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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 7, 1998
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Date of Report
(Date of earliest event reported)
WESTOWER CORPORATION
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(Exact name of registrant as specified in its charter)
Washington 333-32963 91-1825860
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
7001 NE 40th Avenue
Vancouver, Washington 98661
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(Address of principal executive offices, including zip code)
(360) 750-9355
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(Registrant's telephone number, including area code)
Page 1 of 4
Exhibit Index appears on page 4
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 7, 1998, Westower Corporation (the "Company") executed a Stock
Purchase Agreement relating to the acquisition of WTC Holdings Inc., formerly
known as 411677 Alberta Ltd. ("Holdings") by the Company (the "Agreement").
Holdings holds 100% of the stock of Western Telecom Construction Ltd., an
Alberta corporation ("Western Telecom"). Western Telecom is in the business of
designing, constructing, and maintaining cellular communications towers, and its
business substantially overlaps with the current business operations of the
Company and its other subsidiaries. The Agreement makes the purchase effective
as of October 28, 1997 to reflect that Western Telecom's functional operations
were integrated into the Company as of that date. Pursuant to the Agreement,
the Company issued 835,000 shares of its Common Stock to Peter Jeffrey, the sole
shareholder of Holdings, in exchange for all of the outstanding stock of
Holdings. Peter Jeffrey is the brother of S. Roy Jeffrey, a director, more than
10% beneficial owner, and the chief operating officer of the Company. At the
time an oral understanding was reached in October 1997, the market value of the
835,000 shares equaled six times the Company's estimate of Western Telecom's
sustainable annual after-tax earnings. At that time, the Company understood the
industry average purchase price for tower companies to be from four to seven
times sustainable annual after-tax earnings.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired*
(b) Pro Forma Financial Information*
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description Page
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<C> <S> <C>
2.1 Stock Purchase Agreement Relating to the
Acquisition of WTC Holdings Inc., formerly
known as 411677 Alberta Ltd. by Westower
Corporation
</TABLE>
______________________
Form 8-K - Westower Corporation Page 2
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SIGNATURE
Pursuant to the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WESTOWER CORPORATION
Dated: May 22, 1998
By: /s/ Peter Lucas
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Peter Lucas, Vice President, Chief Financial
Officer, Treasurer and Secretary
Form 8-K - Westower Corporation Page 3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page
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<C> <S> <C>
2.1 Stock Purchase Agreement Relating to the
Acquisition of WTC Holdings Inc., formerly
known as 411677 Alberta Ltd. by Westower
Corporation
</TABLE>
_________________________
Form 8-K - Westower Corporation Page 4
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STOCK PURCHASE AGREEMENT
Relating to the Acquisition of
WTC HOLDINGS, INC.
FORMERLY KNOWN AS
411677 ALBERTA LTD.
BY
WESTOWER CORPORATION
THIS STOCK PURCHASE AGREEMENT is entered into effective the 28th-day of
October, 1997 by and among Peter Jeffrey ("Stockholder") being the owner of all
the issued and outstanding shares of capital stock of WTC Holdings, Inc. a
Wyoming corporation formerly known as 411677 Alberta Ltd. ("Limited") and
Westower Corporation ("Westower"), a Washington corporation.
RECITALS:
A. The number of shares of common stock of Limited owned by the Stockholder is
listed on Schedule A hereof, the aggregate amount of such Stock being sometimes
referred to as the "Limited Stock".
B. The Stockholder desires to sell all of the Limited Stock owned by him to
Westower in exchange for 835,000 shares of common stock, $.01 par value, of
Westower (the "Westower Stock"), upon and subject to the terms and conditions
hereinafter set forth.
1. NOW THEREFORE, in consideration of the recitals and of the respective
covenants, representations and agreements herein contained, it is hereby
covenanted and agreed by and among the parties that they shall carry out and
consummate the following Stock Purchase Agreement (the "Agreement"):
1. Purchase and Sale of Stock. The Stockholder, in reliance upon the
representations, warranties, and covenants of Westower contained herein and
subject to the terms and conditions of this agreement, shall exchange all of the
shares of the Limited Stock which he owns for the consideration set forth blow.
Westower, in reliance upon the representations, warranties and covenants of the
Stockholder contained herein and subject to the terms and conditions of this
Agreement, shall purchase the Limited Stock for the aggregate purchase price of
$5,135,250 (the "Purchase Price") which will be paid in Westower Stock. The
aggregate number of shares of Westower Stock to be delivered to the Stockholder
shall be 835,000, or $6.15 per share of Westower Stock.
