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APPENDIX A:
SEPCO MERGER AGREEMENT
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* * * * *
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INDEX, INC.,
SEPCO ACQUISITION CORPORATION
AND
SEPCO INDUSTRIES, INC.
* * * * *
AUGUST 12, 1996
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ARTICLE/SECTION PAGE
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RECITALS ........................................................................
ARTICLE 1 THE MERGER..............................................................
1.1 The Merger..............................................................
1.2 Closing.................................................................
1.3 Effective Time of the Merger............................................
1.4 Articles of Incorporation and Bylaws....................................
1.5 Directors and Officers..................................................
ARTICLE 2 CONVERSION OF SHARES....................................................
2.1 Conversion of Company Stock.............................................
2.2 Stock Certificates......................................................
2.3 Fractional Shares.......................................................
2.4 Dissenting Shares.......................................................
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF INDEX AND THE MERGER SUB..............
3.1 Organization............................................................
3.2 Capitalization..........................................................
3.3 Certain Corporate Matters...............................................
3.4 Authority Relative to this Agreement....................................
3.5 Consents and Approvals; No Violations...................................
3.6 Information Supplied....................................................
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................
4.1 Organization............................................................
4.2 Capitalization and Ownership of the Company.............................
4.3 Certain Corporate Matters...............................................
4.4 Subsidiaries............................................................
4.5 Authority Relative to this Agreement....................................
4.6 Consents and Approvals; No Violations...................................
4.7 Intentionally Deleted...................................................
4.8 Financial Statements....................................................
4.9 Events Subsequent to Financial Statements...............................
4.10 Undisclosed Liabilities.................................................
4.11 Tax Returns and Audits..................................................
4.12 Books and Records.......................................................
4.13 Questionable Payments...................................................
4.14 Environmental Matters...................................................
4.15 Intellectual Property...................................................
4.16 Insurance...............................................................
4.17 Contracts...............................................................
4.18 Litigation..............................................................
4.19 Employees...............................................................
4.20 Employee Benefit Plans..................................................
4.21 Legal Compliance........................................................
4.22 Broker's Fees...........................................................
4.23 Disclosure..............................................................
4.24 Information Supplied....................................................
ARTICLE 5 CONDUCT OF BUSINESS PENDING THE CLOSING.................................
5.1 Conduct of Business by the Company Pending the Closing..................
5.2 Other Actions...........................................................
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ARTICLE/SECTION PAGE
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ARTICLE 6 ADDITIONAL AGREEMENTS...................................................
6.1 Access and Information..................................................
6.2 Registration Statement..................................................
6.3 Meetings of Shareholders................................................
6.4 Stock Market Approval...................................................
6.5 Press Releases..........................................................
ARTICLE 7 CONDITIONS TO CLOSING...................................................
7.1 Conditions to Obligations of Each Party to Effect the Closing...........
7.2 Additional Conditions to Index's and the Merger Sub's Obligations.......
7.3 Additional Conditions to the Company's Obligations......................
ARTICLE 8 REMEDIES................................................................
8.1 General.................................................................
8.2 Waiver..................................................................
ARTICLE 9 TERMINATION.............................................................
9.1 Termination by Mutual Consent...........................................
9.2 Termination by Any Party................................................
9.3 Termination by Index....................................................
9.4 Effect of Termination and Abandonment...................................
9.5 Material Breach.........................................................
ARTICLE 10 GENERAL PROVISIONS......................................................
10.1 Notices.................................................................
10.2 Interpretation..........................................................
10.3 Severability............................................................
10.4 Miscellaneous...........................................................
10.5 Separate Counsel........................................................
10.6 Governing Law...........................................................
10.7 Counterparts............................................................
10.8 Amendment...............................................................
10.9 Parties In Interest; No Third Party Beneficiaries.......................
10.10 Captions................................................................
10.11 Expenses................................................................
10.12 Survival................................................................
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of August 12, 1996 (this
"Agreement"), is made and entered into by and among Index, Inc., a Texas
corporation ("Index"), Sepco Acquisition Corporation, a Nevada corporation and a
wholly-owned subsidiary of Index (the "Merger Sub") and Sepco Industries, Inc.,
a Texas corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Index, the Merger Sub and
the Company have adopted resolutions approving and adopting the proposed merger
(the "Merger") of the Company with the Merger Sub upon the terms and conditions
hereinafter set forth in this Agreement;
WHEREAS, Index is entering into that Agreement and Plan of Merger with
Newman Communications, Inc., a New Mexico corporation ("Newman") and Newman
Acquisition, Inc., a Nevada corporation ("Newman Acquisition") simultaneously
with this Agreement (the "Newman Merger Agreement");
WHEREAS, the Merger and the merger contemplated by the Newman Merger
Agreement (the "Newman Merger") will be effected simultaneously; and
WHEREAS, the Merger and the Newman Merger are both intended to qualify as a
tax-free transaction under Section 351 and Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the conditions set forth herein, the parties hereto
agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.3 hereof), the Merger Sub shall be
merged with and into the Company and the separate corporate existence of the
Merger Sub shall thereupon cease. The Company shall be the surviving corporation
in the Merger. The Merger shall have the effects set forth in the applicable
provisions of the Nevada General Corporation Law (the "NGCL") and the Texas
Business Corporation Act (the "TBCA").
1.2 Closing. The closing of the Merger (the "Closing") shall take place at
10:00 a.m., local time, at the offices of Fulbright & Jaworski, L.L.P. located
at 1301 McKinney, Houston, Texas 77010, on the next business day after all the
shareholder approvals set out in Section 6.3 hereof have been completed, or as
soon as the conditions set forth in Article 7 have been satisfied or waived or
as soon as practicable thereafter; provided, however, that the date of the
Closing shall not be later than December 31, 1996, unless the parties hereto
otherwise mutually agree. Such date is herein referred to as the "Closing Date."
At the Closing, the parties hereto shall deliver or cause to be delivered the
certificates and other documents set forth in Article 7.
1.3 Effective Time of the Merger. If all the conditions to the Merger set
forth in Article 7 shall have been fulfilled or waived in accordance herewith
and this Agreement shall not have been terminated as provided in Article 9, the
parties hereto shall cause Articles of Merger (the "Articles of Merger") that
meet the requirements of the applicable provisions of the NGCL and the TBCA,
respectively, to be properly executed and filed with the Secretary of State of
the States of Nevada and Texas, respectively, on the Closing Date. The Merger
shall be effective at the time of acceptance of the filing of the Articles of
Merger with the Secretary of State of the States of Nevada and Texas in
accordance with the NGCL and the TBCA, respectively, or at such later time which
the parties hereto shall have agreed upon and designated in such filing as the
effective time of the Merger (the "Effective Time").
