<PAGE> 1
As filed with the Securities and Exchange Commission on September 27, 1996
File No. 333-
=============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
----------------------------
NORDIC EQUITY PARTNERS CORP.
(Exact name of registrant as specified in its charter)
Delaware 5090 13-3853305
(State or other juris- (Primary Standard Industrial (I.R.S. Employer
diction of incorpora- Classification Code Number) Identification No.)
tion or organization)
120 Wall Street
New York, New York 10005
(212) 269-1400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
- --------------------------------------------------------------------------------
Bjorn Nysted
President
Nordic Equity Partners Corp.
120 Wall Street
New York, New York 10005
(212) 269-1400
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Lawrence G. Nusbaum, Esq. Jay M. Kaplowitz, Esq.
Richard A. Friedman, Esq. Gersten, Savage, Kaplowitz
Gusrae Kaplan & Bruno & Curtin, LLP
120 Wall Street 575 Lexington Avenue
New York, New York 10005 New York, New York 10022-6102
(212) 269-1400 (212) 752-9700
Fax: (212) 809-5449 Fax: (212) 980-5192
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this Registration Statement.
If any 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,
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, please 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,
please check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class Amount Maximum Maximum Amount of
Securities Being Offering Price Aggregate Registration
Being Registered Registered Per Security (1) Offering Price (1) Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value (2) 895,000 $7.00 $ 6,265,000 $2,160.34
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock Purchase Warrants(3) 2,990,000 $ .15 448,500 154.66
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock $.0001 par value (4) 2,990,000 $8.40 25,116,000 8,660.69
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock $.0001 par value (5) 600,000 $7.00 4,200,000 1,448.28
- ---------------------------------------------------------------------------------------------------------------------------
Underwriter's Warrants (6) 130,000 --- 5 (7)
- ---------------------------------------------------------------------------------------------------------------------------
Underwriter's Warrants (6) 260,000 --- 5 (7)
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock Purchase Warrants(8) 260,000 $ .18 46,800 16.14
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, $.0001 par value (9) 130,000 $8.40 1,092,000 376.55
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock, $.0001 par value (10) 260,000 $8.40 2,184,000 753.10
- ---------------------------------------------------------------------------------------------------------------------------
Totals.............. 39,352,300 13,569.76
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total estimated solely for the purpose of determining the registration
fee.
(2) Includes 120,000 shares of Common Stock subject to sale upon exercise
of the Underwriter's Over-allotment Option granted to the Underwriter
by the Company.
(3) Includes 390,000 Redeemable Common Stock purchase warrants (the
"Warrants") subject to sale upon exercise of the Underwriter's Over-
allotment Option granted to the Underwriter.
(4) Issuable upon exercise of the Warrants, together with such
indeterminate number of securities as may be issuable by reason of
anti-dilution provisions contained therein.
(5) Includes 525,000 shares of Common Stock being sold by certain selling
stockholders (the "Selling Stockholders") and 75,000 shares of Common
Stock subject to sale upon the exercise of the Underwriter's
Over-allotment Option granted to the Underwriter by the Selling
Stockholders.
(6) Represent warrants to be issued to the Underwriter to purchase 130,000
shares of Common Stock and 260,000 Warrants (the "Underwriter's
Warrants"). See "Underwriting."
(7) No fee due pursuant to Rule 457(g).
(8) Represents Warrants issuable upon exercise of the Underwriter's
Warrants.
(9) Represents shares of Common Stock issuable upon the exercise of the
Underwriter's Warrants, together with such indeterminate number of
securities as may be issuable by reason of anti-dilution provisions
contained therein.
(10) Represents shares of Common Stock issuable upon the exercise of
Warrants issuable upon exercise of the Underwriter's Warrants,
together with such indeterminate number of securities as may be
issuable by reason of anti-dilution provisions contained therein.
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<PAGE> 3
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.
3
<PAGE> 4
NORDIC EQUITY PARTNERS CORP.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(b) OF REGULATION S-K
<TABLE>
<CAPTION>
ITEM OF FORM S-1 LOCATION IN PROSPECTUS
---------------- ----------------------
<S> <C>
PART I - INFORMATION REQUIRED IN PROSPECTUS
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus ....... Forepart of Registration Statement and Outside Front Cover Page
2. Insider Front and Outside Back Cover
Pages of Prospectus .......................... Inside Front and Outside Back Cover Pages of Prospectus
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges ........... Prospectus Summary; Risk Factors
4. Use of Proceeds .............................. Use of Proceeds
5. Determination of Offering Price .............. Outside Front Cover Page; Risk Factors; Underwriting
6. Dilution ..................................... Dilution; Risk Factors
7. Selling Security Holders...................... Selling Securityholders
8. Plan of Distribution ......................... Underwriting
9. Description of Securities to be Registered ... Prospectus Summary; Description of Securities
10. Interest of Named Experts and Counsel ........ Legal Matters; Experts
11. Information with Respect to the Registrant ... Prospectus Summary; Risk Factors; Use of Proceeds; Capitalization;
Dividend Policy; Selected Consolidated Financial Data; Shares
Eligible for Future Sale; Management's Discussion and Analysis of
Financial Condition and Results of Operations; Management;
Business; Principal and Selling Stockholders; Certain Transactions;
Description of Securities; Underwriting; Consolidated Financial
Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities .................................. Not Applicable
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
13. Other Expenses of Issuance and Distribution .. Other Expenses of Issuance and Distribution
14. Indemnification of Directors and Officers ... Indemnification of Directors and Officers
15. Recent Sales of Unregistered Securities ...... Recent Sales of Unregistered Securities
16. Exhibits and Financial Statement Schedules ... Exhibits
17. Undertakings ................................. Undertakings
</TABLE>
4
<PAGE> 5
[FRONT COVER PAGE OF PROSPECTUS]
SUBJECT TO COMPLETION, DATED SEPTEMBER 27, 1996
NORDIC EQUITY PARTNERS CORP.
1,300,000 SHARES OF COMMON STOCK AND
2,600,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS
Nordic Equity Partners Corp., a Delaware corporation (the "Company")
hereby offers (the "Offering") 775,000 shares of common stock, $.0001 par value
(the "Common Stock") of the Company and 2,600,000 Redeemable Common Stock
Purchase Warrants (the "Warrants"). This Prospectus also relates to the
offering of 525,000 shares of Common Stock by certain individuals (the "Selling
Stockholders") being sold through Mason Hill & Co., Inc. (the "Underwriter").
The Common Stock and the Warrants offered hereby (sometimes hereinafter
collectively referred to as the "Securities") will be separately tradeable
immediately upon issuance and may be purchased separately. Investors will not
be required to purchase shares of Common Stock and Warrants together or in any
particular ratio. Each Warrant entitles the holder to purchase one share of
Common Stock at an exercise price of $8.40 (the "Exercise Price"), subject to
adjustment, commencing one year after the date of this Prospectus (the
"Effective Date") until the close of business on the sixth year after the
Effective Date.
The Warrants are redeemable, in whole or in part, by the Company at a
price of $.05 per Warrant, commencing one year after the Effective Date and
prior to their expiration, provided that (i) prior written notice of not less
than thirty (30) days is given to the Warrantholders, (ii) the closing bid
price (as defined) of the Company's Common Stock for the twenty (20)
consecutive trading days immediately prior to the date on which the notice of
redemption is given, shall have exceeded $13.00 per share, and (iii)
Warrantholders shall have exercise rights until the close of business the day
preceding the date fixed for redemption.
For at least five years prior to this Offering, there has been no
public market for the Company's Common Stock and there has never been a market
for the Company's Warrants. There can be no assurance that a public market will
develop or be sustained for the Common Stock or the Warrants after the
completion of the Offering. The Offering prices of the Common Stock and
Warrants, exercise price and other terms of the Warrants were established by
negotiations between the Company and Mason Hill & Co., Inc. (the "Underwriter")
and do not bear any direct relationship to the Company's assets, book value,
results of operations or any other criteria of value. The Company has applied
for the listing of the Common Stock and Warrants on the NASDAQ National Market
System ("NASDAQ-NMS") under the symbols "NEPC" and "NEPCW", respectively. See
"Risk Factors" and "Underwriting."
_____________________
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE AND
SUBSTANTIAL DILUTION. SEE "RISK FACTORS" COMMENCING
ON PAGE 12 AND "DILUTION".
_____________________
<PAGE> 6
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDER-
WRITING
DISCOUNTS PROCEEDS TO
PRICE TO AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS(3)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share..... $7.00 $.70 $6.30 $6.30
- ---------------------------------------------------------------------------------------------------------------
Per Warrant... $.15 $.015 $.135 ----
- ---------------------------------------------------------------------------------------------------------------
Total(4)...... $9,490,000 $949,000 $5,233,500 $3,307,500
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See footnotes on following page of this Prospectus.
__________________________________________
MASON HILL & CO., INC.
__________________________________________
THE DATE OF THIS PROSPECTUS IS ____________ ____, 1996
2
<PAGE> 7
[INSIDE FRONT COVER PAGE OF PROSPECTUS]
- -------------------------
Footnotes to Table
(1) Does not include additional compensation to the Underwriter consisting
of (i) a non-accountable expense allowance equal to 3% of the aggregate
purchase price of the Securities, or $174,450 ($201,405 if the Underwriter's
over-allotment option is exercised in full) none of which has been paid to
date; (ii) warrants to purchase 130,000 shares of Common Stock at $8.40 per
share and 260,000 Common Stock Purchase Warrants at $.18 per Warrant; and (iii)
a three year consulting agreement providing for fees totalling $100,000, which
is payable to the Underwriter in full on the closing of this Offering. For
additional information concerning further agreements between the Company and
the Underwriter, including an agreement to indemnify the Underwriter against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act") See "Underwriting".
(2) After deducting Underwriting discounts and commissions, but before the
payment of the Underwriter's non-accountable expense allowance in the amount of
$174,450 ($201,405 if the Underwriter's over-allotment option is exercised in
full) and other expenses of the Offering payable by the Company (estimated at
$430,000).
(3) Before deducting a 3% non-accountable expense allowance being paid by
the Selling Stockholders to the Underwriter of $110,250 ($126,000 if the
Underwriter's over-allotment option is exercised in full).
(4) The Company and the Selling Stockholders have granted the Underwriter
an option, exercisable within forty-five (45) days from the date of this
Prospectus, to purchase up to 195,000 additional shares of Common Stock and
390,000 additional Warrants, upon the same terms and conditions set forth
above, solely to cover over-allotments, if any (the "Over-allotment Option").
Of the 195,000 shares of Common Stock, 75,000 shares will be provided by the
Selling Stockholders. If the Over-allotment Option is exercised in full, the
Total Price to Public, Underwriting Discounts and Commissions, Proceeds to
Company, and Proceeds to the Selling Stockholders will be increased to
$10,913,500, $1,091,350, $6,042,150 and $3,780,000, respectively.
The Common Stock and Warrants are being offered on a "firm commitment"
basis, subject to prior sale, when, as, and if delivered to and accepted by the
Underwriter, and subject to certain other conditions and legal matters. The
Underwriter reserves the right to withdraw, cancel or modify the Offering and
to reject orders in whole or in part. It is expected that delivery of the
certificates representing the shares of Common Stock and Warrants will be made
at the offices of the Underwriter, in New York City, on or about _____________,
1996.
3
<PAGE> 8
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK AND THE WARRANTS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
_____________________
AVAILABLE INFORMATION
The Company has filed with the Washington, D.C. office of the
Securities and Exchange Commission a Registration Statement (the "Registration
Statement") under the Securities Act with respect to the securities offered by
this Prospectus. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and this Offering, reference is made to
the Registration Statement, including the exhibits filed therewith. Statements
contained in the Prospectus as to the contents of any contract or other
document are not necessarily complete and reference is made to each such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference.
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Reports and other
information filed by the Company can be inspected, without charge, at
prescribed rates from the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, or at the following Regional Offices of the Commission, at
Citicorp, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 or at
Northeast Regional Office, 7 World Trade Center, New York, New York 10048. The
Commission maintains a World Wide Website that contains reports, proxies and
information statements and other information regarding issuers that file
electronically with the Commission. The Commission's World Wide Website is
located at http://www.sec.gov.
The Company intends to distribute to its stockholders annual reports
containing financial statements audited and reported upon by its independent
public accountants after the close of each fiscal year, and will make such
other periodic reports as the Company may determine to be appropriate or as may
be required by law. The Company's fiscal year ends December 31st of each year.
In addition to the 775,000 shares of Common Stock and 2,300,000
Warrants being offered by the Company, the Registration Statement of which this
Prospectus forms a part also covers 525,000 shares of Common Stock by certain
Selling Stockholders. The Company completed a bridge financing in July 1996,
whereby the Company sold 500,000 shares of Common Stock at a price of $.30 per
share. The Company also consummated a private placement in August 1996,
whereby the Company sold ten (10) units, each unit was comprised of a $950,000
principal amount 10% promissory note and 10,000 shares of Common Stock at a
purchase price of $100,000 per unit. The shares of Common Stock purchased in
the Bridge Financing
4
<PAGE> 9
and the Private Placement are being sold through the Underwriter on a firm
commitment basis in this Offering. The proceeds of the Bridge Financing and
the Private Placement were used by the Company for working capital purposes,
including proposed acquisitions. See "Risk Factors" and "Selling
Stockholders."
[END OF INSIDE FRONT COVER]
5
<PAGE> 10
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information, including financial statements and notes thereto
appearing elsewhere in this Prospectus. Each prospective investor is urged to
read this Prospectus in its entirety. Unless otherwise indicated, all share
and per share amounts reflect a fifty-for-one and a 1,000-for-one reverse stock
split of the Company's issued and outstanding Common Stock effective as of May
1994 and September 1995, respectively. All references to "$" herein are to
United States dollars and all references to "Norwegian NOK" and "Swedish SEK"
are to "Norwegian Krones" and "Swedish Krones", respectively. The $ figures
have been converted from either Norwegian NOKs or Swedish SEKs, based upon the
applicable conversion rate at the time a particular transaction or reporting
event occurred.
THE COMPANY
Nordic Equity Partners Corp.(the "Company"), through its two
wholly-owned subsidiaries, Nortelco AS, a Norwegian corporation ("Nortelco"),
and Storebro Machine AB, a Swedish corporation ("Storebro"), (i) imports and
distributes products for use in the electronic, electrical and audio visual
industries and (ii) designs, assembles and distributes lathes, sells lathe
spare parts to existing lathe owners and services, and repairs and overhauls
lathes owned by third parties.
NORTELCO. Nortelco imports and distributes over 10,000 products for
use in the electronic, electrical and audio visual industries to over 1,000
customers throughout Norway and Sweden. The prices of its products range from
$1.00 to $100,000. Nortelco's product strategy is to have its product line
consist substantially of "niche" products.
Nortelco does not manufacture any products that it distributes.
Nortelco purchases its products from over thirty (30) non-affiliated third
party manufacturers worldwide including Germany and the United States.
Nortelco's revenues result primarily from the difference between the price it
purchases its products from non-affiliated third party manufacturers and the
price it sells such products to its customers. Nortelco also designs, installs
and sells complete, customized conference rooms and auditoriums and provides
after sale service and maintenance support to its customers.
Substantially all of Nortelco's products are sold by its internal
sales force which consists of approximately fifty (50) full time salespersons
in Norway and Sweden. Nortelco believes that because its salespersons are
experienced and have technical backgrounds,
6
<PAGE> 11
it is able to service the continuing needs of its customers and attract
additional customers.
Nortelco believes that because of the high cost of establishing and
maintaining operations in Sweden and Norway, many foreign product manufacturers
avoid doing so. As a result, many of such companies enter into agreements with
Nortelco for Nortelco to act as their distributor in both or one of such
countries. Because Nortelco already has established operations in both
countries, Nortelco believes it can distribute products for manufacturers more
efficiently and inexpensively.
STOREBRO. Storebro designs, assembles and distributes lathes. Storebro
also sells lathe spare parts to existing lathe owners and services, repairs and
overhauls lathes owned by third parties.
Storebro sells over six different types of its proprietary lathes
which include both computer numerically controlled ("CNC") lathes and
traditional manually-operated lathes. Storebro distributes its lathes mainly to
customers in Germany and Sweden, both through its own and independent sales
representatives. The prices of its products range from $18,000 - $360,000.
In 1996, Storebro introduced the ALERT, which is a new model of lathe.
The ALERT lathe is a combination of a conventional and a CNC lathe and was
shown officially for the first time in May 1996 at the Gothenburger Machine
Tool Show in Sweden. The ALERT lathe can either be used as a conventional lathe
with a control system or as a CNC machine. Although sales of the ALERT lathes
have been minimal, the Company anticipates, although there can be no assurance,
that sales of such lathes will increase in the future.
The Company was organized under the laws of Delaware in May 1994. In
May 1995, the Company entered into an agreement and plan of merger with
Sherman, Goelz & Associates ("SGA"), pursuant to which SGA was merged with and
into the Company. Prior to the merger, SGA had acquired Nortelco and Storebro
from corporations controlled by, among others, the Company's current principal
stockholders in exchange for cash and shares of Common Stock. See "Certain
Transactions."
The Company's executive office is located at 120 Wall Street, New
York, New York 10005 and its telephone number at that address is (212)
269-1400.
Unless the context requires differently, all references herein to the
"Company" include Nortelco and Storebro, the Company's wholly-owned
subsidiaries, as well as three wholly-owned subsidiaries of Nortelco, Nortelco
System Teknikk AS, a Norwegian corporation ("Nortelco System Teknikk"),
Brannteknikk AS, a Norwegian corporation ("Brannteknikk"), and Nortelco
Audiatur AB, a Swedish corporation ("Nortelco Audiatur").
7
<PAGE> 12
THE OFFERING
<TABLE>
<S> <C>
Securities Offered By
The Company................. 775,000 shares of Common Stock and 2,600,000 Warrants.
The Selling Stock-
holders..................... 525,000 shares of Common Stock.
Common Stock Outstanding
Before Offering...................... 2,400,000 shares.
Common Stock Outstanding
After Offering(1)(2)................. 3,175,000 shares.
Warrants Outstanding
Before Offering...................... - 0 -
Warrants Outstanding After
Offering............................. 2,600,000 Warrants.
Exercise Terms.............. Each Warrant entitles the holder thereof to purchase one share of Common Stock for
$8.40, during the four (4) year period commencing one year after the Effective Date,
subject to adjustment in certain circumstances. See "Description of Securities-
Warrants".
Expiration Date............. _________, 2003 (six years after the Effective Date).
Redemption.................. Redeemable by the Company, in whole or in part, at a price of $.05 per Warrant,
commencing one year after the Effective Date upon not less than thirty (30) days
prior written notice to the holders of such Warrants, provided that the closing bid
price (as defined) of the Company's Common Stock for the twenty (20) consecutive
trading days immediately prior to the date on which the notice of redemption is
given, shall have exceeded $13.00 per share.
</TABLE>
8
<PAGE> 13
<TABLE>
<S> <C>
Use of Proceeds........... Repayment of indebtedness, acquisition of businesses and working capital.
See "Use of Proceeds".
Risk Factors.............. Investment in the securities offered hereby involves a high degree of risk and
immediate substantial dilution. See "Risk Factors" and "Dilution".
Proposed NASDAQ Symbols:(3)
Common Stock.............. NEPC
Warrants.................. NEPCW
</TABLE>
__________________
(1) Does not include (i) 120,000 shares of Common Stock subject to the
Underwriter's Over-allotment Option; (ii) 130,000 shares of Common
Stock and 260,000 Warrants issuable upon the exercise of the
Underwriter's Warrants; or (iii) 250,000 shares of Common Stock
reserved for issuance pursuant to the Company's stock option plan. See
"Management", "Underwriting" and "Description of Securities".
(2) Does not include 390,000 Warrants subject to the Underwriter's
Over-allotment option.
(3) The proposed trading symbols do not imply that a liquid and active
market will be developed or sustained for the securities upon
completion of the Offering.
9
<PAGE> 14
SUMMARY FINANCIAL DATA
The summary financial information set forth below is derived from and
should be read in conjunction with the consolidated financial statements of the
Company, including the notes thereto, appearing elsewhere in this Prospectus.
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
For the Years Ended For the Six Months Ended
December 31, June 30,
------------------------------------------------- --------------------------------
(unaudited)
1993 1994 1995 1995 1996
---- ---- ---- ---- ----
(Pro Forma)(1)
<S> <C> <C> <C> <C> <C>
Net Sales 11,527,000 20,632,000 25,531,000 12,273,000 13,667,000
Cost of Goods Sold 6,445,000 12,296,000 15,318,000 7,097,000 8,083,000
Gross Profit 5,082,000 8,336,000 10,213,000 5,176,000 5,584,000
Operating Expenses
Selling, General
and Administrative 3,910,000 7,408,000 8,707,000 4,162,000 4,623,000
Interest 830,000 511,000 536,000 228,000 253,000
Depreciation and
Amortization 300,000 376,000 503,000 282,000 224,000
Earnings before other
Income, Taxes,
Extraordinary
Income and
Minority Interest 42,000 41,000 467,000 504,000 484,000
Other Income
Interest Earned 18,000 30,000 84,000 92,000 87,000
Other Earnings (Loss) (114,000) 511,000 210,000 28,000 25,000
Earnings (Loss) before
Taxes and Minority
Interest (54,000) 582,000 761,000 624,000 596,000
Provision for Taxes 35,000 136,000 254,000 175,000 173,000
Earnings (Loss)
before Minority
Interest (89,000) 446,000 507,000 449,000 423,000
Minority Interest (31,000) 54,000 0 68,000 ---
Net Earnings (Loss) (58,000) 392,000 507,000 381,000 423,000
Net Earnings (Loss) Per Share:
Net Earnings (Loss)
before Extraordinary
Item 0.02 (0.01) 0.11 0.06 0.22
Net Earnings (Loss) (0.01) 0.07 0.11 0.06 0.24
Weighted Average Number
of Common Stock
Outstanding 5,751,003 5,766,323 4,640,741 6,061,112 1,800,000
</TABLE>
- -------------
(1) The 1993 statement of operations reflects balances as though the pooling of
interests had occurred on January 1, 1993.
10
<PAGE> 15
CONSOLIDATED BALANCE SHEET DATA:
<TABLE>
<CAPTION>
December 31, 1995 June 30, 1996
----------------- -----------------------
(unaudited)
Actual Adjusted
------ --------
<S> <C> <C> <C>
Working Capital 1,648,000 2,793,000 7,489,000
Total Assets 11,240,000 11,668,000 17,683,000
Current Liabilities 7,674,000 7,343,000 7,343,000
Long-Term Debt 1,276,000 1,630,000 1,630,000
Stockholders' Equity 2,290,000 2,695,000 8,710,000
</TABLE>
11
<PAGE> 16
RISK FACTORS
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE IN NATURE,
INVOLVES A HIGH DEGREE OF RISK AND SHOULD NOT BE MADE BY ANY INVESTOR WHO
CANNOT AFFORD THE LOSS OF HIS ENTIRE INVESTMENT. EACH PROSPECTIVE PURCHASER
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS AND SPECULATIVE FACTORS
ASSOCIATED WITH THIS OFFERING, AS WELL AS OTHERS DESCRIBED ELSEWHERE IN THIS
PROSPECTUS, BEFORE MAKING ANY INVESTMENTS.
1. DEPENDENCE BY NORTELCO ON THIRD PARTY MANUFACTURERS AND SUPPLIERS.
Nortelco does not own or operate any manufacturing or production facilities.
Nortelco distributes products which are manufactured and supplied by third
party companies. These companies could terminate their relationships with
Nordic at any time. Although no products from any of Nortelco's suppliers
accounted for more than 5% of the gross sales of the Company for the year ended
December 31, 1995 or the six months ended June 30, 1996, the loss of business
from major manufacturers and suppliers as a result of change in sales or
distribution practices or otherwise, would have a material adverse affect on
Nortelco's operations. Although the Company believes it has good relationships
with its manufacturers and suppliers, and that it could readily obtain other
suppliers of similar products, there can be no assurances that Nortelco would
not experience delays in locating alternative sources for such products. See
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" and "Business."
2. STOREBRO'S DEPENDENCE ON A SINGLE PRODUCT LINE. Sales of lathes and
lathe parts and the servicing and repairing of lathes by Storebro for the year
ended December 31, 1995 and the six months ended June 30, 1996 accounted for
approximately $4,250,000 and $1,822,000 of the Company's revenues,
respectively, or 16.6% and 13.3% of the Company's revenues, respectively.
Although Storebro offers for sale a variety of different lathes, Storebro's
business is dependent on sales of lathes. A substantial reduction in lathe
sales could have a material adverse effect on the Company's results of
operations. See "Business."
3. NEED FOR ADDITIONAL FUTURE FINANCING. Although the Company
believes that the net proceeds from the sale of the Securities offered hereby
will be sufficient to fund the Company's operations for a period of
approximately one year, there can be no assurances that this Offering will
provide the Company with sufficient capital to continue its business, in which
case the Company will be required to seek additional financing. There can be
no assurances that the Company will be able to obtain such additional financing
on acceptable terms or at all. In the event that the Company is unable to
obtain additional financing, the Company's growth plans
12
<PAGE> 17
may be impaired, which would likely result in loss to investors of all or a
substantial portion of their investment. See Managements's Discussion and
Analysis of Financial Condition and Results of Operations" and "Use of
Proceeds."
4. FOREIGN MANUFACTURING. A substantial portion of the Company's
business consists of sales of products manufactured outside of Sweden and
Norway. Foreign manufacturing is subject to a number of risks, including
transportation delays and interruptions, political and economic disruptions,
the impositions of tariffs and import and export controls and changes in
governmental policies. While the Company has not, to date, experienced any
material adverse effects due to such risks, there can be no assurance that such
events will not occur in the future with the result of possible increases in
costs and delays of, or interferences with, product deliveries resulting in
losses of revenues and goodwill. See "Business."
5. SENSITIVITY TO ECONOMIC AND OTHER CONDITIONS. The Company's
businesses may be affected by changes in economic conditions. A downturn in the
economy in one or more markets served by the Company, particularly Norway,
Sweden or certain other European countries, could have a material adverse
effect on the Company's operations. See "Management's Discussion and Analysis
of Financial Conditions and Results of Operations."
6. ACQUISITION STRATEGY. The Company's growth strategy includes the
acquisition of entities with businesses and/or assets similar to the Company's.
The Company continually seeks acquisition candidates in selected markets and
from time to time engages in exploratory discussions with suitable candidates.
There can be no assurance, however, that the Company will be able to identify
and acquire appropriate businesses or obtain financing for such acquisitions on
satisfactory terms. The process of integrating acquired businesses into the
Company's operations may result in unforeseen difficulties and may require a
disproportionate amount of resources and management's attention. Future
acquisitions may be financed through the issuance of Common Stock, which may
dilute the Company's shareholders, or through the incurrence of additional
indebtedness. Furthermore, there can be no assurance that competition for
acquisition candidates will not escalate, thereby increasing the costs of
making acquisitions. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
7. COMPETITION. Nortelco and Storebro both compete in markets that
are extremely competitive and sensitive to changing consumer preferences and
demands. Each such corporation competes against many companies that are better
known with better known brand products, substantially larger and more
diversified, and have substantially greater financial, employee and marketing
resources
13
<PAGE> 18
than either of such corporations, as well as greater name recognition and the
ability to develop and market products similar to and more competitively priced
than those distributed by such corporations. No assurances can be given that
either of such companies will be able to compete in their respective markets.
See "Business."
8. FOREIGN CURRENCY AND FOREIGN EXCHANGE REGULATION. The Company's
sales are invoiced primarily in the Swedish Krone and the Norwegian Krone. A
decreasing value of the Swedish Krone and the Norwegian Krone would make the
Company's products more expensive to its buyers. Fluctuations in exchange
rates of the Swedish Krone and the Norwegian Krone against foreign currencies
and the translation of such currencies into U.S. dollars for determining the
Company's financial statements could adversely affect the Company's results and
operations. Furthermore, there can be no assurances that the Company will be
able to forecast and adjust to a rapid fluctuation in the international
currency market.
9. LACK OF EXPERIENCE OF THE UNDERWRITER. The Underwriter was
organized in March 1995, was first registered as a broker dealer in December
1995, and became a member firm of the NASD in December 1995. The Underwriter is
principally engaged in retail brokerage and market making activities and
various corporate finance projects. Although the Underwriter has acted as a
placement agent in private offerings and has participated as a member of the
underwriting syndicate or as a selected dealer in four prior public offerings,
it only has acted as the lead managing underwriter in one prior public
offering and has co-managed one other public offering. No assurance can be
given that the Underwriter's lack of experience as a lead managing underwriter
of public offerings will not adversely affect the Offering and the subsequent
development of a liquid public trading market in the Company's securities.
10. BROAD DISCRETION IN APPLICATION OF PROCEEDS. Approximately 19% of
the net proceeds of this Offering will be applied to working capital and
general corporate purposes. Accordingly, management will have a broad
discretion over the use of proceeds. See "Use of Proceeds."
11. DEPENDENCE UPON MANAGEMENT; NO "KEY MAN LIFE INSURANCE";
ATTRACTION AND RETENTION OF KEY PERSONNEL. The success of the Company will be
dependent on its existing management team. Although the Company intends in the
future to obtain "key man life insurance," the Company currently has no such
insurance on the life of any of its employees. The loss of the services of any
of such persons may adversely affect the Company's business and prospects. The
success of the Company's business will also be dependent upon its ability to
attract and retain other qualified personnel. There
14
<PAGE> 19
can be no assurances that the Company will be successful in attracting or
retaining such personnel. See "Management."
12. PRODUCT LIABILITY. Nortelco has approximately $500,000 in product
liability insurance. Nortelco believes that, generally, the manufacturers of
its products also have product liability insurance for their respective
products. Storebro has approximately $2,000,000 of product liability insurance.
To date, neither Nortelco or Storebro has been a party to any material product
liability claims asserted against them, and believe their respective product
liability insurance policies are sufficient. However, no assurance can be given
that in the future a claim will not be made against the Company and such
insurance will not be sufficient.
13. CONTROL BY MANAGEMENT. The Company's officers and directors
currently own and have the power to vote 51.9% of the shares of Common Stock.
In addition, upon the completion of this Offering, management of the Company
will continue to beneficially own shares of Common Stock representing 51.9% of
all votes entitled to be cast. Accordingly, management of the Company will, as
a practical matter, be in a position to elect a majority of the directors of
the Company and to control the Company's day-to-day affairs. See "Principal
Stockholders" and "Description of Securities."
14. ANTI-TAKEOVER PROVISIONS. The Company's Certificate of
Incorporation permits its Board of Directors to designate the terms of and
issue shares of Preferred Stock (subject to the prohibition of the Company
issuing such shares for two years from the Effective Date, without the consent
of the Underwriter). These provisions, might render it more difficult, and
therefore discourage, an unsolicited takeover proposal such as a proxy contest
or the removal of incumbent management, even if such actions would be in the
best interest of the Company's stockholders. See "Description of Securities -
Preferred Stock."
15. SHARES ELIGIBLE FOR FUTURE SALE. The Company currently has
2,400,000 shares of Common Stock outstanding that are "restricted securities",
as that term is defined under Rule 144 promulgated under the Securities Act of
1933, as amended (the "Securities Act"). In general, under Rule 144, a person
who has satisfied a two-year holding period may, under certain circumstances,
sell within any three month period a number of shares of Common Stock that does
not exceed the greater of 1% of the then outstanding shares of Common Stock or
the average weekly trading volume in such shares during the four calendar weeks
prior to such sale. Rule 144 also permits, under certain circumstances, the
sale of shares without any quantity or other limitation by a person who is not
an affiliate of the Company and who has satisfied a three-year holding period.
Any substantial sale of restricted securities under Rule
15
<PAGE> 20
144 could have a significant adverse effect on the market price of the
Company's securities.
Giving effect to the sale of 775,000 by the Company and 525,000 shares
by the Selling Stockholders, the Company will have issued and outstanding
3,175,000 shares of its Common Stock, of which 1,875,000 will be "restricted
securities". See "Shares Eligible for Future Sale."
