1
EXHIBIT 1.1
AGREEMENT AND PLAN OF MERGER
AUGUST 20, 1999
BY AND AMONG
WESTECH CAPITAL CORP., WESTECH MERGER SUB, INC., ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ SECURITIES GROUP, INC. AND TEJAS SECURITIES GROUP
HOLDING COMPANY
2
TABLE OF CONTENTS
Page
1. Vote on Merger and Related Matters..............................................................................2
2. Representations, Warranties and Covenants of Tejas Holding and Tejas............................................3
3. Representations and Warranties of Merger Sub and ▇▇▇▇▇▇........................................................16
4. Representations and Warranties of Westech and ▇▇▇▇▇▇...........................................................18
5. Representations to Survive Closing.............................................................................25
6. Surviving Corporation..........................................................................................25
7. Treatment of Shares of Constituent Corporations................................................................25
8. Rights and Liabilities of Surviving Corporation................................................................26
9. Further Assurances of Title....................................................................................27
10. Conditions of Obligations of Merger Sub and Westech............................................................27
11. Conditions of Obligations of Tejas.............................................................................28
12. Abandonment....................................................................................................31
13. Closing or Termination.........................................................................................31
14. Delivery of Corporate Proceedings of Westech...................................................................32
15. Delivery of Corporate Proceedings of Merger Sub................................................................32
16. Delivery of Company Proceedings of Tejas.......................................................................32
17. Limitation of Liability........................................................................................32
18. Further Instruments and Actions................................................................................32
19. Governing Law..................................................................................................33
20. Notices........................................................................................................33
21. Binding Agreement..............................................................................................33
-i-
3
22. Counterparts...................................................................................................33
23. Severability...................................................................................................33
24. Joint Drafting.................................................................................................33
Tejas Schedule of Exceptions
Exhibit A Certificate of Merger - Delaware
Exhibit B Articles of Merger - Texas
Exhibit C Westech Common Stock
Exhibit D Investor Questionnaire
-ii-
4
INDEX OF DEFINED TERMS
Page
----
Audited Financial Statements.............................................................................................8
Bad Events..............................................................................................................23
Closing..................................................................................................................3
Closing Date.............................................................................................................3
Code.....................................................................................................................2
Companies................................................................................................................2
Constituent Corporations.................................................................................................3
Contracts or Other Agreements............................................................................................6
Employee Benefit Plan...................................................................................................10
Environmental Laws......................................................................................................13
ERISA...................................................................................................................10
ERISA Affiliate.........................................................................................................10
Governmental Entity......................................................................................................6
Holding Securities.......................................................................................................5
Intellectual Property...................................................................................................13
Interim Financial Statements.............................................................................................8
▇▇▇▇▇▇...................................................................................................................2
Legal Requirements.......................................................................................................6
Merger...................................................................................................................2
Merger Sub...............................................................................................................2
Merger Sub Shares.......................................................................................................17
multiemployer plan......................................................................................................11
NASD.....................................................................................................................7
Orders...................................................................................................................9
Private Placements......................................................................................................32
Records.................................................................................................................15
Regulatory Agencies......................................................................................................7
SEC Filings.............................................................................................................20
Securities Act..........................................................................................................20
Stock Split..............................................................................................................2
Tejas....................................................................................................................2
Tejas Holding............................................................................................................2
Tejas Schedule of Exceptions.............................................................................................4
Westech..................................................................................................................2
Westech Common Shares....................................................................................................3
Westech Common Stock.....................................................................................................2
-iii-
5
AGREEMENT AND PLAN OF MERGER made as of this 20th day of August, 1999,
by and between Westech Capital Corp., a New York corporation having its
principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ("Westech"), Westech Merger Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Westech having its principal place of business at ▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("Merger Sub"), ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, an individual residing at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
("▇▇▇▇▇▇"), Tejas Securities Group Holding Company, a Texas corporation having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Tejas Holding"), and Tejas Securities Group, Inc., a
Texas corporation and a subsidiary of Tejas Holding having its principal place
of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ("Tejas").
WHEREAS, the respective Boards of Directors of Westech, Merger Sub,
Tejas Holding and Tejas (collectively the "Companies") deem it advisable and to
the advantage and welfare of the Companies and their respective stockholders
that Merger Sub be merged with and into Tejas Holding under the terms and
conditions hereinafter set forth (the "Merger") as a tax-free reorganization
under Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the
"Code"), pursuant to the Texas Business Corporation Act and the Delaware General
Corporation Law; and
WHEREAS, in connection with and in preparation for the Merger, the
respective Boards of Directors of the Companies deem it advisable and in the
best interest of the Companies that Westech, which presently has 182,500 shares
of common stock, par value $.001 per share ("Westech Common Stock") outstanding,
undergo a stock split in the form of a stock dividend (the "Stock Split") by
issuing 2.28767 new shares of Westech Common Stock for each one share of Westech
Common Stock currently outstanding to stockholders of record on August 13, 1999,
resulting in their being
6
no more than 600,000 shares of Westech Common Stock outstanding immediately
following the Stock Split (the "Westech Common Shares").
NOW, THEREFORE, in consideration of the premises, the parties hereto do
mutually agree as follows:
1. Vote on Merger and Related Matters. Westech and Merger Sub shall, as
soon as practicable but in no event later than 5 days after the execution and
delivery hereof, authorize and approve the Stock Split, subject to the
consummation of the Merger, in accordance with the terms hereof. On or prior to
the 15th day following the Merger, Westech stockholders who would otherwise be
entitled to receive fractional shares as the result of the Stock Split shall be
paid cash in lieu thereof at the rate of $.076 per share (payable to the nearest
$.01). Tejas Holding shall, as soon as practicable and in no event later than 15
days after the execution and delivery hereof, cause a special meeting of its
stockholders to be called to consider and vote upon the Merger on the terms and
conditions hereinafter set forth or seek the written consent of such
stockholders as are necessary to approve the Merger in accordance with Texas
law. If the Stock Split and the Merger are approved (subject to the further
conditions and provisions of this Agreement) a closing shall be held at the
offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in Austin, Texas (the "Closing"). On such
date (the "Closing Date"), Articles of Merger and a Certificate of Merger and
all other documents or instruments deemed necessary or appropriate by the
parties hereto to effect the Merger shall be executed and filed with the
Secretary of State of the States of Texas and Delaware, respectively. The
Certificate of Merger to be filed in Delaware shall be substantially in the form
of Exhibit A annexed hereto, with such changes therein as the Boards of
Directors of Westech and Tejas Holding (the "Constituent Corporations") shall
mutually approve and the Articles of Merger to be filed in Texas shall be
-2-
7
substantially in the form of Exhibit B annexed hereto, with such changes therein
as the Boards of Directors of the Constituent Corporations shall mutually
approve.