1.4 Articles of Incorporation and By-Laws. The Articles of Incorporation
and By-Laws of the Company in effect immediately prior to the Effective Time
shall continue to be the Articles of Incorporation and By-
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Laws of the Company subsequent to the Effective Time, subject always to the
right of the Company to amend its Articles of Incorporation and By-Laws in
accordance with the laws of the State of Texas and the provisions of its
Articles of Incorporation and By-Laws.
1.5 Directors and Officers. The directors and officers of the Company
immediately prior to the Effective Time shall continue to be the directors and
officers of the Company and shall hold such positions from the Effective Time
until their respective successors are duly elected or appointed and qualify in
the manner provided in the Articles of Incorporation and By-Laws of the Company
or as otherwise provided by law.
ARTICLE 2
CONVERSION OF SHARES
2.1 Conversion of Company Stock. At the Effective Time, by virtue of the
Merger and without any action required on the part of Index, the Company, the
Merger Sub or any holder of capital stock of any of them:
(a) Subject to the limitations contained herein, each outstanding
share of Sepco Class A Common Stock will be converted into the right to
receive 16 shares of Index Common Stock. Each outstanding share of Sepco
Class B Common Stock will be converted into the right to receive 18.1232
shares of Index Common Stock. Further, each outstanding share of Sepco
Class A Convertible Preferred Stock will be converted into the right to
receive one share of Index Series B Convertible Preferred Stock. Finally,
each outstanding share of Sepco Preferred Stock will be converted into the
right to receive one share of Index Series A Preferred Stock. The Sepco
Preferred Stock, Sepco Class A Convertible Preferred Stock, Sepco Class A
Common Stock and Sepco Class B Common Stock shall be collectively referred
to as "Company Stock"). The Index Common Stock, Index Series A Preferred
Stock and Index Series B Convertible Preferred Stock shall be collectively
referred to as "Index Stock".
(b) All shares of common stock of the Merger Sub issued and
outstanding immediately prior to the Effective Time shall be cancelled and
cease to be outstanding.
2.2 Stock Certificates. At or following the Effective Time, each holder of
an outstanding certificate or certificates representing the Company Stock shall
surrender the same to Index and Index shall, in exchange therefor, cause to be
issued to the holder of such certificate(s) a new certificate representing
shares of Index Stock in accordance with Section 2.1, less any amount required
to be withheld under applicable federal, state or local tax requirements, and
the surrendered certificate(s) shall be cancelled. Until so surrendered and
exchanged, each such certificate shall represent solely the right to receive
shares of Index Stock in accordance with Section 2.1, without interest and less
any tax withholding.
2.3 Fractional Shares. No fractional shares of Company Common Stock shall
be issued in the Merger. In lieu thereof, all fractional shares of Company
Common Stock that a holder of a Sepco Class A Common Stock would otherwise be
entitled to receive as a result of the Merger shall be automatically converted
into the right to receive an amount of cash to be determined by multiplying
$0.58 by the fraction of a share of Company Common Stock to which such holder
would otherwise have been entitled. Further, all fractional shares of Company
Common Stock that a holder of Sepco Class B Common Stock would otherwise be
entitled to receive as a result of the Merger shall be automatically converted
into the right to receive an amount of cash to be determined by multiplying
$0.58 by the fraction of a share of Company Common Stock to which such holder
would otherwise be entitled. Fractional shares of Company Convertible Preferred
Stock and Company Preferred Stock, if any, will be issued in the Merger to the
holders of Sepco Class A Convertible Preferred Stock and Sepco Preferred Stock,
respectively.
2.4 Dissenting Shares. Each share of Company Stock issued and outstanding
immediately prior to the Effective Time not voted in favor of the Merger, the
holder of which has given written notice of the exercise of dissenter's rights
and has perfected such rights as required by the TBCA is herein called a
"Dissenting Share." Dissenting Shares shall not be converted into or represent
the right to receive shares of Index Stock pursuant to this Section 2 and shall
be entitled only to such rights as are available to such holder pursuant to the
TBCA,
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unless the holder thereof shall have withdrawn or forfeited his dissenter's
rights. Each holder of Dissenting Shares shall be entitled to receive the value
of such Dissenting Shares held by him in accordance with the applicable
provisions of the TBCA. Index will promptly pay to any holder of Dissenting
Shares such amount as such holder shall be entitled to receive in accordance
with the applicable provisions of the TBCA. If any holder of Dissenting Shares
shall effectively withdraw or forfeit his dissenter's rights under the TBCA,
such Dissenting Shares shall be converted into the right to receive shares of
Index Stock in accordance with this Section 2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
INDEX AND THE MERGER SUB
Index and the Merger Sub hereby jointly and severally represent and warrant
to the Company as follows:
3.1 Organization. Each of Index and the Merger Sub has been duly
incorporated, is validly existing as a corporation and is in good standing under
the laws of its state of incorporation, and has the requisite corporate power to
carry on its business as now conducted.
3.2 Capitalization. The total number of shares of stock of all classes
which Index shall have the authority to issue is 110,000,000 shares, of which
the following designations have been made: 100,000,000 shares of common stock
par value $0.01 per share ("Index Common Stock"), 1,000,000 shares of preferred
stock, par value $1.00 per share ("Index Series A Preferred Stock") and
1,000,000 shares of convertible preferred stock, par value $100 per share
("Index Series B Convertible Preferred Stock"). As of the date of this
Agreement, 100 shares of Index Common Stock are issued and outstanding, no
shares of Index Series A Preferred Stock are issued and outstanding and no
shares of Index Series B Convertible Preferred Stock are issued and outstanding.
All of the issued and outstanding shares of Index Common Stock are validly
issued, fully paid, nonassessable and free of preemptive rights. All shares of
Index Stock issuable in accordance with this Agreement will be, when so issued,
duly authorized, validly issued, fully paid and nonassessable. The authorized
capital stock of the Merger Sub consists of 100 shares of common stock, par
value $0.10 per share, all of which are validly issued, fully paid and
nonassessable and are owned by Index.
3.3 Certain Corporate Matters. Index is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
ownership of its properties, the employment of its personnel or the conduct of
its business requires it to be so qualified, except where the failure to so
qualify would not have a material adverse effect on Index's financial condition,
results of operations or business. Index has the requisite corporate power and
authority and all authorization, licenses and permits necessary to carry on the
business in which it is engaged and to own and use the properties owned and used
by it, except such authorizations, licenses and permits, the failure of which to
possess would not have a material adverse effect on the financial condition,
results of operations of business of Index.
