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):
September 30, 1997
______________________
WESTWOOD CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 0-19381 87-0430944
____________________________ ___________ __________________
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5134 South Yale Avenue, Suite 1100, Tulsa, Oklahoma 74135
_________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 918/524-0002
12437 East 60th Street, Tulsa, Oklahoma 74146
_________________________________________________________________
(Former name or former address if changed since last report.)
<PAGE>
WESTWOOD CORPORATION
CURRENT REPORT
FORM 8-K
ITEM 2. Acquisition or Disposition of Assets.
On September 30, 1997, Westwood Corporation (the
"Company") sold 100% of the issued and outstanding common shares
of its wholly owned subsidiary, Rox Corp., an Oklahoma
corporation ("Rox Corp."). The shares were purchased by Roxtec
Holding AB, a Swedish limited liability company ("Roxtec")
pursuant to the terms and conditions of the Stock Purchase
Agreement (the "Agreement") by and between the Company and
Roxtec, dated September 30, 1997. Of the Purchase Price of
$850,000, as defined in the Agreement, $765,000 was paid in cash
at closing. The Purchase Price may be adjusted based upon the
Rox Corp. balance sheet as of the close of business on
September 30, 1997, as compared to the balance sheet as of
June 30, 1997. The sum of $85,000 was withheld by Roxtec until
adjustment of the Preliminary Purchase Price, as provided in the
Agreement. The Purchase Price paid by Roxtec was approximately
sixteen times the net book value of Rox Corp. on June 30, 1997.
As an additional requirement for closing the transaction, Roxtec
repaid, or caused to be repaid, all loans from Rox Corp. to the
Company or its affiliates, totaling $1,666,185.
Pursuant to a license agreement covering the United
States and Mexico, by and between Roxtec and Rox Corp. (the
"License Agreement"), Rox Corp. manufactured and distributed
safety cable sealing and transit systems manufactured by Roxtec.
The Roxtec System is primarily designed to protect electrical and
transmission cables from damage caused by fire, smoke, gas and
water. Roxtec, the trade name used for this safety cable sealing
and transit system product line, was marketed to major ship
construction yards as well as to numerous repair yards located
throughout the country.
The License Agreement was originally entered into with
Roxtec in January of 1992 and had a termination date scheduled
for January, 2002. The Company was recently informed by
officials of Roxtec that Roxtec had made a corporate decision to
take over distribution of its products in major world markets
and, as a result of such decision, would not be renewing the
License Agreement with Rox Corp. in January of 2002. In
conjunction with receipt of this information, Roxtec made an
-1-
<PAGE>
unsolicited offer to buy Rox Corp. with subsequent negotiations
culminating in the Agreement. The Company's Board looked at
several factors in determining to sell Rox Corp. at this
time, including the fact that substantial additional expenditures
would be required to expand markets in the United States with a
limited time remaining with the License Agreement in which to
recognize revenues and profits from expansion expenditures.
Additionally, the sale price received for Rox Corp., plus the
immediate payment of Rox Corp.'s indebtedness to the Company and
its subsidiaries, resulted in a cash flow of $2,431,184, of which
$2,000,000 was used to pay down the Company's credit line at
NationsBank, with the remaining $431,184 as working capital
primarily projected for use in the Company's electrical
generation subsidiary in Dallas, Texas. The Directors determined
that the price received for Rox Corp. was fair and that the
Company can maximize its business potential by concentrating on
the electrical generation markets.
On an interim basis to facilitate the acquisition, NMP
Corp., the Company's subsidiary located in Tulsa, Oklahoma, has
entered into an Administrative Services Agreement with Rox Corp.,
to provide transition services and facilities to Rox Corp. on a
month-to-month basis including office and warehouse space,
telephone, computer, human resources and engineering services.
In consideration of these services, Rox Corp. will pay a monthly
fee of $11,023 per month. Either party can terminate the
Administrative Services Agreement upon sixty (60) days notice
except that NMP Corp. agreed not to terminate such services
before January 31, 1998. The services provided, and the
consideration to be received, are identical to those provided
based on the current inter-corporate expense allocation
determined by NMP Corp. and Rox Corp.
Michael A. McKee, President of Rox Corp., will continue
to serve as President of Rox Corp. pursuant to an Employment
Agreement entered into with Roxtec on the date of closing.
Michael A. McKee is the son of Ernest H. McKee, the Company's
President and Chief Executive Officer. Michael A. McKee's
compensation and benefits with Rox Corp. were negotiated
independently between himself and Roxtec in conjunction with the
acquisition.
