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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
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 10, 1998
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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 (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
7001 N.E. 40TH AVENUE, VANCOUVER, WASHINGTON 98661
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(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (360) 750-9355
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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On November 10, 1998, Westower Corporation (the "Company") completed the
acquisition of Summit Communications, LLC, a Mississippi limited liability
company ("Summit"), pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") with Summit, the members of Summit (the "Members") and Westower
Summit Acquisition, LLC, a Mississippi limited liability company and a wholly-
owned subsidiary of the Company ("Sub"). Pursuant to the terms of the Merger
Agreement, Sub was merged with and into Summit. Summit, headquartered in
Jackson, Mississippi, provides construction and related services to providers of
wireless communication services. The acquisition further extends the Company's
reach into the southeastern and south central states. The Company intends to
use the assets of Summit as they were used prior to the merger.
Under the terms of the Merger Agreement, the total consideration paid at
closing by the Company to the Members was $4,400,000 in cash and 200,000 shares
of Westower common stock, par value $.01 per share ("Westower Stock"). The
Members may also receive an earnout of up to 100,000 shares of Westower Stock,
based upon the number of certain "build-to-suit" towers completed during the
three years immediately following closing. The merger price was determined by
arms-length negotiations between the parties. The cash portion of the merger
price was paid out of the Company's cash on hand.
The foregoing description is qualified in its entirety by reference to the
Merger Agreement, a copy of which is attached hereto as Exhibit 2.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(a) Financial Statements of Business Acquired.
To be filed by amendment on Form 8-K/A within 60 days after the date this
Current Report is required to be filed.
(b) Pro Forma Financial Information.
To be filed by amendment on Form 8-K/A within 60 days after the date this
Current Report is required to be filed.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of November 10, 1998, among
Westower Corporation, Westower Summit Acquisition, LLC, Summit
Communications, LLC and the Members of Summit Communications, LLC.*
2.2 Registration Rights Agreement, dated as of November 10, 1998, among
Westower Corporation and the Members of Summit Communications, LLC.
2.3 Employment Agreement, dated as of November 10, 1998, between Summit
Communications, LLC and Mark J. Shapley.
2.4 Employment Agreement, dated as of November 10, 1998, between Summit
Communications, LLC and Mike A. Jarvis.
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* The schedules to this document are not being filed herewith but will be
furnished to the Securities and Exchange Commission upon request.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTOWER CORPORATION
Date: November 20, 1998 By: /s/ Peter Lucas
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Peter Lucas, Senior Vice President,
Chief Financial Officer, Treasurer
and Secretary
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Exhibit Index
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Exhibit
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2.1 Agreement and Plan of Merger, dated as of November 10, 1998, among Westower
Corporation, Westower Summit Acquisition, LLC, Summit Communications, LLC
and the Members of Summit Communications, LLC.*
2.2 Registration Rights Agreement, dated as of November 10, 1998, among
Westower Corporation and the Members of Summit Communications, LLC.
2.3 Employment Agreement, dated as of November 10, 1998, between Summit
Communications, LLC and Mark J. Shapley.
2.4 Employment Agreement, dated as of November 10, 1998, between Summit
Communications, LLC and Mike A. Jarvis.
__________
* The schedules to this document are not being filed herewith but will be
furnished to the Securities and Exchange Commission upon request.
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Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WESTOWER CORPORATION,
WESTOWER SUMMIT ACQUISITION, LLC,
SUMMIT COMMUNICATIONS, LLC
AND
THE MEMBERS OF SUMMIT COMMUNICATIONS, LLC
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TABLE OF CONTENTS
<TABLE>
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Page
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ARTICLE 1. THE MERGER.......................................................... 2
1.1 Merger.............................................................. 2
1.2 Certificate of Formation............................................ 2
1.3 Operating Agreement................................................. 2
ARTICLE 2. CONVERSION AND EXCHANGE OF MEMBERSHIP INTERESTS..................... 2
2.1 Merger Terms........................................................ 2
2.2 Closing............................................................. 3
ARTICLE 3. DEFAULT............................................................. 3
3.1 Default at Closing.................................................. 3
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SUMMIT AND THE
INDIVIDUAL MEMBERS.................................................. 4
4.1 Organization Standing and Qualification............................. 4
4.2 Membership Interests................................................ 4
4.3 No Subsidiaries, Partnerships or Joint Ventures..................... 4
4.4 Financial Statements................................................ 4
4.5 Title to Properties................................................. 5
4.6 Tax Matters......................................................... 5
4.7 Litigation and Labor Matters........................................ 6
4.8 Patents, Trademarks, and Copyrights................................. 7
4.9 Contracts and Commitments........................................... 7
4.10 Absence of Undisclosed Liabilities.................................. 8
4.11 Existing Condition.................................................. 8
4.12 Validity of Contemplated Transactions............................... 8
4.13 Licenses and Permits and Compliance with Laws....................... 9
4.14 Transactions with Affiliates........................................ 9
4.15 Bank Accounts....................................................... 9
4.16 Summit's Employees.................................................. 9
4.17 Environmental Liabilities........................................... 10
4.18 Accounts Receivable................................................. 11
4.19 Books and Records................................................... 11
4.20 Insurance........................................................... 11
4.21 Employee Benefit Plans.............................................. 11
4.22 Investment Representations.......................................... 12
4.23 Information Related to Westower..................................... 13
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(i)
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ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF WESTOWER
AND SUB............................................................. 13
5.1 Organization, Good Standing and Authority........................... 13
5.2 Validity of Contemplated Transaction................................ 13
5.3 Westower SEC Filings................................................ 14
5.4 Material Changes.................................................... 14
5.5 Entity Classification............................................... 14
ARTICLE 6. COVENANTS........................................................... 14
6.1 Business in the Ordinary Course..................................... 14
6.2 Accounting and Credit Changes....................................... 14
6.3 Capitalization, Options and Dividends............................... 14
6.4 Encumbrance of Assets............................................... 14
6.5 Employment Agreements............................................... 15
6.6 Access.............................................................. 15
6.7 Good Will........................................................... 15
6.8 Exclusive Rights to Westower........................................ 15
6.9 Maintenance of Property............................................. 15
6.10 No New Material Agreements.......................................... 15
6.11 Compensation........................................................ 15
6.12 Indebtedness........................................................ 15
6.13 Cooperation......................................................... 16
ARTICLE 7. POST-CLOSING COVENANTS.............................................. 16
7.1 Personal Guarantees................................................. 16
7.2 Sale of the Westower Stock.......................................... 16
7.3 Registration Rights................................................. 17
7.4 Westower SEC Filing Obligations..................................... 17
7.5 Removal of Legend on Certificates Representing the Westower Stock... 17
7.6 Employment Agreements. At the Closing Summit,..................... 17
7.7 Covenant Not to Compete............................................. 17
7.8 Election to Close Books............................................. 19
7.9 Audit............................................................... 19
ARTICLE 8. INDEMNIFICATION..................................................... 19
8.1 Indemnification of Westower......................................... 19
8.2 Indemnification by Westower......................................... 20
8.3 Indemnification Procedure for Third-Party Claims.................... 20
ARTICLE 9. CONDITIONS PRECEDENT TO WESTOWER'S AND SUB'S
OBLIGATIONS......................................................... 20
9.1 Representations and Warranties...................................... 20
9.2 Compliance with Agreements.......................................... 21
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9.3 Opinion of Counsel.................................................. 21
9.4 Material Damage..................................................... 21
9.5 Employment Agreements............................................... 21
9.6 Other Approvals..................................................... 21
9.7 No Litigation....................................................... 22
ARTICLE 10. CONDITIONS PRECEDENT TO MEMBERS' OBLIGATIONS........................ 22
10.1 Representations and Warranties...................................... 22
10.2 Compliance with Agreements.......................................... 22
10.3 Opinion of Counsel.................................................. 22
10.4 Material Damage..................................................... 22
10.5 Agreements.......................................................... 22
10.6 Other Approvals..................................................... 23
10.7 No Litigation....................................................... 23
10.8 Waivers and Consents Obtained....................................... 23
ARTICLE 11. MISCELLANEOUS....................................................... 23
11.1 Broker Fees......................................................... 23
11.2 Survival of Representations and Warranties.......................... 23
11.3 Knowledge........................................................... 23
11.4 Expenses............................................................ 23
11.5 Announcements....................................................... 24
11.6 Further Actions and Assurances...................................... 24
11.7 Counterparts........................................................ 24
11.8 Contents of Agreement; Parties in Interest.......................... 24
11.9 Mississippi Law to Govern........................................... 24
11.10 Section Headings and Gender......................................... 24
11.11 Schedules........................................................... 24
11.12 Notices............................................................. 24
11.13 Confidential Information............................................ 25
</TABLE>
(iii)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is entered as of the 10th day of
November, 1998 by and among WESTOWER CORPORATION, a Washington corporation
("Westower"), WESTOWER SUMMIT ACQUISITION, LLC, a Mississippi limited liability
company and wholly-owned subsidiary of Westower ("Sub"), SUMMIT COMMUNICATIONS,
LLC, a Mississippi limited liability company ("Summit"), and MARK J. SHAPLEY
("Shapley"), MIKE A. JARVIS ("Jarvis"), THE MARK J. SHAPLEY CHILDREN'S TRUST
(the "Shapley Trust"), and THE MIKE A. JARVIS CHILDREN'S TRUST (the "Jarvis
Trust"), being all the members of Summit (each a "Member" and together the
"Members"). Shapley and Jarvis are referred to herein as the "Individual
Members," and the Shapley Trust and the Jarvis Trust are referred to herein as
the "Trust Members".
RECITALS:
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A. All of the membership interests of Summit (individually, a "Summit
Interest" and, collectively, the "Summit Interests") are owned by the Members as
follows:
Name Membership Interest
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Shapley 45%
Jarvis 45%
Shapley Trust 5%
Jarvis Trust 5%
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TOTAL 100%
Each Member's Summit Interest is referred to herein as such Member's "Pro
Rata Share."
B. The board of directors of Westower, the Manager and Member of Sub, and
the Members of Summit deem it advisable and in the best interest of Sub and
Summit that Sub merge with and into Summit (the "Merger") pursuant to this
Agreement and Plan of Merger and the applicable provisions of the laws of the
State of Mississippi.
AGREEMENTS
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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 Agreement and Plan of Merger (the "Agreement"):
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ARTICLE 1.
THE MERGER
1.1 MERGER. Upon the filing of the Certificate of Merger with the
Secretary of State of the State of Mississippi, in the form attached to this
Agreement as EXHIBIT 1.1, Sub shall be merged with and into Summit pursuant to
this Agreement, the separate existence of Sub shall cease, and Summit shall
survive as a limited liability company organized under and governed by the laws
of the State of Mississippi. Summit, as it exists from and after the Merger, is
sometimes referred to as the "Surviving Company."
1.2 CERTIFICATE OF FORMATION. The Certificate of Formation of Summit in
effect immediately prior to the Merger shall be amended and restated as set
forth in Attachment A to the Certificate of Merger and, as so amended and
restated, shall be the Certificate of Formation of the Surviving Company until
amended in accordance with applicable law.
1.3 OPERATING AGREEMENT. The Operating Agreement of Summit in effect
immediately prior to the Merger shall be amended and restated and, as so amended
and restated, shall be the Operating Agreement of the Surviving Company until
amended in accordance with applicable law.
ARTICLE 2.
CONVERSION AND EXCHANGE OF MEMBERSHIP INTERESTS
2.1 MERGER TERMS.
(a) The consideration to be paid to the Members in the Merger (the "Merger
Consideration") is set forth in this Section. The Merger Consideration shall
consist of (i) $4,400,000 in cash; plus (ii) 200,000 shares of common stock, par
value $.01 per share, of Westower ("Westower Stock"); plus (iii) up to an
additional 100,000 shares of Westower Stock pursuant to the terms of the formula
set forth in Section 2.1(b). In the Merger, each Member's Summit Interest shall
be converted into and become the right to receive its Pro Rata Share of the
Merger Consideration.