3.4 Authority Relative to this Agreement. Each of Index and the Merger Sub
has the requisite corporate power and authority to enter into this Agreement and
to carry out its obligations hereunder. The execution, delivery and performance
of this Agreement by Index and the Merger Sub and the consummation by Index and
the Merger Sub of the transactions contemplated hereby have been duly authorized
by the Boards of Directors of each of Index and the Merger Sub and, subject to
stockholder approval as set forth in this Agreement, no other actions on the
part of Index or the Merger Sub are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Index and the Merger Sub and constitutes,
subject to stockholder approval as set forth in this Agreement, a valid and
binding agreement of each of Index and the Merger Sub, enforceable against Index
and the Merger Sub in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
3.5 Consents and Approvals; No Violations. Except as may be required under
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), the
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Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"), state securities or blue sky laws,
and the filing and recordation of the Articles of Merger as required by the NGCL
and the TBCA, no filing with, and no permit, authorization, consent or approval
of, any public body or authority is necessary for the consummation by Index and
the Merger Sub of the transactions contemplated by this Agreement. Neither the
execution and delivery of this Agreement by Index or the Merger Sub nor the
consummation by Index or the Merger Sub of the transactions contemplated hereby,
nor compliance by Index or the Merger Sub with any of the provisions hereof,
will (a) conflict with or result in any breach of any provisions of the Articles
of Incorporation or By-Laws of Index or the Articles of Incorporation or By-Laws
of the Merger Sub, (b) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default of a material nature
(or give rise to any right of termination, cancellation or acceleration) under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation, of a
material nature, to which Index or any of its subsidiaries is a party or by
which any of them or their properties or assets may be bound or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Index, any of its subsidiaries or any of their properties or assets, except in
the case of clauses (b) and (c) for violations, breaches or defaults which in
the aggregate would not have a material adverse effect on the financial
condition or results of operations of Index and its subsidiaries taken as a
whole. The parties hereto agree and acknowledge that Index was required to
obtain and has obtained the written consent of Fleet Capital Corporation.
3.6 Information Supplied. None of the information provided by Index for
use in the Registration Statement (as defined in Section 6.2 hereof) and
contained therein will, as of the date that the Registration Statement is filed
with the Securities and Exchange Commission (the "Commission"), on the date it
is declared effective or at the time of the meeting of the shareholders of the
Company to be held in connection with the Merger, contain any untrue statement
of a material fact or omit 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 were made, not misleading. The registration
statement and prospectus contained in the Registration Statement will comply, in
all material respects, as to form with the provisions of the Exchange Act and
the Securities Act.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
The Company hereby represents and warrants to Index and the Merger Sub as
follows:
4.1 Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
and has the requisite corporate power and authority to carry on its business as
now conducted in all applicable jurisdictions.
4.2 Capitalization and Ownership of the Company. The Company's entire
authorized capital stock consists of Sepco's authorized capital consists of
10,000,000 shares of Sepco Class A Common Stock, $0.01 par value per share,
10,000,000 shares of Sepco Class B Common Stock, $0.01 par value per share,
1,000,000 shares of Sepco Preferred Stock, $1.00 par value per share, 1,000,000
shares of Sepco Class A Convertible Preferred Stock, $100.00 par value per share
and 1,000,000 shares of Sepco Class B Convertible Preferred Stock, $100.00 par
value per share. As of July 23, 1996, there were 758,899 shares of Sepco Class A
Common Stock, 176,900 shares of Sepco Class B Common Stock, 3,366 shares of
Sepco Preferred Stock, 19,500 shares of Sepco Class A Convertible Preferred
Stock and no shares of Sepco Class B Convertible Preferred Stock outstanding. As
of such date, there were approximately 16 holders of Sepco Class A Common Stock,
1 holder of Sepco Class B Common Stock, 6 holders of Sepco Preferred Stock, 3
holders of Sepco Class A Convertible Preferred Stock and no holders of Sepco
Class B Convertible Preferred Stock of record. All of the shares of Company
Stock have been duly authorized and are validly issued, fully paid and
nonassessable and have not been issued in violation of any pre-emptive rights.
Except as disclosed in the Registration Statement, there are no outstanding or
authorized options, rights, warrants, calls, convertible securities, rights to
subscribe,
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conversion rights or other agreements or commitments to which the Company is a
party or which are binding upon the Company providing for the issuance by the
Company or transfer by the Company of additional shares of Company Stock and the
Company has not reserved any shares of the Company Stock for issuance, nor are
there any outstanding stock option rights, phantom equity or similar rights,
contracts, arrangements or commitments. There are no voting trusts or any other
agreements or understandings, written or oral, with respect to the voting of the
Company Stock.
4.3 Certain Corporate Matters. The Company is duly licensed or qualified
to do business and is in good standing as a foreign corporation in every
jurisdiction in which the character of the Company's properties or nature of the
Company's business requires it to be so licensed or qualified other than such
jurisdictions in which the failure to be so licensed or qualified does not, or
insofar as can reasonably be foreseen, in the future will not, have a material
adverse effect on its financial condition, results of operations or business.
The Company has full corporate power and authority and all authorizations,
licenses, variances, exemptions, orders, contracts, approvals and permits
necessary to carry on the business in which it is engaged or in which it
proposes presently to engage and to own and use the properties owned and used by
it. The Company has delivered to Index true, accurate and complete copies of its
Articles of Incorporation and By-Laws, which reflect all amendments made thereto
at any time prior to the date of this Agreement. The records of meetings of the
shareholders and Board of Directors of the Company are complete and correct in
all material respects. The stock records of the Company and the shareholder
lists of the Company that the Company has previously furnished to Index are
complete and correct in all material respects and accurately reflect the record
ownership and the beneficial ownership of all the outstanding shares of the
Company's capital stock and all other outstanding securities issued by the
Company. The Company is not in default under or in violation of any provision of
its Articles of Incorporation or By-Laws in any material respect. The Company is
not in default or in violation of any restriction, lien, encumbrance, indenture,
contract, lease, sublease, loan agreement, note or other obligation or liability
by which it is bound or to which any of its assets is subject.
4.4 Subsidiaries. American MRO, Inc., a Nevada corporation, is a wholly
owned subsidiary of the Company. The Company does not own, directly or
indirectly, any of the capital stock of any other corporation or any equity,
profit sharing, participation or other interest in any corporation, partnership,
joint venture or other entity of a material nature, except as set out in the
Registration Statement.
4.5 Authority Relative to this Agreement. The Company has the requisite
corporate power and authority to enter into this Agreement and carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby have
been duly authorized by the Boards of Directors of the Company and, subject to
shareholder approval as set forth in this Agreement, no other actions on the
part of the Company are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and constitutes, subject to shareholder
approval as set forth in this Agreement, a valid and binding obligation of the
Company, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
The parties hereto agree and acknowledge that the Company was required to obtain
and has obtained the written consent of Fleet Capital Corporation required under
that Amended and Restated Loan and Security Agreement by and between the Company
and Fleet Capital Corporation.