2. Delivery of Certificates. The Stockholder shall deliver, free and
clear of all liens and encumbrances, claims and other charges thereon of every
kind, the certificate(s) for the shares of Limited Stock in negotiable form,
duly endorsed in blank or with separate stock transfer powers attached with
signatures guaranteed by a bank or trust company, to Westower upon delivery by
Westower to the Stockholder of the Westower Stock on the basis as provided in
Section 1 hereof.
3. Default. Notwithstanding the provisions of Section 3.1 hereof, if the
Stockholder shall fail or refuse to deliver any of the Limited Stock as provided
in Section 2 hereof, or if the Stockholder shall fail or refuse to consummate
the transactions described in this Agreement, Westower at its option, may refuse
to make such acquisition and thereby terminate all of its obligations hereunder.
The Stockholder
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acknowledges that the Limited Stock is unique and otherwise not
available and agrees that in addition to any other remedies, Westower may invoke
any equitable remedies to enforce performance hereunder, including, without
limitation, an action for specific performance.
3.1 Damages. Each of the parties hereto shall be liable to each other
party for a material breach of its representations, warranties and covenants
which results in a failure to perform under Sections 1 and 2 hereof, but then
only to the extent of the expenses incurred by the other parties in connection
with the transactions contemplated by this Agreement
4. Representations and Warranties of Stockholder. The Stockholder
represents and warrants to Westower as follows:
4.1 Organization, Standing, Qualification and Capitalization. Limited is a
corporation duly organized, validly existing and in good stand standing under
the laws of Wyoming, and has the corporate power to perform its business as
presently conducted and to own and lease the properties used in connection
therewith. A complete and correct copy of the Articles of Incorporation and all
amendments thereto of Limited certified by the Secretary of State of Wyoming and
a complete and correct copy of its By-laws and all amendments thereto, certified
by its Secretary, will be delivered to Westower within ten days from the
Execution Date. Limited is duly qualified to do business and is in good standing
in all jurisdictions in which its business or the ownership of its property
requires such qualification.
The total authorized capital stock of Limited consists of unlimited number
of shares of Class A, Class B and Class C Common Stock, no par value, and
unlimited number of shares of A Preference Stock, no par value, unlimited number
of shares of B Preference Stock, no par value, Series 1 and Series 2. There are
currently 51 shares of Class A common Stock, 467 shares of Class A Preference
Stock, 200 shares of Class B Preference, Series 1, and 100 shares of Class B
Preference, Series 2 issued and outstanding, all of which are validly issued,
fully paid and non-assessable. Neither Limited nor the Stockholder will be a
party to or bound by any written or oral contract or agreement which grants to
any person an option or right of first refusal or other right of any character
to acquire at any time, or upon the happening of any stated events, shares of
Common Stock or Preference Stock of Limited, whether or not presently issued and
outstanding.
4.2 Stock Ownership. The Stockholder is the lawful owner of record and
beneficially of the number of shares of Limited Preference and Common Sock set
forth on Schedule A hereto, free and clear of all liens and encumbrances, claims
and charges of every kind, and the Stockholder has full legal power and all
authorization required by law to transfer and deliver said shares in accordance
with this Agreement.
4.3 Subsidiaries. A list of all subsidiaries owned by Limited is attached
hereto as Schedule B, with the name, state or jurisdiction of organization,
jurisdiction in which each such subsidiary is doing business and in which each
is qualified to do business, and percentage of interest owned in each such
subsidiary.
4.4 Financial Statements. The Stockholder has delivered to Westower
copies of the following financial statements, all of which have been prepared in
accordance with generally accepted accounting principles except as otherwise
disclosed therein applied on a basis consistent with that of the preceding
fiscal year:
(i) Draft consolidated balance sheet of Limited as of its fiscal year ended
January 31, 1997, prepared by Moss Adams LLP, independent accountants,
which balance sheet together with any notes thereto presents fairly the
financial condition and assets and liabilities of Limited as of such date.
The balance sheet is hereinafter referred to as the "1997 Balance Sheet."
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(ii) Draft consolidated statement of operations of Limited for the fiscal
year ended January 31, 1997 prepared by Moss Adams LLP, which statement,
together with any notes thereto present fairly the results of operations of
Limited for the said fiscal year.
(a) Accounts Receivable. The accounts receivable of Limited as set forth on
the 1997 Balance Sheet and all accounts receivable acquired by Limited or
arising subsequent to January 31, 1997 are collectible in full in the
ordinary course of business in the aggregate reported amounts less reserves
reflected on the 1997 Balance sheet.
