<PAGE>
As filed with the Securities and Exchange Commission on April 24, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
ELTRAX SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENT)
MINNESOTA 41-1484525
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
_______________
WILLIAM P. O'REILLY
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
2000 TOWN CENTER, SUITE 690
SOUTHFIELD, MI 48075
(248) 358-1699
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
_______________
Copies of all correspondence to:
JEFFREY L. FORMAN, ESQ.
JAFFE, RAITT, HEUER & WEISS, P.C.
ONE WOODWARD AVENUE
SUITE 2400
DETROIT, MICHIGAN 48226
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
_______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Amount to be Proposed Maximum Amount of
Title of Each Class of Securities Registered Aggregate Offering Price (1) Registration Fee
- --------------------------------- ------------ ---------------------------- ----------------
<S> <C> <C> <C>
Common Stock, $.01 par value 30,000 shares $300,000.00 $88.50
</TABLE>
(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(c), based upon the average of the high and low prices of the
Registrant's common stock on April 22, 1998 on the NASDAQ SmallCap Market.
_______________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAD BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
<PAGE>
SUBJECT TO COMPLETION
PROSPECTUS DATED APRIL 23, 1998
PROSPECTUS
30,000 SHARES
ELTRAX SYSTEMS, INC.
COMMON STOCK
This Prospectus relates to 30,000 shares (the "Shares") of common stock,
par value $.01 per share (the "Common Stock"), of Eltrax Systems, Inc., a
Minnesota corporation (the "Company"). The Shares are held by a certain
shareholder (the "Selling Shareholder"). See "Selling Shareholder."
The Company will not receive any proceeds from the sale of Shares by the
Selling Shareholder. Other than any commissions or discounts paid or allowed by
the Selling Shareholder to underwriters, dealers, brokers or agents, all
expenses incurred in connection with this offering are being borne by the
Company.
The Selling Shareholder has not advised the Company of any specific plans
for the distribution of the Shares, but it is anticipated that the Shares may be
sold from time to time in over-the-counter market transactions (which may
include block transactions) on the NASDAQ SmallCap Market System at the market
prices then prevailing. Sales of the Shares may also be made through negotiated
transactions or otherwise. The Selling Shareholder and the brokers and dealers
through which the sales of the Shares may be made may be deemed to be
"underwriters" within the meaning set forth in the Securities Act of 1933, as
amended, and their commissions and discounts and other compensation may be
regarded as underwriters' compensation. See "Plan of Distribution."
The Common Stock is listed on the NASDAQ SmallCap Market System under the
symbol "ELTX". On April 20, 1998, the last reported sale price of the Common
Stock on the NASDAQ SmallCap Market System was $8.875 per share.
SEE "RISK FACTORS" ON PAGE 3 FOR CERTAIN FACTORS RELATING TO AN INVESTMENT IN
THE SHARES.
__________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
__________________________________
The date of this Prospectus is April 23, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected at the Public Reference Section maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and the
following regional offices of the Commission: 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a Web site that contains
reports, proxy information and statements, and other information regarding
registrants that file electronically with the Commission. The Web site address
is http://www.sec.gov. The Company files electronically. In addition, the
Company's Common Stock is listed on the NASDAQ SmallCap Market System and such
reports, proxy statements and other information concerning the Company can be
inspected at the offices of the National Association of Securities Dealers,
Inc., Reports Section, 1735 K Street, N.W. Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement"), of which this Prospectus is a part, under
the Securities Act of 1933, as amended (the "Securities Act" or "Securities Act
of 1933"), with respect to the Shares offered hereby. This Prospectus does not
contain portions of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to
the contents of any contract or other documents are not necessarily complete,
and in each instance, reference is made to the copy of such contract or
documents filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference and the exhibits and schedules
thereto. For further information regarding the Company and the Shares,
reference is hereby made to the Registration Statement and such exhibits and
schedules which may be obtained from the Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference.
1. The Company's Annual Report on Form 10-KSB for the year ended December 31,
1997, filed with the Commission on March 27, 1998 and amended by Amendment
No. 1 on Form 10-KSB/A filed with the Commission on April 17, 1998.
2. The description of the Common Stock contained in the Company's Registration
Statement on Form 8-A (File No. 0-22190).
All documents that are filed pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act, subsequent to the date of this Prospectus and prior to
termination of the offering to which this Prospectus relates, are incorporated
by reference into this Prospectus, and they shall be considered part hereof from
the date of filing of such document.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon their
written or oral request, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents). Written requests
for such copies should be addressed to Nicholas J. Pyett, the Company's Chief
Financial Officer, at 2000 Town Center, Suite 690, Southfield, MI 48075,
telephone number (248) 358-1699.
