Exhibit 10.1
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ADVANCED ENVIRONMENTAL SYSTEMS, INC.,
TELETRAK ADVANCED TECHNOLOGY SYSTEMS, INC.,
HELM CAPITAL GROUP, INC.
AND
AES ACQUISITION CORP.
DATED AS OF JULY 24, 1998
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TABLE OF CONTENTS
PAGE
ARTICLE 1
THE MERGER
Section 1.1. The Merger.............................................. 1
Section 1.2. Effects of the Merger................................... 1
Section 1.3. Effective Time of the Merger............................ 2
Section 1.4. Directors............................................... 2
Section 1.5. Officers................................................ 2
Section 1.6. Tax Consequences........................................ 2
Section 1.7. Taking of Necessary Action; Further Action.............. 2
ARTICLE 2
TREATMENT OF SHARES
Section 2.1. Effect of the Merger on Capital Stock................... 2
Section 2.2. Issuance of New Certificates............................ 3
ARTICLE 3
THE CLOSING
Section 3.1. Closing................................................. 4
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AES
Section 4.1. Organization and Qualification.......................... 4
Section 4.2. Subsidiaries; Interests in Other Persons................ 4
Section 4.3. Capitalization.......................................... 4
Section 4.4. Authority; Non-Contravention; Statutory Approvals;
Compliance............................................. 5
Section 4.5. Financial Statements.................................... 6
Section 4.6. Absence of Certain Changes or Events.................... 6
Section 4.7. Litigation.............................................. 7
Section 4.8. Tax Matters............................................. 7
Section 4.9. Employee Matters........................................ 8
Section 4.10. Environmental Protection................................ 9
Section 4.11. Vote Required........................................... 10
Section 4.12. Contracts............................................... 10
Section 4.13. Intellectual Property................................... 10
Section 4.14. Brokers................................................. 11
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF TELETRAK AND HELM
Section 5.1. Organization and Qualification.......................... 11
Section 5.2. Subsidiaries; Interests in Other Persons................ 11
Section 5.3. Capitalization.......................................... 12
Section 5.4. Authority; Non-Contravention; Statutory Approvals;
Compliance............................................. 12
Section 5.5. Reports and Financial Statements........................ 13
Section 5.6. Absence of Certain Changes or Events.................... 14
Section 5.7. Litigation.............................................. 14
Section 5.8. Tax Matters............................................. 14
Section 5.9. Employee Matters........................................ 15
Section 5.10. Environmental Protection................................ 16
Section 5.11. Contracts............................................... 16
Section 5.12. Intellectual Property................................... 16
Section 5.13. Brokers................................................. 16
Section 5.14. Interested Party Transactions........................... 17
Section 5.15. Vote Required........................................... 17
ARTICLE 6
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1. Covenants of the Parties................................ 17
ARTICLE 7
ADDITIONAL AGREEMENTS
Section 7.1. Access to Information...................................... 19
Section 7.2. Regulatory Matters......................................... 20
Section 7.3. Public Announcements....................................... 20
Section 7.4. No Solicitations........................................... 20
Section 7.5. Teletrak Board of Directors................................ 21
Section 7.6. Related Transactions....................................... 21
Section 7.7. Stock Split; Distribution; Name Change;
Filing of Information Statement........................... 21
Section 7.8. Expenses................................................... 22
Section 7.9. Best Efforts............................................... 22
ARTICLE 8
CONDITIONS
Section 8.1. Conditions to Each Party's Obligation to Effect The Merger. 22
Section 8.2. Conditions to Obligation of Teletrak to Effect the Merger.. 23
Section 8.3. Conditions to Obligation of AES to Effect the Merger....... 23
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
Section 9.1. Termination................................................ 24
Section 9.2. Effect of Termination...................................... 25
Section 9.3. Amendment.................................................. 25
Section 9.4. Waiver..................................................... 25
ARTICLE 10
INDEMNIFICATION.
Section 10.1. Teletrak and Helm Indemnification.......................... 25
Section 10.2. AES Indemnification........................................ 26
Section 10.3. Procedures for Indemnification............................. 26
ARTICLE 11
GENERAL PROVISIONS
Section 11.1. Survival................................................... 26
Section 11.2. Notices.................................................... 26
Section 11.3. Miscellaneous.............................................. 27
Section 11.4. Interpretation; Definitions................................ 27
Section 11.5. Counterparts; Effect....................................... 28
Section 11.6. Enforcement................................................ 28
Section 11.7. No Third Party Beneficiaries............................... 28
Section 11.8. Assignment................................................. 28
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 24,
1998, by and between Advanced Environmental Systems, Inc., a Massachusetts
corporation ("AES"), Teletrak Advanced Technology Systems, Inc., a Delaware
corporation ("Teletrak"), Helm Capital Group, Inc., a Delaware corporation
and majority shareholder of Teletrak ("Helm") and AES Acquisition Corp., a
Massachusetts corporation and wholly-owned subsidiary of Teletrak
("Acquisition Sub").
WHEREAS, Teletrak and AES have determined to engage in a business
combination;
WHEREAS, in furtherance thereof, the respective Boards of Directors of
AES, Teletrak and Acquisition Sub, and Teletrak acting as the sole
shareholder of Acquisition Sub, have approved the merger of Acquisition Sub
with and into AES (the "Merger"), upon the terms and conditions set forth in
this Agreement;
WHEREAS, the respective Boards of Directors of AES and Teletrak have
each determined that the Merger and the other transactions contemplated
hereby are in the best interests of their respective corporations and their
respective shareholders and have adopted resolutions approving the Merger and
the adoption of this Agreement in order to advance the long-term business
interests of Teletrak and AES; and
WHEREAS, it is intended that the parties hereto and their respective
shareholders recognize no gain or loss for United States Federal income tax
purposes as a result of the consummation of the Merger.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE 1
THE MERGER
Section 1.1. THE MERGER. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time (as defined in Section 1.3 hereof),
Acquisition Sub shall be merged with and into AES in accordance with the
provisions of the Massachusetts Business Corporation Law (the "MBCL").
Following the Effective Time, the separate existence of Acquisition Sub shall
cease and AES shall be the surviving corporation in the Merger (the
"Surviving Corporation") and shall continue its corporate existence under the
laws of the State of Massachusetts.
Section 1.2. EFFECTS OF THE MERGER. At the Effective Time, (i) the
articles of incorporation of Acquisition Sub, as in effect immediately prior
to the Effective Time, shall be the articles of incorporation of the
Surviving Corporation unless and until thereafter amended as provided by
applicable law or such articles of incorporation, and (ii) the by-laws of
Acquisition Sub, as in effect immediately prior to the Effective Time, shall
be the by-laws of the Surviving Corporation unless and until thereafter
amended as provided by applicable law, the articles of
incorporation of the Surviving Corporation or such by-laws. Subject to the
foregoing, additional effects of the Merger shall be as provided by the
applicable provisions of the MBCL.
Section 1.3. EFFECTIVE TIME OF THE MERGER. Subject to the provisions
of this Agreement, on or as soon as practicable after the Closing Date (as
defined in Section 3.1 hereof), articles of merger (the "Articles of Merger")
complying with the requirements of the MBCL shall be executed by AES and
Acquisition Sub and shall be filed with the Secretary of State of the State
of Massachusetts. The parties hereto shall make all such other filings or
recordings in connection with the Merger when and as required under the MBCL
and other applicable law. The Merger shall become effective at the time the
Articles of Merger are duly filed with the Secretary of State of the State of
Massachusetts, or at such later time or date specified in the Articles of
Merger as Teletrak and AES shall agree (the time and date that the Merger
becomes effective being hereinafter referred to as the "Effective Time").
Section 1.4. DIRECTORS. The individuals set forth on Schedule 1.4
hereto shall be the directors of the Surviving Corporation, until the earlier
of their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
Section 1.5. OFFICERS. The individuals set forth on Schedule 1.5
hereto shall be the officers of the Surviving Corporation, until the earlier
of their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
Section 1.6. TAX CONSEQUENCES. It is intended by the parties hereto
that the Merger shall constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
Section 1.7. TAKING NECESSARY ACTION; FURTHER ACTION. Each of
Teletrak, Acquisition Sub and AES will take all such reasonable and lawful
action as may be necessary or appropriate in order to effectuate the Merger
in accordance with this Agreement as promptly as possible. If, at any time
after the Effective Time, any such further action is necessary or desirable
to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession of all assets, property,
rights, privileges, powers and franchises of AES, the officers and directors
of AES, Teletrak and Acquisition Sub immediately prior to the Effective Time
are hereby fully authorized in the name of their respective corporations or
otherwise to take, and will take, all such lawful and necessary action.
