EXHIBIT 99.1
PURCHASE AGREEMENT
DATED AS OF OCTOBER 1, 2006
BY AND AMONG
TEJAS INCORPORATED,
CAPITAL & TECHNOLOGY ADVISORS, INC.
AND
THE PERSONS AND ENTITIES LISTED ON THE SIGNATURE PAGE HERETO
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS..........................................................1
Section 1.01 Definitions................................................1
Section 1.02 Other Definitional Provisions..............................3
ARTICLE II PURCHASE AND SALE...................................................4
Section 2.01 Sale and Transfer of Tejas Shares..........................4
Section 2.02 Sale and Transfer of Company Shares........................4
Section 2.03 Closing....................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TEJAS............................4
Section 3.01 Organization; Authority....................................4
Section 3.02 Execution of the Agreement.................................5
Section 3.03 Agreement Binds the Company................................5
Section 3.04 No Conflicts...............................................5
Section 3.05 Title of Company Shares....................................5
Section 3.06 Brokers....................................................5
Section 3.07 Consents; Governmental Approvals...........................5
Section 3.08 SEC Filings; Financial Statements..........................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS..................6
Section 4.01 Organization; Authority....................................6
Section 4.02 Agreement Binds the Stockholders...........................7
Section 4.03 No Conflicts...............................................7
Section 4.04 Title to Tejas Stock.......................................7
Section 4.05 Consents; Governmental Approvals...........................7
Section 4.06 Investment Representations.................................7
Section 4.07 Brokers....................................................8
ARTICLE V REPRESENTATION AND WARRANTY OF THE COMPANY...........................8
Section 5.01 No Pending or Contemplated Opportunities...................8
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ARTICLE VI COVENANTS OF THE PARTIES............................................8
Section 6.01 Commercially Reasonable Efforts............................8
Section 6.02 Termination of the Agreements..............................9
Section 6.03 Stockholder Spousal Consent................................9
Section 6.04 Stock Options..............................................9
Section 6.05 Resignation of the Company Board of Directors..............9
Section 6.06 Termination of Tejas Intercompany Receivable...............9
Section 6.07 Directors and Officer and Insurance Continuation...........9
Section 6.08 Release of Stockholders and Tejas Affiliates...............9
Section 6.09 COBRA Coverage.............................................9
Section 6.10 Further Assurances........................................10
Section 6.11 Tax Reporting.............................................10
ARTICLE VII CONDITIONS PRECEDENT..............................................10
Section 7.01 Conditions to Obligations of Tejas and Stockholders.......10
Section 7.02 Conditions to Obligations of Tejas........................10
Section 7.03 Conditions to Obligations of the Stockholders.............11
ARTICLE VIII INDEMNIFICATION..................................................12
Section 8.01 Survival of Representations and Warranties................12
Section 8.02 Indemnification of Tejas..................................12
Section 8.03 Indemnification of the Company and the Stockholders.......13
Section 8.04 Procedures for Indemnification............................13
Section 8.05 Sole Remedy...............................................14
Section 8.06 Continuation of the Company...............................14
ARTICLE IX GENERAL PROVISIONS.................................................14
Section 9.01 Dispute Resolution........................................14
Section 9.02 Expenses..................................................15
Section 9.03 No Third-Party Beneficiaries..............................15
Section 9.04 Entire Agreement..........................................15
Section 9.05 Succession and Assignment.................................15
Section 9.06 Counterparts and Facsimile Signatures.....................15
Section 9.07 Headings..................................................16
Section 9.08 Notices...................................................16
Section 9.09 Governing Law and Jurisdiction............................17
Section 9.10 Amendments and Waivers....................................17
Section 9.11 Severability..............................................17
Section 9.12 Construction..............................................17
Section 9.13 Specific Performance......................................17
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Schedule 1 Employment Agreements
Schedule 2 Non-Compete Agreements
Schedule 3 Tejas Common Stock
Schedule 4 Company Common Stock
Schedule 5 Stock Options
Schedule 6 Company Pending or Contemplated Fee-Generating Matters,
Arrangements, Proposals or Opportunities
Schedule 7 Board of Directors of Company
Exhibit A Form of Termination and Release Agreement for Merger Agreement
Exhibit B Form of Termination and Release Agreement Relating to Escrow
Agreement
Exhibit C Form of Termination and Release Agreement Relating to
Registration Rights Agreement
Exhibit D Form of Termination and Release Agreement Relating to
Non-Compete Agreement
Exhibit E Form of Termination and Release Agreement Relating to
Employment and Confidentiality Agreement
Exhibit F Form of Spousal Consent
Exhibit G Form of Release Relating to Stock Options
Exhibit H Form of Release for Stockholders Who Served as Officers and
Directors of Tejas and the Company
Exhibit I Form of Release for Tejas Affiliates Who Served as Officers
and Directors of the Company
Exhibit J Form of Employee Letter
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PURCHASE AGREEMENT (this "Agreement") dated October 1, 2006, among
Tejas Incorporated, a Delaware corporation ("Tejas"), Capital & Technology
Advisors, Inc., a Delaware corporation (the "Company") and the persons and
entities listed on the signature page hereto (each, a "Stockholder" and,
collectively, the "Stockholders"). All capitalized terms used and not otherwise
defined herein shall have the same meaning as in the Merger Agreement (as
defined below).
