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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): AUGUST 31, 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 August 31, 1998, Westower Corporation (the "Company") completed the
acquisition of Cord Communications Incorporated, a California corporation
("Cord"), pursuant to an Agreement and Plan of Merger (the "Merger Agreement")
with Cord, Cord's stockholders Mark Buechley, Seth Buechley and Mark Reed (the
"Stockholders"), and Cord Acquisition Co., a Washington corporation and a
wholly-owned subsidiary of the Company ("Sub"). Pursuant to the terms of the
Merger Agreement, Cord was merged with and into Sub, which survived as a
corporation under the name "Cord Communications, Inc." Cord, headquartered in
Portland, Oregon, provides construction and related services to telephone
companies. The acquisition extends the Company's reach into California and
Nevada. The Company intends to use the assets of Cord 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 Stockholders was $5,000,000 in cash and 217,387
shares of Westower common stock, par value $.01 per share ("Westower Stock").
The Stockholders may also receive an earnout of up to 347,826 shares of Westower
Stock, based upon Sub's performance for the twelve months 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.
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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 August 31, 1998, among Cord
Communications Incorporated, Cord Acquisition Co., Mark Buechley, Seth
Buechley, Mark Reed and Westower Corporation.*
2.2 Registration Rights Agreement, dated as of August 31, 1998, among
Westower Corporation and Mark Buechley, Seth Buechley and Mark Reed.
2.3 Employment Agreement, dated as of August 31, 1998, between Cord
Acquisition Co. and Mark Buechley.
2.4 Employment Agreement, dated as of August 31, 1998, between Cord
Acquisition Co. and Seth Buechley.
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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: September 14, 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 August 31, 1998, among Cord
Communications Incorporated, Cord Acquisition Co., Mark Buechley, Seth
Buechley, Mark Reed and Westower Corporation.
2.2 Registration Rights Agreement, dated as of August 31, 1998, among Westower
Corporation and Mark Buechley, Seth Buechley and Mark Reed.
2.3 Employment Agreement, dated as of August 31, 1998, between Cord Acquisition
Co. and Mark Buechley.
2.4 Employment Agreement, dated as of August 31, 1998, between Cord Acquisition
Co. and Seth Buechley.
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EXHIBIT 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
AMONG
CORD COMMUNICATIONS, INCORPORATED,
CORD ACQUISITION CO.,
MARK BUECHLEY,
SETH BUECHLEY,
MARK REED
AND
WESTOWER CORPORATION
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TABLE OF CONTENTS
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Page
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ARTICLE 1. THE MERGER................................................ 1
1.1 Merger.................................................... 1
1.2 Articles of Incorporation................................. 2
1.3 Bylaws.................................................... 2
1.4 Directors and Officers.................................... 2
ARTICLE 2. CONVERSION AND EXCHANGE OF STOCK.......................... 2
2.1 Merger Terms.............................................. 2
2.2 Stock Portion of Merger Consideration..................... 2
2.3 Earnout................................................... 3
2.4 Closing................................................... 4
ARTICLE 3. DEFAULT................................................... 5
3.1 Default at Closing........................................ 5
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF CORD AND THE
CORD STOCKHOLDERS......................................... 5
4.1 Organization Standing and Qualification................... 5
4.2 Capitalization............................................ 6
4.3 Stock Ownership........................................... 6
4.4 No Subsidiaries, Partnerships or Joint Ventures........... 6
4.5 Financial Statements, etc................................. 6
4.6 Title to Properties....................................... 7
4.7 Tax Matters............................................... 7
4.8 Litigation and Labor Matters.............................. 8
4.9 Insurance................................................. 8
4.10 Patents, Trademarks, and Copyrights....................... 9
4.11 Contracts and Commitments................................. 9
4.12 Absence of Undisclosed Liabilities........................10
4.13 Absence of Default........................................11
4.14 Existing Condition........................................11
4.15 Validity of Contemplated Transactions.....................11
4.16 Restrictions..............................................11
4.17 Compliance with Laws......................................11
4.18 Disclosure................................................12
4.19 Transactions with Affiliates..............................12
4.20 Bank Accounts and Officers................................12
4.21 Environmental Liabilities.................................12
4.22 CORD's Employees..........................................13
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(i)
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4.23 Employee Benefit Plans....................................14
4.24 Investment Representations................................15
4.25 Information Related to Westower...........................16
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF WESTOWER
AND SUB...................................................16
5.1 Organization, Good Standing and Authority.................16
5.2 Financial Statements......................................16
5.3 Validity of Contemplated Transaction......................16
5.4 Material Changes..........................................17
5.5 Disclosure................................................17
ARTICLE 6. COVENANTS.................................................17
6.1 Conduct of Business Pending Closing.......................17
6.2 Business in the Ordinary Course...........................17
6.3 Accounting and Credit Changes.............................17
6.4 Capitalization, Options and Dividends.....................17
6.5 Encumbrance of Assets.....................................17
6.6 Employment Agreements.....................................17
6.7 Real Property Acquisitions, Dispositions and Leases.......18
6.8 Litigation During Interim Period..........................18
6.9 Access....................................................18
6.10 Good Will.................................................18
6.11 Exclusive Rights to Westower..............................18
ARTICLE 7. POST-CLOSING COVENANTS....................................18
7.1 Benefit Plans.............................................18
7.2 Bonuses...................................................19
7.3 Personal Guarantees.......................................19
7.4 Board Position............................................19
7.5 Continuing Independence...................................20
7.6 Registration Rights.......................................20
7.7 Employment Agreements....................................20
7.8 Covenant Not to Compete...................................21
7.9 Authorized Capital Stock of Westower......................22
ARTICLE 8. INDEMNIFICATION...........................................22
8.1 Indemnification by Buechley Stockholders..................22
8.2 Indemnification by Westower and Sub.......................23
8.3 Indemnification Procedure.................................23
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(ii)
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ARTICLE 9. CONDITIONS PRECEDENT TO WESTOWER'S AND SUB'S
OBLIGATIONS...............................................24
9.1 Representations and Warranties............................24
9.2 Compliance with Agreements................................24
9.3 Opinion of Counsel........................................24
9.4 Material Damage...........................................25
9.5 Employment Agreements.....................................25
ARTICLE 10. CONDITIONS PRECEDENT TO CORD STOCKHOLDERS' OBLIGATIONS....25
10.1 Representations and Warranties............................25
10.2 Compliance with Agreements................................26
10.3 Material Damage...........................................26
10.4 Employment Agreements.....................................26
ARTICLE 11. MISCELLANEOUS.............................................26
11.1 Broker and Finder's Fees..................................26
11.2 Survival of Representations and Warranties................26
11.3 Expenses..................................................27
11.4 Announcements.............................................27
11.5 Further Actions and Assurances............................27
11.6 Counterparts..............................................27
11.7 Contents of Agreement; Parties in Interest................27
11.8 Washington Law to Govern..................................27
11.9 Section Headings and Gender...............................27
11.10 Schedules.................................................27
11.11 Notices...................................................27
11.12 Confidential Information..................................28
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(iii)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is entered as of the 31st day of August,
1998 by and among CORD COMMUNICATIONS INCORPORATED, a California corporation
("CORD"), MARK BUECHLEY and SETH BUECHLEY (the "Buechley Stockholders"), being
the owners of all the issued and outstanding shares of capital stock of CORD,
MARK REED ("Reed" and together with Mark Buechley and Seth Buechley, the "CORD
Stockholders"), CORD ACQUISITION CO., a Washington corporation ("Sub"), and
WESTOWER CORPORATION, a Washington corporation ("Westower").
RECITALS:
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A. Mark Buechley owns 582 shares of common stock of CORD, Seth Buechley
owns 291 shares of common stock of CORD, and Reed will, as of Closing, own 22.38
shares of common stock of CORD, the aggregate amount of such stock being
sometimes referred to as the "CORD Stock."
B. Sub is a wholly owned subsidiary of Westower. The CORD Stockholders
desire to cause CORD to merge with and into Sub and thereby convert all of the
CORD Stock owned by them into cash and shares of common stock, $.01 par value,
of Westower (the "Westower Stock"), upon and subject to the terms and conditions
hereinafter set forth.
C. CORD, Sub and Westower intend the merger to be a reorganization within
the meaning of Internal Revenue Code (S) 368(a).
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"):
ARTICLE 1.
THE MERGER
1.1 Merger. Upon the filing of Articles of Merger with the appropriate
filing offices in the States of California and Washington, in the form attached
to this Agreement as Exhibit 1.1, CORD shall be merged with and into Sub (the
"Merger"), the separate existence of CORD shall cease, and Sub shall survive as
a corporation under the name "CORD Communications, Inc.," organized under and
governed by the laws of the State of Washington. From that time, Sub shall
possess all the rights, privileges, immunities, and franchises of each of CORD
and Sub, all property
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belonging to CORD shall be transferred to and vested in Sub without further act
or deed; Sub shall be responsible for all liabilities of each of CORD and Sub,
all in the manner and with the effect set forth in California General
Corporation Law (S)(S)1108 et seq. and RCW (S)(S) 23B.11, et seq.