All Company's securityholders, on the date hereof, have agreed not to
publicly sell, for a period of two (2) years from the date of this Prospectus,
any shares of the Company's Common Stock without the prior written consent of
the Underwriter.
16. IMMEDIATE AND SUBSTANTIAL DILUTION. As of June 30, 1996, the net
tangible book value of the Company was $1,611,000 or approximately $0.50 per
share of Common Stock, based on 1,800,000 shares outstanding on such date.
Investors participating in this Offering will incur immediate dilution in net
tangible book value of $4.83 per share of Common Stock, which is approximately
69.0%, based upon the Offering Price of $7.00 per share for the Common Stock.
All of the Company's present stockholders purchased their shares at a price
substantially less than Offering Price herein. See "Dilution."
17. NO DIVIDENDS AND NONE ANTICIPATED. The holders of Common Stock are
entitled to receive dividends when, as and if declared by the Board of
Directors, out of funds legally available therefor. To date, no dividends have
been declared or paid on the Common Stock, and the Company does not intend to
declare any dividends in the foreseeable future. It is currently anticipated
that earnings, if any, will be used to develop and finance the Company's
proposed business operations. See "Dividend Policy."
18. NO ASSURANCE OF PUBLIC MARKET; DETERMINATION OF OFFERING PRICE;
VOLATILITY OF STOCK PRICE. Prior to this Offering, there has been no sustained
public market for the Company's Common Stock and no public market for the
Company's Warrants. There can be no assurance that a trading market will
develop or be sustained after this Offering. The initial public offering prices
of the Securities and the exercise price and other terms of the Warrants were
established by negotiations between the Company and the Underwriter and do not
bear any direct relationship to the Company's assets, book value, results of
operations or any other criteria of value. In addition, factors such as
quarterly variations in the Company's actual or anticipated results of
operations may cause the market price of the Common Stock and Warrants to
fluctuate significantly. Furthermore, the stock market may experience extreme
price and volume fluctuations. These broad market fluctuations may adversely
affect the market price of the Company's Common Stock and Warrants. See
"Underwriting".
16
<PAGE> 21
19. NASDAQ ELIGIBILITY AND MAINTENANCE REQUIREMENTS; POSSIBLE
DELISTING OF SECURITIES FROM NASDAQ MARKET; RISKS OF LOW-PRICED STOCKS. Prior
to this Offering, there has been no sustained public trading market for the
Company's securities and there is no assurance that a sustained public trading
market for the Company's securities will develop after the completion of this
Offering. If a trading market does in fact develop for the securities offered
hereby, there can be no assurance that it will be sustained.
The Company has applied for listing of the Common Stock and Warrants
on NASDAQ-NMS upon the Effective Date. The Commission has approved rules for
imposing criteria for listing of securities on NASDAQ-NMS, including standards
for maintenance of such listing. In order to qualify for initial quotation of
securities on NASDAQ-NMS, a company, among other things, must have at least
$4,000,000 in net tangible assets, $3,000,000 in market value of the public
float and a minimum bid price of $5.00 per share. For continued listing, a
company, among other things, must have at least $1,000,000 in net tangible
assets, $1,000,000 in market value of the public float and a minimum bid price
of $1.00 per share. If the Company is unable to satisfy NASDAQ-NMS maintenance
criteria for listing in the future, its securities may be delisted from
NASDAQ-NMS. In such event, the Company would seek to list its securities on the
NASDAQ SmallCap Market, however, if it is unsuccessful, trading, if any, in the
Company's securities would thereafter be conducted in the over-the-counter
market in the so-called "pink sheets" or the NASD's "Electronic Bulletin
Board." As a consequence of such delisting, an investor would likely find it
more difficult to dispose of, or to obtain quotations as to, the price of the
Company's securities.
20. PENNY STOCK REGULATION. In the event that the Company is unable to
satisfy the maintenance criteria requirements for the NASDAQ-NMS and its
Common Stock falls below the minimum bid price of $5.00 per share for the
initial quotation, the Company would seek to list its securities on the NASDAQ
SmallCap Market. If it was unsuccessful, trading would be conducted in the
"Pink Sheets" or the NASD's Electronic Bulletin Board. In the absence of the
Common Stock being quoted on NASDAQ, or the Company's having $2,000,000 in
stockholders' equity, trading in the Common Stock would be covered by Rule
15g-9 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), for non-NASDAQ and non-exchange listed securities. Under such rule,
broker-dealers who recommend such securities to persons other than established
customers and accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement
to a transaction prior to sale. Securities are exempt from this rule if the
market price is at least $5.00 per share.
17
<PAGE> 22
The Commission has adopted regulations that generally define a "penny
stock" to be any equity security that has a market price of less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Such exceptions include an equity security listed on NASDAQ, and an
equity security issued by an issuer that has (i) net tangible assets of at
least $2,000,000, if such issuer has been in continuous operation for three
years, (ii) net tangible assets of at least $5,000,000, if such issuer has been
in continuous operation for less than three years, or (iii) average revenue of
at least $6,000,000 for the preceding three years. Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a risk disclosure schedule explaining the penny
stock market and the risks associated therewith.
If the Company's securities were to become subject to the regulations
applicable to penny stocks, the market liquidity for the securities would be
severely affected, limiting the ability of broker-dealers to sell the
securities and the ability of purchasers in this Offering to sell their
securities in the secondary market. There is no assurance that trading in the
Company's securities will not be subject to these or other regulations that
would adversely affect the market for such securities.
21. POTENTIAL ADVERSE EFFECT OF REDEMPTION OF WARRANTS. The Warrants
offered hereby are redeemable, in whole or in part, at a price of $.05 per
Warrant, commencing one year after the Effective Date and prior to their
expiration; provided that (i) prior notice of not less than 30 days is given to
the Warrantholders; (ii) the closing bid price of the Company's Common Stock
for the twenty (20) consecutive trading days immediately prior to the date on
which the notice of redemption is given, shall have exceeded $13.00 per share;
and (iii) Warrantholders shall have exercise rights until the close of the
business day preceding the date fixed for redemption. Notice of redemption of
the Warrants could force the holders to exercise the Warrants and pay the
Exercise Price at a time when it may be disadvantageous for them to do so, or
to sell the Warrants at the current market price when they might otherwise wish
to hold them, or to accept the redemption price, which may be substantially
less than the market value of the Warrants at the time of redemption. The
Warrants may not be exercised unless the registration statement pursuant to the
Securities Act covering the underlying shares of Common Stock is current and
such shares have been qualified for sale, or there is an exemption from
applicable qualification requirements, under the securities laws of the state
of residence of the holder of the Warrants. Although the Company does not
presently intend to do so, the Company reserves the right to call the Warrants
for redemption whether or not a current prospectus is in effect or such
underlying shares are not, or cannot be, registered in the applicable states.
Such restrictions could have the effect of preventing certain Warrantholders
from
18
<PAGE> 23
liquidating their Warrants. See "Description of Securities - Warrants."
22. CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO
EXERCISE WARRANTS. Holders of the Warrants will have the right to exercise the
Warrants for the purchase of shares of Common Stock only if a current
prospectus relating to such shares is then in effect and only if the shares are
qualified for sale under the securities laws of the applicable state or states.
The Company has undertaken and intends to file and keep current a prospectus
which will permit the purchase and sale of the Common Stock underlying the
Warrants, but there can be no assurance that the Company will be able to do so.
Although the Company intends to seek to qualify for sale the shares of Common
Stock underlying the Warrants in those states in which the securities are to be
offered, no assurance can be given that such qualification will occur. In
addition, purchasers may buy Warrants in the aftermarket or may move to
jurisdictions in which the shares of Common Stock issuable upon exercise of the
Warrants are not so registered or qualified during the period that the Warrants
are exercisable. In such event, the Company would be unable to issue shares to
those persons desiring to exercise their Warrants unless and until the shares
could be registered or qualified for sale in the jurisdiction in which such
purchasers reside, or an exemption to such qualification exists or is granted
in such jurisdiction. The Warrants may lose or be of no value if a prospectus
covering the shares issuable upon the exercise thereof is not kept current or
if such underlying shares are not, or cannot be, registered in the applicable
states. See "Description of Securities - Warrants."
23. RELATIONSHIP OF UNDERWRITER TO TRADING. The Underwriter may act as
a broker or dealer with respect to the purchase or sale of the Common Stock and
the Warrants in the over-the-counter market where each is expected to trade.
The Underwriter also has the right to act as the Company's exclusive agent in
connection with any future solicitation of warrantholders to exercise their
Warrants. Unless granted an exemption by the Commission from Rule 10b-6 under
the Exchange Act, the Underwriter will be prohibited from engaging in any
market-making activities or solicited brokerage activities with regard to the
Company's securities during a period beginning nine business days prior to the
commencement of any such solicitation and ending on the later of the
termination of such solicitation activity or the termination (by waiver or
otherwise) of any right the Underwriter may have to receive a fee for the
exercise of the Warrants following such solicitation. As a result, the
Underwriter and soliciting broker/dealers may be unable to continue to make a
market in the Company's securities during certain periods while the exercise of
Warrants is being solicited. Such a limitation, while in effect, could impair
the liquidity and market price of the Company's securities.
19
<PAGE> 24
24. UNDERWRITER'S WARRANTS AND REGISTRATION RIGHTS. In connection with
this Offering, the Company has agreed to sell to the Underwriter, for $10, the
Underwriter's Warrants which entitle the Underwriter to purchase up to 130,000
shares of Common Stock and/or 260,000 Warrants, respectively. The securities
issuable upon exercise of the Underwriter's Warrants are identical to those
offered pursuant to this prospectus. The Underwriter's Warrants are exercisable
at $8.40 and $.18, respectively, for a period of four years commencing one year
from the Effective Date. The exercise of the Underwriter's Warrants and the
Warrants contained in the Underwriter's Warrants may dilute the value of the
shares of Common Stock to be acquired by holders of the Warrants, may adversely
affect the Company's ability to obtain equity capital, and, if the Common Stock
issuable upon the exercise of the Underwriter's Warrants and the Warrants
contained in the Underwriter's Warrants are sold in the public market, may
adversely affect the market price of the Common Stock. The Underwriter has been
granted certain "piggyback" and demand registration rights for a period of five
years from the Effective Date with respect to the registration under the
Securities Act of the securities directly or indirectly issuable upon exercise
of the Underwriter's Stock Warrants and Underwriter's warrants. The exercise of
such rights could result in substantial expense to the Company. See
"Underwriting."
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<PAGE> 25
USE OF PROCEEDS
The net proceeds to the Company from the sale the Securities offered
hereby are estimated to be approximately $4,549,050 ($5,331,000 if the
Underwriter's Over-allotment Option is exercised in full) after deducting
underwriting commissions and discounts and other expenses of the Offering. The
Company expects to use the net proceeds approximately as follows:
<TABLE>
<CAPTION>
Approximate
Application of Approximate Percentage of
Net Proceeds Dollar Amount Net Proceeds
- -------------- ------------- -------------
<S> <C> <C>
Repayment of Bridge Loans(1) $ 950,000 20.9%
Acquisitions(2) 2,599,050 57.1%
Working Capital 1,000,000 22.0%
---------- ------
Total $4,549,050 100.0%
========== ======
</TABLE>
- ---------------
(1) The Bridge Loans which were made by unaffiliated third parties are
payable on the earlier of the closing of this Offering or February 15,
1998. The principal amount of the Bridge Loans of $950,000 bears
interest at the rate of 10% per annum. The proceeds of the Bridge
Loans were used to finance, in part, the cost of the public offering
and for corporate and general working capital purposes, including
proposed acquisitions.
(2) The Company intends to use a portion of the proceeds from this
offering to pursue acquisition of entities with businesses and/or
assets similar to the Company's. See "Risk Factors - Acquisition
Strategy."
The foregoing represents the Company's current estimate of the
allocation of the net proceeds of the Offering based upon certain assumptions
relating to the Company's business. Future events, including changes in
economic conditions, regulatory or competitive conditions, and the success or
lack thereof of the Company's businesses, may make shifts in the allocation of
funds necessary or desirable. There can be no assurance that the Company's
estimates will prove to be accurate or that unforeseen expenses will not be
incurred.
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<PAGE> 26
The Company anticipates, based on its currently proposed plans and
assumptions relating to its operations, that the proceeds of this Offering,
together with projected cash flow from operations and available cash resources,
will be sufficient to satisfy the Company's contemplated cash requirements for
at least twelve (12) months following the consummation of this Offering. In
the event that the Company's plans change, its assumptions change or prove to
be inaccurate, or if the proceeds of this Offering or cash flow otherwise prove
to be insufficient to fund operations (due to unanticipated expenses, problems,
difficulties or otherwise), the Company may find it necessary or advisable to
reallocate some of the proceeds within the above-described categories or may be
required to seek additional financing sooner than currently anticipated or
curtail its expansion activities. There can be no assurance that additional
financing will be available to the Company on commercially reasonable terms, or
at all.
Proceeds not immediately required for the purposes described above
will be invested principally in short-term bank certificates of deposit,
short-term securities, United States Government obligations, money market
instruments or other interest-bearing investments.
DILUTION
The difference between the initial public offering price per share of
Common Stock and the pro forma net tangible book value per share of Common
Stock after this Offering constitutes the dilution to investors in this
Offering. Net tangible book value per share is determined by dividing the net
tangible book value of the Company (total tangible assets less total
liabilities) by the number of outstanding shares of Common stock. The following
discussions allocate no value to the Class A Warrants.
At June 30, 1996, the Company's tangible assets exceeded its
liabilities by $2,279,000 (giving effect to expenses of the Offering paid at
such date) and accordingly the Company's Common Stock had a net tangible book
value of $.0.50 per share. After giving effect to the receipt of the net
proceeds from the sale of the Common Stock offered hereby at an initial public
offering price of $7.00 per share of Common Stock (less underwriting discount
and offering expenses) the pro forma net tangible book value of the Company at
June 30, 1996 would have been $6,908,000 or $2.17 per share, representing an
immediate increase in net tangible book value of $1.67 per share to the
existing stockholders and an immediate dilution of $4.83 per share (69.0%) to
new investors. The following table illustrates dilution to new investors on a
per share basis:
22
<PAGE> 27
<TABLE>
<S> <C>
Initial public offering price ................................. $7.00
Net tangible book value per share
before this offering(1) ........................... $0.50
Increase per share attributable
to new investors .................................. 1.43
Pro forma net tangible book value per share after
this offering ................................................. 2.17
-----
Dilution per share to new investors(2) ........................ $4.83
=====
</TABLE>
___________________
(1) Net tangible book value per share is determined by dividing the
Company's net tangible book value (total assets less intangible assets
and total liabilities) at June 30, 1996 by the number of shares of
Common Stock then outstanding.
(2) Dilution per share is determined by subtracting pro forma net tangible
book value per share after the Underwritten Offering from the initial
public offering price per share. The foregoing table also assumes no
exercise of the Underwriter's Warrant or options to purchase 250,000
shares of Common Stock to be granted pursuant to the Company's Stock
Option Plan.
In the event the underwriter exercises its Over-allotment Option in
full, the pro forma net tangible book value per share would be $2.10 which
would result in dilution to new investors of $4.99 per share.
The following table sets forth on a pro forma basis as of June 30,
1996 the respective positions of the Company's existing stockholders and new
investors with respect to the number of shares of Common Stock purchased from
the Company, the total cash consideration paid and the average price per share
paid by the existing stockholders and by the new investors with respect to the
775,000 shares of Common Stock to be issued by the Company at an initial public
offering price of $7.00 per share.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
----------------------- ------------------------ Average
Approximate Approximate Price Per
Number Percent Amount Percent Share
------ ----------- ------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Existing Stockholders 2,400,000 75.6% 1,422,000 20.8% $ 0.59
New Investors 775,000 24.4% 5,425,000 79.2% $ 7.00
--------- ----- --------- ----- ------
Total 3,175,000 100.0% 6,847,000 100.0%
</TABLE>
The foregoing table assumes no exercise of any Warrants or options to
purchase 250,000 shares of Common Stock to be granted pursuant to the Company's
1995 Stock Option Plan.
23
<PAGE> 28
DIVIDEND POLICY
To date, the Company has paid no dividends on any shares of its Common
Stock and the Company's Board of Directors has no present intention of paying
any dividends on its Common Stock in the foreseeable future, as it intends to
use its earnings, if any, to generate increased growth. The payment by the
Company of dividends in the future, if any, rests solely within the discretion
of the Board of Directors and will depend upon, among other things, the
Company's earnings, capital requirements and financial condition, as well as
other factors deemed relevant by the Company's Board of Directors. Although
dividends are not limited currently by any agreements, it is anticipated that
future agreements, if any, with institutional lenders or others may also limit
the Company's ability to pay dividends.
24
<PAGE> 29
CAPITALIZATION
The following table sets forth (i) the capitalization of the Company
as of June 30, 1996 and (ii) such capitalization as adjusted to give effect to
the sale of 775,000 shares of Common Stock and 2,600,000 Warrants at initial
public offering prices of $7.00 per share and $.15 per Warrant and the
application of the net proceeds therefrom. This table should be read in
conjunction with the Financial Statements and the notes thereto appearing
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
June 30, 1996
---------------------------
Actual As Adjusted
------ -----------
<S> <C> <C>
Current Liabilities $7,343,000 $7,343,000
Long-Term Debt $1,630,000 $1,630,000
Common Stock, $.0001 par value;
19,000,000 shares authorized;
1,800,000 shares issued and
outstanding as of June 30,
1996 (actual); 600,000 shares
issued and outstanding
(as adjusted); 775,000 shares
issued and outstanding
(pro forma) $ 1,800 $4,629,000
Additional Paid-In Capital $1,085,000 $1,085,000
Retained Earnings $1,655,000 $1,655,000
Cumulative Currency
Translation Adjustment $ (46,800) $ (44,820)
Total Stockholders' Equity $2,695,000 $7,324,000
---------- ----------
Total Capitalization $2,695,000 $7,324,000
========== ==========
</TABLE>
PRIVATE PLACEMENTS
The Company consummated two private placement offering in July and
August 1996. Pursuant to the July 1996 private placement, the Company sold
500,000 shares of Common stock for an aggregate of $150,000. In addition,
pursuant to the August 1996 private placement, the Company sold 10 units, each
unit consisting of $95,000 principal amount 10% promissory note and 10,000
shares of Common Stock, at a purchase price of $100,000 per unit. 525,000
shares of Common Stock are being sold by the Selling Stockholders
25
<PAGE> 30
through the Underwriter on a firm commitment basis, with an additional 75,000
shares registered for sale pursuant to the Underwriter's Over-allotment Option
granted by the Selling Stockholders to the Underwriter. The proceeds of the
private placements were used by the Company to finance, in part, the costs of
the public offering, and for corporate and general working capital purposes,
including proposed acquisitions.
MARKET FOR SECURITIES
There is presently no established public trading market for the
Company's Common Stock. Present management is unaware of any active trading in
the Company's Common Stock within the last three (3) years.
The approximate number of record holders of the Company's Common Stock
as of September 1, 1996 was approximately 630.
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<PAGE> 31
SELECTED FINANCIAL INFORMATION
The following is a summary of the Company's financial information
extracted from the indicated year end Consolidated Financial Statements of the
Company, and is qualified in its entirety by the detailed financial information
appearing in the Consolidated Financial Statements and the Notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." The unaudited Consolidated Financial Statements of the Company
for the interim periods ended June 30, 1996 and 1995, have been prepared by
management from the books and records of the Company and reflect, in the
opinion of management, all adjustments (consisting of normally occurring
accruals), necessary for a fair presentation of the financial position,
results of operations, and changes in the financial position of the Company, as
at the periods indicated therein. Results for interim periods are not
necessarily indicative of results which can be expected for the entire year.
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
For the Years Ended For the Six Months Ended
December 31, June 30,
------------------------------------------------- --------------------------------
(unaudited)
1993 1994 1995 1995 1996
---- ---- ---- ---- ----
(Pro Forma)(1)
<S> <C> <C> <C> <C> <C>
Net Sales 11,527,000 20,632,000 25,531,000 12,273,000 13,667,000
Cost of Goods Sold 6,445,000 12,296,000 15,318,000 7,097,000 8,083,000
Gross Profit 5,082,000 8,336,000 10,213,000 5,176,000 5,584,000
Operating Expenses
Selling, General
and Administrative 3,910,000 7,408,000 8,707,000 4,162,000 4,623,000
Interest 830,000 511,000 536,000 228,000 253,000
Depreciation and
Amortization 300,000 376,000 503,000 282,000 224,000
Earnings before other
Income, Taxes,
Extraordinary
Income and
Minority Interest 42,000 41,000 467,000 504,000 484,000
Other Income
Interest Earned 18,000 30,000 84,000 92,000 87,000
Other Earnings (Loss) (114,000) 511,000 210,000 28,000 25,000
Earnings (Loss) before
Taxes and Minority
Interest (54,000) 582,000 761,000 624,000 596,000
Provision for Taxes 35,000 136,000 254,000 175,000 173,000
Earnings (Loss)
before Minority
Interest (89,000) 446,000 507,000 449,000 423,000
Minority Interest (31,000) 54,000 0 68,000 ---
Net Earnings (Loss) (58,000) 392,000 507,000 381,000 423,000
Net Earnings (Loss) Per Share:
Net Earnings (Loss)
before Extraordinary
Item 0.02 (0.01) 0.11 0.06 0.22
Net Earnings (Loss) (0.01) 0.07 0.11 0.06 0.24
Weighted Average Number
of Common Stock
Outstanding 5,751,003 5,766,323 4,640,741 6,061,112 1,800,000
- -------------
</TABLE>
(1) The 1993 statement of operations reflects balances as though the pooling of
interests had occurred on January 1, 1993.
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<PAGE> 32
CONSOLIDATED BALANCE SHEET DATA:
<TABLE>
<CAPTION>
December 31, 1995 June 30, 1996
----------------- -----------------------
(unaudited)
Actual Adjusted
------ --------
<S> <C> <C> <C>
Working Capital 1,648,000 2,793,000 7,489,000
Total Assets 11,240,000 11,668,000 17,683,000
Current Liabilities 7,674,000 7,343,000 7,343,000
Long-Term Debt 1,276,000 1,630,000 1,630,000
Stockholders' Equity 2,290,000 2,695,000 8,710,000
</TABLE>
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<PAGE> 33
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be
read in conjunction with the Financial Statements and notes thereto appearing
elsewhere in this Prospectus.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
For twelve months
ended December 31
------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net Sales ................................. 100.00% 100.0% 100.0%
Cost of Goods Sold ........................ 60.0% 59.6% 55.9%
------- ------ ------
Gross Profit .............................. 40.0% 40.4% 44.1%
Operating Expenses:
Selling, General and Administrative .... 34.1% 35.9% 33.9%
Depreciation and Amortization .......... 2.0% 1.8% 2.6%
Interest ............................... 2.1% 2.5% 7.2%
Earnings before other income,
taxes, extraordinary income,
and minority interest .................. 1.8% 0.2% 0.4%
Earnings before taxes, extraordinary
income and minority interest ........... 3.0% 0.6% 0.9%
Earnings/(Loss) before taxes and
minority interest ...................... 3.0% 2.8% (0.5)%
Earnings/(Loss) before
minority interest ...................... 2.0% 2.2% (0.8)%
Net Earnings/(Loss) ....................... 2.0% 1.9% (0.5)%
</TABLE>
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1996 TO THE SIX MONTHS ENDED JUNE
30, 1995
NET EARNINGS
The Company's net earnings for the six month period ended June 30, 1995
were $423,000, an increase of $42,000 from 1994, when the Company had a net
earning of 381,0000. Such increase resulted from an increased level of sales.
NET SALES
Net sales increased by $1,394,000 for the six months ended June 30,
1996, from $12,273,000 to $13,667,000, or approximately 11.3%, from the
previous year as a result of normal growth.
GROSS PROFIT
Gross Profit increased in 1996 by $408,000, from $5,176,000 to
$5,584,000 as a result of the increased net sales and higher profit margin on
goods sold.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased for the six
months ended June 30, 1996 by $408,000, from $4,215,000 to $4,623,000 and as a
percentage of net sales to 33.8% from 33.9%.
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<PAGE> 34
COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 1994 TO THE TWELVE MONTHS
ENDED DECEMBER 31, 1993
NET EARNINGS
The Company's net earnings in 1995 were $507,000, an increase of
$115,000 from 1994, when the Company had net earnings of $392,000. Such
increase resulted from an increased level of sales and resulting net earnings
from the acquisition of a 100% stock interest in Nortelco Audiatur, and 100% of
Bror Maurit-Hansen AS, which was subsequently merged into Nortelco System
Teknikk.
NET SALES
Net sales increased by $4,899,000 for the twelve months ended December
31, 1995, from $20,632,000 to $25,531,000, or approximately 23.7%, from the
previous year as a result of the larger business base due to Nortelco's 1994
acquisitions discussed above.
GROSS PROFIT
Gross Profit increased in 1995 by $1,877,000, from $8,336,000 to
$10,213,000 as a result of increased net sales in 1995 from the Nortelco
acquisition. However, profit remained the same due to the administrative and
relocation costs incurred from the acquisition.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased in 1995 by
$1,299,000, from $7,408,000 to $8,707,000 and decreased as a percentage of net
sales to 34.1% from 35.9%. The increase in selling, general and administrative
expenses resulted from increased salaries due to Nortelco's 1994 acquisitions
discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Historically, Nortelco has financed its operations and acquisitions
through borrowings from certain officers and/or directors of the Company, loans
under its bank credit agreements and cash flow from operations. Storebro has
financed its operations from cash flow from operations.
The primary uses of Nortelco's cash are product acquisitions from
suppliers, and, in 1994, to fund, in part, growth through acquisitions of
corporations with compatible product lines. The primary uses of Storebro's
cash are to purchase materials and inventory used in the assembly of its lathe
product line.
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<PAGE> 35
In 1994, Haggqvinvest AB, a corporation owned by Mr. Haggqvist, and
certain family members contributed $1,000,000 to the Company and subsequently
received 1,794,320 shares of Common Stock of the Company in September 1995.
Such funds were used in connection with the Company's acquisition of Storebro
and Nortelco.
In March 1994, Nortelco sold its corporate headquarters for
approximately $6,700,000. Nortelco then entered into a ten-year lease for such
property. The funds from such sale were used to repay loans on the premises
which reduced the Company's interest payments to its bank, paid certain
obligations to product suppliers and the remaining funds were used for working
capital purposes.
Net cash used by operating activities was ($119,000) and ($164,000) for
the year ended December 31, 1995 and the six months ended June 30, 1996,
respectively. Bank indebtedness at December 31, 1995 and June 30, 1996 was
$484,087 and $2,586,000, respectively.
The Company's working capital at December 31, 1995 and June 30, 1996
was $1,648,000 and $2,701,000, respectively. The Company's accounts receivable
at December 31, 1995 and June 30, 1996 were $3,934,000 and $5,169,000,
respectively. The Company's inventory at December 31, 1995 and June 30, 1996
was $4,516,000 and $4,487,000, respectively.
Nortelco AS has a revolving working capital credit facility of
approximately $722,300 with Den Norske Bank, a Norwegian bank ("DNB"), and
Nortelco System Teknikk has a revolving working capital credit facility of
approximately $136,435 also with DNB. Such credit lines bear interest at the
rate of 8.75% per annum, payable quarterly, for the first 60% of the aggregate
amount available under each such credit facility and 10.75% per annum, payable
quarterly, for all funds borrowed in excess of such 60% amount. DNB also
receives a fee of .25% each quarter for all funds outstanding at such time
under each such credit facility. As of December 31, 1994, Nortelco and
Nortelco System Teknikk had approximately $558,275 and approximately $103,790
outstanding, respectively under such facilities.
Nortelco AS and Nortelco System Teknikk also have four-year working
capital loans expiring in April 1998 with DNB in the amounts of $615,000 and
$308,000, respectively. Such loans each bear interest at the rate of 9.5% per
annum, payable quarterly, and have an annual repayment schedule of $158,000 for
Nortelco AS and $79,000 for Nortelco System Teknikk with the balance due upon
expiration of the credit facilities in April 1998.
In order for Nortelco AS to enter into its lease on its corporate
headquarters in Oslo, Norway, DNB posted a one year letter of credit in favor
of the property owner in the amount of $385,000. Under such facility, Nortelco
pays to DNB an annual fee of 1.75% on such amount payable quarterly in advance.
As of the date hereof, such letter of credit has not been drawn down upon.
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<PAGE> 36
Such Letter of Credit is renewable annually at the option of Nortelco.
DNB also has provided a letter of credit facility to Nortelco AS in the
aggregate principal amount of $154,000 to guarantee payments by Nortelco to its
suppliers for products purchased. Under such facility, DNB charge an annual
fee of 1.75% per annum, but in no event can the annual fee be less than $77
payable quarterly in advance. Such facility is renewable annually at the
option of Nortelco. As of December 31, 1994, no funds had been drawn down upon
such facility.
Under the credit facilities between Nortelco AS, Nortelco System
Teknikk and DNB discussed above, Nortelco AS and Nortelco System Teknikk have
each secured such loans by providing cross security interests in $2,615,000 in
the inventories of each corporation and $2,615,000 in the accounts receivable
of each such corporation. Additionally, Mr. Nysted, the President of Nortelco
and a Director, Executive Vice President and principal shareholder of the
Company has guaranteed up to $77,000 under such credit facilities.
Nortelco Audiatur has a revolving credit facility of $530,000 with
Handelsbanken, a Swedish Bank, secured by all of such entities' inventory and
account receivables. At June 30, 1996 $510,000, was outstanding under such
facility. Nortelco Audiatur also has a term working capital credit facility
with Handelsbanken bearing annual interest of 12.5% per annum of $384,000 of
which $190,000 was outstanding at June 30, 1996. The outstanding principal
under such credit facility is repayable at the rate of $21,000 each quarter and
is secured by such entity's inventory and accounts receivable.
Storebro currently has a revolving credit facility with Handelsbanken,
a Swedish bank, of $137,000 (the "Storebro Credit Facility"). Under the terms
of the Swedish Credit Facility, the Company may draw down working capital loans
for $137,000. Storebro also has a letter of credit facility with such bank to
allow Storebro to guarantee payment of supplies. The interest rate on the
Storebro credit facility is 12% and a 1.5%-2.0% fee on the amount of any
letter of credit posted. As of December 31, 1994, Storebro had $68,000
outstanding under the Storebro Credit Facility and no outstanding letters of
credit.
In April 1994, Nortelco acquired certain assets of the Swedish and
Norwegian operations of Dynatech Corporation, a Massachusetts corporation, for
approximately $237,344. To fund such acquisition, Nortelco borrowed $237,244
from Bjorn Nysted, the President of Nortelco. In exchange for such funds,
Nortelco issued to Mr. Nysted a 12% $237,344 demand promissory note.
In December 1994, in exchange for a cancellation of a $77,000 invoice
from the Company to Nortelco for administrative services performed by certain
officers of the Company on behalf of Nortelco, Nortelco issued to the Company
500 shares of its common stock, par
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<PAGE> 37
value $153. Nordic Business Development AS, a Norwegian corporation controlled
by Mr. Nysted ("NBD"), then purchased from the Company 100 shares of such stock
for $15,000. Such purchase price was paid by a 10% promissory note from NBD
due December 31, 1995.
In January 1995, the Company sold 32,947 shares of its Common Stock to
Mayfair Capital Limited at a purchase price of $1.75 per share, $221,832 in
the aggregate. The Company subsequently loaned such $221,832 to Nortelco
through a 10% subordinated note due December 31, 1996, which funds were used by
Nortelco to purchase 75% of the issued and outstanding stock of Brannteknikk.
Management believes that the credit facilities of Nortelco and
Storebro, together with internally generated funds and the proceeds of this
offering will be adequate to meet the Company's working capital requirements
for approximately twelve months following the date hereof.