-2-
<PAGE>
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits: Attached as Exhibit A is a copy of the
Stock Purchase Agreement I, dated September 30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
DATED: October 14, 1997. WESTWOOD CORPORATION
By: /s/ Paul R. Carolus
____________________________
Paul R. Carolus,
Chief Financial Officer
and Treasurer
-3-
<PAGE>
EXHIBIT "A"
<PAGE>
STOCK PURCHASE AGREEMENT I
This Agreement is entered into on September 30, 1997, by and
between Roxtec Holding AB, reg. No. 556481-8499, a Swedish
limited liability company with its registered office at Box 540,
371 23 Karlskrona, Sweden, duly incorporated and registered under
the laws of Sweden (the "Buyer") and Westwood Corporation., a
company with offices in Tulsa, Oklahoma, duly incorporated and
existing under the laws of the State of Nevada, (the "Seller").
The Buyer and the Seller are referred to collectively herein as
the "Parties".
WITNESSETH
WHEREAS, the Seller is the owner of 500 shares (the "Shares")
with a par of value of USD 1.00 per share in ROXCORP, a company
with its registered office at 2300 Williams Center Tower II, Two
West Second Street, Tulsa, Oklahoma, 74103-3136, duly
incorporated and existing under the laws of the State of Oklahoma
(the "Company"), representing 100 percent of the issued share
capital of the Company and;
WHEREAS, the Seller has offered to sell the Shares to the Buyer
and the Buyer desires to purchase the Shares.
NOW THEREFORE
In consideration of the premises and the mutual promises made
herein, and in consideration of the representations, warranties
and the covenants contained herein, the Parties agree as follows.
1. PURCHASE AND SALE OF SHARES
Pursuant to the terms and conditions set forth herein, the
Seller hereby agrees to sell the Shares to the Buyer and the
-1-
<PAGE>
Buyer agrees to purchase the Shares from the Seller for the
consideration specified in Section 2 and Section 3.
2. PURCHASE PRICE
2.1 The Buyer agrees to pay to the Seller at the Closing (as
defined in Section 6.1) USD seven hundred and sixty five thousand
(765,000) (the "Preliminary Purchase Price") in cash by wire
transfer. The Preliminary Purchase Price, plus USD eighty five
thousand (85,000) which sum the Buyer withholds (the "Withheld
Amount") up until the adjustment of the Preliminary Purchase
Price is made in accordance with Sections 2.2 - 2.5, is based on
the Company's net book value of the Company's assets and
liabilities (the "June Net Book Value") as shown in the attached
balance sheet of the Company dated June 30, 1997, Exhibit 2.1.b
(the "June Balance Sheet").
2.2 Within fourteen days after the Closing Date (as defined in
Section 6.1), the Buyer will prepare and deliver to the Seller a
draft balance sheet (the "Draft Closing Balance Sheet") for the
Company as of the closing of business on the Closing Date. The
Buyer will prepare the Draft Closing Balance Sheet in accordance
with United States generally accepted accounting principles
("GAAP") applied on a basis consistent with the preparation of
the June Balance Sheet. In regard to the following three items of
presentation, however, the Parties agree that (i) the reserve for
slow moving and obsolete inventory shall remain the same as
presented in the June Balance Sheet, i.e., USD 30,000, (ii) the
reserve for taxes shall be determined as it was in the June
Balance Sheet, i.e., at a 38 per cent rate and (iii) yearly
commission based on contract commission sales to employees of the
Company are not reflected in the June Balance Sheet, but a
reserve for such commission based on contract commission sales to
employees of the Company should be made in the Closing Balance
Sheet, as defined in Section 2.3, for an amount not exceeding
USD 25,000. The Buyer will at the Seller's request make the work
papers and back-up materials used in the preparation of the Draft
Closing Balance Sheet available to the Seller and its
accountants. The Seller shall within five days inform in writing
the Buyer whether or not the Seller agrees to the Draft Closing
Balance Sheet.
2.3 If the Seller has any objections to the Draft Closing
Balance Sheet, the Seller's objections shall also include a
detailed statement describing its objections. The Parties shall
-2-
<PAGE>
use reasonable efforts to resolve any such objections between
themselves. If the Parties are not able to resolve the issue
within five days after the Buyer has received the statement of
objections, either Party may on behalf of the Parties appoint the
accounting firm Price Waterhouse in New York, USA. The appointed
accounting firm shall act as an expert for the benefit of the
Parties and its conclusions which shall be given within a thirty
day period from the date of its appointment shall be conclusive
and binding upon the Parties. The fees and expenses for any work
conducted by the accounting firm shall be born by the Parties in
equal shares. The Draft Closing Balance Sheet agreed upon
pursuant to Section 2.2 or 2.3 is referred to herein as the
"Closing Balance Sheet".