4.6 Consents and Approvals; No Violations. Except as may be required under
the Securities Act, the Exchange Act, state securities or blue sky laws, and the
filing and recordation of the Articles of Merger as required by the NGCL and the
TBCA, no filing with, and no permit, authorization, consent or approval of, any
public body or authority is necessary for the consummation by the Company of the
transactions contemplated by this Agreement. Neither the execution and delivery
of this Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby, nor compliance by the Company with any of the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the Articles of Incorporation or By-Laws of Company, (b) result in
a violation or breach of, or constitute (with or without due 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 note,
bond, mortgage, indenture, license, contract, agreement or other instrument or
obligation to which the Company is a party or by which it or any of
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its properties or assets may be bound except as setout herein or (c) violate any
order, law, resolution, writ, injunction, decree, statute, rule or regulation
applicable to the Company, or any of its properties or assets, except in the
case of clauses (b) and (c) for violations, breaches or defaults which in the
aggregate would not have a material adverse effect on the financial condition or
results of operations of the Company taken as a whole.
4.7 Intentionally Deleted.
4.8 Financial Statements. The Company has delivered to Index the following
audited financial statements: (a) its balance sheets as of December 31, 1995;
(b) its statements of operations for the twelve months ended December 31, 1995;
(c) its statements of cash flows for the twelve months ended December 31, 1995;
(d) its statements of changes in shareholders' equity for the twelve months
ended December 31, 1995. In addition, the Company has delivered to Index the
following unaudited financial statements:(a) its balance sheet as of June 30,
1996; (b) its statement of operations for the six months ended June 30, 1996;
and (c) its statement of cash flows for the six months ended June 30, 1996. Such
financial statements are herein collectively referred to as the "Financial
Statements." The Financial Statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods covered thereby and present fairly the financial condition of the
Company as of such dates and the results of its operations and changes in cash
flows for such periods.
4.9 Events Subsequent to Financial Statements. Since June 30, 1996, except
in the ordinary course of business there has not been:
(a) Any material adverse change in the financial condition, results of
operations or business of the Company;
(b) Any sale, lease, transfer, license or assignment of any material
assets, tangible or intangible, of the Company;
(c) Any material damage, destruction or property loss, whether or not
covered by insurance, affecting adversely the properties or business of the
Company;
(d) Any declaration or setting aside or payment of any dividend or
distribution with respect to the Company Stock (except as required by the
terms of the Class A Convertible Preferred Stock) or any redemption,
purchase or other acquisition of any such shares;
(e) Any subjection to any lien on any of the assets, tangible or
intangible, of the Company;
(f) Any material incurrence of indebtedness or liability or assumption
of obligations by the Company;
(g) Any waiver or release by the Company of any right of any material
value;
(h) Any material increase in compensation or benefits to officers or
directors of the Company;
(i) Any change made or authorized in the Articles of Incorporation or
By-laws of the Company;
(j) Except as disclosed to Index, any issuance, transfer, sale or
other disposition by the Company of any shares of Company Stock or other
equity securities, or any grant of any options, warrants or other rights to
purchase or obtain (including upon conversion or exercise) shares of
Company Stock or other equity securities; or
(k) Any material loan to or other material transaction with any
officer, director or shareholder of the Company giving rise to any claim or
right of the Company against any such person or of such person against the
Company.
4.10 Undisclosed Liabilities. The Company has no material liability or
obligation of any nature whatsoever, either direct or indirect, matured or
unmatured, accrued, absolute, contingent or otherwise.
4.11 Tax Returns and Audits. The Company has duly and timely filed or
caused to be filed all returns, reports or similar statements (including any
attached schedules) required to be filed with respect to any tax
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including, without limitation, all information returns, claims for refunds,
amended returns and declarations of estimated tax (collectively, the "Tax
Returns"). For the purpose of this Agreement, "tax" shall include any federal,
state, local or foreign income, gross receipts, windfall profits, severance,
property, production, sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add-on minimum, ad valorem, transfer, stamp
or environmental tax, or any other tax or similar assessment or charge, together
with any interest or penalty, addition to tax or additional amount imposed by
any governmental authority. The Company has paid in full or fully reserved
against in the Financial Statements all taxes, interest, penalties, assessments
and deficiencies due or claimed to be due by it to foreign, federal, state or
local taxing authorities. All Tax Returns are complete and accurate and disclose
all taxes required to be paid. The income Tax Returns filed by the Company are
not being, to the knowledge of the Company, examined by the Internal Revenue
Service (the "IRS") or other applicable taxing authorities for any period,
except as set out in the Registration Statement. All taxes or estimates thereof
that are due as of December 31, 1995, or are claimed or asserted by any taxing
authority to be due as of such date, have been (a) timely and appropriately paid
so as to avoid penalties for underpayment or (b) accrued for on the balance
sheet as of December 31, 1995, as contained in the Financial Statements. Except
for amounts not yet due and payable, all tax liabilities to which the properties
of the Company may be subject have been paid and discharged. The provisions for
income and other taxes payable reflected in the Financial Statements make
adequate provision for all then accrued and unpaid taxes of the Company. There
are no tax liens on any property of the Company, nor are there any pending or
threatened examinations, actions, suits, investigations, audits, assessments or
tax claims asserted. The Company has not been granted any extensions of
limitation periods applicable to tax claims. Except jurisdictions in which the
Company filed Tax Returns, no claim has been made by a taxing authority that the
Company is or may be subject to taxation by that jurisdiction. All copies of Tax
Returns delivered to Index by the Company are true and correct, and any and all
notices from foreign, federal, state and local taxing authorities, tax
examination reports and statements of deficiencies assessed against or agreed to
by the Company have been made available to Index. The Company is not a party to,
or bound by, any tax indemnity, tax sharing or tax allocation agreement. The
Company is not a member of an "affiliated group," as defined in Section 1504(a)
of the Code and is not the owner of an interest in a partnership, joint venture,
trust, limited liability company or other entity or organization. All positions
taken on federal Tax Returns that could give rise to a penalty for substantial
understatement pursuant to Section 6662(d) of the Code have been disclosed on
such Tax Returns. The Company has not agreed to and is not required to make any
adjustment pursuant to Section 481(a) of the Code (or any predecessor provision)
by reason of any change in any accounting method. The Company has no application
pending with any taxing authority requesting permission for any changes in any
accounting method, and the IRS has not proposed any such adjustment or change in
accounting method. The Company is not subject to any limitation under Section
382 or Section 383 of the Code.
Index shall have sole control over any contest relating to federal, state,
local, or foreign tax assessments or proposed assessments against the Company.
Index shall promptly notify the Company of any audit or examination of the books
and records of the Company undertaken by the tax authorities, any tax
assessments or proposed assessments or any extension of the statute of
limitations applicable to any Tax Returns of the Company relating to any taxable
year or periods ending on or prior to the Closing Date and shall provide the
Company with periodic reports regarding the status of such audit or examination.
The Company shall be entitled to participate in (but not control) any such
contest at its sole cost. Index shall not settle or otherwise compromise any
such contest in a manner which results in liability to the Company under this
Agreement without the written consent of the Company, which consent shall not be
unreasonably withheld.
4.12 Books and Records. The books and records of the Company fairly
reflect the transactions to which the Company is a party or by which its
properties are bound.