(b) Inventory. All inventory of Limited as set forth in the 1997 Balance
Sheet, consisted, and all such inventory will consist of, a quality usable
or salable in the ordinary course of business of Limited. The value at
which inventories were reflected in the 1997 Balance Sheet was the lower of
cost (defined as invoice cost) or replacement market value and with
adequate provisions for obsolete material, all in accordance with generally
accepted accounting principles applied on a basis consistent with that of
the prior fiscal year.
(c) Other Assets. The prepaid expenses and other assets of Limited as shown
on the 1997 Balance Sheet represent amounts which will benefit Limited in
future periods. All material tangible assets owned and used by Limited in
its future operations were reflected in the 1997 Balance Sheet.
(d) Fixed Assets. The fixed assets of Limited are stated at cost in the
1997 Balance Sheet. The reserves for depreciation and amortization provided
against these assets have been established in accordance with the notes to
the financial statements and are adequate to reduce any idle fixed assets
to net realizable value.
4.5 Title to Properties. Limited has good and marketable title to all of its
properties and assets reflected in the 1997 Balance Sheet (except properties and
assets sold or otherwise disposed of since January 31, 1997 in the normal and
ordinary course of business), free and clear of all mortgages, liens, pledges,
charges or other encumbrances of any nature whatsoever disclosed in the 1997
Balance Sheet; or (ii) liens for current taxes not yet due and payable. Limited
has valid and enforceable title insurance coverage on all real property
reflected in the 1997 Balance sheet and will deliver a true and correct copy of
any such policy or policies of such insurance within 10 days from the date
hereof. All plants, structures and equipment owned or used by Limited are, with
minor exceptions, in good operating repair.
4.6 Tax Matters. The amounts set up as provisions for taxes on the 1997
Balance Sheet are sufficient for the payment of all foreign, federal, state,
county and local taxes, and all employment and payroll related taxes, including
any penalties or interest thereon, whether disputes or not, of Limited accrued
for or applicable to all periods ended on or prior to January 31, 1997. Limited
did not and will not realize any gain or income of any kind with respect to
activities subsequent to January 31, 1997 and through the date of execution
hereof, except gain and income incurred in the ordinary course of business
subsequent to January 31, 1997. Limited has duly made all deposits required by
law to be made with respect to employees' withholding taxes. Limited has duly
filed all income, foreign, franchise, excise, employment and payroll related,
real and personal property, sales and gross receipts tax returns and all other
tax returns which were required to be filed by it, and has paid or set up
adequate reserves for the payment of, all taxes shown on such returns.
Stockholder has no knowledge of any unassessed tax deficiency proposed or
threatened against Limited.
4.7. Litigation and Labor Matters. Except as provided for or disclosed in
the 1997 Balance Sheet or in Schedule B hereto:
(a) There is no litigation, proceeding or governmental investigation pending
or to the knowledge of the Stockholder threatened, against Limited, or its
properties or business;
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(b) Limited is not in default with respect to any order, writ, injunction or
decree of any court or federal, state, municipal or governmental
department, commission, board, bureau, agency or instrumentality; and
(c) Limited has not committed, and neither the Stockholder nor Limited has
received any notice of or claim that Limited has committed any unfair labor
practice under applicable federal or state law.
4.8. Insurance. Limited is insured under various policies of fire,
liability and other forms of insurance, as set forth in Schedule D hereto, which
policies are valid and enforceable in accordance with their terms and provide
adequate insurance for the business of Limited and its assets and properties.
Limited shall continue to carry such policies or similar policies during the
pendency of this Agreement, and all outstanding claims under such policies are
described in Schedule C. There is no liability for retrospective insurance
premium adjustments for any period prior to the date hereof.
4.9. Patents, Trademarks, and Copyrights. Schedule E attached hereto sets
forth all patents, patent applications, registered trademarks, registered
service marks, trademarks and service mark applications, unregistered trademarks
and service marks, copyrights and copyright applications, owned or filed by
Limited or in which Limited has an interest and the nature of such interest. No
other patent, trademark, or service mark, copyright or license under any
thereof, is necessary to permit the business of Limited to be conducted as it is
now conducted or as heretofore or proposed to be conducted. No person, firm or
corporation has any proprietary, financial or other interest in any such
patents, patent applications, registered trademarks, registered service marks,
trademarks and service mark applications, unregistered trademarks and service
marks, copyrights and copyright applications, and there are no violations by
others of any rights of Limited thereunder. Limited is not infringing on any
patent, trademark, or service mark, or copyright or otherwise violating the
rights, of any third party, and no proceedings have been instituted or are
pending, or to the knowledge of the Stockholder or Limited are threatened, and
no claim has been received by Limited, alleging any such violation. Limited is
not a party to or bound by any license agreement requiring the payment by
Limited of any royalty payment, except as set forth in Schedule D hereto.