WHEREAS, Tejas, the Company, Tejas Acquisition Corp. ("Sub"), and the
Stockholders entered into an agreement and plan of merger (the "Merger
Agreement") on July 1, 2005 pursuant to which Sub merged with and into the
Company upon the terms and subject to the condition of the Merger Agreement;
WHEREAS, the Stockholders own the respective shares of common stock of
Tejas (the "Tejas Shares") set forth opposite such Stockholder's name in the
second column on Schedule 3;
WHEREAS, Tejas owns all of the outstanding shares of the common stock
of the Company (the "Company Shares");
WHEREAS, upon the terms and subject to the conditions set forth
herein, the parties hereto desire that (i) the Stockholders sell and transfer
the Tejas Shares to Tejas, and Tejas purchase the Tejas Shares from the
Stockholders and (ii) Tejas sell and transfer the Company Shares to the
Stockholders, and the Stockholders purchase the Company Shares from Tejas, and
WHEREAS, the Stockholders are selling and transferring the Tejas
Shares to Tejas in consideration for the Company Shares and the releases from
Tejas contemplated hereby.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. For purposes of this Agreement:
"AAA" shall have the meaning set forth in SECTION 9.01 hereof.
"XXXXXXXXXX" shall mean Xxxxx X. Xxxxxxxxxx, Xx.
"XXXX" shall mean Xxxxx Xxxx, Xx.
"CLOSING" shall have the meaning set forth in SECTION 2.03 hereof.
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"CLOSING DATE" shall have the meaning set forth in SECTION 2.03
hereof.
"COMPANY" shall have the meaning set forth in the recitals.
"COMPANY INDEMNIFIED PARTIES" shall have the meaning set forth in
SECTION 8.03 hereof.
"COMPANY SHARES" shall have the meaning set forth in the recitals.
"EMPLOYMENT AGREEMENTS" means each of the employment and
confidentiality agreements listed on SCHEDULE 1.
"ESCROW AGREEMENT" means that certain Escrow Agreement, dated as of
July 1, 2005, by and among Tejas, the Company, Niskayuna Development LLC (now
known as Winchester Development LLC), Xxxx, and HSBC Bank USA, National
Association, as escrow agent.
"ESCROWED PROPERTY" means the 309,316 shares of Tejas common stock
that was deposited by Niskayuna Development LLC (now known as Winchester
Development LLC) and Xxxx in escrow pursuant to the Escrow Agreement plus any
dividends or other distributions relating thereto and any proceeds from the sale
of the such shares.
"GOVERNMENTAL AGENCY" means any federal, state, local, foreign or
other governmental agency, instrumentality, commission, authority, board or
body.
"INDEMNIFIED PARTY" shall have the meaning set forth in SECTION
8.04(a) hereof.
"INDEMNIFYING PARTY" shall have the meaning set forth in SECTION
8.04(a) hereof.
"KNOWLEDGE OF TEJAS" means the actual knowledge of any of the
following persons: the Chairman, the President and the General Counsel of Tejas.
"KNOWLEDGE OF THE COMPANY" means the actual knowledge of any of the
Stockholders.
"LOSS" shall have the meaning set forth in SECTION 8.02(a) hereof.
"MERGER AGREEMENT" shall have the meaning set forth in the recitals.
"NON-COMPETE AGREEMENTS" means each of the non-compete agreements
listed on SCHEDULE 2.
"REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights
Agreement, dated as of July 1, 2005, by and among Tejas and the Stockholders.
"STOCKHOLDER" shall have the meaning set forth in the recitals.
"SUB" shall have the meaning set forth in the recitals.
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"SUBSIDIARY" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, fifty percent
(50%) of more of the equity interests of which) which is owned directly or
indirectly by such first person.
"TEJAS" shall have the meaning set forth in the recitals.
"TEJAS COMMON STOCK" means the common stock of Tejas.
"TEJAS INDEMNIFIED PARTIES" shall have the meaning set forth in
SECTION 8.02(a) hereof.
"TEJAS INTERCOMPANY RECEIVABLE" means the intercompany receivable that
the Company owes Tejas existing on the Closing Date.
"TEJAS SHARES" shall have the meaning set forth in the recitals.
"TEJAS STOCK OPTIONS" means the stock options provided to the
employees of the Company and which are set forth on SCHEDULE 5 .
"TOTAL OUTSTANDING COMPANY SHARES" means the total number of shares of
Company Common Stock outstanding on the Closing Date.
"TRANSACTIONS" shall have the meaning set forth in SECTION 3.01(a)
hereof.
"TRANSACTION AGREEMENTS" shall mean the Agreement and the termination
and release agreements required under SECTION 6.02.
Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined or incorporated by reference
herein shall be equally applicable to both the singular and plural forms of such
terms.
(c) Any reference in this Agreement to any representation, warranty or
covenant "deemed" to have been made is intended to encompass only
representations, warranties or covenants that are expressly stated to be
repeated on or as of the dates following the execution and delivery of this
Agreement, and no such reference shall be interpreted as a reference to any
implicit, inferred, tacit or otherwise unexpressed representation, warranty or
covenant.
(d) The words "include", "includes" or "including" shall be
interpreted as if followed, in each case, by the phrase "without limitation".
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(e) The use of the masculine, feminine or neuter gender herein shall
not limit any provision of this Agreement.