1.2 ARTICLES OF INCORPORATION. The Articles of Incorporation of Sub in
effect immediately prior to the Merger shall be amended to change the name of
the corporation in Article 1 thereof to "Cord Communications, Inc.," and, as so
amended, shall be the Articles of Incorporation of the surviving corporation
until amended in accordance with applicable law.
1.3 BYLAWS. The Bylaws of Sub in effect immediately prior to the Merger
shall be the Bylaws of the surviving corporation until amended in accordance
with applicable law.
1.4 DIRECTORS AND OFFICERS. The Board of Directors of the surviving
corporation shall initially consist of Seth Buechley, Mark Buechley, Mike
McWhirter, Calvin J. Payne, S. Roy Jeffrey, Peter Lucas and Mike Carr, who shall
hold office in each case until their successors are elected and qualified. The
initial officers of the surviving corporation shall be:
Mark Buechley President
Seth Buechley Vice President
Peter Lucas Vice President, Treasurer and
Secretary
Each officer shall hold office in accordance with the Bylaws of the surviving
corporation.
ARTICLE 2.
CONVERSION AND EXCHANGE OF STOCK
2.1 MERGER TERMS. In the Merger, each outstanding share of CORD Stock
shall be converted into and become the right to receive: (a) $5,584.22 in cash;
plus (b) 242.79 shares of Westower Stock; plus (c) up to 388.47 shares of
Westower Stock pursuant to the terms of the earnout formula contained in Section
2.3 of this Agreement (collectively, the "Merger Consideration").
2.2 STOCK PORTION OF MERGER CONSIDERATION. For purposes of calculating
the number of shares of Westower Stock to be delivered for each share of CORD
Stock, the Westower Stock has been valued at $23.00 per share, which was the
price on the date the terms of the Merger were agreed to by the parties. No
fractional shares of Westower Stock will be issued. The number of shares to be
issued to any CORD Stockholder will be rounded downward to the nearest whole
share and cash will be paid in lieu of any fraction at the rate of $23.00 per
share.
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2.3 Earnout.
(a) Within 15 days after EBITDA (hereinafter defined) is determined, Sub
and Westower shall deliver to the CORD Stockholders the portion of the
Merger Consideration deliverable pursuant to Section 2.1(c) (the
"Earnout"). The Earnout shall be, for each share of CORD Stock, a
number of shares of Westower Stock equal to the product of .00025902
multiplied by EBITDA for the period from September 1, 1998 through
August 31, 1999 (the "Earnout Period"), subject to the limitation that
in no event shall the Earnout for each share of CORD Stock exceed
388.47 shares of Westower Stock; provided, however, that in the event
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that the authorized number of shares of Westower Stock is not
increased as contemplated by Section 7.9 hereof, Westower may at its
option replace up to 194.23 shares of Westower Stock with cash at the
rate of $23.00 per share of Westower Stock. The term "EBITDA" shall
mean the net income of CORD (for the portion of the Earnout Period
prior to the Merger) and Sub (for the portion of the Earnout Period
after the Merger), determined in accordance with generally accepted
accounting principles, as utilized by CORD for its fiscal year ended
June 30, 1998, consistently applied, plus, to the extent deducted in
determining net income, interest, income taxes, depreciation and
amortization. In addition, for purposes of this Agreement, (i) EBITDA
of the Sub shall be computed without giving effect to the Merger and
any accounting adjustments caused thereby and any expenses as a result
of the Merger will be excluded (including audit expenses to the extent
increased above normal audit expenses); (ii) EBITDA shall not be
reduced by bonuses paid to Sub employees as set forth in Section 7.2
hereof; (iii) EBITDA shall not be reduced for severance payments made
by CORD or Sub to Reed pursuant to Reed's post-Closing severance
agreement as set forth in Disclosure Schedule 4.14; (iv) EBITDA shall
not be reduced by Westower for overhead costs attributable to Westower
incurred by Sub; (v) all transactions between CORD and Sub and
Westower and its subsidiaries and affiliates shall be adjusted to an
arm's-length price for sales or leases of property or provision of
services to the extent that the price paid is less than the price that
would otherwise be charged by or to CORD in a transaction with an
independent third party; and (vi) extraordinary and nonrecurring gains
(including tax refunds) and extraordinary and nonrecurring losses not
related to operations shall be excluded; provided that gains and
losses from projects of the nature associated with CORD's core
business shall not be considered nonrecurring.
(b) Westower will determine the Earnout within forty-five (45) days
following the last day of the Earnout Period and deliver prompt notice
of such amount to the CORD Stockholders (the "Earnout Notice") with
supporting documentation. The CORD Stockholders shall have the right
to inspect, audit and make extracts from all of the records, files and
books of account of Westower relating to the Earnout for purposes of
verifying the amount of the Earnout at reasonable times during
business hours, upon advance notice to Westower.
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(c) The CORD Stockholders shall have thirty (30) days from the receipt of
the Earnout Notice to notify Westower if they dispute the amount of
the Earnout. If Westower has not received notice of any such dispute
within such 30-day period, the Earnout shall be final. If, however,
CORD Stockholders have delivered notice of such a dispute to Westower
within such 30-day period, then Westower's independent accountants
shall select a mutually agreeable partner at an independent accounting
firm that has not represented any of the parties hereto within a
period of two (2) years and is one of the five largest accounting
firms in the United States (the "New Accounting Firm") to review the
Earnout, the books of Sub and the Earnout Notice to determine the
amount, if any, that the Earnout is in error. The New Accounting Firm
shall make its determination of the Earnout (the "Revised Earnout")
within thirty (30) days of its selection. The Revised Earnout shall be
final and binding on the parties hereto, and, upon such determination,
the Earnout shall be adjusted accordingly. The costs of the New
Accounting Firm shall be borne by Westower if the Revised Earnout is
higher than the Earnout as originally calculated and by the CORD
Stockholders in all other cases.
(d) If, on or prior to the date the Earnout is paid, Westower should split
or combine the Westower Stock, or pay a stock dividend or other stock
distribution in Westower Stock or any other security, or otherwise
change the Westower Stock into other securities, or make any dividend
or distribution on the Westower Stock, then the number of shares of
Westower Stock issuable as payment of the Earnout will be
appropriately adjusted to reflect such split, combination, dividend or
other distribution or change.
(e) All actions and determinations by the CORD Stockholders with respect
to the Earnout shall be taken and made by Mark Buechley as
representative of the CORD Stockholders, or, in the event of his death
or disability, Seth Buechley.
2.4 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 August 31, 1998 (the "Closing
Date"). At the Closing, the CORD Stockholders shall deliver, (i) free and clear
of all liens and encumbrances, claims and other charges thereon of every kind,
the certificate(s) for the shares of CORD Stock in negotiable form, duly
endorsed in blank or with separate stock transfer powers attached; (ii) signed
Employment Agreements, as described in Section 7.7 of this Agreement; (iii) a
signed Registration Rights Agreement, as described in Section 7.6 of this
Agreement; (iv) the signed Articles 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 (i) the cash portion of the Merger
Consideration, in immediately available funds; (ii) the number of shares of
Westower Stock determined under Section 2.2 of this Agreement, free and clear of
all liens and encumbrances, claims and charges thereon of every kind,
represented by certificates or an irrevocable direction to Westower's transfer
agent to deliver such shares; (iii) a signed Registration Rights Agreement, as
described in Section 7.6 of this Agreement; (iv) signed
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Employment Agreements, as described in Section 7.7 of this Agreement; (v) the
signed Articles of Merger, as described in Section 1.1 of this Agreement; and
(vi) the other deliveries required by this Agreement. If certificates for the
Westower Stock are not delivered at Closing, certificates shall be delivered to
the CORD Stockholders as soon as they are made available by Westower's transfer
agent.
ARTICLE 3.
DEFAULT
3.1 DEFAULT AT CLOSING. If CORD or any of the CORD Stockholders, 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 CORD AND THE CORD STOCKHOLDERS
To induce Westower and Sub to enter into this Agreement and consummate the
transactions contemplated hereby, CORD and each of the Buechley Stockholders,
jointly and severally, and, with respect to Sections 4.3, 4.15, 4.24 and 4.25 as
they apply to Reed, Reed represent and warrant to Westower that, except as set
forth in the Schedules, the statements contained in this Article 4 are true and
complete:
4.1 ORGANIZATION STANDING AND QUALIFICATION. CORD is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California, and has all requisite corporate 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 Articles of
Incorporation and all amendments thereto of CORD certified by the Secretary of
State of California and a complete and correct copy of its Bylaws and all
amendments thereto, certified by its Secretary, have been delivered to Westower
at least 5 days prior to the date hereof. CORD is duly qualified to do business
and is in good standing to do business as a foreign corporation in [list], which
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constitute all jurisdictions in which the failure to so qualify would have a
material adverse effect on CORD's business or the ownership of its property.
4.2 CAPITALIZATION. The total authorized capital stock of CORD consists
of 1,000,000 shares of common stock, $1.00 par value. As of Closing, 895.38
shares of common stock will be issued and outstanding, all of which will be
validly issued, fully paid and non-assessable. There are no shares of preferred
stock outstanding.