ARTICLE 2
TREATMENT OF SHARES
Section 2.1. EFFECT OF THE MERGER ON CAPITAL STOCK. At the Effective
Time, by virtue of the Merger and without any action on the part of any
holder of the capital stock of AES or Acquisition Sub:
(i) CONVERSION OF AES COMMON STOCK. Each issued and outstanding
share of Common Stock, no par value per share, of AES ("AES Common
Stock") shall be converted into the right to receive 375 (the
"Ratio") fully paid and non-assessable shares of common stock, par
value $.001 per share, of Teletrak ("Teletrak Common Stock").
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All such shares of AES Common Stock, when so converted, shall no
longer be outstanding and shall be cancelled and retired and cease to
exist, and each holder of a certificate formerly representing any
such shares shall cease to have any rights with respect thereto,
except the right to receive the shares of Teletrak Common Stock to be
issued in accordance with the Ratio upon the surrender of such
certificate in accordance with Section 2.2 hereof.
(ii) TREATMENT OF ACQUISITION SUB STOCK. Each issued and
outstanding share of common stock, par value $.001, of Acquisition
Sub shall be converted into and become one fully paid and
non-assessable share of Common Stock, par value $.001, of the
Surviving Corporation.
Section 2.2. ISSUANCE OF NEW CERTIFICATES.
(a) ISSUANCE PROCEDURES. As soon as practicable after the Effective
Time, Teletrak shall deliver to each holder of record of a certificate or
certificates ("Certificates") which immediately prior to the Effective Time
represented outstanding shares of AES Common Stock ("Cancelled AES Shares")
that were cancelled and became instead the right to receive shares of
Teletrak Common Stock pursuant to Section 2.1(i) hereof ("Teletrak Shares")
(i) a letter of transmittal (which shall specify that delivery of the
Certificates shall be effected, and risk of loss and title to the
Certificates shall pass, only upon actual delivery of the Certificates to the
exchange agent appointed by the agreement of AES and Teletrak (the "Exchange
Agent") and shall be in a form and have such other provisions as Teletrak and
AES may reasonably specify) and (ii) instructions for use in effecting the
surrender of Certificates representing Cancelled AES Shares in exchange for
certificates representing Teletrak Shares. Upon surrender of a Certificate to
the Exchange Agent for cancellation (or to such other agent or agents as may
be appointed by the agreement of Teletrak and AES), together with a duly
executed letter of transmittal and such other customary documents as may be
required by the aforesaid instructions, the holder of such Certificate shall
be entitled to receive in exchange therefor, and Teletrak shall issue
certificates evidencing that number of Teletrak Shares which such holder has
the right to receive in accordance with the Ratio in respect of the Cancelled
AES Shares formerly represented by such Certificate and the Certificates so
surrendered shall forthwith be cancelled. Until surrendered as contemplated
by this Section 2.2, each Certificate shall be deemed at any time on and
after the Effective Time to represent only the right to receive upon such
surrender the number of Teletrak Shares into which the Cancelled AES Shares
represented by such Certificate shall have been converted pursuant to Section
2.1(i) hereof.
(b) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, such Teletrak
Shares as may be required pursuant to Section 2.1(i) hereof; PROVIDED,
HOWEVER, that Teletrak may, in its discretion, require the owner of such
lost, stolen or destroyed Certificates to deliver a bond as indemnity against
any claim that may be made against Teletrak or the Exchange Agent with
respect to the Certificates alleged to have been lost, stolen or destroyed.
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ARTICLE 3
THE CLOSING
Section 3.1. CLOSING. The closing of the Merger (the "Closing") shall
take place at the offices of Teletrak, at 10:00 A.M., local time, on the
second business day immediately following the date on which the last of the
conditions set forth in ARTICLE 8 hereof is fulfilled or duly waived, or at
such other time, date and place as AES and Teletrak shall mutually agree (the
"Closing Date").
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AES
AES represents and warrants to Teletrak and Acquisition Sub as follows:
Section 4.1. ORGANIZATION AND QUALIFICATION. Except as set forth on
Schedule 4.1 hereto, AES is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, has
all requisite corporate power and authority, and has been duly authorized by
all necessary approvals and orders, to own, lease and operate its assets and
properties to the extent owned, leased and operated and to carry on its
business as it is now being conducted. AES is duly qualified or licensed to
do business and in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its assets and properties makes
such qualification necessary, except in such jurisdictions where the failure
to be so duly qualified or licensed could not, individually or in the
aggregate, reasonably be expected to result in a material adverse effect on
the business, assets, condition (financial or otherwise), or results of
operations of AES (a "AES Material Adverse Effect") or prevent or materially
delay the consummation of the Merger. True and complete copies of the
articles of incorporation and by-laws of AES, as in full effect on the date
hereof, have been furnished to Teletrak.
Section 4.2. SUBSIDIARIES; INTERESTS IN OTHER PERSONS. There are no
AES Subsidiaries or any other Persons (as defined in Section 10.5 hereof) in
which AES has a significant equity or other ownership interest. All of the
issued and outstanding shares of capital stock of each AES Subsidiary are
validly issued, fully paid, non-assessable and free of preemptive rights, and
are owned by AES free and clear of any liens, claims, encumbrances, security
interests, equities, charges (collectively, "Liens") or limitations on AES's
voting rights, voting trusts or proxies.
Section 4.3. CAPITALIZATION. The authorized capital stock of AES
consists solely of 200,000 shares of common stock, no par value. As of the
close of business on December 31, 1997, there were issued and outstanding
10,000 shares of AES Common Stock. There are no outstanding subscriptions,
options, calls, contracts or other commitments, understandings, restrictions,
arrangements, rights or warrants, including any right of conversion or
exchange under any outstanding security, instrument or other agreement,
obligating AES to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of its capital stock or obligating it to grant,
extend or enter into any such agreement or commitment (collectively, "Equity
Commitments"). All of the issued and outstanding shares of capital stock of
AES are, and will be, duly authorized, validly issued, fully paid,
non-assessable and free of preemptive
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rights. There are no bonds, debentures, notes or other indebtedness of AES
having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which shareholders of
AES may vote. Except as set forth above, since December 31, 1997, no shares
of capital stock or other voting securities of AES were issued, reserved for
issuance, issuable or outstanding.
Section 4.4. AUTHORITY; NON-CONTRAVENTION; STATUTORY APPROVALS; COMPLIANCE
(a) AUTHORITY. AES has all requisite power and authority to execute and
deliver this Agreement, and, subject to the AES Shareholders' Approval (as
defined in Section 4.11 hereof) and the AES Statutory Approvals (as defined
in Section 4.4(c) hereof), to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation by
AES of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of AES, subject only to obtaining the
AES Shareholders' Approval. This Agreement has been duly and validly executed
and delivered by AES and, assuming the due authorization, execution and
delivery hereof by the other signatories hereto, constitutes the valid and
binding obligation of AES enforceable against it in accordance with its
terms, except as such enforceability may be limited by (i) bankruptcy laws
and other similar laws affecting creditors' rights generally and (ii) general
principles of equity, regardless of whether asserted in a proceeding in
equity or at law. The Board of Directors of AES has determined that it is
advisable and in the best interest of AES's shareholders and AES for AES to
effect the Merger upon the terms and conditions of this Agreement and has
unanimously approved and recommended that AES's shareholders approve and
adopt this Agreement and the Merger.
(b) NON-CONTRAVENTION. The execution and delivery of this Agreement by
AES does not, and the consummation of the transactions contemplated hereby
will not violate, conflict with, or result in a breach of any provision of,
or constitute a default (with or without notice or lapse of time or both)
under, or result in the termination or modification of, or accelerate the
performance required by, or result in a right of termination, cancellation,
or acceleration of any obligation or the loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or assets of
AES or any of the AES Subsidiaries (any such violation, conflict, breach,
default, right of termination, modification, cancellation or acceleration,
loss or creation, a "Violation" with respect to AES, and such term when used
in ARTICLE 5 hereof having a correlative meaning with respect to Teletrak)
pursuant to or under (i) except as provided in Section 1.2 hereof, the
articles of incorporation, by-laws or similar constituent documents of AES,
(ii) subject to obtaining the AES Statutory Approvals and the receipt of the
AES Shareholders' Approval, any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license (collectively,
"Legal Requirements") of any Governmental Authority (as defined in Section
4.4(c) hereof) applicable to AES or (iii) subject to obtaining any necessary
third-party consents (the "AES Required Consents"), any note, bond, mortgage,
indenture, deed of trust, license, franchise, contract, lease or other
instrument or agreement (collectively, "Contracts") to which AES is a party
or by which it or any of its properties or assets may be bound or affected,
except for Violations that could not, individually or in the aggregate,
reasonably be expected to result in a AES Material Adverse Effect or prevent
or materially delay the consummation of the Merger.
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(c) STATUTORY APPROVALS. Other than for the filing and recordation of
appropriate merger or other documents as required by the MBCL, no
declaration, filing or registration with, or notice to or authorization,
consent or approval (collectively, "Governmental Filings and Approvals") of
any court, Federal, state, local, foreign or transnational governmental or
regulatory agency, body (including a stock exchange or other self-regulatory
body) or authority (each, a "Governmental Authority") is necessary for the
execution and delivery of this Agreement by AES or the consummation by AES of
the transactions contemplated hereby, except where the failure to make or
obtain such Governmental Filings and Approvals could not, individually or in
the aggregate, reasonably be expected to result in a AES Material Adverse
Effect or prevent or materially delay the consummation of the Merger (the
"AES Statutory Approvals").