ARTICLE II
PURCHASE AND SALE
Section 2.01 SALE AND TRANSFER OF TEJAS SHARES. Upon the terms and
subject to the conditions of this Agreement, at the Closing (as defined below),
each of the Stockholders shall sell, convey, assign, transfer and deliver to
Tejas, and Tejas shall purchase and acquire from the Stockholders, each of such
Stockholder's rights, title and interests in and to the Tejas Shares, free and
clear of all Encumbrances; PROVIDED, however, that the parties hereto
acknowledge that transfer of the Escrowed Property is subject to termination of
the Escrow Agreement and that delivery of the certificates representing the
Escrowed Property shall be made by the Escrow Agent pursuant to the terms of the
Termination and Release Agreement Relating to Escrow Agreement attached hereto
as EXHIBIT B.
Section 2.02 SALE AND TRANSFER OF COMPANY SHARES. Upon the terms and
subject to the conditions of this Agreement, in consideration of the aforesaid
sale, conveyance, assignment, transfer and delivery to Tejas of the Tejas
Shares, Tejas shall sell, convey, assign, transfer and deliver to each of
Stockholders, and each Stockholder shall accept and acquire from Tejas, all of
Tejas' rights, title and interests in and to the certain number of Company
Shares as set forth opposite Stockholder's name in the second column on SCHEDULE
4.
Section 2.03 CLOSING. The closing of the transactions contemplated
hereby (the "CLOSING") shall be the date (referred to herein as the "CLOSING
DATE") on which this Agreement is executed by all parties hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TEJAS
Tejas represents and warrants to the Stockholders as follows:
Section 3.01 ORGANIZATION; AUTHORITY.
(a) POWER TO ENTER INTO THE AGREEMENT. Tejas is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Tejas has the power and authority to execute and deliver this
Agreement and each other document to be executed and delivered by it under this
Agreement, to perform its obligations under such documents, and to consummate
the transactions contemplated by or pursuant to this Agreement and any ancillary
documents (the "TRANSACTIONS").
(b) AUTHORIZATION OF THE AGREEMENT. Tejas has, by requisite action,
authorized the execution, delivery and performance of this Agreement and each
other document to be executed and delivered by it under this Agreement, and the
consummation of the Transactions to which it is a party in accordance with
Applicable Law and the organizational documents.
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Section 3.02 EXECUTION OF THE AGREEMENT. Tejas has duly executed and
delivered this Agreement and each other document to be executed and delivered by
it under this Agreement.
Section 3.03 AGREEMENT BINDS THE COMPANY. This Agreement and each
other document to be delivered by Tejas under this Agreement constitutes the
valid and legally binding obligation of Tejas, enforceable against it in
accordance with its terms (subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and to
general principles of equity, regardless of whether enforcement is sought in a
proceeding in equity or at law).
Section 3.04 NO CONFLICTS. Tejas' execution, delivery and performance
of this Agreement, and of each other document to be executed and delivered by
them under this Agreement, and the consummation of the Transactions, will not:
(a) conflict with, or result in a breach of, a provision of Tejas'
organizational documents;
(b) conflict with, or result in a breach of, a provision of a
contract, agreement or undertaking to which the Tejas is a party, or by which it
or any of its assets or properties is bound;
(c) give rise to a right of termination, cancellation, amendment or
acceleration of an obligation or loss of a benefit affecting, or result in the
imposition of any Liens on, any of its assets; or
(d) violate Applicable Law.
Section 3.05 TITLE OF COMPANY SHARES. Tejas is the record and
beneficial owner of the Company Shares, with good and marketable title thereto,
free and clear of all Encumbrances and upon delivery at the Closing, the
Stockholders will receive good and valid title to the Company Shares, free and
clear of any and all Encumbrances.
Section 3.06 BROKERS. No Broker is entitled to any brokerage, finder's
or other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Tejas.
Section 3.07 CONSENTS; GOVERNMENTAL APPROVALS. Tejas is not required
to obtain any material order, consent, approval or authorization of, or to make
any declaration or filing with, any Governmental Agency or any other person or
entity in connection with its:
(a) executing and delivering this Agreement and each other document to
be executed and delivered by it under this Agreement;
(b) performing its obligations under this Agreement and each other
document to be executed and delivered by it under this Agreement; and
(c) consummating the Transactions.
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Section 3.08 SEC FILINGS; FINANCIAL STATEMENTS.
To the Knowledge of Tejas:
(a) Tejas has timely filed or otherwise transmitted all forms,
reports, statements, certifications and other documents (including all exhibits,
amendments and supplements thereto) required to be filed by it with the SEC
since June 1, 2005 (all such forms, reports, statements, certificates and other
documents filed by Tejas with the SEC, whether or not required to be filed,
collectively, the "Tejas SEC Reports"). Each of Tejas' SEC Reports, as amended,
complied as to form in all material respects with the applicable requirements of
the Securities Act, the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder (the "Exchange Act"), each as in effect on
the date so filed and with then applicable accounting standards. None of the
Tejas SEC Reports, when filed as amended, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Each of the consolidated financial statements of Tejas and its
Subsidiaries (including the related notes and schedules) included in the Tejas
SEC Reports comply as to form in all material respect with the published rules
and regulations of the SEC applicable thereto and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto). Each of the consolidated balance sheets of the Tejas and its
Subsidiaries included in the Tejas SEC Reports (including the related notes and
schedules) fairly presents, in all material respects, the consolidated financial
position of Tejas and its Subsidiaries at the respective dates thereof, and each
of the related consolidated statements of operations, cash flows and changes in
stockholders' equity included in the Tejas SEC Reports (including any related
notes and schedules) fairly presents, in all material respects, the results of
operations and cash flows of Tejas and its Subsidiaries for the periods
indicated (subject, in the case of unaudited statements, to normal period-end
adjustments).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby severally represents, warrants, and agrees
that:
Section 4.01 ORGANIZATION; AUTHORITY.