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4.3 STOCK OWNERSHIP. The CORD Stockholders will be, as of Closing, the
lawful owners of record and beneficially of the number of shares of CORD Stock
set forth in Recital A of this Agreement, free and clear of all liens and
encumbrances, claims and charges of every kind.
4.4 NO SUBSIDIARIES, PARTNERSHIPS OR JOINT VENTURES. CORD owns no equity
interest in any corporation, joint venture, partnership or other entity.
4.5 FINANCIAL STATEMENTS, ETC.
(a) Financial Statements. CORD has delivered to Westower copies of the
following financial statements:
(i) Balance sheets. Balance sheets of CORD as of June 30, 1998
(unaudited), June 30, 1997 (audited by Moss Adams LLP) and June
30, 1996 (unaudited), which balance sheets together with any notes
to the financial statements present fairly the financial condition
and assets and liabilities of CORD 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 June 30, 1998 is hereinafter referred to
as the " 1998 Balance Sheet."
(ii) Statements of Income, etc. A statement of income of CORD for the
fiscal year ended June 30, 1998 (unaudited) and statements of
income, changes in stockholders' equity and cash flows of CORD for
the fiscal years ended June 30, 1997 (audited by Moss Adams LLP)
and June 30, 1996 (unaudited), which statements, together with any
notes to the respective statements of income present fairly the
income, changes in stockholders' equity and cash flows of CORD for
the said periods in accordance with generally accepted accounting
principles consistently applied except as may be otherwise
disclosed therein.
(b) Accounts Receivable. The accounts receivable of CORD as set forth on
the 1998 Balance Sheet and all accounts receivable arising subsequent
to June 30, 1998 did and will arise in the ordinary course of business
and represent bona fide obligations of the persons or entities from
whom they are due.
(c) Other Assets. The prepaid expenses and other unused assets of CORD as
shown on the 1998 Balance Sheet or arising thereafter prior to Closing
represent amounts which will benefit CORD in future periods. All
material tangible assets owned and used by CORD in its future
operations were reflected in the 1998 Balance Sheet.
(d) Fixed Assets. The fixed assets of CORD are stated at cost in the 1998
Balance Sheet. The reserves for depreciation and amortization provided
against these assets have
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been established in accordance with the notes to the financial
statements and are adequate to reduce any idle fixed assets to net
realizable value.
4.6 TITLE TO PROPERTIES. CORD 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 June 30, 1998 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 4.6. All equipment owned or used by CORD is,
with minor exceptions, in good operating repair.
4.7 TAX MATTERS. Except as set forth in the attached Schedule 4.7:
(a) CORD has filed all Tax Returns (as hereinafter defined) that it was
required to file. All such Tax Returns were correct and complete. All
Taxes (as hereinafter defined) owed by CORD (whether or not shown on
any Tax Return) have been paid or properly accrued. CORD 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 CORD does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no liens on any of
the assets of CORD that arose in connection with any failure (or
alleged failure) to pay any Tax.
(b) CORD has withheld and paid all Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee,
independent contractor or other third party.
(c) There is no dispute or claim concerning any Tax Liability of CORD
either (1) claimed or raised by any authority in writing or (2) as to
which any CORD Stockholder or any employee responsible for Tax matters
of CORD has knowledge. No Tax Returns filed with respect to CORD have
been audited or currently are the subject of audit. CORD has delivered
to Westower correct and complete copies of all federal and state
income Tax Returns filed by CORD since June 30, 1995 and all related
examination reports and statements of deficiencies, if any.
(d) CORD 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.
(e) The unpaid Taxes of CORD did not, as of June 30, 1998, exceed the
reserve for Tax liability set forth on the face of the 1998 Balance
Sheet.
(f) 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
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section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability,
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.
(g) "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.
4.8 LITIGATION AND LABOR MATTERS. Except as provided for and disclosed in
the 1998 Balance Sheet or disclosed in Schedule 4.8 hereto:
(a) There is no litigation, proceeding or governmental investigation
pending or, to the knowledge of the Buechley Stockholders, threatened
against CORD, its properties or its business;
(b) CORD is not in default with respect to any order, writ, injunction or
decree of any court or federal state, municipal or governmental
department, commission, board, bureau, agency or instrumentality;
(c) CORD has not committed, and neither the Buechley Stockholders nor CORD
have received any notice of or claim that CORD has committed any
unfair labor practice under applicable federal or state law; and
(d) To the knowledge of the Buechley Stockholders, there are no facts that
could furnish the basis for a valid claim that could be brought
against CORD in litigation or arbitration.
4.9 INSURANCE. CORD is insured under various policies of fire, liability
and other forms of insurance, as set forth in Schedule 4.9 hereto, which
policies are valid and enforceable in accordance with their terms and, in the
opinion of the Buechley Stockholders, provide adequate insurance for the
business of CORD and its assets and properties. Such policies or substantially
equivalent policies have been effect for at least five years. CORD shall
continue to carry such policies or similar policies during the pendency of this
Agreement. Any outstanding claims under such policies are described in Schedule
4.9 hereto. There is no liability for retrospective insurance premium
adjustments for any period prior to the date hereof.
4.10 PATENTS, TRADEMARKS, AND COPYRIGHTS. Schedule 4.10 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 CORD
or in which CORD has an interest and the nature of such interest. No other
patent, trademark, service mark, copyright or license is necessary to permit
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the business of CORD 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, and there are no violations by
others of any rights of CORD thereunder. To the knowledge of the Buechley
Stockholders, CORD is not infringing on any patent, trademark, or service mark,
or copyright or otherwise violating the rights, of any third party, and no
proceedings have been instituted or are pending, or to the knowledge of the CORD
Stockholders are threatened, and no claim has been received by CORD, alleging
any such violation. CORD is not a party to or bound by any license agreement
requiring the payment by CORD of any royalty payment, except as set forth in
Schedule 4.11 hereto.
4.11 CONTRACTS AND COMMITMENTS. Except as listed and identified in
Schedule 4.11 hereto or contemplated by this Agreement, CORD is not a party to
any written or oral:
(a) contract or commitment with any person or former director or employee
or consultant;
(b) contract or commitment with any labor union or employee group;
(c) contract or commitment for the future purchase of, or payment for, raw
materials, supplies or products, that individually total $50,000 or
more;
(d) contract or commitment to sell or supply products or to perform
services that individually total $50,000 or more without the ability
on the part of CORD to increase such price or to cancel the contract
or commitment without any liability on the part of CORD;
(e) contract or commitment continuing over a period of more than six
months from the date of this Agreement;
(f) representative or sales agency contract or commitment;
(g) lease under which it is either lessor or lessee (other than the assets
leased pursuant to leases listed on Schedule 4.11, there are no other
material assets or properties necessary or utilized in the business
and operations of CORD that are not owned by CORD);
(h) bonus, pension, profit sharing, retirement, stock purchase, stock
option hospitalization, insurance, vacation pay or any similar plan or
practice, including but not limited to any welfare benefit plan as
defined in Section 3.1 of the Employee Retirement Income Security Act,
formal or informal, in effect with respect to any of CORD's employees
or former employees (collectively, the "Plans");
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(i) contract or commitment for the borrowing of money or other agreement
or arrangement for a line of credit;
(j) contract or commitment for any charitable contribution;
(k) contract or commitment for capital expenditures in excess of $50,000;
(l) contract or commitment for limiting or restraining it from engaging in
any lines of business with any person, firm, corporation or any other
entity;
(m) contract not made in the ordinary course of business; or
(n) license agreement.
Except as stated in Schedule 4.11 hereto and for delays, minor failures to
meet specifications or other minor defaults which are normal in the conduct of
the business between CORD and other parties to the above contracts, CORD has
complied with the provisions thereof, is not in default thereunder, and to the
knowledge of the Buechley Stockholders, 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.
4.12 ABSENCE OF UNDISCLOSED LIABILITIES. There are no material liabilities
or obligations of CORD of any nature whatsoever, whether accrued, absolute,
contingent, known or unknown, or otherwise, including, but not limited to, any
tax liabilities due or to become due, and no Buechley Stockholder knows of any
basis for assertion against CORD of any such liability or obligation except (i)
as identified on schedules to this Agreement, (ii) to the extent reflected in
the 1998 Balance Sheet and not heretofore paid or discharged and (iii) 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 June 30,
1998.
4.13 ABSENCE OF DEFAULT. Except as set forth in Schedule 4.13, CORD is not
in default in the performance, observance or fulfillment of any material
obligation, covenant or condition contained in any debenture or note, or
contained in any conditional sale or equipment trust agreement, or loan or other
borrowing agreement to which CORD is a party.
4.14 EXISTING CONDITION. Except as disclosed in Schedule 4.14 hereto,
since June 30, 1998, there has not been (i) any material adverse change in the
financial condition or in the operations, business or properties of CORD; (ii)
any material damage, destruction or loss, whether or not covered by insurance,
affecting the operations, business or properties of CORD; (iii) any declaration,
setting aside or payment of any dividend, or any distribution in respect of
capital stock of CORD, or any redemption, purchase or other acquisition of any
kind of any shares of CORD; (iv) any increase in the compensation payable by
CORD to any of its officers, directors or employees;
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(v) any change in the terms of any bonus, insurance, pension or other benefit
plan for or with any officer, director or employee which increases amounts paid,
payable to or to become payable thereunder; or (vi) any complaints or other
concerns which have been brought to the attention of the Buechley Stockholders
and which relate to CORD's labor relations.
