholdings of any nature whatsoever ("Taxes")
shown to be due and payable in respect of such returns and reports. To the
knowledge of Four Corners and the Shareholders, all such returns are true,
correct and complete in all material respects. Except as disclosed on Schedule
2.11, Four Corners does not owe any deficiency for any Taxes, and no tax returns
are presently under audit or examination by any federal, state or local tax
authority, and no adjustments have been proposed or asserted by the Internal
Revenue Service or any other agency in respect of any liability for Taxes
arising out of or relating to such returns. Four Corners has never filed an
election to be taxed as an S corporation under the Code.
2.12. INSURANCE.
Schedule 2.12 contains an accurate and complete list of all policies of
fire and other casualty, general liability, theft, life, workers' compensation,
health, directors and officers liability, business interruption and other forms
of insurance owned or held by Four Corners, specifying the insurer, the policy
number, the term of the coverage and the same information as to predecessor
policies for the previous five years. All present policies are in full force
and effect and all premiums that are due as of the date hereof and as of the
Closing Date with respect thereto have been paid. Neither Four Corners nor
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any of the Shareholders has been denied any form of insurance and no policy of
insurance has been revoked or rescinded during the past three years, except as
described under Schedule 2.12.
2.13. BENEFIT PLANS.
Except as disclosed on Schedule 2.13, Four Corners does not maintain, is
not a party to, bound by or a contributor to, or required to contribute to,
(a) any employee pension benefit plans whether or not qualified under Section
401(a) of the Code, (b) any employee welfare benefit plans, or (c) any other
compensation, fringe or welfare plan or program, policy, understanding or
arrangement providing plan benefits or welfare, with respect to its employees
or employees of others (collectively, the "Employee Plans"). As used in this
Section, the terms "employee pension benefit plan" and "employee welfare
benefit plan" will have the respective meanings assigned to such terms in
Section 3 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Each Employee Plan described on Schedule 2.13 meets all
applicable requirements of ERISA, and has been operated and administered in
accordance with the Code, ERISA and the plan document. To the knowledge of
Four Corners and the Shareholders, all required government filings and
disclosures have been timely and fully made, are true, correct and complete
in all material respects, and no prohibited transaction or other act or
omission which could result in the imposition of an excise tax has occurred.
2.14. CONTRACTS AND COMMITMENTS; NO DEFAULT.
Schedule 2.14 sets forth a complete and accurate list of all agreements
or other binding commitments or proposals involving a possible liability or
obligation of Four Corners or the other party of at least $25,000 or which
are not terminable without penalty at the option of Four Corners upon no more
than 30 days' notice (the "Contracts"). The aggregate amount of the
liabilities or obligations of Four Corners or the other parties under
agreements or other binding commitments or proposals not listed on Schedule
2.14 does not exceed $100,000. Four Corners has made available to Parent true
and accurate copies of the Contracts. To the knowledge of Four Corners and
the Shareholders, the Contracts are valid, binding and in full force and
effect, and are enforceable in accordance with their respective terms
(subject to the Enforceability Exceptions). Four Corners is not in default
under any of the Contracts, nor has any notice of default been received by
Four Corners. To the knowledge of Four Corners and the Shareholders, all
other parties to the Contracts have performed or are performing all
obligations required to be performed by them and are not in default
thereunder.
2.15. LABOR MATTERS.
Schedule 2.15 sets forth a list of all employees of Four Corners and
includes their position, current salary, and 1996 wage information for each
person. Except as set forth on Schedule 2.15 and except as are not material
to the business of Four Corners: (i) To the knowledge of Four Corners and
the Shareholders, Four Corners is and has at all times been in compliance
with all applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, including without
limitation any such laws respecting employment discrimination and
occupational safety and health requirements, and has not and is not engaged
in any unfair labor practice; (ii) there is no unfair labor practice
complaint against either Four Corners or any of the Shareholders pending or,
to the knowledge of Four Corners and each of the Shareholders, threatened
before the National Labor Relations Board or any other comparable government
authority; (iii) there is no labor strike, dispute, slowdown or stoppage
actually pending or, to the knowledge of Four Corners and each of the
Shareholders, threatened against or directly affecting Four Corners; (iv) no
collective bargaining agreement is binding and in force against either Four
Corners or any of the Shareholders or currently being negotiated by either
Four Corners or any of the Shareholders; (v) Four Corners is not delinquent
in payments to any person for any
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wages, salaries, commissions, bonuses or other direct or indirect
compensation for any services performed by them or amounts required to be
reimbursed to such persons, including without limitation any amounts due
under any pension plan, welfare plan or compensation plan; and (vi) within
the 12 month period prior to the date hereof there has not been any
expression of intention to Four Corners by any officer or key employee to
terminate such employment.