(a) POWER TO ENTER INTO THE AGREEMENT. Each Stockholder has the power
and authority, and with respect to individuals, the competency, to execute and
deliver this Agreement and each other document to be executed and delivered by
it under this Agreement, to perform its obligations under such documents, and to
consummate the Transactions contemplated by or pursuant to this Agreement.
(b) AUTHORIZATION OF THE AGREEMENT. Each Stockholder has, by requisite
action, authorized the execution, delivery and performance of this Agreement and
each other document to be executed and delivered by it under this Agreement, and
the consummation of the Transactions to which it is a party in accordance with
Applicable Law.
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(c) EXECUTION OF THE AGREEMENT. Each Stockholder has duly executed and
delivered this Agreement and each other document to be executed and delivered by
it under this Agreement.
Section 4.02 AGREEMENT BINDS THE STOCKHOLDERS. This Agreement and each
other document to be executed and delivered by each Stockholder under this
Agreement constitutes the valid and legally binding obligation of the
Stockholder, enforceable against it in accordance with its terms (subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and to general principles of equity,
regardless of whether enforcement is sought in a proceeding in equity or at
law).
Section 4.03 NO CONFLICTS. Each Stockholder's execution, delivery and
performance of this Agreement, and of each other document to be executed and
delivered by it under this Agreement, and the consummation of the Transactions,
will not:
(a) conflict with, or result in a breach of, a provision of a
contract, agreement or undertaking to which the Stockholder is a party, or by
which it or any of its assets or properties is bound;
(b) give rise to a right of termination, cancellation, amendment or
acceleration of an obligation or loss of a benefit affecting, or result in the
imposition of any Liens on, any of its assets; or
(c) violate Applicable Law.
Section 4.04 TITLE TO TEJAS STOCK. Each Stockholder is the record and
beneficial owner of the Tejas Stock being conveyed, with good and marketable
title thereto, free and clear of all Encumbrances (provided, however, that
Encumbrances relating to the Merger Agreement, Escrow Agreement and Registration
Rights Agreement shall be terminated only upon termination of each such
agreement pursuant to the termination agreements attached hereto as EXHIBITS A,
B AND C hereof) and upon delivery at the Closing, Tejas will receive good and
valid title to the Tejas Shares, free and clear of any and all Encumbrances.
Section 4.05 CONSENTS; GOVERNMENTAL APPROVALS. No Stockholder is
required to obtain any order, consent, approval or authorization of, or to make
any declaration or filing with, any Governmental Agency or any other person or
entity in connection with:
(a) executing and delivering this Agreement and each other document to
be executed and delivered by them under this Agreement; and
(b) performing any of their obligations under this Agreement and each
other document to be executed and delivered by them under this Agreement.
Section 4.06 INVESTMENT REPRESENTATIONS.
(a) Each Stockholder is an Accredited Investor.
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(b) Each Stockholder, by reason of his or her business and financial
experience has such knowledge, sophistication and experience in financial and
business matters and in making investment decisions of this type that he/she is
capable of (i) evaluating the merits and risks of an investment in the Company
Common Stock and making an informed investment decision, (ii) protecting his or
her own interest and (iii) bearing the economic risk of such investment. No
Stockholder has retained a purchaser's representative with respect to the
investment in Company Common Stock.
(c) Each Stockholder is acquiring Company Common Stock for investment
for the Stockholder's own account, not as a nominee or agent and not with the
view to, or any intention of, a resale or distribution thereof, in whole or in
part.
Section 4.07 BROKERS. No Broker is entitled to any brokerage, finder's
or other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of any Stockholder.
ARTICLE V
REPRESENTATION AND WARRANTY OF THE COMPANY
The Company hereby represents and warrants and agrees that:
NO ARRANGEMENTS PENDING OR SUBJECT TO BINDING TERM SHEET. Except as set forth in
SCHEDULE 6 and except for arrangements that are set forth on the books and
records of the Company, to the Knowledge of the Company, there are no
fee-generating arrangements that are currently pending or the subject of binding
term sheets that would or should inure to the benefit of the Company.
ARTICLE VI
COVENANTS OF THE PARTIES
Section 6.01 COMMERCIALLY REASONABLE EFFORTS. Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use all commercially reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Transactions contemplated by this Agreement, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
and the taking of all steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iii) the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this agreement or the consummation of the
Transactions contemplated by this Agreement, and (iv) the execution and delivery
of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
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Section 6.02 TERMINATION OF THE AGREEMENTS. Each of the parties agree
that at or prior to the Closing Date, the Merger Agreement, the Escrow
Agreement, the Registration Rights Agreement, the Non-Compete Agreements, and
the Employment Agreements will be terminated and that a termination and release
agreement with respect to each of such agreements will be executed,
substantially in the forms attached hereto as EXHIBIT A (Merger Agreement),
EXHIBIT B (Escrow Agreement), EXHIBIT C (Registration Rights Agreement), EXHIBIT
D (Non-Compete Agreement) and EXHIBIT E (Employment Agreement).
Section 6.03 STOCKHOLDER SPOUSAL CONSENT. Any Stockholder whose
interest in the Tejas Common Stock may be subject to community or marital
property on the Closing Date agrees to obtain and deliver to Tejas an executed
consent of spouse substantially in the form of EXHIBIT F hereto, in each case
effective at or before the Closing Date.