(b) In addition to the Merger Consideration set forth in Section 2.1(a)(i)
and 2.1(a)(ii) above, each Member shall receive such Member's Pro Rata Share of
an additional 333 shares of Westower Stock upon the completion by Summit, during
the three-year period immediately after the Closing Date, of the construction of
each "build-to-suit" wireless communications transmitting and receiving tower to
be constructed and owned by Summit and leased in whole or in part to Mercury
Communications Company or an affiliate designated by it ("Mercury"), all
pursuant to a contract or contracts between Summit and Mercury and approved in
writing by Westower (the "Earnout"). In no event shall the aggregate Earnout
either paid or payable to the Members exceed 100,000 shares of Westower Stock.
No fractional shares of Westower Stock will be issued. The number of shares to
be issued to each Member will be rounded downward to the nearest whole share and
cash will be
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paid in lieu of any fraction based upon the closing price of Westower Stock on
the American Stock Exchange on the trading day immediately preceding the date of
payment.
(c) The membership interest of Sub shall be converted into and become the
sole membership interest in the Surviving Company.
2.2 CLOSING. The closing (the "Closing") of the Merger shall take place
at the offices of Morgan, Lewis & Bockius LLP, 2000 One Logan Square,
Philadelphia, Pennsylvania 19103 at 2:00 p.m. on the date of execution and
delivery of this Agreement or on such other date as the parties hereto may
mutually agree upon (the "Closing Date"). At the Closing, the Members shall
deliver or cause to be delivered, (i) free and clear of all liens and
encumbrances, claims and other charges thereon of every kind their respective
Summit Interests; (ii) signed Employment Agreements, as described in Section 7.6
of this Agreement; (iii) a signed Registration Rights Agreement, as described in
Section 7.3 of this Agreement; (iv) the signed Certificate of Merger, as
described in Section 1.1 of this Agreement; and (v) the other deliveries
required by this Agreement. At Closing, Westower shall deliver or cause to be
delivered (i) the cash portion of the Merger Consideration, in immediately
available funds; (ii) an irrevocable authorizing letter to its transfer agent
directing that the transfer agent issue certificates for Westower Stock, free
and clear of all liens and encumbrances, claims and charges thereon of every
kind, to the Members in the respective amounts determined pursuant to Section
2.1 of this Agreement and deliver the certificates by overnight mail; (iii) a
signed Registration Rights Agreement, as described in Section 7.3 of this
Agreement; (iv) signed Employment Agreements, as described in Section 7.6 of
this Agreement; (v) the signed Certificate of Merger, as described in Section
1.1 of this Agreement; and (vi) the other deliveries required by this Agreement.
ARTICLE 3.
DEFAULT
3.1 DEFAULT AT CLOSING. If Summit or any of the Members, on one hand, or
Westower and Sub, on the other hand, fails or refuses to consummate the
transactions described in this Agreement, the other at its option, may refuse to
complete the transaction and thereby terminate all of its obligations hereunder.
Such refusal shall not limit any remedies available to the parties for breach of
this Agreement.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
OF SUMMIT AND THE INDIVIDUAL MEMBERS
To induce Westower and Sub to enter into this Agreement and consummate the
transactions contemplated hereby, (i) Summit (except as to Sections 4.22 and
4.23) and each of the Individual Members jointly and severally represent and
warrant to Westower and Sub that the statements
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contained in this Article 4 are true and complete, and (ii) each of the Trust
Members represents and warrants that the statements contained in Sections 4.22
and 4.23 are true and complete as to such Trust Member:
4.1 ORGANIZATION STANDING AND QUALIFICATION. Summit is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Mississippi, and has all requisite power and authority 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 Certificate of
Formation and all amendments thereto of Summit certified by the Secretary of
State of Mississippi and a complete and correct copy of its Operating Agreement
and all amendments thereto, certified by the Individual Members, have been
delivered to Westower. Summit is duly qualified to do business and is in good
standing to do business as a foreign limited liability company in those
jurisdictions listed in Schedule 4.1, which constitute all jurisdictions in
which the failure to so qualify would have a material adverse effect on Summit's
business or the ownership of its property.
4.2 MEMBERSHIP INTERESTS. The Members are the lawful owners of record and
beneficially of the Summit Interests, as set forth in the recitals to this
Agreement, free and clear of all liens and encumbrances, claims and charges of
every kind, and the Summit Interests represent all of the ownership interests in
Summit.
4.3 NO SUBSIDIARIES, PARTNERSHIPS OR JOINT VENTURES. Summit owns no
equity interest in any corporation, limited liability company, joint venture,
partnership or other entity.
4.4 FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 4.4 are copies of
the following financial statements:
(a) Balance Sheets. Balance sheets of Summit as of September 30, 1998 (the
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"Balance Sheet Date") (unaudited) and December 31, 1997 (audited by Shearer,
Taylor & Co., P.A.), which balance sheets together with the notes to the
financial statements present fairly the financial condition and assets and
liabilities of Summit as of their respective dates in accordance with generally
accepted accounting principles consistently applied except as may be otherwise
disclosed therein. The balance sheet as of September 30, 1998 is hereinafter
referred to as the "1998 Balance Sheet."
(b) Statements of Income, etc. A statement of income of Summit for the
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nine months ended September 30, 1998 (unaudited) and statements of income,
members' equity and cash flows of Summit for the period commencing May 24, 1997
(the date of inception) and ending on December 31, 1997 (audited by Shearer,
Taylor & Co., P.A.), which statements, together with any notes to the respective
financial statements present fairly the income, changes in members' equity and
cash flows of Summit for such periods in accordance with generally accepted
accounting principles consistently applied except as may be otherwise disclosed
therein.
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4.5 TITLE TO PROPERTIES. Summit has good and marketable title to all of
its properties and assets reflected in the 1998 Balance Sheet (except properties
and assets sold or otherwise disposed of since the Balance Sheet Date in the
normal and ordinary course of business), free and clear of all mortgages, liens,
pledges, charges or other encumbrances of any nature whatsoever, except (i) any
mortgages, liens, pledges, charges or other encumbrances disclosed in the 1998
Balance Sheet; (ii) liens for current taxes not yet due and payable, or (iii)
encumbrances disclosed in SCHEDULE 4.5. Except as set forth on SCHEDULE 4.5,
Summit neither owns nor formerly owned any real estate.
4.6 TAX MATTERS. Except as set forth in the attached SCHEDULE 4.6:
(a) Summit has timely filed all Tax Returns (as hereinafter defined) that
it was required to file for all periods prior to the Closing Date. All such Tax
Returns were correct and complete, and all Taxes (as hereinafter defined) owed
by Summit (whether or not shown on any Tax Return) for periods ending on or
before August 31, 1998 have been paid or properly accrued on the 1998 Balance
Sheet. Summit is not currently the beneficiary of any extension of time within
which to file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where Summit does not file Tax Returns that it is nor may be
subject to taxation by that jurisdiction. There are no liens on any of the
assets of Summit that arose in connection with any failure (or alleged failure)
to pay any Tax.
(b) Summit has complied with all laws relating to the withholding of Taxes.
(c) Summit has made a valid election to be treated as an S corporation ("S
Corporation") within the meaning of Section 1361 of the Internal Revenue Code of
1986, as amended (the "Code"), and such election has been in effect for each of
the Company's taxable years since its inception. The Company has qualified and
will qualify as an S corporation at all times from election up to and including
the Closing Date. The Company has not been and will not be subject to any Taxes
pursuant to Section 1363(d) or Section 1374 of the Code at any time up to and
including the Closing Date.
(d) There is no outstanding unresolved Tax deficiency of Summit, and no Tax
Returns filed with respect to Summit currently are the subject of an audit.
(e) Summit has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency.
(f) Summit is not a party to any tax-sharing agreement and has no liability
for the tax obligations of any other taxpayer.
For purposes of this Agreement, "Tax" means any federal, state, local,
or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code section 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability,
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real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
For purposes of this Agreement, "Tax Return" means any return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
4.7 LITIGATION AND LABOR MATTERS. Except as disclosed in SCHEDULE 4.7
attached hereto, Summit is not aware of and has not been served with any notice
or claim by any governmental agency, customer, employee or any other party
whatsoever relating to:
(a) any environmental claim associated with operations of Summit or the
ownership or operations of any property or properties by Summit;
(b) any claim of non-compliance by Summit under any occupational safety or
health law;
(c) any negligence claims or errors and omissions claims with respect to
any services performed by or goods or products sold by Summit;
(d) any violation of any law or regulation or any term or condition of any
permit or licence held by Summit;
(e) any workers' compensation statute and any other applicable equal
employment opportunity or discrimination, wage and hour, collective bargaining
agreement, wrongful discharge, personnel or other employment related statutes,
law or common law rights of any type or description; or
(f) any other litigation of any type related in any way to the business and
operations of Summit.
4.8 PATENTS, TRADEMARKS, AND COPYRIGHTS. SCHEDULE 4.8 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
Summit or in which Summit has an interest and the nature of such interest. No
other patent, trademark, service mark, copyright or license is necessary to
permit the business of Summit to be conducted as it is now 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. To the knowledge of
Summit, it is not infringing on, and has not been served with any notice or
claim alleging that it is infringing, any patent, trademark, or service mark or
copyright or otherwise violating the intellectual property rights, of any third
party.
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4.9 CONTRACTS AND COMMITMENTS. Except as listed and identified in
SCHEDULE 4.9 attached hereto or contemplated by this Agreement, Summit is not a
party to any written or oral:
(a) contract or commitment with any 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 that individually total $10,000 or more;
(d) contract or commitment to sell or supply products or to perform
services that individually total $10,000 or more without the ability on the part
of Summit to increase such price or to cancel the contract or commitment without
any liability on the part of Summit;
(e) contract or commitment continuing over a period of more than six months
from the date of this Agreement;
(f) lease under which it is either lessor or lessee (and other than the
assets leased pursuant to leases listed on SCHEDULE 4.9, there are no other
material assets or properties necessary or utilized in the business and
operations of Summit that are not owned by Summit);
(g) 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 the Employee
Retirement Income Security Act of 1974 ("ERISA"), formal or informal, in effect
with respect to any of Summit's employees or former employees (collectively, the
"Plans");
(h) contract or commitment for the borrowing of money or other agreement or
arrangement for a line of credit;
(i) contract or commitment for any charitable contribution;
(j) contract or commitment for capital expenditures in excess of $10,000;
(k) contract or commitment for limiting or restraining it from engaging in
any lines of business with any person, firm, corporation or any other entity;
(l) contract not made in the ordinary course of business
(m) license agreement; or
(n) representative or sales agency agreement.
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Except as stated in SCHEDULE 4.9 hereto and for delays, minor failures to
meet specifications or other minor defaults which are normal in the conduct of
the business between Summit and other parties to the above contracts, Summit has
complied with the provisions thereof, is not in default thereunder, and to the
knowledge of the Individual Members, all other parties to the above contracts
have complied with the provisions thereof, are not 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.
4.10 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed on SCHEDULE
4.9 attached hereto, Summit has no liabilities or obligations of any nature
whatsoever, whether accrued, absolute, contingent, known or unknown, or
otherwise, and Summit does not know of any basis for assertion against Summit of
any such liability or obligation except (i) to the extent reflected in the 1998
Balance Sheet and not heretofore paid or discharged and (ii) accounts payable
and accrued expenses incurred, consistently with past business practice, in or
as a result of the normal and ordinary course of business since the Balance
Sheet Date.
4.11 EXISTING CONDITION. Except as disclosed in SCHEDULE 4.11 hereto,
since December 31, 1997, there has not been (i) any material adverse change in
the financial condition or in the results of operations, business or properties
of Summit; (ii) any material damage, destruction or loss, whether or not covered
by insurance, affecting the operations, business or properties of Summit; (iii)
any declaration, setting aside or payment of any distribution in respect of the
Summit Interests, or any redemption, purchase or other acquisition of any kind
of any Summit Interests; (iv) any increase in the compensation payable by Summit
to any of its managers, members or employees; or (v) any change in the terms of
any bonus, insurance, pension or other benefit plan for or with any manager,
member or employee which increases amounts paid, payable to or to become payable
thereunder.
4.12 VALIDITY OF CONTEMPLATED TRANSACTIONS. Neither the execution and
delivery of this Agreement nor the consummation of the transactions provided for
herein will violate any material agreement to which Summit is a party or by
which it is bound or any law, order or decree or any provision of the
Certificate of Formation or Operating Agreement of Summit. Summit, and the
Members have 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 Summit and the Members legally binding upon
them in accordance with its terms.