2. Representations, Warranties and Covenants of Tejas Holding and
Tejas. Tejas Holding and Tejas jointly and severally represent and warrant as
follows, except to the extent set forth on the Tejas Schedule of Exceptions
annexed hereto and made a part hereof ("Tejas Schedule of Exceptions"):
(a) Organization: Tejas Holding and Tejas have each been duly
organized, are validly existing, and in good standing under the laws
of the jurisdiction of their respective organizations and have all
requisite corporate power and authority to own, lease and operate
their respective properties and assets and to carry on their
respective businesses as now being conducted. Tejas is duly qualified
or licensed to do business and in good standing in each jurisdiction
in which the properties and assets owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or
licensing necessary, except for such failures to be so duly qualified
or licensed and in good standing that, individually or in the
aggregate, could not reasonably be expected to have a material adverse
effect on Tejas. Both Tejas Holding and Tejas have previously
delivered or made available to the Westech correct and complete copies
of their respective certificates of incorporation and bylaws as
currently in effect.
(b) Equity Capitalization and Subsidiaries: The only subsidiary of
Tejas Holding is Tejas. Tejas has no subsidiaries. The Tejas Schedule
of Exceptions sets forth (i) the equity capitalization of Tejas
Holding, including the total number of authorized and issued shares of
equity securities (the "Holding Securities") as of the date hereof,
including the total number
-3-
8
of Holding Securities subject to options, warrants or any similar
rights; and (ii) the equity capitalization of Tejas, including the
total number of authorized and issued shares of equity securities (the
"Tejas Securities") as of the date hereof, including the total number
of Tejas Securities subject to options, warrants or any similar
rights. There are no issued and outstanding securities of any nature
convertible into Holding Securities or Tejas Securities, or any
commitments to issue any such securities. All issued and outstanding
shares of Holding Securities and Tejas Securities have been duly
authorized, are validly issued, fully paid and non-assessable, and
were issued in full compliance with all applicable federal and state
securities laws. There are no preemptive rights in existence in
connection with the outstanding Holding Securities or Tejas
Securities.
(c) Business: Neither Tejas Holding nor Tejas are a party to any
contract which restricts the freedom of either to carry on the
business as it is now being conducted.
(d) Authorization; Binding Agreement: Tejas Holding has the full
corporate power and authority to execute and deliver this Agreement
and, subject to the approval of its stockholders, to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized, executed and delivered by the
Board of Directors of Tejas Holding and, prior to the Closing, by its
stockholders and, assuming the Agreement has been duly and validly
executed by each of Westech and the Merger Sub, will constitute the
legal, valid and binding agreement of Tejas Holding and Tejas,
enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and
similar laws affecting creditors' rights generally and to general
principles of
-4-
9
equity regardless of whether enforcement is sought in a proceeding at
law or in equity. (e) Noncontravention: Neither the execution and
delivery of this Agreement nor the consummation and performance of the
transactions contemplated hereby, or the compliance with the terms of
this Agreement, will (i) conflict with or result in any breach of any
provision of the certificate of incorporation or bylaws of Tejas
Holding, (ii) require any consent, approval or notice under, or
conflict with or result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give
rise to any right of termination, cancellation or acceleration) under,
any of the terms, conditions or provisions of any loan or credit
agreement, note, bond, mortgage, indenture, license, agreement or
other instrument or obligation (collectively, "Contracts or Other
Agreements") to which Tejas Holding or Tejas is a party the failure to
obtain consent or approval or to give notice under which, or the
conflict with or violation of, breach of or default under, would,
individually or in the aggregate, have a material adverse effect on
Tejas Holding or Tejas, or (iii) violate any order, judgment, writ,
injunction, determination, award, decree, law, statute, rule or
regulation (collectively, "Legal Requirements") applicable to Tejas
Holding, Tejas or their properties or assets the violation of which,
individually or in the aggregate, would have a material adverse effect
on Tejas Holding or Tejas.
(f) Governmental Approvals: No consent, approval or authorization of
or declaration or filing with any foreign, federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality (each, a "Governmental Entity") on the part of Tejas
Holding or Tejas is required in connection with the execution or
delivery by Tejas Holding of this Agreement or the consummation by
Tejas Holding of the
-5-
10
transactions contemplated hereby, other than (i) consents, approvals,
authorizations, declarations or filings with the National Association
of Securities Dealers ("NASD") and all other states, stock exchanges,
options exchanges, boards of options, clearinghouses and other
regulatory, self-regulatory and trade agencies, boards, commissions,
organizations, departments and entities (the "Regulatory Agencies") of
which Tejas is a member or is otherwise subject, (ii) consents,
approvals, authorizations, declarations or filings with respect to the
Investment Advisers Act of 1940, as amended, and (iii) the filing of a
Certificate of Merger with the Secretary of State of the State of
Delaware and the filing of Articles of Merger with the Secretary of
State of the State of Texas.
(g) Consents: Other than as set forth on the Tejas Schedule of
Exceptions in response to Section 2(i), and except for the consent and
approval of the Board of Directors and stockholders of Tejas Holding
and the Board of Directors and stockholder of Merger Sub, no consents
or approvals of, or filings or registrations with, any third party or
any public body or authority are necessary in connection with (i) the
execution and delivery by Tejas Holding of this Agreement and (ii) the
consummation by Tejas Holding of the Merger and by Tejas Holding of
all other transactions contemplated hereby.
(h) Adverse Actions: There are, and as of the Closing there will be,
no legal, administrative, arbitral or other proceedings, claims,
actions or governmental investigations of any nature, challenging the
validity or propriety of the transactions contemplated by this
Agreement and, to the best knowledge of Tejas Holding and Tejas, there
is no reasonable basis for any such proceeding, claim, action or
governmental investigation for any reason whatsoever. Neither Tejas
Holding nor Tejas are a party to any order, judgment or decree
-6-
11
which will, or might reasonably be expected to, materially adversely
affect the business, operations, properties, assets or financial
condition of Tejas Holding or Tejas.