4.13 Questionable Payments. The Company nor any employee, agent or
representative of either of them has, directly or indirectly, made any bribes,
kickbacks, illegal payments or illegal political contributions using Company
funds or made any payments from the Company's funds to governmental officials
for improper purposes or made any illegal payments from the Company's funds to
obtain or retain business.
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4.14. Environmental Matters.
(a) Definitions. For the purpose of this Agreement, the following
terms shall have the meaning herein specified:
(i) "Governmental Authority" shall mean the United States, each
state, each county, each city and each other political subdivision in
which the Company's business is located, and any court, political
subdivision, agency or instrumentality with jurisdiction over the
Company's business.
(ii) "Environmental Laws" shall mean (A) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C.A. 9601 et seq. ("CERCLA"), (B) the Resource Conservation and
Recovery Act, as amended by the Hazardous and Solid Waste Amendment of
1984, 42 U.S.C.A. 6901 et seq. ("RCRA"), (C) the Clean Air Act, 42
U.S.C.A. 7401 et seq., (D) the Federal Water Pollution Control Act, as
amended, 33 U.S.C.A. 1251 et seq., (E) the Toxic Substances Control Act,
15 U.S.C.A. 2601 et seq., (F) all applicable state laws, and (G) all
other laws and ordinances relating to municipal waste, solid waste, air
pollution, water pollution and/or the handling, discharge, disposal or
recovery of on-site or off-site hazardous substances or materials, as
each of the foregoing has been or may hereafter be amended from time to
time.
(iii) "Hazardous Materials" shall mean, among others, (A) any
"hazardous waste" as defined by the RCRA, and regulations promulgated
thereunder; (B) any "hazardous substance" as defined by CERCLA, and
regulations promulgated thereunder; (C) any "toxic pollutant" as defined
in the Federal Water Pollution Prevention and Control Act, as amended,
33 U.S.C. 1251 et seq., (commonly known as "CWA" for "Clear Water Act"),
and any regulations thereunder; (D) any "hazardous air pollutant" as
defined in the Air Pollution Prevention and Control Act, as amended, 42
U.S.C. 7401 et seq. (commonly known as "CAA" for "Clear Air Act") and
any regulations thereunder; (E) asbestos; (F) polychlorinated biphenyls;
(G) underground storage tanks, whether empty, filled or partially filled
with any substance; (H) any substance the presence of which on the
Business Location (as hereinafter defined) is prohibited by any
Environmental Laws; and (I) any other substance which is regulated by
any Environmental Laws.
(iv) "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing or hereafter occurring) of the
improvements, facilities, soil, groundwater, air or other elements on or
at the location of the Company at 6500 Brittmoore Road, Houston, Texas
77041, or at any other location where the Company conducts or has
conducted business (collectively, the "Business Location") by Hazardous
Materials, or the contamination of the buildings, facilities, soil,
groundwater, air or other elements on or any other specific property or
general area, as a result of Hazardous Materials emanating from the
operations of the Company's business.
Notwithstanding the foregoing, if any Environmental Law is amended so
as to broaden the meaning of any term defined in it, such broader meaning
shall apply subsequent to the effective date of such amendment. Where a
defined term in this Agreement derives its meaning from a statutory
reference, for the purposes of this Agreement any regulatory definition
promulgated pursuant to the applicable statute shall be deemed to be
applicable to the extent its definition is broader than the statutory
reference and any reference or citation to a statute or regulation shall be
deemed to include any amendments to that statute or regulation and judicial
and administrative interpretations of it. To the extent that any state laws
or regulations establish a meaning for a term defined in this Agreement
through reference to a federal Environmental Law that is broader than the
meaning specified in such federal Environmental Law, such broader meaning
set forth in the state Environmental Law shall apply. Any specific
references to a law shall include any amendments to it promulgated from
time to time.
(b) Representations and Warranties. Based on the foregoing, the
Company represents and warrants that, to its best knowledge and belief:
(i) There has been no failure by the Company to comply with all
applicable requirements of Environmental Laws relating to the Company,
the Company's operations, and the Company's
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manufacture, processing, distribution, use, treatment, generation,
recycling, reuses, sale, storage, handling, transportation or disposal
of any Hazardous Material and the Company is not aware of any facts or
circumstances which could materially impair such compliance with all
applicable Environmental Laws.
(ii) The Company has not, through the Closing Date, received notice
from any Governmental Authority or any other person of any actual or
alleged violation of any Environmental Laws, nor is any such notice
anticipated.
(iii) The Company will not do or permit anything that will cause
the Company to be in violation of any requirements of Environmental
Laws, or do or permit anything to be done that would materially and
adversely affect the financial condition of the Company or subject the
Company to any enforcement actions under any Environmental Laws.
(iv) The Company has not obtained and is not required to obtain any
permits, licenses or similar authorizations to construct, occupy,
operate or use any buildings, improvements, fixtures and equipment owned
or leased by the Company by reason of any Environmental Laws.
(v) No Hazardous Materials are now located at the Business
Location, and the Company has not ever caused or permitted any Hazardous
Materials to be generated, placed, stored, held, handled, located or
used at the Business Location, any part thereof or at any other site
controlled or utilized by the Company in its operation of its business,
except in compliance with applicable Environmental Laws.
(vi) Hazardous Materials Contamination does not now and has never
existed on, in, under or at the location of the Company or at any other
site controlled or utilized by the Company in the operation of its
business. No part of the Business Location or any other site controlled
or utilized by the Company in the operation of its business is being
used has ever been used by others for the release, disposal or long-term
storage of Hazardous Materials, nor is any part of the Business Location
or any other site controlled or utilized by the Company in the operation
of its business otherwise affected by Hazardous Materials Contamination.
(vii) No investigation, administrative order, consent order or
agreement, litigation or settlement with respect to Hazardous Materials
or Hazardous Materials Contamination is proposed, threatened,
anticipated, pending or otherwise in existence with respect to the
Business Location or with respect to any other site controlled or
utilized by the Company in the operation of its business. The Business
Location is not currently on, and has never been on, any federal or
state "Superfund" or "Superlien" list.
4.15 Intellectual Property. There are no material patents, patent
applications, trade names, trademark or service mark registrations or
applications, registered trade dress rights, common law trademarks or copyright
registrations or applications owned by the Company or which the Company is
licensed to use. To the best knowledge and belief of the Company, there are no
claims that any product, activity or operation of the Company infringes upon or
involves, or has resulted in the infringement of, any patents, patent
applications, trade names, trademark or service mark registrations or
applications, registered trade dress rights, common law trademarks or copyright
registrations or applications or any other proprietary right of any other
person, corporation or other entity; and no proceedings have been instituted,
are pending or are threatened with respect thereto.