4.13 LICENSES AND PERMITS AND COMPLIANCE WITH LAWS. Summit has all
material licenses and permits necessary to the conduct of the business of Summit
as presently conducted and in the conduct of its business has complied in all
material respects with all applicable laws and regulations.
4.14 TRANSACTIONS WITH AFFILIATES. No member, manager or employee of
Summit 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
Summit
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except as described in SCHEDULE 4.14 attached hereto. All relationships
described in SCHEDULE 4.14 will terminate as of the Closing Date, unless
expressly stated to the contrary in such Schedule.
4.15 BANK ACCOUNTS. SCHEDULE 4.15 attached hereto contains a true and
correct list of the name and location of each bank in which Summit has an
account, each safety deposit box or custody agreement and the names of the
persons authorized to draw thereon or to withdraw therefrom.
4.16 SUMMIT'S EMPLOYEES. SCHEDULE 4.16 attached hereto sets forth a list
of Summit's employees, their positions and rates of compensation. Except as
disclosed on SCHEDULE 4.9 attached hereto, there are no outstanding claims for
wages, vacations, or other benefits or compensation of any type or description,
whether currently payable or deferred under any defined benefit pension plan,
any defined contribution pension plan, any implied or deemed employee benefit or
plan, or any welfare plan or otherwise or any other policy, program or practice,
whether formal or informal, by any of Summit's employees or any other
individuals covered by or eligible under such plans or programs, other than
wages that will become due for current pay periods and/or benefits that have
accrued through the Closing Date and will become payable in the future. Except
as disclosed on Schedule 4.16, there are no existing or, to the knowledge of the
Individual Members, threatened claims by any of Summit's employees with respect
to any applicable workers' compensation, worker health or safety, equal
employment opportunity or discrimination, wage and hour, wrongful discharge,
personnel or other employment related statutes, laws or common law rights of any
type or description. Except as disclosed on SCHEDULE 4.9 attached hereto, there
is no collective bargaining agreement in existence between Summit and a
collective bargaining representative for any of Summit's employees, and during
the one (1) year period immediately preceding the date of this Agreement, there
has not been any union organizing activities or proceedings involving, or any
petitions for election of or demands for recognition by, a labor union or labor
organization as the exclusive bargaining agent for any of Summit's employees.
Summit has not received notice of any proceeding involving Summit currently
pending before the National Labor Relations Board, including but not limited to
any wherein a labor organization is seeking representation of any of Summit's
employees.
4.17 ENVIRONMENTAL LIABILITIES. Except as disclosed on SCHEDULE 4.17
attached hereto, in the operation of the business of Summit at any time prior to
the Closing Date, including but not limited to the ownership or operation of any
real properties, Summit: (a) has not been in material violation of any common
law or any federal foreign, state or local laws, regulations, statutes or
ordinances relating to personal injury arising out of Hazardous Substances (as
such term is hereinafter defined) or protection of the environment
(collectively, the "Environmental Laws"); (b) possesses all of the material
permits, licenses, approvals and identification numbers required under any
Environmental Laws for the operation of each of Summit's offices, manufacturing
or warehouse facilities and communication sites (collectively, the "Facilities")
in the manner in which any such facility is presently operated; (c) is in
compliance in all material respects with all permits, licenses and approvals
required by any of the Environmental Laws for the operation of each of the
Facilities in the manner in which each such facility is currently being
operated, except for such non-compliance as would not be reasonably expected to
lead to imposition of penalties or similar
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sanctions by regulatory agencies; (d) is not aware of any conditions that will
affect the continued validity after the Closing Date of all such permits,
licenses and approvals required by any Environmental Laws for the operation of
any of the Facilities in the manner in which it is currently being operated; (e)
is not aware of the existence of any pending or threatened suits, proceedings,
investigations or claims with respect to sites of, or the operations conducted
at any of the Facilities relating to the enforcement of any Environmental Laws
or to determine the existence of any environmental liabilities; (f) is not aware
of the existence of any pending or threatened suits, proceedings or claims by
any third parties for damages or injunctive relief arising out of the presence
of any emissions, discharges, releases or threatened releases, storage,
transportation or the handling of pollutants, contaminants, regulated wastes or
hazardous wastes (collectively, the Hazardous Substances) on or off the sites of
any of the Facilities allegedly caused, directly or indirectly, by the
operations of Summit at any such facility; (g) is not aware of the existence of
any citizen complaint relating to the site of any of the Facilities or the
operations of Summit at any such facility; (h) other than normal wear and tear
on equipment that may alter its performance, is not aware of any existing
circumstances that may interfere with the continued compliance with any existing
permit, license or approval required by statute or regulations for the operation
of any of the Facilities in the manner in which it is presently operated, except
for such non-compliance as would not be reasonably expected to lead to
imposition of penalties or similar sanctions by regulatory agencies; (i) is not
aware of the occurrence of any spill discharge, deposit or other release of any
Hazardous Substances, in excess of reportable quantities under Federal or state
environmental laws and which has led or is likely to lead to enforcement actions
by governmental agencies, at any of the Facilities caused, directly or
indirectly, by Summit; (j) is not aware of any asbestos conditions at any of the
Facilities; (k) is not aware of any transformers, fixtures or other electrical
equipment containing PCB's installed in, affixed to or located at any of the
Facilities; (l) is not aware of any storage tanks for petroleum or hazardous
substances located at any of the Facilities, whether above ground, underground
or within a structure; (m) is not aware of any current or prior use of the
premises of the Facilities which would give rise to liability under any
Environmental Laws; and (n) is not aware of any potential liability under any
Environmental Laws arising out of any pre-Closing utilization of or operations
at any of the Facilities by Summit or other third parties and has not been
placed on notice of any claim of any governmental agency or other regulatory
body claiming violation of any Environmental Laws or requiring any remediation
or cleanup with respect to any of the Facilities or requiring any change in the
means or methods of operation of any such facility.
4.18 ACCOUNTS RECEIVABLE. Except as disclosed on SCHEDULE 4.18 attached
hereto, all accounts receivable of Summit reflected on the 1998 Balance Sheet
are bona fide and have arisen in the ordinary course of business. The 1998
Balance Sheet contains adequate provision for doubtful accounts set forth on the
1998 Balance Sheet.
4.19 BOOKS AND RECORDS. Summit has furnished to Westower's
representatives for their examination true and complete copies of (a) Summit's
Certificate of Formation and Operating Agreement as currently in effect, (b)
Summit's minute books, which books are complete in all material respects, and
(c) all records, certificates, documents and agreements of any kind relating to
the transfer of any ownership interest in Summit. Such minutes reflect all
documented meetings of
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Summit's Members and Managers, if any, and any committees thereof since Summit's
inception, and accurately reflect in all material respects the events of and
actions taken at such meetings.
4.20 INSURANCE. SCHEDULE 4.20 attached hereto is a certificate of all
policies of fire, liability, title and other forms of insurance held by Summit.
There are no material claims pending thereunder. Except as set forth on
SCHEDULE 4.20, all such policies or similar policies have been in force for
since the inception of Summit and will be in force on the Closing Date in
accordance with their respective terms, including without limitation, with
respect to any insured losses resulting from occurrences prior to the Closing
Date. Summit is not in material default with respect to any provisions of any
such policy and has not failed to give any notice or failed to present any
material claim thereunder, as to which it has knowledge, in due and timely
fashion.
4.21 EMPLOYEE BENEFIT PLANS.
(a) Each of the Plans has been administered in compliance with its terms
and all filing, reporting, disclosure and other requirements of ERISA and the
requirements of the Code have been materially satisfied with respect to each of
the Plans.
(b) No "withdrawal liability" (as that term is used in Section 4201 of
ERISA) has been or is reasonably expected to be assessed against Summit, nor is
Summit otherwise aware of any facts or circumstances that could lead to
assessment of withdrawal liability. Summit has not withdrawn, either partially
or completely, from any multi-employer plans.
(c) Neither any of the Plans nor any trust created thereunder, nor any
trustee or administrator thereof, has engaged in a "prohibited transaction" (as
such term is defined in Section 406 of ERISA) in connection with which any of
the Plans, any such trust, or any trustee or administrator thereof, or any party
dealing with the Plans or any such trust could be subject to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code.
(d) Summit is not aware and has received no notice that it has incurred any
liability to the Pension Benefit Guaranty Corporation ("PBGC") with respect to
any of the Plans or with respect to any other employee benefit plan maintained
or contributed to by Summit that has been terminated or otherwise discontinued
prior to the date of this Agreement. The PBGC has not instituted proceedings to
terminate any of the Plans. Summit has not received any notice of and has no
knowledge of a "reportable event" (within the meaning of Section 4043(b) of
ERISA).
(e) Full payment has been made of all amounts which Summit is required to
pay under the terms of each of the Plans as a contribution to the Plans as of
the last day of the most recent fiscal year of each of the Plans ended prior to
the date of this Agreement. None of the Plans nor any trust established
thereunder has incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, as of
the last day of the most recent
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fiscal year of each of the Plans ended prior to the date of this Agreement or
the most recent contribution date as required under the terms of any such Plans
if later.
(f) Each of the Plans is in compliance in all material respects with
applicable federal, state and local laws, including but not limited to ERISA.
Each of the Plans that is intended to be "qualified" has been administered in
accordance with the requirements of Section 401(a) of the Code, and a
determination letter has been received from the IRS with respect to
qualification of such Plans, and no facts or circumstances exist which would
adversely affect the qualified status of the Plans.
4.22 INVESTMENT REPRESENTATIONS. Each Member acknowledges and understands
that (i) the Westower Stock has not been registered with the Securities and
Exchange Commission (the "SEC") or with any state official or agency and is
being offered and issued pursuant to an exemption from the registration
requirements set forth in the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state blue sky or securities laws, and that no
governmental agency has recommended or endorsed the Westower Stock or made any
finding or determination relating to the fairness of the transaction set forth
herein and (ii) each Member is acquiring the Westower Stock issuable to such
Member hereunder for such Member's own account for investment, with no present
intention of reselling or otherwise distributing the same, except (x) pursuant
to an offering of shares duly registered under the Securities Act or (y) under
other circumstances which do not require registration under the Securities Act
and applicable state securities laws.
4.23 INFORMATION RELATED TO WESTOWER. Each Individual Member is an
"accredited investor" as defined in Rule 501 under the Securities Act. Each
Member has received and had an opportunity to review for a reasonable time
preceding the date of execution of this Agreement certain filings made by
Westower with the SEC under the Securities Act and the Securities Exchange Act
of 1934 (excluding exhibits, unless requested by a Member) (the "Westower SEC
Filings"). Each Member acknowledges that Westower has made available to the
Members the opportunity to ask questions and receive answers concerning Westower
and the Westower Stock and to obtain any additional information which Westower
possesses or can acquire without unreasonable effort or expense that is
necessary to verify the accuracy of such additional information and/or the
Westower SEC Filings. Each Member possesses such knowledge and experience in
financial and business matters or has been advised by such persons who do
possess such knowledge that such Member is capable of evaluating the merits and
risks of the investment in Westower Stock contemplated by this Agreement.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF WESTOWER AND SUB
Westower and Sub represent and warrant to Summit and the Members that the
statements contained in this Article 5 are true and correct:
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5.1 ORGANIZATION, GOOD STANDING AND AUTHORITY. Westower and Sub are a
corporation and a limited liability company, respectively, duly incorporated or
formed, validly existing and in good standing under the laws of the State of
Washington and the State of Mississippi, respectively, and have full power and
authority to own their properties and assets and to carry on their businesses as
they have been and are being conducted. The execution of this Agreement and the
consummation of the transactions contemplated hereby are within the corporate or
company power of Westower and Sub and have been duly authorized by all necessary
corporate and other action. This Agreement constitutes a valid obligation of
Westower and Sub legally binding upon them in accordance with its terms. When
executed and delivered, the Registration Rights Agreement contemplated by
Section 7.3 and the Employment Agreements contemplated by Section 7.5 will be
valid obligations of Westower and Summit, respectively, legally binding on them
in accordance with their terms. The Westower Stock to be delivered to the
Members as the Merger Consideration when issued and delivered will be validly
issued, fully paid and nonassessable.