(d) COMPLIANCE. AES is in compliance with all Legal Requirements of any
Governmental Authority applicable to its business and operations, except for
instances of noncompliance that could not, individually or in the aggregate,
reasonably be expected to result in a AES Material Adverse Effect or prevent
or materially delay the consummation of the Merger. AES has in effect all
permits, licenses, franchises and other similar governmental authorizations,
consents and approvals (collectively, "Permits") necessary to conduct its
business as presently conducted, except for the failure to have such Permits
that could not, individually or in the aggregate, reasonably be expected to
result in a AES Material Adverse Effect. There has occurred no default under
any Permit, except for defaults under Permits that could not, individually or
in the aggregate, reasonably be expected to result in a AES Material Adverse
Effect. No investigation or review by any Governmental Authority with respect
to AES is pending or, to the best knowledge of AES, threatened, nor has any
Governmental Authority indicated an intention to conduct any investigation or
review, other than, in each case, those the outcome of which could not,
individually or in the aggregate, reasonably be expected to result in a AES
Material Adverse Effect or prevent or materially delay the consummation of
the Merger.
Section 4.5. FINANCIAL STATEMENTS. The audited consolidated financial
statements for the fiscal years ended December 31, 1996 and 1997of AES have
been prepared in accordance with United States generally accepted accounting
principles ("GAAP") then in effect (except as may be indicated therein or in
the notes thereto) applied on a consistent basis and fairly present in all
material respects the financial position of AES as of the date thereofs and
the results of its operations, cash flows and shareholders' equity for the
periods then ended. Except for liabilities and obligations incurred in the
ordinary course of business consistent with past practice since the date of
the most recent balance sheet furnished to Teletrak and that could not,
individually or in the aggregate, reasonably be expected to result in a AES
Material Adverse Effect, AES does not have any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) required by
GAAP to be set forth on a balance sheet of AES or in the notes thereto. The
unauditied June 30, 1998 financial statements fairly present in all material
respects the financial position of AES as and the date thereof and the
results of its operations for the period then ended.
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Section 4.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1996, AES has conducted its business only in the ordinary course of business
consistent with past practice and there has not been, insofar as reasonably
can be foreseen, (i) a AES Material Adverse Effect; (ii) any damage to,
destruction or loss of any asset of AES (whether or not covered by insurance)
that could reasonably be expected to result in a AES Material Adverse Effect;
(iii) any material change by AES in its accounting methods, principles or
practices; (iv) any revaluation by AES of any of its assets having a AES
Material Adverse Effect; (v) any other action or event that would have
required the consent of Teletrak pursuant to ARTICLE 6 hereof had such action
or event occurred after the date of this Agreement and that could,
individually or in the aggregate, reasonably be expected to have a AES
Material Adverse Effect; (vi) any sale of a material amount of property or
capital stock of AES, except in the ordinary course of business; (vii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of AES's capital
stock; (viii) any repurchase, redemption, split, combination or
reclassification of any of AES's capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock; or (ix) (A) any
granting by AES to any officer of AES of any increase in compensation, except
in the ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of the date of the most
recent audited financial statements, (B) any granting by AES to any officer
of any increase in severance or termination pay, except as was required under
any employment, severance or termination agreements in effect as of the date
of the most recent audited financial statements or (C) any entry by AES into
any employment, severance or termination agreement with any officer.
Section 4.7. LITIGATION. There is no claim, suit, action or
proceeding (collectively, "Legal Proceedings") pending or, to the best
knowledge of AES, threatened against, relating to or affecting AES, except
those that could not, individually or in the aggregate, reasonably be
expected to result in a AES Material Adverse Effect or prevent or materially
delay the consummation of the Merger, nor is there any judgment, decree,
injunction, rule or order of any Governmental Authority or arbitrator
outstanding against, relating to or affecting AES having, or which could
reasonably be expected to have, any such effects.
Section 4.8. TAX MATTERS
(a) "Taxes", as used in this Agreement, means any United States
Federal, state, county, local, transnational or foreign taxes, charges, fees,
levies, or other assessments, including all net income, gross income, sales
and use, ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipt, capital stock, production, business and
occupation, disability, employment, payroll, license, estimated, stamp,
custom duties, severance or withholding taxes or charges imposed by any
Governmental Authority and includes any interest and penalties (civil or
criminal) on or additions to any such taxes. "Tax Return", as used in this
Agreement, means report, return or other information required to be supplied
to a Governmental Authority with respect to Taxes including, where permitted
or required, combined or consolidated returns for any group of Persons that
includes AES, or Teletrak or any of its Subsidiaries, as the case may be.
(b) (i) AES has filed (or there has been filed on its behalf) all
material Tax Returns required to be filed by it under applicable law and all
such Tax Returns were and are in
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all material respects complete and correct and were filed on a timely basis,
(ii) AES has, within the time and in the manner prescribed by applicable law,
paid all Taxes that were due and payable except for those contested in good
faith and for which adequate reserves have been taken, and except where any
failure to make such payment would not be reasonably likely to have a AES
Material Adverse Effect, (iii) AES has established on its books and records
reserves adequate to pay all unpaid Taxes in accordance with GAAP, (iv) AES
has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent
contractor, customer, creditor or other Person, except where any failure to
make such withholding would not be reasonably likely to have a AES Material
Adverse Effect, (v) AES has not executed any outstanding waivers, extensions
or comparable consents regarding the application of the statute of
limitations with respect to any Taxes or Tax Returns, (vi) no audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Returns of AES, and there is (A) no deficiency for
any Taxes proposed, asserted or assessed against AES that has not been
resolved and paid in full and (B) no dispute or claim concerning any Tax
liability of AES either (x) claimed or raised in writing by any Governmental
Authority or (y) as to which any officer, director or employee of AES who is
responsible for Tax matters has knowledge and (vii) AES has no liability for
Taxes of any Person other than AES, as a transferee or successor, by
contract, or otherwise.
Section 4.9. EMPLOYEE MATTERS.
(a) EMPLOYEE BENEFIT PLANS. There are no material employee benefit,
welfare or compensation plans or arrangements (written or oral) covering
current or former directors, officers of employees of AES ("AES Employee
Plans"). True, correct and complete copies of all written AES Employee Plans
have been provided to Teletrak.
(b) PAYMENTS RESULTING FROM MERGER. The consummation or announcement of
any transaction contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or further acts or events) result in any
payment (whether of severance pay, "change of control payment" (including any
gross-up payments) or otherwise) becoming due from AES or any successor
thereof to any officer, employee, former employee or director thereof.
(c) LABOR AGREEMENTS. AES is not a party to any collective bargaining
agreement or other labor agreement with any union or labor organization. To
the best knowledge of AES, there is no current union representation question
involving employees of AES, nor does AES know of any activity or proceeding
of any labor organization (or representative thereof) or employee group to
organize any such employees. (i) There is no unfair labor practice,
employment discrimination or other material complaint against AES pending, or
to the best knowledge of AES, threatened, (ii) there is no strike or lockout
or material dispute, slowdown or work stoppage pending, or to the best
knowledge of AES, threatened, against or involving AES, and (iii) there is no
Legal Proceeding pending or, to the best knowledge of AES, threatened, in
respect of which any director, officer, employee or agent of AES is or may be
entitled to claim indemnification from AES pursuant to its articles of
incorporation or by-laws or other similar constituent documents or as
provided in any indemnification agreements.
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Section 4.10. ENVIRONMENTAL PROTECTION.
(a) COMPLIANCE; PERMITS. AES is in compliance with all applicable
Environmental Laws (as defined in Section 4.10(e)(ii) hereof), except for
noncompliance which could not, individually or in the aggregate, reasonably
be expected to result in a AES Material Adverse Effect. AES has obtained or
has applied for all material environmental, health and safety Permits
(collectively, the "Environmental Permits") necessary for the conduct of
their operations, and all such Environmental Permits are in good standing or,
where applicable, a renewal application has been timely filed and is pending
agency or other governmental approval, and AES is in compliance with all
terms and conditions of the Environmental Permits, except for noncompliance
which could not, individually or in the aggregate, reasonably be expected to
result in a AES Material Adverse Effect.
(b) ENVIRONMENTAL CLAIMS. To the best knowledge of AES, there is no
Environmental Claim (as defined in Section 4.10(e)(i) hereof) pending (i)
against AES, (ii) against any Person whose liability for any Environmental
Claim has been retained or assumed by AES either contractually or by
operation of law, or (iii) against any real or personal property or
operations which AES owns, leases or manages, in whole or in part, except for
any such Claims which could not, individually or in the aggregate, reasonably
be expected to result in a AES Material Adverse Effect.