AS USED HEREIN, THE TERM "COMPANY" INCLUDES ELTRAX SYSTEMS, INC., A
MINNESOTA CORPORATION, AND ONE OR MORE OF ITS SUBSIDIARIES.
THE COMPANY
Eltrax Systems, Inc. (the "Company" or "Eltrax"), is a nationwide managed
network services company, providing communications products and services for
enterprise wide networks. Eltrax designs and installs networking systems for
corporate and government customers. The Company also provides
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<PAGE>
monitoring, management, and maintenance services to support enterprise
networks. Eltrax has acquired several independent companies over the last
two years, and these acquisitions now comprise Eltrax's national network of
regional operations.
The Company headquarters is located at 2000 Town Center, Suite 690,
Southfield, MI 48075, and its telephone number is (248) 358-1699. The Company
maintains a worldwide web address at www.eltrax.com.
RISK FACTORS
Prospective investors should carefully consider, among other factors, the
matters described below.
HISTORY OF LOSSES; UNCERTAIN PROFITABILITY PROSPECTS. The Company has a
history of net losses, including a loss of $11,332,000 in 1997. As of December
31, 1997, the Company had an accumulated deficit of approximately $17,350,000.
The ability of the Company to achieve profitability will depend upon several
factors, including: the efficient consolidation of the recently acquired
businesses and of future acquisitions; the ability to achieve sufficient levels
of product sales and profit margins and Network Management Services sales and
profit margins; and the ability to control operating costs and other expenses.
There can be no assurance that the Company will achieve profitability during the
current fiscal year or at any time in the near future.
INTEGRATION OF ACQUISITIONS; MANAGEMENT OF EXPANDING OPERATIONS. During
the last two years, the Company has merged with or acquired seven network
products and services companies, and its annual revenue run rate has
increased from just over $1 million to the current annual revenue run rate of
over $50 million. The Company intends to continue its rapid growth through
future acquisitions and through internal growth. This rapid growth has
placed, and will continue to place, a significant strain on the Company's
administrative, operational, and financial resources and on the Company's
systems and controls. Management has expended, and expects to continue to
expend, significant time and effort in integrating the operations of its
acquisitions into the Company.
There can be no assurance that the Company's current systems, procedures
and controls will be adequate to support the Company's operations as they
expand. Any future growth will impose significant added responsibilities on
members of senior management, including the need to identify, recruit and
integrate new senior level managers and executives. There can be no assurance
that such additional management will be identified and retained by the Company.
If the Company is unable to manage growth effectively, customer confidence could
erode and demand for the Company's products and services could deteriorate,
which could materially and adversely affect the Company's business and operating
results.
FUTURE ACQUISITIONS. The Company continues to pursue acquisitions of
complementary businesses. Future acquisitions by the Company could result in
additional debt and amortization expenses that may adversely affect the
Company's balance sheet and profitability. Acquisitions also involve numerous
other risks, including difficulties in integrating the operations of new
businesses into the Company, the potential loss of key employees of the acquired
business, and the risk that acquisitions do not continue to perform at their
historical levels. No assurance can be given as to the effect of any future
acquisition on the Company's business or operating results.
NETWORK MANAGEMENT SERVICES. During the first quarter of 1998, the Company
began offering network management services on a nationwide basis. This effort
is part of the Company's long-term strategic plan, and represents an extension
of the Company's current service offerings. This effort has required capital
expenditures and expenditures for management, sales, and marketing personnel,
and technical resources. The success of this new line of business depends upon
the Company's ability to successfully market and deliver these services. While
the Company believes that these investments will yield a return in the near
future, there can be no assurance of this result.
DEPENDENCE ON SENIOR MANAGEMENT AND KEY EMPLOYEES. The Company is
dependent upon the performance of its executive officers and other key
personnel. The loss of the services of any of its executive officers or other
key employees could have a material adverse effect on the Company. The
Company's future success will also depend in part upon its ability to attract
and retain highly skilled and qualified technical, managerial and marketing
personnel. Competition for such personnel in the data
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<PAGE>
communications industry is intense, and there can be no assurance that the
Company will be successful in attracting and retaining such personnel. The
loss of any of the Company's key management or the inability to hire or
retain qualified personnel could have a material adverse effect on the
Company.