4.16 Insurance. The Company has provided Index a list of all material
insurance policies and binders in effect, insuring the Company, including,
without limitation, fire and extended coverage, public liability, property
damage, vehicle, product liability insurance, environmental impairment
insurance, worker's compensation coverage, medical and dental insurance held by
or on behalf of the Company. All such insurance is in full force and effect and
no notice of cancellation has been received.
4.17 Contracts. Except as set forth in the Registration Statement, the
Company has no material contracts, leases, arrangements and commitments (whether
oral or written). Except in the ordinary course and
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as set forth in the Registration Statement, the Company is not a party to or
bound by or affected by any material contract, lease, arrangement or commitment
(whether oral or written) relating to: (a) the employment of any person; (b)
collective bargaining with, or any representation of any employees by, any labor
union or association; (c) the acquisition of services, supplies, equipment or
other personal property; (d) the purchase or sale of real property; (e)
distribution, agency or construction; (f) lease of real or personal property as
lessor or lessee or sublessor or sublessee; (g) lending or advancing of funds;
(h) borrowing of funds or receipt of credit; (i) incurring of any obligation or
liability; or (j) the sale of personal property.
4.18 Litigation. The Company is not subject to any judgment or order of
any court or quasi-judicial or administrative agency of any jurisdiction,
domestic or foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending or, to the best knowledge of the Company, threatened
against the Company. The Company is not a plaintiff in any action, domestic or
foreign, judicial or administrative. There are no existing actions, suits,
proceedings or investigations of the Company, and the Company does not know of
any basis for such actions, suits, proceedings or investigations. There are no
unsatisfied judgments, orders, writs, injunctions, decrees or stipulations
affecting the Company or to which the Company is a party.
4.19 Employees. Except in the ordinary course, the Company does not owe
any material compensation, bonuses, profit sharing, pension, retirement, stock
options or related appreciation rights, deferred or otherwise, to any current or
previous employees. The Company is not a party to or bound by any collective
bargaining agreement. There are no material loans or other material obligations
payable or owing by the Company to any shareholder, officer, director or
employee of the Company, except as set out in the Registration Statement.
4.20 Employee Benefit Plans. Except as set out in the Registration
Statement, the Company has no material (a) nonqualified deferred or incentive
compensation or retirement plans or arrangements, (b) qualified retirement plans
or arrangements, (c) other employee compensation, severance or termination pay
or welfare benefit plans, programs or arrangements or (d) any related trusts,
insurance contracts or other funding arrangements maintained, established or
contributed to by the Company within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The Company does
not have any liability under Title IV of ERISA as a result of actions or events
occurring prior to the Closing.
4.21 Legal Compliance. No claim has been filed against the Company
alleging a violation of any applicable laws and regulations of foreign, federal,
state and local governments and all agencies thereof. The Company holds all of
the material permits, licenses, certificates or other authorizations of foreign,
federal, state or local governmental agencies required for the conduct of its
business as presently conducted.
4.22 Broker's Fees. The Company or anyone on its behalf does not have any
liability to any broker, finder, investment banker or agent, or has agreed to
pay any brokerage fees, finder's fees or commissions, or to reimburse any
expenses of any broker, finder, investment banker or agent in connection with
the Merger or any similar transaction.
4.23 Disclosure. The representations and warranties and statements of fact
made by the Company in this Agreement and in any Schedule hereto are, as
applicable, accurate, correct and complete and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements and information contained herein or therein not
misleading.
4.24 Information Supplied. None of the information supplied by the Company
for use in the Registration Statement and contained therein will, as of the date
that the Registration Statement is filed with the Commission, on the date it is
declared effective or at the time of the meeting of the shareholders of the
Company to be held in connection with the Merger, contain any untrue statement
of a material fact or omit 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 were made, not misleading. The proxy statement
contained in the Registration Statement will comply, in all material respects,
as to form with the provisions of the Exchange Act.
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ARTICLE 5
CONDUCT OF BUSINESS PENDING THE CLOSING
5.1 Conduct of Business by the Company Pending the Closing. The Company
covenants and agrees that prior to the Closing Date, except in the ordinary
course of business or with the approval of Index:
(a) The Company shall conduct its business and operations only in the
usual and ordinary course of business and consistent with past custom and
practice;
(b) The Company shall not directly or indirectly do any of the
following, except in the ordinary course of business: (i) sell, pledge,
dispose of or encumber any of its material assets, (ii) amend or propose to
amend its Articles of Incorporation or By-Laws; (iii) split, combine or
reclassify any outstanding shares of its capital stock, or declare, set
aside or pay any dividend or other distribution payable in cash, stock,
property or otherwise with respect to shares of its capital stock except as
required for the Class A Convertible Preferred Stock; (iv) redeem, purchase
or acquire or offer to acquire any shares of Company Stock; or (v) enter
into or modify any material contract, agreement, commitment or arrangement
with respect to any of the foregoing;
(c) The Company shall not, (i) issue, sell, pledge or dispose of, or
agree to issue, sell, pledge or dispose of, any additional shares of, or
any options, warrants, conversion privileges or rights of any kind to
acquire any shares of, its capital stock; (ii) acquire (by merger,
consolidation, acquisition of stock or assets or otherwise) any
corporation, partnership or other business organization or division or the
material assets thereof; (iii) incur any indebtedness for borrowed money,
issue any debt securities or guarantee any indebtedness to others; or (iv)
enter into or modify any contract, agreement, commitment or arrangement
with respect to any of the foregoing;
(d) The Company shall not enter into any employment, severance or
similar agreements or arrangements with, or grant any bonus, salary
increase, severance or termination pay to, any officers or directors;
(e) The Company shall not adopt any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee;
(f) Except as otherwise required by its Articles of Incorporation or
By-Laws, by this Agreement or by applicable law, the Company shall not call
any meeting of shareholders;
(g) The Company shall (i) use its best efforts not to take any action
which would render, or which reasonably may be expected to render, any
representation or warranty made by it in this Agreement untrue at any time
prior to the Closing Date as if then made; and (ii) notify Index of any
emergency or other change in the normal course of its business or in the
operation of its properties and of any tax audits, tax claims, governmental
or third party complaints, investigations or hearings (or communications
indicating that the same may be contemplated) if such emergency, change,
audit, claim, complaint, investigation or hearing would be material,
individually or in the aggregate, to the financial condition, results of
operations or business of the Company, or to the ability of any of the
parties hereto to consummate the transactions contemplated by this
Agreement;
(h) The Company shall notify Index promptly of any material adverse
event or circumstance affecting the Company (including the filing of any
material litigation against the Company or the existence of any dispute
with any person or entity which involves a reasonable likelihood of such
litigation being commenced); and
(i) The Company shall comply with all legal requirements and
contractual obligations applicable to its operations and business and pay
all applicable taxes.