(c) RELEASES. There has been no Release (as defined in Section
4.10(e)(iv) hereof) of any Hazardous Material (as defined in Section
4.10(e)(iii) hereof) that could be reasonably likely to form the basis of any
Environmental Claim against AES, or against any Person whose liability for
any Environmental Claim has been retained or assumed by AES either
contractually or by operation of law, except for any Releases which could
not, individually or in the aggregate, reasonably be expected to result in a
AES Material Adverse Effect.
(d) PREDECESSORS. AES has no knowledge, with respect to any predecessor
of AES, of any Environmental Claim pending or threatened, or of any Release
of Hazardous Materials that could be reasonably likely to form the basis of
any Environmental Claim, except for those which could not, individually or in
the aggregate, reasonably be expected to result in a AES Material Adverse
Effect.
(e) As used in this Agreement:
(i) "Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters,
directives, claims, Liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any Person (or any
Governmental Authority) alleging potential liability (including
liability for enforcement, investigatory costs, cleanup costs,
governmental response costs, removal costs, remedial costs, natural
resources damages, property damages, personal injuries or penalties)
arising out of, based on or resulting from (A) the presence, or Release
or threatened Release into the environment, of any Hazardous Materials
at any location, whether or not owned, operated, leased or managed by
AES (for purposes of this Section 4.10), or by Teletrak or any of its
subsidiaries (for purposes of Section 5.10 hereof); or (B) any and all
claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from the presence or Release of
11
any Hazardous Materials.
(ii) "Environmental Laws" means all Federal, state, transnational,
foreign, or local Legal Requirements relating to pollution, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or protection of human
health as it relates to the environment including, without limitation,
Legal Requirements relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials.
(iii) "Hazardous Materials" means any pollutant, contaminant,
hazardous, radioactive or toxic substance, material, constituent or
waste, or any other waste, substance, chemical or material regulated
under any Environmental Law, including (1) petroleum, crude oil and any
fractions thereof, (2) natural gas, synthetic gas and any mixtures
thereof, (3) asbestos and/or asbestos-containing material, (4) radon
and (5) polychlorinated biphenyls ("PCBs"), or materials or fluids
containing PCBs.
(iv) "Release" means any release, spill, emission, leaking,
injection, deposit, disposal, discharge, dispersal, leaching or
migration into the atmosphere, soil, surface water, groundwater or
property.
Section 4.11. VOTE REQUIRED. The approval of this Agreement by the
holders of two-thirds (2/3) of the outstanding shares of AES Common Stock
(the "AES Shareholders' Approval") is the only vote of the holders of any of
the capital stock of AES required to approve this Agreement, the Merger and
the other transactions contemplated hereby.
Section 4.12. CONTRACTS. Except as set forth on Schedule 4.12 hereto
and copies of which were delivered to Teletrak, there are no Contracts that
are material to the business, financial condition or results of operations of
AES. AES is not in violation of or default under (nor does there exist any
condition which upon the passage of time or the giving of notice or both
would cause such a violation of or default under) any Contract to which it is
a party or by which it or any of its properties or assets is bound, except
for violations or defaults that could not, individually or in the aggregate,
reasonably be expected to result in a AES Material Adverse Effect.
Section 4.13. INTELLECTUAL PROPERTY. AES owns or is validly licensed
or otherwise has the right to use all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, service xxxx
rights, copyrights and other intellectual property rights and computer
programs that are material to the conduct of the business of AES as now
operated (collectively, "AES Intellectual Property Rights"). (i) No claims
are pending or, to the best knowledge of AES, threatened that AES is
infringing or otherwise adversely affecting the material rights of any Person
and (ii) to the best knowledge of AES, no Person is infringing the rights of
AES with respect to any material item of AES Intellectual Property Rights.
Section 4.14. BROKERS. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement.
12
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF TELETRAK AND HELM
Teletrak and Helm, jointly and severally, represent and warrant to AES
as follows:
Section 5.1. ORGANIZATION AND QUALIFICATION. Except as set forth on
Schedule 5.1 hereto, each of Teletrak, Helm and each of the Teletrak
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has all requisite corporate power and authority, and has been duly authorized
by all necessary approvals and orders, to own, lease and operate its assets
and properties to the extent owned, leased and operated and to carry on its
business as it is now being conducted. Each of Teletrak, Helm and the
Teletrak Subsidiaries is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its assets and properties makes such qualification
necessary, except in such jurisdictions where the failure to be so duly
qualified or licensed could not, individually or in the aggregate, reasonably
be expected to result in a material adverse effect on the business, assets,
condition (financial or otherwise), or results of operations of Teletrak (a
"Teletrak Material Adverse Effect") or of Helm (a "Helm Material Adverse
Effect") or prevent or materially delay the consummation of the Merger. True
and complete copies of the certificate of incorporation and by-laws of
Teletrak, as in full effect on the date hereof, have been furnished to AES.
Section 5.2. SUBSIDIARIES; INTERESTS IN OTHER PERSONS. Schedule 5.2
hereto sets forth a true and complete list of all Teletrak Subsidiaries and
other Persons in which Teletrak has a significant equity or other ownership
interest, including the name, state or country of organization of each such
Subsidiary or other Person and Teletrak's interest therein. Except as set
forth on Schedule 5.2, all of the issued and outstanding shares of capital
stock of each Teletrak Subsidiary are validly issued, fully paid,
non-assessable and free of preemptive rights, and are owned by Teletrak free
and clear of any Liens or limitations on Teletrak's voting rights, voting
trusts or proxies and there are no Equity Commitments in respect of such
Subsidiaries' capital stock. With respect to any Person in which Teletrak has
an interest that is not a Teletrak Subsidiary (i) except as set forth on
Schedule 5.2, neither Teletrak nor any Teletrak Subsidiary is liable,
directly or indirectly, for any obligations or liabilities of any such
Person; and (ii) neither Teletrak nor any Teletrak Subsidiary is obligated to
redeem or otherwise acquire any shares of such Person or to provide funds to
or make any investments in such Person in the form of loans, capital
contributions or guarantees.
Section 5.3. CAPITALIZATION. As of October 31, 1997, the authorized
capital stock of Teletrak consists solely of 80,000,000 shares of common
stock, par value $.01 per share, and 20,000,000 shares of preferred stock,
par value $.01 per share (the "Teletrak Preferred Stock"). As of the close of
business on December 31, 1997, (i) there were issued and outstanding
30,229,268 shares of Teletrak Common Stock and no shares of Teletrak
Preferred Stock, and (ii) no shares of Teletrak Common Stock were held in
treasury or by subsidiaries. Except as set forth on Schedule 5.3 hereto,
there are no outstanding Equity Commitments in respect of any of the capital
stock or other voting securities of Teletrak. All of the issued and
outstanding shares of capital stock of Teletrak are, and any shares of
Teletrak Common Stock issued pursuant to Teletrak Equity Commitments, will
be, duly authorized, validly issued, fully paid, non-assessable
13
and free of preemptive rights. There are no outstanding stock appreciation
rights of Teletrak or other rights of Teletrak redeemable for cash. Except as
set forth on Schedule 5.3, there are no bonds, debentures, notes or other
indebtedness of Teletrak having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on
which shareholders of Teletrak may vote. Except as set forth above, since
December 31, 1997, no shares of capital stock or other voting securities of
Teletrak were issued, reserved for issuance, issuable or outstanding.
Section 5.4. AUTHORITY; NON-CONTRAVENTION; STATUTORY APPROVALS; COMPLIANCE
(a) AUTHORITY. Each of Teletrak, Helm and Acquisition Sub has all
requisite power and authority to execute and deliver this Agreement, and,
subject to the Teletrak Statutory Approvals (as defined in Section 5.4(c)
hereof), to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation by Teletrak, Helm and
Acquisition Sub of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Teletrak, Helm
and Acquisition Sub, subject to obtaining the Teletrak Shareholders' Approval
with respect to the transactions contemplated by Section 7.7 hereof. This
Agreement has been duly and validly executed and delivered by Teletrak, Helm
and Acquisition Sub, assuming the due authorization, execution and delivery
hereof by the other signatories hereto, constitutes the valid and binding
obligation of Teletrak, Helm and Acquisition Sub enforceable against each of
them in accordance with its terms, except as such enforceability may be
limited by (i) bankruptcy laws and other similar laws affecting creditors'
rights generally and (ii) general principles of equity, regardless of whether
asserted in a proceeding in equity or at law. The Boards of Directors of
Teletrak, Helm and Acquisition Sub have determined that it is advisable and
in the best interest of Teletrak's and Acquisition Sub's shareholders and
Teletrak and Acquisition Sub for Teletrak and Acquisition Sub to effect the
Merger upon the terms and conditions of this Agreement.