COMPETITION. Competition in the data communications industry is intense and
is expected to increase. The Company's current competitors include many which
have longer operating histories and significantly greater financial, technical,
research, marketing, sales, distribution and other resources, as well as greater
name recognition and a larger customer base, than the Company. As a result,
they may be able to respond more quickly to new or emerging technologies and
changes in customer requirements or may be able to devote greater resources to
the development, promotion, sale and support of their products than the Company.
Many also have long-standing customer relationships with large enterprises that
are part of the Company's target market and these relationships may make it more
difficult to complete sales of the Company's products to these enterprises. The
Company expects increased competition, particularly in the networking market.
Increased competition could result in significant price competition, reduced
profit margins or loss of market share, any of which could have a material
adverse effect on the Company's business, operating results and financial
condition. There can be no assurance that the Company will be able to compete
successfully in the future.
GENERAL ECONOMIC CONDITIONS. Demand for the Company's products and
services depends, in large part, on the overall demand for communications and
networking products, which may be effected by industry capital spending levels
and general economic conditions, including interest rate fluctuations, economic
recessions and customer business cycles. There can be no assurance that the
Company will not experience a decline in demand for its products and services
due to general economic conditions. Any such decline could have an adverse
effect on the Company's business, operating results and financial condition.
NEED FOR ADDITIONAL CAPITAL. The Company has developed a strategy to grow
through additional acquisitions. While the Company believes it will continue to
structure the payment of the purchase price of the majority of its acquisitions
with stock, the Company anticipates that cash may be required to achieve this
goal. The Company believes it has adequate access to funding sources for its
acquisitions in the short term, however, there can be no assurances that cash
will be available at acceptable levels when required.
ADVERSE EFFECT ON PRICE OF SHARES AVAILABLE FOR FUTURE SALE. Sales of a
substantial number of shares of the Company's common stock, or the perception
that such sales could occur, could adversely affect prevailing market prices for
the shares. The Company's officers and directors and former shareholders of the
Company's acquisitions hold approximately 4.5 million shares of common stock and
warrants to purchase approximately 875,000 shares of the common stock. These
shares may be sold pursuant to registration rights granted to the holders
thereof in certain instances or pursuant to Rule 144 promulgated by the
Commission pursuant to the Securities Act of 1933. No prediction can be made
regarding the effect that future sales will have on the market price of the
Company's common stock.
LACK OF DIVIDENDS. The Company has not paid dividends on its common stock
and does not anticipate paying cash dividends in the foreseeable future. The
Company intends to retain any earnings to finance the development of its
business. There can be no assurance that the Company will ever pay cash
dividends.
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<PAGE>
SELLING SHAREHOLDER
The following table sets forth specified information regarding the Selling
Shareholder and the shares of Common Stock beneficially owned by him:
<TABLE>
<CAPTION>
Shares Beneficially Owned
After Completion of the
Shares of Common Stock of the Offering
Beneficially Owned Number of Shares --------------------------
Selling Shareholder Prior to the Offering(1) Being Offered Number(2) Percentage(3)
- ------------------- ------------------------ ---------------- --------------------------
<S> <C> <C> <C> <C>
John Good 525,000(4) 30,000 495,000 4.56%
</TABLE>
- ---------------------
(1) Based upon questionnaires received from the Selling Shareholder in
connection with the preparation of the Registration Statement on Form S-3,
of which this Prospectus is a part, showing beneficial ownership as of
March 31, 1998. Shares not outstanding but deemed beneficially owned by
virtue of the right of a person or member of a group to acquire them within
60 days are treated as outstanding only when determining the amount and
percentage owned by such person or group.
(2) Assumes that all Shares being offered and registered hereunder are sold,
although the Selling Shareholder is not obligated to sell any Shares.
(3) Based upon 10,847,771 shares of Common Stock outstanding as of February
2, 1998, as reported in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1997.
(4) Includes options to purchase 28,000 shares of Common Stock, pursuant to
the Company's Incentive Stock Option Plan, which options are vested and may
be exercised immediately. This figure does not include options to purchase
22,000 shares of Common Stock, pursuant to the Company's Incentive Stock
Option Plan, which options are not exercisable within the next 60 days.