4.10 Contracts and Commitments. Except as listed and identified in
Schedule F hereto, Limited is not a party to any written or oral:
(a) contract or commitment with any person or former director or employee or
consultant;
(b) contract or commitment with any labor union or employee group;
(c) contract or commitment for the future purchase of, or payment for, raw
materials, supplies or products, involving in any case $10,000 or more;
(d) contract or commitment to sell or supply products or to perform services
for a specific price involving $10,000 or more without the ability on the
part of Limited to increase such price or to cancel the contract or
commitment without any liability on the part of Limited;
(e) contract or commitment continuing over a period of more than six months
from the date of this Agreement;
(f) representative or sales agency contract or commitment;
(g) lease under which it is either lessor or lessee;
(h) bonus, pension, profit sharing, retirement, stock purchase, stock option
hospitalization, insurance, vacation pay or any similar plan or practice,
including but not Limited to any welfare benefit plan as defined in Section
3.1 of the Employee Retirement Income Security Act, formal or informal, in
effect with respect to any of Limited's employees or former employees;
(i) contract or commitment for the borrowing of money or other agreement or
arrangement for a line of credit;
(j) contract or commitment for any charitable contribution;
(k) contract or commitment for capital expenditures in excess of $10,000;
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(l) contract or commitment for limiting or restraining it from engaging in
any lines of business with any person, firm, corporation or any other
entity; or
contract not made in the ordinary course of business.
Except as stated in Schedule F hereto and for delays, minor failures to
meet specifications or other minor defaults which are normal in the conduct of
the business between Limited and other parties to the above contracts, all
parties to the above contracts have complied with the provisions thereof, no
party is in default thereunder, and no event has occurred which but for the
passage of time or the giving of notice would constitute a default thereunder.
4.11. Absence of Undisclosed Liabilities. There are no liabilities or
obligations of Limited either
(a) to the extent reflected in the 1997 Balance Sheet and not heretofore
paid or discharged, and
(b) those incurred, consistently with past business practice, in or as a
result of the normal and ordinary course of business since January 31,
1997.
4.12. Absence of Default. Limited is not in default in the performance
of, observance or fulfillment of any material obligation, covenant or condition
contained in any debenture or note, or contained in any conditional sale or
equipment trust agreement, or loan or other borrowing agreement to which Limited
is a party.
4.13. Existing Condition. Except as disclose in Schedule F hereto, since
January 31, 1997, there has not been (i) any material adverse change in the
financial condition or in the combined operations, business or properties of
Limited; (ii) any damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting the operations, businesses or properties
of Limited; (iii) any declaration, setting aside or payment of any dividend, or
any distribution in respect of capital stock of Limited, or any redemption,
purchase of other acquisition of any kind of any shares of Limited; (iv) any
increase in the compensation payable by Limited to any of its officers,
directors or employees; (v) any change in the terms of any bonus, insurance,
pension or other benefit plan for or with any officer, directors or employees
which increase amounts paid, payable to or to become payable thereunder; or (vi)
any complaints or other concerns which have been brought to the attention of the
Stockholder and which relate to Limited's labor relations.
4.14. Validity of Contemplated Transactions. Neither the execution and
delivery of this Agreement nor the consummation of the transactions provided for
herein will violate any agreement to which Limited or the Stockholder is a party
or by which it either of them is bound or any law, order or decree or any
provision of the Articles of Incorporation, Charter or By-laws of Limited. The
Stockholder has full legal authority to execute and deliver this Agreement and
to consummate and perform the transactions contemplated hereby, and this
Agreement constitutes the valid obligation of the Stockholder legally binding
upon him in accordance with its terms.
4.15. Restrictions. Limited is not subject to any charter or any other
corporate restriction or any judgment, order writ, injunction or decree, which
materially and adversely affects or, so far as the Stockholder can now foresee,
may in the future materially and adversely affect, the combined businesses,
operations prospect, properties, assets, or condition, financial or otherwise,
of Limited.