The Company does not believe that its operations have been materially
affected by inflation or seasonality.
BUSINESS
GENERAL
Nordic Equity Partners Corp.("the "Company"), through its two
wholly-owned subsidiaries, Nortelco AS, a Norwegian corporation ("Nortelco"),
and Storebro Machine AB, a Swedish corporation ("Storebro"), (i) imports and
distributes products for use in the electronic, electrical and audio visual
industries and (ii) designs, assembles and distributes lathes, sells lathe
spare parts to existing lathe owners and services, and repairs and overhauls
lathes owned by third parties.
The consolidated revenues of the Company were approximately
$25,531,000, $20,632,000 and $11,527,000 in 1995, 1994 and 1993, respectively.
In addition, the net earnings (loss) of the Company were approximately
$507,000, $392,000 and ($58,000) in 1995, 1994 and 1993, respectively. See
"Management's Discussion and analysis of Financial Condition and Results of
Operations."
NORTELCO. Nortelco imports and distributes throughout Norway and Sweden
over 10,000 products for use in the electronic, electrical and audio visual
industries to over 1,000 customers. The prices of its products range from $1.00
to $100,000. Nortelco's product strategy is to have its product line consist
substantially of "niche" products.
Nortelco does not manufacture any products that it distributes.
Nortelco purchases its products from over 30 non-affiliated third party
manufacturers worldwide including Germany and the United States. Sales of
products manufactured by Lycab AB, Sennheisser GmbH and TOA Ltd., constituted
9%, 8% and 7%, respectively of Nortelco's revenues in 1995, and 10%, 9% and 7%,
respectively of Nortelco's revenues in 1994. No other
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<PAGE> 38
manufacturer's products accounted for more than 5% of Nortelco's sales in 1995
and 1994.
Nortelco's revenues result primarily from the difference between the
price it purchases its products from non-affiliated third party manufacturers
and the price it sells such products to its customers. Nortelco also designs,
installs and sells complete, customized conference rooms and auditoriums and
provides after sale service and maintenance support to its customers.
Substantially all of Nortelco's products are sold by its internal sales
force which consists of approximately 50 full time salespersons in Norway and
Sweden. Nortelco believes that because its salespersons are experienced and
have technical backgrounds, it is able to service the continuing needs of its
customers and attract additional customers.
Nortelco believes that because of the high cost of establishing and
maintaining operations in Sweden and Norway, many foreign product manufacturers
avoid doing so. As a result, many of such companies enter into agreements with
Nortelco for Nortelco to act as their distributor in both or one of such
countries. Because Nortelco already has established operations in both
countries, Nortelco believes it can distribute for manufacturers their products
more efficiently and inexpensively.
STOREBRO. Storebro designs, assembles and distributes lathes. Storebro
also sells lathe spare parts to existing lathe owners and services, repairs and
overhauls lathes owned by third parties.
Storebro sells over six different types of its proprietary lathes which
include both computer numerically controlled ("CNC") lathes and traditional
manually-operated lathes. Storebro recently introduced a new lathe which can
function as either a manually operated or CNC lathe. Storebro distributes its
lathes mainly to customers in Germany and Sweden, both through its own and
independent sales representatives. The prices of its products range from
$18,000 to $360,000.
Revenues for Storebro for the years ended December 31, 1995 and 1994
were $4,250,000 and $2,288,333, respectively. Net income for Storebro for the
years ended December 31, 1995 and 1994 were $260,000 and $240,041,
respectively.
PRODUCTS
NORTELCO. Nortelco, through itself and its three wholly-owned
subsidiaries, Nortelco Audiatur, Nortelco System Teknikk, and Brannteknikk,
imports and sells approximately 10,000 select technical products to its
customers throughout Sweden and Norway. Products included in the Company's
product line are generally the same products that such manufacturers market and
sell in other countries. In determining which products to include in its
product line, the Company examines factors such as demand for the product in
other countries, as well as competition and customer demand
34
<PAGE> 39
within Norway and Sweden. The price range that Nortelco sells its products
ranges from $1 to $100,000.
Nortelco has three divisions, the Electronics Division, the Electrical
Division and the Audio Visual Division.
ELECTRONICS DIVISION. Nortelco purchases and resells approximately
5,000 different products in the electronics industry including components,
telecommunication and datacommunication equipment and studio and communication
equipment. Sales of these products accounted for approximately 37% and 36% of
the Company's consolidated revenues for the six months ended June 30, 1996 and
for the year ended December 31, 1995, respectively.
Components. The Company's electronic components product line consists
of power conditioning components that protect, stabilize and monitor a proper
and continuous flow of power to electronic and electrical appliances and
equipment, such as computers. These components are designed to protect such
equipment from disturbances and memory loss that can result from blackouts,
voltage fluctuations and transients. They include electronic voltage regulators
that protect computers by compensating for rapid and slow variations in
voltage, electronic line conditioners to protect computers and electronics
systems from voltage variations, line noises and voltage spikes; power supply
systems that guarantee power to computers without significant interruptions;
powerline diagnostic analyzers that detect powerline disturbances such as
voltage fluctuations voltage spikes and blackouts; and high energy transient
protection components such as zener diode regulators, bridge rectifiers, gas
discharge tubes and filters. Also included in this product line are
semiconductors, precision potentiometers, resistors/capacitators, ferrites and
interconnecting components that hook up public telephone networks, data
networks and optical fiber networks.
Telecommunication and Datacommunication Products. Telecommunication
products sold by the Company generally are innovative test and measurement
instruments used in the development, installation and maintenance of
sophisticated telecommunications networks. Products included in this category
sold by the Company include a wide array of portable instruments and
permanently located system testers, multi-function communicators, analyzers
that typically test at the physical and logical levels of network organization
which measure performance and error on a wide range of network transmission
media equipment modular, portable fiber optic test instruments which allow
both central office and field technicians to isolate fiber optic cable breaks
and measure degradation caused by aging connectors and related components.
Datacommunications products sold by the Company provide users of
information networks with the management tools to ensure reliable network
operations and products to condition the data operations for transmission via
private or public networks. These products are designed primarily to manage
data transmission and communication networks in a computer environment. Among
the
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<PAGE> 40
products included in this product category and sold by the Company include
patches used for monitoring, testing and rearranging datacommunications lines
and equipment and high performance packet switching equipment which breaks up
data into "packets" for efficient transmission over private and public data
networks, which generally is a cost effective means for companies to transmit
data over long distances.
Studio and Communication Products. Included in this product line is a
wide array of speakers, amplifiers, microphones, microphone systems and
headphones with related accessories and components, and a wide array of
multifamily (apartments) and business (office) video entry security systems,
residential audio and audio/video intercoms, conference and simultaneous
interpretation systems.
ELECTRICAL DIVISION. Nortelco's Electrical Division imports and
distributes approximately 7,000 products for use in the electrical field. The
price range that Nortelco sells products to its customers in this division is
from $1 to $1,000.
Nortelco's Electrical Division's products generally are divided into
three main areas: explosion proof equipment and lighting, passive fire
protection equipment and installation materials. Sales of these products
accounted for approximately 27% and 26% of the Company's consolidated revenues
for the six months ended June 30, 1996 and for the year ended December 31,
1995, respectively.
Explosion Proof Equipment. Products in this product line include a wide
array of "explosion proof" equipment designed to be used in hazardous areas,
such as offshore drilling areas. Products include explosion protected
self-housed, high performance switches, transformers, terminals, terminal
blocks, cables, junction and distribution boxes and a wide variety of explosion
protected, high quality line bushings and cable entries.
Lighting. Nortelco sells approximately 200 lighting products.
Generally, products in this product line are used in highly hazardous areas
such as utility plants and offshore drilling rigs, including a wide variety of
special purpose lighting systems for, among other users, ships and offshore
drilling platforms including floodlights, hazardous arc lighting equipment,
lanterns and searchlights fluorescent luminaries and search lights used by
shipyards, ship chandlers and electrical installers.
Fire Protection Equipment. The products in this area consist of
modulbuilt fire protection, pressure-tight systems and components for both
cables and pipes. Generally, this equipment is used to prevent the spread of
fire and gas in hazardous areas such as on ships and oil rigs and other
potentially hazardous areas. The equipment is used to seal off construction
into watertight and fireproof sections so that if a fire or gas leak occurs,
the spread of fire or gas between sections of cables or pipes would be
prevented.
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<PAGE> 41
Installation Materials. Included in such product line are
heat-shrinkable products that protect energy and signal conductors, connectors
and cable systems from corrosion, chemicals and environmental hazards,
miniature circuit breakers, switch gear, time switches, accessories for
cabinets, and a wide variety of electrical insulation tapes for high and low
voltage, infrared heating systems and anaconda circuits.
AUDIO VISUAL DIVISION. Nortelco's Audio Visual Division sells
approximately 1,000 products in the audio visual industry. Generally, the price
range for such products ranges from $100 to $80,000.
The products sold in the Audio Visual Division include audio equipment
(AV cassette recorders, microphones, sound systems and cassettes) overhead
projectors and accessories and related equipment such as projection screens,
portable and fixed video projectors, data interface equipment, conference room
and auditorium furniture and related equipment and light-dimming systems.
The Audio Visual Division also offers a wide variety of additional
related and compatible services and "add-ons" such as designing, equipping and
installing "turn-key", fully equipped conference rooms and auditoriums.
Furthermore, such division provides consulting services with clients regarding
previously-built conference rooms and auditoriums. The Audio Visual Division
also leases equipment such as overhead slide or film projectors, service and
maintenance programs for systems either designed or installed by Nortelco or
others and provides installation assistance for equipment purchased. These
services accounted for approximately 37% of the Company's consolidated revenues
for the six months ended June 30, 1996 and for the year ended December 31,
1995, respectively.
STOREBRO. The lathes which Storebro designs, assembles, and
distributes are principally used as metal cutting machine tools, however, in
certain instances, the lathes may be specially designed to work with plastic or
other materials. Metal cutting machine tools utilize a process in which a part
or finished product is generated or shaped by rotating the workpiece. Lathing
is a machining process whereby a surface is shaped with a tool contained in the
lathe which is applied to the rotating workpiece which is chucked in the lathe.
Typically, early metal working machines, including lathes, were either
manually operated or specifically engineered for production applications. In
the early 1950's, numerical controls were introduced which automated the
operations of a machine tool and increased its efficiency. In the mid 1970's,
microprocessors were integrated with numerical controls, which allowed
personnel on the shop floor to program and perform sophisticated metal working
tasks without central office support. Machine tools with computer numerical
controls are referred to as "CNC" machines. All other machine tools are
referred to as "conventional" machines.
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<PAGE> 42
Storebro's product line includes both manual lathes and CNC lathes. In
the year ended December 31, 1995, Storebro sold 24 lathes, of which 7 were
manual lathes and 17 were CNC lathes. The Company also sells lathe parts to
existing lathe owners and also services, repairs and overhauls existing lathes.
MANUAL LATHES. Storebro's manual lathes are used in small workshops,
vocational schools and tool rooms of large manufacturing companies. The Company
sells two lines of its manual lathes, the GK-195 and the SB-N.
The GK-195 manual lathe is used for smaller jobs such as in repair
shops and vocational schools. Generally, these lathes are designed to be used
for small single jobs and single small pieces such as making spare parts for,
among other things, automobiles and boats. The GK-195 lathe may also be
designed by the Company in varying lengths and with various options, depending
upon the needs and specifications, if any, of a particular customer.
The SB-N lathe is used for substantially larger, heavy production jobs
such as the manufacture of heavy metal cylinders and axles. The SB-N model,
depending on customer needs and specifications can be designed in a variety of
lengths and with a variety of options.
Depending on the number of "add-ons," if any, a particular client may
request to be built into a particular lathe, the price range for the GK-195
lathes ranges from approximately $18,000 to $28,000 and approximately $60,000
to $160,000 for the SB-N lathe.
CNC LATHES. Storebro's CNC lathe machine product line consists of four
basic models: the STM 2000, the STM 2500, the STM 4000 and the STM 6000.
Generally, the difference in the models is the size of the "chuck" within the
lathe and the general size of the lathe. The "chuck" is the component of the
lathe which holds the workpiece. Within the four basic CNC lathes sold by
Storebro, an unlimited variety of any of each such lathes can be designed and
assembled by the Company, depending upon a particular customer's specifications
and requirements. All of the Company's CNC lathes incorporate CNC control
systems produced by third party manufacturers.
In the second quarter of 1996, Storebro introduced a new model of
lathe, the ALERT, which is a combination of a conventional and a CNC lathe.
The ALERT Model was shown officially for the first time in May 1996 at the
Gothenburger Machine Tool Show in Sweden. The Company believes that this lathe
can either be used as a conventional lathe with a control system recording the
various manual operations made by the operator making a first part in order to
automatically turn the next workpiece in accordance with the originally turned
piece (teach-in), or in the alternative, it can be programmed in a very easy
and user-friendly way as an ordinary CNC machine. Although sales of such lathes
have been minimal as the Company has only recently commenced marketing it, the
Company
38
<PAGE> 43
anticipates, although there can be no assurance, that sales of such lathes will
increase in the future.
The Company believes that all of its CNC lathes are equipped with
state-of-the-art interactive programming capabilities with operator guidance,
blueprint programming and graphics. All controls are located in a sliding
console which the Company believes allows the operator easy access. The
software can be manually input into the machine or fed into memory. Because
data entry and display for such lathes are simplified, each of Storebro's CNC
lathes are shop-floor programmable.
Depending on the number of "add-ons", a particular client may request
to be built into a particular CNC lathe, the price range of the STM 2000 ranges
from approximately $110,000 to $150,000. The STM 2500 ranges from approximately
$130,000 to $180,000, the STM 4000 ranges from approximately $160,000 to
$270,000 and the STM 6000 ranges from approximately $175,000 to $360,000.
Storebro also generates revenues from providing maintenance and support
services to lathe owners and from the sale of spare parts for lathes.
SOURCES OF MANUFACTURING
NORTELCO. Nortelco does not manufacture any of the products its
distributes. The products Nortelco distributes are purchased from various
manufacturers as finished products and are stored at Nortelco's corporate
headquarters and subsequently sold by Nortelco to its customers. Nortelco has
not entered into any written, material contracts with any of its product
manufacturers for the manufacture of products for Nortelco.
Approximately 20% of Nortelco's net sales in 1995 and 1994 were of
products supplied by the following two manufacturers, Lycab and Sennheisser,
whose products respectively accounted for approximately 10% and 9% of
Nortelco's 1995 net sales and 10% and 9% of Nortelco's 1994 net sales.
Although no products from any of Nortelco's suppliers accounted for
more than 5% of the Company's revenues in the year ended December 31, 1995 or
the six months ended June 30, 1996, the loss of business from major suppliers
could have a material adverse effect on Nortelco's operations. See "Risk
Factors."
Nortelco's products are imported from non-affiliated, third-party
manufacturers throughout the world including Germany (approximately 40%),
United States (approximately 10%), England (approximately 10%), and certain
countries in the Far East, aggregating approximately 10%. No other country
accounted for more than 5%. Nortelco avoids incurring fixed manufacturing
costs. Delays in shipments or defects in products could result in a loss of
sales or customers, which could have a material adverse affect on Nortelco.
39
<PAGE> 44
Products purchased by Nortelco are paid for by either letter of credit
or wire transfer. Payment is made by Nortelco only upon the proper fulfillment
of terms established between Nortelco and the manufacturer. Most product
purchases are made and paid for in foreign currency. To date, Nortelco has not
experienced any material delays or defects in its products. Because Nortelco
purchases substantially all of its products from third-party manufacturers in
foreign countries, timely delivery of such products is subject to and could be
affected by political or economic disruptions, including labor strikes and
disruptions in the shipping industries. To date, Nortelco has not experienced
any problems as a result of any political or economic disruptions. See "Risk
Factors-Foreign Manufacturing."
Nortelco purchases products from approximately 50 manufacturers.
Nortelco's corporate headquarters and executive offices are located in Oslo,
Norway. In addition, Nortelco's Norwegian subsidiaries, Nortelco Teknikk and
Brannteknikk, also maintain their offices at such location. Nortelco also
maintains offices, warehouse and showroom space for itself and its Swedish
subsidiary, Nortelco Audiatur, in Solna, Sweden. Nortelco maintains an
inventory of certain of its products at its facilities, enabling it to respond
quickly to customer orders.
STOREBRO. Although Storebro orders the components included in its
lathes, generally, Storebro manufactures and assembles all of its lathes on a
customized basis. Based upon discussions with a particular customer, Storebro's
in-house engineers produce drawings of the type of lathe desired by the
customers. Storebro then contracts with a design consulting firm which produces
more detailed and extensive drawings of the lathe, which drawings are finalized
by Storebro's engineers. Based upon such final drawings, Storebro has molds of
the particular lathe parts manufactured and the steel molds are sent to a
foundry which produces iron castings to be used for the major body and various
other parts of the lathe. The iron castings are sent back to Storebro and the
lathe body and the mechanical features are machined to correct specifications
and assembled into a customized lathe in Storebro's workshop. All of the
components used in assembling the lathes are purchased from independent third
parties. Many of such components are standard components and can be ordered and
delivered to Storebro in one to sixteen weeks. Storebro keeps an internal
supply of the standard components. Storebro is dependent on the manufacture of
its components used in its lathes. To date, although Storebro has experienced
delays in delivery of certain non-standard parts of its lathes, such delays
have not had a material adverse affect on Storebro. In the future, however,
such delays could have a material adverse affect on the Company. See "Risk
Factors".
MARKETING, SALES AND DISTRIBUTION
NORTELCO. Nortelco distributes its products throughout Norway and
Sweden through its own sales representatives. Nortelco currently has fifty (50)
in-house full-time sales representatives. The Company believes that each such
sales representative is a
40
<PAGE> 45
highly trained, technical person which management believes enables the
representative to explain and install the products and assist the customer in
problem solving and after-sale maintenance. Nortelco also employs one
independent sales representative. Purchasers of Nortelco's products include
retailers, end users and wholesalers. Other than purchase orders completed by
customers, Nortelco does not have written agreements with its customers but
sells products to customers on open accounts with payment terms typically
varying from thirty (30) to ninety (90) days.
Nortelco also markets products at international and regional trade
shows in Norway and Sweden. In addition, Nortelco maintains showrooms in its
Oslo and Stockholm facilities where it exhibits its products to customers.
Nortelco directly, or through its independent salespersons takes
written orders for its products from its customers. If Nortelco has the
particular item in inventory, it generally ships it or makes it available for
pick-up by the customer within one day. If the particular product is not in
inventory, Nortelco orders such product from the manufacturer. Delivery of such
products to its customers can take, depending on how quickly Nortelco is able
to obtain the product from the manufacturer, up to six months. Cancellations
are generally made in writing and Nortelco takes appropriate steps to notify
its manufacturers of such cancellations.
Nortelco generally does not accept returns, although consistent with
industry practices, it makes exceptions to this policy on a case-by-case
negotiated basis. Generally, Nortelco provides a one to three year warranty on
its products pursuant to which it replaces defective products. To date
replacement of products under warranty by Nortelco have not been material.
Nortelco considers backlog to be written customer orders received but
not yet shipped by Nortelco. Nortelco's backlog at June 30, 1996 was
approximately $3,000,000. Backlog generally represents orders that will be
shipped within six months. Because customer orders may be canceled at any time
without penalty, Nortelco believes that backlog may not accurately indicate
sales for any future period.
Nortelco has expended approximately $160,000 on a computer system and
custom-made software which enable it to have a fully integrated
state-of-the-art distribution system. The Company believes that this system
will not only result in a substantial saving of time and manpower in Nortelco's
distribution process, but also allows Nortelco to order and distribute its
products in a more timely and efficient manner. Nortelco's computer
distribution system encompasses its entire distribution network from purchase
orders to the actual receipt of inventory in its warehouse and from sales
orders to customer invoice and collection. This system enables Nortelco to
track a product order from initiation through the ultimate cash receipt from
the customer. The system also has a built-in management information system,
which enables Nortelco to
41
<PAGE> 46
analyze its total profitability as well as profitability by a particular
product or customer. The Company is currently inputting all of Nortelco's
products and information and Nortelco believes that by the year ending December
31, 1996 all of Nortelco's production information will be "on" such system.
STOREBRO. Storebro distributes its lathes primarily in Sweden and
Germany. Sales of lathes to Swedish customers accounted for approximately 60%
of all of its lathes sold in the year ended December 31, 1995 and the six
months ended June 30, 1996. In addition, sales of lathes to German customers
accounted for approximately 40% of all of its lathes sold in the year ended
December 31, 1995 and the six months ended June 30, 1996. In Sweden, Storebro
sells lathes through its two full-time, in house sales representatives. The
Company also distributes its lathes to customers in Germany, Norway, Denmark,
and Switzerland through independent sales representatives located in such
countries. Such representatives purchase the lathes and then sell them to their
customers.
Generally, all sales of lathes require customers to pay an initial down
payment of approximately 30% of the purchase price, and the balance on
delivery.
Storebro advertises through trade shows and trade magazines in Sweden
and uses its corporate headquarters to exhibit lathes to customers. Outside of
Sweden, all advertising and promotion is done by Storebro's independent sales
representatives at their own costs.
Although cancellations of orders by customers have occurred, to date,
cancellations have not had a material adverse effect on Storebro. Delivery of
a lathe from the date of order generally is approximately four months.
For all lathes sold, Storebro provides a twelve (12) month full
warranty and provides on-site services to customers including delivery of
replacement parts during the warranty period.
Storebro considers backlog to be written customer orders received but
not yet shipped. At June 30, 1996, Storebro's backlog was $3,000,000. Backlog
generally represents orders that will be shipped within eight months. Because
Storebro has not experienced any cancellations of customer orders, Storebro
believes that backlog accurately indicates sales for future periods.
PRODUCT LIABILITY
Nortelco has approximately $500,000 in product liability insurance.
Nortelco believes that, generally, the manufacturers of its products also have
product liability insurance for their respective products. Storebro has
approximately $2,000,000 of product liability insurance. To date, neither
Nortelco or Storebro has been a party to any material product liability claims
asserted against them, and believe their respective product liability
42
<PAGE> 47
insurance policies are sufficient. See "Risk Factors-Product Liability."
COMPETITION
Nortelco and Storebro both compete in markets that are extremely
competitive and sensitive to changing consumer preferences and demands. Each
such corporation competes against many companies that are better known,
substantially larger and more diversified, and have substantially greater
financial, employee and marketing resources than either of such corporations,
as well as greater name recognition and the ability to develop and market
products similar to and more competitively priced than those distributed by
such corporations. No assurances can be given that either of such companies
will be able to compete in their respective markets.
EMPLOYEES
At June 30, 1996, the Company, through Nortelco and Storebro, employed
approximately 92 persons. Of such 92 persons, Nortelco employs approximately
73 persons and Storebro employs approximately 19 persons, all of which are full
time employees. The Company employs three persons, its executive officers,
Messrs. Haggqvist, Nysted and Sjostrand, one of which, Mr. Nysted, is the
President of Nortelco.
FACILITIES
NORTELCO. Nortelco leases approximately 30,000 square feet in Oslo,
Norway, pursuant to a lease expiring December 31, 2003, at a rate of $400,000
per year, subject to an escalation clause based upon the Norwegian Consumer
Price Index. Payments on the lease are cross-guaranteed by Nortelco up to
$270,000 and by Nortelco System Teknikk up to approximately $130,000. The
premises are used as Nortelco's executive offices, warehouse, showroom and
business office. The premises were originally owned by Nortelco Real Estate,
AS, a subsidiary of Nortelco AS, which sold the premises in March 1994 to a
non-affiliated third party for approximately $6,700,000. Nortelco also leases
approximately 12,000 square meters in Solna, Sweden, which is used as the main
sales office, executive office, warehouse and workshop for Nortelco Audiatur
pursuant to a lease expiring December 31, 1999 at a rent of approximately
$90,000 per year. Nortelco also leases space in Gothenburg, Sweden, pursuant to
a five-year lease expiring June 30, 2001, at an annual rent of $9,600.
STOREBRO. Pursuant to a year-to-year lease, Storebro leases
approximately 22,000 square feet in Storebro, Sweden. Of such 22,000 square
feet, 6,000 square feet is used as its executive and main offices and the
remaining 16,000 square feet is the workshop for assembling, re-tooling and
repairing lathes. The lease is renewable on six (6) months notice and the lease
payment is approximately $55,000 per annum, subject to an annual escalation
clause based upon the Swedish Consumer Price Index. Storebro also
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<PAGE> 48
leases approximately an additional 8,000 square feet, also in Storebro, Sweden,
which space is used to warehouse spare parts for lathes that Storebro sells.
The lease is renewable on nine (9) months notice and the annual rent payments
are approximately $7,500.
LEGAL PROCEEDINGS
The Company is not party to any material legal proceedings.
44
<PAGE> 49
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Bjorn Nysted 58 President and a Director
Goran Haggqvist 52 Chairman of the Board
Kjell Sjostrand 40 Chief Financial Officer, Treasurer
and Secretary
Espen Komnaes 44 Director
Jan Thunell 52 Director
</TABLE>
Set forth below is a brief background of the executive officers and
directors of the Company, based on information supplied by them.
GORAN HAGGQVIST has been the Chairman of the Board of the Company since
May 1994. From May 1994 to September 1996, Mr. Haggqvist was President of the
Company. Since April 1993 and April 1994, Mr. Haggqvist has been the Chairman
of the Board of Directors of Storebro and Nortelco, respectively. From 1992 to
the present, Mr. Haggqvist also has been the President and controlling
shareholder of Haggqvinvest AB a privately held international corporate finance
firm that invests in and provides advisory services in connection with domestic
and international corporate transactions. From 1985 to 1992, he was the
President of Societe Generale (Sweden), the Swedish subsidiary of Societe
Generale France. Prior to such time, he held a number of executive positions
with two Swedish banks including Executive Vice President of Gotabanken and
President of Svenska Handelsbanken S.A., Luxembours. Mr. Haggqvist also was the
Assistant to the Swedish Trade Commissioner in Zurich. Mr. Haggqvist received
a master in political science from the University of Gothenburg in 1970.
BJORN NYSTED has been the President of the Company since September
1996, and he has been the Treasurer and a Director of the Company since May
1994. Mr. Nysted has been the Managing Director, President, and a Director of
Nortelco since 1990 when he founded Nortelco. Mr. Nysted is also the Chairman
of the Board of Directors of Nordic Business Development Corp., a privately
held corporation controlled by Mr. Nysted and certain of his family members.
45
<PAGE> 50
KJELL SJOSTRAND has been the Treasurer of the Company since September
1996, and he has been the Chief Financial Officer and Secretary of the Company
since May 1994. From 1990 to the present, Mr. Sjostrand has been the Chief
Financial Officer and a Director of AB Antion, a privately held Swedish
corporate finance firm controlled by Mr. Sjostrand and one other person. Mr.
Sjostrand received a master in economics from the University of Stockholm in
1979.
ESPEN KOMNAES has been a Director of the Company since September 1996.
Mr. Komnaes has been employed as an attorney at Meltvedt, Komnaes & Co., an
Oslo, Norway based law firm since 1983. Mr. Komnaes received a degree in
jurisprudence from the University of Bergen in 1979 and a B.A. in political
science from Santa Barbara City College in 1979.
JAN THUNELL has been a Director of the Company since September 1996.
Since 1987, Mr. Thunell has served as President and a Director of Fidem
Foretags & Idemaklarna AB, a privately held Swedish management consulting and
business advisory firm controlled by Mr. Thunell. Mr. Thunell received a
Master of Science in Mechanical Engineering from the Royal Institute of
Technology, Stockholm in 1968.
Directors are elected annually by the shareholders and hold office
until the next annual meeting and until their respective successors are elected
and qualified. Executive officers are elected by the Board of Directors and
hold office until their respective successors are elected and qualified.
EXECUTIVE COMPENSATION
The following table sets forth, in U.S. dollars, the cash compensation
paid by the Company or its subsidiaries for services rendered during the fiscal
years ended December 31, 1995 and 1994 and to each of its executive officers
whose compensation exceed $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------
Annual Compensation Awards Payouts
-------------------------- ------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restr- All
Name and Annual icted Plan Other
Principal Salary Bonus Compen- Stock Options Payouts Compen-
Position Year ($)(1) ($) sation($) Awards($) (#) ($) sation($)
- --------- ---- ------ ----- --------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Bjorn Nysted
1995 92,000 15,000 -- -- -- -- --
</TABLE>
46
<PAGE> 51
EMPLOYMENT AGREEMENTS
Pursuant to an employment agreement dated April 25, 1994, by and
between Nortelco and Mr. Nysted, Nortelco agreed to employ Mr. Nysted as its
President until April 1998 at an annual salary of approximately $92,064. In
addition, Nortelco also agreed to pay to Mr. Nysted an annual automobile and
certain other expenses in an amount not to exceed approximately $13,334 per
annum. Such employment contract also includes certain non-competitive
provisions and provides that Mr. Nysted can be terminated at the option of
Nortelco on twelve (12) months prior notice. Mr. Nysted, however, is entitled
to receive all compensation under his employment agreement notwithstanding if
he is terminated by Nortelco.
Pursuant to an employment agreement dated August 17, 1992 by and
between Storebro and Jan Uddgren, Storebro agreed to employ Mr. Uddgren as its
President. Although the agreement does not have a specified termination date,
it can be terminated by either party on six (6) months prior notice. Pursuant
to the employment agreement, Storebro pays to Mr. Uddgren approximately $70,000
per annum, provided him with a one-time $23,000 lump sum pension payment which
was paid in 1993, and a company car, which to date Mr. Uddgren has not
requested.
Although both Nortelco and Storebro have entered into employment
agreements with a number of their respective employees, the Company has not
entered into any other employment agreements.
1995 STOCK OPTION PLAN
The Company's 1995 Stock Option Plan (the "Stock Option Plan") was
adopted by the Board of Directors and the shareholders of the Company as of
September 1995.
The Stock Option Plan provides for the granting of options to purchase
up to 250,000 shares of the Company's Common Stock that are intended to qualify
either as incentive stock options ("Incentive Stock Options") within the
meaning of Section 422 of the United States Internal Revenue Code or as options
that are not intended to meet the requirements of such section ("Nonstatutory
Stock Options"). Options to purchase shares may be granted under the Stock
Option Plan to persons who, in the case of Incentive Stock Options, are
employees (including officers) of the Company, or, in the case of Nonstatutory
Stock Options, are employees (including officers) or non-employee directors of
the Company or consultants to the Company.
The Stock Option Plan provides for its administration by a committee
chosen by the Board of Directors comprised of directors who are disinterested
persons (as defined in Rule 16(b)(3) under Section 16(b) of the Securities
Exchange Act of 1934). Once the committee is chosen by the Board of Directors,
the Stock Option Committee shall have full discretionary authority, subject to
certain restrictions, to determine the number of shares for which
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<PAGE> 52
Incentive Stock Options and Nonstatutory Stock Options may be granted and the
individuals to whom, the times at which, and the exercise price for which
options will be granted.
The exercise price of all Incentive Stock Options granted under the
Stock Option Plan must be at least equal to the fair market value of such
shares on the date of the grant, or, in the case of Incentive Stock Options
granted to the holder of 10% or more of the Company's Common Stock, at least
110% of the fair market value of such shares on the date of the grant. The
maximum exercise period for which Incentive Stock Options may be granted is ten
years from the date of grant (five years in the case of an individual owning
more than 10% of the Company's Common Stock). The aggregate fair market value
(determined at the date the option is granted) of shares with respect to which
Incentive Stock Options are exercisable for the first time by the holder of the
option during any calendar year shall not exceed $100,000. If such amount
exceeds $100,000, the Board of Directors or the Committee may, when the Options
are exercised and the shares transferred to an employee, designate those shares
that will be treated as Incentive Stock Options and those that will be treated
as Nonstatutory Stock Options.
As of the date hereof, no options under the Stock Option Plan have been
granted.