5.2 Other Actions. Unless approved by Index, the Company shall not take
any action or permit any action to occur that might reasonably be expected to
result in any of the representations and warranties of the
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Company contained in this Agreement becoming untrue after the date hereof or any
of the conditions to the Closing set forth in Article 7 of this Agreement not
being satisfied.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Access and Information. Except for information relating to any claims
any party may have against the other, the Company and Index shall each afford to
the other and to the other's financial advisors, legal counsel, accountants,
consultants and other representatives full access during normal business hours
throughout the period prior to the Effective Time to all of its books, records,
properties and personnel and, during such period, each shall furnish promptly to
the other (a) a copy of each report, schedule and other document filed or
received by it pursuant to the requirements of federal or state securities laws,
and (b) all other information as such other party may reasonably request. Each
party shall hold in confidence all non-public information until such time as
such information is otherwise publicly available and, if this Agreement is
terminated, each party will upon written request deliver to the other all
documents, work papers and other material obtained by such party or on its
behalf from the other party as a result of this Agreement or in connection
herewith, whether so obtained before or after the execution hereof. As soon as
practicable following the Closing, the Company shall deliver to Index all of the
books and records of the Company.
6.2 Registration Statement. Index and the Company shall cooperate in
preparing a registration statement on Form S-4 and combined prospectus and proxy
statement, any amendments or supplements thereto and any notices, reports,
letters, proxies or other materials required to be filed with the Commission in
connection with the Merger and the Newman Merger (collectively, the registration
statement and combined prospectus and proxy statement, any amendments or
supplements thereto and any notices, reports, letters, proxies or other
materials required to be filed with the Commission in connection with the Merger
and the Newman Merger are herein referred to as the "Registration Statement").
The parties shall cooperate with each other in providing any information that
the other party may reasonably request to aid in the preparation of the
Registration Statement. The parties will use their commercially reasonable
efforts to respond to the comments of the Commission with respect to the
Registration Statement and will make any further filing (including amendments
and supplements) in connection therewith that may be necessary, proper and
advisable. Index will provide the Company, and the Company will provide Index,
with whatever information and assistance in connection with the foregoing
filings that the filing party reasonably may request. Index will take all
actions that may be necessary, proper or advisable under state securities laws
in connection with the offering and issuance of Index Common Stock as
contemplated herein.
6.3 Meetings of Shareholders.
(a) The Company shall call a special meeting of its shareholders prior
to the Effective Time (at a date agreed upon with Index) to be held in
accordance with the laws of the State of Texas to consider and vote upon
the Merger.
(b) The Merger Sub shall call a special meeting of its sole
stockholder prior to the Effective Time to be held in accordance with the
laws of the State of Nevada to consider and vote upon the Merger. The
parties hereto acknowledge and agree that the Merger Sub's sole stockholder
may approve the Merger by written consent in lieu of holding such a
meeting.
(c) Index shall call a special meeting of its shareholder prior to the
Effective Time to be held in accordance with the laws of the State of Texas
to consider and vote upon the Newman Merger.
6.4 Intentionally Left Blank.
6.5 Press Releases. The Company and Index shall consult with each other as
to the form and substance of any press release or other public disclosure of
matters related to this Agreement or any of the transactions contemplated
hereby; provided, however, that nothing in this Section 6.5 shall be deemed to
prohibit any party
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hereto from making any disclosure that is required to fulfill such party's
disclosure obligations imposed by law, including, without limitation, federal
securities laws.
ARTICLE 7
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Each Party to Effect the Closing. The
respective obligations of each party to effect the Closing shall be subject to
the fulfillment on or prior to the Closing Date of the following conditions:
(a) The Registration Statement shall have been declared effective by
the Commission and no stop order with respect thereto shall be in effect;
(b) The Merger shall have been approved by the shareholders of Index,
the Company and the Merger Sub, in accordance with the laws of the States
of Texas and Nevada;
(c) The Newman Merger shall have been approved by the shareholders of
Index, Newman Acquisition and Newman, in accordance with the laws of the
States of Nevada and New Mexico, respectively;
(d) Intentionally left blank;
(e) No order, injunction or decree shall have been entered and remain
in effect in any action or proceeding before any foreign, federal or state
court or governmental agency or other foreign, federal or state regulatory
or administrative agency or commission that would prevent or make illegal
the consummation of the transactions contemplated hereby.
7.2 Additional Conditions to Index's and the Merger Sub's Obligations. The
obligations of each of Index and the Merger Sub to effect the Closing are
subject to the satisfaction of the following additional conditions on or before
the Closing Date:
(a) The representations and warranties set forth in Article 4 of this
Agreement will be true and correct in all material respects as of the date
hereof and at and as of the Closing Date as though then made;
(b) The Company shall have performed, in all material respects, each
obligation and agreement and complied with each covenant to be performed
and complied with by it under Articles 5 and 6 of this Agreement prior to
the Closing Date;
(c) All consents by governmental or regulatory agencies or otherwise
that are required for the consummation of the transactions contemplated
hereby or that are required for Index to own, operate or control the
Company or any portion of the assets of the Company to prevent a breach of
or a default under or a termination of any agreement material to the
Company to which the Company is a party or to which any material portion of
the assets of the Company is subject, will have been obtained;
(d) No action or proceeding before any court or governmental body will
be pending or threatened wherein a judgment, decree or order would prevent
or restrain any of the transactions contemplated hereby or cause such
transactions to be declared unlawful, nullified or rescinded or which might
adversely affect the right of Index to own, operate or control the Company;
(e) Index and its financial and legal advisors shall have completed a
due diligence review of the business, operations and financial statements
of the Company, the results of which shall be satisfactory to Index in its
sole discretion;
(f) Index will have received from Fulbright & Jaworski, L.L.P.,
counsel to the Company, an opinion addressed to Index, dated the Closing
Date;
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(g) No event shall have occurred prior to the Closing which in the
reasonable judgment of Index or the Merger Sub, would materially affect the
purpose of the Merger; and
(h) At the Closing, the Company shall have delivered or caused to be
delivered to Index the following:
(i) a certificate executed by the President and Secretary of the
Company stating that the conditions set forth in Sections 7.2(a) through
(d) of this Agreement have been satisfied;
(ii) certified copies of the resolutions duly adopted by the
Company's Board of Directors authorizing and approving the Merger and
the execution, delivery and performance of this Agreement;
(iii) certified copies of resolutions duly adopted by the Company's
shareholders authorizing and approving the Merger and the execution,
delivery and performance of this Agreement;
(iv) certificates of good standing or comparable certificates for
the Company from the jurisdiction of its incorporation and from every
jurisdiction where a failure to be qualified or licensed would have a
material adverse effect on its financial condition, results of
operations or business, dated not earlier than five days prior to the
Closing Date;
(v) a copy of the Company's Articles of Incorporation certified as
of a recent date by the Secretary of State of the State of Texas;
(vi) an incumbency certificate of the officers of the Company; and
(vii) such other documents as Index may reasonably request in
connection with the transactions contemplated hereby.