(i) Financial Statements: Absence of Undisclosed Liabilities or
Material Adverse Change:
(i) Tejas has previously furnished to Westech copies of the
audited balance sheet of Tejas as at December 31, 1998 and 1997 and
the related statements of operations, stockholders' equity and cash
flows for the years then ended, including the footnotes thereto (the
"Audited Financial Statements"), certified by KPMG, independent
certified public accountants, and Tejas' most recent unaudited
balance sheet as at June 30, 1999 and the related statements of
operations, stockholders' equity and cash flows for the six months
then ended (the "Interim Financial Statements"). The Audited
Financial Statements and the Interim Financial Statements have been
prepared in conformity with generally accepted accounting principles
consistently applied throughout the periods involved and present
fairly the financial position and results of operations of Tejas on
and as of the dates and for the periods therein indicated, subject,
in the case of the Interim Financial Statements, to normal year-end
adjustments and the absence of footnotes. The statements of
operations do not contain any special or nonrecurring items (as
compared to the prior year) of income or loss, except as expressly
specified therein.
(ii) Except as incurred in connection with this transaction, or
to the extent reflected or reserved against in the Interim Financial
Statements or incurred since such
-7-
12
date in the ordinary course of business consistent with past
practice, Tejas has no direct or indirect material liabilities of
any nature whatsoever.
(iii) There has not been, and on the Closing Date there will not
have been, any material adverse change in the financial condition of
Tejas from that set forth in the Tejas Financial Statements except
for the transactions relating to this Agreement.
(j) Absence of Certain Changes or Events: Since June 30, 1999, Tejas
has conducted its business in the ordinary course consistent with past
practice and there has not been any condition, event or occurrence
that, individually or in the aggregate, has resulted, or could
reasonably be expected to result, in a material adverse effect with
respect to Tejas (excluding however, the transactions contemplated by
this Agreement and changes in conditions generally applicable to the
industries in which Tejas is involved and general economic
conditions).
(k) Absence of Litigation. As of the date hereof there are no
claims, actions, proceedings, investigations or audits pending or, to
the knowledge of Tejas Holding or Tejas, threatened against Tejas
Holding or Tejas on the date hereof before any court or Governmental
Entity or Regulatory Agency. As of the date hereof, neither Tejas
Holding nor Tejas are subject to any order, judgment, injunction or
decree (collectively, "Orders") of any court, Governmental Entity or
Regulatory Agency.
(l) Compliance: Tejas is not in default or violation of any term,
condition or provision of its certificate of incorporation or bylaws,
or any Legal Requirements applicable to Tejas, or of any material
contract, the default or violation of which would have a material
adverse effect on Tejas.
-8-
13
(m) ERISA and Employee Benefit Matters:
(i) Neither Tejas nor any ERISA Affiliate (as defined below)
maintains any Employee Benefit Plan. As used in this Agreement,
"Employee Benefit Plan" shall mean any "employee benefit plan"
as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and any other
material plan, policy, program, practice, agreement,
understanding or arrangement (whether written or unwritten)
providing compensation or other benefits to any current or
former director, officer, employee or consultant (or to any
dependent or beneficiary thereof), of Tejas or any ERISA
Affiliate which are now, or were within the past six (6) years,
maintained by Tejas or any ERISA Affiliate or under which Tejas
or any ERISA Affiliate has or could have any obligation or
liability, whether actual or contingent (and including, without
limitation, any liability arising out of an indemnification,
guarantee, hold harmless or similar agreement), including,
without limitation, all incentive, bonus, deferred compensation,
vacation, holiday, cafeteria, medical, disability, stock
purchase, stock option, stock appreciation, phantom stock,
restricted stock or other stock-based compensation plans,
policies, programs, practices or arrangements. As used in this
Agreement, "ERISA Affiliate" shall mean any entity (whether or
not incorporated) other than Tejas that, together with Tejas, is
or was a member of (A) a controlled group of corporations within
the meaning of Section 414(b) of the Code, (B) a group of trades
or businesses under common
-9-
14
control within the meaning of Section 414(c) of the Code or (C)
an affiliated service group within the meaning of Section 414(m)
of the Code.
(ii) Neither Tejas nor any ERISA Affiliate maintains or has
ever maintained, contributed to or had an obligation to
contribute to, or could have any obligation in respect of, an
Employee Benefit Plan subject to Title IV of ERISA or to Section
412 of the Code. Neither Tejas nor any ERISA Affiliate has ever
contributed to, or withdrawn in a partial or complete withdrawal
from, any "multiemployer plan" (as defined in Section 3(37) of
ERISA) or has any fixed or contingent liability under Section
4204 of ERISA. No Employee Benefit Plan is a "multiple employer
plan" as described in Section 3(40) of ERISA or Section 413(c)
of the Code.
(iii) With respect to each Employee Benefit Plan, (A) no
party in interest or disqualified person (as defined in Section
3(14) of ERISA and Section 4975 of the Code, respectively) has
at any time engaged in a transaction which could subject
Westech, the Merger Sub, Tejas Holding or Tejas, directly or
indirectly, to a tax, penalty or liability for prohibited
transactions imposed by ERISA or the Code and (B) no fiduciary
(as defined in Section 3(21) of ERISA) with respect to any
Employee Benefit Plan, or for whose conduct Tejas could have any
liability (by reason of indemnities or otherwise), has breached
any of the responsibilities or obligations imposed upon the
fiduciary under Title I of ERISA.
-10-
15
(iv) Neither Tejas nor any ERISA affiliate has engaged in or
participated in any transaction, whether or not related to an
Employee Benefit Plan, that could, directly or indirectly,
result in any tax, penalty or liability imposed by ERISA or the
Code including, without limitation, any excise tax under Section
4975 of the Code or any civil penalty under Section 409, 502(i)
or 502(l) of ERISA.
(v) Tejas has neither received notice of nor is aware of any
actions, claims (other than routine claims for benefits),
lawsuits or arbitrations pending or threatened with respect to
any Employee Benefit Plan or against any fiduciary of any
Employee Benefit Plan, and Tejas has no knowledge of any facts
that could give rise to any such actions, claims, lawsuits or
arbitrations. There has not occurred any circumstances by reason
of which Tejas may be liable for an act, or a failure to act, by
a fiduciary with respect to any Employee Benefit Plan. No
Employee Benefit Plan is under audit or is the subject of an
audit or investigation by the IRS, the DOL, or any other federal
or state governmental agency, nor, to Tejas Holding's or Tejas'
knowledge, is any such audit or investigation pending or
threatened.
(vi) The consummation of the transactions contemplated
hereby, either alone or in combination with another event, will
not result in (A) any payment (including, without limitation,
severance, unemployment compensation, golden parachute or bonus
payments or otherwise) becoming due to any director, officer,
employee or consultant of Tejas, (B) any increase
-11-
16
in the amount of compensation or benefits payable in respect of
any director, officer, employee or consultant of Tejas, or (C)
acceleration of the vesting or timing of payment of any benefits
or compensation payable in respect of any director, officer,
employee or consultant of Tejas. No Employee Benefit Plan
provides benefits or payments contingent upon, triggered by, or
increased as a result of a change in the ownership or effective
control of Tejas.