4.16. Compliance with Laws. Limited has complied with and is not in
default under, or in violation of, any laws, ordinances, rules, regulations or
orders (including without limitation any safety, health or trade laws,
ordinances, rules, regulations or orders) applicable to the operations,
businesses or properties of Limited which materially and adversely affect or, so
far as the Stockholder can now foresee, may in the future materially affect, the
businesses , operations, prospects, properties or assets or condition, financial
or otherwise, of Limited;
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4.17. Disclosure. No representation by the Stockholder in this Agreement
contains any untrue statement of material facts or omits to state any material
fact necessary to make any statement herein not misleading.
4.18. Transactions with Affiliates. No director, officer or Stockholder
of Limited owns or during the last two years has owned, directly or indirectly,
or has, or during the last two years has had, an ownership interest in any
business, corporate or otherwise, which is a party to, or in any property which
is the subject of, any business arrangement or relationship of any kind with
Limited except as described in Schedule G hereto.
4.19. Bank Accounts and Officers. Schedule H hereto contains a true and
correct list of the name and location of each bank in which Limited has an
account, each safety deposit box or custody agreement and the names of the
persons authorized to draw thereon or to withdraw therefrom, and also sets forth
the names of all directors and officers of Limited.
4.20. Investment Representations. The Stockholder by executing this
Agreement represents and warrants to Westower that the Stockholder is acquiring
the Westower Stock hereunder for his own account for investment, with no present
intention of reselling or otherwise distributing the same, except (i) pursuant
to an offering of shares duly registered under the Securities Act of 1933, as
amended, (the "Securities Act") or (ii) under other circumstances which in the
opinion of counsel to Westower at the time does not require registration under
the Securities Act. The Stockholder further covenants and represents that none
of the Westower Stock that will be issued to him pursuant to this Agreement will
be offered, sold, assigned, pledged, transferred, or otherwise disposed of by
him except after full compliance with all of the applicable provisions of the
Securities Act and the rules and regulations thereunder. The Stockholder hereby
confers full authority upon Westower to instruct its transfer agent not to
transfer any of the Westower Stock until it has received written approval from
Westower to the effect that the provisions of this Section have been satisfied.
The Stockholder acknowledges that Westower shall place a stop transfer order
against the transfer of the Westower Stock owned by him until he satisfies one
of the conditions set forth in this Section. All stock certificates
representing the Westower Stock shall be endorsed with the following restrictive
legend:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW BUT HAVE BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF
THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL EITHER
(i) A REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR SUCH APPLICABLE
STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR
(ii) THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO THE
CORPORATION AND ITS COUNSEL THAT REGISTRATION UNDER SUCH SECURITIES ACT OR
SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED OFFER, SALE OR TRANSFER."
5. Representations and Warranties of Westower. Westower represents and
warrants to the Stockholder that:
5.1 Organization, Good Standing and Authority. Westower is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Washington, and has full corporate power and authority to own its
properties and assets and to carry on its business as it has been and is
conducted. The execution of this Agreement and the consummation of the
transactions contemplated hereby are within the corporate power of Westower and
have been duly authorized by all necessary corporate and other action. This
agreement constitutes, and will constitute when delivered in accordance with the
terms hereof, the valid obligation of Westower legally binding upon it in
accordance with its terms. The stock of Westower to be delivered to the
Stockholder in payment of the purchase price when issued and delivered will be
validly issued, fully paid and non assessable.
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5.2. Validity of Contemplated Transaction. Neither the execution and
delivery of this Agreement nor the consummation of the transactions provided for
herein will violate any agreement to which Westower is a party or by which it is
bound, or any law, order or decree or any provisions of its Articles of
Incorporation or By-laws.
5.3. Investment Representations The Limited Stock being delivered pursuant
to this Agreement will be held by Westower for its own account and not with a
view to, or for resale in connection with a distribution thereof.
5.4. Litigation.
(a) There is no litigation, proceeding or governmental investigation
pending, or to the knowledge of the officers and directors of Westower,
against or relating to Westower, or its properties or businesses, and
(b) Westower is not knowingly in default with respect to any order, writ,
injunction or decree of any court or federal, state, provincial, municipal
or governmental department, commission, board, bureau, agency or
instrumentality.
5.5. Conduct of Business. The Stockholder represents and warrants and
agrees with respect to Limited that, until all transfers contemplated hereunder
have been consummated, except as otherwise approved by Westower:
6.1. Business in the Ordinary Course. Limited shall refrain from engaging
in transactions other than in the ordinary course of business. Limited shall
also refrain from entering into any transaction involving a capital expenditure
(including any borrowings in connection with such transaction) of more than
$5,000 or the disposal of any property or asset (other than in the ordinary
course of business) with a value of more than $5,000 or the disposal of any
property or asset (other than inventory in the ordinary course of business) with
a value of more than $5,000.