2.4 The Preliminary Purchase Price shall be adjusted as follows.
(i) If the excess of assets over liabilities as shown on
the Closing Balance Sheet (the "Closing Net Book Value") exceeds
the June Net Book Value, the Buyer shall pay to the Seller an
amount equal to such excess in cash by wire transfer within three
business days after the date at which the Closing Balance Sheet
was finally determined.
(ii) If the Closing Net Book Value is less than the June Net
Book Value, the Seller shall pay to the Buyer an amount equal to
such deficiency in cash by wire transfer within three business
days after the date at which the Closing Balance Sheet was
finally determined.
The Preliminary Purchase Price adjusted in accordance with
this Section 2.4 is referred herein as the "Purchase price".
2.5 The adjustment of the Preliminary Purchase Price as set
forth in Section 2.4 shall, if applicable, be set off against the
Withheld Amount. This shall for example mean that if the Seller
shall repay USD 50,000 under Section 2.4 the Buyer shall release
USD 35,000 of the Withheld Amount to the Seller. To the extent
the adjustment of the Preliminary Purchase Price is not set off
against the Withheld Amount, the Buyer shall pay such part of the
the Withheld Amount to the Seller at the same time as the
adjustment of the Preliminary Purchase Price is made in
accordance with Section 2.4.
-3-
<PAGE>
3. REPAYMENT OF LOAN
The Buyer shall arrange for the Company to repay the Seller
and the Seller's affiliates all their respective loans to the
Company as shown in the Closing Balance Sheet (the "Loan"). An
affiliate shall mean an entity which controls the Seller, is
under the control of the Seller, or is under common control with
such the Seller (the "Affiliate"). The Seller shall not later
than two working days before the Closing Date in writing present
to the Buyer the sum to which the Seller warrants and represents
is the Loan at the Closing Date; including all accrued interest,
fees and any other amounts related to such loan or the repayment
thereof. The Seller shall at the Closing release and cause the
Affiliates to release the Company from any and all security
interests in any and all of the Company's property and deliver,
if applicable, any promissory note(s) and any other documentation
evidencing the Loan and in writing issue evidence of the
repayment of the Loan.
4. CONDITIONS TO THE BUYER'S OBLIGATIONS
The purchase of the Shares by the Buyer from the Seller on
the Closing Date is conditioned upon the satisfaction or waiver,
at or prior to the Closing, of all the following conditions.
4.1 The Buyer shall on behalf of the Company have secured in
writing a new employment agreement with the key-employee, Mike
McKee on terms acceptable to the Buyer.
4.2 The Buyer shall have secured in writing, on terms acceptable
to the Buyer, third party financing enabling the Buyer to fulfil
its obligation set forth in Section 3.
4.3 The Company shall have entered into a transition agreement
with the Seller and/or any Affiliate concerning services to be
rendered to the Company on terms acceptable to the Buyer.
4.4 The license agreement between the Buyer and NMP Corp. shall
be terminated at the Closing Date without further obligations on
the parties and this termination shall be verified in writing by
NMP Corp. and the Buyer.
4.5 The Seller shall have caused all agreements which have been
entered into by the Seller or any Affiliate concerning products
-4-
<PAGE>
or services in relation to the licence agreement mentioned under
Section 4.4. to be validly assigned to the Company.
4.6 The Buyer and its representatives shall be entitled from the
date first written above and through the Closing to review the
properties, books and records and ask questions to the employees
of the Company (the "Due Diligence"). The Seller shall cause the
Company (i) to permit the Buyer and its representatives to have
reasonable access to the premises of the Company to conduct the
Due Diligence. The Buyer's obligations, as set forth above in the
beginning of this Section 4, are conditioned upon that the result
of the Due Diligence is satisfactory to the Buyer.
4.7 The representations, warranties and covenants of the Seller
contained herein shall be true and correct in all material
aspects on and as of the Closing Date with the same effect as
though such representations, warranties and covenants had been
made on and as of the Closing Date.
4.8 Each and all of the agreements of the Seller to be performed
at or prior to the Closing pursuant to the terms hereof shall
have been duly performed in all material aspects.