(n) Environmental Matters. (i) Tejas is in compliance with all
applicable federal, state and local Legal Requirements relating to
pollution or protection of the environment (collectively,
"Environmental Laws"), (ii) there is no civil, criminal or
administrative Order, action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter pending
or, to Tejas' knowledge, threatened in writing on the date hereof
against Tejas pursuant to Environmental Laws and (iii) Tejas is not
otherwise subject to any current liabilities under Environmental Laws.
(o) Intangible Property; Software: Tejas owns or has a valid license
or otherwise has the right to use all patents, copyrights, trademarks,
service marks and trade names, including any registrations or
applications for registration of any of the foregoing, technology,
know-how, computer software programs and applications, and tangible or
intangible proprietary information or material (collectively,
"Intellectual Property") that are material to the operation of the
business of Tejas as presently conducted. To the knowledge of Tejas,
the use of the Intellectual Property by Tejas does not infringe upon
or otherwise violate any intellectual property rights of third
parties. To the knowledge of Tejas, no third party including, but not
limited to, any employee, former employee, independent contractor or
-12-
17
consultant of Tejas, is infringing upon or otherwise violating the
rights of Tejas in the Intellectual Property.
(p) Labor Matters:
(i) Tejas is in compliance in all material respects with all
laws, agreements and contracts relating to the employment of former,
current, and prospective employees, independent contractors and
"leased employees" (within the meaning of Section 414(n) of the
Code) of Tejas, including all such laws, agreements and contracts
relating to wages, hours, collective bargaining, employment
discrimination, immigration, disability, civil rights, fair labor
standards, occupational safety and health, workers' compensation,
pay equity, wrongful discharge and violation of the potential rights
of such former, current, and prospective employees, independent
contractors and leased employees, and it has timely prepared and
filed all appropriate forms (including Immigration and
Naturalization Service Form 1-9) required by any relevant
governmental authority.
(ii) No collective bargaining agreement with respect to the
business of Tejas is currently in effect or being negotiated. Tejas
has no obligation to negotiate any such collective bargaining
agreement, and Tejas has not been advised that, or has any knowledge
that, the employees of Tejas desire to be covered by a collective
bargaining agreement.
(iii) There are no strikes, slowdowns or work stoppages pending
or, to the best knowledge of Tejas, threatened with respect to the
employees of Tejas, nor has any such strike, slowdown or work
stoppage occurred or, to the best knowledge of
-13-
18
Tejas, been threatened since January 1, 1999. There is no
representation claim or petition pending before the National Labor
Relations Board or any state or local labor agency, and, to the best
knowledge of Tejas, no question concerning representation has been
raised or threatened since January 1, 1998 respecting the employees
of Tejas.
(iv) There are no complaints or charges against Tejas pending
before the National Labor Relations Board or any state or local
labor agency, and, to the best knowledge of Tejas, no person has
threatened since January 1, 1999 to file any complaint or charge
against Tejas with any such board or agency.
(v) To the best knowledge of Tejas, no charges with respect to
or relating to the business of Tejas or any affiliate thereof are
pending before the Equal Employment Opportunity Commission or any
state or local agency responsible for the prevention of unlawful
employment practices.
(q) Real Property. Tejas does not own any real property.
(r) Books and Records. All constituent documents, business licenses,
minute books, stock certificate books, stock transfer ledgers and other
records of Tejas (collectively, the "Records") have been maintained in
accordance with sound business practices and Legal Requirements
applicable to Tejas. The Records are complete and accurate in all
material respects and contain all material matters required to be dealt
with in such Records.
(s) Finders and Investment Bankers: Neither Tejas Holding nor Tejas
or any of their respective officers or directors have employed any
investment banker, financial advisor, broker or finder in connection
with the transactions contemplated by this Agreement or
-14-
19
incurred any liability for any investment banking, business
consultancy, financial advisory, brokerage or finders' fees or
commissions in connection with the transactions contemplated hereby,
except for fees payable to Gro-Vest Management Consultants Inc., whose
$150,000 fee will be paid by Westech within five business days after
the Westech's Common Stock is approved for trading on NASDAQ's small
capitalization market; provided, however, that any Westech liability,
whether contingent or actual, known or unknown, in existence on the
date of the Merger (other than the fees recited herein as payable to
Gro-Vest) shall be deducted from the fee payable to Gro-Vest Management
Consultants, Inc.
(t) Transactions with Certain Persons: Since January 1, 1999 neither
Tejas Holding nor Tejas have, except on an arm's-length basis, directly
or indirectly, purchased, leased or otherwise acquired any assets or
properties or obtained any services from, or sold, leased or otherwise
disposed of any assets or properties or furnished any services to, or
otherwise dealt with (except with respect to remuneration for services
rendered as a director, officer or employee of Tejas), any person
which, directly or indirectly, alone or together with others, controls,
is controlled by or is under common control with Tejas.
(u) Tejas Holding: Tejas Holding has been organized solely for the
purpose of consummating the Merger and, since its inception and until
the Closing Date, Tejas Holding has had and will have no business
activity of any nature other than those related to its organization or
as contemplated by this Agreement.
(v) Y2K: Tejas is in material compliance with all NASD requirements
relating to computer and software readiness with respect to the Y2K
issue.
-15-
20
(w) Disclosure: The representations and warranties by Tejas Holding
and Tejas contained in this Agreement do not contain any untrue
statement of a material fact, and do not omit to state any material
fact required to be stated herein or necessary in order to make the
statements herein, in light of the circumstances under which they were
made, not misleading.
3. Representations and Warranties of Merger Sub and ▇▇▇▇▇▇. Merger Sub
and ▇▇▇▇▇▇ represent and warrant, jointly and severally, to Tejas Holding and
Tejas as follows:
(a) Organization: Merger Sub is, and on the Closing Date will be, a
duly organized and validly existing corporation in good standing under
the laws of the State of Delaware, authorized to issue 100 shares of
common stock, par value $.01 per share (the "Merger Sub Shares"). As of
the Closing Date and immediately prior to consummation of the Merger
there will be issued and outstanding all of the Merger Sub Shares which
shall be fully paid and nonassessable and which shall be owned by
Westech. There are no, and on the Closing Date there will be no, issued
or outstanding options or warrants to purchase Merger Sub Shares or any
issued or outstanding securities of any nature convertible into Merger
Sub Shares nor are there nor will there be any commitments to issue any
such options or warrants or convertible securities.