Based upon the questionnaire received from the Selling Shareholder in
connection with the preparation of the Registration Statement on Form S-3, of
which this Prospectus is a part, the Selling Shareholder had the following
relationships with the Company during the past three (3) years:
JOHN GOOD: Mr. Good was the sole shareholder and the majority shareholder,
respectively, of DataComm Associates, Inc. ("DataComm") and Midwest Telecom
Associates, Inc. ("Telecom"), which were acquired by the Company pursuant to
merger on October 31, 1997. The Shares were part of the merger consideration
received by Mr. Good. Mr. Good was the president and sole director of DataComm
prior to October 31, 1997, and served as its president until its liquidation
into the Company on January 1, 1998. Mr. Good was the chief executive officer
and a director of Telecom prior to October 31, 1997, and served as its president
until its liquidation into the Company on January 1, 1998. Mr. Good is
currently the manager of the Company's Midwest region. Mr. Good is the
beneficial owner of approximately 5,600 square feet of office space in North
Olmsted, Ohio, of which the Company's Midwest region (and DataComm, prior to
October 31, 1997) is the tenant.
Except as specifically set forth above, the Selling Shareholder has not had
any position, office or other material relationship with the Company or any of
its predecessors or affiliates, within the past three years.
USE OF PROCEEDS
The Company will not receive any of the proceeds of any sale by the Selling
Shareholder.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold by the Selling Shareholder or,
subject to applicable law, by pledgees, donees, transferees or other successors
in interest (collectively with the Selling Shareholder, the "Sellers") acting as
principals for their own accounts. The Company will not receive any of the
proceeds of this offering.
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<PAGE>
The Sellers, directly or through brokers, dealers, underwriters, agents or
market makers, may sell some or all of the Shares. Any broker, dealer,
underwriter, agent or market maker participating in a transaction involving the
Shares may receive a commission from the Sellers. The Sellers may pay usual and
customary commissions. The broker, dealer, underwriter or market maker may
agree to sell a specified number of the Shares at a stipulated price per Share
and, to the extent that such person is unable to do so acting as an agent for
the Sellers, to purchase as principal any of the Shares remaining unsold at a
price per Share required to fulfill the person's commitment to the Sellers.
A broker, dealer, underwriter or market maker who acquires the Shares from
the Sellers as a principal for its own account may thereafter resell such Shares
from time to time in transactions (which may involve block or cross transactions
and which may also involve sales to or through another broker, dealer,
underwriter, agent or market maker, including transactions of the nature
described above) in the over-the-counter market, in negotiated transactions or
otherwise, at market prices prevailing at the time of the sale or at negotiated
prices. In connection with such resales, the broker, dealer, underwriter, agent
or market maker may pay commissions to or receive commissions from the
purchasers of the Shares. The Sellers also may sell some or all of the Shares
directly to purchasers without the assistance of a broker, dealer, underwriter,
agent or market maker and without the payment of any commissions.
Other than any commissions or discounts paid or allowed by the Sellers to
underwriters, dealers, brokers or agents, all expenses incurred in connection
with this offering are being borne by the Company.
Pursuant to the registration rights granted to the Selling Shareholder in
connection with the issuance of the Shares, the Company has agreed to indemnify
the Selling Shareholder against certain liabilities and expenses arising out of
or based upon the information set forth or incorporated by reference in this
Prospectus, and the Registration Statement of which this Prospectus is a part,
including liabilities under the Securities Act. Any commissions paid or any
discounts or concessions allowed to any broker, dealer, underwriter, agent or
market maker and, if any such broker, dealer, underwriter, agent or market maker
purchases any of the Shares as principal, any profits received on the resale of
such Shares, may be deemed to be underwriting commissions or discounts under the
Securities Act.
LEGAL MATTERS
Jaffe, Raitt, Heuer & Weiss, Professional Corporation, of Detroit, Michigan
will pass on the legality of the Shares for the Company.
EXPERTS
The consolidated balance sheets as of December 31, 1997 and 1996, and the
consolidated statements of operations, shareholders' equity and cash flows for
the year ended December 31, 1997 and the nine months ended December 31, 1996,
incorporated by reference in this prospectus, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
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<PAGE>
No dealer, salesperson or other individual has been authorized to
give any information or to make any representations not contained or
incorporated by reference in this Prospectus in connection with any
offering to be made by the Prospectus. If given or made, such
information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, the Securities, in
any jurisdiction where, or to any person to whom, it is unlawful to
make such offer or solicitation. Neither the delivery of this
Prospectus nor any offer or sale made hereunder shall, under any
circumstance, create an implication that there has been no change in the
facts set forth in this Prospectus or in the affairs of the Company since
the date hereof.