Section 6.04 STOCK OPTIONS. The Stockholders agree that Tejas will
cancel the Tejas Stock Options effective as of the Closing Date and Xxxxxxxxxx
and Xxxx shall use their good faith reasonable efforts to cause each employee
whose Stock Options have been cancelled by Tejas to execute a release
substantially in the form of EXHIBIT G hereto, in each case effective at or
before the Closing Date.
Section 6.05 RESIGNATION OF THE COMPANY BOARD OF DIRECTORS. Tejas
agrees to cause the Company to obtain written letters of resignation from each
of the current members of the Company Board of Directors, in each case effective
immediately upon the Closing Date, and the successor directors listed in
SCHEDULE 7 hereof shall be elected to the Company's Board of Directors on the
Closing Date.
Section 6.06 TERMINATION OF TEJAS INTERCOMPANY RECEIVABLE. Tejas
agrees to cancel the Tejas Intercompany Receivable on or before the Closing
Date.
Section 6.07 DIRECTORS AND OFFICER AND INSURANCE CONTINUATION. Tejas
shall use all commercially reasonable efforts to maintain directors and officers
liability insurance in amounts and on terms at least as favorable as are
provided to the continuing members of the Board of Directors and officers of
Tejas for the benefit of each of the Stockholders who is currently covered by
such insurance.
Section 6.08 RELEASE OF STOCKHOLDERS AND TEJAS AFFILIATES. Each of the
Stockholders, the Company and Tejas agree to execute a release relating to such
Stockholder's service as an officer or director of Tejas or the Company, such
release to be substantially in the form attached hereto as EXHIBIT H and in each
case effective at or before the Closing Date. The Company and each Tejas
affiliate that served as an officer or director of the Company agree to execute
a release relating to such Tejas affiliate's service as an officer or director
of the Company, substantially in the form of EXHIBIT I hereto and in each case
effective at or before the Closing Date.
Section 6.09 COBRA COVERAGE. Tejas shall provide each employee of the
Company who elects COBRA the opportunity to purchase up to 18 months of coverage
commencing on the date of this Agreement.
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Section 6.10 FURTHER ASSURANCES. Each of Tejas and the Company shall
cooperate with one another to effect, and use all reasonable efforts to ensure,
a smooth transition, including but not limited to transitions relating to
personnel and employment matters, financial books and records and reporting
requirements, and regulatory matters.
Section 6.11 TAX REPORTING. For U.S. federal, state and local income
tax purposes, each of Tejas and each Stockholder acknowledges and agrees that it
or he shall (i) report the distribution of Company Shares as a taxable
distribution from Tejas in redemption of each Stockholder's Tejas Shares and the
termination of the agreements set forth in Section 7.01(a) of this Agreement,
and (ii) treat the Company Shares received in the transaction as having a fair
market value equal to the fair market value of such Stockholder's Tejas Shares
(determined pursuant to the valuation described in Section 7.03(g) of this
Agreement).
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01 CONDITIONS TO OBLIGATIONS OF TEJAS AND STOCKHOLDERS. The
obligations of Tejas and of the Stockholders to effect the Transactions on the
Closing Date are subject to the satisfaction of the following conditions
precedent on or before the Closing Date:
(a) TERMINATION OF AGREEMENTS. The Merger Agreement, the Escrow
Agreement, the Registration Rights Agreement, the Non-Compete Agreements, and
the Employment Agreements shall have been terminated and a termination and
release agreement with respect to each of such agreements shall have been
executed, substantially in the forms attached hereto as EXHIBIT A (Merger
Agreement), EXHIBIT B (Escrow Agreement), EXHIBIT C (Registration Rights
Agreement), EXHIBIT D (Non-Compete Agreement), EXHIBIT E (Employment Agreement).
(b) TERMINATION OF STOCK OPTIONS. The Tejas Stock Options shall have
been cancelled, and each employee whose stock options has been cancelled (with
the exception of Xxx xxXxxx) shall have executed a release substantially in the
form of EXHIBIT B hereto, in each case effective at or before the Closing Date.
(c) EMPLOYEE LETTERS. Each of Xxxxx X.Xxxxxxxxxx, Xx. and Xxxxx Xxxx,
Xx. shall have executed a letter substantially in the form of EXHIBIT J hereto,
in each case effective at or before the Closing Date.
Section 7.02 CONDITIONS TO OBLIGATIONS OF TEJAS. The obligation of
Tejas to effect the Transactions on the Closing Date is further subject to the
satisfaction of the following conditions precedent on or before the Closing
Date:
(a) DELIVERY OF TEJAS SHARES. Each of the Stockholders shall have
delivered, or directed the Escrow Agent under the Escrow Agreement to deliver,
to Tejas the certificates representing each Stockholder's ownership of the Tejas
Shares, free and clear of all Encumbrances, duly endorsed in blank for transfer
or accompanied by a stock power duly executed in blank.
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(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Stockholders contained in this Agreement shall be true and correct when
made and shall be true and correct as of the Closing Date, as if made as of the
Closing Date (except for those representations and warranties that address
matters as of a particular date, which need be true only as of such date).
(c) AGREEMENTS AND COVENANTS. Each Stockholder shall have performed
and complied with all covenants. agreements and conditions required by this
Agreement to be performed or complied with by such parties prior to or on the
Closing Date.
(d) CONSENTS AND APPROVALS. All consents, waivers, notices,
authorizations and approvals shall have been duly obtained in form and substance
reasonably satisfactory to Tejas and shall be in full force and effect on the
Closing Date.