(b) Activity: Merger Sub has been organized solely for the purpose
of consummating the Merger and, since its inception and until the
Closing Date, Merger Sub has had and will have no business activity of
any nature other than those related to its organization or as
contemplated by this Agreement.
-16-
21
(c) Authority: Merger Sub has, and as of the Closing Date will have,
full power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. This Agreement and the
transactions contemplated hereby have been duly approved by the Board
of Directors of Merger Sub and by its sole stockholder, Westech.
(d) Consents: Except for the approval of the Board of Directors and
stockholder of Merger Sub, which have heretofore been obtained, and the
Board of Directors and stockholders of Tejas Holding, and the filing of
the Certificate and Articles of Merger, no consents or approvals of, or
filings or registrations with, any third party or any public body or
authority are necessary in connection with (i) the execution and
delivery by Merger Sub of this Agreement and (ii) the consummation by
Merger Sub of the Merger and the other transactions contemplated
hereby.
(e) Noncontravention: The execution and delivery by Merger Sub of
this Agreement, the consummation and performance of the transactions
herein contemplated, and compliance with the terms of this Agreement by
Merger Sub will not conflict with, result in a breach of or constitute
a default under any indenture, mortgage, deed of trust or other
agreement, instrument or contract to which Merger Sub is now a party or
by which it or any of its assets or properties is bound or the
Certificate of Incorporation, as amended, or the bylaws of Merger Sub,
in each case as amended, or any law, order, rule or regulation, writ,
injunction, judgment or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
Merger Sub or any of its business or properties.
(f) Liabilities: There are, and as of the Closing Date there will
be, no liabilities (including, but not limited to tax liabilities) or
claims against Merger Sub whether such
-17-
22
liabilities or claims are contingent or absolute, direct or indirect,
matured or unmatured, known or unknown other than reasonable
organizational expense of Merger Sub which shall be the obligation of
Westech.
4. Representations and Warranties of Westech and ▇▇▇▇▇▇. Westech and
▇▇▇▇▇▇ represent and warrant, jointly and severally, to Tejas Holding and Tejas,
as follows:
(a) Organization: Westech is, and on the Closing Date will be, a
duly organized and validly existing corporation and on the Closing Date
Westech will be in good standing under the laws of the State of New
York.
(b) Equity Capitalization and Subsidiaries: Westech is authorized to
issue an aggregate of 50,000,000 shares of Westech Common Stock. As of
the Closing and after giving effect to the Stock Split (but not to the
Merger) there will be issued and outstanding no more than 600,000
shares of Westech Common Stock, all of which issued and outstanding
shares will be fully paid and nonassessable. Exhibit C attached hereto
contains a current listing of all stockholders of record of Westech
Common Stock and the amount of such stock owned by each and the amount
of Westech Common Stock to be owned immediately following the Stock
Split. Except as contemplated by this Agreement, there are no, and on
the Closing Date there will be no, issued or outstanding options,
warrants or other rights, contingent or otherwise, to purchase or
acquire shares of Westech Common Stock or any issued or outstanding
securities of any nature convertible into shares of Westech Common
Stock, or any outstanding commitments to issue such options, warrants
or other rights or such contingent securities. The outstanding shares
of Westech Common Stock have all been issued in full compliance with,
or pursuant to an appropriate exemption from, the registration
-18-
23
requirements of the Securities Act of 1933 (the "Securities Act") and
any applicable registration requirements of the various states. The
holders of shares of Westech Common Stock are not and as of the Closing
Date will not be entitled to any preemptive rights, rights of first
refusal, rights of first offer or other similar right or privilege.
Other than Merger Sub, Westech has no subsidiaries.
(c) Activities: Since its formation in July of 1990, the business of
Westech has been limited to the search for an acquisition or merger
partner and certain transactions described in its filings with the
Securities and Exchange Commission (the "SEC Filings") and, except for
transactions related thereto or related to its status as a publicly
held company, it has not engaged in any other business or activity
since July 1990.
(d) Qualification to do Business: The business of Westech does not
require it to be registered as an investment company or investment
advisor, as such terms are defined under the Investment Company Act and
the Investment Advisors Act of 1940, nor does the business of Westech
require it to be qualified or licensed to transact business as a
foreign corporation in any jurisdiction.
(e) Financial Statements: The financial statements of Westech,
consisting of its Balance Sheets as at June 30, 1999 and 1998, and its
related Statement of Operations, Statement of Stockholders' Equity, and
its Statements of Cash Flows for the fiscal years ended June 30, 1999,
1998 and 1997 (collectively, the "Westech Financial Statements"), have
been prepared in conformity with generally accepted accounting
principles consistently applied throughout the periods involved and
have been audited by ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
-19-
24
independent public accountants. Westech Financial Statements have been
delivered to Tejas Holding and Tejas.
(f) No Financial Changes: There has not been, and on the Closing
Date there will not have been, any material change in the financial
condition of Westech from that set forth in the Westech Financial
Statements except for transactions relating to this Agreement, and the
incurring of expenses and liabilities relating to this Agreement.
(g) Liabilities: There are, and on the Closing Date there will be,
no liabilities (including, but not limited to, tax liabilities) or
claims against Westech (whether such liabilities or claims are
contingent or absolute, direct or indirect, matured or unmatured, known
or unknown) not appearing on the Westech Financial Statements, except
for liabilities for expenses incurred relating to this Agreement and
the consummation of the transactions contemplated hereby.
(h) Contracts, Etc.: Other than this Agreement and Plan of Merger,
there are no contracts, arrangements, understandings and commitments,
whether written or oral, to which Westech or Merger Sub is, or as of
the Closing Date will be, a party, or from which Westech or Merger Sub
will receive substantial benefits or be subjected to substantial
liabilities and which are material to Westech.
(i) Taxes: All federal, state, county and local income, excise,
property or other tax returns required to be filed by Westech have been
filed and all required taxes, fees or assessments have been paid or an
adequate reserve therefor has been set up and is reflected in the
Westech Financial Statements.
-20-
25
(j) FF&E: Westech has, and as of the Closing Date will have, no
fixtures, furniture, equipment, inventory or accounts receivable.
(k) Adverse Actions: There are, and on the Closing Date there will
be, no legal, administrative, arbitral or other proceedings, claims,
actions or governmental investigations of any nature against Westech,
or challenging the validity or propriety of the transactions
contemplated by this Agreement and, to Westech's and ▇▇▇▇▇▇'▇ best
knowledge, there is no reasonable basis for any proceeding, claim,
action or governmental investigation either against Westech or
involving the transactions contemplated by this Agreement, nor has any
such action been threatened by any party. Westech is not a party to any
order, judgment or decree which will, or might reasonably be expected
to, materially adversely affect the business, operations, properties,
assets or financial condition of Westech.