4.15 VALIDITY OF CONTEMPLATED TRANSACTIONS. Neither the execution and
delivery of this Agreement nor the consummation of the transactions provided for
herein will violate any agreement to which CORD or the CORD Stockholders are a
party or by which it or any of them is bound or any law, order or decree or any
provision of the Articles of Incorporation, Charter or Bylaws of CORD. The CORD
Stockholders 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 the CORD Stockholders legally
binding upon them in accordance with its terms.
4.16 RESTRICTIONS. CORD is not subject to any charter or any other
corporate restriction or any judgment, order, writ, injunction or decree, which
materially and adversely affects or, so far as the Buechley Stockholders can now
foresee, may in the future materially and adversely affect, the business,
operations prospect, properties, assets, or condition, financial or otherwise,
of CORD.
4.17 COMPLIANCE WITH LAWS. CORD has complied with and is not in default
under, or in violation of, any federal, state or local laws, ordinances, rules,
regulations or orders (including without limitation any safety, health or trade
laws, ordinances, rules, regulations or orders) applicable to the operations,
business or properties of CORD which materially and adversely affects or, so far
as the Buechley Stockholders can now foresee, may in the future materially
affect, the business, operations, prospects, properties or assets or condition,
financial or otherwise, of CORD.
4.18 DISCLOSURE. No representation by CORD or the CORD Stockholders in
this Agreement contains any untrue statement of a material fact or omits to
state any material fact necessary to make any statement herein not misleading.
4.19 TRANSACTIONS WITH AFFILIATES. No director, officer or stockholder of
CORD 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
CORD except as described in Schedule 4.19 hereto.
4.20 BANK ACCOUNTS AND OFFICERS. Schedule 4.20 hereto contains a true and
correct list of the name and location of each bank in which CORD has an account,
each safety deposit box or custody agreement and the names of the persons
authorized to draw thereon or to withdraw therefrom, and also sets forth the
names of all directors and officers of CORD.
4.21 ENVIRONMENTAL LIABILITIES. Except as disclosed on Schedule 4.21
attached hereto, in the operation of the business of CORD at any time prior to
the Closing Date, including but not limited to the ownership or operation of any
real properties, CORD: (a) has not been in material
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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 CORD'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
operate, except for such non-compliance as would not be reasonably expected to
lead to imposition of penalties or similar 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 CORD 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 CORD 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 CORD; (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 CORD 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.
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4.22 CORD'S EMPLOYEES. Schedule 4.22 attached hereto sets forth a list of
CORD's employees, their positions and rates of compensation. Except as
disclosed on Schedule 4.11 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 CORD'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. There are no existing or,
to the knowledge of the Buechley Stockholders, threatened claims by any of
CORD'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
4.11 attached hereto, there is no collective bargaining agreement in existence
between CORD and a collective bargaining representative for any of CORD'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 CORD's employees. CORD had not received notice of any
proceeding involving CORD currently pending before the National Labor Relations
Board, including but not limited to any wherein a labor organization is seeking
representation of any of CORD's employees.
4.23 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 the
Employee Retirement Income Security Act of 1974, as amended ("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 CORD,
nor is CORD otherwise aware of any facts or circumstances that could
lead to assessment of withdrawal liability, nor has CORD been notified
by any multi-employer plan (as that term is defined in Section
4001(a)(3) or ERISA) that such multi-employer plan is in
reorganization or insolvency within the meaning of Section 4241 or
Section 4245 of ERISA or that such multi-employer plan intends to
terminate or has terminated under Section 4041A of ERISA. CORD 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
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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) CORD 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 CORD 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. CORD 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 CORD 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
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.
4.24 INVESTMENT REPRESENTATIONS. Each CORD Stockholder, by executing this
Agreement, represents and warrants to Westower that such CORD Stockholder is
acquiring the Westower Stock hereunder for his own account for investment, with
no present intention of reselling or otherwise distributing the same, except (i)
pursuant to an offering of shares duly registered under the Securities Act of
1933, as amended, (the "Securities Act") or (ii) under other circumstances which
in the opinion of counsel acceptable to Westower does not require registration
under the Securities Act and applicable state securities laws. Westower agrees
that Davis Wright Tremaine LLP is acceptable counsel. Each CORD Stockholder
further covenants and represents that none of the Westower Stock that will be
issued to him pursuant to this Agreement will be offered, sold, assigned,
pledged, transferred, or otherwise disposed of by him except after full
compliance with all of the applicable provisions of the Securities Act and the
rules and regulations thereunder and applicable state securities laws. Until
and unless Westower receives the legal opinion referenced above, the CORD
Stockholders hereby confer full authority upon Westower to instruct its transfer
agent not to transfer any of the Westower Stock. The CORD Stockholders
acknowledge that Westower shall place a stop transfer order against the transfer
of the Westower Stock owned by them
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until they deliver the opinion required by this Section. All stock certificates
representing the Westower Stock shall be endorsed with the following restrictive
legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW BUT HAVE
BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER
HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL
EITHER (i) A REGISTRATION STATEMENT UNDER SUCH SECURITIES
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) THE
CORPORATION HAS RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO
THE CORPORATION AND ITS COUNSEL THAT REGISTRATION UNDER SUCH
SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED OFFER, SALE OR
TRANSFER.
4.25 INFORMATION RELATED TO WESTOWER. Each CORD Stockholder is an
"accredited investor" as defined in Rule 501 under the Securities Act. Each
CORD Stockholder has received and had an opportunity to review Westower's Post-
Effective Amendment No. 1 to its Registration Statement on Form SB-2 and Form 8-
K/A filed with the SEC on August 7, 1998 and August 15, 1998, respectively (the
"Westower SEC Filings"). Each CORD Stockholder acknowledges that Westower has
made available to the CORD Stockholders 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 CORD Stockholder
possesses such knowledge and experience in financial and business matters or has
been advised by such persons who do possess such knowledge that he 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 the CORD Stockholders that the
statements contained in this Section 5 are true and correct:
5.1 ORGANIZATION, GOOD STANDING AND AUTHORITY. Westower and Sub are
corporations duly organized, validly existing and in good standing under the
laws of the State of Washington and have full corporate power and authority to
own their properties and assets and to carry on their
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business as it has been and is conducted. The execution of this Agreement and
the consummation of the transactions contemplated hereby are within the
corporate power of Westower and Sub and have been duly authorized by all
necessary corporate and other action. This Agreement constitutes, and will
constitute when delivered in accordance with the terms hereof, a valid
obligation of Westower and Sub legally binding upon them in accordance with its
terms. The Westower Stock to be delivered to the CORD Stockholders as part of
the Merger Consideration when issued and delivered will be validly issued, fully
paid and non assessable.
5.2 FINANCIAL STATEMENTS. The financial statements of Westower contained
in the Westower SEC Filing have been prepared in accordance with generally
accepted accounting principles and present fairly the financial position of
Westower as of the respective balance sheet dates and results of operations and
cash flows of Westower for the periods then ended.
5.3 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 or Bylaws.
5.4 MATERIAL CHANGES. Except as disclosed in the Westower SEC Filing,
there has not been, since May 31, 1998, (i) any event, occurrence or series of
events or occurrences that have had, or are reasonably expected to have, a
material adverse effect on Westower's business, (ii) any declaration, setting
aside or payment of any dividend or distribution in respect of capital stock of
Westower, or (iii) any redemption, purchase or other acquisition of any kind of
any shares of Westower other than redemption of outstanding warrants.
5.5 DISCLOSURE. No representation by Westower or Sub in this Agreement
contains any untrue statement of a material fact or omits to state any material
fact necessary to make any statement herein not misleading.
ARTICLE 6.
COVENANTS
6.1 CONDUCT OF BUSINESS PENDING CLOSING. CORD and the CORD Stockholders
agree that, pending the Closing and except as otherwise approved by Westower:
6.2 BUSINESS IN THE ORDINARY COURSE. Except with respect to its
arrangements with Reed described on Schedule 4.14, CORD shall refrain from
engaging in transactions other than in the ordinary course of business. CORD
shall also refrain from entering into any transaction involving a capital
expenditure (including any borrowings in connection with such transaction) of
more than $10,000 or the disposal of any property or asset (other than inventory
in the ordinary course of business) with a value of more than $10,000.
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6.3 ACCOUNTING AND CREDIT CHANGES. CORD shall not make any changes in its
accounting procedures and practices or its credit criteria from those in
existence at July 1, 1998.
6.4 CAPITALIZATION, OPTIONS AND DIVIDENDS. CORD shall not amend its
Articles of Incorporation and, except for the issuance of 22.38 shares of CORD
stock to Mark Reed immediately prior to Closing, it shall not issue or
reclassify or alter any shares of outstanding or unissued shares of its capital
stock, it shall not grant options, warrants, or other rights of any kind to
purchase, or agree to issue any shares of its capital stock; it shall not
purchase or redeem or otherwise acquire for a consideration any shares of its
capital stock and shall not declare, pay, set aside or make any dividends or
other distributions or payments in respect of its capital stock.