6.2. Accounting and Credit Changes. Limited shall not make any changes in
its accounting procedures and practices or its credit criteria from those in
existence at January 31, 1997.
6.3. Capitalization, Options and Dividends. No changes shall be made in
the Articles of Incorporation of Limited; it shall not issue or reclassify or
alter any shares of outstanding or unissued shares of its capital stock; it
shall not grant options, warrants, or other rights of any kind to purchase, or
agree to issue any shares of its capital stock; it shall not purchase or redeem
or otherwise acquire for a consideration any shares of its capital stock and
shall not declare, pay set aside or make any dividends or other distributions or
payments in respect of its capital stock.
6.4. Encumbrance of Assets. No mortgage, pledge or encumbrance of any of
the properties or assets of Limited shall be made.
6.5. Employment Agreements. Limited shall refrain from entering into any
employment agreements, and shall keep in effect its present salary
administration program (including pension plans and other fringe benefits).
6.6. Real Property Acquisitions, Dispositions and Leases. Limited shall
refrain from acquiring or agreeing to acquire, or disposing or agreeing to
dispose of, real estate and from entering into or agreeing to enter into leases
of real estate or equipment for a period in excess of one year.
6.7 Litigation During Interim Period. Limited will promptly advise
Westower in writing of the commencement or threat against Limited of any claim,
litigation, proceeding or tax audit not covered by insurance when the amount
claimed is in excess of $10,000.
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6.8. Access. Westower and its officers, attorneys, accountants and
representatives shall be permitted to examine the property, books and records of
Limited, and its title to any real estate, and such officers, attorneys,
accountants and representatives shall be afforded access to such property,
books, records and titles, and the Stockholder will upon request furnish
Westower with any information reasonably required in respect to Limited's
property, assets, and business and will provide Westower with copies of any
contract, document or instrument listed in any Schedule hereto.
6.9. Good Will. Limited will use its best efforts to preserve the good
will of its customers and suppliers and others having business relations with
it.
7. Covenants of Westower and the Stockholder.
7.1 Pension Plan. Westower agrees that it will take no action after
Execution Date which would result in an adverse change in the benefits to the
employees covered by Limited's Pension Plan described in Schedule E.
7.2 Employment Agreement. Peter Jeffrey shall have entered into an
Employment Agreement with Limited with annual base compensation payable
thereunder of $75,000 US which provides for a bonus as determined by the
Compensation Committee of Westower and employee benefits as are currently
enjoyed by the principal executive officers of Westower.
7.3 Covenant Not to Compete. The Stockholder agrees that for a period of
five years from and after the Execution Date he will not, unless acting as an
employee or consultant to Westower or Limited or with Westower's written
consent, directly or indirectly, own, manage, operate, join, control or
participate in the ownership of, or be connected as an officer, employee,
partner or otherwise with, any business engaged in any of the businesses which
are presently conducted by Limited within any state or province in which Limited
presently maintains an office, other than by owning not more than 5% of a class
of securities registered under Section 12 of the Securities Exchange Act of 1934
or traded on a Canadian national securities exchange. Each person agrees that
the remedy at law for any breach of the foregoing will be inadequate and that
Limited and Westower shall be entitled, inter alia, to temporary and permanent
injunctive relief without the necessity of proving actual damage to Limited or
Westower.
8. Liability and Responsibility of and Indemnification by Stockholder.
8.1 Subject to other subsections of this Section 8, the Stockholder shall
indemnify and hold harmless Westower and Limited against any and in respect of
any and all liability, damage, loss, cost and expenses arising out of or
otherwise in respect of :
(a) any misrepresentation, breach or warranty or non-fulfillment of any
agreement or covenant or from any misrepresentation in or omission from any
Schedule or list contained in this Agreement, certificate or other
instrument furnished by the Stockholder, and
(b) any and all actions, suits, proceedings, audits, judgments, costs and
legal and other expenses incident to any of the foregoing or to the
enforcement of this Section 8;
provided, however, that the Stockholder shall not be liable to Westower under
this Agreement for any matter, other than matters relating to taxes, which was
not set forth in a claim presented in writing to the Stockholder pursuant to
Section 21 within four years from the date of execution hereof. Notwithstanding
anything to the contrary herein, the Stockholder shall be liable, responsible or
obligated to indemnify Westower for claims hereunder this Section 8, only if the
aggregate amount of such claims exceeds $15,000. The total liability and
responsibility of the Stockholder under this Section 8 shall be Limited to the
aggregate purchase price received under this Agreement.