2.16. INTELLECTUAL PROPERTY RIGHTS.
Except as disclosed on Schedule 2.16, Four Corners does not own or use
any patents, trade names, service names, trademarks, service marks,
copyrights, or any other intellectual or intangible property or applications
therefor and has not conducted business under any corporate, trade or
fictitious name other than its current corporate name. There are no pending
or, to the knowledge of Four Corners and the Shareholders, threatened claims
of infringement upon the rights to any intellectual or intangible property of
others or, except as set forth on Schedule 2.16, any agreements or
undertakings with respect to any such rights.
2.17. HAZARDOUS SUBSTANCES AND HAZARDOUS WASTES.
Except as set forth on Schedule 2.17:
(a) To the knowledge of Four Corners and the Shareholders, there
is not now, nor has there ever been, any disposal, release or threatened
release of Hazardous Materials (as defined below) on, from or under
properties now or ever owned or leased by or to Four Corners (the
"Properties"). There has not been generated by or on behalf of Four
Corners any Hazardous Material. No Hazardous Material has been disposed of
or allowed to be disposed of by Four Corners, or to the knowledge of Four
Corners and the Shareholders by any other party, on or off any of the
Properties during the period that Four Corners owned or leased the property
which may give rise to a clean-up responsibility, personal injury liability
or property damage claim against Four Corners or Four Corners being named a
potentially responsible party for any such clean-up costs, personal
injuries or property damage or create any cause of action by any third
party against Four Corners. For purposes of this subsection, the terms
"disposal," "release," and "threatened release" shall have the definitions
assigned thereto by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and the term "Hazardous Material"
means any hazardous or toxic substance, material or waste or pollutants,
contaminants or asbestos containing material which is or becomes regulated
by any Authority in any jurisdiction in which any of the Properties is
located. The term "Hazardous Material" includes without limitation any
material or substance which is (i) defined as a "hazardous waste" or a
"hazardous substance" under applicable Law, (ii) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution Control
Act, (iii) defined as a "hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, or (iv) defined as a
"hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.
(b) To the knowledge of Four Corners and the Shareholders, none
of the Properties is (or, with respect to past Properties and Properties of
former subsidiaries, was at the time of disposition) in violation of any
law (with respect to past Properties and Properties of former subsidiaries,
laws in effect at the time of disposition) relating to industrial hygiene
or to the environmental conditions on, under or about such Properties,
including without limitation soil and ground water condition and there are
(or at the time of disposition were) no underground tanks or related
piping, conduits or related structures. During the period that Four
Corners
7
owned or leased the Properties, to the knowledge of Four Corners and the
Shareholders, neither Four Corners nor any third party used, generated,
manufactured or stored on, under or about such Properties or transported
to or from such Properties any Hazardous Materials and there has been no
litigation brought or threatened against Four Corners or any settlements
reached by Four Corners with any third party or third parties alleging the
presence, disposal, release or threatened release of any Hazardous
Materials on, from or under any of such Properties.
2.18. BROKERS.
Neither the Shareholders nor Four Corners or any of its directors, officers
or employees has employed any broker, finder, or financial advisor or incurred
any liability for any brokerage fee or commission, finder's fee or financial
advisory fee, in connection with the transactions contemplated hereby, nor is
there any basis known to either Four Corners or any of the Shareholders for any
such fee or commission to be claimed by any person or entity.
2.19. SHAREHOLDERS' REPRESENTATIONS.
In addition to the foregoing representations of each of the Shareholders,
each of the Shareholders individually represents and warrants to Parent as
follows:
(a) The Shareholders are acquiring the shares of Parent's Common
Stock pursuant to the Merger for such Shareholders' sole account (and such
Shareholders will be the sole beneficial owners thereof) for the purpose of
investment and not with a view to distribution thereof within the meaning
of the Securities Act of 1933, as amended and the rules and regulations
thereunder (the "Securities Act"), nor with any present intention of
distribution or selling such shares of Parent Common Stock in connection
with any such distribution, and such Shareholders understand that such
shares have not been registered under the Securities Act or any applicable
state securities law and therefore cannot be resold unless they are
registered under the Securities Act and any applicable state securities
laws or unless an exemption from registration is available.