(e) STOCKHOLDER SPOUSAL CONSENT. Any Stockholder whose interest in the
Tejas Common Stock may be subject to community or marital property on the
Closing Date shall have obtained and delivered to Tejas an executed consent of
spouse in the form of EXHIBIT A hereto.
(f) KEY MAN INSURANCE. Tejas shall have cancelled the key man life
insurance policies for the benefit of Tejas covering Xxxxxxxxxx and Xxxx in an
amount equivalent to forty five million dollars ($45 million) and five million
dollars ($5 million), respectively.
Section 7.03 CONDITIONS TO OBLIGATIONS OF THE STOCKHOLDERS. The
obligation of the Stockholders to effect the Transactions on the Closing Date is
further subject to the conditions precedent, which may be waived by the
Purchaser, that the conditions set forth below shall have been satisfied on or
before the Closing Date:
(a) DELIVERY OF COMPANY SHARES. Tejas shall have delivered to the
Stockholders the certificates representing the Company Shares, free and clear of
all Encumbrances, duly endorsed in blank for transfer or accompanied by a stock
power duly executed in blank.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Tejas contained in this Agreement shall be true and correct when made and
shall be true and correct as of the Closing Date, as if made as of the Closing
Date (except for those representations and warranties that address matters as of
a particular date, which need be true only as of such date).
(c) AGREEMENTS AND COVENANTS. Tejas shall have performed and complied
with all covenants, agreements and conditions required by this Agreement to be
performed or complied with by such parties prior to or on the Closing Date.
(d) CONSENTS AND APPROVALS. All consents, waivers, notices,
authorizations and approvals shall have been duly obtained in form and substance
reasonably satisfactory to the Stockholders and shall be in full force and
effect on the Closing Date.
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(e) COMPANY BOARD OF DIRECTORS. The Stockholders shall have received
written letters of resignation from each of the current members of the Company
Board of Directors, in each case effective immediately upon the Closing Date.
The board of directors of the Company shall be constituted as specified in
Section 5.10 hereof.
(f) TERMINATION OF TEJAS INTERCOMPANY RECEIVABLE. Tejas shall have
cancelled the Tejas Intercompany Receivable.
(g) VALUATION. Tejas shall have received a valuation of the Tejas
Shares from Sandler X'Xxxxx & Partners, L.P., an independent appraisal firm, and
shall have been authorized to, and shall have, delivered a copy of such report
to each of the Stockholders.
ARTICLE VIII
INDEMNIFICATION
Section 8.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the parties contained in this Agreement or any
other Transaction Agreement shall survive the Closing.
Section 8.02 INDEMNIFICATION OF TEJAS.
(a) After the Closing, the Company shall indemnify, defend and hold
harmless Tejas and its affiliates and its and their respective officers,
directors, employees, and agents (the "TEJAS INDEMNIFIED PARTIES") from any and
all losses, costs, expenses (including, without limitation, reasonable
attorneys' and independent accountants' fees and disbursements), liabilities,
damages (excluding incidental, consequential or punitive damages), fines,
penalties, charges, assessments, judgments, settlements, claims, causes of
action and other obligations of any nature whatsoever (individually, a "LOSS"
and collectively, "LOSSES") that the Tejas Indemnified Parties suffer related
to, arising out of, or in connection with (i) Tejas' ownership of the Company
Shares during the period from July 1, 2005 to the date of this Agreement, other
than for Losses arising from (x) matters relating to the financial, accounting
and payroll books and records of the Company, the maintenance of such books and
records and any claims arising from misstatements or omissions relating thereto,
unless such Losses arise from facts underlying the information contained in such
books and records or from information provided by the Company or its officers or
employees (including officers and employees which are Stockholders but excluding
officers or employees who are Tejas Indemnified Parties) to Tejas or its
representatives and included in such books and records, in which case for
avoidance of doubt, such Losses shall be indemnified under this clause (x), (y)
any regulatory matters arising out of or relating to the Company's affiliation
with a regulated broker-dealer, unless such Losses arise from an act or omission
of the Company itself or any of its officers or employees (including officers or
employees who are Stockholders but excluding officers or employees who are Tejas
Indemnified Parties) or the Stockholders, in which case for avoidance of doubt,
such Losses shall be indemnified under this clause (y), and (ii) the fact that
such Tejas Indemnified Party, or a person of whom such Tejas Indemnified Party
is the legal representative, is or was a director or officer of the Company;
provided that such indemnification shall be provided only as and to the extent
that such person would have been entitled to indemnification under the
certificate of incorporation and by-laws of the Company in effect on the date
hereof and (z) any breach of the representation and warranty of the Company
contained in Section 5.01.
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(b) After the Closing, each Stockholder shall, severally and not
jointly, indemnify, defend and hold harmless the Tejas Indemnified Parties from
any and all Losses that the Tejas Indemnified Parties suffer related to, arising
out of, or in connection with any breach of any representation, warranty or
covenant of such Stockholder contained herein.
Section 8.03 INDEMNIFICATION OF THE COMPANY AND THE STOCKHOLDERS.