8.2 Promptly after the receipt by any party hereto of notice of any claim
or the commencement of any action or proceeding, such party will, if a claim
with respect thereto is to be made
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against any party obligated to provide indemnification (the "Indemnifying
Party") pursuant to this Section 9, give such indemnifying Party written notice
of such claim or the commencement of such action or proceeding. Such
Indemnifying Party shall have the right, at its option and upon posting a bond
or other security equal to such claims, to compromise or defend, at its own
expense and by its counsel, any matter involving the asserted liability of the
party seeking such indemnification. Such notice, and opportunity to defend,
shall be a condition precedent to any liability of the Indemnifying Party under
the indemnification agreements contained in this Section 8. If any Indemnifying
Party shall undertake to compromise or defend any such asserted liability, it
shall promptly notify the party seeking indemnification of its intention to do
so, and the party seeking indemnification agrees to cooperate fully with the
Indemnifying Party and its counsel in the compromise of, or defense against any
such asserted liability. In any event, the indemnified party shall have the
right at its own expense to participate in the defense of such asserted
liability.
9. Conditions Precedent to Westower's Obligations. All obligations of
Westower under this Agreement are subject to the fulfillment of each of the
following conditions:
9.1 Representations and Warranties. The Stockholder's representations and
warranties contained in this Agreement or in any list, certificate or document
delivered pursuant to the provisions hereof shall be true at and as of the
Execution Date as though made at and as of such time (except to the extent that
they are stated therein to be true as of some other date) and the Stockholder
shall have delivered to Westower a certificate dated the Execution Date and
signed by him to such effect.
9.2 Compliance with Agreements. The Stockholder and Limited shall have
complied with all agreements and conditions required by this Agreement to be
performed by them prior to or at the Execution Date and the Stockholder shall
have delivered to Westower a certificate dated the Execution Date and signed by
him to such effect.
9.3 Directors. The Stockholder shall have taken action by unanimous
Consent or at a meeting duly called to elect to the board of directors of
Limited the following directors: S. Roy Jeffrey, Calvin J. Payne, and Peter
Jeffrey.
9.4 Material Damage. The business and properties of Limited, taken as a
whole, shall not have been and shall not be threatened to be materially
adversely affected in any way as a result of fire, explosion, earthquake,
disaster, accident, labor dispute, flood, drought, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or public enemy.
9.5 Employment Agreement. The Employment Agreement with the person
referred to in Section 7.2 shall have been executed and delivered.
10. Conditions Precedent to Stockholder' Obligations. All obligations of
the Stockholder under this agreement are subject to the fulfillment, prior to or
at the date of execution, of each of the following conditions:
10.1 Representations and Warranties. Westower's representations and
warranties contained in this Agreement or in any certificate or document
delivered pursuant to the provisions hereof shall be true at and as of the time
of Execution Date as though made at and as of such time (except to the extent
that they are stated therein to be true as of some other date) and Westower
shall have delivered to the Stockholder a certificate dated the Execution Date
and signed by its Chairman or President to such effect.
10.2. Compliance with Agreements . Westower shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed by it prior to or at the Execution Date and shall have delivered to
the Stockholder a certificate dated the date of execution and signed by signed
by its Chairman or President to such effect.
<PAGE>
10.3. Material Damage. The business and properties of Westower, taken as
a whole, shall not have been and shall not be threatened to be, affected in any
way materially adverse to the enterprise of Westower as a result of fire,
explosion, earthquake, disaster, accident, labor dispute, flood, drought,
embargo, riot, civil disturbance, uprising, activity of armed forces or act of
God or public enemy.
11. Broker and Finder's Fees. The Stockholder represents and warrants to
Westower that he has not engaged or dealt with any broker for a fee or
commission in respect to the execution of this Agreement or the consummation of
the transactions contemplated hereby. Westower represents and warrants to the
Stockholder and Limited that neither it nor any corporate affiliate has engaged
or dealt with any broker or other person who may be entitled to any brokerage
fee or commission in respect of the execution of this Agreement or the
consummation of the transactions contemplated hereby.
Each of the parties hereto shall indemnify and hold the others harmless
against any and all claims, losses, liabilities or expenses which may be
asserted against such other parties as a result of such first mentioned party's
dealings, arrangements or agreements with any such broker or person.