4.9 No court or other government body or public authority shall
have issued an order which shall then be in effect restraining or
prohibiting the completion of the transactions contemplated
hereby.
4.10 All governmental and other consents and approvals necessary
to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
5. CONDITIONS TO THE SELLER'S OBLIGATIONS
The sale of the Shares by the Seller to the Buyer on the
Closing Date is conditioned upon the satisfaction or waiver, at
or prior to the Closing, of all the following conditions.
5.1 The representations and warranties of the Buyer contained
herein shall be true and correct in all material aspects on and
as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the
Closing Date.
-5-
<PAGE>
5.2 Each and all of the agreements of the Buyer to be performed
at or prior to the Closing pursuant to the terms hereof shall
have been duly performed in all material aspects.
5.3 No court or other government body or public authority shall
have issued an order which shall then be in effect restraining or
prohibiting the completion of the transactions contemplated
hereby.
5.4 All governmental and other consents and approvals necessary
to permit the consummation of the transactions contemplated by
this Agreement shall have been received.
6. CLOSING
6.1 The consummation of the transaction agreed to herein (the
"Closing") shall take place on September 30, 1997 (the "Closing
Date"), at the offices of Mannheimer Swartling Advokatbyra LLP
located at 101 Park Avenue, New York at 09.00 hours.
6.2 At the Closing, the Buyer shall pay to the Seller the
Preliminary Purchase Price and deliver the certificate referred
to in Section 10.2. and arrange for the Company to repay the
Loan. The Seller shall at the same time deliver to the Buyer the
share certificates representing the Shares duly endorsed in blank
or accompanied by duly endorsed assignment documents, the minute
book and share ledger and the certificate referred to in
Section 9.3 and release and cause the Affiliates to release the
Company from any and all security interests in any and all of the
Company's property and deliver, if applicable, any promissory
note(s) and any other documentation evidencing the Loan. Each of
the Parties undertakes to deliver at Closing such other documents
which the other party may reasonably require in connection with
the Closing.
6.3 The Seller undertakes to cause all members of the board of
directors of the Company to resign from their positions, unless
the Buyer instructs the Seller otherwise no later than ten days
prior to the Closing Date, and to waive any claims of any nature
whatsoever against the Company.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants the following.
-6-
<PAGE>
7.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation and has corporate power and authority to own,
lease and operate its properties and to carry on its business as
now being conducted. The Company has an authorized capitalization
of 500 shares with par value of USD 1.00 per share. All such
outstanding shares have been duly authorized and validly issued
and are fully paid and nonassessable.
7.2 The Seller is the lawful owner of the Shares free and clear
of all liens, encumbrances, restrictions and claims of every kind
and the Seller has full legal right, power and authority to sell,
assign, transfer and convey the Shares. The Seller is not bound
by any commitment of any kind relating to the Shares, whether by
conversion, exchange, option, warrant or otherwise.
7.3 The execution, delivery and performance of this Agreement
and the hereto referred documents have been duly authorized by
the Seller, NMP Corp. and any Affiliate and Nations Bank and
constitute binding obligations of, and is enforceable against,
the Seller, NMP Corp. and any Affiliate and Nations Bank in
accordance with its respective terms and does not (i) violate the
Articles of Incorporation or the By-Laws of the Seller or the
Company, (ii) conflict with or violate any law, rule, regulation,
order, writ, decree, judgment, injunction or award applicable to
the Company or the Seller and (iii) will not result in a
violation or breach of, or constitute a default under, any
agreement to which the Seller or the Company is a party or by
which either of their respective assets are bound.
7.4 The Seller has furnished Buyer with the June Balance Sheet
and the financial statements set forth in Exhibit 7.4. Such
financial statements, except as indicated therein, have been
prepared in accordance with GAAP and give a true and fair view of
the financial position and results of the operations of the
Company as of said dates and for said periods.
7.5 The Company has conducted its business at all times in
accordance with, and has complied with, applicable local, state,
federal and foreign laws relating to its operations and business
and the Company is in compliance with all applicable laws,
regulations, orders, judgements and decrees applicable to the
conduct of its business, including applicable zoning and
environmental laws affecting the Company's business.
-7-
<PAGE>
7.6 The Company has good title to all its properties and assets,
including, without limitation, all the properties and assets
reflected in the June Balance Sheet and specified in
Exhibit 7.6 A and B subject to no encumbrance, lien, charge or
other restriction of any kind, except for such restrictions
reflected in the June Balance Sheet or Exhibit 7.6 A and B. The
Company's properties and assets are in good working order and
condition, ordinary wear and tear excepted.