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 or Sub is a party or by
which either is bound, or any law, order or decree or any provisions of their
respective Articles of Incorporation and Bylaws or Certificate of Formation.
5.3 WESTOWER SEC FILINGS. The Westower SEC Filings were complete and
accurate in all material respects as of the date of the filings and there were
no material misstatements therein as of such dates.
5.4 MATERIAL CHANGES. There has not been, since the dates of the SEC
Filings any material adverse change in the financial condition or in the results
of operations, business or properties of Westower.
5.5 ENTITY CLASSIFICATION. Sub has made and has not revoked an election
to be classified as an association by filing Form 8832 with the applicable IRS
Service Center. Sub has complied or will comply with the requirements of
Section 7701-3 of the Treasury Regulations regarding such election, and for
Federal tax purposes, is classified as an association taxable as a corporation.
ARTICLE 6.
COVENANTS
The Individual Members hereby covenant and agree from the date hereof to
the Closing Date that, except for transactions expressly authorized by this
Agreement, including transactions consented to in writing by Westower, they will
cause Summit to comply with the following:
6.1 BUSINESS IN THE ORDINARY COURSE. Summit shall refrain from engaging
in transactions other than in the ordinary course of business consistent with
past practice. Summit shall also refrain from entering into any transaction
involving expenditures of more than $10,000.
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6.2 ACCOUNTING AND CREDIT CHANGES. Summit shall not make any changes in
its accounting procedures and practices or its credit criteria from those in
existence at January 1, 1998.
6.3 CAPITALIZATION, OPTIONS AND DIVIDENDS. Summit shall not amend its
Certificate of Formation and shall not issue or reclassify or alter any Summit
Interests; it shall not grant options, warrants, or other rights of any kind to
purchase, or agree to issue any additional Summit Interests; it shall not
purchase or redeem or otherwise acquire for consideration any Summit Interests
and shall not declare or pay any distribution or make payments in respect of the
Summit Interests except distributions set forth on Schedule 4.11.
6.4 ENCUMBRANCE OF ASSETS. Summit shall not mortgage, pledge or encumber
any of its properties or assets.
6.5 EMPLOYMENT AGREEMENTS. Summit shall not enter into any employment
agreements and shall keep in effect its present compensation program (including
pension plans and other fringe benefits).
6.6 ACCESS. Subject to the confidentiality obligations contained in this
Agreement, Westower and its officers, attorneys, accountants and representatives
shall be permitted to examine the property, books and records of Summit, 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 Members will upon request furnish Westower with any information
reasonably required in respect to Summit's property, assets, and business and
will provide Westower with copies of any contract, document or instrument listed
in any Schedule hereto.
6.7 GOOD WILL. Summit will use its best efforts to preserve the good will
of its customers and suppliers and others having business relations with it.
6.8 EXCLUSIVE RIGHTS TO WESTOWER. Neither Summit nor the Individual
Members, will enter into discussions or negotiations with any other party with a
view to (i) the sale of the Summit Interests, (ii) a merger between Summit and
another party or (iii) a sale of all or substantially all of the assets of
Summit.
6.9 MAINTENANCE OF PROPERTY. Summit will maintain all of its assets in
customary repair, order and condition, reasonable wear and use and damage by
unavoidable casualty excepted, and take all steps reasonably necessary to
maintain its intangible assets, including without limitation, its patents,
trademarks, tradenames, brand names, copyrights and any pending applications
therefor.
6.10 NO NEW MATERIAL AGREEMENTS. Summit will not enter into any material
leases, sale/leaseback transactions, agreements for the purchase of fixed
assets, exclusive services agreements, or other material agreements, other than
agreements relating to the purchase and sale of inventory and/or contract
equipment in the ordinary course of business.
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6.11 COMPENSATION. Summit will not (a) grant any increase in compensation
other than normal merit and cost-of-living increases in accordance with Summit's
general prevailing practices existing prior to the date of this Agreement to any
officer, employee or agent, or (b) enter into or amend any bonus, incentive
compensation, deferred compensation, profit sharing, retirement, pension, group
insurance, death benefit or other fringe benefit plan, trust agreement, or
arrangement, or any employment, compensation or consulting agreement except as
required by law.
6.12 INDEBTEDNESS. Summit will not create, incur, assume guarantee or
otherwise become liable with respect to any indebtedness for money borrowed or
voluntarily create, incur, assume or guarantee any other indebtedness or
obligation other than in the ordinary course of business.
6.13 COOPERATION. The Individual Members will cooperate and will cause
the Company to cooperate fully with Westower in promptly taking any and all
actions or executing any and all documents appropriate to consummate the
transactions contemplated by this Agreement.
ARTICLE 7.
POST-CLOSING COVENANTS
7.1 PERSONAL GUARANTEES. Within 30 days after Closing, Westower shall use
commercially reasonable efforts to cause the release of the Individual Members
from personal guarantees issued by them that are disclosed on SCHEDULE 4.9 to
secure obligations of Summit. Westower shall retain discretion over the nature
of the action to be taken, which may include the granting of replacement
security or the refinancing of the loans secured by the guarantees. Westower
shall indemnify each Individual Member against any cost expense or liability
under any such guarantee.
7.2 SALE OF THE WESTOWER STOCK. Each Member agrees that such Member will
not sell, pledge or otherwise transfer any of the Westower Stock received by
such Member until such time as permitted under Rule 144 under the Securities Act
("Rule 144") or a registration statement with respect to the Westower Stock
filed by Westower pursuant to the provisions of Paragraph 7.3 below becomes
effective. Each Member understands that stop-transfer instructions will be
given to Westower's transfer agent with respect to the certificates evidencing
the Westower Stock delivered to them hereunder. In order to evidence the
agreement described in this paragraph, each Member further agrees that the
following legend may be placed by Westower upon the certificates representing
the Westower Stock delivered to such Member hereunder:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 BUT HAVE BEEN ACQUIRED FOR INVESTMENT
BY THE REGISTERED OWNER. NO SALE, PLEDGE OR OTHER TRANSFER MAY BE
MADE UNLESS THE CORPORATION IS FURNISHED WITH AN OPINION OF COUNSEL
FOR THE SHAREHOLDER IN FORM AND SUBSTANCE SATISFACTORY TO THE
CORPORATION THAT SUCH SALE IS IN COMPLIANCE WITH THE
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SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS. IN
ADDITION, THE TRANSFER OF THESE SHARES IS RESTRICTED UNTIL THE
CORPORATION HAS PUBLICLY RELEASED ITS FIRST REPORT INCLUDING THE
COMBINED FINANCIAL RESULTS OF THE CORPORATION AND SUMMIT
COMMUNICATIONS, LLC FOR A PERIOD OF AT LEAST 30 DAYS OF COMBINED
OPERATIONS.
7.3 REGISTRATION RIGHTS. With respect to the Westower Stock to be
delivered to the Members at Closing, Westower shall grant to the Members
piggyback and demand registration rights pursuant to a Registration Rights
Agreement in substantially the form attached to this Agreement as EXHIBIT 7.3.
7.4 WESTOWER SEC FILING OBLIGATIONS. With a view to making available the
benefits of certain rules and regulations of the SEC which may at any time
permit the sale of any of the Westower Stock which may be restricted as defined
in Rule 144 to the public without registration pursuant to the Securities Act,
Westower agrees to use its best lawful efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 at all times during which Westower is subject
to the reporting requirements of the Exchange Act;
(b) File with the SEC in a timely manner all reports and other documents
required of Westower under the Securities Act and the Exchange Act (at all times
during which Westower is subject to such reporting requirements); and
(c) So long as any Member owns any of the Westower Stock as restricted
securities as defined in Rule 144, to furnish to the Member upon request a
written statement to Westower as to its compliance with the reporting
requirements of the Exchange Act, a copy of the most recent annual or quarterly
report of Westower, and such other reports and documents of Westower and other
information in the possession of or reasonably obtainable by Westower as the
Member may reasonably request in availing himself of any rule or regulation of
the SEC allowing the Member to sell any of the Westower Stock without
registration pursuant to the Securities Act.
7.5 REMOVAL OF LEGEND ON CERTIFICATES REPRESENTING THE WESTOWER STOCK.
Westower shall promptly remove the legend on any certificates representing the
Westower Stock once the provisions of this Agreement and the Securities Act are
satisfied. In addition, Westower shall notify its transfer agent that any stop-
transfer instructions with respect to the Westower Stock have been rescinded.
7.6 EMPLOYMENT AGREEMENTS. At the Closing Summit, Shapley and Jarvis
will enter into Employment Agreements in substantially the form attached hereto
as EXHIBIT 7.6.
7.7 COVENANT NOT TO COMPETE.
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(a) Each Individual Member agrees that for a period of three years
following the Closing Date or eighteen months following from the date of
termination of his employment with Surviving Company for any reason, whether
with or without cause, whichever period is longer, he will not, except as
expressly permitted hereunder, directly or indirectly (i) operate, develop or
own any interest, other than the ownership of less than 5% of the equity
securities of a publicly traded company, in the business of wireless
telecommunications site development within Canada and/or the United States of
America (a "Business"); (ii) compete with Westower, Surviving Company or their
subsidiaries and affiliates in the operation or development of any Business;
(iii) with the exception of Surviving Company, be employed by any business which
owns, manages, or operates a Business; (iv) interfere with, solicit, disrupt or
attempt to disrupt any past, present or prospective relationship, contractual or
otherwise, between Surviving Company, or its subsidiaries or affiliates, and any
customer, client, supplier or employee of Surviving Company, or its subsidiaries
or affiliates; or (v) solicit any employee of Surviving Company, or its
subsidiaries or affiliates, to leave their employment with Surviving Company or
its subsidiaries or affiliate, as the case may be, or hire any such employee to
work for a Business. The Individual Members shall not be entitled to circumvent
the provisions of this Section 7.7 by entering into a relationship with a
Business as a consultant, director, advisor, or otherwise, which has the effect
of competing with Surviving Company, its affiliates or subsidiaries.
(b) If a judicial determination is made that any of the provisions of
Section 7.7(a) constitute an unreasonable or otherwise unenforceable
restriction, such provisions shall be rendered void only to the extent that such
judicial determination finds such provisions to be unreasonable or otherwise
unenforceable. In this regard, the parties hereto hereby agree that any
judicial authority construing this Agreement shall be empowered to sever any
portion of the territory or prohibited business activity from the coverage of
Section 7.7(a) and to apply the provisions of Section 7.7(a) to the remaining
portion of the territory or the remaining business activities not so severed by
such judicial authority. The time period during which the prohibitions set
forth in Section 7.7(a) shall apply shall be tolled and suspended during all
violations of Section 7.7(a).
(c) The Individual Members specifically acknowledge and agree that the
restrictions set forth in this Section are reasonable and necessary to protect
the legitimate interests of Westower and Surviving Company and that Westower and
Sub would not have undertaken the Merger in the absence of such restrictions.
The Individual Members further acknowledge and agree that any violation of the
provisions of this Section 7.7 will result in irreparable injury to Westower and
Surviving Company, that the remedy at law for any violation or threatened
violation of such Section will be inadequate and that in the event of any such
breach, Westower or Surviving Company, in addition to any other remedies or
damages available at law or in equity, shall be entitled to temporary injunctive
relief before trial from any court of competent jurisdiction as a matter of
course and to permanent injunctive relief without the necessity of proving
actual damages. The existence of any claim or cause of action on the part of
the Individual Members against Westower or Surviving Company, whether arising
from this Agreement or otherwise, shall not constitute a defense to the granting
or enforcement of this injunctive relief. If Westower or Surviving Company is
required to enforce any of its rights under this Agreement, Westower or
Surviving Company shall be entitled
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to recover from the Individual Members, as applicable, all reasonable attorneys'
fees, court costs and other expenses incurred by Westower or Surviving Company
in connection with the enforcement of those rights.
7.8 ELECTION TO CLOSE BOOKS. The Members agree that promptly following
the Closing they will take whatever steps are necessary to cause the Company to
sign and deliver to the Internal Revenue Service an Election to Close Books Upon
S Corporation Termination and will execute the Consent of the Shareholder to
such election.