(b) The Shareholders have received the reports, proxy statements
and registration statements listed on Schedule 2.19 (the "Eltrax Reports"),
and have had sufficient time to review and consider such Eltrax Reports.
The Shareholders have been afforded an opportunity to ask questions of and
receive answers from representatives of Parent concerning the terms and
conditions of the Transactions and to obtain any additional information as
such Shareholders have requested in writing to verify the accuracy of the
Eltrax Reports and copies of any exhibits identified in such documents that
such Shareholders have requested.
(c) The Shareholders have accurately, truthfully and completely
executed the Investor Questionnaire, in the form of Exhibit 2.19.
(d) The Shareholders have consented to the following legend on
the certificate or certificates for shares of Parent Common Stock to be
issued to each such Shareholder in connection with the Merger:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES
LAWS AND MAY BE SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED ONLY IF A REGISTRATION
8
STATEMENT WITH RESPECT TO SUCH TRANSACTION IS IN EFFECT
PURSUANT TO THE PROVISIONS OF SUCH LAWS OR IF, IN THE
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER,
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
LAWS IS AVAILABLE.
2.20. ACCURACY OF INFORMATION.
Neither this Agreement, the Exhibits and Schedules hereto, the Financial
Statements, nor any other document delivered in connection herewith and
expressly referred to herein, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein or herein not misleading. All information and documents
provided prior to the date of this Agreement, and all information and
documents subsequently provided to Parent or its representatives by or on
behalf of Four Corners or the Shareholders are or contain, or will be or will
contain as to subsequently provided information or documents, true, accurate
and complete information in all material respects with respect to the subject
matter thereof and are, or will be as to subsequently provided information or
documents, responsive in all material respects to any specific request made
by or on behalf of Parent or its representatives. Four Corners and the
Shareholders promptly shall notify Parent of any change or event which could
adversely affect the assets, operations, business, condition or prospects of
Four Corners.
ARTICLE
3.
REPRESENTATIONS AND WARRANTIES
OF PARENT
The Parent represents and warrants to the Shareholders that the
following statements are true, complete and correct as of the date hereof and
shall be true, complete and correct as of the Closing Date:
3.1. ORGANIZATION.
Each of Parent and Acquiring Sub is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation and each has all requisite corporate power and authority to
own, lease and operate its respective properties and to carry on its business
as it is now being conducted. Acquiring Sub is a recently-formed Arizona
corporation that has not conducted, and will not conduct prior to the
Closing, any activities other than those incident to its formation and in
connection with the consummation of the Merger. Each of Parent and Acquiring
Sub is duly qualified and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary and
where the failure to qualify could have a material adverse effect on the
business, results of operations or financial condition of the Parent and its
subsidiaries taken as a whole.
3.2. AUTHORITY AND VALIDITY OF AGREEMENT.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Boards of Directors of Parent and Acquiring Sub and by Parent as
the sole shareholder of Acquiring Sub, and no other corporate proceedings on the
part of Parent or Acquiring Sub are necessary to authorize this Agreement or to
9
consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed by each of Parent and Acquiring Sub and constitutes
valid and binding obligations of Parent and Acquiring Sub, enforceable
against each of them in accordance with their terms, subject to the
Enforceability Exceptions.
3.3. CONSENTS AND APPROVALS.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not, except for any applicable
requirements of the Securities Act and state securities laws, and the filing
and recordation of appropriate merger documents as required by the ABCA,
require any filing with or permit, consent or approval of any authority.
3.4. CAPITALIZATION.
The authorized capital stock of the Parent consists of 50,000,000 shares
of Parent Common Stock and 970,000 shares of undesignated preferred stock, of
which there were 7,812,063 shares of Parent Common Stock issued and
outstanding on June 2. All shares of Parent Common Stock to be issued and
delivered in the Merger will be, at the time of issuance and delivery,
validly issued, fully paid, nonassessable and free of preemptive rights.
3.5. NON-CONTRAVENTION.
Neither the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated herein will: (i) violate
or be in conflict with any provision of the articles or certificate of
incorporation or bylaws of the Parent or Acquiring Sub; or (ii) be in
conflict with, or constitute a default under, any instrument or other
agreement or obligation to which the Parent or Acquiring Sub is a party.