6.5 ENCUMBRANCE OF ASSETS. CORD shall not mortgage, pledge or encumber
any of its properties or assets.
6.6 EMPLOYMENT AGREEMENTS. Except as contemplated by this Agreement, CORD
shall refrain from entering into any employment agreements, and shall keep in
effect its present salary administration program (including pension plans and
other fringe benefits). Notwithstanding the foregoing CORD may continue its
process of revising and updating current employment agreements as their terms
expire provided that they are on substantially the same terms.
6.7 REAL PROPERTY ACQUISITIONS, DISPOSITIONS AND LEASES. CORD shall
refrain from acquiring or agreeing to acquire, or disposing or agreeing to
dispose of, real estate and from entering into or agreeing to enter into leases
of real estate or equipment for a period in excess of one year.
6.8 LITIGATION DURING INTERIM PERIOD. CORD will promptly advise Westower
in writing of the commencement or threat against CORD of any claim, litigation,
proceeding or tax audit whether or not covered by insurance when the amount
claimed is in excess of $ 10,000.
6.9 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 CORD, 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 Buechley Stockholders will upon request furnish Westower with
any information reasonably required in respect to CORD's property, assets, and
business and will provide Westower with copies of any contract, document or
instrument listed in any Schedule hereto.
6.10 GOOD WILL. CORD will use its best efforts to preserve the good will
of its customers and suppliers and others having business relations with it.
6.11 EXCLUSIVE RIGHTS TO WESTOWER. The Buechley Stockholders, individually
and collectively, will not enter into discussions or negotiations with any other
party with a view to (i) the sale of the CORD Stock, (ii) a merger between CORD
and another party or, (iii) a sale of all or
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substantially all of the assets of CORD for a period of 30 days from the date of
execution of this Agreement without prior notice to and the consent of Westower.
ARTICLE 7.
POST-CLOSING COVENANTS
7.1 BENEFIT PLANS.
(a) CORD's current employee benefit plans described in Schedule 4.11 shall
be continued by the Sub after the Closing. Westower and Sub shall have
the right at any time to modify or terminate any employee benefit
plans but, during the Earnout Period, only with the approval of the
Buechley Stockholders. Eligible employees of Sub shall be entitled to
participate in an employee stock option plan of Westower as it may
exist from time to time; provided that the decision whether to have
any such plan, the terms of any such plan and the decision to grant
options to any particular employees shall be determined solely by
Westower. Subject to compliance with applicable securities laws,
Westower also agrees to adopt a plan whereby 100 shares of Westower
Stock shall be issuable to each CORD employee who completes at least
one year of service with Sub.
(b) Seth Buechley shall have the right to recommend to the committee of
Westower's Board of Directors that administers Westower's stock option
plan the identities of employees to receive options pursuant to the
Westower Corporation 1998 Stock Incentive Compensation Plan or such
successor plan as Westower and its stockholders may adopt (the "Plan")
and the number of shares to be subject to the options for each such
employee, such options to be effective and priced on the date of
grant; provided, however, that the total number of options granted
pursuant to the terms of this provision will in no event confer on
such Sub employees any rights to purchase an aggregate of more than
21,738 shares of Westower common stock, plus, when and if additional
shares of Westower Stock are issued in connection with the Earnout, an
additional number of shares equal to 10% of the shares issued in the
Earnout. Subject to approval by such committee, all options granted to
Sub employees will be exercisable within ten (10) years from the date
of grant and shall vest as follows: thirty-three percent (33%) of the
total shares granted on each of the first and second anniversaries of
the Closing Date and thirty-four percent (34%) on the third
anniversary of the Closing Date. Subject to approval by such
committee, all options granted hereunder shall constitute "incentive
stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), to the extent permitted
under the Code and applicable rulings and regulations, or nonqualified
stock options, as requested by Seth Buechley.
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7.2 BONUSES. For the 12-month period ended June 30, 1999, an amount equal
to 10% of the pre-tax income of Sub (without deduction for any allocation for
Westower overhead) may be paid as bonuses to key employees of Sub selected in
Seth Buechley's sole discretion. As reflected in Section 2.3 of this Agreement,
these bonus payments shall not reduce EBITDA for purposes of calculating the
Earnout. Bonus policies in subsequent periods shall be determined by the Board
of Directors of Sub.
7.3 PERSONAL GUARANTEES. Within 30 days after Closing, Westower shall use
its reasonable best efforts necessary to cause the release of Mark Buechley and
Seth Buechley from personal guarantees issued by them that are disclosed on
Schedule 4.11 to secure loans granted to CORD in the ordinary course of CORD's
business. 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.
7.4 BOARD POSITION. Promptly after the Closing Date, Westower will take
such action as may be necessary to appoint Seth Buechley as a member of the
Board of Directors, and Westower will nominate Seth Buechley as a director at
its next Annual Meeting of Shareholders, and each subsequent Annual Meeting of
Shareholders for so long as he is an employee of Sub and Sub is a subsidiary of
Westower.
7.5 CONTINUING INDEPENDENCE.
(a) During the Earnout Period, the businesses of Sub will be operated in
the ordinary course consistent with the past practice of CORD, and
Westower will not take any actions that would materially change the
operations of Sub, including any action that would prevent Sub (i)
from conducting its business in the ordinary course or (ii) from
taking any action necessary to preserve the businesses of Sub, to keep
available to Sub its employees or to preserve Sub's relationships with
customers, suppliers and others having business with relationships
with it.
(b) In the event that Westower or Sub takes any action or omits to take
any action which has a direct, negative impact on the EBITDA of Sub
during the Earnout Period, then, in such event, the parties, in good
faith, shall make reasonable adjustments in the calculation of the
EBITDA as may be necessary to neutralize the impact of any such action
or omission. Without limiting the generality of the foregoing, this
Section 7.5 shall apply if Westower acquires Teletronics and directs
to Teletronics work that could normally be performed by CORD and that
CORD has the capacity to perform.
(c) Westower and Sub agree that separate books and records will be kept
for Sub during the Earnout Period.
(d) Westower shall, during the Earnout Period, use its reasonable best
efforts to ensure that Sub has working capital sufficient to undertake
and complete projects that are
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normally within the scope of CORD's business and would affect EBITDA.
Westower acknowledges that in addition to paying off CORD's
outstanding credit line, the Buechley Stockholders anticipate working
capital requirements of approximately $2.5 million.
7.6 REGISTRATION RIGHTS. With respect to the Westower Stock to be
delivered to the CORD Stockholders at Closing and as payment for the Earnout,
Westower shall grant to the CORD Stockholders piggyback and demand registration
rights pursuant to a Registration Rights Agreement in substantially the form
attached to this Agreement as Exhibit 7.6.
7.7 EMPLOYMENT AGREEMENTS. Westower shall cause Sub to enter into
Employment Agreements with Mark Buechley and Seth Buechley in substantially the
form attached hereto as Exhibit 7.7.
7.8 COVENANT NOT TO COMPETE.
(a) Mark Buechley and Seth Buechley agree that for a period of two (2)
years from the date of termination of their employment with Sub for
any reason, whether with or without cause, neither will, 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 any business
engaged in the wireless communications industry or communications
tower construction industry (a "Business"); (ii) compete with
Westower, Sub or their subsidiaries and affiliates in the operation or
development of any Business within North America (Canada, Mexico, and
the United States of America); (iii) with the exception of Sub, 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
Sub, or its subsidiaries or affiliates, and any customer, client,
supplier or employee of Sub, or its subsidiaries or affiliates; or (v)
solicit any employee of Sub, or its subsidiaries or affiliates, to
leave their employment with Sub or its subsidiaries or affiliates, as
the case may be, or hire any such employee to work for a Business.
Mark Buechley and Seth Buechley shall not be entitled to circumvent
the provisions of this Section 7.8 by entering into a relationship
with a Business as a consultant, director, advisor, or otherwise,
which has the effect of competing with Sub, its affiliates or
subsidiaries.
(b) If a judicial determination is made that any of the provisions of
Section 7.8(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 7.8(a) and
to apply the provisions of Section 7.8(a) to the
20
<PAGE>
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 7.8(a) shall apply
shall be tolled and suspended during all violations of Section 7.8(a).
(c) The Buechley Stockholders specifically acknowledge and agree that the
restrictions set forth in this Section 7.8 are reasonable and
necessary to protect the legitimate interests of Westower and Sub and
that Westower and Sub would not have undertaken the Merger in the
absence of such restrictions. Mark Buechley and Seth Buechley further
acknowledge and agree that any violation of the provisions of this
Section 7.8 will result in irreparable injury to Westower and Sub,
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 Sub, 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 Mark Buechley or Seth Buechley
against Westower or Sub, whether arising from this Agreement or
otherwise, shall not constitute a defense to the granting or
enforcement of this injunctive relief. If Westower or Sub is required
to enforce any of its rights under this Agreement, Westower or Sub
shall be entitled to recover from Mark Buechley or Seth Buechley, as
applicable, all reasonable attorneys' fees, court costs and other
expenses incurred by Westower or Sub in connection with the
enforcement of those rights.