7.9 AUDIT. The Individual Members will cooperate fully (including
delivery of representation letters in a form customarily required of management)
with independent auditors designated by Westower to allow such auditors to audit
financial statements of Summit for any periods through the Closing Date and
deliver an opinion thereon.
ARTICLE 8.
INDEMNIFICATION
8.1 INDEMNIFICATION OF WESTOWER. Subject to the consummation of the
Closing and limitations set forth in this Section 8.1, the Individual Members
shall severally, in an amount equal to 50% payable hereunder for each Individual
Member, indemnify, defend and hold harmless Westower, its subsidiaries and
affiliates and their respective officers, directors, agents and employees (the
"Indemnified Parties") against and in respect of any and all claims, suits,
demands, liabilities, damages, losses, costs and expenses ("Losses") arising out
of or otherwise in respect of:
(a) any breach of any representation, warranty or covenant of Summit or any
of the Members contained in this Agreement or in any certificate or other
instrument furnished on behalf of Summit or by any of the Members, 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 8.1; provided, however, that the Members shall not be liable
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under this Agreement to the Indemnified Parties for any breach of a
representation or warranty that was not set forth in a notice of claim
(including a contingent claim that sets forth the facts on which a claim may be
made in the future to the extent then known) presented in writing to the
Individual Members pursuant to Section 11.13 within (i) eighteen months after
Closing in the case of any representation or warranty except those set forth in
Sections 4.2, 4.6 and 4.17, (ii) four years in the case of the representations
and warranties set forth in 4.17, and (iii) the expiration of the applicable
statute of limitations in the case of Sections 4.2 and 4.6. Notwithstanding
anything to the contrary herein, the Individual Members shall be liable,
responsible or obligated to indemnify the Indemnified Parties under this Section
8.1 for claims for breach of a representation or warranty only to the extent
that the aggregate amount of Losses exceeds $100,000, and the total liability
and responsibility of the Individual Members under this Section 8.1 for breaches
of representations and warranties shall be limited to the aggregate Merger
Consideration
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received by the Members under this Agreement. Payment for indemnification by the
Individual Members may be made in their discretion by cash or the return of
Westower Stock. The value of Westower Stock shall be its average closing price
per share on the American Stock Exchange or other principal market on which it
is traded for the 30 trading days preceding such payment.
8.2 INDEMNIFICATION BY WESTOWER. Subject to the consummation of the
Closing, Westower shall indemnify and hold harmless the Members against and in
respect of any and all claims, suits, demands, liabilities, damages, losses,
costs and expenses, arising out of or resulting from any of the following:
(a) any breach of any representation, warranty or covenant in this
Agreement or in any certificate or other instrument furnished on behalf of
Westower or Sub pursuant to this Agreement, 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 8.2.
8.3 INDEMNIFICATION PROCEDURE FOR THIRD-PARTY CLAIMS. Promptly after the
receipt by any Indemnified Party of notice of any claim or the commencement of
any action or proceeding by any third party, such party will, if a claim with
respect thereto is to be made against any party obligated to provide
indemnification (the "Indemnifying Party") pursuant to Section 8.1, 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 this Article 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.
ARTICLE 9.
CONDITIONS PRECEDENT TO WESTOWER'S AND SUB'S OBLIGATIONS
All obligations of Westower and Sub under this Agreement are, at the option
of Westower, subject to the fulfillment, prior to or at the Closing, of each of
the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Summit and the Members contained in this Agreement shall be true in all material
respects at and as of the time of Closing 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 Summit and the Members shall have delivered to
19
<PAGE>
Westower and Sub a certificate dated the Closing Date and signed by them to such
effect. A representation or warranty that is expressly subject to a materiality
limitation shall not be subject to a further materiality limitation as a result
of the use of the phrase "in all material aspects" in the preceding sentence.
9.2 COMPLIANCE WITH AGREEMENTS. The Members and Summit shall have
complied with all agreements and conditions required by this Agreement to be
performed by them prior to or at the Closing, and Summit and the Members shall
have delivered to Westower and Sub a certificate dated the Closing Date and
signed by them to such effect.
9.3 OPINION OF COUNSEL. Summit and the Members shall have delivered to
Westower and Sub an opinion of Brunini, Grantham, Grower & Hewes, PLLC, dated as
of the Closing Date and in form and substance satisfactory to Westower and
based, as to factual matters, on certificates of the Individual Members to the
effect that:
(a) Summit is a limited liability company duly formed, validly existing and
in good standing under the laws of the State of Mississippi and has the power to
perform its business as presently conducted and to own and lease the properties
used in connection therewith.
(b) Each of the Members is the lawful owner of the Summit Interests set
forth in this Agreement free and clear of any liens and encumbrances known to
such counsel.
(c) This Agreement constitutes a legal valid and binding obligation of
Summit and the Members enforceable in accordance with its terms and, upon filing
of the Certificate and Articles of Merger as set forth in this Agreement, Sub
will be merged with and into Summit as provided in this Agreement.
(d) The consummation of the transactions contemplated by this Agreement
will not result in a breach of any term of or constitute a default under the
Certificate of Formation or Operating Agreement of Summit, or, to the knowledge
of such counsel, any indenture, agreement, instrument or understanding known to
such counsel to which Summit or the Members are a party or by which it or any of
them is bound.
9.4 MATERIAL DAMAGE. The business and properties of Summit, 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 AGREEMENTS. The Employment Agreements referred to in
Section 7.6 shall have been executed and delivered.
9.6 OTHER APPROVALS. All authorizations, consents, orders or approvals of
any federal or state governmental agency necessary for the consummation of the
transactions contemplated
20
<PAGE>
hereby (other than such actions, approvals or filings which, pursuant to the
terms of this Agreement, are to take place on or after the Closing) shall have
been filed, occurred or been obtained.
9.7 NO LITIGATION. No administrative investigation, action, suit or
proceeding seeking to enjoin the consummation of the transactions contemplated
under this Agreement shall be pending or threatened.
ARTICLE 10.
CONDITIONS PRECEDENT TO MEMBERS'
OBLIGATIONS
All obligations of the Members under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
10.1 REPRESENTATIONS AND WARRANTIES. Westower's and Sub's representations
and warranties contained in this Agreement shall be true at and as of the time
of Closing 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 and Sub shall
have delivered to the Members a certificate dated as of Closing and signed by
them to such effect.
10.2 COMPLIANCE WITH AGREEMENTS. Westower and Sub shall have performed
and complied with all agreements and conditions required by this Agreement to be
performed by it prior to or at the Closing, and shall have delivered to the
Members a certificate dated as of Closing and signed by them to such effect.
10.3 OPINION OF COUNSEL. Westower and Sub shall have delivered to the
Members and Summit an opinion of their counsel Morgan, Lewis & Bockius LLP (who
will rely on Davis Wright Tremaine LLP as to matters of Washington law), dated
as of the Closing Date and in form and substance satisfactory to the Members and
Summit that the Westower Stock to be delivered as part of the Merger
Consideration, when issued and delivered, will be validly issued, fully paid and
nonassessable.
10.4 MATERIAL DAMAGE. The business and properties of Westower and its
subsidiaries, taken as a whole, shall not have been and shall not be threatened
to be, affected in any way materially adverse to its subsidiaries taken as a
whole 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.
10.5 AGREEMENTS. The Registration Rights Agreement referred to in Section
7.3 and the Employment Agreements referred to in Section 7.6 shall have been
executed and delivered.
21
<PAGE>
10.6 OTHER APPROVALS. All authorizations, consents, orders or approvals
of any federal or state governmental agency necessary for the consummation of
the transactions contemplated hereby (other than such actions, approvals or
filings which, pursuant to the terms of this Agreement, are to take place on or
after the Closing) shall have been filed, occurred or been obtained.
10.7 NO LITIGATION. No administrative investigation, action, suit or
proceeding seeking to enjoin the consummation of the transactions contemplated
under this Agreement shall be pending or threatened.
10.8 WAIVERS AND CONSENTS OBTAINED. Westower shall have obtained all such
consents, waivers, orders and approvals, as may be necessary so as to cure,
resolve or otherwise avoid any conflict, breach or default, lien creation or
violation that would have been caused by consummation of the transactions
contemplated hereunder had such consents, waivers, orders and approvals not been
obtained.
ARTICLE 11.
MISCELLANEOUS
11.1 BROKER FEES. Summit and the Members represent and warrant to
Westower and Sub that they have not engaged or dealt with any broker or finder
so as to obligate Westower or the Surviving Company to pay a fee, commission or
similar amount in respect to the execution of this Agreement or the consummation
of the transactions contemplated hereby. Any breach of this representation and
warranty shall not be subject to the limits set forth in Section 8.1(b).
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties and agreements, made by Summit, the Members, Westower or Sub in this
Agreement or pursuant hereto shall survive the Closing and continue in full
force and effect for a period of two years, except that the representations and
warranties of Summit and the Members contained in Sections 4.2 and 4.6 will
survive the Closing until the expiration of the applicable statute of
limitations and the representations and warranties of Summit and the Members
contained in Section 4.17 will survive the Closing and continue in full force
and effect for four years after the Closing. Notwithstanding any investigations
or audit conducted before or after Closing, the parties shall be entitled to
rely upon the representations and warranties set forth in this Agreement.
11.3 KNOWLEDGE. References to the "knowledge" of Summit contained herein
refer to the actual knowledge of Shapley and Jarvis after inquiry of the
employees of Summit having knowledge of the subject matter.
11.4 EXPENSES. Each of the parties hereto shall bear their own expenses,
in connection with the transactions contemplated hereby; provided, however, that
-------- -------
the fees and expenses of Brunini, Grantham, Grower & Hewes, PLLC in excess of
$25,000 shall be borne by the Members.
22
<PAGE>
11.5 ANNOUNCEMENTS. All parties shall 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, customers and suppliers.
11.6 FURTHER ACTIONS AND ASSURANCES. Westower, Sub, Summit and the
Members will execute and deliver any and all documents, and will cause any and
all other action to be taken, either before or after Closing, which may be
necessary or proper to effect or evidence the provisions of this Agreement and
the transactions contemplated hereby.
11.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which is an original and the Members 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.
11.8 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 superseded 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 Summit, the Members, Westower
and Sub.
11.9 MISSISSIPPI LAW TO GOVERN. This Agreement shall be construed and
enforced in accordance with the laws of the State of Mississippi.
11.10 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 of such
party.
11.11 SCHEDULES. All Schedules referred to in this Agreement are intended
to be and are hereby specifically made a part of this Agreement.
11.12 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
facsimile followed by an original signed copy, as follows: (or to such other
addresses as shall be set forth in a notice given in the same manner):
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If to Westower or Sub: Westower Corporation
7001 NE 40th Avenue
Vancouver, Washington 98661
Facsimile No. (360) 750-9354
With a copy to: Peter S. Sartorius Esq.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
If to Summit or the Members: Summit Communications LLC
112 E. State Street
Ridgeland, MS 39157
Attention: Mike A. Jarvis
Summit Communications LLC
112 E. State Street
Ridgeland, MS 39157
Attention: Mark J. Shapley
With a copy to: Walter S. Weems, Esq.
Brunini, Grantham, Grower &
Hewes, PLLC
1400 Trustmark Building
248 East Capitol Street
Jackson, MS 39201
11.13 Confidential Information. Westower and sub agree to hold in
confidence any information not generally available to the public received by
them from Summit or the Members pursuant to the terms of this Agreement.
Similarly, Summit and the Members agree to hold in confidence any information
not generally available to the public received by them from Westower. If this
Agreement is terminated for any reason, each of the parties and their corporate
affiliates and representatives will continue to hold such information in
confidence and will, to the extent requested by the other party, promptly return
all written materials furnished pursuant hereto. Neither party to this
Agreement shall use information received from the other for any purpose other
than evaluating the merits and risks of the transaction contemplated by this
Agreement.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year
first above written.