(l) Employees: Since January 1, 1998, there have been, and to the
Closing Date there will be (i) no salaried or otherwise compensated
employees and no bonuses paid to any officer or director of Westech,
(ii) no dividends or other distributions declared or paid by Westech,
and (iii) no purchase by Westech of any of its securities.
(m) Additional Shares: Since January 1, 1999, Westech has not issued
or committed itself to issue, and to the Closing Date will not issue or
commit itself to issue, any additional shares of Westech Common Stock
or any options, rights, warrants, or other securities convertible into
shares of Westech Common Stock, except as contemplated by this
Agreement.
-21-
26
(n) Intellectual Property: Westech has, and as of the Closing Date
will have, no patents, patent applications, trademarks, trademark
registrations or applications, trade names, copyrights, copyright
registrations or applications, or other intellectual property.
(o) Compliance: Since its inception, Westech has, and as of the
Closing Date will have operated its business and conducted its affairs
in compliance with all applicable laws, rules and regulations.
(p) Contracts: There are, and as of the Closing Date there will be,
no loans, leases or other Contracts outstanding between Westech and any
officer or manager of Westech, or any person related to or affiliated
with any officer or manager of Westech or ▇▇▇▇▇▇.
(q) "Bad Events": During the past five-year period neither Westech
nor any officer or manager of Westech, or any successor entity or
subsidiary, or ▇▇▇▇▇▇ has:
(i) been suspended or expelled from membership in any securities
or commodities exchange, association of securities or commodities
dealers or investment advisors;
(ii) had a license or registration as a dealer, broker,
investment advisor or salesman, futures commission merchant,
associated person, commodity pool operator, or commodity trading
advisor denied, suspended or revoked;
(iii) been enjoined or restrained by any court or government
agency from:
(A) the issuance, sale or offer for sale of securities or
commodities;
(B) rendering securities or commodities advice;
(C) handling or managing trading accounts;
-22-
27
(D) continuing any practices in connection with securities
or commodities;
(iv) been convicted of any crime (other than minor traffic);
(v) used or been known by any other name;
(vi) been the subject of any professional disciplinary
proceeding; or
(vii) been adjudged a bankrupt or made a general assignment for
benefit of creditors; or been an officer, director or principal of
any entity which was reorganized in bankruptcy, adjudged a bankrupt
or made a general assignment for benefit of creditors.
All items described in clauses (i) through (vii) above are
collectively referred to herein as "Bad Events."
(r) Employee Benefit Plans: Westech has no pension plan, profit
sharing or similar employee benefit plan.
(s) Approvals: Except for the approval of the Board of Directors and
stockholder of Merger Sub, which has heretofore occurred, and the Board
of Directors and stockholders of Tejas Holding, and the filing of
Certificate and Articles of Merger, no consents or approvals of, or
filings or registrations with, any third party or any public body or
authority are necessary in connection with (i) the execution and
delivery by Westech of this Agreement and (ii) the consummation of the
Stock Split and the Merger and the other transactions contemplated
hereby. Westech has, and on the Closing Date will have, full power and
authority to enter into this Agreement and to consummate the
transactions contemplated
-23-
28
hereby. This Agreement and the transactions contemplated hereby have
been duly approved by the Board of Directors of Westech.
(t) Finders and Investment Bankers: Neither Westech nor Merger Sub
know of any person who rendered any service in connection with the
introduction of Westech, Merger Sub, Tejas Holding or Tejas to each
other, and that it knows of no claim by anyone for a "finder's fee" or
similar type of fee in connection with the Merger and the other
transactions contemplated hereby, except for fees payable to Gro-Vest
Management Consultants Inc. as set forth herein.
(u) Employees: Neither Westech nor Merger Sub have any employees.
(v) Disclosure: None of the information supplied or to be supplied
by or about Westech or Merger Sub to Tejas Holding or Tejas concerning
Westech or Merger Sub or any of their officers, directors or affiliates
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading.
(w) Authorization: The execution and delivery by Westech and Merger
Sub of this Agreement, the consummation and performance of the
transactions herein contemplated, and compliance with the terms of this
Agreement by Westech and Merger Sub will not conflict with, result in a
breach of or constitute a default under (i) any contracts or other
agreements to which Westech or Merger Sub is now a party or by which it
or any of their respective assets or properties is bound; (ii) the
Certificate of Incorporation, as amended, or
-24-
29
the bylaws of Westech or Merger Sub; or (iii) any Legal Requirement
applicable to Westech or Merger Sub or any of their respective business
or properties.
(x) SEC Filings: Westech's SEC Filings neither contained any untrue
material fact nor omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(y) Foreign Corrupt Practices Act: Westech has not violated the
Foreign Corrupt Practices Act.
5. Representations to Survive Closing. All of the representations and
warranties contained in this Agreement (including all statements contained in
any certificate or other instrument delivered by or on behalf of Westech, Merger
Sub, ▇▇▇▇▇▇, ▇▇▇▇▇ Holding, or Tejas pursuant hereto or in connection with the
transactions contemplated hereby) shall survive the Closing for one year.
6. Surviving Corporation. The surviving corporation shall be Tejas
Holding. Its name, identity, certificate of incorporation, bylaws, existence,
purposes, powers, objects, franchises, rights and immunities shall be unaffected
and unimpaired by the Merger, except as described in the Certificate of Merger.
7. Treatment of Shares of Constituent Corporations. The terms and
conditions of the Merger, the mode of carrying the same into effect, and the
manner and basis of converting the securities of each of the Constituent
Corporations are as follows:
(a) The Tejas Holding Common Stock shall be converted by virtue of
the Merger into a total of 11,937,237 whole Westech Common Shares (on
the basis of 2.4825 Westech Common Shares for each one share of Tejas
Holding Common Stock outstanding, rounded downward) on the Closing
-25-
30
without any action on the part of the holders thereof. After the
Merger, each holder of a Tejas Holding Common Stock prior to the Merger
shall be entitled upon surrender to receive from Westech a certificate
representing the number of Westech Common Shares to which such holder
shall be entitled, which certificate shall contain an appropriate
legend restricting the resale of such Westech Common Shares. Until so
surrendered, any outstanding certificates or other documentation which,
prior to the Merger, represented a Tejas Holding Common Stock shall be
deemed for all corporate purposes to evidence ownership of the Westech
Common Shares into which such Tejas Holding Common Stock shall have
been converted. Upon such surrender, the Tejas Holding Common Stock so
surrendered shall no longer be outstanding and shall automatically be
canceled and retired, and shall cease to exist.