7.7 All agreements, contracts, commitments, leases, purchase
orders, sales orders, proposals or understandings, whether
written or oral, which are of importance to the Company are
listed in Exhibit 7.7 and are hereinafter referred to as the
"Material Agreements". The Material Agreements are in full force
and effect, valid and enforceable in accordance with their
respective terms. With respect to the Material Agreements no
party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or
default, or permit termination, modification or acceleration
under such Material Agreement.
7.8 The Company has not entered into any agreements with its
employees relating to profit sharing, stock options or similar
arrangements, except as set forth in Exhibit 7.8.
7.9 The Company has, subsequent to the repayment of the Loan and
in respect of the Seller and the Affiliates, no further
obligation to make any payment or to fulfil any other obligation,
except as specified in Exhibit 7.9.
7.10 There is no action, suit or proceeding at law or in equity
or any arbitration or any administrative or other proceeding by
or before any governmental or other instrumentality or agency,
pending, or, threatened against the Company which could have a
material adverse effect on the business, financial condition or
results of operations of the Company.
7.11 Set forth in Exhibit 7.11 is a list of the domestic and
foreign patent applications, patent licenses, software licenses,
trade names, trademarks, service marks, trademarks registrations
and applications, mask works, service mark registrations and
applications, copyright registrations and applications and all
other intellectual property rights owned by the Company which is
used in the operation of the Company (collectively, the
"Intellectual Property"). Unless otherwise indicated in Exhibit
7.11, the Company owns the entire right, title and interest in
-8-
<PAGE>
and to the Intellectual Property including, without limitation,
the exclusive right to use and license the same. There are no
pending proceedings or litigation or other adverse claims made in
writing affecting or with respect to the Intellectual Property.
7.12 Attached hereto as Exhibit 7.12 is a list of all policies of
property and casualty, fire, extended coverage, public and
products liability and all other kinds of insurance held by the
Company. Said policies are in full force and effect, and the
Company is not delinquent with respect to any premium relating
thereto. The Seller shall cause the Company to keep or such
policies duly in force through the Closing Date.
7.13 For purposes of this Agreement, "Employee Benefit Plan"
means any "employee benefit plan" (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained for the benefit of the employees of the
Company, and any other written or oral plan, agreement or
arrangement involving direct or indirect compensation, including
without limitation insurance coverage, severance benefits,
disability benefits, deferred compensation, bonuses, stock
options, stock purchase, phantom stock, stock appreciation or
other forms of incentive compensation or post-retirement
compensation, maintained for the benefit of the employees of the
Company. Each Employee Benefit Plan has at all times been
administered in all material respects in accordance with its
terms, and the Company has in all material respects met its
obligations with respect to such Employee Benefit Plan and has
made all required contributions thereto. The Company and all
Employee Benefit Plans are and at all times have been in
compliance in all material respect with the currently
applicable provisions of law, including ERISA and the U.S.
Internal Revenue Code, as amended, and the U.S. Treasury
Regulations promulgated under it (the "Code"), and each Employee
Benefit Plan intended to qualify under Section 401(a) of the Code
has at all times been so qualified.
There are no investigations by any governmental entity,
termination proceedings or other claims (except claims for
benefits payable in the normal operation of the Employee Benefit
Plans), suits or proceedings against or involving any Employee
Benefit Plan that would, if adversely determined, give rise to a
material liability.
-9-
<PAGE>
The Company has not in the past, maintained or contributed
to any employee benefit plan subject to Section 412 of the Code
or Title IV of ERISA.
There are no unfunded obligations under any Employee Benefit
Plan providing benefits after termination of employment to any
employee of the Company (or to any beneficiary of any such
employee), including but not limited to retiree health coverage
and deferred compensation, but excluding any obligations or
liabilities related to benefits mandated by applicable law,
including, but not limited to, continuation coverage required to
be provided under Section 498OB of the Code. Title I, Subtitle B,
Part 6 of ERISA or state law and insurance conversion privileges
under state law.
No act or omission has occurred and no condition exists with
respect to any Employee Benefit Plan maintained by the Company
that would subject the Company to any material fine, penalty, tax
or liability of any kind imposed under ERISA or the Code.