COMPENSATION OF DIRECTORS
Directors of the Company do not receive compensation for their services
as directors; however, the Board of Directors may authorize the payment of
compensation to directors for their attendance at regular and special meetings
of the Board and for attendance at meetings of committees of the Board as is
customary for similar companies. Directors will be reimbursed for their
reasonable out-of-pocket expenses incurred in connection with their duties to
the Company.
LIMITATION ON LIABILITY OF DIRECTORS
The Delaware General Corporation Law permits a corporation, through its
Certificate of Incorporation, to exonerate its directors from personal
liability to the corporation, or to its stockholders, for monetary damages for
breach of fiduciary duty of care as a director, with certain exceptions. The
exceptions include a breach of the director's duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or knowing
violation of law, improper declarations of dividends, and transactions from
which the directors derived an improper personal benefit. The Company's
Certificate of Incorporation exonerates its directors from monetary liability
to the extent permitted by this statutory provision.
48
<PAGE> 53
The Company has been advised that it is the position of the Commission
that insofar as the foregoing provision may be invoked to disclaim liability
for damages arising under the Act, that provision is against public policy as
expressed in the Act and is therefore unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of September 1, 1996, certain
information concerning beneficial ownership of shares of Common Stock with
respect to (i) each person known to the Company to own 5% or more of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
the executive officer(s) of the Company named in the Summary Compensation
Table, and (iv) all directors and officers of the Company as a group:
<TABLE>
<CAPTION>
Amount and Approximate Approximate
Nature of Percentage of Percentage of
Beneficially Common Stock Common Stock
Name Owned Before Offering(1)(2) After Offering
- ---- ----------- --------------------- --------------
<S> <C> <C> <C>
Goran Haggqvist 699,063(3) 29.1% 22.0%
Karlaplan 10
Stockholm, Sweden
Bjorn Nysted 821,629(4) 34.2% 25.9%
c/o Nortelco AS
P.O. Box 116
Manglerud
Olso, Norway
Kjell Sjostrand 125,447(5) 5.2% 3.9%
c/o AB. Antion
Sveavagen 60
Stockholm, Sweden
Espen Komnaes 0 0 0
c/o Meltvedt, Komnaels & Co.
Haakon VIIS GT. 2
Oslo, Norway
Jan Thunell 0 0 0
Norr Malarstrand 52
Stockholm, Sweden
All Officers and
Directors as a group
(three (5) persons) 1,649,139(6) 68.5% 51.9%
</TABLE>
____________________
* Less than 1% of issued and outstanding.
(1) Based upon 2,400,000 shares of Common Stock issued and outstanding.
However, each beneficial owner's percentage ownership is determined by assuming
that options, warrants and other convertible securities that are held by such
person (but not those held by any other person) and that are exercisable or
convertible within sixty (60) days have been exercised or converted. A person
49
<PAGE> 54
is deemed to be the beneficial owner of securities that can be acquired by such
person within sixty (60) days upon the exercise of options or warrants.
(2) Unless otherwise provided herein, the Company believes that all persons
named in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them.
(3) Mr. Haggqvist is the Chairman and a Director of the Company and a
Director of Nortelco and Storebro. Of such 699,063 shares, 500,000 of such
shares are owned by the father of Mr. Haggqvist and the balance by Mr.
Haggqvist. See "Certain Transactions."
(4) All shares are owned by Nordic Business Development AS, a privately
held corporation controlled by Mr. Nysted and certain of his family members.
Mr. Nysted is the President and a Director of the Company, and the Managing
Director, President, and a Director of Nortelco. See "Certain Transactions."
(5) Includes 118,953 shares and 6,494 shares owned by AB Antion and
Retrivum AB, two privately held corporations controlled by Mr. Sjostrand
and/or one other person. See "Certain Transactions."
(6) See footnotes (3), (4) and (5).
SELLING STOCKHOLDERS
The following table set forth certain information at September 1, 1996
and as adjusted to reflect the sale of the Common Stock by the Selling
Stockholders.
<TABLE>
<CAPTION>
Shares
Owned After
Offering if
Percentage Over-
Shares Shares of Shares allotment
Beneficially Owned Owned is
Name of Owned Prior Shares After After exercised
Stockholder to Offering Offered Offering Offering in full
----------- ------------ ------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Sean Leahy 250,000 218,750 31,250 * 0
George Sweetman 250,000 218,750 31,250 * 0
Jeff Levine 10,000 8,750 1,250 * 0
Bruce Fixelle 10,000 8,750 1,250 * 0
Ballard Property Co. #1 Ltd. 5,000 4,375 625 * 0
Richard Metsch 5,000 4,375 625 * 0
George Rutland 10,000 8,750 1,250 * 0
</TABLE>
50
<PAGE> 55
<TABLE>
<S> <C> <C> <C> <C> <C>
Silverio Conte 5,000 4,375 625 * 0
Wayne Wiseman 10,000 8,750 1,250 * 0
Joseph Raimando 5,000 4,375 625 * 0
Deborah Caruso 10,000 8,750 1,250 * 0
Sierra Holding Trust 10,000 8,750 1,250 * 0
Marscel Aronheim 5,000 4,375 625 * 0
A88TB, Inc. 5,000 4,375 625 * 0
8Edward Wilkins 5,000 4,375 625 * 0
Joseph DiMarco 5,000 4,375 625 * 0
</TABLE>
_________________
* Less than 1%
CERTAIN TRANSACTIONS
THE COMPANY
In April 1994, Joe Vick ("Vick"), Mega Holding Corp. and Monkwell
Consultants, Inc. ("Monkwell"), a United Kingdom corporation controlled by a
former executive officer and director of the Company, entered into a Stock
Purchase Agreement pursuant to which Monkwell purchased 4,000 shares of Common
Stock of the Sherman, Goelz and Associates, a Nevada corporation ("SGA"), which
shares constituted approximately 86% of the then issued and outstanding Common
Stock of SGA, from Vick for an aggregate of $190,000. To fund the purchase of
the 4,000 shares and certain other related expenses, Monkwell borrowed
approximately $240,000 from Mr. Goran Haggqvist (currently the chairman of the
board and a principal shareholder of the Company).
Subsequently, in April 1994, Monkwell transferred (i) approximately 419
shares of Common Stock of SGA to Universal Commodity Trading Group, S.A.
("Universal"), (ii) approximately 445 shares of Common Stock of SGA to a
corporation controlled by another former executive officer and director of the
Company, and (iii) approximately 1,776 shares of Common stock of SGA to Mr.
Goran Haggqvist in consideration for the cancellation of the $240,000 owed by
Monkwell to Mr. Haggqvist.
Following the purchase of the 4,000 shares by Monkwell from Vick, in
April 1994, two persons were terminated as directors and officers of SGA and
were replaced by certain persons, including the Company's current executive
officers and directors. In connection with their termination, approximately
419 shares out of approximately 867 shares of Common Stock of SGA then
beneficially owned by such persons were transferred by such persons to
Ovington.
In May 1995, the Company entered into an Agreement and Plan of Merger
with SGA, pursuant to which SGA was merged with and into the Company, with each
share of SGA being exchanged for one share of
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<PAGE> 56
the Company. Prior to the merger, the Nevada corporation acquired Nortelco and
Storebro from corporations controlled by, among others, the Company's current
principal stockholders in exchange for cash and shares of Common Stock.
In September 1995, the Company sold an aggregate of 1,794,320 shares of
Common Stock to Mr. Goran Haggqvist for approximately $1,000,000, which funds
had previously been provided to the Company in May 1994, and were used by the
Company for, among other purposes, as part of the consideration used by the
Company to acquire Nortelco and Storebro. In September 1995, Mr. Haggqvist
transferred an aggregate of 821,629 shares and 125,447 shares to corporations
controlled by Messrs. Bjorn Nysted (currently the president and a principal
shareholder of the Company) and Kjell Sjostrand (currently the chief financial
officer, treasurer, secretary and a principal shareholder of the Company),
respectively.
NORTELCO
In April 1994, Nortelco acquired certain assets of the Swedish and
Norwegian operations of Dynatech Corporation, a non-affiliated Massachusetts
corporation, for approximately $237,344. To fund such acquisition, Nortelco
borrowed $237,344 from NBD. In exchange for such funds, Nortelco issued to Mr.
Bjorn Nysted a 12% $237,344 demand promissory note. Such note is still
currently outstanding.
In May 1994, Monkwell and Nordic Business Development AS, (formerly
Aktiv Bedriftsutvikling, AS), a Norwegian corporation ("NBD"), whose stock is
wholly-owned by Bjorn Nysted and certain of his family members, entered into a
Stock Purchase Agreement pursuant to which Monkwell acquired 80% of the issued
and outstanding stock of Nortelco for an aggregate of approximately $785,000
from NBD. To fund the purchase price for the 80% of the issued and outstanding
shares of Nortelco and certain other related expenses, Monkwell borrowed an
aggregate of $706,429 from Mr. Goran Haggqvist and certain family members and
an additional $150,000 from a corporation controlled by Mr. Kjell Sjostrand.
Subsequent to the acquisition by Monkwell from NBD of the 80% of the issued and
outstanding shares of Nortelco, in May 1994, Monkwell transferred to Universal
(a corporation also controlled by a former officer and director of SGA who also
controlled Monkwell) (i) all of the shares of Nortelco owned by Monkwell, and
(ii) approximately $856,429 of the outstanding aggregate indebtedness owed by
Monkwell to Mr. Goran Haggqvist, certain of Mr. Haggqvist's family members and
a corporation controlled by Mr. Kjell Sjostrand. As described below,
approximately $856,429 of outstanding indebtedness was satisfied by the
repayment from Universal to Mr. Goran Haggqvist of the sum of $785,000 and the
transfer of 581 shares of Common Stock of SGA owned by Universal.
In November 1994, the Company and Universal entered into a Stock
Purchase Agreement pursuant to which the Company acquired all of the issued and
outstanding common stock of Nortelco owned by Universal (80%) for an aggregate
consideration of $2,285,000, $785,000 of which was previously paid in May 1994
at a closing held
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<PAGE> 57
pursuant to an original Stock Purchase Agreement entered into between the
parties in May 1994, which agreement was subsequently amended and superseded in
October 1994. Pursuant to the November 1994 Stock Purchase Agreement, which
agreement amended and superseded the October 1994 Stock Purchase Agreement, the
$1,500,000 balance of the purchase price was paid by the delivery to Universal
of 581 shares of Common Stock of the Company.
In November 1994, approximately $856,429 of outstanding indebtedness
owed by Universal to corporations controlled by Messrs. Goran Haggqvist and
Kjell Sjostrand (representing funds loaned to Monkwell for the purchase of 80%
of the issued and outstanding shares of Nortelco from NBD) was satisfied by the
repayment from Universal to Mr. Goran Haggqvist of the sum of $785,000 and the
transfer of 581 shares of Common Stock of the Company owned by Universal.
In November 1995, the Company and NBD entered into a Stock Purchase
Agreement pursuant to which the Company acquired the remaining 20% of the
issued and outstanding common stock of Nortelco for 216,000 shares of Common
Stock, which shares were provided to NBD from the principal and certain other
shareholders of the Company.
NORTELCO SUBSIDIARIES
In May 1994, Nortelco acquired the remaining 20% of Nortelco Audiatur
from Mark Oldmar (the current President and former owner of Nortelco Audiatur)
for approximately 230 shares of common stock of the Company (50 shares of which
were transferred from NBD and the remaining 180 shares of which were issued by
the Company). Nortelco had previously acquired the initial 80% of Nortelco
Audiatur effective January 1, 1994 from Mr. Oldmar.
In July 1994, Monkwell entered into an agreement with NBD pursuant to
which Monkwell acquired all of the issued and outstanding shares of common
stock of Bror Mauritz Hansen AS, a Norwegian corporation ("Bror") in exchange
for the issuance to NBD of approximately 1,410 shares of Common Stock of the
Company.
In September 1994, Monkwell entered into a Stock Purchase Agreement
pursuant to which it sold all of the issued and outstanding shares of common
stock of Bror to Nortelco System Teknikk, for approximately $145.
Subsequently, in September 1994, Bror was merged with and into Nortelco System
Teknikk.
STOREBRO
In May 1994, AB Grundstenen, a Swedish corporation, entered into an
agreement with Ovington Investments Limited, a Gibraltar corporation controlled
by Mr. Goran Haggqvist ("Ovington"), pursuant to which AB Grundstenen sold all
of the issued and outstanding shares of common stock of Storebro to Ovington
for 25 shares of Common Stock of the Company.
53
<PAGE> 58
In November 1994, Ovington and the Company entered into a Stock
Purchase Agreement pursuant to which the Company acquired all of the issued and
outstanding shares of common stock of Storebro from Ovington for an aggregate
consideration of $1,600,000, $215,000 of which was paid in May 1994 at a
closing held pursuant to an original Stock Purchase Agreement entered into
between the parties in May 1994, which agreement was subsequently amended and
superseded in October 1994. Pursuant to the November 1994 Stock Purchase
Agreement, which agreement amended and superseded the October 1994 Stock
Purchase Agreement, the $1,385,000 balance of the purchase price was paid by
the delivery to Ovington of 490 shares of Common Stock of the Company.
In connection with the acquisition of all of the issued and outstanding
shares of common stock of Storebro by the Company, in November 1994, Storebro
Svarv AB, a Swedish corporation owned by a corporation controlled by Messrs.
Goran Haggqvist and Kjell Sjostrand ("Storebro Svarv"), sold all of Storebro
Svarv's lathe spare parts inventory to Storebro for a $53,000 promissory demand
note, which note was subsequently repaid.
DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue up to 19,000,000 shares of Common
Stock, $.0001 par value per share, 2,400,000 of which are issued and
outstanding as of the date of this Prospectus. The holders of the Common Stock
are entitled to receive dividends equally when, as and if declared by the Board
of Directors, out of funds legally available therefore.
Subject to the rights that may be designated by the Board of Directors
to the holders of any preferred stock, the holders of the Common Stock have
sole voting rights, one vote for each share held of record, and are entitled
upon liquidation of the Company to share ratably in the net assets of the
Company available for distribution. Shares of the Company's Common Stock do not
have cumulative voting rights and vote as a class on all matters requiring
stockholder approval. Therefore, the holders of a majority of the shares of
Common Stock may elect all of the directors of the Company, control its affairs
and day to day operations. The shares of Common Stock are not redeemable and
have no preemptive or similar rights. All outstanding shares of the Company's
Common Stock are fully paid for and non-assessable.
PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of "blank check"
Preferred Stock par value $.0001 per share ("Preferred Stock"). The Preferred
Stock may be issued from time to time, in one or more series, upon
authorization by the Company's Board of Directors. The Board of Directors,
without further approval of the stockholders, will be authorized to fix the
dividend rights and terms, conversion rights, voting rights, redemption rights
and
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<PAGE> 59
terms, liquidation preferences, and any other rights, preferences, privileges
and restrictions applicable to each series of Preferred Stock. The issuance of
Preferred Stock (subject to the prohibition of the Company issuing such shares
for two years from the Effective Date, without the consent of the
Underwriter), while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, adversely
effect the voting power of the holders of the Common Stock and, under certain
circumstances, make it more difficult for a third party to gain control of the
Company, discourage bids for the Company's Common Stock at a premium or
otherwise adversely effect the market price of the Common Stock, if the Common
Stock is ever publicly traded, of which there are no assurances. As of the date
hereof, the Company has no plans to issue, or any present intention to issue
any such shares.
REDEEMABLE COMMON STOCK PURCHASE WARRANTS
Each Warrant entitles its holder to purchase one share of Common Stock
at an exercise price of $8.40 per share, subject to adjustment, commencing one
year after the Effective Date until _______, 2003.
The Warrants will be issued pursuant to a warrant agreement (the
"Warrant Agreement") among the Company, the Underwriter and Olde Monmouth Stock
Transfer Co., Inc., the warrant agent, and will be evidenced by warrant
certificates in registered form.
The exercise price of the Warrants and the number and kind of shares of
Common Stock or other securities and property issuable upon exercise of the
Warrants are subject to adjustment in certain circumstances, including stock
splits, stock dividends, subdivisions, combinations, reclassification, or
issuances of stock at a price lower than the current market price.
Additionally, an adjustment will be made upon the sale of all or substantially
all of the assets of the Company in order to enable the holders of the Warrants
to purchase the kind and number of shares of stock or other securities or
property (including cash) receivable in such event by a holder of the number of
shares of Common Stock that might otherwise have been purchased upon exercise
of the Warrants.
The Warrants do not confer upon the holder any voting or any other
rights of a stockholder of the Company. Upon notice to the holders of the
Warrants, the Company has the right to reduce the exercise price or extend the
expiration date of the Warrants.
Warrants may be exercised upon surrender of the Warrant certificate
evidencing those Warrants on or prior to the expiration date (or earlier
redemption date) of the Warrants to the Warrant Agent, with the form of
"Election to Purchase" on the reverse side of the Warrant certificate completed
and executed as indicated, accompanied by payment of the full exercise price
(in United States funds, by cash or certified bank check payable to the order
of the Warrant Agent) for the number of Warrants being exercised.
55
<PAGE> 60
No fractional shares will be issued upon exercise of the Warrants.
However, if a holder of a Warrant exercises all Warrants then owned of record
by him, the Company will pay to that holder, in lieu of the issuance of any
fractional share which would otherwise be issuable, an amount in cash based on
the market value of the Common Stock on the last trading day prior to the
exercise date.
No Warrant will be exercisable unless at the time of exercise the
Company has filed with the Commission a current prospectus covering the
issuance of shares of Common Stock issuable upon exercise of the Warrants and
the issuance of shares has been registered or qualified or is deemed to be
exempt from registration or qualification under the securities laws of the
state of residence of the holder of the Warrant. The Company has undertaken to
use its best efforts to maintain a current prospectus relating to the issuance
of shares of Common Stock upon the exercise of the Warrants until the
expiration of the Warrants, subject to the terms of the Warrant Agreement.
While it is the Company's intention to maintain a current prospectus, there is
no assurance that it will be able to do so. See "Risk Factors-Current
Prospectus and State Blue Sky Registration Required to Exercise Warrants."
The Warrants are redeemable, in whole or in part, by the Company at a
price of $.05 per Warrant, commencing one year after the Effective Date and
prior to their expiration, provided that (i) prior written notice of not less
than 30 days is given to the Warrantholders, (ii) the closing bid price (as
defined) of the Company's Common Stock for the twenty consecutive trading days
immediately prior to the date on which the notice of redemption is given, shall
have exceeded $13.00 per share, and (iii) Warrantholders shall have exercise
rights until the close of business the day preceding the date fixed for
redemption. The Warrants shall be exercisable until the close of the business
day preceding the date fixed for redemption. In addition, subject to the rules
of the NASD, the Company has agreed to engage the Underwriter as warrant
solicitation agent, in connection with which it would be entitled to a 5% fee
upon exercise of the Warrants. See "Underwriting."
TRANSFER AGENT AND WARRANT AGENT
The Transfer Agent for the Company's Common Stock and the Warrant
Agent for the Company's A Warrants is Olde Monmouth Stock Transfer Co., Inc.,
Middletown, New Jersey.
SHARES ELIGIBLE FOR FUTURE SALE
Upon consummation of this Offering, the Company will have 3,175,000
shares of Common Stock outstanding (3,395,000 shares if the Underwriter's
Over-allotment option is exercised in full). All of the shares of Common Stock
sold in this Offering will be freely tradeable without restriction or further
registration under the Securities Act of 1933, as amended (the "Securities
Act"), except for any shares purchased by an "affiliate" of the Company which
56
<PAGE> 61
will be subject to certain limitations of Rule 144 adopted under the Securities
Act.
The 2,400,000 presently outstanding shares of Common Stock are
restricted securities and will be subject to the resale limitations provided
for in Rule 144. Under Rule 144, as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the company, who has owned restricted shares of Common Stock beneficially for
at least two years, is entitled to sell, within any three month period, a
number of shares that does not exceed the greater of 1% of the total number of
outstanding shares of the same class or, if the Common stock is quoted on an
exchange, the average weekly trading volume during the four calendar weeks
preceding the sale. A non-affiliate who has not been an affiliate of the
Company for at least the three months immediately preceding the sale and who
has beneficially owned shares of Common Stock for at least three years is
entitled to sell such shares under Rule 144 without regard to any of the
limitations described above. In meeting the two and three year holding periods
described above, a holder who has purchased shares can include the holding
periods of a prior owner who was not an affiliate of the Company.
Giving effect to the sale of 775,000 by the Company and 525,000 shares
by the Selling Stockholders, the Company will have issued and outstanding
3,175,000 shares of its Common Stock, of which 1,875,000 will be "restricted
securities".
All Company's securityholders, on the date hereof, have agreed not to
publicly sell, for a period of two (2) years from the date of this Prospectus,
any shares of the Company's Common Stock without the prior written consent of
the Underwriter .
Prior to this Offering, there has been no sustained market for any
securities of the Company. The effect, if any, of public sales of the
restricted shares of Common Stock or the availability of such shares for future
sale at prevailing market prices cannot be predicted. Nevertheless, the
possibility that substantial amounts of restricted shares may be resold in the
public market may adversely affect prevailing market prices for the Common
Stock and the Class A Warrants, if any such market should develop.
UNDERWRITING
Subject to the terms and conditions contained in the underwriting
agreement between the Company and the Underwriter (a copy of which agreement is
filed as an exhibit to the Registration Statement of which this Prospectus
forms a part), the Company and the Selling Stockholders have agreed to sell to
the Underwriter 1,300,000 shares of Common Stock and the Company has agreed to
sell the Underwriter 2,600,000 Warrants. All 1,300,000 shares and 2,600,000
Warrants offered must be purchased by the Underwriter if any are purchased. The
shares and Warrants are being offered by the
57
<PAGE> 62
Underwriter subject to prior sale, when, as and if delivered to and accepted by
the Underwriters and subject to approval of certain legal matters by counsel
and to certain other conditions.
The Underwriter has advised the Company that it proposes to offer the
shares of Common Stock and the Warrants to the public at the offering prices
set forth on the cover page of this Prospectus and that the Underwriter may
allow to certain dealers who are members in good standing with the National
Association of Securities Dealers, Inc. ("NASD") concessions, not in excess of
$______ per share of Common Stock and $______ per Warrant. After the initial
public offering, the public offering price and concessions may be changed by
the Underwriter.
The Company and the Selling Stockholders have granted the Underwriter
an option, exercisable for 45 days from the date of this Prospectus, to
purchase up to 195,000 shares of Common Stock (120,000 shares by the Company
and 75,000 shares by the Selling Stockholders) and 390,000 Warrants by the
Company, at the public offering price less the underwriting discounts set forth
on the cover page of this Prospectus. The Underwriters may exercise this
option solely to cover over-allotments in the sale of the shares of Common
Stock and Warrants offered hereby.
The Company and the Selling Stockholders have agreed to pay the
Underwriter a non-accountable expense allowance of 3% of the gross proceeds of
the shares of Common Stock and Warrants sold in this Offering, or a total of
$174,450 and $110,250, respectively ($201,405 and $126,000, respectively, if
the Over-allotment Option is exercised in full), none of which has been paid
prior to the date hereof.
The underwriting agreement provides for reciprocal indemnification
between the Company and the Underwriters against certain civil liabilities,
including liabilities under the Securities Act of 1933.
The Company has agreed to sell to the Underwriter or its designees, at
a price of $10, the Underwriter's Warrants, which entitle the Underwriter to
purchase up to 130,000 shares of Common Stock of the Company and/or 260,000
Warrants, respectively. The Underwriter's Warrants will be exercisable at a
price of $8.40 per share and $.18 per Warrant, respectively, for a period of
four years commencing one year from the date of this Prospectus, and they will
not be transferable except to underwriters and selected dealers and officers
and partners thereof. Any profit realized upon any resale of the Underwriter's
Warrants or upon any sale of the shares of Common Stock or Warrants underlying
same may be deemed to be additional underwriter's compensation. The Company has
agreed that, upon written request of the then holder(s) of at least a majority
of the Underwriter's Warrants, the Company will register (or file a
post-effective amendment with respect to any registration statement
registering) the Underwriter's Warrants and
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<PAGE> 63
the underlying securities under the Securities Act at its sole expense. In
addition, the Company has also agreed to certain "piggy-back" registration
rights for the holders of the Underwriter's Warrants and the underlying
securities.
The Company has agreed that for a period of three years, the
Underwriter will have the right to designate a person to be a non-voting
advisor to the Company's Board of Directors who will receive the same
compensation as a non-officer member of the Board of Directors and who will be
indemnified by the Company against any claims arising out of his participation
at meetings of the Board of Directors. In lieu of the Underwriter's right to
designate an advisor to the Board of Directors, the Underwriter shall have the
right during such three year period, in its sole discretion, to designate one
person for election as a director of the Company and the Company will use its
best efforts to obtain the election of such person who shall be entitled to
receive the same compensation, expense reimbursements and other benefits as any
other director. The identity of such person has not been determined as of the
date hereof, and it is not expected that such right will be exercised in the
immediate future.
The Underwriter has informed the Company that it does not expect sales
of shares and the Warrants to be made to discretionary accounts to exceed 1% of
the shares of Common Stock and Warrants offered hereby.
The Offering is subject to the agreement by all present stockholders
of the Company that they will not sell any shares of Common Stock to the public
without the prior written consent of the Underwriter for a period of
twenty-four months.
The Company has agreed to enter into an agreement with the Underwriter
retaining them as a financial consultant for a period of three years from the
date hereof, pursuant to which they will receive fees aggregating $100,000
which fees will be payable in full at closing.
The foregoing is a summary of the principal terms of the underwriting
agreement, the Underwriter's Warrant, and the Consulting Agreement. Reference
is made to the copies of the underwriting agreement, the Underwriter's Warrant
Agreement and the Consulting Agreement which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part.
Prior to the Offering, there has been no sustained public market for
the Common Stock and no public market for the Warrants. Consequently, the
Offering Price of the Common Stock and Warrants and the exercise price and
other terms of the Warrants have been determined by the Company and the
Underwriter and are not related to the Company's asset value, earnings, book
value or other such criteria of value. Factors considered in determining the
Offering Price of the Common Stock and Warrants and the exercise price and
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<PAGE> 64
other terms of the Warrants include principally, the prospects for the industry
in which the company operates, the Company's management, the general condition
of the securities markets and the demand for securities in similar industries.
LEGAL MATTERS
The validity of the issuance of the shares offered hereby will be
passed upon for the Company By Gusrae, Kaplan & Bruno, Esqs., New York, New
York. Certain legal matters in connection with this Offering will be passed
upon for the Underwriter by Gersten Savage Kaplowitz & Curtin, LLP, New York,
New York.
EXPERTS
The consolidated balance sheets of the company as of December 31,
1993, 1994 and 1995 appearing in this Prospectus and Registration Statement
have been audited by McManus & Co., P.C., independent auditors, as stated in
their report appearing elsewhere herein and have been so included in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
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<PAGE> 65
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
INDEX
<TABLE>
<S> <C>
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2 - F-3
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statement of Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Changes in Stockholders' Equity . . . . . . . . . . . . . . . . . F-6 - F-7
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . F-9 - F-15
</TABLE>
F-1
<PAGE> 66
[MCMANUS & CO., P.C., LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF NORDIC EQUITY PARTNERS CORP:
We have audited the accompanying consolidated balance sheet of Nordic Equity
Partners Corp. and Subsidiaries as of December 31, 1995 and 1994 and the
related consolidated statements of earning, stockholders equity, and cash flows
for each of the three years in the period ended December 31, 1995. These
consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We did not audit the financial
statements of Nortelco AS, or Storebro Machine AB, which are included in the
financial statements, and which statements reflect total assets of $10,960,000
and $9,169,000 as of December 31, 1995 and 1994 and total revenues
of $25,531,000, $20,632,000 and $11,527,000 respectively for each of
the three years in the period ended December 31, 1995. Those statements were
audited by other auditors whose reports have been furnished to us, and our
opinion insofar as it relates to the amounts included for Nortelco AS and
Storebro Machine AB is based solely on the reports of the other auditors.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principals used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit and the report of
the other auditors provides a reasonable basis for our opinion.
F-2
<PAGE> 67
In our opinion, based on our audit and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects the financial position of Nordic Equity Partners Corp. and
Subsidiaries as of December 31, 1995 and 1994 and the result of its operations,
stockholder's equity and its cash flows for each of the three years in the
period the years ended December 31, 1995 in conformity with generally accepted
accounting principles.
McManus and Company, P.C.
Certified Public Accountants
April 26, 1996
F-3
<PAGE> 68
NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
DECEMBER 31 JUNE 30
------------------- 1996
1995 1996 (UNAUDITED)
------- ------ -----------
<S> <C> <C> <C>
CURRENT ASSETS:
CASH IN BANKS $ 518 $ 815 $ 404
ACCOUNTS RECEIVABLE 3,934 2,820 5,169
PREPAID EXPENSES 291 21 20
OTHER CURRENT RECEIVABLES 63 229 56
INVENTORIES (NOTE 1) 4,516 3,580 4,487
------- ------ -------
TOTAL CURRENT ASSETS 9,322 7,465 10,136
------- ------ -------
PROPERTY AND EQUIPMENT (NET) (NOTE 1) 1,239 1,128 1,208
------- ------ -------
OTHER ASSETS:
ORGANIZATION COSTS, NET OF AMORTIZATION 245 231 205
GOODWILL 434 345 119
------- ------ -------
TOTAL OTHER ASSETS 679 576 324
TOTAL ASSETS $11,240 $9,169 $11,668
======= ====== =======
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 3,533 $2,903 $ 3,316
ACCRUED EXPENSES 2,077 1,198 1,833
NOTE PAYABLE - CREDIT LINE (NOTE 3) 1,094 735 1,394
NOTE PAYABLE - CREDIT LINE (NOTE 3) 242 0 0
NOTE PAYABLE - BANK (NOTE 4) 321 433 309
OTHER CURRENT LIABILITIES 407 1,189 491
------- ------ -------
TOTAL CURRENT LIABILITIES 7,674 6,458 7,343
LONG-TERM LIABILITIES:
NOTES PAYABLE - BANK (NOTE 4) 484 710 883
DEFERRED TAXES 73 14 2
DUE TO OFFICERS 43 47 43
DUE MINORITY SHAREHOLDERS - NORTELCO 0 140 0
OTHER LONG-TERM LIABILITIES 676 429 702
------- ------ -------
TOTAL LONG-TERM LIABILITIES 1,276 1,340 1,630
------- ------ -------
TOTAL LIABILITIES 8,950 7,798 8,973
------- ------ -------
STOCKHOLDERS' EQUITY
COMMON STOCK $.001 PAR VALUE
AUTHORIZED 100,000 SHARES, ISSUED AND
OUTSTANDING 1,800,000 AND 5,934,841 SHARES
RESPECTIVELY AT DECEMBER 31, 1995 AND 1994 (NOTE 9)
AND 1,800,000 SHARES AT JUNE 30, 1996 2 6 2
PAID IN CAPITAL 1,085 737 1,085
RETAINED EARNINGS 1,232 645 1,655
CUMULATIVE CURRENCY TRANSLATION ADJUSTMENT (29) (17) (47)
------- ------ -------
TOTAL STOCKHOLDERS' EQUITY 2,290 1,371 2,695
------- ------ -------
COMMITMENTS AND CONTINGENCIES (NOTES 10 AND 11)
SUBSEQUENT EVENTS (NOTE 12)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,240 $9,169 $11,668
======= ====== =======
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS REPORT AND NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS.