(b) The separate existence and corporate organization of Merger Sub,
except insofar as it may be continued by statute, shall cease on the
Merger and Tejas Holding shall become a wholly owned subsidiary of
Westech.
8. Rights and Liabilities of Surviving Corporation. On and after the
Merger, Tejas Holding, as the surviving corporation, shall succeed to and
possess, without further act or deed, all of the estate, rights, privileges,
powers and franchises, both public and private, and all of the property, real,
personal, and mixed, of each of the Constituent Corporations; all debts due to
either of the Constituent Corporations on whatever account shall be vested in
Tejas Holding; all claims, demands, property, rights, privileges, powers,
franchises and every other interest of either of the Constituent Corporations
shall be as effectively the property of Tejas Holding as they were of the
respective Constituent Corporations; the title to any real estate by deed or
otherwise in either of the Constituent Corporations shall not revert or be in
any way impaired by reason of the Merger, but shall be vested in Tejas Holding;
all rights of creditors and all liens upon any property of either of the
Constituent Corporations shall be preserved unimpaired, limited in lien to the
property affected by such lien at
-26-
31
the Merger; and all debts, liabilities, and duties of the respective Constituent
Corporations shall thenceforth attach to Tejas Holding and may be enforced
against it to the same extent as if such debts, liabilities, and duties had been
incurred or contracted by it.
9. Further Assurances of Title. As and when requested by Tejas Holding
or by its successors or assigns, Westech or Merger Sub shall execute and
deliver, or cause to be executed and delivered, all such deeds and instruments
and will take or cause to be taken all such further action as Tejas Holding may
deem necessary or desirable in order to vest in and confirm to Tejas Holding
title to and possession of its property acquired by Tejas Holding by reason or
as a result of the Merger, and otherwise to carry out the intent and purposes
hereof, and the officers and directors of Merger Sub and Westech are fully
authorized in the name of Merger Sub or Westech or otherwise to take any and all
such action.
10. Conditions of Obligations of Merger Sub and Westech. The obligation
of Merger Sub and Westech to consummate the Merger is subject to the following
conditions prior to the Closing:
(a) That no material adverse change shall have occurred in the
financial condition of Tejas since June 30, 1999 or in Tejas Holding
since its incorporation.
(b) That Tejas Holding and Tejas shall have performed and complied
with the provisions and conditions of this Agreement on its part to be
performed and complied with, and that the representations and
warranties made by Tejas Holding and Tejas in this Agreement are true
and correct, both when made and as of the Closing Date.
(c) That this Agreement and the transactions contemplated hereby
shall have been approved by appropriate corporate action of Tejas
Holding and that resolutions to that effect have been delivered to
Westech.
-27-
32
(d) That Westech shall have received an opinion from counsel to
Tejas Holding in form satisfactory to Westech's counsel, that:
(i) Tejas Holding and Tejas have each been duly organized and
are validly existing corporations in good standing under the laws of
the State of Texas with full power and authority to own and operate
their respective properties and to carry on their current and
proposed businesses.
(ii) This Agreement has been duly authorized, executed and
delivered by Tejas Holding and Tejas and is a valid and binding
obligation of Tejas Holding and Tejas, legally enforceable against
Tejas Holding and Tejas in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights now or hereafter in effect, and to
general equitable principles.
(iii) Upon consummation of the Merger, Westech will be the sole
owner of all of the Tejas Holding Common Stock.
(e) Westech shall have received completed copies of the Subscription
Agreement and related Investor Questionnaire attached hereto as Exhibit
D from each stockholder of Tejas Holding representing that each such
stockholder is an Accredited Investor under the Securities Act of 1933,
as amended.
Compliance with the provisions of this paragraph shall be evidenced by
the certificate of the President and Secretary of Tejas.
11. Conditions of Obligations of Tejas. The obligations of Tejas
Holding and Tejas to consummate the Merger are subject to the following
conditions prior to the Closing:
(a) That no material adverse change shall have occurred in the
financial condition of Westech since June 30, 1999 and no material
adverse change shall have occurred in the financial condition of Merger
Sub since its formation.
-28-
33
(b) That no material transactions shall have been entered into by
Merger Sub or Westech since June 30, 1999, other than as referred to in
this Agreement, except with the prior written consent of Tejas.
(c) That none of the properties or assets of Merger Sub or Westech
shall have been sold or otherwise disposed of since June 30, 1999,
except with the written consent of Tejas.
(d) That Merger Sub, Westech and ▇▇▇▇▇▇ shall each have performed
and complied with the provisions and conditions of this Agreement on
its part to be performed and complied with, and that the
representations and warranties made by Merger Sub, Westech and ▇▇▇▇▇▇
herein are true and correct.
(e) That Westech shall have held a meeting of its Board of Directors
at which meeting all of its directors shall have resigned seriatim
subject to the consummation of the Merger.
(f) That Tejas Holding and Tejas shall have received an opinion from
counsel to Merger Sub and Westech in form satisfactory to Tejas
Holding's counsel, that:
(i) Westech has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of New York
with full corporate power and authority to own and operate its
properties and to carry on its current business.
(ii) Merger Sub has been duly incorporated and is a validly
existing corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own and operate
its properties and to carry on its current business.
(iii) All of the issued and outstanding Westech Common Shares,
as well as all issued and outstanding Merger Sub Shares, have been,
and, immediately after the effectiveness of the Merger will be, duly
authorized and validly issued, represent fully paid and
nonassessable Westech Common Shares or Merger Sub Shares, as
applicable, and do not have any preemptive rights applicable
thereto.
(iv) This Agreement and the transactions contemplated hereby
have been duly authorized by appropriate corporate action of both
Merger Sub and Westech and no shareholder of either Merger Sub or
Westech is entitled to appraisal rights with respect to the Merger
contemplated by this Agreement.
-29-
34
(v) Neither the execution, delivery or performance of this
Agreement nor the consummation of the transactions herein
contemplated, nor compliance with the terms hereof by Westech or
Merger Sub do or will conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, the
articles of organization or the bylaws of Westech or Merger Sub, any
indenture, mortgage, deed of trust or other contract, agreement or
instrument to which such counsel knows, after due inquiry, Westech
or Merger Sub is a party or by which, to the knowledge of such
counsel after due inquiry, Westech or Merger Sub or any of their
respective assets or properties is bound, or to the knowledge of
such counsel after due inquiry, any law, order, rule or regulation,
judgment, writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction
over Westech or Merger Sub or their respective business or any of
their respective properties; and no further consent, approvals,
authorizations or orders of agencies, officers or other regulatory
authorities are necessary for the consummation of the Merger.