(d) The Buechley Stockholders 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 CORD referred to in Section
4.5 and deliver an opinion thereon as required by the rules and
regulations of the SEC.
7.9 AUTHORIZED CAPITAL STOCK OF WESTOWER. Westower agrees to use all
reasonable efforts to amend its Articles of Incorporation to increase the
authorized number of shares of common stock of Westower to at least 20,000,000
shares and to submit such an amendment to a vote of its shareholders at the next
meeting of shareholders.
ARTICLE 8.
INDEMNIFICATION
8.1 Indemnification by Buechley Stockholders. Subject to the limitations
set forth in this Section 8.1, the Buechley Stockholders shall, jointly and
severally, indemnify and hold harmless Westower, Sub and their respective
officers, directors, agents, employees and affiliates against and
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in respect of any and all claims, suits, demands, liabilities, damages, losses,
costs and expenses arising out of or otherwise in respect of:
(a) any breach of any representation, warranty or covenant contained in
this Agreement or in any certificate or other instrument furnished on
behalf of CORD or by the CORD Stockholders, 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 Buechley Stockholders shall not be liable to
Westower or Sub under this Agreement for any breach of a representation or
warranty that was not set forth in a 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 Buechley Stockholders pursuant to
Section 11.11 within (i) two years after Closing in the case of any
representation or warranty except those set forth in Sections 4.2, 4.3, 4.7 and
4.21, (ii) four years in the case of the representations and warranties set
forth in Section 4.21, and (iii) the expiration of the applicable statute of
limitations in the case of Sections 4.2, 4.3 and 4.7. Notwithstanding anything
to the contrary herein, the Buechley Stockholders shall be liable, responsible
or obligated to indemnify Westower and Sub for claims for breach of a
representation or warranty under this Section 8.1, only if the aggregate amount
of such claims exceeds $10,000. The total liability and responsibility of the
Buechley Stockholders under this Section 8.1 shall be limited to the aggregate
Merger Consideration received by the CORD Stockholders under this Agreement.
Payment for indemnification by the Buechley Stockholders 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 10 trading days preceding
such payment.
8.2 Indemnification by Westower and Sub. Westower and Sub shall indemnify
and hold harmless the Buechley Stockholders against and in respect of any and
all liability, damage, loss, cost and expenses arising out of or otherwise in
respect of any personal guarantees referred to in Section 7.3 hereof.
8.3 Indemnification Procedure. Promptly after the receipt by any party
hereto 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 or 8.2, give such Indemnifying Party written
notice of such claim or the commencement of such action or proceeding. Such
Indemnifying Party shall have the right, at its option and upon posting a bond
or other security equal to such claims, to compromise or defend, at its own
expense and by its counsel, any matter involving the asserted liability of the
party seeking such indemnification. Such notice, and opportunity to defend,
shall be a condition precedent to any liability of the Indemnifying Party under
the indemnification agreements contained in this 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
22
<PAGE>
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 subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions:
9.1 REPRESENTATIONS AND WARRANTIES. The CORD Stockholders'
representations and warranties contained in this Agreement or in any Schedule,
list, certificate or document delivered pursuant to the provisions hereof 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 the CORD Stockholders shall have delivered to
Westower and Sub a certificate dated the Closing Date and signed by them to such
effect.
9.2 COMPLIANCE WITH AGREEMENTS. The CORD Stockholders and CORD shall have
complied with all agreements and conditions required by this Agreement to be
performed by them prior to or at the Closing, and the CORD Stockholders 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. The CORD Stockholders shall have delivered to
Westower and Sub an opinion of their counsel Davis Wright Tremaine LLP, dated as
of the Closing Date and in form and substance satisfactory to Westower and
based, as to factual matters, on certificates of CORD Stockholders to the effect
that:
(a) Each of the CORD Stockholders is the lawful owner of record and
beneficially of all the number of shares of CORD Stock set forth in
the recitals of this Agreement, free and clear of any liens and
encumbrances, equities and claims.
(b) This Agreement constitutes the valid obligations of the CORD
Stockholders legally binding upon them in accordance with its terms,
and upon filing of Articles of Merger as set forth in this Agreement,
CORD will be merged with and into Sub as provided in this Agreement.
(c) To the knowledge of such counsel, CORD is not a party to, or bound by
any written or oral contract or agreement which grants to any person
an option or right of first refusal or other right to acquire at any
time, or upon the happening of any stated events, shares of the
capital stock of CORD.
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(d) CORD's authorized capital stock consists of 1,000,000 shares of common
stock, $1.00 par value, of which 895.38 shares are validly issued,
outstanding, fully paid and non-assessable as of Closing.
(e) CORD is a corporation duly organized, validly existing and in good
standing under the laws of the State of California, and has the
corporate power to perform its business as presently conducted and to
own and lease the properties used in connection therewith. CORD is
duly qualified to do business and is in good standing in all
jurisdictions specified in this Agreement.
(f) 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 Articles of Incorporation or Bylaws of CORD, or, to the
knowledge of such counsel, any indenture, agreement, instrument or
understanding known to such counsel to which CORD or the CORD
Stockholders are a party or by which it or any of them is bound.
(g) CORD has good and marketable title to the properties described in the
1998 Balance Sheet subject to no liens or other encumbrances except
those listed in phrases (i)-(iii) of said Subsection 4.6 and Schedule
4.6. The opinion required by this Subsection shall be based solely
upon matters which have come to such counsel's attention and which are
contained in any judgment, federal tax lien or financing statement
searches in respect of CORD.
9.4 MATERIAL DAMAGE. The business and properties of CORD, 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 with those persons
referred to in Section 7.7 shall have been executed and delivered.
ARTICLE 10.
CONDITIONS PRECEDENT TO CORD STOCKHOLDERS' OBLIGATIONS
All obligations of the CORD Stockholders 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 or in any certificate or document
delivered pursuant to the provisions hereof 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
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<PAGE>
Sub shall have delivered to the CORD Stockholders a certificate dated as of
Closing and signed by its Chief Executive Officer or Chief Operating Officer 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 CORD
Stockholders a certificate dated as of Closing and signed by its Chief Executive
Officer or Chief Operating Officer to such effect.
10.3 MATERIAL DAMAGE. The business and properties of Westower and its
subsidiaries then 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.
10.4 EMPLOYMENT AGREEMENTS. The employment agreements with those persons
referred to in Section 7.7 shall have been executed and delivered.
ARTICLE 11.
MISCELLANEOUS
11.1 BROKER AND FINDER'S FEES. Except for the engagement of JMW Capital,
which has been disclosed to Westower, the CORD Stockholders represent and
warrant to Westower and Sub that they have not engaged or dealt with any broker
for a fee or commission in respect to the execution of this Agreement or the
consummation of the transactions contemplated hereby. The fees and expenses of
JMW Capital shall be solely the obligation of and shall be paid by the CORD
Stockholders. Westower and Sub represent and warrant to the CORD Stockholders
and CORD that neither they nor any corporate affiliate has engaged or dealt with
any broker or other person who may be entitled to any brokerage fee or
commission in respect of the execution of this Agreement or the consummation of
the transactions contemplated hereby. Each of the parties hereto shall
indemnify and hold the others harmless against any and all claims, losses,
liabilities or expenses which may be asserted against such other parties as a
result of such first mentioned party's dealings, arrangements or agreements with
any such broker or person.
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties and agreements, made by Westower, Sub and the CORD Stockholders 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 the CORD Stockholders contained in Sections 4.2, 4.3 and 4.7
will survive the Closing until the expiration of applicable statute of
limitations and the representations and warranties of CORD and the CORD
Stockholders contained in Section 4.21 will survive the Closing and continue in
full force and effect for four years after 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.
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11.3 EXPENSES. The CORD Stockholders and CORD shall bear their own
expenses, and Westower and Sub shall bear their expenses, in connection with the
transactions contemplated hereby; provided, however, the fees and expenses of
-------- -------
Davis, Wright & Tremaine LLP shall be borne by the CORD Stockholders to the
extent that they exceed $40,000.
11.4 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.
11.5 FURTHER ACTIONS AND ASSURANCES. Westower, Sub, CORD and the CORD
Stockholders 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.
11.6 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which is an original and the CORD Stockholders 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.
11.7 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 the CORD Stockholders, Westower
and Sub.
11.8 WASHINGTON LAW TO GOVERN. This Agreement shall be construed and
enforced in accordance with the laws of the State of Washington.
11.9 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.
11.10 SCHEDULES. All Schedules referred to in this Agreement are intended
to be and are hereby specifically made a part of this Agreement.
11.11 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
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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):
If to Westower or Sub: Westower Corporation
7001 NE 40th Avenue
Vancouver, Washington 98661
Facsimile No. (360) 750-9354
With Copy to: Peter S. Sartorius Esq.