3.6. ACCURACY OF INFORMATION.
Neither this Agreement, the Exhibits and Schedules hereto, the Eltrax
Reports, nor any other document delivered in connection herewith and
expressly referred to herein, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein or herein not misleading. All information and documents
provided prior to the date of this Agreement, and all information and
documents subsequently provided to the Shareholders or their representatives
by or on behalf of Parent are or contain, or will be or will contain as to
subsequently provided information or documents, true, accurate and complete
information in all material respects with respect to the subject matter
thereof and are, or will be as to subsequently provided information or
documents, responsive in all material respects to any specific request made
by Shareholders or their representatives. Parent promptly shall notify the
Shareholders of any change or event which could adversely affect the assets,
operations, business, condition or prospects of Parent.
ARTICLE
4.
COVENANTS
4.1. FOUR CORNERS' AGREEMENTS AS TO SPECIFIED MATTERS.
Except as agreed to in writing by Parent, from the date hereof until the
Closing Date, Four Corners will operate its business only in the ordinary
course consistent with past practice. Four Corners
10
will use and the Shareholders will cause it to use its best efforts to
preserve intact its business organizations, existing business relationships,
goodwill and going concern value.
4.2. CONFIDENTIALITY.
The parties hereto will not use, or permit the use of, any of the
information relating to any other party hereto furnished to it in connection
with the transactions contemplated herein ("Information") in a manner or for
a purpose detrimental to such other party or otherwise than in connection
with the transaction, and that they will not disclose, divulge, provide or
make accessible (collectively, "Disclose"), or permit the Disclosure of, any
of the Information to any person or entity, other than their responsible
directors, officers, employees, investment advisors, accountants, counsel and
other authorized representatives and agents, except as may be required by
judicial or administrative process or, in the opinion of such party's regular
counsel, by other requirements of Law, unless the disclosing party first
obtains the prior written consent of the other parties hereto. The parties
hereto also will promptly return to the party from whom originally received
all original and duplicate copies of written materials containing Information
should the transactions contemplated herein not occur. This Section 4.2
survives Closing and any termination of this Agreement.
4.3. FURTHER ASSURANCES; COOPERATION; NOTIFICATION.
(a) Each party hereto will, before, at and after Closing,
execute and deliver such instruments and take such other actions as the
other party or parties, as the case may be, may reasonably require in order
to carry out the intent of this Agreement, including, but not limited to,
any securities filings.
(b) At all times from the date hereof until the Closing, each
party will promptly notify the other in writing of the occurrence of any
event which it reasonably believes will or may result in a failure by such
party to satisfy the conditions specified in Article 5 and Article 6
hereof.
4.4. REGISTRATION RIGHTS.
Parent agrees to provide the Shareholders with the registration rights with
respect to Parent Common Stock they receive as Merger Consideration as set forth
on Exhibit 4.4 hereto.
ARTICLE
5.
CONDITIONS TO OBLIGATION OF PARENT AND ACQUIRING SUB
The following are conditions to the obligations of the Parent and Acquiring
Sub to close the Transactions:
(a) The truth of the representations and warranties of Four
Corners and the Shareholders contained in this Agreement;
(b) The full performance of all obligations of each of Four
Corners and the Shareholders contained in this Agreement;
11
(c) Parent's receipt of the opinion of Xxxxxxxx & Xxxxxx Xxxx,
Ltd., counsel for Four Corners, dated on the Closing Date, in the form
reasonably agreed to by counsel for Parent; and
(d) Parent's receipt of the employment and non-competition
agreements of the Shareholders, in a form reasonably agreed to by and among
the Parent and Shareholders.
ARTICLE
6.
CONDITIONS TO THE OBLIGATION OF FOUR CORNERS AND SHAREHOLDERS
The following are conditions to the obligations of Four Corners and the
Shareholders to close the Transactions:
(a) The truth of the representations and warranties of Parent
contained in this Agreement;
(b) The full performance of all obligations of the Parent
contained in this Agreement;
(c) Parent's receipt of the opinion of Jaffe, Raitt, Heuer &
Xxxxx, P.C., counsel for Parent, dated on the Closing Date, in the form
reasonably agreed to by counsel for Four Corners;
(d) The receipt by each of the Shareholders of employment and
non-competition agreements with Parent, in a form reasonably agreed to by
and among each such Shareholder and the Parent; and
(e) The receipt by the Shareholders of reasonable assurance from
counsel for Parent that the Merger will constitute a tax-free
reorganization under the Code.