(b) NON-CONTRAVENTION. The execution and delivery of this Agreement by
Teletrak, Helm and Acquisition Sub does not, and the consummation of the
transactions contemplated hereby will not result in a Violation pursuant to
or default under (i) the certificate of incorporation, by-laws or similar
constituent documents of Teletrak, Helm or any of the Teletrak Subsidiaries,
(ii) subject to obtaining the Teletrak Statutory Approvals, any Legal
Requirement of any Governmental Authority applicable to Teletrak, Helm or any
of the Teletrak Subsidiaries or (iii) subject to obtaining any necessary
third-party consents (the "Teletrak Required Consents"), any Contract to
which Teletrak, Helm or any of the Teletrak Subsidiaries is a party or by
which it or any of its properties or assets may be bound or affected, except
for Violations that could not, individually or in the aggregate, reasonably
be expected to result in a
14
Teletrak Material Adverse Effect, a Helm Material Adverse Effect or prevent
or materially delay the consummation of the Merger.
(c) STATUTORY APPROVALS. Other than for applicable requirements, if
any, of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
Blue Sky Laws, and the filing and recordation of appropriate merger or other
documents as required by the MBCL, no Governmental Filings and Approvals of
any Governmental Authority is necessary for the execution and delivery of
this Agreement by Teletrak or Helm or the consummation by Teletrak or Helm of
the transactions contemplated hereby, except where the failure to make or
obtain such Governmental Filings and Approvals could not, individually or in
the aggregate, reasonably be expected to result in a Teletrak Material
Adverse Effect, a Helm Material Adverse Effect or prevent or materially delay
the consummation of the Merger (the "Teletrak Statutory Approvals").
(d) COMPLIANCE. Teletrak and the Teletrak Subsidiaries are in
compliance with all Legal Requirements of any Governmental Authority
applicable to its business and operations, except for instances of
noncompliance that could not, individually or in the aggregate, reasonably be
expected to result in a Teletrak Material Adverse Effect or prevent or
materially delay the consummation of the Merger. Teletrak and the Teletrak
Subsidiaries have in effect all Permits necessary to conduct their businesses
as presently conducted, except for the failure to have such Permits that
could not, individually or in the aggregate, reasonably be expected to result
in a Teletrak Material Adverse Effect. There has occurred no default under
any Permit, except for defaults under Permits that could not, individually or
in the aggregate, reasonably be expected to result in a Teletrak Material
Adverse Effect. No investigation or review by any Governmental Authority with
respect to Teletrak is pending or, to the best knowledge of Teletrak,
threatened, nor has any Governmental Authority indicated an intention to
conduct any investigation or review, other than, in each case, those the
outcome of which could not, individually or in the aggregate, reasonably be
expected to result in a Teletrak Material Adverse Effect or prevent or
materially delay the consummation of the Merger.
Section 5.5. REPORTS AND FINANCIAL STATEMENTS. All filings required
to be made, or otherwise made, by Teletrak since January 1, 1995 through the
date hereof under the Securities Act of 1933, as amended (the "Securities
Act") and the Exchange Act, have been filed with the Securities and Exchange
Commission (the "SEC"), including all forms, statements, reports and other
documents (as such documents may have since the time of their filing been
amended or supplemented through the date hereof, the "Teletrak SEC Reports").
As of their respective filing dates, the Teletrak SEC Reports (i) complied in
all material respects with the Securities Act or the Exchange Act, as the
case may be, and (ii) did not contain any untrue statement of a material fact
or omit 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 made, not misleading. To the extent so required by applicable law,
such Teletrak SEC Reports have been subsequently updated and/or amended.
Teletrak "meets the requirements for use of Form S-3" as such phrase is used
in Instruction C of Form S-3 under the Securities Act and qualifies as an
"inactive entity" as defined in Rule 3-11 of SEC Regulation S-X. The
consolidated financial statements and interim financial statements of
Teletrak included in the Teletrak SEC Reports complied as to form in all
material respects with applicable accounting rules and regulations of the SEC
in respect thereto then in effect, have been prepared in accordance with GAAP
then in effect (except as may be indicated therein or in the notes thereto)
15
applied on a consistent basis and fairly present in all material respects the
consolidated financial positions of Teletrak and the Teletrak Subsidiaries as
of the dates thereof and the consolidated results of its operations, cash
flows and shareholders' equity for the periods then ended, subject, in the
case of the interim financial statements, to normal, recurring audit
adjustments which were not material in amount. Teletrak does not have any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise).
Section 5.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
expressly contemplated by this Agreement and except as set forth on Schedule
5.6 hereto, since December 31, 1996, Teletrak and each of the Teletrak
Subsidiaries have conducted their business only in the ordinary course of
business consistent with past practice and there has not been, insofar as
reasonably can be foreseen, (i) a Teletrak Material Adverse Effect; (ii) any
material change by Teletrak in its accounting methods, principles or
practices; (iii) any other action or event that would have required the
consent of AES pursuant to ARTICLE 6 hereof had such action or event occurred
after the date of this Agreement and that could, individually or in the
aggregate, reasonably be expected to result in a Teletrak Material Adverse
Effect; (iv) any sale of capital stock of Teletrak or any of the Teletrak
Subsidiaries; (v) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect to
any of Teletrak's capital stock; (vi) any repurchase, redemption, split,
combination or reclassification of any of Teletrak's capital stock or any
issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock; or
(vii) (A) any granting by Teletrak to any officer of Teletrak of any increase
in compensation, except in the ordinary course of business consistent with
prior practice or as was required under employment agreements in effect as of
the date of the most recent financial statements included in the Teletrak SEC
Reports, (B) any granting by Teletrak to any officer of any increase in
severance or termination pay, except as was required under any employment,
severance or termination agreements in effect as of the date of the most
recent financial statements included in the Teletrak SEC Reports or (C) any
entry by Teletrak into any employment, severance or termination agreement
with any officer.
Section 5.7. LITIGATION. Except as set forth on Schedule 5.7 hereto,
there is no Legal Proceeding pending or, to the best knowledge of Teletrak,
threatened against, relating to or affecting Teletrak or any of the Teletrak
Subsidiaries, nor is there any judgment, decree, injunction, rule or order of
any Governmental Authority or arbitrator outstanding against, relating to or
affecting Teletrak or any of the Teletrak Subsidiaries.
Section 5.8. TAX MATTERS. Except as set forth on Schedule 5.8 hereto:
(i) Teletrak and each of the Teletrak Subsidiaries have filed (or there has
been filed on its behalf) all material Tax Returns required to be filed by
each of them under applicable law and all such Tax Returns were and are in
all material respects complete and correct and were filed on a timely basis,
(ii) Teletrak and each of the Teletrak Subsidiaries have, within the time and
in the manner prescribed by applicable law, paid all Taxes that were due and
payable except for those contested in good faith and for which adequate
reserves have been taken, and except where any failure to make such payment
would not be reasonably likely to have a Teletrak Material Adverse Effect,
(iii) Teletrak and the Teletrak Subsidiaries have established on their books
and records reserves adequate to pay all unpaid Taxes in accordance with
GAAP, (iv) Teletrak and each of the Teletrak Subsidiaries have withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, customer,
16
creditor or other Person, except where any failure to make such withholding
would not be reasonably likely to have a Teletrak Material Adverse Effect,
(v) neither Teletrak nor any of the Teletrak Subsidiaries has executed any
outstanding waivers, extensions or comparable consents regarding the
application of the statute of limitations with respect to any Taxes or Tax
Returns, (vi) no audits or other administrative proceedings or court
proceedings are presently pending with regard to any Taxes or Tax Returns of
Teletrak or any of the Teletrak Subsidiaries, and there is (A) no deficiency
for any Taxes proposed, asserted or assessed against Teletrak or any of the
Teletrak Subsidiaries that has not been resolved and paid in full and (B) no
dispute or claim concerning any Tax liability of Teletrak or any Subsidiary
either (x) claimed or raised in writing by any Governmental Authority or (y)
as to which any officer, director or employee of Teletrak or any Subsidiary
who is responsible for Tax matters has knowledge, and (vii) neither Teletrak
nor any of the Teletrak Subsidiaries has any liability for Taxes of any
Person other than Teletrak and the Teletrak Subsidiaries as a transferee or
successor, by contract, or otherwise.
Section 5.9. EMPLOYEE MATTERS
(a) EMPLOYEE BENEFIT PLANS. There are no material employee benefit,
welfare or compensation plans or arrangements (written or oral) covering
former or current officers, directors or employees of Teletrak or its
Subsidiaries.
(b) PAYMENTS RESULTING FROM MERGER. (i) Other than as expressly
contemplated by this Agreement, the consummation or announcement of any
transaction contemplated by this Agreement will not (either alone or upon the
occurrence of any additional or further acts or events) result in any payment
(whether of severance pay, "change of control payment" (including any
gross-up payments) or otherwise) becoming due from Teletrak or any of the
Teletrak Subsidiaries or any successor thereto to any officer, employee,
former employee or director thereof.