F-4
<PAGE> 69
NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 SIX MONTHS ENDED JUNE 30
1995 1994 1993 1996 1995
---------- ---------- ---------- -------------------------
(PROFORMA) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET SALES $ 25,531 $ 20,632 $ 11,527 $ 13,667 $ 12,273
COST OF GOODS SOLD 15,318 12,296 6,445 8,083 7,097
---------- ---------- ---------- ---------- ----------
GROSS PROFIT 10,213 8,336 5,082 5,584 5,176
---------- ---------- ---------- ---------- ----------
OPERATING EXPENSES:
SELLING, GENERAL AND ADMINISTRATIVE 8,707 7,408 3,910 4,623 4,162
INTEREST 536 511 830 253 228
DEPRECIATION AND AMORTIZATION 503 376 300 224 282
---------- ---------- ---------- ---------- ----------
9,746 8,295 5,040 5,100 4,672
---------- ---------- ---------- ---------- ----------
EARNINGS BEFORE OTHER INCOME, TAXES, 467 41 42 484 504
EXTRAORDINARY INCOME AND MINORITY INTEREST ---------- ---------- ---------- ---------- ----------
OTHER INCOME:
INTEREST EARNED 84 30 18 87 92
MISCELLANEOUS 210 62 41 0 5
---------- ---------- ---------- ---------- ----------
294 92 59 87 97
---------- ---------- ---------- ---------- ----------
EARNINGS BEFORE TAXES, EXTRAORDINARY INCOME 761 133 101 571 801
AND MINORITY INTEREST ---------- ---------- ---------- ---------- ----------
EXTRAORDINARY INCOME (NOTE 7) 0 449 (155) 25 23
---------- ---------- ---------- ---------- ----------
EARNINGS BEFORE TAXES AND MINORITY INTEREST 761 562 (54) 596 624
PROVISION FOR TAXES 254 136 35 173 175
---------- ---------- ---------- ---------- ----------
EARNINGS BEFORE MINORITY INTEREST 507 446 (89) 423 449
MINORITY INTEREST 0 54 (31) 0 68
---------- ---------- ---------- ---------- ----------
NET EARNINGS $ 507 $ 392 $ (58) $ 423 $ 381
========== ========== ========== ========== ==========
NET EARNINGS/(LOSS) PER SHARE
NET EARNINGS/(LOSS) BEFORE EXTRAORDINARY ITEM $ 0.11 $ (0.01) $ 0.02 $ 0.22 $ 0.06
NET EARNINGS/(LOSS) $ 0.11 $ 0.07 $ (0.01) $ 0.24 $ 0.06
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 4,640,741 5,766,323 5,751,003 1,800,000 6,061,112
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS REPORT AND NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS.
F-5
<PAGE> 70
NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
CUMULATIVE TOTAL
ADDITIONAL CURRENCY STOCK-
JANUARY 1, 1993 COMMON PAID-IN RETAINED TRANSLATION HOLDERS'
TO JUNE 30, 1996 STOCK CAPITAL EARNINGS ADJUSTMENT EQUITY
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
JANUARY 1, 1993 $ 6 $ 141 $ 311 $ 111 $ 569
FOREIGN CURRENCY ADJUSTMENT (17) (17)
NET LOSS 1993 (58) (58)
----------------------------------------------------------------------------
TOTAL STOCKHOLDERS'
EQUITY, DECEMBER 31, 1993 6 141 253 94 494
FOREIGN CURRENCY ADJUSTMENT (111) (111)
REVERSE STOCK
SPLIT 1 X 50 (5) 33 28
SALE OF STOCK 4 186 190
0
CAPITAL CONTRIBUTIONS 377 377
COMMON STOCK ISSUED
FOR ACQUISITIONS 1 1
NET EARNINGS 1994 392 392
----------------------------------------------------------------------------
TOTAL STOCKHOLDERS'
EQUITY, DECEMBER 31, 1994 6 737 645 (17) 1,371
UNTAXED RESERVE 80 80
FOREIGN CURRENCY ADJUSTMENT (12) (12)
COMMON STOCK ISSUED FOR ACQUISITIONS 1 220 221
REVERSE STOCK
SPLIT 1 X 1000 (6) 6 0
CAPITAL CONTRIBUTIONS 123 123
COMMON STOCK ISSUED TO CHAIRMAN
OF BOARD AND VARIOUS OTHER PARTIES 1 (1) 0
NET EARNINGS 1995 507 507
----------------------------------------------------------------------------
TOTAL STOCKHOLDERS'
EQUITY, DECEMBER 31, 1995 2 1,085 1,232 (29) 2,290
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS REPORT AND NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS.
F-6
<PAGE> 71
NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
CUMULATIVE TOTAL
ADDITIONAL CURRENCY STOCK-
JANUARY 1, 1993 COMMON PAID RETAINED TRANSLATION HOLDERS'
TO JUNE 30, 1996 STOCK CAPITAL EARNINGS ADJUSTMENT EQUITY
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOREIGN CURRENCY ADJUSTMENT (18) (18)
(UNAUDITED)
NET EARINGS FOR THE
SIX MONTHS ENDED
JUNE 30, 1996 (UNAUDITED) 423 423
TOTAL STOCKHOLDERS'
EQUITY, JUNE 30, 1996
(UNAUDITED) $ 2 $ 1,085 $ 1,655 $ (47) $ 2,695
=========================================================
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS REPORT AND NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS.
F-7
<PAGE> 72
NORDIC EQUITY PARTNERS CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30
DECEMBER 31 UNAUDITED
---------------------------------------- ----------------------
1995 1994 1993 1996 1995
-------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 507 $ 392 $ (58) $ 423 $ 381
ADJUSTMENTS TO RECONCILE NET
INCOME/(LOSS) TO NET CASH PROVIDED/
(USED) IN OPERATING ACTIVITIES:
DEPRECIATION & AMORTIZATION 503 376 300 224 282
(INCREASE)/DECREASE IN ACCOUNTS RECEIVABLE (1,114) (867) (295) (1,235) (1,013)
(INCREASE)/DECREASE IN OTHER RECEIVABLES 158 117 42 7 22
(INCREASE)/DECREASE IN INVENTORIES (936) (1,743) (709) 29 (781)
(INCREASE)/DECREASE IN DEFERRED TAXES 59 14 10 (71) (27)
(INCREASE)/DECREASE IN PREPAID EXPENSES (270) (21) (23) 271 17
(INCREASE)/DECREASE IN ACCOUNTS PAYABLE 630 767 812 (217) 216
(INCREASE)/DECREASE IN OTHER LIABILITIES (535) 265 639 110 (314)
(INCREASE)/DECREASE IN ACCRUED EXPENSES 879 1,119 (1,177) (244) 111
-------- ------- ------- ------- -------
TOTAL ADJUSTMENTS (626) 27 (401) (1,126) (1,487)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (119) 419 (459) (703) (1,106)
-------- ------- ------- ------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
(PURCHASE)/DISPOSAL OF PROPERTY, PLANT & EQUIPMENT (552) 4,502 0 (137) 487
(INCREASE)/DECREASE IN GOODWILL (89) (345) 0 315 (72)
(INCREASE)/DECREASE IN MINORITY INTEREST (140) 138 0 0 (140)
(INCREASE)/DECREASE IN ORGANIZATIONAL COST (68) (172) 0 (16) (39)
(INCREASE)/DECREASE IN PAID IN CAPITAL 412 454 0 (18) 24
-------- ------- ------- ------- -------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (437) 4,577 0 144 260
CASH FLOW FROM FINANCING ACTIVITIES:
INCREASE/(DECREASE) IN NOTE PAYABLE-CREDIT LINE 601 (66) (11) 58 (38)
INCREASE/(DECREASE) IN NOTES PAYABLE-BANK (338) (4,434) 579 387 352
INCREASE/(DECREASE) IN DUE TO OFFICERS (4) 47 0 0 18
-------- ------- ------- ------- -------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 259 (4,453) 568 445 332
NET INCREASE IN CASH (297) 543 109 (114) (514)
CASH - AT BEGINNING OF YEAR/PERIOD 815 272 163 518 815
-------- ------- ------- ------- -------
CASH - AT END OF YEAR/PERIOD $ 518 $ 815 $ 272 $ 404 $ 301
======== ======= ======= ======= =======
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
INTEREST $ 536 $ 511 $ 830 $ 253 $ 228
INCOME TAXES 254 136 35 173 175
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS REPORT AND NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS.
F-8
<PAGE> 73
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1994 IS UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
(a) PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements are presented in U.S. dollars and in
accordance with accounting principles accepted in the United States.
(b) CORPORATE REORGANIZATION:
On May 26, 1994 Nortelco AS, a Norwegian corporation, Storebro Machine AB, a
Swedish corporation and Sherman, Goelz & Associates, a United States
corporation combined businesses. The combination was accounted for by the
pooling of interest method. 1,071,000 shares of common stock were issued in
the business combination. Prior to the combination Nortelco AS had net sales
of $5,055,049; extraordinary income of $416,103 and net earnings of $25,896.
Storebro Machine AB had net sales of $698,719; extraordinary income of $ -0-,
and net income of $128,295. There were no changes in net assets and retained
earnings as a result of combining enterprises.
(c) FOREIGN CURRENCY TRANSLATION:
(1) Sales and expenses denominated in foreign currencies are
translated at average exchange rates in effect during the
period. The assets and liabilities of foreign operations are
translated into U.S. dollars using the current exchange rate.
Translation gains and losses are accumulated as a separate
component of stockholders equity.
(2) Other monetary assets and liabilities denominated in foreign
currencies are translated at the exchange rates prevailing at
the balance sheet date. Revenues and expenses denominated in
foreign currencies are translated at the rates of exchange
prevailing at the transaction dates. All exchange gains and
losses are included in income.
(d) REVENUE:
Sales are recorded net of returns of merchandise.
F-9
<PAGE> 74
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1994 IS UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(e) INVENTORIES:
Inventories have been valued using the first in - first out method. Raw
materials and purchased manufactured and semi-manufactured products have been
valued at the lowest of purchase price or replacement costs.
Manufactured and semi-manufactured products have been valued to manufacturing
costs, including appropriate share of indirect costs.
(f) NET EARNINGS PER COMMON SHARE:
Net earnings per common share is determined by dividing the weighted average
number of common shares outstanding during the year into net earnings. Common
share equivalents in the form of options and warrants are excluded from the
calculation since they have an anti-dilutive effect on per share figures.
(g) EQUIPMENT:
Equipment is stated at cost less accumulated depreciation as follows:
<TABLE>
<CAPTION>
ASSET METHOD RATE
- ----- ------ ----
<S> <C> <C>
Computer Equipment Straight Line 20%
Machinery & Equipment Straight Line 20%
Furniture & Fixtures Straight Line 20%
Cars Straight Line 20%
</TABLE>
(h) INCOME TAXES:
Effective January 1, 1993, the Company adapted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes",
which requires a change from the deferral method to assets and liability method
of accounting for income taxes.
F-10
<PAGE> 75
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1994 IS UNAUDITED)
NOTE 2 - CORPORATE REORGANIZATION AND POOLING OF INTEREST
The Corporation was incorporated under the name Pearl Ventures in November 1,
1986 in the State of Nevada.
In April 1988 the name of the Corporation was changed to Sherman, Goelz and
Associates. In May of 1994 Nordic entered into a business combination with
Nortelco AS and Storebro Machine AB (see Note 1). This combination was done
through the exchange of 1,071,000 shares of common stock and $1,000,000 from
Nordic to the stockholders of record of Nortelco AS and Storebro Machine AB.
These transactions, under Common Control, are accounted for at historical cost
which is in accordance with a pooling of interest business combination.
NOTE 3 - NOTE PAYABLE
Credit Line:
The Company has an open line of credit of approximately $1,400,000 with the
bank, secured by accounts receivable, inventory, and fixed assets of which the
Company has used approximately $1,094,083 as of December 31, 1995.
Approximately $70,000 of the total line of credit is personally guaranteed by
Bjorn Nysted, President of Nortelco AS.
The Company has a second line of credit of approximately $375,000 with
Handelsbanken. The credit line is secured by accounts receivable, inventory
and fixed assets of the Company.
NOTE 4 - NOTES PAYABLE
<TABLE>
<CAPTION>
December 31, June 30,
1995 1994 1996
---- ---- ----
<S> <C> <C> <C>
Handelsbaken Bank secured by accounts receivable, - 0 - 137,588 557,692
inventory and fixed assets, bearing interest at
approximately 12%.
Dynatech installment loan secured by accounts 41,109 - 0 - 32,338
receivable,inventory and fixed assets, due
April 1997, bearing no interest.
</TABLE>
F-11
<PAGE> 76
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1994 IS UNAUDITED)
DenNorske Bank notes payable secured by
accounts receivable, inventory and fixed
assets as follows:
<TABLE>
<S> <C> <C> <C>
Bearing interest at 12% per annum due 1995 20,371 63,948 - 0 -
Bearing interest at approximately
12% per annum due 1997 129,687 104,996 114,382
Bearing interest at approximately 12% per
annum due 1997 20,764 29,219 18,411
Bearing interest at 9.5% per annum due 1998 395,632 538,461 307,574
Bearing interest at 9.5% per annum due 1998 197,816 269,230 162,017
-------- --------- ---------
Total 805,379 1,143,442 1,192,414
------- --------- ---------
Less: Current portion of long term debt 321,292 433,135 309,186
------- ------- -------
Long term debt $484,087 710,307 883,228
======== ======== ========
</TABLE>
Principal repayment in each of the next four years are as follows:
<TABLE>
<S> <C>
1996 $321,292
1997 300,919
1998 161,675
1999 21,493
---------
$805,379
========
</TABLE>
NOTE 5 - SECURED LOAN
The bank has a Security Loan of approximately $720,000 on Storebro AS
manufactured machinery. The bank has guaranteed delivery of purchased
machinery to certain customers; if the Company fails to deliver, the bank is
liable to reimburse all monies paid to the Company by the customer.
F-12
<PAGE> 77
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1994 IS UNAUDITED)
NOTE 6 - PENSION
The Company finances its pension liability through a collective pension
agreement. The liability is funded through periodic lump sum payments and is
treated as a cost in the year paid for both book and tax purposes.
NOTE 7 - EXTRAORDINARY INCOME
This amount is comprised of profit realized on the sale of real estate
previously owned by Nortelco AS. The real estate sold is being leased back at
approximately $400,000 per year. The lease expires December 31, 2003 which is
subject to an escalation clause based upon the Norwegian Consumer Price Index.
NOTE 8 - INCOME TAXES
a) As discussed in Note 1, the Company adopted the provisions of
Statement of Financial Standards (SFAS) No. 109 "Accounting for Income
Taxes". The effective tax rate for the Company is reconcilable to
statutory tax rates as follows:
<TABLE>
<CAPTION>
December 31, June 30,
1995 1994 1993 1996 1995
---- ---- ---- ---- ----
% %
<S> <C> <C> <C> <C> <C>
U.S. Federal Statutory Tax Rate 34 34 34 34 34
Effect of Foreign Tax Rate difference (34) (34) (34) (34) (34)
--- --- --- --- ---
Effective U.S. Rate - - - - -
</TABLE>
b) The Company has a temporary difference that gives rise to a deferred
tax liability in Norway amounting to $73,000and $14,000 as of December
31, 1995 and 1994.
c) All of the Company's income is generated from Nortelco and
subsidiaries, Norwegian Companies and Storebro, a Swedish company. As
such, the income is not taxable in the United States.
Deferred taxes in the profit and loss account are taxes calculated for
temporary differences between tax and accounting result. Instead of
showing the year's tax
F-13
<PAGE> 78
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIRIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1994 IS UNAUDITED)
gross disposals in the account, the effect of tax is entered as a part
of the year's tax cost. Deferred taxes are set aside as long- term
liabilities in the balance sheet.
NOTE 9 - CAPITAL STOCK
a) Authorized Capital:
100,000,000; $ 0.001 par value voting common shares
b) Issued and outstanding:
1,800,000; $ 0.001 par value voting common shares
c) Share Transaction:
During the year, the Company had the following share transactions:
(I) 126,271 shares were issued at $1.75 per share to a third
party.
(II) A 1 for 1,000 reverse split of issued and outstanding shares
(III) Stock Issue:
1,793,939 shares were issued to Goran Haggqvist, Chairman of the Board
of the Company.
(IV) 999,550 shares were transferred from Goran Haggqvist, Chairman of
the Board of the Company, to various other parties.
(V) 216,000 shares were transferred from various parties to Nordic
Business Development A/S for the final 20% of Nortelco AS.
F-14
<PAGE> 79
NORDIC EQUITY PARTNERS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 1996 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1995 AND 1994 IS UNAUDITED)
NOTE 10 - LEASE
The Company has entered into long term leases with minimum annual rental
payments approximately as follows:
<TABLE>
<S> <C>
1996 $ 494,800
1997 490,000
1998 490,000
1999 490,000
2000 490,000
Thereafter 1,110,000
----------
Total $3,564,800
==========
</TABLE>
Rent expense for the year ended December 31, 1995 and 1994, amounted to
$534,600 and $713,339 respectively.
NOTE 11 - STOCK OPTIONS AND STOCK WARRANTS
The Company had no outstanding stock options or stock warrants at December 31,
1995.
A Stock Option Plan was instituted in 1995 where by 250,000 shares were
reserved for issuance as incentive stock options.
These options will be issued at fair market value at time of granting. As of
December 31, 1995, no options have been granted under the Stock Option Plan.
F-15
<PAGE> 80
No dealer, salesperson or any other person has been authorized to give
any information or to make any representations other than those contained in
this Prospectus, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or the
Underwriter. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Common Stock
offered by this Prospectus, or an offer to sell or a solicitation of an offer
to buy any security, by any person in any jurisdiction in which such an offer
or solicitation would be unlawful. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, imply that the
information in this Prospectus is correct as of any time subsequent to the date
of this Prospectus.
_________________
TABLE OF CONTENTS NORDIC EQUITY
<TABLE> PARTNERS CORP.
<CAPTION>
PAGE
<S> <C>
Prospectus Summary................ 6 1,300,000 Shares
Risk Factors...................... 12 of Common Stock and
Use of Proceeds .................. 21 2,600,000 Common Stock
Dilution.......................... 22 Purchase Warrants
Dividend Policy .................. 24
Capitalization ................... 25
Market for Securities............. 26
Selected Consolidated Financial
Data............................ 27 ___________________
Management's Discussion and
Analysis of Financial Condition PROSPECTUS
and Results of Operations....... 29 ___________________
Business.......................... 33
Management........................ 45
Principal and Selling
Stockholders.................... 49
Certain Transactions.............. 51
Description of Securities......... 54 MASON HILL & CO., INC.
Shares Eligible for Future Sale .. 56
Underwriting...................... 57
Legal Matters..................... 60 , 1996
Experts .......................... 60
Additional Information............
Index to Financial Statements .... F-1
</TABLE>
Until , 1996 (25 days after the date of this Prospectus), all
dealers effecting transactions in the shares of Common Stock offered hereby,
whether or not participating in the distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
===============================================================================
<PAGE> 81
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses of this Offering all of which are to be paid by
the Registrant in connection with the issuance and distribution of the
securities being registered are as follows:
<TABLE>
<S> <C>
SEC registration fee................... $ 13,569.76
NASD filing fee........................ 4,435.23
NASDAQ-NMS listing and Filing fee...... 33,875.00
Printing and engraving expenses........ 60,000.00
Accounting fees and expenses........... 50,000.00
Legal fees and expenses................ 175,000.00
Blue sky fees and expenses............. 75,000.00
Transfer agent fees.................... 10,000.00
Miscellaneous expenses................. 8,120.00
-----------
Total.................................. $430,000.00
===========
</TABLE>
__________________
* Estimated.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
In general, Section 145 of the Delaware General Corporation Law
provides that persons who are officers or directors of a corporation may be
indemnified by the corporation for acts performed in their capacities as such.
The Registrant's by-Laws authorize indemnification in accordance with and to
the extent permitted by said statute.
The Company's Certificate of Incorporation and By-Laws provide for
indemnification to the fullest extent permitted by law.
Reference is also made to Section 8 of the Underwriting Agreement
filed as Exhibit 1.1 to this Registration Statement, pursuant to which the
underwriter has agreed to indemnify and hold harmless the company and its
directors, officers and controlling persons against certain liabilities.
Except as hereinafter set forth, there is no charter provision,
by-law, contract, arrangement or statute under which any director or officer of
the Company is indeminified in any manner against any liability which he may
incur in his capacity as such.
II-1
<PAGE> 82
Article SEVENTH of the Company's Certificate of Incorporation provides
as follows:
Directors of the corporation shall not be liable either to the
corporation or its stockholders for monetary damages for breach of fiduciary
duties unless the breach involves: (1) a director's duty of loyalty to the
corporation or its stockholders; (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (3)
liability for unlawful payments of dividends or unlawful stock purchase or
redemption by the corporation; or (4) a transaction from which the director
derived any improper personal benefit.
Article X of the Company's By-Laws provides as follows:
The Corporation shall indemnify to the full extent authorized by law
any person made or threatened to be made a party to an action or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he, his testator or intestate is or was a director, officer or employee or
agent of the Corporation or any predecessor of the Corporation or serves or
served any other enterprise as a director, officer or employee or agent at the
request of the Corporation or any predecessor of the Corporation.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Except as set forth below, there were no sales of unregistered
securities by the Registrant during the past three (3) years:
Effective as of May 15, 1994, the Registrant sold 180 shares of the
Company's Common Stock to Mark Oldmar in consideration for the acquisition of
all of the outstanding securities of Nortelco Audiatur AB. This transaction was
exempt from registration under the Securities Act of 1933, as amended (the
"Act"), under Section 4(2) of the Act as not involving a public offering.
Effective as of November 23, 1994, the Registrant sold 490 shares of
the Company's Common Stock to Ovington Investments Limited in consideration for
the acquisition of all of the outstanding securities of Storebro Machine AB.
This transaction was exempt from registration under Section 4(2) of the Act
as not involving a public offering.
Effective as of November 23, 1994, the Registrant sold 581 shares of
the Company's Common Stock to Universal Commodity Trading Group, S.A. in
consideration for the acquisition of all of the outstanding securities of
Nortelco AS. This transaction was exempt from registration
II-2
<PAGE> 83
under Section 4(2) of the Act as not involving a public offering.
In September 1995, the Registrant sold 1,794,320 shares of the
Company's Common Stock to Mr. Goran Haggqvist for aggregate consideration of
$1,000,000. This transaction was exempt from registration under Section 4(2) of
the Act as not involving a public offering.
In July 1996, the Registrant issued an aggregate of 500,000 shares of
Common Stock to a total of 2 private investors, who paid total gross
consideration of $150,000. These transactions were exempt from registration
under the Act, under Section 4(2) and Rule 506 of Regulation D of the Act as
not involving a public offering. Mason Hill & Co., Inc. acted as Placement
Agent for these issuances and received an aggregate of $19,500 in commissions
(10%) and non-accountable expense allowances (3%). The recipients of all of
the foregoing securities represented that such securities were being acquired
for investment and not with a view to the distribution thereof. In addition,
the certificates evidencing such securities bear restrictive legends.
In August 1996, the Registrant issued an aggregate of $1,000,000
principal amount twelve percent (12%) promissory notes, and 100,000 shares of
Common Stock to a total of 14 private investors, who paid total gross
consideration of $1,000,000. These transactions were exempt from registration
under the Act, under Section 4(2) and Rule 506 of Regulation D of the Act as
not involving a public offering. Mason Hill & Co., Inc. acted as Placement
Agent for these issuances and received an aggregate of $115,000 in commissions
(10%) non-accountable expenses (1.5%). The recipients of all of the foregoing
securities represented that such securities were being acquired for investment
and not with a view to the distribution thereof. In addition, the certificates
evidencing such securities bear restrictive legends.
II-3
<PAGE> 84
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
1.1 Form Underwriting Agreement*
1.2 Form of Selected Dealers Agreement*
2.1 Agreement and Plan of Merger, dated as of May 15, 1995,
by and between Sherman, Goelz and Associates and the
Company
3.1 Articles of Incorporation, as amended and restated to
date (including certificate of merger)
3.2 By-Laws
4.1 Form of Underwriter's Warrant*
4.2 Form of Financial Advisory and Investment Banking
Agreement with the Underwriter*
4.3 Form of Common Stock Certificate
4.4 Form of Common Stock Purchase Warrant
4.5 Form of Promissory Note used for Bridge Loans
4.6 Form of Warrant Agreement*
5.1 Opinion of Gusrae Kaplan & Bruno*
10.1 Registrant's 1996 Stock Option Plan
10.2 Employment Agreement with Goran Haggqvist
10.3 Employment Agreement with Bjorn Nysted
10.4 Employment Agreement with Kjell Sjostrand
10.5 Agreement dated November 23, 1994 by and between
Universal Commodity Trading Group, S.A. and the Registrant
10.6 Agreement dated November 30, 1995 by and between Nordic
Business Development and the Registrant
10.7 Agreement dated May 15, 1994 by and between Nortelco AS,
the Registrant and Marc Olmar, as amended
10.8 Stock Purchase Agreement dated September 20, 1994 by and
between Monkwell Consultants, Ltd. and Nortelco System
Teknikk AS
10.9 Stock Purchase Agreement dated November 23, 1994 by and
between Ovington Investments Ltd. and the Registrant
21.1 List of Subsidiaries of the Registrant
23.1 Consent of Gusrae, Kaplan & Bruno (to be included in
Exhibit 5.1)*
23.2 Consent of McManus & Co., P.C.
- ----------------------
* To be filed by Amendment.
All other schedules are omitted, as the required information is either
inapplicable or presented in the financial statements or related notes.
II-4
<PAGE> 85
ITEM 17. UNDERTAKINGS
The 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 date 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 the registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the 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 therein, 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;
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, 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 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 of 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-5
<PAGE> 86
(5) The undersigned registrant hereby undertakes to provide to the
underwriters, at the closing, specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
II-6
<PAGE> 87
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement on Form S-1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, New York, on the 27th day of September, 1996.
NORDIC EQUITY PARTNERS CORP.
By: /s/ BJORN NYSTED
------------------------
Bjorn Nysted
President and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-1 has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C> <C>
/s/ BJORN NYSTED President and Director September 27, 1996
- ---------------------
Bjorn Nysted
/s/ GORAN HAGGQVIST Chairman of the Board September 27, 1996
- ---------------------
Goran Haggqvist
/s/ JAN THUNELL Director September 27, 1996
- ---------------------
Jan Thunell
/s/ ESPEN KOMNAES Director September 27, 1996
- ---------------------
Espen Komnaes
/s/ KJELL SJOSTRAND Chief Financial Officer, September 27, 1996
- --------------------- Treasurer, and Secretary
Kjell Sjostrand (Principal Accounting
and Financial Officer)
</TABLE>
II-7
<PAGE> 88
EXHIBIT INDEX
1.1 Form Underwriting Agreement*
1.2 Form of Selected Dealers Agreement*
2.1 Agreement and Plan of Merger, dated as of May 15, 1995,
by and between Sherman, Goelz and Associates and the
Company
3.1 Articles of Incorporation, as amended and restated to
date (including certificate of merger)
3.2 By-Laws
4.1 Form of Underwriter's Warrant*
4.2 Form of Financial Advisory and Investment Banking
Agreement with the Underwriter*
4.3 Form of Common Stock Certificate
4.4 Form of Common Stock Purchase Warrant
4.5 Form of Promissory Note used for Bridge Loans
4.6 Form of Warrant Agreement*
5.1 Opinion of Gusrae Kaplan & Bruno*
10.1 Registrant's 1996 Stock Option Plan
10.2 Employment Agreement with Goran Haggqvist
10.3 Employment Agreement with Bjorn Nysted
10.4 Employment Agreement with Kjell Sjostrand
10.5 Agreement dated November 23, 1994 by and between
Universal Commodity Trading Group, S.A. and the Registrant
10.6 Agreement dated November 30, 1995 by and between Nordic
Business Development and the Registrant
10.7 Agreement dated May 15, 1994 by and between Nortelco AS,
the Registrant and Marc Olmar, as amended
10.8 Stock Purchase Agreement dated September 20, 1994 by and
between Monkwell Consultants, Ltd. and Nortelco System
Teknikk AS
10.9 Stock Purchase Agreement dated November 23, 1994 by and
between Ovington Investments Ltd. and the Registrant
21.1 List of Subsidiaries of the Registrant
23.1 Consent of Gusrae, Kaplan & Bruno (to be included in
Exhibit 5.1)*
23.2 Consent of McManus & Co., P.C.
- ----------------------
* To be filed by Amendment.
<PAGE> 1
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER dated as of May , 1995, is entered into
by and between SHERMAN, GOELZ AND ASSOCIATES, a Nevada corporation ("Sherman
Goelz"), and NORDIC EQUITY PARTNERS CORP., a Delaware corporation ("Nordic"),
such corporations being hereinafter collectively referred to as the
"Constituent Corporations."
RECITALS
WHEREAS, Nordic is a corporation duly organized and existing under the
laws of the state of Delaware, having an authorized capital of 100,000,000
shares of common stock par value $.001 per share (the "Common Stock of
Nordic"), of which one share is issued and outstanding as of the date hereof
and 1,000,000 shares of preferred stock, par value $.001 per share, of which no
shares are issued and outstanding as of the date hereof; and
WHEREAS, Sherman Goelz is a corporation duly organized and existing under
the laws of the state of Nevada, having an authorized capital of 100,000,000
shares of common stock, par value $.001 per share (the "Common Stock of Sherman
Goelz"), of which 4,680,003 shares are issued and outstanding as of the date
hereof; and
WHEREAS, the respective boards of directors of Sherman Goelz and Nordic
have each duly approved this Agreement and Plan of Merger (the "Plan")
providing for the merger of Sherman Goelz with and into Nordic with Nordic as
the surviving corporation as authorized by the statutes of the State of
Delaware; and
WHEREAS, Sherman Goelz owns all of the issued and outstanding voting
securities of Nordic;
Agreement
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for the purpose of setting forth the terms
and conditions of said merger and the manner and basis of causing the shares of
Sherman Goelz to be converted into shares of stock of Nordic and such other
provisions as are deemed necessary or desirable, the parties hereto have agreed
and do hereby agree, subject to the approval and adoption of this Plan by the
requisite vote of the stockholders of each Constituent Corporation, and subject
to the conditions hereinafter set forth, as follows;
<PG$PX>
<PAGE> 2
ARTICLE I
MERGER AND NAME OF SURVIVING CORPORATION
On the effective date of the merger, Sherman Goelz and Nordic shall cease
to exist separately and Sherman Goelz shall be merged with and into Nordic,
which is hereby designated as the "Surviving Corporation," the name of which on
and after the Effective Date of the merger shall be Nordic Equity Partners
Corp. or such other name as may be available and to which the parties may
agree.
ARTICLE II
TERMS AND CONDITIONS OF MERGER
The terms and conditions of the merger are (in addition to those set forth
elsewhere in this Plan) as follows:
(a) On the Effective Date of the merger:
(1) Sherman Goelz shall be merged into Nordic to form a single
corporation, and Nordic shall be designated herein as the Surviving
Corporation.
(2) The separate existence of Sherman Goelz shall cease.
(3) The Surviving Corporation shall have all the rights,
privileges, immunities, and powers and shall be subject to all duties
and liabilities of a corporation organized under the laws of the
State of Delaware.
(4) The Surviving Corporation shall thereupon and thereafter
possess all the rights, privileges, immunities, and franchises, of a
public as well as of a private nature, of each of the Constituent
Corporations; and all property, real, personal, and mixed, and all
debts due of whatever account, including subscriptions to shares, and
all other choses in action, and all and every other interest, of or
belonging to or due to each of the Constituent Corporations, shall be
taken and deemed to be transferred to and vested in the Surviving
Corporation without further act or deed; the title to any real
estate, or any interest therein, vested in either Constituent
Corporation shall not revert or be in any way impaired by reason of
the merger; the Surviving Corporation shall thenceforth be
responsible and liable for all the liabilities and obligations of
each of the Constituent Corporations; any claim existing or action or
proceeding pending by or against either of such
-2-
<PG$PX>
<PAGE> 3
Constituent Corporations may be prosecuted as if the merger had not
taken place, or the Surviving Corporation may be substituted in place
of the Constituent Corporation; and neither the rights of creditors
nor any liens on the property of either of the Constituent
Corporations shall be impaired by the merger.