WESTOWER CORPORATION
By:/s/ Calvin J. Payne
-------------------
Calvin J. Payne, Chairman
WESTOWER SUMMIT ACQUISITION LLC
By: Westower Corporation, its sole member
By:/s/ Calvin J. Payne
-------------------
Calvin J. Payne, Chairman
SUMMIT COMMUNICATIONS LLC
By:/s/ Mark J. Shapley
-------------------
Mark J. Shapley, Member
By:/s/ Mike A. Jarvis
------------------
Mike A. Jarvis, Member
MEMBERS:
/s/ Mark J. Shapley
-------------------
Mark J. Shapley
/s/ Mike A. Jarvis
------------------
Mike A. Jarvis
The Mark J. Shapley Children's Trust
/s/ Christopher A. Shapley
--------------------------
Christopher A. Shapley, Sole Trustee
The Mike A. Jarvis Children's Trust
/s/ Tom Ward
------------
Tom Ward, Sole Trustee
25
<PAGE>
Attachment A
------------
PLAN OF MERGER
OF
WESTOWER SUMMIT ACQUISITION, LLC
(A MISSISSIPPI LIMITED LIABILITY COMPANY)
INTO
SUMMIT COMMUNICATIONS, LLC
(A MISSISSIPPI LIMITED LIABILITY COMPANY)
Pursuant to the provisions of Section 79-29-209 of the Mississippi
Limited Liability Company Act, the following is the Plan of Merger for the
purpose of merging Westower Summit Acquisition, LLC, a Mississippi limited
liability company, into Summit Communications, LLC, a Mississippi limited
liability company (the "Merger").
A. The Plan of Merger is as follows:
1. The Merger. The names of each corporation to be merged are Westower
----------
Summit Acquisition, LLC, a Mississippi limited liability company ("Sub"), and
Summit Communications, LLC, a Mississippi limited liability company ("Summit").
Summit shall be the surviving limited liability company (the "Surviving
Company").
2. Merger Terms.
------------
(a) The Membership Interests of Summit shall be converted into and
become the right to receive the Merger Consideration, as defined in that certain
Agreement and Plan of Merger among Westower Corporation, a Washington
corporation, Sub, Summit and the members of Summit, dated as of November 10,
1998.
(b) The membership interest of Sub shall be converted into and become
the sole membership interest in the Surviving Company.
3. Certificate of Formation. The Certificate of Formation of Summit as
------------------------
the surviving limited liability company shall be amended and restated to read in
full as set forth on Exhibit A hereto.
B. The effective time of the Merger shall be the date on which the Certificate
of Merger is filed with the Secretary of State for the State of Mississippi.
<PAGE>
Exhibit 1
---------
AMENDED AND RESTATED
CERTIFICATE OF FORMATION
1. The name of the Limited Liability Company is Summit Communications, LLC.
2. The Federal Tax ID Number is: 72-1375436
3. The name and street address of the registered agent and registered office
is:
CT Corporation System
631 Lakeland East Drive
Flowood, MS 39708
4. Management of the limited liability company is vested in managers.
<PAGE>
Form of Registration Rights Agreement
See Exhibit 2.2 of the Company's Current Report on Form 8-K
<PAGE>
Form of Employment Agreements
See Exhibits 2.3 and 2.4 of the Company's Current Report on Form 8-K
<PAGE>
Exhibit 2.2
-----------
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of the
10th day of November, 1998, by and among Westower Corporation, a Washington
corporation (the "Company"), and Mark J. Shapley, Mike A. Jarvis, the Mark J.
Shapley Children's Trust and the Mike A. Jarvis Children's Trust (the
"Shareholders").
BACKGROUND
On November 10, 1998, the parties to this Agreement entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which
Westower Summit Acquisition, LLC, a Mississippi limited liability company and
wholly owned subsidiary of the Company ("Sub"), was merged with and into Summit
Communications, LLC, a Mississippi limited liability company. Capitalized terms
used in this Agreement and not otherwise defined in this Agreement shall have
the meanings given to them in the Merger Agreement.
Pursuant to the Merger Agreement, the Company issued to the Shareholders
shares of Westower Stock. As a material term of the Merger Agreement, the
Company has agreed to grant to the Shareholders certain registration rights with
respect to the Registrable Securities.
Therefore, the parties agree as follows:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(b) The term "Act" means the Securities Act of 1933, as amended.
(c) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee of Registrable Securities in
accordance with Section 1.10 of this Agreement.
(d) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of effectiveness
of such registration statement.
<PAGE>
(e) The term "Registrable Securities" means the shares of Westower
Stock issued under the Merger Agreement and any securities of the Company
issued or issuable in exchange for or in replacement of, such Westower
Stock, excluding in all cases, however, (i) any Registrable Securities
transferred by a Holder in a transaction in which rights under this
Agreement are not assigned, (ii) any Registrable Securities sold in a
public offering pursuant to a Registration Statement filed with the SEC, or
(iii) any Registrable Securities which may be sold in a single 3-month
period without registration under the Act pursuant to Rule 144 promulgated
under the Act ("Rule 144").
(f) The term "SEC" means the Securities and Exchange Commission.
1.2 DEMAND REGISTRATION
(a) If the Company receives at any time after the date that is 12
months after Closing, a written request from the Holders of a majority of
the Registrable Securities then outstanding (the "Initiating Holders") that
the Company file a registration statement under the Act covering the
registration of at least fifty percent (50%) of the Registrable Securities
then outstanding, then the Company shall:
(i) within 10 days of the receipt thereof, give written notice of
such request to all Holders; and
(ii) use all reasonable efforts to effect as soon as practicable,
and in any event within 180 days of the receipt of such request, the
registration under the Act of all Registrable Securities which the
Holders request to be registered, within 30 days of the mailing of
such notice by the Company in accordance with Section 2.4. subject to
the limitations of subsection 1.2(b).
(b) If the Initiating Holders intend to distribute Registrable
Securities by means of an underwriting, they shall so advise the Company as
a part of their request made pursuant to subsection 1.2(a), and the Company
shall include such information in the written notice referred to in
subsection 1.2(a). The underwriter will be selected by the Initiating
Holders and shall be an underwriter of regional or national standing
reasonably acceptable to the Company. In such event, the right of any
Holder to include Registrable Securities in the registration shall be
conditioned upon such Holder's participation in the underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder). All Holders proposing to distribute
their securities through the underwriting shall (together with the Company
as provided in subsection 1.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section 1.2, if
the underwriter advises the Initiating Holders in writing that marketing
factors require a limitation of the number of shares to be underwritten,
then the Initiating Holders shall so advise all Holders of
-2-
<PAGE>
Registrable Securities which would otherwise be underwritten pursuant to
this subsection, and the number of shares of Registrable Securities that
may be included in the underwriting shall be allocated among all Holders,
including the Initiating Holders, in proportion (as nearly as practicable)
to the amount of Registrable Securities of the Company owned by each
Holder; provided, however, that the number of shares of Registrable
Securities to be included in the underwriting shall not be reduced unless
all other securities are first entirely excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company furnishes to
Initiating Holders a certificate signed by the Chief Executive Officer of
the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
and its shareholders for a registration statement to be filed and it is
therefore essential to defer the filing of the registration statement, the
Company shall have the right to defer taking action with respect to the
filing for a period of not more than 120 days after receipt of the request
of the Initiating Holders; provided, however, that the Company may not
utilize this right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:
(i) after the Company has effected two registrations pursuant to
this Section 1.2 and such registrations have been declared or ordered
effective; and
(ii) within twelve months after the effective date of the first
registration made pursuant to this Section 1.2.
1.3 PIGGYBACK REGISTRATION.
If the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its stock under the Act in connection with the public offering of such
securities solely for cash (other than a registration on Form S-4 or Form S-8 or
successors thereto or on any other form which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within 20 days after mailing of such notice
by the Company, the Company shall, subject to the provisions of Section 1.4,
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered. In the event that the Company
decides, for any reason, not to complete the registration of shares of common
stock other than the Registrable Securities, or in the event that inclusion of
the Registrable Securities would in the opinion of the managing underwriter for
the offering, impair an offering by the Company or its shareholders for whom the
registration statement is filed, the Company shall have no obligation under this
Section 1.3 to register, or continue with the registration of, the Registrable
Securities.
-3-
<PAGE>
1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of up
to 120 days or until the distribution contemplated in the Registration
Statement has been completed; provided, however, that the 120-day period
shall be extended for a period of time equal to the period the Holder is
prohibited from selling any securities included in such registration
pursuant to Section 1.11 hereof or the terms of any lockup agreement
entered into at the request of the Company or an underwriter.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by the registration statement under other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required to qualify to do business
or to file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act or the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing.
-4-
<PAGE>
(g) Cause all Registrable Securities registered pursuant to this
Agreement to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to this Agreement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date
of the registration.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this
Agreement, on the date that the Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this
Section 1, if such securities are being sold through underwriters, or, if
such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the counsel representing the
Company, in form and substance as is customarily given to underwriters in
an underwritten public offering, and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering.
1.5 EXPENSES OF DEMAND REGISTRATION. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company (including the reasonable fees and
disbursements of one counsel for the selling Holders) shall be borne by the
Company, provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses) unless the Holders of a majority
of the Registrable Securities agree to forfeit their right to one demand
registration pursuant to Section 1.2.
1.6 EXPENSES OF COMPANY REGISTRATION. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
1.3 for each Holder, including (without limitation) all registration, filing,
and qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for the selling Holders
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
1.7 UNDERWRITING REQUIREMENTS. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 1.3 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it
-5-
<PAGE>
(or by other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, to be included in such
underwriting exceeds the amount of securities, other than the securities to be
sold by the Company, that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the underwriting only that number of Registrable Securities, if
any, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the Registrable Securities so included
to be apportioned pro rata among the selling shareholders having piggyback
registration rights according to the total amount of Registrable Securities
entitled to be included therein owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholder).
1.8 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; and the Company
will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this subsection shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon written information furnished expressly
for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers
who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any
other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the Act, the 1934 Act or
other federal or state law, insofar as such
-6-
<PAGE>
losses, claims, damages, or liabilities (or actions in respect thereto)
arise out of or are based upon written information furnished by such Holder
expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this
subsection, in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided, that, in no event shall any
indemnity under this subsection exceed the gross proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, than an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if prejudicial to
its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section, but the omission
so to deliver written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than
under this Section.
(d) If the indemnification provided for in this Section is held by a
court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, claim,
damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense
as well as any other relevant equitable considerations. The relative fault
of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified
-7-
<PAGE>
party and the parties' relative intent, knowledge, access to information,
and opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this Section
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement.
1.9 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Holders the benefits of Rule 144, the Company agrees to use its
reasonable best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, upon request (i) a written statement by the Company stating
whether it has complied with the reporting requirements of Rule 144, the
Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such
form.
1.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Agreement may be assigned
(but only with all related obligations) by a Holder, provided: (a) the Company
is, within a reasonable time after such transfer, furnished with written notice
of the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; (b) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement; (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act and the Merger
Agreement; and (d) the Company gives its prior written consent, such consent not
to be unreasonably withheld. The Company agrees that it will consent to
assignments to trusts created by the Shareholders for estate planning purposes.
1.11 BLACKOUT PERIOD. If at any time after the effective date of a
registration statement filed hereunder the Company gives to the Shareholders a
notice pursuant to Section 1.4(f) hereof
-8-
<PAGE>
stating that the Company requires the suspension by the Shareholders of the
distribution of any of the Registrable Securities, then the Shareholders shall
cease distributing the Registrable Securities for such period of time (the
"Blackout Period"), not to exceed 120 days from the time notice is sent until
the Company informs the Shareholders that the Blackout Period has been
terminated. Upon notice by the Company to the Shareholders of such
determination, the Shareholders will (a) keep the fact of any such notice
strictly confidential, (b) promptly halt any offer, sale, trading or transfer of
any of the Registrable Securities for the duration of the Blackout Period, and
(c) promptly halt any use, publication, dissemination or distribution of each
prospectus included within the registration statement, and any amendment or
supplement thereto, by it and any of its affiliates for the duration of the
Blackout Period.
1.12 LOCK-UP. In connection with any underwritten public offering by the
Company, the Shareholders agree, if requested, to execute a lock-up letter
addressed to the managing underwriter in customary form agreeing not to sell or
otherwise dispose of the Registrable Securities owned by the Shareholders (other
than any that may be included in the offering) for a period not exceeding 180
days.