(c) LABOR AGREEMENTS. Neither Teletrak nor any of the Teletrak
Subsidiaries is a party to any collective bargaining agreement or other labor
agreement with any union or labor organization. To the best knowledge of
Teletrak, there is no current union representation question involving
employees of Teletrak or any of the Teletrak Subsidiaries, nor does Teletrak
know of any activity or proceeding of any labor organization (or
representative thereof) or employee group to organize any such employees.
There is no unfair labor practice, employment discrimination or other
material complaint against Teletrak or any of the Teletrak Subsidiaries
pending, or to the best knowledge of Teletrak, threatened and there is no
Legal Proceeding pending or, to the best knowledge of Teletrak, threatened,
in respect of which any director, officer, employee or agent of Teletrak or
any of the Teletrak Subsidiaries is or may be entitled to claim
indemnification from Teletrak or such Subsidiary pursuant to their respective
certificates of incorporation or by-laws or other similar constituent
documents or as provided in any indemnification agreements.
Section 5.10. ENVIRONMENTAL PROTECTION
(a) COMPLIANCE; PERMITS. Teletrak and each of the Teletrak
Subsidiaries is in compliance with all applicable Environmental Laws.
(b) ENVIRONMENTAL CLAIMS. To the best knowledge of Teletrak,
there is no
17
Environmental Claim pending (i) against Teletrak or any of the Teletrak
Subsidiaries, (ii) against any Person whose liability for any Environmental
Claim has been retained or assumed by Teletrak or any of the Teletrak
Subsidiaries either contractually or by operation of law, or (iii) against
any real or personal property or operations which Teletrak or any of the
Teletrak Subsidiaries owns, leases or manages, in whole or in part.
(c) RELEASES. There has been no Releases of any Hazardous Material that
could be reasonably likely to form the basis of any Environmental Claim
against Teletrak or any of the Teletrak Subsidiaries, or against any Person
whose liability for any Environmental Claim has been retained or assumed by
Teletrak or any of the Teletrak Subsidiaries either contractually or by
operation of law.
(d) PREDECESSORS. Teletrak has no knowledge, with respect to any
predecessor of Teletrak or any of the Teletrak Subsidiaries, of any
Environmental Claim.
Section 5.11. CONTRACTS. There are no Contracts that are material to
the business, financial condition or results of operations of Teletrak.
Neither Teletrak nor any of the Teletrak Subsidiaries is in violation of or
in default under (nor does there exist any condition which upon the passage
of time or the giving of notice or both would cause such a violation of or
default under) any Contract to which it is a party or by which it or any of
its properties or assets is bound.
Section 5.12. INTELLECTUAL PROPERTY. Teletrak or a Teletrak
Subsidiary owns or is validly licensed or otherwise has the right to use all
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service xxxx rights, copyrights and other intellectual
property rights and computer programs that are material to the conduct of the
business of Teletrak and the Teletrak Subsidiaries as now operated, taken as
a whole (collectively, "Teletrak Intellectual Property Rights"). No claims
are pending or, to the best knowledge of Teletrak, threatened that Teletrak
or a Teletrak Subsidiary is infringing or otherwise adversely affecting the
material rights of any Person and to the best knowledge of Teletrak, no
Person is infringing the rights of Teletrak or any Teletrak Subsidiary with
respect to any material item of Teletrak Intellectual Property Rights.
Section 5.13. BROKERS. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement.
Section 5.14. INTERESTED PARTY TRANSACTIONS. Except as contemplated
by this Agreement and except as set forth on Exhibit 5.6, no event has
occurred that would be required to be reported as a Certain
18
Relationship or Related Transaction pursuant to Item 404 of
Regulation S-K promulgated by the SEC.
Section 5.15. VOTE REQUIRED. The approval of the transactions
described in Section 7.7 hereof by the holders of a majority of the
outstanding shares of Teletrak Common Stock (the "Teletrak Shareholders'
Approval") has been obtained by written consent in the form of Exhibit A
hereto and is the only vote of the holders of any capital stock required to
approve this Agreement, the Merger and the other transactions contemplated
hereby. Helm is the beneficial owner of a majority of the Teletrak Common
Stock and covenants and agrees, to the extent such consent or vote is legally
required, to consent or vote in favor of the adoption of this Agreement, the
Merger and the other transactions contemplated hereby.
ARTICLE 6
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1. COVENANTS OF THE PARTIES. From the date hereof and
through the Effective Time or the earlier termination of this Agreement in
accordance with ARTICLE 9 hereof, AES and Teletrak each agree, each as to
itself and as to each of the Teletrak Subsidiaries, and Helm agrees as to
Teletrak and the Teletrak Subsidiaries as the case may be, as follows, except
as expressly permitted or contemplated by this Agreement by Sections 7.6 and
7.7 hereto, or to the extent the other parties hereto shall otherwise consent
in writing:
(a) ORDINARY COURSE OF BUSINESS. AES and Teletrak shall, and shall
cause its Subsidiaries to, carry on their respective businesses in the usual
and ordinary course, consistent with past practice, and use all commercially
reasonable efforts to preserve intact their present business organizations,
preserve the goodwill and relationships with customers, suppliers and others
having business dealings with them and, subject to prudent management of
workforce needs and ongoing programs currently in force, keep available the
services of their present officers and employees. Neither AES nor Teletrak
shall, nor shall any party permit any of its Subsidiaries to, enter into a
new line of business or make any change in the line of business it engages in
as of the date hereof involving any material investment of assets or
resources or any material exposure to liability or loss, in the case of AES,
to AES and in the case of Teletrak, to Teletrak and the Teletrak Subsidiaries.
(b) CHARTER DOCUMENTS. Neither AES nor Teletrak shall amend or propose
to amend its respective certificate or articles of incorporation, or by-laws
except as expressly contemplated in this Agreement.
(c) NO ACQUISITIONS. Neither AES nor Teletrak shall, nor shall either
of them permit any of its Subsidiaries to, acquire, or publicly propose to
acquire, or agree to acquire, by merger or consolidation with, or by purchase
or otherwise, a substantial equity interest in or a substantial portion of
the assets of, any business or any Person, nor shall any party acquire or
agree to acquire a material amount of assets of any other Person other than
in the ordinary course of business consistent with past practice.
(d) ACCOUNTING. Neither AES nor Teletrak shall, nor shall either of
them permit any of its Subsidiaries to, make any changes in their accounting
methods or practices,
19
except as required by law, rule, regulation or GAAP.
(e) TAX-FREE STATUS. Neither AES nor Teletrak shall, nor shall either
of them permit any of its Subsidiaries to, take any actions which would, or
would be reasonably likely to, adversely affect the status of the Merger as a
tax-free transaction under Section 368(a) of the Code, and each party hereto
shall use all reasonable efforts to achieve such result.
(f) AFFILIATE TRANSACTIONS. Except as expressly contemplated by this
Agreement, neither AES nor Teletrak shall, nor shall either of them permit
any of its Subsidiaries to, enter into any material agreement or arrangement
with any of their respective officers, directors, Affiliates or Associates
(other than wholly-owned Subsidiaries) on terms materially less favorable to
such party than could be reasonably expected to have been obtained with an
unaffiliated third party on an arm's-length basis.
(g) COOPERATION, NOTIFICATION. Each party shall, and shall cause its
Subsidiaries to, (i) confer on a regular and frequent basis with one or more
representatives of the other party to discuss, subject to applicable law,
material operational matters and the general status of its ongoing
operations; (ii) promptly notify the other party of any significant changes
in its business, properties, assets, condition (financial or otherwise),
results of operations or prospects; (iii) advise the other party of any
change or event which has had or, insofar as reasonably can be foreseen, is
reasonably likely to result in, in the case of AES, a AES Material Adverse
Effect or, in the case of Teletrak, a Teletrak Material Adverse Effect; and
(iv) promptly provide the other party with copies of all filings made by such
party or any of its Subsidiaries with any court or other Governmental
Authority in connection with this Agreement and the transactions contemplated
hereby.
(h) THIRD-PARTY CONSENTS. AES shall use all commercially reasonable
efforts to obtain all AES Required Consents. AES shall promptly notify
Teletrak of any failure or prospective failure to obtain any such consents
and, if requested by Teletrak, shall provide copies of all AES Required
Consents obtained by AES to Teletrak. Teletrak shall, and shall cause its
Subsidiaries to, use all commercially reasonable efforts to obtain all
Teletrak Required Consents. Teletrak shall promptly notify AES of any failure
or prospective failure to obtain any such consents and, if requested by AES,
shall provide copies of all Teletrak Required Consents obtained by Teletrak
to AES.
(i) NO BREACH, ETC. No party shall, nor shall any party permit any of
its Subsidiaries to, willfully take any action that would or is reasonably
likely to result in a material breach of any provision of this Agreement, or
in any of its representations and warranties set forth in this Agreement,
being untrue on and as of the Closing Date.
(j) DIVIDENDS. Neither AES nor Teletrak shall (i) declare or pay any
dividends on or make other distributions in respect of any of its capital
stock; (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of, or in substitution for, shares of its capital stock; or (iii)
redeem, repurchase or otherwise acquire any shares of its capital stock.