7.14 As used in this Agreement, "Taxes" shall mean all taxes,
charges, fees, levies or other similar assessments or
liabilities, including, without limitation, income, gross
receipts, ad valorem, premium, value-added, excise, real
property, personal property, sales, use, transfer, withholding,
employment, payroll and franchise taxes imposed by the United
States of America or any state, local or foreign government, or
any agency thereof, or other political subdivision of the United
States or any such government, and any interest, fines,
penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any
contest or dispute thereof. "Tax Returns" shall mean all
reports, returns, declarations, statements or other information
required to be supplied to a taxing authority in connection with
Taxes.
The Company has timely filed or will timely file all Tax
Returns and reports required to be filed by it on or before the
Closing Date and has timely paid or will timely pay all Taxes
required to be paid by it on or before the Closing Date, and the
financial statements of the Company reflect an adequate reserve
for all Taxes payable by the Company for all taxable periods and
portions thereof through the Closing Date. No audit of any tax
return of the Company by any governmental authority is in
progress, nor has the Company received any written notice of any
pending or threatened audit; no deficiencies for any Taxes have
-10-
<PAGE>
been proposed, asserted, threatened or assessed against the
Company and no waivers of the time to assess any such Taxes have
been requested or granted.
7.15 Copies of the Company's Articles of Incorporation and
By-Laws as set out in Exhibit 7.15.1 and Exhibit 7.15.2 are
complete, correct and current in all material respects. The
Company's minute books (containing the records of meetings of the
stockholders of the Company and the board of directors), the
stock certificate books and the stock record books are complete
and correct.
7.16 No dividend or other payment in respect of the Shares has
been declared or paid by the Company.
7.17 The Company's accounts receivable are bona fide accounts and
have not been diminished in any manner other than by cash
collections and write-offs in the ordinary course of business.
All accounts receivable reflected in the Closing Balance Sheet
will be fully collected up to the book value within 120 days from
the Closing. If all accounts receivable are not then fully
collected, the Buyer's sole remedy is set forth in Section 12.3.
7.18 No representation or warranty herein, and no document
provided or hereafter provided to the Buyer by or on behalf of
the Seller or the Company, has contained or will contain any
untrue statement of a material fact or has omitted or will omit
to state a material fact.
7.19 Neither the Seller nor the Company is aware of any facts or
circumstances relating to the affairs of the Company which have
not been disclosed might reasonably have been expected to
influence the decision of the Buyer to purchase the Shares on the
terms contained in this Agreement.
7.20 No agent, broker, person or firm acting on behalf of the
Seller or the Company, is or will be, entitled to any commission
or broker's or finder's fees from the Seller or the Company in
connection with any of the transactions contemplated herein.
The warranties and representations given above shall be
separate and independent. No representation, warranty or covenant
of the Seller set forth in this Agreement shall be deemed waived
or otherwise affected by the Buyer's Due Diligence or any other
commercial or financial analysis, or any inquiry or investigation
-11-
<PAGE>
which the Buyer, its advisors, auditors or representatives may
take with respect to the Company.
8. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants the following.
8.1 The Buyer is a corporation duly organized and existing under
the laws of Sweden, having all corporate power and authority to
carry on its business as now conducted and to enter into this
Agreement and to consummate the transactions contemplated
thereunder.
8.2 The Buyer is not prohibited or restrained by its Articles of
Incorporation, By-Laws or other agreements to which it is a party
from entering into this Agreement and consummating the
transactions contemplated herein, and the Agreement and such
transactions have been duly authorized by all necessary corporate
action.
8.3 The execution, delivery and performance of this Agreement
has been duly authorized by the Buyer and constitute binding
obligations of, and is enforceable against, the Buyer in
accordance with its respective terms and does not (i) violate the
Articles of Incorporation or the By-Laws of the Buyer,
(ii) conflict with or violate any law, rule, regulation, order,
writ, decree, judgment, injunction or award applicable to the
Buyer and (iii) will not result in a violation or breach of, or
constitute a default under, any agreement to which the Buyer is a
party or by which its assets are bound.
8.4 The Buyer understands and acknowledges that the Shares are
not registered, and represents and warrants that it is entering
into this transaction for investment purposes and not with a view
to public distribution.
8.5 No agent, broker, person or firm acting on behalf of the
Buyer is, or will be, entitled to any commission or broker's or
finder's fees from the Buyer in connection with any of the
transactions contemplated herein.
The warranties and representations given above shall be
separate and independent.
-12-
<PAGE>
9. COVENANTS OF THE SELLER
The Seller covenants the following.