(b) On the Effective Date of the merger, the Board of Directors of
the Surviving Corporation and the members thereof shall consist of the
members of the Board of Directors of Sherman Goelz immediately prior to
the merger, to serve thereafter in accordance with the bylaws of the
Surviving Corporation and until their respective successors shall have
been duly elected and qualified in accordance with such bylaws and the
laws of the State of Delaware.
(c) On the Effective Date of the merger, the officers of the
Surviving Corporation shall be the officers of Sherman Goelz immediately
prior to the merger, such officers to serve thereafter in accordance with
the bylaws of the Surviving Corporation and until their respective
successors shall have been duly elected and qualified in accordance with
such bylaws and the laws of the State of Delaware.
If on the Effective Date of the merger, a vacancy shall exist in the Board
of Directors or in any of the offices of the Surviving Corporation, such
vacancy may be filled in the manner provided in the bylaws of the Surviving
Corporation.
ARTICLE III
MANNER AND BASIS OF CONVERTING SHARES
The manner and basis of converting the shares of the Constituent
Corporations and the mode of carrying the merger into effect are as follows:
(a) Each share of Common Stock of Sherman Goelz outstanding on the
Effective Date of the merger shall, without any action on the part of the
holder thereof, be converted into one fully paid and nonassessable share
of Common Stock of Nordic which shall, on such conversion, be validly
issued and outstanding, fully paid, and nonassessable, and shall not be
liable to any further payments with respect thereto. After the Effective
Date of the merger, each holder of an outstanding certificate which prior
thereto represented shares of Common Stock of Sherman Goelz shall be
entitled, on surrender thereof to the transfer and exchange agent, to
receive in exchange therefor
-3-
<PG$PX>
<PAGE> 4
a certificate or certificates representing the number of whole shares of
Common Stock, of Nordic. Until so surrendered, each such outstanding
certificate (which prior to the Effective Date of the merger represented
shares of Common Stock of Sherman Goelz) shall for all purposes evidence
the ownership of the shares of Nordic into which such shares shall have
been converted. Nordic shall not issue any fractional interest in shares
of Nordic in connection with the aforesaid conversion, and any fractional
shares shall be rounded to the next highest number of whole shares.
(b) All shares of the Common Stock of Nordic into which shares of the
Common Stock of Sherman Goelz shall have been converted, pursuant to this
Article III, shall be issued in full satisfaction of all rights pertaining
to the shares of Common Stock of Sherman Goelz.
(c) If any certificate for shares of Nordic is to be issued in a name
other than that in which the certificate surrendered in exchange therefor
is registered, it shall be a condition of the issuance thereof that the
certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that the transfer be in compliance with
applicable federal and state securities laws, and that the person
requesting such exchange pay to Nordic or any agent designated by it any
transfer or other taxes required by reason of the issuance of a
certificate for shares of Nordic in any name other than that of the
registered holder of the certificate surrendered, or established to the
satisfaction of Nordic or any agent designated by it that such tax has
been paid or is not payable.
(d) On the Effective Date, the one share of Common Stock of Nordic
currently issued and outstanding shall be cancelled and returned to the
status of authorized but unissued Common Stock.
ARTICLE IV
CERTIFICATE OF INCORPORATION AND BYLAWS
1. The Certificate of Incorporation of Nordic shall, on the merger
becoming effective, be and constitute the Certificate of Incorporation of the
Surviving Corporation until amended in the manner provided by law.
2. The Bylaws of Nordic shall, on the merger becoming effective, be and
constitute the Bylaws of the Surviving Corporation until amended in the manner
provided by law.
-4-
<PG$PX>
<PAGE> 5
ARTICLE V
SHAREHOLDER APPROVAL
This Plan shall be submitted for approval by the stockholders of each of
the Constituent Corporations as provided by the laws of the states of Nevada
and Delaware. After the approval or adoption thereof by the stockholders of
each Constituent Corporation in accordance with the requirements of the
applicable laws, all required documents shall be executed, filed, and recorded,
and all required acts shall be done in order to accomplish the merger under the
provisions of the laws of the states of Nevada and Delaware.
ARTICLE VI
APPROVAL AND EFFECTIVE DATE OF THE MERGER,
MISCELLANEOUS MATTERS
1. The merger shall become effective when all the following actions shall
have been taken:
(a) This Plan shall be authorized, adopted, and approved on behalf of
each Constituent Corporation in accordance with the laws of the States of
Nevada and Delaware; and
(b) This Plan, or a certificate of merger in the form required,
executed and verified in accordance with the laws of the state of
Delaware, shall be filed in the Office of the Secretary of State of
Delaware.
The date on which such actions are completed and such merger is effected is
herein referred to as the "Effective Date".
2. If at any time the Surviving Corporation shall deem or be advised that
any further grants, assignments, confirmations, or assurances are necessary or
desirable to vest, perfect, or confirm title in the Surviving Corporation, of
record or otherwise, to any property of Sherman Goelz acquired or to be
acquired by, or as a result of, the merger, the officers and directors of
Sherman Goelz or any of them shall be severally and fully authorized to execute
and deliver any and all such deeds, assignments, confirmations, and assurances
and to do all things necessary or proper so as to best prove, confirm, and
ratify title to such property in the Surviving Corporation and otherwise carry
out the purposes of the merger and the terms of this Plan.
3. For the convenience of the parties and to facilitate the filing and
recording of this Plan, any number of counterparts hereof may be executed, each
such counterpart shall be deemed to
-5-
<PG$PX>
<PAGE> 6
be an original instrument, and all such counterparts together shall be
considered one instrument.
4. If, at any time prior to the Effective Date hereof, events or
circumstances occur, which in the opinion of a majority of the Board of
Directors of either of the Constituent Corporations, renders it inadvisable to
consummate the merger, this Plan shall not become effective.
5. This Plan shall be governed by and construed in accordance with the
laws of the state of Delaware.
6. This Plan cannot be altered or amended, except pursuant to an
instrument in writing signed on behalf of the parties hereof.
The foregoing Agreement and Plan of Merger, having been approved by the
Board of Directors of each Constituent Corporation, and having been adopted
separately by the stockholders of each Constituent Corporation thereto in
accordance with the laws of the states of Nevada and Delaware, the President
and Secretary of Sherman Goelz, and the President and Secretary of Nordic, do
hereby execute this Agreement and Plan of Merger this 16 day of May, 1995.
ATTEST: SHERMAN, GOELZ AND ASSOCIATES
(A Nevada Corporation)
/s/ KJELL SJOSTRAND By: /s/ GORAN HAGGQVIST
- -------------------------- ----------------------------------
Kjell Sjostrand, Goran Haggqvist, President
Secretary
ATTEST: NORDIC EQUITY PARTNERS CORP.
(A Delaware corporation)
/s/ KJELL SJOSTRAND By: /s/ GORAN HAGGQVIST
- -------------------------- ----------------------------------
Kjell Sjostrand, Goran Haggqvist, President
Secretary
-6-
<PG$PX>
<PAGE> 1
EXHIBIT 3.1
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 05/31/1994
944097373 - 2406925
CERTIFICATE OF INCORPORATION
OF
FIRST NORDIC EQUITY PARTNERS CORP.
FIRST: The name of this corporation is First Nordic Equity Partners Corp.
SECOND: Its registered office in the state of Delaware is to be located at
Three Christina Centre, 201 N. Walnut Street, Wilmington DE 19801, New Castle
County. The registered agent in charge thereof is The Company Corporation,
address "same as above".
THIRD: The nature of the business and, the objects and purposes proposed to be
transacted, promoted and carried on, are to do any or all the things herein
mentioned as fully and to the same extent as natural persons might or could do,
and in any part of the world, viz:
The purpose of the corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
divided into 100,000,000 shares of stock at $.001 par value.
FIFTH: The name and mailing address of the incorporator is as follows:
Vanessa Foster Three Christina Centre, 201 N. Walnut Street;
Wilmington DE 19801
SIXTH: The Directors shall have power to make and to alter or amend the
By-Laws; to fix the amount to be reserved as working capital, and to authorize
and cause to be executed, mortgages and liens without limit as to the amount,
upon the property and franchise of the Corporation.
With the consent in writing, and pursuant to a vote of the holders of a majority
of the capital stock issued and outstanding, the Directors shall have the
authority to dispose, in any manner, of the whole property of this corporation.
The By-Laws shall determine whether and to what extent the accounts and books
of this corporation, or any of them shall be open to the inspection of the
stockholders; and no stockholder shall have any right of inspecting any
account, or book or document of this Corporation, except as conferred by the
law or the By-Laws, or by resolution of the stockholders.
The stockholders and directors shall have power to hold their meetings and keep
the books, documents, and papers of the Corporation outside of the State of
Delaware, at such places as may be from time to time designated by the By-Laws
or by resolution of the stockholders or directors, except as otherwise required
by the laws of Delaware.
It is the intention that the objects, purposes and powers specified in the
Third paragraph hereof shall, except where otherwise specified in said
paragraph, be nowise limited or restricted by reference to or inference from
the terms of any other clause or paragraph in this certificate of
incorporation, that the objects, purposes and powers specified in the Third
paragraph and in each of the clauses or paragraphs of this charter shall be
regarded as independent objects, purposes and powers.
SEVENTH: Directors of the corporation shall not be liable to either the
corporation or its stockholders for monetary damages for a breach of fiduciary
duties unless the breach involves: (1) a director's duty of loyalty to the
corporation or its stockholders; (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (3)
liability for unlawful payments of dividends or unlawful stock purchase or
redemption by the corporation; or (4) a transaction from which the director
derived an improper personal benefit.
I, THE UNDERSIGNED, for the purpose of forming a Corporation under the laws of
the State of Delaware, do make, file and record this Certificate and do certify
that the facts herein are true; and I have accordingly hereunto set my hand.
DATED: May 31, 1994 /s/ VANESSA FOSTER
<PG$PX>
<PAGE> 2
CERTIFICATE OF MERGER
OF
SHERMAN, GOELZ AND ASSOCIATES
(A Nevada Corporation)
AND
NORDIC EQUITY PARTNERS CORP.
(A Delaware Corporation)
It is hereby certified that:
1. The constituent business corporations participating in the merger
herein certified are:
(i) Sherman, Goelz and Associates ("Sherman Goelz"), which is
incorporated under the laws of the State of Nevada; and
(ii) Nordic Equity Partners Corp. ("Nordic"), which is incorporated
under the laws of the State of Delaware.
2. An Agreement and Plan of Merger has been approved, adopted, certified,
executed and acknowledged by each of the aforesaid constituent corporations in
accordance with the provisions of subsection (c) of Section 252 of the General
Corporation Law of the State of Delaware, to wit, by Sherman Goelz in
accordance with the laws of the State of its incorporation and by Nordic in the
same manner as is provided in Section 251 of the General Corporation Law of the
State of Delaware.
3. The name of the surviving corporation in the merger herein certified is
Nordic Equity Partners Corp., which will continue its existence as said
surviving corporation under its present name upon the effective date of said
merger pursuant to the provisions of the General Corporation Law of the State
of Delaware.
4. The Certificate of Incorporation of Nordic, as now in force and effect,
shall continue to be the Certificate of Incorporation of said surviving
corporation until amended and changed pursuant to the provisions of the General
Corporation Law of the State of Delaware.
5. The executed Agreement and Plan of Merger between the aforesaid
constituent corporations is on file at the principal place of business of the
aforesaid surviving corporation, the address of which is as follows:
<PG$PX>
<PAGE> 3
NORDIC EQUITY PARTNERS CORP.
C/O GUSRAE, KAPLAN & BRUNO
120 Wall Street, 11th Floor
New York, New York 10005
Attention: Lawrence G. Nusbaum, Esq.
6. A copy of the aforesaid Agreement and Plan of Merger will be furnished
by the aforesaid surviving corporation, on request, and without cost, to any
stockholder of each of the aforesaid constituent corporations.
7. The authorized capital stock of Sherman Goelz consists of 100,000,000
shares of common stock, par value $.001 per share.
Dated: May 16, 1995
SHERMAN, GOELZ AND ASSOCIATES
(A Nevada Corporation)
By: /s/ GORAN HAGGQVIST
--------------------------------
Goran Haggqvist
President
Dated: May 16, 1995
NORDIC EQUITY PARTNERS CORP.
(A Delaware Corporation)
By: /s/ GORAN HAGGQVIST
---------------------------------
Goran Haggqvist
President
2
<PG$PX>
<PAGE> 4
RESTATED
CERTIFICATE OF INCORPORATION
OF
FIRST NORDIC EQUITY PARTNERS CORP.
It is hereby certified that:
1. The present name of the corporation (hereinafter called the
"corporation") is First Nordic Equity Partners Corp., which is the name under
which the corporation was originally incorporated; and the date of filing of
the original certificate of incorporation with the Secretary of State of
Delaware is May 31, 1994.
2. The certificate of incorporation of the corporation is hereby amended
by striking out Articles FIRST, SECOND, THIRD, FOURTH and SEVENTH thereof and
by substituting in lieu thereof new Articles FIRST, SECOND, THIRD, FOURTH and
SEVENTH. In addition, Articles FIFTH and SIXTH have been deleted in their
entirety without substituting any new Articles in lieu thereof. Furthermore,
Articles FIFTH, SIXTH, EIGHTH and NINTH have been added. All new and additional
Articles are set forth in the Restated Certificate of Incorporation hereinafter
provided for.
3. The provisions of the certificate of incorporation of the corporation
as heretofore amended and/or supplemented, and as herein amended, are hereby
restated and integrated into the single instrument which is hereinafter set
forth, and which is entitled Restated Certificate of Incorporation of First
Nordic Equity Partners Corp. without any further amendments other than the
amendments herein certified and without any discrepancy between the provisions
of the certificate of incorporation as heretofore amended and supplemented and
the provisions of the said single instrument hereinafter set forth.
4. The amendments and the restatement of the certificate of incorporation
herein certified have been duly adopted by the stockholders in accordance with
the provisions of Sections 228, 242 and 245 of the General Corporation Law of
the State of Delaware.
5. The certificate of incorporation of the corporation, as amended and
restated herein, shall at the effective time of this Restated Certificate of
Incorporation, read as follows:
FIRST: The name of the corporation (hereinafter called the "corporation")
is Nordic Equity Partners Corp.
SECOND: The address, including street, number, city and county, of the
registered office of the corporation in the State
<PG$PX>
<PAGE> 5
of Delaware is 32 Loockerman Square, Suite L-100, City of Dover 19901, County
of Kent; and the name of the registered agent of the corporation in the State
of Delaware at such address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purposes to be conducted and
promoted by the corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is 101,000,000, consisting of 100,000,000 shares of
common stock, each of which shall have a par value of $.001 per share, and
1,000,000 shares of preferred stock, each of which shall have a par value of
$.001 per share. The preferred stock may be assigned such designations,
preferences and relative participating, optional or other special rights, and
qualifications or restrictions thereof, including without limitation voting
rights, as determined by the board of directors of the corporation, as provided
by resolution. The board of directors shall also have the right to cancel any
series of preferred stock, in the event that there are no longer any shares of
such series outstanding.
FIFTH: The corporation is to have perpetual existence.
SIXTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder hereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of Section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
-2-
<PG$PX>
<PAGE> 6
SEVENTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by the provisions of
paragraph (7) of subsection (b) of Section 102 of the General Corporation Law
of the State of Delaware, as the same may be amended and supplemented.
EIGHTH: The corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities, or other matters referred to
in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
NINTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the provisions of this
Article NINTH.
IN WITNESS WHEREOF, the undersigned, does make this Restated Certificate
of Incorporation, hereby declaring, under the penalties of perjury, that the
instrument is his act and deed, and that the facts stated herein are true and,
accordingly, has hereunto set his hand as of the 16 day of May 1995.
/s/ GORAN HAGGQVIST
--------------------------------
Goran Haggqvist, President
ATTEST:
/s/ KJELL SJOSTRAND
- --------------------------------
Kjell Sjostrand, Secretary
-3-
<PG$PX>
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
OF
NORDIC EQUITY PARTNERS CORP.
(Delaware)
ARTICLE I - OFFICES
The office of the Corporation shall be located in the City and State designated
in the Articles of Incorporation. The Corporation may also maintain offices at
such other places within or without the United States as the Board of Directors
may, from time to time, determine.
ARTICLE II - MEETING OF STOCKHOLDERS
Section 1 - Annual Meetings:
The annual meeting of the stockholders of the Corporation shall be held within
five months after the close of the fiscal year of the Corporation, for the
purpose of electing directors, and transacting such other business as may
properly come before the meeting.
Section 2 - Special Meetings:
Special meetings of the stockholders may be called at any time by the Board of
Directors or by the President, and shall be called by the President or the
Secretary at the request in writing of a majority of the directors or
stockholders entitled to vote or as otherwise required by the Delaware General
Corporation Law (the "Corporation Law").
Section 3 - Place of Meetings:
All meetings of stockholders shall be held at the principal office of the
Corporation, or at such other places as shall be designated in the notices or
waivers of notice of such meetings.
Section 4 - Notice of Meetings:
(a) Except as otherwise provided by statute, written notice of each meeting of
stockholders, whether annual or special, stating the time when and place where
it is to be held, shall be served either personally or by mail, not less than
ten or more than fifty days before the meeting, upon each stockholder of record
entitled to vote at such meeting, and to any other stockholder of record
entitled to vote at such meeting, and to any other stockholder to whom the
giving of notice may be required by law. Notice of a special meeting shall also
state the purpose or purposes for which the meeting is called, and shall
indicate that it is being issued by, or at the direction of, the person or
persons calling the meeting. If, at any meeting, action is proposed to be taken
that would, if taken, entitle stockholders to receive payment for their
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shares pursuant to statute, the notice of such meeting shall include a statement
of that purpose and to that effect. If mailed, such notice shall be directed to
each such stockholder at his address, as it appears on the records of the
stockholders of the Corporation, unless he shall have previously filed with the
Secretary of the Corporation a written request that notices intended for him be
mailed to some other address, in which case, it shall be mailed to the address
designated in such request.
(b) Notice of any meeting need not be given to any person who may become a
stockholder of record after the mailing of such notice and prior to the meeting,
or to any stockholder who attends such meeting, in person or by proxy, or to any
stockholder who, in person or by proxy, submits a signed waiver of notice either
before or after such meeting. Notice of any adjourned meeting of stockholders
need not be given, unless otherwise required by statute.
Section 5 - Quorum:
(a) Except as otherwise provided herein, or by statute, or in the Certificate of
Incorporation (such Certificate and any amendments thereof being hereinafter
collectively referred to as the "Certificate of Incorporation"), at all meetings
of stockholders of the Corporation, the presence at the commencement of such
meetings in person or by proxy of stockholders holding of record a majority of
the total number of shares of the Corporation then issued and outstanding and
entitled to vote, shall be necessary and sufficient to constitute a quorum for
the transaction of any business. The withdrawal of any stockholder after the
commencement of a meeting shall have no effect on the existence of a quorum,
after a quorum has been established at such meeting.
(b) In case a quorum shall not be present at any meeting, a majority in interest
of the stockholders entitled to vote thereat, present in person or by proxy,
shall have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until the requisite number of shares entitled
to vote shall be present. At any such adjourned meeting at which the requisite
number of shares entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally noticed shall be entitled to vote at any adjournment or adjournments
thereof.
Section 6 - Voting:
(a) Except as otherwise provided herein, or by statute or by the Certificate of
Incorporation, any corporate action, to be taken by vote of the stockholders,
shall be authorized by a majority of votes cast at a meeting of stockholders by
the holders of shares entitled to vote thereon.
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(b) Except as otherwise provided herein, or by the statute or by the Certificate
of Incorporation or by any Certificate of Designations, at each meeting of
stockholders, each holder of record of stock of the Corporation entitled to vote
thereat, shall be entitled to one vote for each share of stock registered in his
name on the books of the Corporation.
(c) Each stockholder entitled to vote or to express consent or dissent without a
meeting, may do so by proxy; provided, however, that the instrument authorizing
such proxy to act shall have been executed in writing by the stockholder
himself, or by his attorney-in-fact thereunto duly authorized in writing. No
proxy shall be valid after the expiration of eleven months from the date of its
execution, unless the person executing it shall have specified therein the
length of time it is to continue in force. Such instrument shall be exhibited to
the Secretary at the meeting and shall be filed with the records of the
Corporation.
Section 7 - Action Without Meeting:
Except as otherwise provided by the Certificate of Incorporation, whenever the
vote of stockholders at a meeting thereof is required or permitted to be taken
in connection with any corporate action by any provisions of the Corporation Law
or the Certificate of Incorporation or of these By-Laws, the meeting and vote of
shareholders may be dispensed with, if the majority of the stockholders who
would have been entitled to vote upon the action if such meeting were held,
shall consent in writing to such corporate action being taken.
ARTICLE III - BOARD OF DIRECTORS
Section 1 - Number, Election and Term of Office:
(a) The number of the directors of the Corporation shall be as determined by
resolution of the Board of Directors.
(b) Except as may otherwise be provided herein, in the Certificate of
Incorporation or in the Corporation Law, the members of the Board of Directors
of the Corporation, who need not be stockholders, shall be elected by a majority
of the votes cast at a meeting of stockholders, by the holders of shares,
present in person or by proxy, entitled to vote in the election.
(c) Each director shall hold office until the annual meeting of the stockholders
next succeeding his election, and until his successor is elected and qualified,
or until his prior death, resignation or removal.
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Section 2 - Duties and Powers:
The Board of Directors shall be responsible for the control and management of
the affairs, property and interests of the Corporation, and may exercise all
powers of the Corporation, except as are in the Certificate of Incorporation or
by statute expressly conferred upon or reserved to the stockholders.
Section 3 - Annual and Regular Meetings; Notice:
(a) A regular annual meeting of the Board of Directors shall be held immediately
following the annual meeting of the stockholders, at the place of such annual
meeting of stockholders.
(b) The Board of Directors, from time to time, may provide by resolution for the
holding of other regular meetings of the Board of Directors, and may fix the
time and place thereof.
(c) Notice of any regular meeting of the Board of Directors shall not be
required to be given and, if given, need not specify the purpose of the meeting;
provided, however, that in case the Board of Directors shall fix or change the
time or place of any regular meeting, notice of such action shall be given to
each director who shall not have been present at the meeting at which such
action was taken within the time limited, and in the manner set forth in
paragraph (b) Section 4 of this Article III, with respect to special meetings,
unless such notice shall be waived in the manner set forth in paragraph (c) of
such Section 4.
Section 4 - Special Meetings; Notice:
(a) Special meetings of the Board of Directors shall be held whenever called by
the President or by a majority of the directors, at such time and place as may
be specified in respective notices or waivers of notice thereof.
(b) Except as otherwise required by statute, notice of special meeting shall be
mailed directly to each director, addressed to him at his residence or usual
place of business, at least two (2) days before the day on which the meeting is
to be held, or shall be sent to him at such place by telegram, radio,
telecopier, facsimile transmission or cable, or shall be delivered to him
personally or given to him orally, not later than the day before the day on
which the meeting is to be held. A notice, or waiver of notice, except as
required by Section 8 of this Article III, need not specify the purpose of the
meeting.
(c) Notice of any special meeting shall not be required to be given to any
director who shall attend such meeting without protesting prior thereto or at
its commencement, the lack of notice to him, or who submits a signed waiver of
notice, whether before or
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after the meeting. Notice of any adjourned meeting shall not be required to be
given.
Section 5 - Telecommunication Meetings Permitted:
Members of the Board of Directors, or any committee designated by the Board, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this By-Law shall constitute presence in person at such meeting.
Section 6 - Chairman:
At all meetings of the Board of Directors, the Chairman of the Board, if any and
if present, shall preside. If there shall be no Chairman, or he shall be absent,
then the President shall preside, and in his absence, a Chairman chosen by the
directors shall preside.
Section 7 - Quorum and Adjournments:
(a) At all meetings of the Board of Directors, the presence of a majority of the
entire Board shall be necessary and sufficient to constitute a quorum for the
transaction of business, except as otherwise provided by law, by the Certificate
of Incorporation, or by these By-Laws.
(b) A majority of the directors present at the time and place of any regular or
special meeting, although less than a quorum, may adjourn the same from time to
time without notice, until a quorum shall be present.
Section 8 - Manner of Acting:
(a) At all meetings of the Board of Directors, each director present shall have
one vote, irrespective of the number of shares of stock, if any, which he may
hold.
(b) Except as otherwise provided by statute, by the Certificate of
Incorporation, or by these By-Laws, the action of a majority of the directors
present at any meeting at which a quorum is present shall be the act of the
Board of Directors. Any action authorized, in writing, by all of the directors
entitled to vote thereon and filed with the minutes of the Corporation shall be
the act of the Board of Directors with the same force and effect as if the same
had been passed by unanimous vote at a duly called meeting of the Board.
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Section 9 - Vacancies:
Any vacancy in the Board of Directors occurring by reason of an increase in the
number of directors, or by reason of the death, resignation, disqualification,
removal (unless a vacancy created by the removal of a director by the
stockholders shall be filled by the stockholders at the meeting at which the
removal was effected) or inability to act of any director, or otherwise, shall
be filled for the unexpired portion of the term by a majority vote of the
remaining directors, though less than a quorum, at any regular meeting or
special meeting of the Board of Directors called for that purpose.
Section 10 - Resignation:
Any director may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the Corporation. Unless otherwise
specified in such written notice, such resignation shall take effect upon
receipt thereof by the Board of Directors or such officer, and the acceptance of
such resignation shall not be necessary to make it effective.
Section 11 - Removal:
Any director may be removed with or without cause at any time by the affirmative
vote of stockholders holding of record in the aggregate at least a majority of
the outstanding shares of the Corporation at a special meeting of the
stockholders called for that purpose, and may be removed for cause by action of
the Board.
Section 12 - Salary:
No stated salary shall be paid to directors, as such, for their services, but by
resolution of the Board of Directors a fixed sum and expenses of attendance, if
any, may be allowed for attendance at each regular or special meeting of the
Board; provided, however, that nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.
Section 13 - Contracts:
(a) No contract or other transaction between this Corporation and any other
Corporation shall be impaired, affected or invalidated, nor shall any director
be liable in any way by reason of the fact that any one or more of the directors
of this Corporation is or are interested in, or is a director or officer, or are
directors or officers of such other corporation, provided that such facts are
disclosed or made known to the Board of Directors.
(b) Any director, personally and individually, may be a party to or
may be interested in any contract or transaction of this Corpora-
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tion, and no director shall be liable in any way by reason of such interest,
provided that the fact of such interest be disclosed or made known to the Board
of Directors, and provided that the Board of Directors shall authorize, approve
or ratify such contract or transaction by the vote (not counting the vote of any
such interested director) of a majority of a quorum, notwithstanding the
presence of any such director at the meeting at which such action is taken. If
there be no disinterested director, the stockholders of the Company may
authorize, approve or ratify such contract or transaction by the vote of a
majority of a quorum. Such director or directors may be counted in determining
the presence of a quorum at such meeting. This Section shall not be construed to
impair or invalidate or in any way affect any contract or other transaction
which would otherwise be valid under the law (common, statutory or otherwise)
applicable thereto.
Section 14 - Committees:
The Board of Directors, by resolution adopted by a majority of the entire Board,
may from time to time designate from among its members an executive committee
and such other committees, and alternate members thereof, as they may deem
desirable, each consisting of three or more members, with such powers and
authority (to the extent permitted by law) as may be provided in such
resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office:
(a) The officers of the Corporation shall consist of a President, a Secretary, a
Treasurer, and such officers, including a Chairman of the Board of Directors,
and one or more Vice Presidents, as the Board of Directors may from time to time
deem advisable. Any officer may be, but is not required to be, a director of the
Corporation. Any two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of Directors.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation
to the Board of Directors, or to the President or the Secretary of the
Corporation. Unless otherwise specified in such written notice, such resignation
shall take effect upon receipt
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thereof by the Board of Directors or by such officer, and the acceptance of such
resignation shall not be necessary to make it effective.
Section 3 - Removal:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these By-Laws, or may from time to time be specifically conferred or imposed by
the Board of Directors. The President shall be the chief executive officer of
the Corporation. The Treasurer shall be the chief financial officer of the
Corporation.
Section 6 - Sureties and Bonds:
In case the Board of Directors shall so require, any officer, employee or agent
of the Corporation shall execute to the Corporation a bond in such sum, and with
such surety or sureties as the Board of Directors may direct, conditioned upon
the faithful performance of his duties to the Corporation, including
responsibility for negligence and for the accounting for all property, funds or
securities of the Corporation which may come into his hands.
Section 7 - Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other Corporation, any
rights or power of the Corporation as such stockholder (including the
attendance, acting and voting at stockholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on behalf of
the Corporation by the President, any Vice President, or such other person as
the Board of Directors may authorize.
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ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock:
(a) The certificates representing shares of the Corporation shall be in such
form as shall be adopted by the Board of Directors, and shall be numbered and
registered in the order issued. They shall bear the holder's name and the number
of shares, and shall be signed by (i) the Chairman of the Board or the President
or a Vice President, and (ii) the Secretary or Treasurer, or any Assistant
Secretary or Assistant Treasurer, and shall bear the corporate seal.
(b) No certificate representing shares shall be issued until the full amount of
consideration therefor has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the
issuance of certificates for fractions of a share which shall entitle the holder
to exercise voting rights, receive dividends and participate in liquidating
distributions, in proportion to the fractional holdings; or it may authorize the
payment in cash of the fair value of fractions of a share as of the time when
those entitled to receive such fractions are determined; or it may authorize the
issuance, subject to such conditions as may be permitted by law, of scrip in
registered or bearer form over the signature of an officer or agent of the
Corporation, exchangeable as therein provided for full shares, but such scrip
shall not entitle the holder to any rights of a stockholder, except as therein
provided.
Section 2 - Lost or Destroyed Certificates:
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the certificate
representing the same. The Corporation may issue a new certificate in the place
of any certificate theretofore issued by it, alleged to have been lost or
destroyed. On production of such evidence of loss or destruction as the Board of
Directors in its discretion may require, the Board of Directors may, in its
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the Corporation a bond in such sum as the Board may
direct, and with such surety or sureties as may be satisfactory to the Board, to
indemnify the Corporation against any claims, loss, liability or damage it may
suffer on account of the issuance of the new certificate. A new certificate may
be issued without requiring any such evidence or bond when, in the judgment of
the Board of Directors, it is proper to do so.
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Section 3 - Transfers of Shares:
(a) Transfers of shares of the Corporation shall be made on the share records of
the Corporation only by the holder of record thereof, in person or by his duly
authorized attorney, upon surrender for cancellation of the certificate or
certificates representing such shares, with an assignment or power of transfer
endorsed thereon or delivered therewith, duly executed, with such proof of the
authenticity of the signature and of authority to transfer and of payment of
transfer taxes as the Corporation or its agents may require.
(b) The Corporation shall be entitled to treat the holder of record of any share
or shares as the absolute owner thereof for all purposes and, accordingly, shall
not be bound to recognize any legal, equitable or other claim to, or interest
in, such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise expressly
provided by law.
Section 4 - Record Date:
In lieu of closing the share records of the Corporation, the Board of Directors
may fix, in advance, a date not exceeding fifty days, nor less than ten days, as
the record date for the determination of stockholders entitled to receive notice
of, or to vote at, any meeting of stockholders, or to consent to any proposal
without a meeting, or for the purpose of determining stockholders entitled to
receive payment of any dividends, or allotment of any rights, or for the purpose
of any other action. If no record date is fixed, the record date for the
determination of stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if no notice is given, the day on which the
meeting is held; the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the resolution of
the directors relating thereto is adopted. When a determination of stockholders
of record entitled to notice of or to vote at any meeting of stockholders has
been made as provided for herein, such determination shall apply to any
adjournment thereof, unless the directors fix a new record date for the
adjourned meeting.
ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid out of any funds
available therefor, as often, in such amounts, and at such time or times as the
Board of Directors may determine.
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ARTICLE VII - FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors from
time to time, subject to applicable law.
ARTICLE VIII - CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from time
to time by the Board of Directors.