(k) ISSUANCE OF SECURITIES. Neither AES nor Teletrak shall issue, agree
to issue, deliver, sell, award, pledge, dispose of or otherwise encumber or
authorize or propose the
20
issuance, delivery, sale, award, pledge, disposal or other encumbrance of,
any shares of their capital stock of any class or any securities convertible
into or exchangeable for, or any rights, warrants or options to acquire, any
such shares or convertible or exchangeable securities.
(l) CAPITAL EXPENDITURES. Teletrak shall not, nor shall Teletrak
permit any of its Subsidiaries to, make any capital expenditures.
(m) CONTRACTS. Neither AES nor Teletrak shall, except in the ordinary
course of business consistent with past practice, modify, amend, terminate,
renew or fail to use reasonable business efforts to renew any material
Contract to which such party or any of its Subsidiaries is a party or waive,
release or assign any material rights or claims.
ARTICLE 7
ADDITIONAL AGREEMENTS
Section 7.1. ACCESS TO INFORMATION. Upon reasonable notice, each
party shall, and shall cause its Subsidiaries to, afford to the officers,
directors, employees, accountants, counsel, investment bankers, financial
advisors and other representatives of the other (collectively,
"Representatives") reasonable access, during normal business hours throughout
the period from the date hereof through the Effective Time, to all of its
properties, books, contracts, commitments and records (including, but not
limited to, Tax Returns), to make such investigation as each party shall
reasonably request (including the ability to have discussions with suppliers
and customers of each party) and, during such period, each party shall, and
shall cause its Subsidiaries to, furnish promptly to the other (i) access to
each report, schedule and other document filed or received by it or any of
its Subsidiaries pursuant to the requirements of Federal or state securities
laws or filed with or sent to the SEC, the Food and Drug Administration, or
any other Federal, state or foreign regulatory agency or commission, and (ii)
access to all information concerning themselves, their Subsidiaries,
directors, officers and shareholders and such other matters as may be
reasonably requested by the other party in connection with any filings,
applications or approvals required or contemplated by this Agreement or for
any other reason related to the transactions contemplated by this Agreement.
Each party shall, and shall cause its Subsidiaries and Representatives to,
hold in strict confidence all documents and information concerning the other
furnished to it in connection with the transactions contemplated by this
Agreement in accordance with the Confidentiality Agreement, between AES and
Teletrak, as it may be amended from time to time (the "Confidentiality
Agreement").
Section 7.2. REGULATORY MATTERS.
REGULATORY APPROVALS. Each party hereto shall cooperate and use its
best efforts to promptly prepare and file all necessary documentation, to
effect all necessary applications, notices, petitions, filings and other
documents, and to use all commercially reasonable efforts to file and obtain
all Governmental Filings and Approvals of all Governmental Authorities
necessary to consummate the transactions contemplated by this Agreement,
including, without limitation, the AES Statutory Approvals and the Teletrak
Statutory Approvals.
Section 7.3. PUBLIC ANNOUNCEMENTS. Subject to each party's disclosure
obligations imposed by law and securities association listing applications,
AES, Helm and
21
Teletrak will consult and cooperate with each other in the development and
distribution of all news releases and other public information disclosures
with respect to this Agreement or any of the transactions contemplated hereby
and shall not issue any public announcement or statement with respect hereto
or thereto without the consent of the other party (which consent shall not be
unreasonably withheld).
Section 7.4. NO SOLICITATIONS.
(a) Prior to the Effective Time and consummation of the other
transactions contemplated by this Agreement, Helm, Teletrak and AES shall
not, and each shall not authorize or permit any of its Representatives,
directly or indirectly, (i) to initiate, solicit or encourage (including by
way of furnishing information), or take any action to facilitate, any
inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, a Business Combination Proposal (as defined below) or
(ii) participate in any discussions or negotiations regarding, or provide any
non-public information to any Person relating to, any Business Combination
Proposal (iii) agree to, approve or recommend any Business Combination
Proposal. For purposes of this Agreement, "Business Combination Proposal"
means any proposal or offer from any Person (other than a party hereto)
relating to any direct or indirect acquisition or purchase of 20% or more of
the assets or 20% or more of any class of outstanding equity securities of
Teletrak or AES, as the case may be, any tender offer or exchange offer
which, if consummated, would result in any person beneficially owning 20% or
more of any class of equity securities of Teletrak or AES, as the case may
be, or any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Teletrak or AES, as
the case may be, other than the transactions contemplated by this Agreement.
(b) In addition to the obligations of Teletrak and AES set forth in
paragraph (a) of this Section 7.4, Teletrak or AES, as the case may be, shall
immediately advise the other party hereto orally and in writing (within 24
hours after the receipt thereof) of any request for confidential information
or of any Business Combination Proposal or any inquiry regarding the making
of a Business Combination Proposal and the material terms and the conditions
of such request, Business Combination Proposal or inquiry. Teletrak or AES,
as the case may be, will, to the extent reasonably practicable, keep the
other party hereto fully informed of the status and details (including
amendments or proposed amendments) of any such request, Business Combination
Proposal, or inquiry.
Section 7.5. TELETRAK BOARD OF DIRECTORS. Teletrak's Board of
Directors will take such action as may be necessary to increase the number of
directors comprising the Board of Directors of Teletrak at the Effective Time
to six, four of whom shall be designated by AES and two of whom shall be
designated by Helm, prior to the Effective Time. Helm shall not cause, and
shall use its best efforts not to permit, the removal of any of the directors
designated by AES. In the event that any designee of AES shall resign or
cannot otherwise continue to serve as a director, the remaining designees of
AES shall designate a replacement therefor and, upon such designation,
Teletrak and Helm shall use their best efforts to cause the appointment
and/or election of such designated replacement to the Board of Directors.
Section 7.6. RELATED TRANSACTIONS. Simultaneously with Closing, the
Persons listed on Schedule 7.6A hereto shall purchase, and Teletrak shall
sell to such Persons, in the amounts set forth next to their respective names
on Schedule 7.6A an aggregate of 1,000,000
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additional shares of unregistered and restricted Teletrak Common Stock and
warrants ("Warrants") to purchase up to an aggregate of 500,000 shares of
Teletrak Common Stock at an exercise price of $2.00 per share for a period of
three years, and otherwise having such terms as are contained in the form of
Warrant attached hereto as Exhibit B. Simultaneously with Closing, Xxxxxxx X.
Xxxxxxxx and/or certain other management shareholders of Teletrak listed on
Schedule 7.6B hereto shall purchase, and Teletrak shall sell to such Persons,
an aggregate of 250,000 unregistered and restricted shares of Teletrak Common
Stock and 125,000 Warrants (collectively with purchase by the Persons set
forth on Schedule 7.6A, the "Related Transactions"). The purchase price for
the shares of Teletrak Common Stock and Warrants to be issued in the Related
Transactions will be $0.50 in the aggregate for each share of Teletrak Common
Stock and 0.5 Warrant purchased. Teletrak shall also issue 500,000 Warrants
to the Old Teletrak Warrant Holders (as defined in Section 7.7 hereof)
against cancellation of such persons' warrants in the amounts set forth on
Schedule 7.6C.
Section 7.7. STOCK SPLIT; DISTRIBUTION; NAME CHANGE; FILING OF
INFORMATION STATEMENT. Immediately prior to the Effective Time, Teletrak (i)
shall effect a reverse stock split and recapitalization such that the total
number of shares of Teletrak Common Stock outstanding immediately prior to
the Effective Time will be 2,522,927 (the "Stock Split"), (ii) will
distribute Warrants (the "Distribution") to all holders of record of Teletrak
Common Stock at the rate of 0.5 Warrants for each share of Teletrak Common
Stock outstanding (after giving effect to the Stock Split) and (iii) will
effect a corporate name change (the "Name Change") to "Teletrak Environmental
Systems, Inc." Teletrak and Helm shall take all actions necessary to effect
the foregoing including, without limitation, Helm consenting to the Stock
Split, the Distribution and the Name Change, amending the certificate of
incorporation of Teletrak, preparing, filing and mailing an Information
Statement pursuant to Regulation 14C and Rule 14f-1 of the Securities
Exchange Act of 1934, as amended and mailing the notice required pursuant to
Section 228 of the Delaware General Corporation Law (the "Information
Statement"). After giving effect to the Stock Split, the Distribution, the
Related Transactions and the Merger, the capitalization of Teletrak shall be
as set forth on Exhibit C hereto (the "Post-Closing Capitalization"). Helm
agrees to surrender such number of shares of Teletrak Common Stock, warrants
and other securities of Teletrak currently owned by Helm, and Teletrak shall
take all other actions, as are necessary to achieve the Post-Closing
Capitalization including, without limitation, obtaining waivers and releases
of all holders of currently outstanding warrants (the "Old Teletrak Warrant
Holders") to purchase Teletrak common stock in form satisfactory to AES
cancelling such warrants.