ARTICLE
7.
TERMINATION AND ABANDONMENT
7.1. METHODS OF TERMINATION.
This Agreement may be terminated and the transactions contemplated herein
may be abandoned in accordance with the following:
(a) By mutual written consent of Parent, Acquiring Sub, Four
Corners and the Shareholders;
(b) By the Parent and Acquiring Sub, if any of the conditions
provided for in Article 5 have not been satisfied or waived in writing by
Parent prior to Closing; or
(c) By Four Corners and the Shareholders, if any of the
conditions provided for in Article 6 have not been satisfied or waived in
writing by Four Corners and Shareholders prior to Closing; and
12
(d) On July 15, 1997, if the Transactions have not already
closed.
7.2. PROCEDURE UPON TERMINATION.
In the event of termination and abandonment pursuant to Section 7.1(a),
written notice thereof will forthwith be given to the other party or parties,
and the provisions of this Agreement (except to the extent provided in
Section 9.1) will terminate, and the transactions contemplated herein will be
abandoned, without further action by any party hereto. If this Agreement is
terminated as provided herein: (i) each party will, upon request, redeliver
all documents, work papers and other material of any other party (and all
copies thereof) relating to the transactions contemplated herein, whether so
obtained before or after the execution hereof, to the party furnishing the
same; (ii) the confidentiality obligations of Section 4.2 will continue to be
applicable; and (iii) except as provided in this Section, no party will have
any liability for a breach of any representation, warranty, agreement,
covenant or other provision of this Agreement, unless such breach was due to
a willful or bad faith action or omission of such party or any
representative, agent, employee or independent contractor thereof.
ARTICLE
8.
SURVIVAL AND INDEMNIFICATION
8.1. SURVIVAL.
The representations, warranties and covenants of each of the parties hereto
will survive the Closing until one (1) year after the Closing Date.
8.2. INDEMNIFICATION BY PARENT.
Parent agrees to indemnify each of the Shareholders from and against any
and all loss, liability or damage suffered or incurred by them including any
and all costs and expenses, including without limitation reasonable legal
fees and expenses incurred, in connection with enforcing the indemnification
rights of Shareholders pursuant to this Section 8.2 by reason of (i) any
untrue representation of or breach of warranty set forth in Article 3, and
(ii) any loss, liability or damage suffered or incurred by the Shareholders
by reason of any nonfulfillment of any covenant, agreement or undertaking of
Parent in this Agreement.
8.3. INDEMNIFICATION BY SHAREHOLDERS.
The Shareholders jointly and severally agree to indemnify Parent,
Acquiring Sub, their directors, officers, employees and agents, from and
against any and all loss, liability or damage suffered or incurred by it
including any and all costs and expenses, including without limitation
reasonable legal fees and expenses incurred, in connection with enforcing the
indemnification rights of Parent or Acquiring Sub pursuant to this Section
8.3 by reason of (i) any untrue representation of or breach of warranty set
forth in Article 2, and (ii) any and all loss, liability or damage suffered
or incurred by Parent or Acquiring Sub by reason of any nonfulfillment of any
covenant, agreement or undertaking of Four Corners or any Shareholder in this
Agreement.
13
8.4 LIMITATION ON INDEMNIFICATION.
Except as provided in Section 8.5(b), the Shareholders' aggregate
indemnification obligations under this Article 8 will be limited to the
Merger Consideration multiplied by the trading price of Parent's stock on
the Closing Date.
8.5. INDEMNIFICATION DE MINIMIS THRESHOLD.
(a) Except as expressively provided otherwise herein, and
subject to the provisions of Section 8.5(b), neither of the Shareholders
nor the Parent, as the case may be, will be entitled to indemnification
under this Agreement unless the aggregate of all claims with respect to
matters arising hereunder is more than One Hundred Thousand Dollars
($100,000) (the "Threshold Amount"). When the aggregate amount of all such
indemnification claims hereunder equals or exceeds the Threshold Amount,
the Parent or the Shareholders, as the case may be, will be entitled to
full indemnification of all claims, including the One Hundred Thousand
Dollars ($100,000) that amounted to the Threshold Amount. Once the
aggregate amount of all indemnification claims hereunder equal or exceed
the Threshold Amount, the Shareholders or the Parent, as the case may be,
will be entitled to full indemnification for all claims. The parties
hereto agree that the Threshold Amount is not a deductible amount, nor will
the Threshold Amount will be deemed to be a definition of "material" for
any purpose in this Agreement.