ARTICLE IX - AMENDMENTS
Section 1 - By Stockholders:
All By-Laws of the Corporation shall be subject to alteration or repeal, and new
By-Laws may be made, by the affirmative vote of stockholders holding of record
in the aggregate at least a majority of the outstanding shares entitled to vote
in the election of directors at any annual or special meeting of stockholders,
provided that the notice or waiver of notice of such meeting shall have
summarized or set forth in full therein, the proposed amendment.
Section 2 - By Directors:
The Board of Directors shall have power to make, adopt, alter, amend and repeal,
from time to time, By-Laws of the Corporation; provided, however, that the
stockholders entitled to vote with respect thereto as in this Article IX
above-provided may alter, amend or repeal By-Laws made by the Board of
Directors, except that the Board of Directors shall have no power to change the
quorum for meetings of stockholders or of the Board of Directors, or to change
any provisions of the By-Laws with respect to the removal of directors or the
filing of vacancies in the Board resulting from the removal by the stockholders.
If any By-Law regulating an impending election of directors is adopted, amended
or repealed by the Board of Directors, there shall be set forth in the notice of
the next meeting of stockholders for the election of directors, the By-Law so
adopted, amended or repealed, together with a concise statement of the changes
made.
ARTICLE X - INDEMNITY
The Corporation shall indemnify to the full extent authorized by law any person
made or threatened to be made a party to an action or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he, his
testator or intestate is or was a director, officer or employee or agent of the
Corporation or any predecessor of the Corporation or serves or served any other
enterprise as a director, officer or employee or agent at the request of the
Corporation or any predecessor of the Corporation.
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ARTICLE XI - CONFLICTS OF INTEREST
Any conflicts of interest that may arise between the Corporation and the
interests of its officers and directors will be resolved in a fair manner which
will protect the interest of the Corporation pursuant to Delaware law. No
contract or other transaction between the Corporation and any of its directors
or any other entity in which one or more of the Corporation's directors are
directors or officers, or are financially or otherwise interested, will be
invalidated because of such relationship if (i) the fact of such relationship or
interest is disclosed or known to the Board of Directors or committee which
authorizes, approves or ratifies the contract or transaction by a vote or
consent sufficient for the purpose without counting the votes or consents of the
interested director, (ii) the fact of such relationship or interest is disclosed
or known to the stockholders entitled to vote and the stockholders authorize,
approve or ratify the contract or transaction; or (iii) the contract or
transaction is fair and reasonable to the Corporation.
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EXHIBIT 4.3
[FORM OF FACE OF STOCK CERTIFICATE]
[LOGO]
NORDIC EQUITY PARTNERS CORP.
Number Shares
NEPC- See Reverse For
Certain Definitions
This certifies that
is the record holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $.0001 PAR VALUE, OF
NORDIC EQUITY PARTNERS CORP.
(hereinafter called the Corporation) transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate properly endorsed. This certificate is not valid
until countersigned and registered by the Transfer Agent and Registrar.
Witness the facsimile signatures of the Corporation's duly authorized officers.
Dated:
PRESIDENT SECRETARY
Countersigned and Registered:
Olde Monmouth Stock Transfer Co., Inc.
By
Authorized Signature
<PAGE> 2
[FORM OF REVERSE OF STOCK CERTIFICATE]
NORDIC EQUITY PARTNERS CORP.
The Corporation will furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of stock or
series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
UNIF GIFT MIN ACT- Custodian
--------------- ------------
(Cust) (Minor)
under Uniform Gifts to Minors Act
UNIF TRF ACT- Custodian (until age )
--------------------- -----------
(Cust)
under Uniform Transfer to Minor Acts
---------------------
(Minor)
----------------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, HEREBY SELL, ASSIGN AND TRANSFER UNTO
Please insert social security or other
identifying number of assignee
[ ] ____________________________________________________________
(Please print or type name and address, including zip code of assigned)
________________________________________________________________________________
________________________________________________________________________________
OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT ____________________________ ATTORNEY TO
TRANSFER THE SAID STOCK ON THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED
CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
<PAGE> 3
DATED: ___________________________ X __________________________________
X __________________________________
Notice: The signature(s) to this
assignment must correspond with the
names(s) as written upon the face of
the certificate, in every
particular, without alteration or
enlargement, or any change
whatsoever.
SIGNATURE GUARANTEED: __________________________________________________________
The signature(s) should be guaranteed by an eligible
guarantor institution (banks stockbrokers, savings and
loan associations and credit unions with membership in an
approved signature guarantee medallion program), pursuant
to S.E.C. Rule 17Ad-15
<PAGE> 1
EXHIBIT 4.4
[FORM OF FACE OF WARRANT CERTIFICATE]
No. W ________ (_____) Warrants
VOID AFTER ___________, 2001
REDEEMABLE WARRANT CERTIFICATE
FOR PURCHASE OF COMMON STOCK OF
NORDIC EQUITY PARTNERS CORP.
This certifies that FOR VALUE RECEIVED _______________________ or
registered assigns (the "Registered Holder") is the owner of the number of
Redeemable Warrants (the "Warrants") specified above. Each Warrant initially
entitles the Registered Holder to purchase, subject to the terms and conditions
set forth in this Certificate and the Warrant Agreement (as hereinafter
defined), one fully paid and nonassessable share of Common Stock, $.0001 par
value, of Nordic Equity Partners Corp., a Delaware corporation (the "Company"),
at any time between ________, 1997 and the Expiration Date (as hereinafter
defined), upon the presentation and surrender of this Warrant Certificate with
the Subscription Form on the reverse hereof duly executed, at the corporate
office of Olde Monmouth Stock Transfer Co., Inc. as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $8.40 per share (the
"Purchase Price") in lawful money of the United States of America in cash or by
official bank or certified check made payable to the Warrant Agent.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated as of
______________, 1996, by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
<PAGE> 2
The term "Expiration Date" shall mean 5:00 p.m. (Eastern time) on
_______________, 2001, or such earlier date as the Warrants shall be redeemed.
If such date shall in the State of New York be a holiday or a day on which the
banks are authorized to close, then the Expiration Date shall be 5:00 p.m.
(Eastern time) the next day which in the State of New York is not a holiday nor
a day in which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended, with respect to such securities is
effective. The Company has covenanted and agreed that it will file a
registration statement and will use its best efforts to cause the same to become
effective and to keep such registration statement current while any of the
Warrants are outstanding. This Warrant shall not be exercisable by a Registered
Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment together with any tax or other
governmental charge imposed in connection therewith, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
This Warrant may be redeemed at the option of the Company, at a
Redemption Price of $0.05 per Warrant, provided that the closing bid price of
the Company's Common Stock on the Nasdaq Stock Market as reported by the
National Quotation Bureau, Incorporated (or the last sale price, if quoted on a
national securities exchange) exceeds $13.00 per share for a period of 20
consecutive trading days. Notice of redemption shall be mailed within ten (10)
days after the end of such period and be given not later than the thirtieth
(30th) day before the date fixed for redemption, all as provided in the Warrant
Agreement. On and after the date fixed for redemption, the Registered Holder
shall have no rights with respect to this Warrant except to receive the $0.05
per Warrant upon
<PAGE> 3
surrender of this Certificate.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile by two (2) of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: _______________
NORDIC EQUITY PARTNERS CORP.
By: _______________________________
President
By:________________________________
Secretary
[seal]
Countersigned:
OLDE MONMOUTH STOCK TRANSFER CO, INC.
By: ___________________________
Authorized Officer
<PAGE> 4
[FORM OF REVERSE OF WARRANT CERTIFICATE]
NORDIC EQUITY PARTNERS CORP.
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
__________________ (________________) Warrants represented by this Warrant
Certificate, and to purchase the securities issuable upon the exercise of such
Warrants, and requests that certificates for such securities shall be issued in
the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
_____________________________
_____________________________
_____________________________
_____________________________
[please print or type name and address]
and be delivered to
_____________________________
_____________________________
_____________________________
_____________________________
[please print or type name and address]
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
<PAGE> 5
The undersigned represents that the exercise of the within
Warrant was solicited by
--------------------------------
(Indicate the name of
soliciting broker)
Dated: _________________________ --------------------------------
Signature
--------------------------------
Street Address
--------------------------------
City, State and Zip Code
--------------------------------
Taxpayer ID Number
Signature Guaranteed:
--------------------------------
<PAGE> 6
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
_____________________________
_____________________________
_____________________________
_____________________________
[please print or type name and address]
___________________ (_____________) of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
____________________ Attorney to transfer this Warrant Certificate on the books
of the Company, with full power of substitution in the premises.
Dated: ______________________ ________________________________
Signature Guaranteed:
________________________________
THE SIGNATURE MUST BE GUARANTEED BY A MEDALLION BANK.
<PAGE> 1
EXHIBIT 4.5
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "1933 ACT") AND THE SECURITIES LAWS OF ANY STATE. THE NOTE HAS BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTION OR
RESALE, AND MAY NOT BE SOLD, ASSIGNED, MADE SUBJECT TO A SECURITY INTEREST,
PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL
REGISTERED UNDER THE 1933 ACT, OR AN OPINION OF COUNSEL SATISFACTORY TO NORDIC
EQUITY PARTNERS CORP. IS RECEIVED THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
1933 ACT OR SUCH STATE SECURITIES LAWS.
NORDIC EQUITY PARTNERS CORP.
10% REDEEMABLE PROMISSORY NOTE
NEPC - Note 1 $95,000
NORDIC EQUITY PARTNERS CORP., a Delaware corporation (the "Company"),
for value received, hereby promises to pay to the order of
_______________________________________ (the "Payee"), at
__________________________________, on the earlier of (i) eighteen (18) months
from the date hereof, and (ii) at the closing of the Company's initial public
offering (the "Public Offering"), of its securities resulting in the receipt by
the Company of gross proceeds of no less than $5,805,000, as set forth in the
Letter of Intent (the "Letter of Intent") dated April 30, 1996 by and between
the Company and Mason Hill & Co., Inc. ("Mason Hill"), the principal sum of
NINETY FIVE THOUSAND ($95,000) DOLLARS (or such lesser principal amount as may
then be outstanding), together with all accrued unpaid interest (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid balance at the
rate of 12% per annum from the date hereof; provided, however, that,
<PAGE> 2
notwithstanding anything to the contrary provided herein or elsewhere, in the
event the Company does not consummate the Public Offering by January 30, 1997
(the "January 30, 1997 Redemption Date"), the Company shall have the right, in
its sole discretion, at any time or from time to time on or after such date, to
redeem this Note (together with 10,000 shares of Common Stock of the Company
being purchased simultaneously by the Payee in a private offering on the date
hereof) at an aggregate redemption price equal to the principal amount then
remaining outstanding on this Note. The January 30, 1997 Redemption Date may be
extended for up to an additional three (3) months (to April 30, 1997) upon the
mutual written consent of the Company and the Payee provided the Company and
Mason Hill have proceeded in good faith towards the consummation of the Public
Offering, at which time the redemption right shall be reinstated automatically.
Notwithstanding the foregoing, the principal amount of the Note may be prepaid
by the Company, in whole or in part, without premium or penalty, at any time.
Upon any prepayment of this Note, all accrued but unpaid interest on the
principal amount being prepaid shall be paid to the holder on the date of
prepayment. All payments hereunder shall be applied first to interest then to
principal.
This Note is one of a series of Notes included in units (the "Units")
of the Company's securities being offered by the Company through Mason Hill
acting as placement agent in a private placement (the "Offering") pursuant to a
Confidential Private Placement Memorandum dated July 17, 1996. Each Unit
consists of (i) a $95,000 Note, and (ii) 10,000 shares of Common Stock of the
Company, and is being offered at a purchase price of $100,000 per Unit. The
Offering is on a "best efforts five (5) Unit minimum ($500,000)-ten (10) Unit
($1,000,000) maximum" basis.
If the Company shall fail to make a payment of principal or interest
when due and such non-payment shall continue for a period of thirty (30) days
after notice by no more than 51% of the Noteholders to the Company; or shall
make an assignment for the benefit of creditors, file a petition in bankruptcy,
be adjudicated insolvent or bankrupt, suffer an order for relief under any
federal bankruptcy law, petition or apply to any tribunal for the appointment of
a custodian, receiver or any trustee for the Company or any substantial part of
its assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect; or if
there shall have been filed any such petition or application, or any such
proceeding shall have been commenced against the Company, which remains
undismissed for a period of thirty (30) days or more; or if the Company, by any
act or omission shall indicate consent to, approval of or acquiescence in any
such petition, application or proceeding or the appointment of, a custodian,
receiver or any trustee for all or any substantial part of its properties, or if
2
<PAGE> 3
the Company shall suffer such custodianship, receivership, or trusteeship to
continue undischarged for a period of thirty (30) days or more, or the Company
violates any term or provision of this Note and same remains uncured for a
period of 30 days after written notice thereof by any holder of this Note, then
and in any such event (each such event, an "Event of Default"), the outstanding
principal amount of this Note, together with all accrued and unpaid interest
thereon, shall be and become immediately due and payable.
All payments hereunder (including, without limitation, payments of
principal and interest) are and shall be expressly subordinated in right of
payment to all current and future indebtedness of the Company, and to all
extensions, amendments, deferrals, refinancings or renewals thereof.
3
<PAGE> 4
Payments of principal, premium, if any, and interest are to be made in
lawful money of the United States of America at the principal office of the
Company.
1. RESTRICTIONS ON TRANSFER.
The holder acknowledges that he has been advised by the
Company that this Note has not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), that the Note is being issued, on the basis
of the statutory exemption provided by Section 4(2) of the Securities Act
relating to transactions by an issuer not involving any public offering, and
that the Company's reliance upon this statutory exemption is based in part upon
the representations made by the holder in the holder's Subscription Agreement.
The holder acknowledges that he has been informed by the Company of, or is
otherwise familiar with, the nature of the limitations imposed by the Securities
Act and the rules and regulations thereunder on the transfer of securities. In
particular, the holder agrees that no sale, assignment, hypothecation or
transfer of the Note shall be valid or effective, and the Company shall not be
required to give any effect to any such sale, assignment, hypothecation,
transfer or other disposition, unless (i) the sale, assignment, hypothecation,
transfer or other disposition of the Note is registered under the Securities
Act, provided, that the Company has no obligation or intention to so register
the Note in connection herewith, or (ii) the Note is sold, assigned,
hypothecated, transferred or otherwise disposed of in accordance with all the
requirements and limitations of Rule 144 under the Securities Act, or such sale,
assignment, or transfer is otherwise exempt from registration under the
Securities Act.
2. COVENANTS OF COMPANY.
a. The Company covenants and agrees that, so long as this Note
shall be outstanding, it will:
(i) Promptly pay and discharge all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or upon
its income and profits, or upon any of its property, before the same shall
become in default, as well as all lawful claims for labor, materials and
supplies which, if unpaid, might become a lien or charge upon such properties or
any part thereof, except where the failure to so pay would not have a material
effect on the Company; provided, however, that the Company shall not be required
to pay and discharge any such tax, assessment, charge, levy or claim so long as
the validity thereof shall be contested in good faith by appropriate
proceedings, and the Company shall set aside on its books adequate reserves with
respect to any such tax, assessment, charge, levy or claim so contested.
4
<PAGE> 5
(ii) Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises and comply with all material laws applicable to the Company as its
counsel may advise;
(iii) At all times keep true and correct books,
records and accounts.
3. MISCELLANEOUS.
3.l. All the covenants and agreements made by the holder of
this Note and the Company in this Note shall bind their respective successors
and assigns.
3.2. No recourse shall be had for the payment of the
principal, interest or premium, if any, on this Note or for any claim based
hereon or otherwise in any manner in respect hereof, against any incorporator,
stockholder, officer or director, past, present or future, of the Company or of
any predecessor corporation, whether by virtue of any constitutional provision
or statute or rule of law, or by the enforcement of any assessment or penalty or
in any other manner, all such liability being expressly waived and released by
the acceptance hereof and as part of the consideration for the issue hereof.
3.3. No course of dealing between the Company and the holder
hereof shall operate as a waiver of any right of any holder hereof, and no delay
on the part of the holder in exercising any right hereunder shall so operate.
Any such waiver must be in writing and signed by the holder hereof and the
Company.
3.4. This Note may be amended only by a written instrument
executed by the Company and the holder hereof.
3.5. All communications provided for herein shall be sent,
except as may be otherwise specifically provided, by registered or certified
mail: if to the holder of this Note, to the address shown on the books of the
Company; and if to the Company, to: Nordic Equity Partners Corp., 120 Wall
Street, 11th Floor, New York, New York 10005, Attention: Kjell Sjostrand, or to
such other address as the Company may advise the holder of this Note in writing.
Notices shall be deemed given three days after it is mailed.
3.6. The provisions of this Note shall in all respects be
construed according to, and the rights and liabilities of the parties hereto
shall in all respects be governed by, the laws of the State of New York. This
Note shall be deemed a contract made under the laws of the State of New York and
the validity of this Note and all rights and liabilities hereunder shall be
determined under the laws of said State.
5
<PAGE> 6
3.7. The headings of the Sections of this Note are inserted
for convenience only and shall not be deemed to constitute a part of this Note.
IN WITNESS WHEREOF, NORDIC EQUITY PARTNERS CORP. has caused
this Note to be executed in its corporate name by an appropriate
officer of the Company.
Dated: July ____, 1996
NORDIC EQUITY PARTNERS CORP.
By:_______________________________
Name:
Position:
6
<PAGE> 1
NORDIC EQUITY PARTNERS CORP.
1996 STOCK OPTION PLAN
1. Purpose of the Plan. The Nordic Equity Partners Corp. 1996
Stock Option Plan (the "Plan") is intended to advance the interests of Nordic
Equity Partners Corp. (the "Company") by inducing persons of outstanding
ability and potential to join and remain with the Company, by encouraging and
enabling employees (including directors and officers who are employees) and
consultants and directors who are not employees to acquire proprietary
interests in the Company, and by providing the participating persons with an
additional incentive to promote the success of the Company. This is
accomplished by providing for the granting of "Options" (which term as used
herein includes both "Incentive Stock Options" and "Nonstatutory Stock
Options," as later defined, to qualified employees (including directors and
officers who are employees) and consultants and directors who are not
employees. In addition, the Plan also provides for the granting of
"Nonstatutory Stock Options" to all non-employee Directors of the Company, as
consideration for their services and for attending meetings of the Board of
Directors, and also provides for the granting of "Nonstatutory Stock Options"
to consultants and advisors who provide services to the Company.
2. Administration. The Plan shall be administered by a committee
(the "Committee") consisting of at least two (2) Directors chosen by the Board
of Directors, each of which is a "disinterested person", as such term is
defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Except as herein specifically provided, the
interpretation and construction by the Committee of any provision of the Plan
or of any Option granted under it shall be final and conclusive. The receipt
of Options by Directors, or any members of the Committee, shall not preclude
their vote on any matters in connection with the administration or
interpretation of the Plan, except as otherwise provided by law.
3. Shares subject to the Plan. The stock subject to grant under
the Plan shall be shares of the Company's common stock, $.0001 par value (the
"Common Stock"), whether authorized but unissued or held in the Company's
treasury or shares purchased from stockholders expressly for use under the
Plan. The maximum number of shares of Common Stock which may be issued
pursuant to Options granted under the Plan shall not exceed two hundred fifty
thousand (250,000) shares, subject to adjustment in accordance with the
provisions of Section 12 hereof. The Company shall at all times while the Plan
is in force reserve such number of shares of Common Stock as will be sufficient
to satisfy the requirements of all outstanding Options granted under the Plan.
In the event any Option granted under the Plan shall expire or terminate for
any reason without having been exercised in full or
1
<PAGE> 2
shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available for Options under
this Plan.
4. Stock Option Agreement. Each Option granted under the Plan
shall be authorized by the Committee and shall be evidenced by a Stock Option
Agreement which shall be executed by the Company and by the person to whom such
Option is granted. The Stock Option Agreement shall specify the number of
shares of Common Stock as to which any Option is granted, the period during
which the Option is exercisable and the option price per share thereof.
5. Discretionary Grant Participation. The class of persons which
shall be eligible to receive discretionary grants of Options under the Plan
shall be all key employees (including officers) of either the Company or any
subsidiary corporation of the Company and consultants and advisors who provide
services to the Company or any subsidiary of the Company, other than in
connection with the offer or sale of securities in a capital raising
transaction. Employees (including directors and officers who are employees)
and consultants and directors who are not employees shall be entitled to
receive (i) Incentive Stock Options, as described in Section 6 hereafter and
(ii) Nonstatutory Stock Options, as described in Section 8 hereafter. Such
persons, along with advisors to the Company, shall also be entitled to receive
Nonstatutory Stock Options. The Committee, in its sole discretion, but subject
to the provisions of the Plan, shall determine the employees, consultants or
advisors to whom Options shall be granted and the number of shares to be
covered by each Option taking into account the nature of the employment or
services rendered by the individuals being considered, their annual
compensation, their present and potential contributions to the success of the
Company and such other factors as the Committee may deem relevant.
6. Incentive Stock Options. The Committee may grant Options
under the Plan which are intended to meet the requirements of Section 422 of
the Internal Revenue Code of 1986 (the "Code") (such an Option referred to
herein as an "Incentive Stock Option"), and which are subject to the following
terms and conditions and any other terms and conditions as may at any time be
required by Section 422 of the Code:
(a) No Incentive Stock Option shall be granted to individuals other
than employees (including directors and officers who are employees) and
consultants and directors who are not employees of the Company or of a
subsidiary corporation of the Company.
(b) Each Incentive Stock Option under the Plan must be granted prior
to September 3, 2006, which is within ten (10)
2
<PAGE> 3
years from the date the Plan was adopted by the Board of Directors.
(c) The option price of the shares subject to any Incentive Stock
Option shall not be less than the fair market value of the Common Stock at the
time such Incentive Stock Option is granted; provided, however, if an Incentive
Stock Option is granted to an individual who owns, at the time the Incentive
Stock Option is granted, more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of a subsidiary
corporation of the Company, the option price of the shares subject to the
Incentive Stock Option shall be at least one hundred ten percent (110%) of the
fair market value of the Common Stock at the time the Incentive Stock Option is
granted.
(d) No Incentive Stock Option granted under the Plan shall be
exercisable after the expiration of ten (10) years from the date of its grant.
However, if an Incentive Stock Option is granted to an individual who owns, at
the time the Incentive Stock Option is granted, more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or of a
subsidiary corporation, of the Company, such Incentive Stock Option shall not
be exercisable after the expiration of five (5) years from the date of its
grant. Every Incentive Stock Option granted under the Plan shall be subject to
earlier termination as expressly provided in Section 11 hereof.
(e) For purposes of determining stock ownership under this Section 6,
the attribution rules of Section 425(d) of the Code shall apply.
(f) For purposes of the Plan, fair market value shall be determined
by the Committee and, if the Common Stock is listed on a national securities
exchange or traded on the Over-the-Counter market, the fair market value shall
be the closing price of the Common Stock on such exchange, or on the
Over-the-Counter market as reported by the National Quotation Bureau,
Incorporated, as the case may be, on the day on which the Option is granted or
on the day on which a determination of fair market value is required under the
Plan, or, if there is no trading or closing price on that day, the closing
price on the most recent day preceding the day for which such prices are
available.
7. Nonstatutory Stock Options. The Committee may grant Options
under the Plan which are not intended to meet the requirements of Section 422
of the Code, as well as Options which are intended to meet the requirements of
Section 422 of the Code, but the terms of which provide that they will not be
treated as Incentive Stock Options (referred to herein as a "Nonstatutory Stock
Option"). Nonstatutory Stock Options which are not intended to meet these
requirements shall be subject to the following terms and conditions:
3
<PAGE> 4
(a) A Nonstatutory Stock Option may be granted to any person eligible
to receive an Option under the Plan pursuant to Section 5 hereof.
(b) The option price of the shares subject to a Non-Statutory Stock
Option shall be determined by the Committee, in its absolute discretion, at the
time of the grant of the Nonstatutory Stock Option.
(c) A Nonstatutory Stock Option granted under the Plan may be of such
duration as shall be determined by the Committee (not to exceed 10 years), and
shall be subject to earlier termination as expressly provided in Section 10
hereof.
8. Rights of Option Holders. The holder of any Option granted
under the Plan shall have none of the rights of a stockholder with respect to
the shares covered by his Option until such shares shall be issued to him upon
the exercise of his Option.
9. Transferability. No Option granted under the Plan shall be
transferable by the individual to whom it was granted otherwise than by Will or
the laws of decent and distribution, and, during the lifetime of such
individual, shall not be exercisable by any other person, but only by him or
her.
10. Termination of Employment or Death.
(a) If the employment of an employee by the Company or any subsidiary
of the Company shall be terminated voluntarily by the employee or for cause,
then his Options shall expire forthwith. Except as provided in subsections (b)
and (c) of this Section 10, if such employment or services shall terminate for
any other reason, then such Options may be exercised at any time within three
(3) months after such termination, subject to the provisions of subparagraph
(f) of this Section 10. For purposes of the Plan, the retirement of an
individual either pursuant to a pension or retirement plan adopted by the
Company or at the normal retirement date prescribed from time to time by the
Company shall be deemed to be termination of such individual's employment other
than voluntarily or for cause. For purposes of this subparagraph, an employee
who leaves the employ of the Company to become an employee of a subsidiary
corporation of the Company or a corporation (or subsidiary or parent
corporation of the corporation) which has assumed the Option of the Company as
a result of a corporate reorganization, etc., shall not be considered to have
terminated his employment.
(b) If the holder of any Options under the Plan dies (i) while
employed by the Company or a subsidiary of the Company, or (ii) within three
(3) months after the termination of his employment or services other than
voluntarily by the employee or
4
<PAGE> 5
for cause, then such Options may, subject to the provisions of subparagraph (f)
of this Section 10, be exercised by the estate of the employee or by a person
who acquired the right to exercise such Options by bequest or inheritance or by
reason of the death of such employee at any time within one (1) year after such
death.
(c) If the holder of any Options under the Plan ceases employment
because of permanent and total disability (within the meaning of Section
22(e)(3) of the Code) while employed by the Company or a subsidiary of the
Company, then such Options may, subject to the provision of subparagraph (f) of
this Section 10, be exercised at any time within one (1) year after his
termination of employment due to this disability.
(d) If the services of a non-employee Director of the Company shall
be terminated by the Company for cause, then his Options shall expire
forthwith. If such services shall terminate for any other reason (including
the death or disability of a non-employee Director), he shall resign as a
director of the Company or his term shall expire, then such Options may be
exercised at any time within one (1) year after such termination, subject to
the provisions of subparagraph (f) of this Section 10. In the event of the
death of a non-employee Director, his Options may be exercised by his estate or
by a person who acquired the right to exercise such Options by bequest or
inheritance or by reason of the death of such non-employee Director at any time
within one (1) year after such death.
(e) Upon the death of any consultant or advisor to the Company or any
of its subsidiaries, who is granted any Options hereunder, such Options may,
subject to the provisions of subparagraph (f) of this Section 10, be exercised
by the estate of such person or by a person who acquired the right to exercise
such Options by bequest or inheritance or by reason of the death of such person
at any time within one (1) year after such death.
(f) An Option may not be exercised pursuant to this Section 10 except
to the extent that the holder was entitled to exercise the Option at the time
of termination of employment, termination of Directorship, or death, and in any
event may not be exercised after the expiration of the Option.
(g) For purposes of this Section 10, the employment relationship of
an employee of the Company or of a subsidiary corporation of the Company will
be treated as continuing intact while he is on military or sick leave or other
bona fide leave of absence (such as temporary employment by the Government) if
such leave does not exceed ninety (90) days, or, if longer, so long as his
right to reemployment is guaranteed either by status or by contract.
5
<PAGE> 6
11. Exercise of Options.
(a) Unless otherwise provided in the Stock Option Agreement, any
Option granted under the Plan shall be exercisable in whole at any time, or in
part from time to time, prior to expiration. The Committee, in its absolute
discretion, may provide in any Stock Option Agreement that the exercise of any
Option granted under the Plan shall be subject (i) to such condition or
conditions as it may impose, including but not limited to, a condition that the
holder thereof remain in the employ or service of the Company or a subsidiary
corporation of the Company for such period or periods of time from the date of
grant of the Option, as the Committee, in its absolute discretion, shall
determine; and (ii) to such limitations as it may impose, including, but not
limited to, a limitation that the aggregate fair market value of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any employee during any calendar year (under all plans of the
Company and its parent and subsidiary corporations) shall not exceed One
Hundred Thousand Dollars ($100,000). In addition, in the event that under any
Stock Option Agreement the aggregate fair market value of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any employee during any calendar year (under all plans of the Company and its
parent and subsidiary corporations) exceeds One Hundred Thousand Dollars
($100,000), the Committee may, when shares are transferred upon exercise of
such Options, designate those shares which shall be treated as transferred upon
exercise of an Incentive Stock Option and those shares which shall be treated
as transferred upon exercise of a Nonstatutory Stock Option.
(b) An Option granted under the Plan shall be exercised by the
delivery by the holder thereof to the Company at its principal office
(attention of the Secretary) of written notice of the number of shares with
respect to which the Option is being exercised. Such notice shall be
accompanied by payment of the full option price of such shares, and payment of
such option price shall be made by the holder's delivery of his check payable
to the order of the Company; provided, however, that notwithstanding the
foregoing provisions of this Section 11 or any other terms, provisions or
conditions of the Plan, at the written request of the optionee and upon
approval by the Board of Directors or the Committee, shares acquired pursuant
to the exercise of any Option may be paid for in full at the time of exercise
by the surrender of shares of Common Stock of the Company held by or for the
account of the optionee at the time of exercise to the extent permitted by
subsection (c)(5) of Section 422 of the Code and, with respect to any person
who is subject to the reporting requirements of Section 16(a) of the Exchange
Act, to the extent permitted by Section 16(b) of the Exchange Act and the Rules
of the Securities and Exchange Commission, without liability to the Company.
In such case, the fair market value of
6
<PAGE> 7
the surrendered shares shall be determined by the Committee as of the date of
exercise in the same manner as such value is determined upon the grant of an
Incentive Stock Option.
12. Adjustment Upon Change in Capitalization.
(a) In the event that the outstanding Common Stock is hereafter
changed by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, stock dividends or the
like, an appropriate adjustment shall be made by the Committee in the aggregate
number of shares available under the Plan and in the number of shares and
option price per share subject to outstanding Options. If the Company shall be
reorganized, consolidated or merged with another corporation, or if all of
substantially all of the assets of the Company shall be sold or exchanged, the
holder of an Option shall, at the time of issuance of the stock under such a
corporate event, be entitled to receive upon the exercise of his Option the
same number and kind of shares of stock or the same amount of property, cash or
securities as he would have been entitled to receive upon the happening of such
corporate event as if he had been, immediately prior to such event, the holder
of the number of shares covered by his Option; provided, however, that in such
event the Committee shall have the discretionary power to take any action
necessary or appropriate to prevent any Incentive Stock Option granted
hereunder from being disqualified as an "incentive stock option" under the then
existing provisions of the Code or any law amendatory thereof or supplemental
thereto.
(b) Any adjustment in the number of shares shall apply
proportionately to only the unexercised portion of the Option granted
hereunder. If fractions of a share would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.
13. Further Conditions of Exercise.
(a) Unless prior to the exercise of the Option the shares issuable
upon such exercise have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), the notice of exercise shall be accompanied by a representation or
agreement of the individual exercising the Option to the Company to the effect
that such shares are being acquired for investment and not with a view to the
resale of distribution thereof or such other documentation as may be required
by the Company unless in the opinion of counsel to the Company such
representation, agreement or documentation is not necessary to comply with the
Securities Act.
(b) The Company shall not be obligated to deliver any Common Stock
until it has been listed on each securities exchange
7
<PAGE> 8
on which the Common Stock may then be listed or until there has been
qualification under or compliance with such state or federal laws, rules or
regulations as the Company may deem applicable. The Company shall use
reasonable efforts to obtain such listing, qualifications and compliance.