9.1 During the period from the date of this Agreement through
the Closing Date, the Seller covenants to use its best efforts to
cause the Company to conduct its business diligently and only in
the ordinary course, and the Seller will use its best efforts to
preserve the business organization intact and to maintain and
preserve the Company's business relationships with third parties.
Furthermore, the Seller will consult with the Buyer before making
decisions in any matters of material importance to the Company.
9.2 From the date hereof until the Closing Date, the Seller will
use its best efforts to maintain its representations, warranties
and covenants contained in this Agreement true and correct and
will refrain from any activity or transaction which would be
inconsistent with any of its representations, warranties and
covenants. The Seller shall at Closing release the Company from
any and all liens and corporate guarantees relating to the
Seller's credit line with NationsBank as mentioned in Section 7.2
and submit an written confirmation thereof from NationsBank.
9.3 On the Closing Date, the Seller shall deliver to the Buyer a
certificate in the form of Exhibit 9.3 executed by the Seller as
to the truthfulness and correctness of all of the
representations, warranties and covenants contained in Sections 7
and 9 as of said Closing Date.
9.4 The representatives of the Buyer shall from the day first
above written through the Closing Date have full access to the
Company's premises, records and books at any time during
reasonable office hours, from now on and after the date hereof
for inspection, review or copying, and the Seller shall render or
cause to be rendered such assistance and cooperation as the Buyer
may reasonably request.
9.5 The Seller shall apply and see to that NMP Corp. apply with
the appropriate authority to assign to the Company any and all
applications for permits, authorizations or licenses which the
Seller and NMP Corp. have applied for in their names for the
benefit of the Company.
9.6 The Company will not, from this day through the Closing
Date, declare or pay any dividend or make any other distribution
-13-
<PAGE>
to its stockholders or acquire, purchase or redeem any of its
share capital.
9.7 The Company will not, from this date through the Closing
Date, amend its Articles of Incorporation or the By-Laws.
10. COVENANTS OF THE BUYER
The Buyer covenants the following.
10.1 From the date hereof until the Closing Date, the Buyer will
use its best efforts to maintain its representations, warranties
and covenants contained in this Agreement true and correct and
will refrain from any activity or transaction which would be
inconsistent with any of its representations, warranties and
covenants.
10.2 At the Closing, the Buyer shall deliver to the Seller a
certificate in the form of Exhibit 10.2 executed by the Seller as
to the truthfulness and correctness of all of the
representations, warranties and covenants contained in Sections 8
and 10 as of said Closing Date.
11. TERMINATION OF AGREEMENT
11.1 The Buyer may terminate this Agreement by written notice to
the Seller at any time prior to Closing
(i) if the Seller has breached any representation, warranty
or covenant in this Agreement in any material respect and the
Buyer has notified the Seller of the breach and the breach has
continued without cure for a period of ten days after such
notice, or
(ii) if any one of the conditions to the Buyer's obligations
in Section 4 is not fulfilled and such failure is not primarily
the result of the Buyer itself breaching any representation,
warranty or covenant in this Agreement.
11.2 The Seller may terminate this Agreement by written notice to
the Buyer at any time prior to Closing
(i) if the Buyer has breached any representation, warranty
or covenant in this Agreement in any material respect and the
-14-
<PAGE>
Seller has notified the Buyer of the breach and the breach has
continued without cure for a period of ten days after such
notice, or
(ii) if any one of the conditions to the Seller's
obligations in Section 5 is not fulfilled and such failure is not
primarily the result of the Seller itself breaching any
representation, warranty or covenant in this Agreement.
11.3 In the event that this Agreement is terminated pursuant to
this Section 11, all further obligations of the parties hereto
under this Agreement shall terminate without further liability or
obligation of either party to the other party hereunder, all
costs to be borne by the party incurring the cost.
12. INDEMNIFICATION
12.1 All of the representations, warranties and covenants of the
parties contained in this Agreement shall survive the Closing
hereunder and continue in full force and effect forever
thereafter.
12.2 The Seller shall indemnify, defend and hold harmless the
Buyer from and against the cost of any and all claims, damages,
losses, liability, deficiencies, actions, suits, proceedings,
costs or legal expenses (including reasonable attorneys fees)
arising out of or resulting from (i) any breach of a
representation, warranty or covenant by Seller contained in this
Agreement, (ii) events occurring in the course of or relating to
the Company's business prior to Closing which are not disclosed
in this Agreement, (iii) a liability finally determined for Taxes
that relates to periods up to and including the Closing to the
extent that such Taxes were not paid prior to the Closing, (iv) a
liability determined for the period prior to Closing concerning
any claim in respect of the Intellectual Property.