2. MISCELLANEOUS
2.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Registrable Securities). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
2.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Washington.
2.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 NOTICES. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in the manner and to the addresses set forth
in the Merger Agreement.
2.5 EXPENSES. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
2.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended,
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the
-9-
<PAGE>
holders of a majority of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this Section shall be binding
upon each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities, and the Company.
2.7 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provisions shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provisions were so excluded and shall be enforceable with its terms.
2.8 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter of this agreement.
-10-
<PAGE>
The parties have executed this Registration Rights Agreement as of the date
first above written.
WESTOWER CORPORATION,
a Washington Corporation
By:/s/ Calvin J. Payne
----------------------------------
Calvin J. Payne, Chairman
/s/ Mark J. Shapley
----------------------------------
Mark J. Shapley
/s/ Mike A. Jarvis
----------------------------------
Mike A. Jarvis
The Mark J. Shapley Children's Trust
/s/ Christopher A. Shapley
----------------------------------
Christopher A. Shapley, Sole Trustee
The Mike A. Jarvis Children's Trust
/s/ Tom Ward
----------------------------------
Tom Ward, Sole Trustee
-11-
<PAGE>
<PAGE>
(a) An annual salary of $120,000, or such higher salary as shall be
determined by the Managers at Employee's annual evaluation and compensation
review;
(b) Employee shall be eligible to participate in the Company's
discretionary bonus program whereby a bonus pool equal to 10 percent of the pre-
tax earnings (if any) of the Company is made available for employee bonuses.
(c) Use of a Company car or car allowance substantially in accordance
with past practice, and insurance and other benefits equivalent to the benefits
provided other executive employees of the Company;
(d) Three weeks of vacation;
(e) Participation, when eligible, in the Company's retirement plan as
such plan may be amended or modified by the Company from time to time;
(f) Reimbursement for all reasonable expenses incurred by Employee in
the performance of his duties under this Agreement, provided that Employee
submits verification of such expenses in accordance with the policies of the
Company;
(g) Participation, when eligible, in any compensation incentive
program of the Company, if any, as such program may be amended or modified by
the Company from time to time;
(h) Reimbursement of relocation expenses if Employee is required to
work at a facility more than fifty (50) miles distant from his current
residence.
Prior to the end of each calendar year of this Agreement, the Company
may review with Employee his compensation hereunder. Any increase in salary or
changes in fringe benefits agreed upon by Employee and the Company at such
annual review shall become effective the following January 1 unless otherwise
agreed to by the Company and Employee.
3. Confidential Information and Trade Secrets.
------------------------------------------
(a) Employee recognizes that Employee's position with the Company
requires considerable responsibility and trust, and, in reliance on Employee's
loyalty, the Company may entrust Employee with highly sensitive confidential,
restricted and proprietary information involving Trade Secrets (defined below)
and Confidential Information (defined below) of the Company and its affiliates.
(b) For purposes of this Agreement, a "Trade Secret" is any scientific
or technical information, design, process, procedure, formula or improvement of
the Company or any of its affiliates that is valuable and not generally known to
competitors of the Company and
-2-
<PAGE>
its affiliates. "Confidential Information" is any data or information, other
than Trade Secrets, of the Company or any of its affiliates that is important,
competitively sensitive, and not generally known by the public, including, but
not limited to, the Company's strategic and business plans, business prospects,
training manuals, product development plans, bidding and pricing procedures,
market strategies, internal performance statistics, financial data, confidential
personnel information concerning employees, supplier data, operational or
administrative plans, policy manuals, and terms and conditions of contracts and
agreements and such similar information relating to subsidiaries and affiliates
of the Company. The terms "Trade Secret" and "Confidential Information" shall
not apply to information which is (1) already in Employee's possession (unless
such information was obtained by Employee from the Company or its affiliates or
was obtained by Employee in the course of Employee's employment by the Company
or its affiliates), (2) received by Employee from a third party with no
restriction on disclosure or (3) required to be disclosed by any applicable law.
(c) Except as required to perform Employee's duties as an employee,
Employee will not use or disclose any Trade Secrets or Confidential Information
during employment or at any time after termination of employment and prior to
such time as they cease to be Trade Secrets or Confidential Information through
no act of Employee in violation of this Section 3.
(d) Upon the request of the Company and, in any event, upon the
termination of employment hereunder, Employee will surrender to the Company all
memoranda, notes, records, drawings, manuals or other documents (including all
copies thereof) pertaining to the Company's business, Employee's employment or
the business of the Company or its affiliates. Employee will also leave with the
Company all materials involving any Trade Secrets or Confidential Information.
All such information and materials, whether or not made or developed by
Employee, shall be the sole and exclusive property of the Company or its
affiliates, and Employee hereby assigns to the Company all of Employee's right,
title and interest in and to any and all of such information and materials.
4. Covenant Not to Compete. Employee hereby covenants and agrees to
-----------------------
comply with and adhere to the provisions of SECTION 7.7 of the Merger Agreement,
which is incorporated herein by reference with the same effect as if restated
herein in full.
5. Specific Enforcement. Employee specifically acknowledges and
--------------------
agrees that the restrictions set forth in Section 3 hereof and SECTION 7.7 of
the Merger Agreement as incorporated herein by Section 4 are reasonable and
necessary to protect the legitimate interest of the Company and its affiliates
and that the Company would not have employed Employee in the absence of such
restrictions. Employee further acknowledges and agrees that any violation of
the provisions of Section 3 hereof or SECTION 7.7 of the Merger Agreement will
result in irreparable injury to the Company or its affiliates, that the remedy
at law for any violation or threatened violation of such Sections will be
inadequate and that in the event of any such breach, the Company or its
affiliates, in addition to any other remedies or damages available at law or in
-3-
<PAGE>
equity, shall be entitled to temporary injunctive relief before trial from any
court of competent jurisdiction as a matter of course and to permanent
injunctive relief without the necessity of proving actual damages. The
existence of any claim or cause of action on the part of Employee against the
Company or any of its affiliates, whether arising from this Agreement or
otherwise, shall not constitute a defense to the granting or enforcement of this
injunctive relief. If the Company is required to enforce any of its rights
under this Agreement, the Company shall be entitled to recover from Employee all
reasonable attorneys' fees, court costs and other expenses incurred by the
Company in connection with the enforcement of those rights.
6. Term of Agreement. This Agreement shall be effective as of the
-----------------
Closing Date and shall continue for a term of two (2) years from the Closing
Date unless terminated by either party in the manner set forth herein. This
Agreement shall be automatically renewed for successive one (1) year terms
unless written notice of termination is given by either party at least ninety
(90) days prior to the end of the then current term.
7. Termination Upon Death or Disability of the Employee. In the
----------------------------------------------------
event the Company ceases its operations (other than pursuant to Section 11
below), Employee dies during the term of this Agreement, or the Employee is
disabled and unable to perform his duties in any material respect for a period
of three (3) months, this Agreement shall immediately terminate and neither the
Employee nor the Company shall have any further obligations hereunder, except
that the Company shall continue to be obligated under Section 2 hereof for any
unpaid salary, accrued benefits or unreimbursed expenses owed to Employee or his
estate that have accrued but not been paid as of the date of termination.
8. Termination by Employee. Employee may at any time terminate his
-----------------------
employment by giving the Company thirty (30) days prior written notice of his
intent to terminate the Agreement, unless the termination is because of Changed
Circumstances as set forth in Section 10. Upon such termination, Employee shall
have no further obligation to the Company, except as set forth in Sections 3 and
4 hereof, and Employee shall have no further rights or obligations hereunder,
except as set forth in Section 2 hereof for unpaid salary, accrued benefits or
unreimbursed expenses that have accrued but have not been paid as of the date of
termination, unless termination is because of Changed Circumstances, as set
forth in Section 10.
9. Termination for Cause. The Company shall have the right at any
---------------------
time to terminate Employee's employment immediately for cause, which shall
include any of the following reasons: Employee's violation of the provisions of
Sections 3 or 4 hereof, gross neglect of duty, conviction under a state or
federal law involving commission of a crime against the Company or any of its
affiliates or a felony, willful failure or refusal to carry out lawful duties or
directions of the Managers of the Company reasonably consistent with the duties
of Employee required by Section 1 hereof, or the willful engaging by the
Employee in gross misconduct materially injurious to the Company or its
affiliates.
-4-
<PAGE>
Employee's obligations under Sections 3 and 4 hereof shall survive the
termination of this Agreement pursuant to this Section 9. In the event
Employee's employment hereunder is terminated in accordance with this Section,
the Company shall have no further obligation to make any payments to Employee
hereunder except as set forth in Section 2 for unpaid salary, accrued benefits
or unreimbursed expenses that have accrued but have not been paid as of the date
of termination.
10. Termination by Company Without Cause or by Employee for Changed
---------------------------------------------------------------
Circumstances. The Company may terminate the employment relationship with
- -------------
Employee without cause (which shall not include a termination pursuant to
Sections 7, 8 or 9) by giving Employee fifteen (15) days prior written notice.
Employee may terminate the employment relationship with the Company for Changed
Circumstances by giving the Company fifteen (15) days prior written notice. The
term "Changed Circumstances" as used in this Section 10 means (a) a reduction in
Employee's base salary and benefits or (b) a material reduction in the scope of
Employee's authority and/or responsibilities. In the event the employment
relationship is terminated by the Company without cause or by Employee for
Changed Circumstances during the term hereof, the Company shall pay Employee all
accrued benefits and unreimbursed expenses owed to Employee that have accrued
but have not been paid as of the date of termination. The Company shall also
continue to pay to Employee all salary and benefits hereunder until the
expiration of the term set forth in Section 6. Such payments shall be made in
accordance with Employee's regular salary schedule. Payment of the severance
benefits set forth herein shall be subject to the execution and delivery of a
Separation Agreement (including a release of all claims against the Company) the
terms of which will reasonably be determined by the parties. The Company's
obligations pursuant to this Section 10 shall terminate immediately upon any
violation of Section 3 or 4 hereof or the taking of any other action by Employee
that would have the effect of declaring the provisions of Section 3 or 4 hereof
not enforceable.
11. Assignment.
----------
(a) The rights and benefits of Employee under this Agreement, other
than accrued and unpaid amounts due under Section 2 hereof, are personal to him
and shall not be assignable.
(b) This Agreement may not be assigned by the Company except to an
affiliate of the Company; provided, however, that if the Company shall sell or
otherwise transfer substantially all its assets to another corporation or
entity, the Company shall assign its rights hereunder to that corporation or
entity and cause such corporation or entity to assume the Company's obligations
under this Agreement.
12. Notices. Any notice or other communication under this Agreement
-------
shall be in writing, signed by the party making the same, and shall be delivered
personally or sent by certified or registered mail, postage prepaid, addressed
as follows:
-5-
<PAGE>
If to Employee: Mark J. Shapley
c/o Summit Communications, LLC
112 E. State Street
Ridgeland, MS 39157
If to the Company: c/o Westower Corporation
7001 NE 40th Ave.
Vancouver, WA 98661
Attention: Chairman of the Board
or to such other address as may hereafter be designated by either party hereto.
All such notices shall be deemed given on the date received.
13. Governing Law. This Agreement shall be interpreted and enforced
-------------
in accordance with the laws of the State of Mississippi.
14. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid, but
if any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability for any such provisions in every other respect and
of the remaining provisions of this Agreement shall not be in any way impaired.
15. Entire Agreement. This Agreement contains the entire agreement
----------------
of the parties hereto with respect to the subject matter contained herein.
There are no restrictions, promises, covenants, or undertakings, other than
those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter. This Agreement may not be changed except by a writing executed by the
parties.
-6-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the day and year first above written.
SUMMIT COMMUNICATIONS, LLC
By: Westower Corporation,
its sole member
By:/s/ Calvin J. Payne
-------------------
Calvin J. Payne,
Chairman of the Board
EMPLOYEE
/s/ Mark J. Shapley
-------------------
Mark J. Shapley
-7-
<PAGE>
Exhibit 2.4
-----------
EMPLOYMENT AGREEMENT
--------------------
This Agreement is made this 10th day of November, 1998, between Summit
Communications, LLC, a Mississippi limited liability company (the "Company"),
and Mike A. Jarvis ("Employee").