(vi) Upon filing of the Certificate of Merger, in substantially
the form of Exhibit A annexed hereto, with the Secretary of State of
Delaware, the Merger shall be effective under Delaware General
Corporation Law. The Stock Split has been duly authorized by
appropriate corporate action of Westech and, when carried out in the
manner set forth in this Agreement, the Westech Common Shares to be
issued pursuant thereto will be duly authorized and validly issued,
represent fully paid and nonassessable Westech Common Shares, and
will not have any preemptive rights applicable thereto.
Such counsel shall also state, if accurate, that such counsel has
participated in conferences with officers and other representatives of
Westech and representatives of the independent auditors for Westech at
which the contents of the documents related to the sale of 40,000
shares of Westech Common Stock, on December 11, 1998, March 2, 1998 and
July 9, 1997 (collectively, the "Private Placements"), the Merger and
related matters were discussed and, although such counsel does not pass
upon, and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in such documents,
such counsel advises Tejas Holding and Tejas that, on the basis of the
foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of Westech), no facts
have come to the attention of such counsel which lead such counsel to
believe that the documents related to the Private Placements or the
Merger, when such documents were first circulated or as of the Closing
Date, respectively, contained or contains an untrue
-30-
35
statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements
therein (in light of the circumstances under which they were or are
being made) not misleading (it being understood that such counsel has
not been requested to and does not make any comment with respect to the
Audited Financial Statements and the notes thereto and related
schedules, and other financial or statistical data found in or
derivable from the financial or internal records of Westech and any
forward-looking or projected financial or statistical data relating to
Westech included in the documents related to the Private Placements).
(g) The stockholders of Tejas Holding shall have approved the
Merger. Compliance with the provisions of this paragraph shall be
evidenced by the certificate of the President and Secretary of each of
Merger Sub and Westech to be delivered at the Closing.
12. Abandonment. This Agreement and the Merger may be abandoned (a) by
either of the Constituent Corporations, acting by its Board of Directors, at any
time prior to its adoption by the stockholders of such constituent corporation,
as provided by law, (b) by both of the Constituent Corporations, acting through
their respective Board of Directors, at any time in the event of the failure of
any condition in favor of such entity as to which the consummation of the Merger
is subject, or (c) by the consent of all the Companies, acting each by its Board
of Directors, at any time after such adoption by such stockholders and prior to
the Merger. In the event of abandonment of this Agreement, the same shall become
wholly void and of no effect, and there shall be no further liability or
obligation hereunder on the part of any of the Companies, their respective Board
of Directors or any other party to this Agreement.
13. Closing or Termination. In the event the Closing of this Agreement
shall not take place by September 15, 1999, then any party shall have the right
to terminate this Agreement, in which event no party shall have any further
right or obligation as against any other.
-31-
36
14. Delivery of Corporate Proceedings of Westech. At least three days
prior to the Closing, Westech shall deliver to Tejas Holding's counsel the
originals of all of the corporate proceedings of Westech, duly certified by its
Secretary.
15. Delivery of Corporate Proceedings of Merger Sub. At least three
days prior to the Closing, Merger Sub shall deliver to Tejas Holding's counsel
the originals of all of the corporate proceedings of Merger Sub, duly certified
by its Secretary.
16. Delivery of Company Proceedings of Tejas. At the Closing, Tejas
Holding shall deliver to Westech's counsel a copy of its company proceedings
relating to this Agreement or taken pursuant to the provisions of this
Agreement, duly certified by its Secretary.
17. Limitation of Liability. The representations and warranties made by
any party to this Agreement are intended to be relied upon only by the other
parties to this Agreement and by no other person. Nothing contained in this
Agreement shall be deemed to confer upon any person not a party to this
Agreement any third party beneficiary rights or any other rights of any nature
whatsoever. It is specifically agreed among the parties hereto that the maximum
amount of liability Tejas Holding may have collectively relating to this
Agreement, the Merger or any other transaction contemplated herein is the sum of
(i) Westech's expenses, including those of Merger Sub, if any, and (ii)
Westech's positive stockholders' equity as of the Closing Date immediately prior
to the effectiveness of the Merger, if any.
18. Further Instruments and Actions. Each party shall deliver such
further instruments and take such further action as may be reasonably requested
by any other in order to carry out the intent and purposes of this Agreement.
-32-
37
19. Governing Law. This Agreement is being delivered and is intended to
be performed in the State of Texas, and shall be construed and enforced in
accordance with the laws of such State without regard to conflicts of laws
thereof.
20. Notices. All notices or other communications to be sent by any
party to this Agreement to any other party to this Agreement shall be sent by
certified mail, nationwide overnight delivery service or by personal delivery or
nationwide overnight courier to the addresses hereinbefore designated, or such
other addresses as may hereafter be designated in writing by a party.
21. Binding Agreement. This Agreement represents the entire agreement
among the parties hereto with respect to the matters described herein and is
binding upon and shall inure to the benefit of the parties hereto and their
legal representatives, successors and permitted assigns. This Agreement may not
be assigned and, except as stated herein, may not be altered or amended except
in writing executed by the party to be charged.
22. Counterparts. This Agreement may be executed in counterparts, all
of which, when taken together, shall constitute the entire Agreement.
23. Severability. The provisions of this Agreement shall be severable,
so that the unenforceability, validity or legality of any one provision shall
not affect the enforceability, validity or legality of the remaining provisions
hereof.
24. Joint Drafting. This Agreement shall be deemed to have been drafted
jointly by the parties hereto, and no inference or interpretation against any
party shall be made solely by virtue of such party allegedly having been the
draftsperson of this Agreement.
-33-
38
IN WITNESS WHEREOF, the parties hereto have made and executed this
Agreement as of the day and year first above written.
TEJAS SECURITIES GROUP
HOLDING COMPANY,
a Texas corporation
By: /s/ ▇▇▇ Van Ert
------------------------------------
▇▇▇ Van Ert, President
------------------------------------
TEJAS SECURITIES GROUP, INC.,
a Texas corporation
By: /s/ ▇▇▇ Van Ert
------------------------------------
▇▇▇ Van Ert, President
------------------------------------
▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
WESTECH CAPITAL CORP.,
a New York corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇, President
------------------------------------
WESTECH MERGER SUB, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇, President
------------------------------------
-34-