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
If to CORD: c/o Seth Buechley
7160 Fir Loop, Suite 102
Portland, OR 97223
Facsimile No. (503) 598-0700
If to CORD Stockholders: Seth Buechley
17620 SW Chippewa Trail
Tualatin, OR 97062
Mark Buechley
P.O. Box 394
Glide, OR 97443
Mark Reed
4185 Rosepark Drive
West Lim, OR 97068
If to CORD or CORD Stockholders
With Copy to: Coni S. Rathbone, Esq.
Davis Wright Tremaine LLP
Suite 2300
1300 S.W. Fifth Avenue
Portland, OR 97201
11.12 Confidential Information. Westower and its corporate affiliates and
its representatives agree to hold in confidence any information not generally
available to the public received by them from CORD or the CORD Stockholders
pursuant to the terms of this Agreement. Similarly, CORD and the CORD
Stockholders and their representatives 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
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<PAGE>
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
CORD Acquisition Co.
By: /s/ Calvin J. Payne
-----------------------------------------
Title: President
CORD Communications, Incorporated
By: /s/ Seth Buechley
-----------------------------------------
Seth Buechley, Vice President
CORD STOCKHOLDERS:
/s/ Seth Buechley
--------------------------------------------
Seth Buechley
/s/ Mark Reed
--------------------------------------------
Mark Reed
/s/ Mark Buechley
--------------------------------------------
Mark Buechley
29
<PAGE>
List of Schedules and Exhibits
------------------------------
Schedule 4.6 Encumbrances
Schedule 4.7 CORD's Deferred Tax Liability
Schedule 4.8 Litigation and Labor Matters - Exceptions
Schedule 4.9 Insurance
Schedule 4.10 Intellectual Property
Schedule 4.11 Contracts and Commitments
Schedule 4.13 Absence of Default
Schedule 4.14 Existing Condition Exceptions
Schedule 4.19 Transactions with Affiliates
Schedule 4.20 Bank Accounts and Officers Information
Schedule 4.21 Environmental Liabilities
Schedule 4.22 Employees, Positions and Compensation
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Exhibit 1.1
Form of Articles of Merger
ARTICLES OF MERGER
OF
CORD COMMUNICATIONS, INCORPORATED
(A CALIFORNIA CORPORATION)
INTO
CORD ACQUISITION CO.
(A WASHINGTON CORPORATION)
Pursuant to the provisions of the RCW (S)23B.11.050 of the Washington
Business Corporation Act, the undersigned corporations do hereby make and
execute these Articles of Merger for the purpose of merging Cord Communications
Incorporated, a California corporation, into Cord Acquisition Co., a Washington
corporation (the "Merger").
A. The Plan of Merger is as follows:
1. The Merger. The name of each corporation to be merged is Cord
----------
Communications Incorporated, a California corporation ("Cord"), and Cord
Acquisition Co., a Washington corporation ("Sub"). The name of the surviving
corporation shall be changed to Cord Communications, Inc.
2. Conversion and Exchange of Stock.
--------------------------------
(a) Merger Terms. In the Merger, each outstanding share of common
------------
stock of Cord (the "Cord Stock") shall be converted into and become the
right to receive: (a) $5,584.22 in cash; plus (b) 242.79 shares of common
stock, $.01 par value, of Westower Corporation, a Washington corporation
(the "Westower Stock"); plus (c) up to 388.47 shares of Westower Stock
pursuant to the terms of the earnout formula contained in Section 2.3 of
the Agreement and Plan of Merger dated as of August 31, 1998 (the "Merger
Agreement") among Cord, Mark Buechley, Seth Buechley, Mark Reed, Sub and
Westower (collectively, the "Merger Consideration").
(b) Stock Portion of Merger Consideration. For purposes of
-------------------------------------
calculating the number of shares of Westower Stock to be delivered for each
share of Cord Stock, the Westower Stock has been valued at $23.00 per
share, which was the price on the date the terms of the Merger were agreed
to by the parties. No fractional shares of Westower Stock will be issued.
The number of shares to be issued to any Cord Stockholder will be
<PAGE>
rounded downward to the nearest whole share and cash will be paid in lieu
of any fraction at the rate of $23.00 per share.
(c) Earnout.
-------
(1) Within 15 days after EBITDA (hereinafter defined) is
determined, Sub and Westower shall deliver to each of Mark Buechley,
Seth Buechley and Mark Reed (collectively, the "Cord Stockholders")
the portion of the Merger Consideration deliverable pursuant to
Section 2.1(c) of the Merger Agreement (the "Earnout"). The Earnout
shall be, for each share of Cord Stock, a number of shares of Westower
Stock equal to the product of .00025902 multiplied by EBITDA for the
period from September 1, 1998 through August 31, 1999 (the "Earnout
Period"), subject to the limitation that in no event shall the Earnout
for each share of Cord Stock exceed 388.47 shares of Westower Stock;
provided, however, that in the event that the authorized number of
-------- -------
shares of Westower Stock is not increased as contemplated by Section
7.9 of the Merger Agreement, Westower may at its option replace up to
194.23 shares of Westower Stock with cash at the rate of $23.00 per
share of Westower Stock. The term "EBITDA" shall mean the net income
of Cord (for the portion of the Earnout Period prior to the Merger)
and Sub (for the portion of the Earnout Period after the Merger),
determined in accordance with generally accepted accounting
principles, as utilized by Cord for its fiscal year ended June 30,
1998, consistently applied, plus, to the extent deducted in
determining net income, interest, income taxes, depreciation and
amortization. In addition, for purposes of the Merger Agreement, (i)
EBITDA of the Sub shall be computed without giving effect to the
Merger and any accounting adjustments caused thereby and any expenses
as a result of the Merger will be excluded (including audit expenses
to the extent increased above normal audit expenses); (ii) EBITDA
shall not be reduced by bonuses paid to Sub employees as set forth in
Section 7.2 of the Merger Agreement; (iii) EBITDA shall not be reduced
for severance payments made by Cord or Sub to Reed pursuant to Reed's
post-Closing severance agreement as set forth in Disclosure Schedule
4.14 of the Merger Agreement; (iv) EBITDA shall not be reduced by
Westower for overhead costs attributable to Westower incurred by Sub;
(v) all transactions between Cord and Sub and Westower and its
subsidiaries and affiliates shall be adjusted to an arm's-length price
for sales or leases of property or provision of services to the extent
that the price paid is less than the price that would otherwise be
charged by or to Cord in a transaction with an independent third
party; and (vi) extraordinary and nonrecurring gains (including tax
refunds) and extraordinary and nonrecurring losses not related to
operations shall be excluded; provided that gains and losses from
projects of the nature associated with Cord's core business shall not
be considered nonrecurring.
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(2) Westower will determine the Earnout within forty-five (45)
days following the last day of the Earnout Period and deliver prompt
notice of such amount to the Cord Stockholders (the "Earnout Notice")
with supporting documentation. The Cord Stockholders shall have the
right to inspect, audit and make extracts from all of the records,
files and books of account of Westower relating to the Earnout for
purposes of verifying the amount of the Earnout at reasonable times
during business hours, upon advance notice to Westower.
(3) The Cord Stockholders shall have thirty (30) days from the
receipt of the Earnout Notice to notify Westower if they dispute the
amount of the Earnout. If Westower has not received notice of any such
dispute within such 30-day period, the Earnout shall be final. If,
however, Cord Stockholders have delivered notice of such a dispute to
Westower within such 30-day period, then Westower's independent
accountants shall select a mutually agreeable partner at an
independent accounting firm that has not represented any of the
parties hereto within a period of two (2) years and is one of the five
largest accounting firms in the United States (the "New Accounting
Firm") to review the Earnout, the books of Sub and the Earnout Notice
to determine the amount, if any, that the Earnout is in error. The New
Accounting Firm shall make its determination of the Earnout (the
"Revised Earnout") within thirty (30) days of its selection. The
Revised Earnout shall be final and binding on the parties hereto, and,
upon such determination, the Earnout shall be adjusted accordingly.
The costs of the New Accounting Firm shall be borne by Westower if the
Revised Earnout is higher than the Earnout as originally calculated
and by the Cord Stockholders in all other cases.
(4) If, on or prior to the date the Earnout is paid, Westower
should split or combine the Westower Stock, or pay a stock dividend or
other stock distribution in Westower Stock or any other security, or
otherwise change the Westower Stock into other securities, or make any
dividend or distribution on the Westower Stock, then the number of
shares of Westower Stock issuable as payment of the Earnout will be
appropriately adjusted to reflect such split, combination, dividend or
other distribution or change.
(5) All actions and determinations by the Cord Stockholders with
respect to the Earnout shall be taken and made by Mark Buechley as
representative of the Cord Stockholders, or, in the event of his death
or disability, Seth Buechley.
3. Articles of Incorporation. The Articles of Incorporation of Sub in
-------------------------
effect immediately prior to the Merger shall be amended to change the name of
the corporation in Article 1 thereof to "Cord Communications, Inc.," and, as so
amended, shall be the Articles of Incorporation of the surviving corporation
until amended in accordance with applicable law.
3
<PAGE>
4. Bylaws. The Bylaws of Sub in effect immediately prior to the Merger
------
shall be the Bylaws of the surviving corporation until amended in accordance
with applicable law.