After the Closing, Tejas shall indemnify, defend and hold harmless the Company
and each of the Stockholders, the Company's officers, directors, employees, and
agents and each of the Company's and the Stockholder's respective affiliates
(the "COMPANY INDEMNIFIED PARTIES") from any and Losses that the Company
Indemnified Parties suffer related to, arising out of, or in connection with (i)
the Company's ownership by, and affiliation with, Tejas during the period from
July 1, 2005 to the date of this Agreement, unless such Losses arise from an act
or omission of the Company itself or any of its officers or employees (including
officers or employees who are Stockholders but excluding officers or employees
who are Tejas Indemnified Parties) or the Stockholders, in which case for
avoidance of doubt, such Losses shall not be indemnified under this clause (i),
(ii) the fact that such Company Indemnified Party is or was a director or
officer of Tejas; provided that such indemnification shall be provided only as
and to the extent that such person would have been entitled to indemnification
under the certificate of incorporation and by-laws of Tejas in effect on the
date hereof, and (iii) any breach of any representation, warranty or covenant of
Tejas contained herein.
Section 8.04 PROCEDURES FOR INDEMNIFICATION.
(a) Promptly after receipt by a Tejas Indemnified Party or a Company
Indemnified Party (such party, the "INDEMNIFIED PARTY") of written notice of the
assertion or the commencement of any proceeding by a third-party with respect to
any matter referred to in Sections 8.02 (other than excepted matters) or 8.03,
as applicable, the Indemnified Party shall give written notice thereof to the
party(ies) responsible for indemnification pursuant to Sections 8.02 or 8.03
hereof (the "INDEMNIFYING PARTY"), and thereafter shall keep the Indemnifying
Party reasonably informed with respect thereto; provided, however, that failure
of the Indemnified Party to give the Indemnifying Party notice as provided
herein shall not relieve the Indemnifying Party of their obligations hereunder,
except to the extent that the Indemnifying Party are prejudiced thereby. A claim
for indemnification for any matter not involving a third-party proceeding may be
asserted by notice to the Indemnifying Party and shall be paid promptly after
such notice.
(b) If the facts pertaining to a Loss arise out of the claim of any
third party, or if there is any claim against a third party available by virtue
of the circumstances of the Loss, the Indemnifying Party may assume the defense
or the prosecution thereof by prompt written notice to the Indemnified Party,
including the employment of counsel or accountants, at its sole cost and
expense. In connection therewith, the Indemnifying Party shall acknowledge that
such claim is the proper subject of indemnification under Section 8.02 or 8.02,
as applicable. The Indemnified Party shall have the right to employ counsel
separate from counsel employed by the Indemnifying Party in any such action and
to participate therein, but the fees and expense of such counsel employed by the
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Indemnified Party shall be at its sole cost and expense. Neither the
Indemnifying Party nor the Indemnified Party shall be liable for any settlement
of any such claim effected without their respective prior written consent, which
shall not be unreasonably withheld; PROVIDED that if the Indemnifying Party does
not assume the defense or prosecution of a claim as provided above without
thirty (30) days after notice thereof from the Indemnified Party, the
Indemnified Party may settle such claim without the Indemnifying Party's
consent. Whether or not the Indemnifying Party chooses to so defend or prosecute
such claim, all the parties hereto shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony, and attend
such conferences, discovery proceedings, hearings, trails and appeals, as may be
reasonably requested in connection therewith.
Section 8.05 SOLE REMEDY. After the Closing, (x) the rights and
remedies set forth in this Article VII shall constitute the sole and exclusive
rights and remedies of the Indemnified Parties hereto following the Closing with
respect to any breach of a representation and warranty under this Agreement or
any of the Losses enumerated in Section 8.02 or 8.03, as applicable, except for
Losses attributable to fraud or intentional malfeasance, in which case the
aggrieved party shall have recourse to all remedies at law or in equity.
Section 8.06 CONTINUATION OF THE COMPANY. The Stockholders agree to
maintain the Company's existence and not to liquidate or dissolve the Company
through the third anniversary of the Closing (the "Term"). During the Term, the
Company shall: (i) continue to own those assets that it owns as of the Closing,
which assets shall include, without limitation, fees received or to be received
in the form of third party equity, receivables and work in process under
contracts to which the Company is a party that were executed on or before the
Closing (the "Contracts"), any contractual benefits (including rights to
indemnification) under the Contracts, and any revenues earned after the Closing
relating to the Contracts, subject to payment of ordinary course liabilities set
forth in clause (ii) below; (ii) not incur any liabilities, other than ordinary
course liabilities relating to performance of the Contracts such as personnel
costs and prorated overhead costs; and (iii) not make any distributions to any
Stockholders or their affiliates.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 DISPUTE RESOLUTION. Resolution of any dispute arising
from or in connection with this Agreement, including but not limited to any
disputes relating to indemnification pursuant to Article VII, shall be
exclusively governed by and settled in accordance with the provisions of this
Section 9.01. The parties shall make a good faith attempt to resolve any dispute
arising out of or relating to this Agreement through informal negotiation
between appropriate representatives of the Stockholders, the Company and Tejas.