12.3 The Seller shall, however, not be liable to indemnify the
Buyer for not collected accounts receivables as shown in the
Closing Balance Sheet and as warranted in Section 7.17 of an
amount not exceeding USD twenty five thousand (25,000). If the
not collected accounts receivables exceed USD 25,000, then the
Buyer shall be entitled to assign or cause to be assigned to the
Seller all rights, claims, actions or causes of action which the
Company may have relating to such unpaid receivables exceeding
USD 25,000 and the Buyer or the Company shall in case of such
-15-
<PAGE>
assignment receive the full outstanding amount including any
interest accrued thereon.
12.4 The Buyer shall indemnify, defend and hold harmless the
Seller from and against the cost of any and all claims, damages,
losses, liabilities, deficiencies, actions, suits, proceedings,
costs or legal expenses (including reasonable attorneys fees)
arising out of or resulting from any breach of a representation,
warranty or covenant by Buyer contained in this Agreement and for
events occurring in the course of or relating to the Company's
business after the Closing with the exception for claims arising
out of or in connection with the events set forth in
Section 12.2.
13. POST CLOSING COVENANTS
13.1 In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of
the Parties will take such further actions (including the
execution and delivery of such instruments and documents) as any
other party may request, all at the cost and expense of the
requesting party (unless the requesting party is entitled to
indemnification therefor under Section 12).
13.2 The Seller acknowledges and agrees that from and after the
Closing the Buyer will be entitled to possession of all
documents, books, records, agreements and financial data of any
sort relating to the Company. This documentation shall also
include any and all documents in the possession of the Seller
including, but limited to, results from any testing performed in
the interest of the Company and financial documents.
13.3 The Buyer covenants that it will cause the Company to use
its best efforts in accordance with the Company's ordinary
procedures during the 120 days mentioned in Section 7.17 to
collect all accounts receivable and refrain from granting
extensions beyond those 120 days to any obligor of an account
receivable.
14. MISCELLANEOUS
14.1 The Exhibits identified in this Agreement are incorporated
herein by reference and made part of the Agreement.
-16-
<PAGE>
14.2 This Agreement supersedes any prior oral or written
agreement between the parties, undertaking or representation or
warranty of any kind with respect to all matters referred to
herein, including the Letter of Intent entered into between the
parties prior to this Agreement. It is expressly declared that no
amendments hereof shall be effective unless made in writing and
signed by the parties.
14.3 Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with
this Agreement or the transactions contemplated hereby. For the
avoidance of doubt, it is explicitly agreed that no party shall
assume any liability whatsoever for Taxes that may be levied on
the other party in connection with the transactions contemplated
hereby.
14.4 This Agreement may not be assigned by any party hereto.
14.5 Should any part of this Agreement, for any reason
whatsoever, be declared invalid, illegal or incapable of being
enforced in whole or in part, such decision shall not affect the
validity of any remaining portion, which remaining portion shall
remain in full force and effect as if this Agreement had been
executed with the invalid portion thereof eliminated, as long as
the Agreement can be given effect in line with the basic
intentions of the parties.
14.6 This Agreement shall be governed by the laws of the State of
New York, USA.
14.7 Any dispute, controversy or claim arising out of or in
connection with this Agreement, or the breach, termination or
invalidity thereof, shall be settled by arbitration in accordance
with the International Arbitration Rules of the American
Arbitration Association. The arbitral tribunal shall be composed
of three arbitrators. The place of arbitration shall be New York,
USA and the arbitration proceedings shall be conducted in the
English language. The arbitrators shall award the prevailing
party compensation for (i) the fees and expenses of the
arbitrators; (ii) the fees and expenses of the American
Arbitration Association; and (iii) reasonable attorney's fees and
other reasonable expenses for legal representation of such party.
14.8 This Agreement may be executed in any number of counterparts
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
-17-
<PAGE>
_________________________
IN WITNESS WHEREOF, the Parties have executed this Agreement at
the date first written above.
Roxtec Holding AB Westwood Corporation
/s/ Mikael Blomquist, /s/ Ernest H. McKee,
President President
/s/ Marc-Erik Anderson,
Marketing Manager
Attest
/s/ Paul R. Carolus,
Secretary/Treasurer
_________________________
By:______________________
Title:___________________
-18-