W I T N E S S E T H:
WHEREAS, the Company will become a wholly-owned subsidiary of
Westower Corporation, a Washington corporation ("Westower"), pursuant to the
terms set forth in the Agreement and Plan of Merger dated as of November 10,
1998 (the "Merger Agreement") .
WHEREAS, Westower and the Company desire that the Company employ
Employee and Employee desires to accept such employment by the Company effective
on the closing date under the Merger Agreement ("Closing Date") subject to the
terms and conditions contained herein;
WHEREAS, in serving as an employee of the Company, Employee will be in
a position in which Employee will participate in the use and development of
confidential proprietary information about the Company and its affiliates (which
term shall include Westower and its other subsidiaries) as to which the Company
desires to protect fully its rights;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of the
promises and the mutual covenants and agreements herein set forth, the parties
agree as follows:
1. Employment. As of the Closing Date, the Company hereby employs
----------
Employee as its President, and Employee accepts such employment, subject to the
terms and conditions set forth herein. Employee shall perform all duties and
services regularly incident to the position of President of the Company, and
Employee shall perform such other reasonable duties and services as may be
prescribed by the Managers of the Company from time to time. During his
employment hereunder, Employee shall devote his best efforts and attention, on a
full-time basis, to the performance of the duties required of him as an employee
of the Company.
2. Compensation. As compensation for services rendered by Employee
------------
hereunder, Employee shall receive:
(a) An annual salary of $120,000, or such higher salary as shall be
determined by the Managers at Employee's annual evaluation and compensation
review;
<PAGE>
(b) Employee shall be eligible to participate in the Company's
discretionary bonus program whereby a bonus pool equal to 10 percent of the pre-
tax earnings (if any) of the Company is made available for employee bonuses.
(c) Use of a Company car or car allowance substantially in accordance
with past practice, and insurance and other benefits equivalent to the benefits
provided other executive employees of the Company;
(d) Three weeks of vacation;
(e) Participation, when eligible, in the Company's retirement plan as
such plan may be amended or modified by the Company from time to time;
(f) Reimbursement for all reasonable expenses incurred by Employee in
the performance of his duties under this Agreement, provided that Employee
submits verification of such expenses in accordance with the policies of the
Company;
(g) Participation, when eligible, in any compensation incentive
program of the Company, if any, as such program may be amended or modified by
the Company from time to time;
(h) Reimbursement of relocation expenses if Employee is required to
work at a facility more than fifty (50) miles distant from his current
residence.
Prior to the end of each calendar year of this Agreement, the Company
may review with Employee his compensation hereunder. Any increase in salary or
changes in fringe benefits agreed upon by Employee and the Company at such
annual review shall become effective the following January 1 unless otherwise
agreed to by the Company and Employee.
3. Confidential Information and Trade Secrets.
------------------------------------------
(a) Employee recognizes that Employee's position with the Company
requires considerable responsibility and trust, and, in reliance on Employee's
loyalty, the Company may entrust Employee with highly sensitive confidential,
restricted and proprietary information involving Trade Secrets (defined below)
and Confidential Information (defined below) of the Company and its affiliates.
(b) For purposes of this Agreement, a "Trade Secret" is any scientific
or technical information, design, process, procedure, formula or improvement of
the Company or any of its affiliates that is valuable and not generally known to
competitors of the Company and its affiliates. "Confidential Information" is
any data or information, other than Trade Secrets, of the Company or any of its
affiliates that is important, competitively sensitive, and not generally
-2-
<PAGE>
known by the public, including, but not limited to, the Company's strategic and
business plans, business prospects, training manuals, product development plans,
bidding and pricing procedures, market strategies, internal performance
statistics, financial data, confidential personnel information concerning
employees, supplier data, operational or administrative plans, policy manuals,
and terms and conditions of contracts and agreements and such similar
information relating to subsidiaries and affiliates of the Company. The terms
"Trade Secret" and "Confidential Information" shall not apply to information
which is (1) already in Employee's possession (unless such information was
obtained by Employee from the Company or its affiliates or was obtained by
Employee in the course of Employee's employment by the Company or its
affiliates), (2) received by Employee from a third party with no restriction on
disclosure or (3) required to be disclosed by any applicable law.
(c) Except as required to perform Employee's duties as an employee,
Employee will not use or disclose any Trade Secrets or Confidential Information
during employment or at any time after termination of employment and prior to
such time as they cease to be Trade Secrets or Confidential Information through
no act of Employee in violation of this Section 3.
(d) Upon the request of the Company and, in any event, upon the
termination of employment hereunder, Employee will surrender to the Company all
memoranda, notes, records, drawings, manuals or other documents (including all
copies thereof) pertaining to the Company's business, Employee's employment or
the business of the Company or its affiliates. Employee will also leave with the
Company all materials involving any Trade Secrets or Confidential Information.
All such information and materials, whether or not made or developed by
Employee, shall be the sole and exclusive property of the Company or its
affiliates, and Employee hereby assigns to the Company all of Employee's right,
title and interest in and to any and all of such information and materials.
4. Covenant Not to Compete. Employee hereby covenants and agrees to
-----------------------
comply with and adhere to the provisions of SECTION 7.7 of the Merger Agreement,
which is incorporated herein by reference with the same effect as if restated
herein in full.
5. Specific Enforcement. Employee specifically acknowledges and
--------------------
agrees that the restrictions set forth in Section 3 hereof and SECTION 7.7 of
the Merger Agreement as incorporated herein by Section 4 are reasonable and
necessary to protect the legitimate interest of the Company and its affiliates
and that the Company would not have employed Employee in the absence of such
restrictions. Employee further acknowledges and agrees that any violation of
the provisions of Section 3 hereof or SECTION 7.7 of the Merger Agreement will
result in irreparable injury to the Company or its affiliates, that the remedy
at law for any violation or threatened violation of such Sections will be
inadequate and that in the event of any such breach, the Company or its
affiliates, in addition to any other remedies or damages available at law or in
equity, shall be entitled to temporary injunctive relief before trial from any
court of competent jurisdiction as a matter of course and to permanent
injunctive relief without the necessity of
-3-
<PAGE>
proving actual damages. The existence of any claim or cause of action on the
part of Employee against the Company or any of its affiliates, whether arising
from this Agreement or otherwise, shall not constitute a defense to the granting
or enforcement of this injunctive relief. If the Company is required to enforce
any of its rights under this Agreement, the Company shall be entitled to recover
from Employee all reasonable attorneys' fees, court costs and other expenses
incurred by the Company in connection with the enforcement of those rights.
6. Term of Agreement. This Agreement shall be effective as of the
-----------------
Closing Date and shall continue for a term of two (2) years from the Closing
Date unless terminated by either party in the manner set forth herein. This
Agreement shall be automatically renewed for successive one (1) year terms
unless written notice of termination is given by either party at least ninety
(90) days prior to the end of the then current term.
7. Termination Upon Death or Disability of the Employee. In the
----------------------------------------------------
event the Company ceases its operations (other than pursuant to Section 11
below), Employee dies during the term of this Agreement, or the Employee is
disabled and unable to perform his duties in any material respect for a period
of three (3) months, this Agreement shall immediately terminate and neither the
Employee nor the Company shall have any further obligations hereunder, except
that the Company shall continue to be obligated under Section 2 hereof for any
unpaid salary, accrued benefits or unreimbursed expenses owed to Employee or his
estate that have accrued but not been paid as of the date of termination.
8. Termination by Employee. Employee may at any time terminate his
-----------------------
employment by giving the Company thirty (30) days prior written notice of his
intent to terminate the Agreement, unless the termination is because of Changed
Circumstances as set forth in Section 10. Upon such termination, Employee shall
have no further obligation to the Company, except as set forth in Sections 3 and
4 hereof, and Employee shall have no further rights or obligations hereunder,
except as set forth in Section 2 hereof for unpaid salary, accrued benefits or
unreimbursed expenses that have accrued but have not been paid as of the date of
termination, unless termination is because of Changed Circumstances, as set
forth in Section 10.
9. Termination for Cause. The Company shall have the right at any
---------------------
time to terminate Employee's employment immediately for cause, which shall
include any of the following reasons: Employee's violation of the provisions of
Sections 3 or 4 hereof, gross neglect of duty, conviction under a state or
federal law involving commission of a crime against the Company or any of its
affiliates or a felony, willful failure or refusal to carry out lawful duties or
directions of the Managers of the Company reasonably consistent with the duties
of Employee required by Section 1 hereof, or the willful engaging by the
Employee in gross misconduct materially injurious to the Company or its
affiliates.
Employee's obligations under Sections 3 and 4 hereof shall survive the
termination of this Agreement pursuant to this Section 9. In the event
Employee's employment hereunder is terminated in accordance with this Section,
the Company shall have no further
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<PAGE>
obligation to make any payments to Employee hereunder except as set forth in
Section 2 for unpaid salary, accrued benefits or unreimbursed expenses that have
accrued but have not been paid as of the date of termination.
10. Termination by Company Without Cause or by Employee for Changed
---------------------------------------------------------------
Circumstances. The Company may terminate the employment relationship with
- -------------
Employee without cause (which shall not include a termination pursuant to
Sections 7, 8 or 9) by giving Employee fifteen (15) days prior written notice.
Employee may terminate the employment relationship with the Company for Changed
Circumstances by giving the Company fifteen (15) days prior written notice. The
term "Changed Circumstances" as used in this Section 10 means (a) a reduction in
Employee's base salary and benefits or (b) a material reduction in the scope of
Employee's authority and/or responsibilities. In the event the employment
relationship is terminated by the Company without cause or by Employee for
Changed Circumstances during the term hereof, the Company shall pay Employee all
accrued benefits and unreimbursed expenses owed to Employee that have accrued
but have not been paid as of the date of termination. The Company shall also
continue to pay to Employee all salary and benefits hereunder until the
expiration of the term set forth in Section 6. Such payments shall be made in
accordance with Employee's regular salary schedule. Payment of the severance
benefits set forth herein shall be subject to the execution and delivery of a
Separation Agreement (including a release of all claims against the Company) the
terms of which will reasonably be determined by the parties. The Company's
obligations pursuant to this Section 10 shall terminate immediately upon any
violation of Section 3 or 4 hereof or the taking of any other action by Employee
that would have the effect of declaring the provisions of Section 3 or 4 hereof
not enforceable.
11. Assignment.
----------
(a) The rights and benefits of Employee under this Agreement, other
than accrued and unpaid amounts due under Section 2 hereof, are personal to him
and shall not be assignable.
(b) This Agreement may not be assigned by the Company except to an
affiliate of the Company; provided, however, that if the Company shall sell or
otherwise transfer substantially all its assets to another corporation or
entity, the Company shall assign its rights hereunder to that corporation or
entity and cause such corporation or entity to assume the Company's obligations
under this Agreement.
12. Notices. Any notice or other communication under this Agreement
-------
shall be in writing, signed by the party making the same, and shall be delivered
personally or sent by certified or registered mail, postage prepaid, addressed
as follows:
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<PAGE>
If to Employee: Mike A. Jarvis
c/o Summit Communications, LLC
112 E. State Street
Ridgeland, MS 39157
If to the Company: c/o Westower Corporation
7001 NE 40th Ave.
Vancouver, WA 98661
Attention: Chairman of the Board
or to such other address as may hereafter be designated by either party hereto.
All such notices shall be deemed given on the date received.
13. Governing Law. This Agreement shall be interpreted and enforced
-------------
in accordance with the laws of the State of Mississippi.
14. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid, but
if any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability for any such provisions in every other respect and
of the remaining provisions of this Agreement shall not be in any way impaired.
15. Entire Agreement. This Agreement contains the entire agreement
----------------
of the parties hereto with respect to the subject matter contained herein.
There are no restrictions, promises, covenants, or undertakings, other than
those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter. This Agreement may not be changed except by a writing executed by the
parties.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the day and year first above written.
SUMMIT COMMUNICATIONS, LLC
By: Westower Corporation,
its sole member
By:/s/ Calvin J. Payne
-------------------
Calvin J. Payne,
Chairman of the Board
EMPLOYEE
/s/ Mike A. Jarvis
------------------
Mike A. Jarvis
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