(b) Notwithstanding the foregoing, in the case of any untrue
representation with respect to which any Shareholder had actual knowledge
or had actual knowledge of the potential or probable loss, liability or
damage (based on actual knowledge of the facts and circumstances giving
rise to such loss, liability or damage) without disclosing such to Parent
on or prior to the Closing Date, the Shareholders will jointly and
severally promptly pay Parent the full indemnification claim without regard
to the Threshold Amount set forth in this Section, the overall limitation
on amount as set forth in Section 8.4 or the time limitation set forth in
Section 8.1.
8.6. CLAIMS FOR INDEMNIFICATION.
The parties intend that all indemnification claims hereunder be made as
promptly as practicable by the party seeking indemnification (the
"Indemnified Party"). Whenever any claim arises for indemnification hereunder
the Indemnified Party will promptly notify the party from whom
indemnification is sought (the "Indemnifying Party") of the claim and, when
known, the facts constituting the basis for such claim. In the case of any
such claim for indemnification hereunder resulting from or in connection with
any claim or legal proceedings of a third party (a "Third Party Claim"), the
notice to the Indemnifying Party will specify, if known, the amount or an
estimate of the amount of the liability arising therefrom. The Indemnifying
Party shall have the right to dispute and defend all Third Party Claims and
thereafter so defend and pay any adverse final judgment or award or
settlement amount in regard thereto. Such defense shall be controlled by the
Indemnifying Party, and the cost of such defense shall be borne by the
Indemnifying Party, except that the Indemnitee shall have the right to
participate in such defense at its own expense, and PROVIDED, HOWEVER that
the Indemnifying Party must first acknowledge that the claim is a bona fide
indemnification claim under this Agreement. The Indemnitee shall cooperate
in all reasonable respects in the defense of any such claim, including making
personnel, books, and records relevant to the claim available to the
Indemnifying Party, without charge, except for reasonable out-of-pocket
expenses. If the Indemnifying Party fails to take action within thirty (30)
days as set forth above, then the Indemnitee shall have the right to pay,
compromise or defend any Third Party Claim and to assert the amount of any
payment on the Third Party Claim plus the reasonable expenses of defense or
14
settlement as the claim. The Indemnitee shall also have the right,
exercisable in good faith, to take such action as may be necessary to avoid a
default prior to the assumption of the defense of the Third Party Claim by
the Indemnifying Party, and any reasonable expenses incurred by Indemnitee so
acting shall be paid by the Indemnifying Party. Except as otherwise provided
herein, the Indemnified Party will not settle or compromise any Third Party
Claim for which it is entitled to indemnification hereunder without the prior
written consent of the Indemnifying Party, which will not be unreasonably
withheld. If the Indemnifying Party is of the opinion that the Indemnified
Party is not entitled to indemnification, or is not entitled to
indemnification in the amount claimed in such notice, it will deliver, within
twenty (20) business days after the receipt of such notice, a written
objection to such claim and written specifications in reasonable detail of
the aspects or details objected to, and the grounds for such objection. If
the Indemnifying Party filed timely written notice of objection to any claim
for indemnification, the validity and amount of such claim will be determined
by arbitration pursuant to Section 9.12 hereof. If timely notice of objection
is not delivered or if a claim by an Indemnified Party is admitted in writing
by an Indemnifying Party or if an arbitration award is made in favor of an
Indemnified Party, the Indemnified Party, as a non-exclusive remedy, will
have the right to set-off the amount of such claim or award against any
amount yet owed, whether due or to become due, by the Indemnified Party or
any subsidiary thereof to any Indemnifying Party by reason of this Agreement
or any agreement or arrangement or contract to be entered into at the Closing.
8.7. SHAREHOLDER PAYMENT OF INDEMNIFICATION CLAIMS OF PARENT.
In the discretion of each of the Shareholders, any payment on a claim made
pursuant to Section 8.6, may be made in cash or shares of Parent Common Stock,
with the surrender value of such shares, for purposes of satisfying any such
claim, equal to the trading price of Parent's stock in effect on the Closing
Date.