TABLE OF CONTENTS
PROSPECTUS
Page
Available Information............................................ 2
Incorporation of Certain Documents by Reference.................. 2
The Company...................................................... 2
Risk Factors..................................................... 3
Selling Shareholder.............................................. 5
Use of Proceeds.................................................. 5
Plan of Distribution............................................. 5
Legal Matters.................................................... 6
Experts.......................................................... 6
30,000 SHARES
ELTRAX SYSTEMS, INC.
COMMON STOCK
---------
PROSPECTUS
---------
APRIL 23, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being
registered.
Registration Fee...................................... $ 89
Legal Fees and Expenses............................... 2,000
Accounting Fees and Expenses.......................... 1,000
Miscellaneous......................................... 1,000
-------
Total................................................. $ 4,089
-------
-------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article V of the Company's Amended and Restated Articles of Incorporation
limits the liability of its directors to the fullest extent permitted by the
Minnesota Business Corporation Act (the "MBCA"). Specifically, directors of the
Company will not be personally liable for monetary damages for breach of
fiduciary duty as directors, except liability for (i) any breach of the duty of
loyalty to the Company or its shareholders, (ii) acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) dividends or other distributions of corporate assets that are in
contravention of certain statutory or contractual restrictions, (iv) violations
of certain Minnesota securities laws, or (v) any transaction from which the
director derives an improper personal benefit.
Article IV of the Company's restated Articles of Incorporation gives the
Company the power and authority to provide indemnification to officers,
directors, employees and agents of the Company to the fullest extent permissible
under the MBCA. Section 302A.521 of the MBCA requires that the Company
indemnify any director, officer or employee made or threatened to be made a
party to a proceeding, by reason of the former or present official capacity of
the person, against judgments, penalties, fines, settlements and reasonable
expenses incurred in connection with the proceeding if certain statutory
standards are met. "Proceeding" means a threatened, pending or completed civil,
criminal, administrative, arbitration or investigative proceeding, including a
derivative action in the name of the Company. Reference is made to the detailed
terms of Section 302A.531 of the MBCA for a complete statement of such
indemnification rights.
Article VII of the Company's Restated Bylaws provides that the Company
shall indemnify such persons, for such expenses and liabilities, in such manner,
under such circumstances, and to such extent, as permitted by the MBCA, as now
enacted or hereafter amended, provided that a determination is made in each
case, in the manner required by such statute, that the person seeking
indemnification is eligible therefor.
The Company maintains directors' and officers' liability insurance,
including a reimbursement policy in favor of the Company.
ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
4.1 Form of Common Stock Certificate (Incorporated by reference from
Exhibit 4.1 of the Company's Registration Statement on Form S-18,
File No. 33-51456)
5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, Professional Corporation,
as to legality of securities
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants
23.2 Consent of Jaffe, Raitt, Heuer & Weiss, Professional Corporation
(included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page of this
registration statement)
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table set forth in this registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the Securities offered herein, and the
offering of such Securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the Securities being registered, which remain, unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the Securities offered herein, and the offering of such Securities
at that time shall be deemed to be the initial bona fide offering thereof; and
insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted against the Registrant by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Southfield, State of Michigan, on April 20, 1998.
ELTRAX SYSTEMS, INC.,
A Minnesota corporation
By: /s/ William P. O'Reilly
------------------------------------------
William P. O'Reilly, Chairman of the Board
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of Eltrax Systems, Inc. hereby constitutes and appoints William P.
O'Reilly and Clunet R. Lewis, or either of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution for him in any and
all capacities, to sign any or all amendments or post-effective amendments to
this Registration Statement, and to file the same, with exhibits thereto and
other documents in connection therewith or in connection with the registration
of the shares of Common Stock under the Securities Act of 1933, with the
Securities and Exchange Commission, granting unto each of such attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary in connection with such matters as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of such attorneys-in-fact and agents or his substitute
or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
NAME TITLE DATE
/s/ William P. O'Reilly Chief Executive Officer,
- --------------------------- Chairman of the Board of April 20, 1998
William P. O'Reilly Directors, and Director
(principal executive
officer)
/s/ Clunet R. Lewis Director April 20, 1998
- ---------------------------
Clunet R. Lewis
/s/ James C. Barnard Director April 20, 1998
- ---------------------------
James C. Barnard
/s/ Patrick J. Dirk Director April 20, 1998
- ---------------------------
Patrick J. Dirk
/s/ Stephen E. Raville Director April 20, 1998
- ---------------------------
Stephen E. Raville
/s/ Mack V. Traynor, III Director April 20, 1998
- ---------------------------
Mack V. Traynor, III
II-3
<PAGE>
/s/ Thomas F. Madison Director April 20, 1998
- ---------------------------
Thomas F. Madison
/s/ Nicholas J. Pyett Chief Financial Officer April 20, 1998
- --------------------------- (principal financial
Nicholas J. Pyett officer and principal
accounting officer)
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
4.1 Form of Common Stock Certificate (Incorporated by reference from
Exhibit 4.1 of the Company's Registration Statement on Form S-18,
File No. 33-51456)
5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, Professional Corporation,
as to legality of securities
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants
23.2 Consent of Jaffe, Raitt, Heuer & Weiss, Professional Corporation
(included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page of this
registration statement)
II-5
<PAGE>
EXHIBIT 5.1
[LETTERHEAD JAFFE, RAITT, HEUER & WEISS]
April 22, 1998
Eltrax Systems, Inc.