14. Effectiveness of the Plan. The Plan was originally adopted
and approved by the unanimous written consent of the Board of Directors and
stockholders on September 3, 1996.
15. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan)
shall terminate on September 3, 2006, which is within ten (10) years from the
date of its adoption by the Board of Directors, or sooner as hereinafter
provided, and no Option shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares
of capital stock of the Company present in person or by proxy at a meeting of
stockholders of the Company convened for such purpose.
(c) The Board of Directors may at any time, on or before the
termination date referred to in Section 15(a) hereof, terminate the Plan, or
from time to time make such modifications or amendments to the Plan as it may
deem advisable; provided, however, that the Board of Directors shall not,
without approval by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Company present in person or by
proxy at a meeting of stockholders of the Company convened for such purpose,
increase (except as provided by Section 12 hereof) the maximum number of shares
as to which Incentive Stock Options may be granted, or change the designation
of the employees or class of employees eligible to receive Options or make any
other change which would prevent any Incentive Stock Option granted hereunder
which is intended to be an "incentive stock option" from disqualifying as such
under the then existing provisions of the Code or any law amendatory thereof or
supplemental thereto.
(d) No termination, modification or amendment of the Plan, may
without the consent of the individual to whom an Option shall have been
previously granted, adversely affect the rights conferred by such Option.
16. Not a Contract of Employment. Nothing contained in the Plan
or in any Stock Option Agreement executed pursuant hereto shall be deemed to
confer upon any individual to whom an Option is or may be granted hereunder any
right to remain in the employ
8
<PAGE> 9
or service of the Company or a subsidiary corporation of the Company.
17. Use of Proceeds. The proceeds from the sale of shares
pursuant to Options granted under the Plan shall constitute general funds of
the Company.
18. Indemnification of Board of Directors or Committee. In
addition to such other rights of indemnification as they may have, the members
of the Board of Directors or the Committee, as the case may be, shall be
indemnified by the Company to the extent permitted under applicable law against
all costs and expenses reasonably incurred by them in connection with any
action, suit or proceeding to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection with the
Plan or any rights granted thereunder and against all amounts paid by them in
settlement thereof or paid by them in satisfaction of a judgment of any such
action, suit or proceeding, except a judgment based upon a finding of bad
faith. Upon the institution of any such action, suit or proceeding, the member
or members of the Board of Directors or the Committee, as the case may be,
shall notify the Company in writing, giving the Company an opportunity at its
own cost to defend the same before such member or members undertake to defend
the same on their own behalf.
19. Definitions. For purposes of the Plan, the terms "parent
corporation" and "subsidiary corporation" shall have the same meanings a set
forth in Sections 425(e) and 425(f) of the Code, respectively, and the
masculine shall include the feminine and the neuter as the context requires.
20. Governing Law. The Plan shall be governed by, and all
questions arising hereunder shall be determined in accordance with, the law of
the State of New York.
<PAGE> 1
EXHIBIT 10.2
NORDIC EQUITY PARTNERS CORP
Date
NORDIC EQUITY PARTNERS CORP. (NEPC)
AND
SVEN GORAN HAGGQVIST (GH)
HAVE ENTERED INTO THE FOLLOWING
AGREEMENT:
1. NEPC employs GH as Chairman of the Board and Vice President of the
Company. The appointments are conditional upon the successful
completion of the currently ongoing Public Offering of shares of NEPC
and the appointments eventually go into effect from that date.
2. The term of office as Chairman of the Board is stated in the bylaws of
the Company. In GH's capacity as Vice President, this Agreement shall
be for a period of 3 - three years.
3. In his capacity as Vice President GH's main task will be the
administration of the offering resources and to finance the whole
group.
4. During the term of this Agreement, NEPC agrees to pay GH, and GH agrees
to accept a salary of USD 10,000 per month.
Relevant costs will be reimbursed as specifically agreed upon between
the parties.
Olso/Stockholm/New York September 1996
Nordic Equity Partners Corp. Sven Goran Haggqvist
/s/ Bjorn Nysted /s/ Sven Goran Haggqvist
----------------------------- --------------------------
- --------------------------------------------------------------------------------
Nordic Equity Partners Corp. Phone +46 8 24 93 02
c/o AB Antion, Sveavagen 60 Fax +46 8 24 93 03
S-111 34 STOCKHOLM, Sweden
<PAGE> 1
EXHIBIT 10.3
NORDIC EQUITY PARTNERS CORP
Date
NORDIC EQUITY PARTNERS CORP. (NEPC)
AND
BJORN NYSTED (BN)
HAVE ENTERED INTO THE FOLLOWING
AGREEMENT
1. NEPC employs BN as President of the Company. The employment is
conditional upon the successful completion of the currently ongoing
Public Offering of shares of NEPC and the appointment eventually go
into effect from that date.
2. This agreement shall be for a period of 3 - three years.
3. BN's assignment is outlined in the bylaws of NEPC and in Delaware
Company regulations. BN has the responsibility for the current
operations of the Company and the operating companies of the group are
ordinarily reporting directly to him.
His main task will be to identify target companies according to the
"Business Plan" and also to incorporate these into the group.
4. During the term of this Agreement, NEPC agrees to pay BN, and BN agrees
to accept, a salary of USD 10,000, - per month.
Relevant costs will be reimbursed as specifically agreed upon between
the parties.
Olso/Stockholm/New York September 1996
Nordic Equity Partners Corp. Bjorn Nysted
/s/ Sven Goran Haggqvist /s/ Bjorn Nysted
---------------------------- ---------------------
- --------------------------------------------------------------------------------
Nordic Equity Partners Corp. Phone +46 8 24 93 02
c/o AB Antion, Sveavagen 60 Fax +46 8 24 93 03
S-111 34 STOCKHOLM, Sweden
<PAGE> 1
EXHIBIT 10.4
NORDIC EQUITY PARTNERS CORP
Date
NORDIC EQUITY PARTNERS CORP. (NEPC)
AND
KJELL SJOSTRAND (KS)
HAVE ENTERED INTO THE FOLLOWING
AGREEMENT
1. NEPC employs KS as Chief Financial Officer, Treasurer and Secretary of
the Company. The employments are conditional upon the successful
completion of the currently ongoing Public Offering of shares of NEPC
and the employments eventually go into effect from that date.
2. This agreement shall be for a period of 3 - three years. However, this
agreement may be subject to earlier termination by NEPC on the grounds
of misconduct of KS's obligations and/or lack of sufficient
assignments. Termination by NEPC for these reasons shall be effective 1
- one year after NEPC gives written notice of such termination to KS.
3. KS's assignments will be outlined in written instructions which will be
issued by NEPC. KS will be in charge of duties like, but not limited
to, public information, reporting to SEC, analyses and descriptions of
new acquisitions, preparations of new offerings etc.
4. During the term of this Agreement, NEPC agrees to pay KS, and KS agrees
to accept, a salary of USD 10,000, - per month.
Car costs will be reimbursed within the limit of USD 500, per month and
health insurance covered within the limit of USD 1,500 - per year.
Other relevant costs will be reimbursed as specifically agreed upon
between the parties.
Olso/Stockholm/New York September 1996
Nordic Equity Partners Corp. Kjell Sjostrand
/s/ Sven Goran Haggqvist /s/ Bjorn Nysted /s/ Kjell Sjostrand
------------------------ ---------------- -------------------
- --------------------------------------------------------------------------------
Nordic Equity Partners Corp. Phone +46 8 24 93 02
c/o AB Antion, Sveavagen 60 Fax +46 8 24 93 03
S-111 34 STOCKHOLM, Sweden
<PAGE> 1
EXHIBIT 10.5
STOCK PURCHASE AGREEMENT
This agreement, made and entered into this 23rd day of November, 1994, is by
and between Universal Commodity Trading Group, S.A. (hereinafter referred to as
"the Seller") and First Nordic Equity Partners Corp. (hereinafter referred to
as "FNEPC" or "the Buyer").
WHEREAS, pursuant to a Stock Purchase Agreement dated May 12, 1994 (the
"Original Stock Purchase Agreement"), annexed hereto as Exhibit
1, Universal Commodity Trading Group, S.A. agreed to sell 1,920
shares (or 80%) of the total 2,400 shares (the "Shares") of
common stock issued and outstanding in the Norwegian company
Nortelco AS, registered in Norway as No. 954543323 (hereinafter
referred to as the "Company"), to FNEPC; and
WHEREAS, pursuant to a subsequent Stock Purchase Agreement dated October
4, 1994 (the "Second Stock Purchase Agreement"), annexed hereto
as Exhibit 2, by and between the Seller and FNEPC, the parties
agreed that the Original Stock Purchase Agreement was null and
void and the terms and conditions of the purchase of the 1,920
Shares of the Company by FNEPC from the Seller would be governed
by the Second Purchase Agreement; and
WHEREAS, the Seller and FNEPC now desire to have the Second Purchase
Agreement declared null and void, and enter into this stock
purchase agreement (the "Agreement") setting forth the terms and
conditions of the FNEPC purchase of the Shares; and
WHEREAS, the Seller has previously received from the Buyer Norwegian
Crowns ("NOK") 5,500,000 in cash, as down payment for the Shares
sold and transferred to FNEPC;
NOW THEREFORE, in consideration of the mutual agreement hereinafter set forth,
the parties hereto, intending to be bound hereby, agree as
follows:
1. Upon, and subject to, the terms and conditions set forth in this
agreement, the Seller hereby agrees to sell to the Buyer, free and clear
of all liens, pledges and encumbrances of every kind, character and
description whatsoever, 1,920 (or 80%) of the total outstanding 2,400
shares of common stock of the Company.
2. The consideration to be paid to the Seller by the Buyer for the 1,920
Shares of the Company's common stock shall be NOK 16,000,000, inclusive of
all commissions and other payments. Such purchase price has been
paid/shall be paid as follows:
a. An initial cash payment of NOK 5,500,000 (five million five hundred
thousand). The parties hereby acknowledge and represent that such payment
has been made by the Buyer and received by the Seller.
b. The balance of NOK 10,500,000 (ten million five hundred thousand) shall
be paid by the Buyer in form of 580,803 shares of the Buyer's common
stock, par value $.001. The Seller hereby agrees that, as a condition to
the issuance of such Shares, the Buyer shall complete the attached
document annexed hereto as Exhibit A. The Seller shall receive such number
of Shares within 60 calendar days from the date of this agreement.
3. The Seller hereby represents and warrants that it has good and marketable
title to the 1,920 Shares of the common stock of the company to be
transferred pursuant to this Agreement, and has the absolute right and
necessary authority to sell, assign and transfer all of said Shares to the
Buyer, free and clear of all liens, claims, pledges and encumbrances of
any kind. The Seller also hereby represents and warrants that it has taken
all action necessary to sell the Shares to the Buyer.
<PG$PX>
<PAGE> 2
4. This instrument contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby, and shall not be
changed or terminated except by written amendment signed by the parties
hereto.
5. The parties hereby agree that this Agreement supersedes all agreements
between the parties, oral or otherwise, including the Original Stock
Purchase Agreement and the Second Stock Purchase Agreement (collectively,
the "Previous Agreements"), and that the Previous Agreements are hereby
null and void and without further effect.
6. This agreement shall be construed in accordance with, and governed by, New
York law.
UNIVERSAL COMMODITY TRADING GROUP, S.A.
By: /s/ Mats Hartling
FIRST NORDIC EQUITY PARTNERS CORP.
By: /s/ Goran Haggqvist
<PG$PX>
<PAGE> 3
Exhibit A
Gentlemen:
The undersigned entity who is acquiring 580,803 shares of common stock ("the
Shares") of First Nordic Equity Partners Corp, a Nevada corporation (the
"Company"), pursuant to a Stock Purchase Agreement dated November 23, 1994, by
and between the Company and the undersigned, hereby acknowledges, represents,
warrants, and covenants as follows:
1. The Shares being acquired have not been registered under the Securities
Act of 1933, as amended (the "Act") and are not freely tradeable. The
Shares must be held indefinitely, unless either a registration statement
with respect to the shares is filed and declared effective under the Act
or an exemption from the registration requirements of the Act is
available.
2. The Company has no obligation to register any or all of the Shares under
the Act for distribution or sale. The Company has not agreed with anyone
to comply with Regulation A or any other exemption under the Act
respecting the resale or other transfer of the Shares.
3. The Shares are being acquired for investment purposes only for the
undersigned's own account and not with a view to sale or resale,
distribution (as that term is defined in the Act), or transfer, or to
offers in connection therewith. When the shares have been issued to the
undersigned, no other person will have a beneficial interest in the
Shares.
4. The Company will affix a legend in substantially the following form to the
certificates evidencing the shares:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
pledged, hypothecated, donated, or otherwise transferred, wether or not
for consideration, unless either the shares have been registered under
said Act or an exemption from such registration requirement is available.
If the shares are to be sold or transferred pursuant to an exemption from
the registration requirements, the Company may require a written opinion
of counsel, satisfactory to counsel for the Company, to the effect that
registration is not required and that such transfer will not violate the
Act or applicable state securities law."
5. Prior to any proposed sale, pledge, hypothecation, gift or other transfer,
for value or otherwise, of any or all of the shares or of any interest
therein (hereinafter, a "transfer"), the undersigned shall give written
notice to the Company describing the transfer, unless the shares have
first been registered under the Act. The undersigned shall not effect any
transfer unless and until (a) the Company receives an opinion of the
undersigned's counsel that the shares have been registered under the Act,
or in form and substance acceptable to counsel for the Company, that the
transfer may be effected without registration under the Act, and without
registration or qualification under applicable state securities laws, and
(b) satisfaction of such other conditions as may be required by counsel to
the Company in order to assure compliance with the Act and with applicable
state securities laws.
Very truly yours,
UNIVERSAL COMMODITY TRADING GROUP, S.A.
By: /s/ Mats Hartling
-----------------------------------
<PG$PX>
<PAGE> 1
NORDIC EXHIBIT 10.6
AGREEMENT
This agreement, made and entered into this 30th day of November 1995, is by and
between Nordic Business Development as seller (hereinafter referred to as "the
Seller") and Nordic Equity Partners Corporation as buyer (hereinafter referred
to as "the Buyer").
WHEREAS: The Seller owns 20%, or 580 shares out of a total of 2,900
shares, par value NOK 1.000;* of common stock issued and
outstanding in the Norwegian company Nortelco A.S., registered in
Norway as F-no954543323 (hereinafter referred to as "the
Company").
WHEREAS: The Buyer is willing to buy all 580 shares owned by the Seller:
WHEREAS: The Seller is willing to sell all the 580 shares the Buyer is
willing to purchase.
WHEREAS: The Buyer has already conducted a due diligence of the Company:
Now, therefore, in consideration of the mutual Agreement hereinafter set forth,
the parties hereto, intending to be bound hereby, agree as follows:
1. Upon, and subject to the terms and conditions set forth in this
Agreement, the Seller hereby agrees to sell to the Buyer on the closing
date provided by in section 2 hereof free and clear of all liens, pledges
and encumbrances of every kind, character and descriptions whatsoever the
580 shares of common stock in the Company.
2. (a). The sale and purchase provided for in this Agreement shall be
consummated at a closing to be held at the offices of Haggqvinvest AB,
Stockholm, Sweden ("the agent") on the 30th day of November 1995, (Closing
date); and after all conditions precedent to the consummation thereof have
been satisfied, or at such other date, time and place as the Seller and
Buyer mutually agree upon.
(b). At the Closing Date the Seller shall deliver to the Buyer:
certificates evidencing and representing the 580 issued and outstanding
shares of the common stock of the Company, all of which are being sold
hereunder, duly endorsed in blank, or accompanied by stock powers duly
endorsed in blank, with signatures guaranteed, in proper form for transfer.
3. (a). The consideration to be paid to the Seller by the Buyer for the
issued and outstanding 580 shares of the Company's Common Stock, shall be
216,000 shares of the Buyers Common Stock which amount of shares equals
12% of the Buyers total amount of outstanding Common Stock (1,800,000).
(b). After the consummation of the transaction referred to in this
Agreement the allocation of shares among the major shareholders of the
Buyer shall be according to appendix 1.
4. The Seller has good and marketable title to the issued and outstanding
Common
<PG$PX>
<PAGE> 2
Stock of the Company to be transferred, and the absolute right hereunder
and the necessary authority to sell, assign and transfer all of said stock
to the Buyer, free of all liens, claims, pledges and encumbrances of any
kind.
5. The Buyer and the Seller shall bear their own expences and costs in
connection with this Agreement and the transaction contemplated herein.
6. This instrument contains the entire Agreement between the parties hereto
with respect to the transaction contemplated hereby, and shall not be
changed or terminated, except by written amendment signed by the parties
hereto.
7. This Agreement shall be construed in accordance with, and governed by, the
laws of the State of New York. Any dispute arising from this Agreement,
which the parties hereto cannot resolve themselves, shall be referred to
Arbitration in the State of New York.
Stockholm, as above
/s/ BJORN NYSTED /s/ GORAN HAGGQVIST
--------------------------- ------------------------------
Bjorn Nysted Goran Haggqvist
Nordic Business Development A.S. Nordic Equity Partners Corp.
Seller Buyer
<PG$PX>
<PAGE> 1
EXHIBIT 10.7
AGREEMENT REGARDING PURCHASE OF SHARES IN NORTELCO AUDIATUR AB, STOCKHOLM
- --------------------------------------------------------------------------------
1. Nortelco AS, Oslo, Norway hereby agrees to purchase and Mr Marc Oldmar,
Stockholm, Sweden hereby agrees to sell Mr Oldmars remaining 20% shares in
Nortelco Audiatur AB effective the date hereof.
2. As payment Mr Oldmar shall receive 229.797 shares (corresponding to about
4%) in The Nortelco-groups mother company Sherman Goelz & Associates/First
Nordic Equity Partners Corp., which for the time being owns 80% in
Nortelco AS and 100% in Storebro Machine AB.
3. Settlement shall take place before the end of 1994.
4. The shares to be received are "restricted shares" - which means that the
shares cannot be sold until a certain time has elapsed and then according
to certain rules.
5. When the share starts to trade in New York and the quotation is not at a
satisfactory level, Mr Oldmar has the right to repurchase his 20% shares
in Nortelco Audiatur AB for the same price. The repurchase has to take
place within a month, from the day when the share has started to trade on
AMEX or another US Stock Exchange.
6. In the event of a reversal of "the New York model" this agreement
automatically permits participation in a "Nordic model".
7. The shareholders agreement dated September 1, 1993 between Nortelco AS and
Mr Oldmar is hereby replaced apart from clause 6 appendix 1 "bonus on year
result" which will be calculated according to the said agreement for the
year 1994.
Oslo/Stockholm May 15, 1994
/s/ BJORN NYSTED/ /s/ GORAN HAGGQVIST /s/ MARC OLDMAR
Nortelco AS/Sherman Goelz & Associates Marc Oldmar
<PAGE> 2
AMENDMENT NO. 1
TO
AGREEMENT
This Amendment No. 1 to the Agreement (the "Agreement") made and
entered into as of the 31st day of August 1996, between Nortelco AS, a
Norwegian corporation ("Nortelco"), Nordic Equity Partners Corp., a Delaware
corporation (the "Company"), and Marc Oldmar ("Oldmar").
WITNESSETH:
WHEREAS, as of May 15, 1994, Nortelco, the Company and Oldmar entered
into an Agreement, a copy of which is annexed hereto as Exhibit 1; and
WHEREAS, the parties now desire to amend the Agreement by deleting
Paragraphs 5, 6 and 7 thereof;
NOW, THEREFORE, in consideration of and for the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Share Exchange Agreement is hereby
amended as follows:
1. Paragraphs 5, 6 and 7 of the Agreement are hereby deleted in
their entirety and shall have no further force and effect.
2. (A) This agreement shall be construed and interpreted in
accordance with the laws of the State of New York without giving effect to the
conflict of laws rules thereof or the actual domiciles of the parties.
(B) Except as amended hereby, the terms and provisions of
the Agreement shall remain in full force and effect, and the Agreement is in all
respects ratified and confirmed. On and after the date of this agreement, each
reference in the Agreement to the "Agreement", "hereinafter", "herein",
"hereinafter", "hereunder", "hereof", or words of like import shall mean and be
a reference to the Agreement as amended by this agreement.
(C) This agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single Amendment.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first stated above.
NORTELCO AS
By:/s/ Bjorn Nysted
-----------------------
NORDIC EQUITY PARTNERS CORP.
By:/s/ Bjorn Nysted /s/ Kjell Sjostrand
------------------------
/s/ MARC OLDMAR
---------------------------
Marc Oldmar
2
<PAGE> 1
EXHIBIT 10.8
STOCK PURCHASE AGREEMENT
This agreement, made and entered into this 20th day of September, 1994, is by
and between Monkwell Consultants Ltd as seller (hereinafter referred to as "the
Seller") and Nortelco System-Teknikk A/S as buyer (hereinafter referred to as
"the Buyer").
Whereas: The Seller owns all outstanding shares of common stock in the
Norwegian company Bror Mauritz-Hansen A/S, registered in Norway as No.
935955688 (hereinafter referred to as "the Company").
Whereas: The Buyer is willing to purchase, from the Seller, all 14,167
outstanding shares of common stock of the Company.
Whereas: The Seller is willing to sell all 14,167 shares of common stock,
outstanding in the Company, to the Buyer.
Now, therefore, in consideration of the mutual agreement hereinafter set forth,
the parties hereto, intending to bound hereby, agree as follows:
1). Upon an subject to the terms and conditions set forth in this agreement,
the Seller hereby agrees to sell to the Buyer on the closing date provided for
in section 2 hereof, free and clear of all liens, pledges and encumbrances of
every kind, character and description whatsoever, that is to say apart from the
pledge in the shares held by Aktiv Bedriftsutvikling A/S, up until such date
Aktiv Bedriftsutvikling A/S has received its consideration as per the purchase
agreement dated July 25th, 1994, between themselves and the Seller, (Exhibit
"A" as attached hereto), all 14,167 shares of common stock of the Company owned
by the Seller.
2). (a). The sale and purchase provided for in this agreement shall be
consummated at a closing to be held at the offices of the Buyer in Oslo,
Norway, on the 1st day of October, 1994 ("Closing date"; "Closing"); and after
all conditions precedent to the consummation thereof have been satisfied, or at
such other date, time and place as the Seller and the Buyer mutually agree
upon.
(b). At the Closing the Seller shall deliver to the Buyer:
(i) certificates evidencing and representing of the issued and outstanding
shares of common stock of the Company, all of which are being sold hereunder,
duly endorsed in blank or accompanied by stock powers duly executed in blank,
with signatures guaranteed, in proper form for transfer;
(ii) a copy of the articles of incorporation of the Company and all, if any,
amendments thereto, and a copy of the Company's certificate of incorporation;
(iii) correct and complete copies of the by-laws, minutes of directors meetings
or consent to action by the shareholders of the Company, and all other
documentation necessary for the operation of the Company, its business and
affairs, such as accounts, books, bank accounts and all other similar corporate
documents of the Company.
3). The consideration to be paid to the Seller by the Buyer for the issued and
outstanding 14,167 shares of the Company's common stock, shall be NOK 1,000:-
in cash.
4). The Seller shall on a regular basis, up until Closing, keep the Buyer well
informed of each and every transaction or other event, that might have an
impact on the Company, its business or affairs now and in the future.
<PG$PX>
<PAGE> 2
5). Prior to the Closing date, the Seller will not, except with written consent
of the Buyer, permit the Company to declare or pay dividend, issue or authorize
the issuance of any stock, declare any stock split, or issue any other security
convertible into stock or warranty or option or right for the purchase of any
stock, sell or otherwise dispose of any asset, except in the ordinary course of
business or borrow money or incur any debt or other obligation, will not permit
the Company to be a party to any merger, consolidation, reorganization or
recapitalization, and the Seller will cause the Company to conduct its affairs
in the usual and ordinary course of business.
6). This instrument contains the entire agreement between the parties hereto
with respect to the transaction contemplated hereby and shall not be changed or
terminated except by written amendment signed by the parties hereto.
7). This agreement shall be kept on a strictly private and confidential basis
by the parties hereto.
8). This agreement shall be construed in accordance with, and governed by,
Norwegian law, any dispute arising out of this agreement, which the parties
hereto can not resolve themselves, shall be referred to Arbitration in Oslo.
as above
/s/ MATS HARTLING /s/ BJORN NYSTED /s/ TORE STRAND
- -------------------------- ----------------------------------
Mats Hartling Bjorn Nysted / Tore Strand
Monkwell Consultants Ltd. Nortelco System-Teknikk A/S
<PG$PX>
<PAGE> 1
EXHIBIT 10.9
STOCK PURCHASE AGREEMENT
This agreement, made and entered into this 23rd day of November, 1994, is by and
between Ovington Investments Ltd (hereinafter referred to as "the Seller") and
First Nordic Equity Partners Corp. (hereinafter referred to as "FNEPC" or "the
Buyer").
WHEREAS, pursuant to a Stock Purchase Agreement dated May 16, 1994 (the
"Original Stock Purchase Agreement"), annexed hereto as Exhibit
1, Ovington Investments Ltd agreed to sell 3,000 shares (or
100%) of the outstanding shares (the "Shares") of common stock
issued and outstanding in the Swedish company Storebro Machine
AB, registered in Sweden as No. 556327-9146 (hereinafter
referred to as the "Company"), to FNEPC; and
WHEREAS, pursuant to a subsequent Stock Purchase Agreement dated October
3, 1994 (the "Second Stock Purchase Agreement"), annexed hereto
as Exhibit 2, by and between the Seller and FNEPC, the parties
agreed that the Original Stock Purchase Agreement was null and
void and the terms and conditions of the purchase of the 3,000
Shares of the Company by FNEPC from the Seller would be governed
by the Second Purchase Agreement; and
WHEREAS, the Seller and FNEPC now desire to have the Second Purchase
Agreement declared null and void, and enter into this stock
purchase agreement (the "Agreement") setting forth the terms and
conditions of the FNEPC purchase of the Shares; and
WHEREAS, the Seller has previously received from the Buyer Swedish Crowns
("SEK") 1,975,000.- in cash, as down payment for the Shares sold
and transferred to FNEPC;
NOW THEREFORE, in consideration of the mutual agreement hereinafter set forth,
the parties hereto, intending to be bound hereby, agree as
follows:
1. Upon, and subject to, the terms and conditions set forth in this
agreement, the Seller hereby agrees to sell to the Buyer, free and clear
of all liens, pledges and encumbrances of every kind, character and
description whatsoever, 3,000 (or 100%) of the total outstanding shares of
common stock of the Company.
2. The consideration to be paid to the Seller by the Buyer for the 3,000
Shares of the Company's common stock shall be SEK 12,000,000.-, inclusive
of all commissions and other payments. Such purchase price has been
paid/shall be paid as follows:
a. An initial cash payment of SEK 1,975,000.- (one million nine hundred
and seventyfive thousand). The parties hereby acknowledge and represent
that such payment has been made by the Buyer and received by the Seller.
b. The balance of SEK 10,025,000.- (ten million twentyfive thousand) shall
be paid by the Buyer in form of 490,197 shares of the Buyer's common
stock, par value $.001. The Seller hereby agrees that, as a condition to
the issuance of such Shares, the Buyer shall complete the attached
document annexed hereto as Exhibit A. The Seller shall receive such number
of Shares within 60 calendar days from the date of this agreement.
3. The Seller hereby represents and warrants that it has good and marketable
title to the 3,000 Shares of the common stock of the company to be
transferred pursuant to this Agreement, and has the absolute right and
necessary authority to sell, assign and transfer all of said Shares to the
Buyer, free and clear of all liens, claims, pledges and encumbrances of
any kind. The Seller also hereby represents and warrants that it has taken
all action necessary to sell the Shares to the Buyer.
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<PAGE> 2
4. This instrument contains the entire agreement between the parties hereto
with respect to the transactions contemplated hereby, and shall not be
changed or terminated except by written amendment signed by the parties
hereto.
5. The parties hereby agree that this Agreement supersedes all agreements
between the parties, oral or otherwise, including the Original Stock
Purchase Agreement and the Second Stock Purchase Agreement (collectively,
the "Previous Agreements"), and that the Previous Agreements are hereby
null and void and without further effect.
6. This agreement shall be construed in accordance with, and governed by, New
York law.
OVINGTON INVESTMENTS LTD
By: /s/ Goran Haggqvist
-------------------------------
FIRST NORDIC EQUITY PARTNERS CORP.
By: /s/ Goran Haggqvist /s/ Kjell Sjostrand
-------------------------------------------
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<PAGE> 3
EXHIBIT A
Gentlemen:
The undersigned entity who is acquiring 490,197 shares of common stock ("the
Shares") of First Nordic Equity Partners Corp., a Nevada corporation (the
"Company"), pursuant to a Stock Purchase Agreement dated November 23, 1994, by
and between the Company and the undersigned, hereby acknowledges, represents,
warrants, and covenants as follows:
1. The Shares being acquired have not been registered under the Securities
Act of 1933, as amended (the "Act") and are not freely tradeable. The
Shares must be held indefinitely, unless either a registration statement
with respect to the shares is filed and declared effective under the Act
or an exemption from the registration requirements of the Act is
available.
2. The Company has no obligation to register any or all of the Shares under
the Act for distribution or sale. The Company has not agreed with anyone
to comply with Regulation A or any other exemption under the Act
respecting the resale or other transfer of the Shares.
3. The Shares are being acquired for investment purposes only for the
undersigned's own account and not with a view to sale or resale,
distribution (as that term is defined in the Act), or transfer, or to
offers in connection therewith. When the shares have been issued to the
undersigned, no other person will have a beneficial interest in the
Shares.
4. The Company will affix a legend in substantially the following form to the
certificates evidencing the shares:
"The securities represented by this certificate have nor been registered
under the Securities Act of 1933, as amended, and may not be sold,
pledged, hypothecated, donated, or otherwise transferred, whether or not
for consideration, unless either the shares have been registered under
said Act or an exemption from such registration requirement is available.
If the shares are to be sold or transferred pursuant to an exemption from
the registration requirements, the Company may require a written opinion
of counsel, satisfactory to counsel for the Company, to the effect that
registration is not required and that such transfer will not violate the
Act or applicable state securities law."
5. Prior to any proposed sale, pledge, hypothecation, gift or other transfer,
for value or otherwise, of any or all of the shares or of any interest
therein (hereinafter, a "transfer"), the undersigned shall give written
notice to the Company describing the transfer, unless the shares have
first been registered under the Act. The undersigned shall not effect any
transfer unless and until (a) the Company receives an opinion of the
undersigned's counsel that the shares have been registered under the Act,
or in form and substance acceptable to counsel for the Company, that the
transfer may be effected without registration under the Act, and without
registration or qualification under applicable state securities laws, and
(b) satisfaction of such other conditions as may be required by counsel to
the Company in order to assure compliance with the Act and with applicable
state securities laws.
Very truly yours,
OVINGTON INVESTMENTS LTD
By: /s/ [ILLEGIBLE]
--------------------------
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<PAGE> 1
EXHIBIT 21.1
Subsidiaries of the Registrant
STATE OR OTHER JURISDICTION OF
NAME INCORPORATION OR ORGANIZATION
- ---- -----------------------------
Storebro Machine AB Sweden
Nortelco AS Norway
Nortelco System -
Teknikk AS* Norway
Brannteknikk AS* Norway
Nortelco Audiator AB* Sweden
- ---------
* wholly-owned subsidiaries of Nortelco AS
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<PAGE> 1
[McMANUS LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion in this Registration Statement on Form
SB-2 of our report dated April 26, 1996, on our audit of the financial
statements of Nordic Equity Partners Corp. and subsidiaries. We also consent
to the reference to our firm under the captions "Selected Financial Data" and
"Experts".
/s/ McManus & Co., P.C.
McMANUS & CO., P.C.
CERTIFIED PUBLIC ACCOUNTANTS
MORRIS PLAINS, NJ 07950
September 25, 1996