ARTICLE
9.
MISCELLANEOUS PROVISIONS
9.1. EXPENSES.
Each of the parties hereto will bear its own costs, fees and expenses in
connection with the negotiation, preparation, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, including without limitation fees, commissions and
expenses payable to brokers, finders, investment bankers, consultants,
exchange or transfer agents, attorneys, accountants and other professionals,
whether or not the Transactions is consummated.
9.2. AMENDMENT AND MODIFICATION.
Subject to applicable law, this Agreement may be amended or modified by
the parties hereto at any time prior to the Closing with respect to any of
the terms contained herein; provided, however, that all such amendments and
modifications must be in writing duly executed by all of the parties hereto.
9.3. WAIVER OF COMPLIANCE; CONSENTS.
Any failure of a party to comply with any obligation, covenant,
agreement or condition herein may be expressly waived in writing by the party
entitled hereby to such compliance, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition will
not
15
operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. No single or partial exercise of a right or remedy will
preclude any other or further exercise thereof or of any other right or
remedy hereunder. Whenever this Agreement requires or permits the consent by
or on behalf of a party, such consent will be given in writing in the same
manner as for waivers of compliance.
9.4. NO THIRD PARTY BENEFICIARIES.
Nothing in this Agreement will entitle any person or entity (other than a
party hereto and his, her or its respective successors and assigns permitted
hereby) to any claim, cause of action, remedy or right of any kind.
9.5. NOTICES.
All notices, requests, demands and other communications required or
permitted hereunder will be made in writing and will be deemed to have been duly
given and effective: (i) on the date of delivery, if delivered personally;
(ii) on the earlier of the fourth (4th) day after mailing or the date of the
return receipt acknowledgment, if mailed, postage prepaid, by certified or
registered mail, return receipt requested; or (iii) on the date of transmission,
if sent by facsimile, telecopy, telegraph, telex or other similar telegraphic
communications equipment:
If to either Four Corners or the Shareholders:
To: Four Corners Technology, Inc.
0000 X. Xxxx Xx.
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxxx & Xxxxx Xxxx, Ltd.
0000 X. Xxxxxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxx Xxxx, Esq.
Fax: (000) 000-0000
or to such other person or address as either Four Corners or the Shareholders
will furnish to the other parties hereto in writing in accordance with this
Section.
If to Parent or the Acquiring Sub:
To: Eltrax Systems, Inc.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Clunet X. Xxxxx
Fax: (000) 000-0000
16
With a copy to:
Jaffe, Raitt, Heuer & Xxxxx
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
or to such other person or address as either Parent or Acquiring Sub will
furnish to the other parties hereto in writing in accordance with this Section.
9.6. ASSIGNMENT.
This Agreement and all of the provisions hereof will be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned (whether voluntarily, involuntarily, by
operation of law or otherwise) by any of the parties hereto without the prior
written consent of the other parties, provided, however, that Parent may assign
this Agreement upon notice to Four Corners and each of the Shareholders, in
whole or in any part, and from time to time, to a wholly-owned, direct or
indirect, subsidiary of Parent, if Parent remains bound hereby.
9.7. GOVERNING LAW.
This Agreement and all legal relations among the parties hereto will be
governed by and construed in accordance with the internal substantive laws of
the State of Michigan (without regard to principles of conflict of laws that
might otherwise apply) as to all matters, including without limitation matters
of validity, construction, effect, performance and remedies.
9.8. COUNTERPARTS.
This Agreement may be executed simultaneously in one or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
9.9. HEADINGS.
The table of contents and the headings of the sections and Sections of this
Agreement are inserted for convenience only and will not constitute a part
hereof.
9.10. ENTIRE AGREEMENT.
The Schedules and the Exhibits and other writings referred to in this
Agreement, together with this Agreement embody the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement and together they are referred to as "this Agreement" or the
"Agreement". This Agreement supersedes all prior and contemporaneous oral and
written agreements and understandings between the parties with respect to the
transaction or transactions contemplated by this Agreement (including without
limitation the letter of intent dated May 12, 1997 between Parent, Four Corners,
and Shareholders and all amendments and extensions thereof).