If at any time either party contends that such negotiations are not leading to a
resolution of the dispute, such party may request a meeting of the senior
executives from each party. Within ten (10) business days after such notice of a
dispute is given, each party shall select appropriate senior executives of each
party who shall have the authority to resolve the matter and shall meet to
attempt in good faith to negotiate a resolution of the dispute prior to pursuing
other available remedies. Discussions and correspondence among the senior
executives for purposes of these negotiations shall be treated as confidential
information and may not be disclosed without the prior written consent of both
parties. In the event that any dispute arising out of or related to this
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Agreement is not settled by the parties within thirty (30) days after the first
meeting of the negotiating senior executives, the dispute will be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") then in effect, and judgment upon the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction. Any such arbitration shall be conducted in New York City. Unless
otherwise agreed, the arbitration will be presided over by a panel of three
arbitrators with one selected by Tejas and one by the Company and the third
selected by the arbitrators selected by the parties. The arbitrators shall
control the scheduling so as to process the matter expeditiously. The
arbitrators may not make any ruling, finding or award that does not conform to
the terms and conditions of this Agreement. Either party, before or during any
arbitration, may apply to a court of competent jurisdiction for a temporary
restraining order or preliminary injunction where such relief is necessary to
protect its interests pending completion of the arbitration proceedings. Neither
party nor the arbitrators may disclose the evidence or result of any arbitration
hereunder without the prior written consent of both parties. Before arbitration
or any other form of legal or equitable proceeding, the aggrieved party shall
give the other party written notice describing the dispute and amount as to
which it intends to initiate action and the prior effort it has made to resolve
such dispute. The parties agree that this Agreement involves interstate commerce
and, notwithstanding any choice of law provisions in this Agreement, any
arbitration hereunder shall be governed by the Federal Arbitration Act (or any
successor thereto). Fees and expenses shall be allocated in accordance with the
arbitrator's determination based on equitable considerations. In no event shall
either party be liable to the other party for any punitive damages.
Section 9.02 EXPENSES. Each of the parties shall bear its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the Transactions contemplated hereby.
Section 9.03 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the parties and their
respective successors and permitted assigns.
Section 9.04 ENTIRE AGREEMENT. This Agreement, including the Exhibits
attached hereto, constitute the entire agreement among the parties and
supersedes any prior understandings, agreements, or representations by or among
the parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
Section 9.05 SUCCESSION AND ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and their
respective successors and permitted assigns. No party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of Tejas and the Company.
Section 9.06 COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may
be executed in two (2) or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
The counterparts of this Agreement may be executed and delivered by facsimile
signature by any of the parties to any other party and the receiving party may
rely on the receipt of such document so executed and delivered by facsimile as
if the original had been received.
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Section 9.07 HEADINGS. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 9.08 NOTICES. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed properly delivered,
given and received when delivered (by hand, by registered mail, by courier or
express delivery services or by facsimile); provided that if delivered on a date
that is not a Business Day or after 5:00 p.m. on a Business Day (in each case at
the place of delivery), such notice, request, demand, claim or other
communication shall be deemed delivered on the next succeeding Business Day;
provided, further that such notice, request, demand, claim or other
communication is delivered to the applicable party at the party's address or
facsimile number as set forth below,
(a) If to Tejas or the Company prior to the Closing Date, addressed to
it at:
Tejas Incorporated
0000 Xxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Fax: 000-000-0000
With a copy to:
Cadwalader, Xxxxxxxxxx & Xxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxx X. Block, Esq.
(b) If to the Stockholders, addressed to it at:
Capital & Technology Advisors, Inc.
00 Xxxxxxxxx Xxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx, Xx.
Fax: (000) 000-0000
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With a copy to:
Day, Xxxxx & Xxxxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx III, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Any party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
parties notice in the manner herein set forth.
Section 9.09 GOVERNING LAW AND JURISDICTION. This Agreement shall be
governed by and construed in accordance with the domestic laws of the State of
New York without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York. Each party hereby consents to the exclusive jurisdiction of any New
York state or United States Federal court sitting in the City of New York with
respect to all disputes between the parties.
Section 9.10 AMENDMENTS AND WAIVERS. This Agreement may be amended by
the parties. No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by the parties. No waiver by any
party of any provision of this Agreement or any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
valid unless the same shall be in writing and signed by the party making such
waiver, nor shall such waiver be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
Section 9.11 SEVERABILITY. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
Section 9.12 CONSTRUCTION. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The words "including", "include" or "includes"
shall mean "including without limitation." The parties intend that each
representation, warranty and covenant contained herein shall have independent
significance. Any reference in this Agreement to a statute shall be to such
statute, as amended from time to time, and to the rules and regulations
promulgated thereunder.
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Section 9.13 SPECIFIC PERFORMANCE. The parties hereto agree that if,
on or prior to the Closing Date, any of the provisions of this Agreement or any
other document contemplated by this Agreement were not performed in accordance
with their specific terms or were otherwise breached, irreparable damage would
occur, no adequate remedy at law would exist and damages would be difficult to
determine, and, therefore, prior to the Closing Date, the parties shall be
entitled to specific performance of the terms hereof and thereof, in addition to
any other remedy at law or in equity.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
TEJAS INCORPORATED
By: /S/ XXXX X. XXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Authorized Signatory
CAPITAL & TECHNOLOGY ADVISORS, INC.
By: /S/ XXXXX XXXX, XX.
------------------------------------
Name: Xxxxx Xxxx, Xx.
Title: Authorized Signatory
STOCKHOLDERS:
WINCHESTER DEVELOPMENT LLC
By: /S/ XXXXX X. XXXXXXXXXX, XX.
------------------------------------
Name: Xxxxx X. Xxxxxxxxxx, Xx.
Title: Authorized Signatory
XXXXX XXXX, XX.
/S/ XXXXX XXXX, XX.
----------------------------------------
XXXXX X'XXXXXXX
/S/ XXXXX X'XXXXXXX
----------------------------------------
XXXXXXX XXXXX
/S/ XXXXXXX XXXXX
----------------------------------------
XXXX X. XXXX
/S/ XXXX X. XXXX
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