7.3 Additional Conditions to the Company's Obligations. The obligations of
the Company to effect the Closing are subject to the satisfaction of the
following conditions on or before the Closing Date:
(a) The representations and warranties set forth in Article 3 of this
Agreement will be true and correct in all material respects as of the date
hereof and at and as of the Closing Date as though then made;
(b) Index shall have performed, in all material respects, each
obligation and agreement and complied with each covenant required to be
performed and complied with by it under Article 6 of this Agreement prior
to the Closing Date;
(c) No action or proceeding before any court or governmental body will
be pending or threatened wherein a judgment, decree or order would prevent
any of the transactions contemplated hereby or cause such transactions to
be declared unlawful or rescinded;
(d) The Company shall have received from Fouts & Moore, L.L.P.,
counsel to Index, an opinion addressed to the Company, dated the Closing
Date; and
(e) On the Closing Date, Index shall have delivered to the Company the
following:
(i) a certificate executed on behalf of Index and the Merger Sub
stating that the conditions set forth in Sections 7.3(a) through (c) of
this Agreement have been satisfied;
(ii) certified copies of resolutions duly adopted by Index's and
the Merger Sub's Boards of Directors authorizing and approving the
Merger and the execution, delivery and performance of this Agreement;
(iii) certified copies of the resolutions duly adopted by the
shareholder of the Merger Sub authorizing and approving the Merger and
the execution, delivery and performance this Agreement;
(iv) certified copies of resolutions duly adopted by Index's Board
of Directors authorizing and approving the Newman Merger and the
execution, delivery and performance of the Newman Merger Agreement;
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(v) certified copies of resolutions duly adopted by the
shareholders of Index authorizing and approving the Newman Merger and
the execution, delivery and performance of the Newman Merger Agreement;
(vi) a certificate of existence for Index from the Secretary of
State of the State of Texas and for Merger Sub from the Secretary of
State of the State of Nevada, dated not earlier than five days prior to
the Closing Date;
(vii) a copy of Index's Articles of Incorporation certified by the
Secretary of State of the State of Texas;
(viii) a certificate of good standing for Index from the Secretary
of State of the State of Texas and for the Merger Sub from the Secretary
of State of the State of Nevada, dated not earlier than five days prior
to the Closing Date;
(ix) a copy of the Merger Sub's Articles of Incorporation certified
by the Secretary of State of the State of Nevada;
(x) an incumbency certificate of the officers of Index and the
Merger Sub; and
(xi) such other material documents as the Company may reasonably
request in connection with the transactions contemplated hereby.
ARTICLE 8
REMEDIES
8.1 General. In the event of any breach of this Agreement, the parties
shall have all remedies at law or in equity.
8.2 Waiver. No waiver by any party of any default or breach by another
party of any representation, warranty, covenant or condition contained in this
Agreement shall be deemed to be a waiver of any subsequent default or breach by
such party of the same or any other representation, warranty, covenant or
condition. No act, delay, omission or course of dealing on the part of any party
in exercising any right, power or remedy under this Agreement or at law or in
equity shall operate as a waiver thereof or otherwise prejudice any of such
party's rights, powers and remedies. All remedies, whether at law or in equity,
shall be cumulative and the election of any one or more shall not constitute a
waiver of the right to pursue other available remedies.
ARTICLE 9
TERMINATION
9.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time by the
mutual consent of the parties hereto.
9.2 Termination by Any Party. This Agreement may be terminated and the
Merger may be abandoned by action of the Board of Directors of any party hereto
if a United States federal or state court of competent jurisdiction or United
States federal or state governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non-appealable; provided, that the
party seeking to terminate this Agreement pursuant to this clause shall have
used all reasonable efforts to remove such injunction, order or decree.
9.3 Termination by Index. This Agreement may be terminated by Index upon
written notice if the Closing has not occurred by December 31, 1996.
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9.4 Effect of Termination and Abandonment. In the event of termination of
this Agreement and the abandonment of the Merger pursuant to this Article 9, all
obligations of the parties hereto shall terminate, except the obligations of the
parties pursuant to Section 6.1.
9.5 Material Breach. This Agreement may be terminated if a material breach
of this Agreement has occurred and such breach has not been cured by the
breaching party within ten (10) business days of receipt of written notice from
a non-breaching party detailing such breach.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
sent by overnight courier or mailed by registered or certified mail (postage
prepaid and return receipt requested) to the party to whom the same is so
delivered, sent or mailed at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Index or the Merger Sub:
David R. Little, President
580 Westlake Park Boulevard
Suite 1100
Houston, Texas 77079
Phone: (713) 558-4448
Fax: (713) 558-4448
with a copy to:
Gary A. Messersmith, Esq.
Fouts & Moore, L.L.P.
5555 San Felipe, 17th Floor
Houston, Texas 77066-2726
Phone: (713) 622-9966
Fax: (713) 622-1045
(b) if to the Company:
Mr. Bryan Wimberly, President
6500 Brittmoore
Houston, Texas 77041
Phone: (713) 937-0330
Fax: (713) 937-0574
with a copy to:
Mr. Curtis Huff
Fulbright & Jaworski, L.L.P.
1301 McKinney
Houston, Texas 77010
Phone: (713) 651-5657
Fax: (713) 651-5246
10.2 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
10.3 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected,
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impaired or invalidated and the parties shall negotiate in good faith to modify
this Agreement to preserve each party's anticipated benefits under this
Agreement.
10.4 Miscellaneous. This Agreement (together with all other documents and
instruments referred to herein): (a) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof; (b) except as
expressly set forth herein, is not intended to confer upon any other person any
rights or remedies hereunder and (c) shall not be assigned by operation of law
or otherwise, except that Index may assign all or any portion of its rights
under this Agreement to any wholly-owned subsidiary but no such assignment shall
relieve Index of its obligations hereunder, and except that this Agreement may
be assigned by operation of law to any corporation with or into which Index may
be merged.
10.5 Separate Counsel. Each party hereby expressly acknowledges that it
has been advised and urged to seek its own separate legal counsel for advice
with respect to this Agreement.
10.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF
TEXAS, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
10.8 Amendment. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by all parties hereto.
10.9 Parties In Interest: No Third Party Beneficiaries. Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto. This Agreement
shall not be deemed to confer upon any person not a party hereto any rights or
remedies hereunder.
10.10 Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
10.11 Expenses. The parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
10.12 Survival. The representations, warranties and covenants contained
herein shall not survive the Closing.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
INDEX, INC.
By: /s/ DAVID R. LITTLE
- ------------------------------------
DAVID R. LITTLE, President
SEPCO ACQUISITION CORPORATION
By: /s/ DAVID R. LITTLE
- ------------------------------------
DAVID R. LITTLE, President
SEPCO INDUSTRIES, INC.
By: /s/ BRYAN WIMBERLY
- ------------------------------------
BRYAN WIMBERLY, President
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