2000 Town Center, Suite 690
Southfield, MI 48075
Gentlemen:
We have acted as counsel to Eltrax Systems, Inc. (the "Company"), a
Minnesota corporation, in connection with the registration by the Company of
30,000 shares (the "Shares") of Common Stock, $.01 par value per share
("Common Stock") pursuant to a Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission on or about April 23, 1998 (the
"Registration Statement"). This opinion letter is furnished to you at your
request to enable you to fulfill the requirements of Item 601(b)(5) of
Regulation S-K, 17 C.F.R. 229.601(b)(5), in connection with the Registration
Statement.
We do not purport to be experts on or to express any opinion in this
letter concerning any law other than the laws of the State of Michigan and
the Minnesota Business Corporation Act, and this opinion is qualified
accordingly. This opinion is limited to the matters expressly set forth in
this letter, and no opinion is to be inferred or may be implied beyond the
matters expressly so stated. In rendering the opinion contained in this
letter, we have assumed without investigation that the information supplied
to us by the Company is accurate and complete.
For purposes of this opinion letter, we have examined copies of the
following documents:
A. An executed copy of the Registration Statement;
B. The Company's Amended and Restated Articles of Incorporation;
C. The Bylaws of the Company;
D. The Company's corporate minute book; and
E. An Officer's Certificate (the "Certificate"), a copy of which is
attached to this letter as Exhibit A.
The documents listed in items A-E above are collectively referred to as
the "Documents".
In rendering our opinion, we have assumed, without independent
verification, that: (i) all signatures are genuine; (ii) all Documents
submitted to us as originals are authentic; and (iii) all Documents submitted
to us as copies conform to the originals of such Documents. Our review has
been limited to examining the Documents and applicable law.
To the extent that any opinion in this letter relates to or is dependent
upon factual information, we have relied exclusively upon the factual
representations and warranties set forth in the Certificate, and we have not
undertaken to independently verify any such facts or information.
<PAGE>
Eltrax Systems, Inc.
April 22, 1998
Page 2
Based upon, subject to and limited by the foregoing, we are of the
opinion that, as of the date hereof, the Shares are validly issued, fully
paid, and non-assessable.
We hereby consent to the filing of this opinion letter as Exhibit 5.1 to
the Registration Statement, and to the use of the name of our firm in the
Prospectus under the caption "LEGAL MATTERS".
Very truly yours,
JAFFE, RAITT, HEUER & WEISS
Professional Corporation
/s/ Jeffrey L. Forman
---------------------------------
Jeffrey L. Forman
<PAGE>
EXHIBIT "A"
OFFICER'S CERTIFICATE
The undersigned, the duly elected and acting Chief Executive Officer and
Chairman of the Board of ELTRAX SYSTEMS, INC., a Minnesota corporation (the
"Corporation"), hereby represents and warrants the following to Jaffe, Raitt,
Heuer & Weiss, professional corporation ("JRH&W"):
1. Eltrax Systems, Inc. is a corporation formed under the laws of the
State of Minnesota.
2. The Amended and Restated Articles of Incorporation of the Company have
not been amended since July 23, 1996.
April ____, 1998 --------------------------------------
William P. O'Reilly, Chief Executive
Officer and Chairman of the Board
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-3 of our
report dated March 26, 1998, on our audits of the financial statements of
Eltrax Systems, Inc. We also consent to the reference to our firm under the
captions "Experts."
/s/ Coopers & Lybrand L.L.P.
- ---------------------------------------
COOPERS & LYBRAND L.L.P.
Detroit Michigan
April 16, 1998