5. Directors and Officers. The Board of Directors of the surviving
----------------------
corporation shall initially consist of Seth Buechley, Mark Buechley, Mike
McWhirter, Calvin J. Payne, S. Roy Jeffrey, Peter Lucas and Mike Carr, who shall
hold office in each case until their successors are elected and qualified. The
initial officers of the surviving corporation shall be:
Mark Buechley President
Seth Buechley Vice President
Peter Lucas Vice President, Treasurer and
Secretary
Each officer shall hold office in accordance with the Bylaws of the surviving
corporation.
B. The Effective Time of the Merger shall be the date on which these Articles
of Merger are filed with the Secretary of State for the State of Washington.
C. The Plan of Merger was not required to be adopted by the shareholders of
Sub. The Plan of Merger was adopted by the Cord stockholders on August 31,
1998.
[Execution Page Follows]
4
<PAGE>
Dated: August 31, 1998 CORD COMMUNICATIONS, INCORPORATED
By:_____________________________________
Seth Buechley
Vice President
CORD ACQUISITION, CO.
By:_____________________________________
Calvin J. Payne
President
5
<PAGE>
Exhibit 7.6
Form of Registration Rights Agreement
See Exhibit 2.2 of the Company's Current Report on Form 8-K
<PAGE>
Exhibit 7.7
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
Exection Copy
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of the
31st day of August, 1998, by and among Westower Corporation, a Washington
corporation (the "Company") and Mark Buechley, Seth Buechley and Mark Reed (the
"Stockholders").
BACKGROUND
On August 31, 1998, the parties to this Agreement entered into an Agreement
and Plan of Merger (the "Merger Agreement"), pursuant to which Cord
Communications Incorporated, a California corporation ("CORD") was merged with
and into CORD Acquisition Co., a Washington corporation and wholly owned
subsidiary of the 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 Stockholders
shares of Westower Stock and may issue to the Stockholders additional Westower
Stock to reflect the Earnout. As a material term of the Merger Agreement, the
Company has agreed to grant to the Stockholders 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 "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted
by the SEC that similarly permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the
SEC.
<PAGE>
(d) 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.
(e) 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.
(f) The term "Registrable Securities" means the shares of Westower
Stock issued under the Merger Agreement and any common stock 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 without registration
under the Act pursuant to Rule 144 promulgated under the Act.
(g) The term "SEC" means the Securities and Exchange Commission.
1.2. REQUEST FOR REGISTRATION
(a) If the Company receives at any time after August 31, 1999, 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) provided the Company is eligible to use Form S-3, 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, subject to the limitations of subsection 1.2(b), within 20
days of the mailing of such notice by the Company in accordance with
Section 2.4.
(b) If the Holders initiating the registration request under
subsection 1.2(a) ("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 Holders and
shall be an underwriter of national standing reasonably acceptable to the
Company.
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<PAGE>
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 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 stockholders 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 (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for stockholders 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
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<PAGE>
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 the Company is not permitted by
any contract with any person for whom shares are to be registered, 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.
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:
(i) the 120-day period shall be extended for a period of time
equal to the period the Holder refrains from selling any securities
included in such registration at the request of the Company or an
underwriter of the registration; and
(ii) in the case of any registration of Registrable Securities
that are intended to be offered on a continuous or delayed basis,
such 120-day period shall be extended, if necessary, to keep the
registration statement effective until all Registrable Securities are
sold, provided that Rule 415, or any successor rule under the Act,
permits an offering on a continuous or delayed basis, and provided
further that applicable rules under the Act governing the obligation
to file a post-effective amendment permit, in lieu of filing a post-
effective amendment which (I) includes any prospectus required by
Section 10(a)(3) of the Act or (II) reflects facts or events
representing a material or fundamental change in the information set
forth in the registration statement, the incorporation by reference
of information required to be included in (I) and (II) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d)
of the 1934 Act in the registration statement.
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<PAGE>
(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.
(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
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<PAGE>
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).
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 (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, requested by Holders to be included in such underwriting
exceeds the amount of securities sold other than 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 such securities, including Registrable
Securities, which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the selling stockholders having piggyback
registration rights according to the total amount of 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:
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<PAGE>
(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 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
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<PAGE>
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 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.
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<PAGE>
1.9. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time after August 31,
1999 permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to
use its reasonable best efforts:
(a) make and keep public information available, as those terms are
understood and defined in SEC 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 SEC Rule 144,
the Act and the 1934 Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3, (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 Stockholders for estate planning purposes
and to gifts to employees of CORD.
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 shares of 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.
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<PAGE>
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 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 provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision 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.
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<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/ Seth Buechley
--------------------------------------------
Seth Buechley
/s/ Mark Buechley
--------------------------------------------
Mark Buechley
/s/ Mark Reed
--------------------------------------------
Mark Reed
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<PAGE>
EXHIBIT 2.3
Execution Copy
EMPLOYMENT AGREEMENT
--------------------
This Agreement is made this 31st day of August, 1998, between Cord
Communications, Inc., a Washington corporation (the "Company"), and Mark
Buechley ("Employee").
W I T N E S S E T H:
WHEREAS, Westower Corporation, a Washington corporation ("Westower"),
is acquiring Cord Communications, Incorporated, a California corporation ("Old
Cord"), by which Employee has previously been employed, pursuant to a merger of
Old Cord with and into the Company (formerly named Cord Acquisition Co.), which
is a wholly-owned subsidiary of Westower, pursuant to an Agreement and Plan of
Merger dated as of August 31, 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 duties and services as may be prescribed by
the Board of Directors of the Company from time to time. Employee will also
serve on the Board of Directors of the Company for so long as he is employed
hereunder. During his employment hereunder, Employee shall devote his best
efforts
<PAGE>
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 Board of Directors at Employee's annual evaluation and
compensation review;
(b) Insurance and other benefits equivalent to the benefits provided
other executive employees of the Company;
(c) Three weeks of vacation;
(d) Participation, when eligible, in the Company's retirement plan as
such plan may be amended or modified by the Company from time to time;
(e) 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;
(f) 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;
(g) 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
2
<PAGE>
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 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 7.8 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 7.8 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 7.8 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
3
<PAGE>
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 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 sixty (60) 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 Board of Directors of the Company reasonably consistent with
such duties, 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. Discharge of Employee's undertakings in Sections 3
and 4 hereof shall be an obligation of Employee's executors, administrators, or
other legal representatives or heirs.
(b) This Agreement may not be assigned by the Company except to an
affiliate of the Company; provided, however, that if the Company shall or 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 communications 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: Mr. Mark Buechley
P.O. Box 394
Glide, OR 97443
If to the Company: c/o Westower Corporation
7001 N.E. 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 Washington.
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.
Cord Communications, Inc.
By: /s/ Calvin J. Payne
-----------------------------------------
Calvin J. Payne, President
EMPLOYEE
/s/ Mark Buechley
--------------------------------------------
Mark Buechley
7
<PAGE>
EXHIBIT 2.4
Execution Copy
EMPLOYMENT AGREEMENT
--------------------
This Agreement is made this 31st day of August, 1998, between Cord
Communications, Inc., a Washington corporation (the "Company"), and Seth
Buechley ("Employee").
W I T N E S S E T H:
WHEREAS, Westower Corporation, a Washington corporation ("Westower"),
is acquiring Cord Communications, Incorporated, a California corporation ("Old
Cord"), by which Employee has previously been employed, pursuant to a merger of
Old Cord with and into the Company (formerly named Cord Acquisition Co.), which
is a wholly-owned subsidiary of Westower, pursuant to an Agreement and Plan of
Merger dated as of August 31, 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 Vice 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 Vice President of the
Company, and Employee shall perform such other duties and services as may be
prescribed by the Board of Directors of the Company from time to time. Employee
will also serve on the Board of Directors of the Company for so long as he is
employed hereunder. During his employment hereunder, Employee shall devote his
best efforts
<PAGE>
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 Board of Directors at Employee's annual evaluation and
compensation review;
(b) Insurance and other benefits equivalent to the benefits provided
other executive employees of the Company;
(c) Three weeks of vacation;
(d) Participation, when eligible, in the Company's retirement plan as
such plan may be amended or modified by the Company from time to time;
(e) 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;
(f) 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;
(g) 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
2
<PAGE>
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 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 7.8 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 7.8 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 7.8 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
3
<PAGE>
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 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 sixty (60) 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 Board of Directors of the Company reasonably consistent with
such duties, 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. Discharge of Employee's undertakings in Sections 3
and 4 hereof shall be an obligation of Employee's executors, administrators, or
other legal representatives or heirs.
(b) This Agreement may not be assigned by the Company except to an
affiliate of the Company; provided, however, that if the Company shall or 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 communications 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: Mr. Seth Buechley
P.O. Box 394
Glide, OR 97443
If to the Company: c/o Westower Corporation
7001 N.E. 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 Washington.
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.
Cord Communications, Inc.
By: /s/ Calvin J. Payne
-----------------------------------------
Calvin J. Payne, President
EMPLOYEE
/s/ Seth Buechley
--------------------------------------------
Seth Buechley
7