17
9.11 INJUNCTIVE RELIEF.
It is expressly agreed among the parties hereto that monetary damages would
be inadequate to compensate a party hereto for any breach by any other party of
its covenants in Section 4.2. Accordingly, the parties agree and acknowledge
that any such violation or threatened violation will cause irreparable injury to
the other and that, in addition to any other remedies which may be available,
such party will be entitled to injunctive relief against the threatened breach
of Section 4.2 hereof or the continuation of any such breach without the
necessity of proving actual damages and may seek specific enforcement of the
terms thereof.
9.12. ARBITRATION.
With the sole exception of the injunctive relief contemplated by
Section 9.11 hereof, any controversy or claim arising out of or relating to this
Agreement, or the making, performance or interpretation hereof, including
without limitation alleged fraudulent inducement hereof, will be settled by
binding arbitration in Southfield, Michigan by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any arbitration award may be entered in any court
having jurisdiction thereof and the parties consent to the jurisdiction of the
courts of the State of Michigan for this purpose.
9.13. ATTORNEYS FEES.
If any arbitration, litigation or similar proceedings are brought by any
party to enforce any obligation or to pursue any remedy under this Agreement,
the party prevailing in any such arbitration, litigation or similar proceedings
will be entitled to costs of collection, if any, and reasonable attorneys fees
incurred in connection with such proceedings and in collecting or enforcing any
award granted therein.
9.14. KNOWLEDGE OF FOUR CORNERS AND SHAREHOLDERS.
Where any representation or warranty contained in this Agreement is
expressly qualified by reference to the knowledge of Four Corners and the
Shareholders, such phrase will include the actual present knowledge of either
one or all of the Shareholders assuming that such Shareholders have made
reasonable diligent inquiry as to the matters that are the subject of the
representations and warranties.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PARENT: FOUR CORNERS:
Eltrax Systems, Inc. Four Corners Technology, Inc.
By: /S/ CLUNET X. XXXXX By: /S/ XXXXXX X. XXXXXX
___________________ ____________________
Clunet X. Xxxxx, its Xxxxxx X. Xxxxxx, its President
Secretary and General
Counsel
ACQUIRING SUB: By: /S/ XXXX X. XXXXXXXXXXXX
________________________
Four Corners Acquiring Corp. Xxxx X. Xxxxxxxxxxxx,
its Secretary
By: /S/ CLUNET X. XXXXX SHAREHOLDERS:
___________________
Clunet X. Xxxxx, its /S/ XXXXXX X. XXXXXX
President ________________________
Xxxxxx X. Xxxxxx
/S/ XXXX X. XXXXXXXXXXXX
________________________
Xxxx X. Xxxxxxxxxxxx
/S/ XXXXX XXXXX
________________________
Xxxxx Xxxxx
19
EXHIBITS AND SCHEDULES
Exhibit 1.1 Articles of Merger - Acquiring Sub into Four Corners
Schedule 2.1 Four Corners Disclosure Regarding Corporate Organization
Schedule 2.4 Four Corners Disclosure Regarding Non-Contravention
Schedule 2.5 Four Corners Disclosure Regarding Financials
Schedule 2.6 Four Corners Disclosure Regarding Accounts Receivable
Schedule 2.7 Four Corners Disclosure Regarding Liabilities
Schedule 2.8 Four Corners Disclosure Regarding Litigation
Schedule 2.9 Four Corners Disclosure Regarding Adverse Changes
Schedule 2.10 Four Corners Disclosure Regarding Title to Assets
Schedule 2.11 Four Corners Disclosure Regarding Taxes
Schedule 2.12 Four Corners Disclosure Regarding Insurance
Schedule 2.13 Four Corners Disclosure Regarding Benefit Plans
Schedule 2.14 Four Corners Disclosure Regarding Contracts
Schedule 2.15 Four Corners Disclosure Regarding Labor Matters
Schedule 2.16 Four Corners Disclosure Regarding Intellectual Property
Schedule 2.17 Four Corners Disclosure Regarding Hazardous Substances
Schedule 2.19 Parent Disclosure of Eltrax Reports
Exhibit 2.19 Investor Questionnaire
Exhibit 4.4 Registration Rights of Shareholders
In accordance with Item 601(b)(2) of Regulation S-K, the exhibits and
schedules described in the List of Exhibits and Schedules of this Agreement have
not been filed with the Current Report on Form 8-K to which this Agreement is an
exhibit. The Registrant hereby agrees to furnish supplementally copies of such
exhibits and schedules to the Commission upon request.
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