12. Survival of Representations and Warranties. All representations,
warranties and agreements, made by Westower, Limited and the Stockholder in this
Agreement or pursuant hereto shall survive the Execution Date for a period of
not to exceed four years, except for representations, warranties and agreements
relating to taxes of all kinds which shall survive until all claims based
thereon shall have been barred by the relevant statutes of limitations.
Notwithstanding any investigations or audit conducted before or after the
Execution Date, the parties shall be entitled to rely upon the representations
and warranties set forth in this Agreement.
13 Expenses. Except as provided in Section 3.1, the Stockholder shall
bear his expenses, and Westower shall bear its expenses, in connection with the
transactions contemplated thereby.
14. Announcements. Westower and the Stockholder will cause Limited to
cooperate with each other as to the timing and content of any announcements of
the transactions contemplated hereby to the general public or to employees,
customer and suppliers.
15. Further Actions and Assurances. Westower and the Stockholder will
execute and deliver any and all documents, and will cause any and all other
action to be taken, either before or after the Execution Date, which may be
necessary or proper to effect or evidence the provisions of this Agreement and
the transactions contemplated hereby.
16. Counterparts. This Agreement may be executed in several counterparts
each of which is an original and the Stockholder may become a party hereto by
executing a counterpart hereof. This Agreement and any counterpart so executed
shall be deemed to be one and the same instrument. It shall not be necessary in
making proof of this Agreement or any counterpart hereof to produce or account
for any of the other counterparts.
17. Contents of Agreement; Parties in Interest. This Agreement sets forth
the entire understanding of the parties. Any previous agreements or
understandings between the parties regarding the subject matter hereof are
merged into and superceded by this Agreement. All representations, warranties,
covenants, terms, conditions and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
legal representatives, successors and assigns of the Stockholder and Westower.
18. Washington Law to Govern. This Agreement is being delivered and is
intended to be performed in the State of Washington and shall be construed and
enforced in accordance with the laws thereof.
<PAGE>
19. Section Headings and Gender. The section headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict the terms or provisions hereof. The use of the masculine pronoun
herein when referring to any party has been for convenience only and shall be
deemed to refer to the particular party intended regardless of the actual gender
or such party.
20. Schedules. All Schedules referred to in this Agreement are intended to
be and are hereby specifically made a part of this agreement.
21. Notices. All notices, requests and other communications which are
required or permitted hereunder shall be sufficient if given in writing and
delivered personally or by registered or certified mail, postage prepaid, or by
facsimilie followed by an original signed copy, as follows: (or to such other
addressee as shall be set forth in a notice given in the same manner):
If to Westower: Westower Corporation
7001 NE 40th Avenue
Vancouver, Washington 98661
Facsimilie No. (360) 750-9354
If to Stockholder: Peter Jeffrey
P. O. Box 390
Thorsby, Alberta, Canada TOC OVO
22. Confidential Information. Notwithstanding any termination of this
Agreement, Westower and its corporate affiliates and its representatives agree
to hold in confidence any information not generally available to the public or
trade received by them from Limited or the Stockholder pursuant to the terms of
this Agreement.. If this Agreement is terminated for any reason, Westower, its
corporate affiliates and its representatives will continue to hold such
information in confidence and will, to the extent requested by Limited, promptly
return to Limited all written materials furnished to Westower, its corporate
affiliates or representatives pursuant hereto.
IN WITNESS WHEREOF, this Agreement has been executed on the 7th day of May
1998.
Westower Corporation
Attest:
By: /s/ Calvin J. Payne
_________________________
Calvin J. Payne, Chairman
/s/ Peter Lucas
___________________
Secretary
411677 Limited Ltd.
Attest;
By: /s/ Peter Jeffrey
________________________
Peter Jeffrey, President
___________________
Secretary
Stockholder:
/s/ Peter Jeffrey
___________________________
Peter Jeffrey
<PAGE>
List of Schedules
Schedule A List of the Stockholder and the number of shares of the Capital
Stock of Limited owned by the Stockholder-Recital A, Section 4.2.
Schedule B Litigation-Section 4.7 [To be prepared by the Stockholder]
Schedule C Insurance Section 4.8 [To be prepared by the Stockholder]
Schedule D Patents, Trademarks, and Copyrights-Section 4.9-[To be prepared by
the Stockholder]
Schedule E Contracts and Commitments-Section 4.10 -[To be prepared by the
Stockholder]
Schedule F Existing Condition Section 4.13--[To be prepared by the Stockholder]
Schedule G Transactions with Affiliates 4.16 --[To be prepared by the
Stockholder]
Schedule H Bank Account Information 4.19 --[To be prepared by the Stockholder]