Section 7.8. EXPENSES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses; PROVIDED, HOWEVER, that Teletrak shall pay
or reimburse AES and its shareholders for their expenses if the Merger is
consummated, and shall pay for the costs of printing and mailing the
Information Statement, new stock certificates and related documents.
Section 7.9. BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each of the parties agrees to use best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper
or advisable under applicable law to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers,
23
consents and approvals from Governmental Authorities and the making of all
necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Authority, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement, including seeking to have any
stay or temporary restraining order entered by any court or other
Governmental Authority vacated or reversed, and (iv) the execution and
delivery of any additional instruments necessary to consummate the
transactions contemplated by, and to fully carry out the purposes of, this
Agreement.
ARTICLE 8
CONDITIONS
Section 8.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing Date of the
following conditions, except, to the extent permitted by applicable law, that
any of such conditions may be waived in writing pursuant to Section 9.5
hereof by the joint action of the parties hereto:
(a) SHAREHOLDER APPROVAL. The AES Shareholders' Approval shall have
been obtained.
(b) NO INJUNCTION. No temporary restraining order or preliminary or
permanent injunction or other order by any Federal, state or foreign court or
other legal or regulatory restraint or prohibition preventing consummation of
the Merger shall have been issued and be continuing in effect, nor shall any
proceeding brought by a Governmental Authority seeking any of the foregoing
be pending, nor shall there be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger which makes the consummation of the Merger illegal, and the Merger and
the other transactions contemplated hereby shall not have been prohibited
under any applicable Federal or state law or regulation.
(c) STATUTORY APPROVALS. The AES Statutory Approvals and the Teletrak
Statutory Approvals shall have been obtained at or prior to the Effective
Time.
(d) OTC BULLETIN BOARD. The shares of Teletrak Common Stock to be
issued pursuant to the Merger and this Agreement (including, without
limitation, shares reserved for issuance upon exercise of the Warrants) shall
have been approved for quotation on The OTC Bulletin Board.
Section 8.2. CONDITIONS TO OBLIGATION OF TELETRAK TO EFFECT THE
MERGER. The obligation of Teletrak to effect the Merger shall be further
subject to the satisfaction, on or prior to the Closing Date, of the
following additional conditions, except as any of such conditions may be
waived by Teletrak in writing pursuant to Section 9.4 hereof:
(a) PERFORMANCE OF OBLIGATIONS OF AES. AES shall have performed in all
material respects its agreements and covenants contained in or contemplated
by this Agreement
24
required to be performed by it at or prior to the Effective Time.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of AES set forth in this Agreement shall be true and correct (i) on and as of
the date hereof and (ii) on and as of the Closing Date with the same effect
as though such representations and warranties had been made on and as of the
Closing Date (except for representations and warranties that expressly speak
only as of a specific date or time other than the date hereof or the Closing
Date which need only be true and correct as of such date or time) except in
each of cases (i) and (ii) for (x) changes expressly contemplated by this
Agreement, and (y) such failures of representations or warranties to be true
and correct which could not, individually or in the aggregate, reasonably be
expected to result in a AES Material Adverse Effect.
(c) AES REQUIRED CONSENTS. The AES Required Consents shall have been
obtained.
(d) EXEMPTION FROM SECURITIES ACT. The issuance of the Teletrak Common
Stock pursuant to this Agreement shall, based upon information provided to
Teletrak by AES and its shareholders, qualify as an offering exempt from
registration under the Securities Act pursuant to Regulation D promulgated
under Section 4(2) of the Securities Act and with the requirements of all
other regulations currently in effect relating to "private offerings" of the
type made by Teletrak hereunder and AES shall have distributed all materials
to its shareholders which conform with and satisfy the above requirements.
Any issuance by Teletrak of Teletrak Common Stock hereunder to any of the AES
shareholders shall, based upon information provided by AES and its
shareholders, qualify as an offering exempt from registration under the
securities laws, rules and regulations of any of the Teletrak in which any of
the AES shareholders reside.
Section 8.3. CONDITIONS TO OBLIGATION OF AES TO EFFECT THE MERGER.
The obligation of AES to effect the Merger shall be further subject to the
satisfaction, on or prior to the Closing Date, of the following additional
conditions, except as any of such conditions may be waived by AES in writing
pursuant to Section 9.4 hereof:
(a) PERFORMANCE OF OBLIGATIONS OF TELETRAK. Teletrak (and/or the
appropriate Subsidiary) shall have performed in all material respects its
agreements and covenants contained in or contemplated by this Agreement
required to be performed at or prior to the Effective Time.
(b) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Teletrak set forth in this Agreement shall be true and correct (i) on and
as of the date hereof and (ii) on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as
of the Closing Date (except for representations and warranties that expressly
speak only as of a specific date or time other than the date hereof or the
Closing Date which need only be true and correct as of such date or time)
except in each of cases (i) and (ii) for (x) changes expressly contemplated
by this Agreement and (y) such failures of representations or warranties to
be true and correct which could not, individually or in the aggregate,
reasonably be expected to result in a Teletrak or Helm Material Adverse
Effect.
(c) STOCK SPLIT; DISTRIBUTION; NAME CHANGE. The Stock Split, the
Distribution and the Name Change shall have been effected by Teletrak and
duly approved by the Teletrak shareholders.
25
(d) TELETRAK REQUIRED CONSENTS. The Teletrak Required Consents shall
have been obtained.
(e) EXEMPTION FROM SECURITIES ACT. The issuance of the Teletrak Common
Stock pursuant to this Agreement shall, based upon information provided to
Teletrak by AES and its shareholders, qualify as an offering exempt from
registration under the Securities Act pursuant to Regulation D promulgated
under Section 4(2) of the Securities Act of 1933, as amended, and with the
requirements of all other regulations currently in effect relating to
"private offerings" of the type made by Teletrak hereunder and AES shall have
distributed all materials to its shareholders which conform with and satisfy
the above requirements. Any issuance by Teletrak of Teletrak Common Stock
hereunder to any of the AES shareholders shall, based upon information
provided by AES and its shareholders, qualify as an offering exempt from
registration under the securities laws, rules and regulations of any of the
States in which any of the AES shareholders reside.
ARTICLE 9
TERMINATION, AMENDMENT AND WAIVER
Section 9.1. TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date, whether before or after approval by the
shareholders of the respective parties hereto contemplated by this Agreement,
only:
(a) by mutual written consent of the Boards of Directors of AES and
Teletrak;
(b) by any party hereto, by written notice to the other parties, if the
Effective Time shall not have occurred on or before September 30, 1998 ;
PROVIDED, HOWEVER, that the right to terminate the Agreement under this
Section 9.1(b) shall not be available to any party whose failure to fulfill
any obligation or condition under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such
date;
(c) by any party hereto, if any foreign, state or Federal law, order,
rule or regulation is adopted or issued, which has the effect, as supported
by the written opinion of outside counsel for such party, of prohibiting the
Merger, or by any party hereto if any court of competent jurisdiction or any
Governmental Authority in the United States or any State shall have issued an
order, judgment, decree or ruling or taken any action permanently
restraining, enjoining or otherwise prohibiting the Merger, and such order,
judgment, decree or ruling shall have become final and nonappealable;
Section 9.2. EFFECT OF TERMINATION. In the event of termination of
this Agreement by either AES or Teletrak pursuant to Section 9.1 hereof, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of either AES, Teletrak or Subsidiary or their
respective officers or directors hereunder, except that the agreement
contained in the last sentence of Section 7.1 hereof, Section 9.1, this
Section 9.2 and ARTICLES 10 and 11 hereof shall survive the termination;
PROVIDED, HOWEVER, nothing herein
26
shall relieve any party of liability for any breach of the provisions of this
Agreement.
Section 9.3. AMENDMENT. This Agreement may be amended by the parties
hereto (by action taken or authorized by their respective Boards of
Directors), at any time before or after approval hereof by the shareholders
of AES and prior to the Effective Time, but after such approval, no such
amendment shall (i) alter or change the Ratio, (ii) alter or change any of
the terms and conditions of this Agreement if any of the alterations or
changes, alone or in the aggregate, would materially adversely affect the
rights of holders of AES Common Stock or Teletrak Common Stock, or (iii)
alter or change any term of the certificate of incorporation of Teletrak as
approved by the shareholders of Teletrak, except for alterations or changes
that could otherwise, by law, be adopted by the Board of Directors of
Teletrak, without the further approval of such shareholders, as applicable.
This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto.
Section 9.4. WAIVER. At any time prior to the Effective Time, by
action taken or authorized by their respective Boards of Directors, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties of the other parties
hereto contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any of the agreements or conditions contained herein
for its benefit alone, to the extent permitted by applicable law. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE 10
INDEMNIFICATION.
Section 10.1. TELETRAK AND HELM INDEMNIFICATION. Teletrak and Helm
hereby jointly and severally agree to indemnify, hold harmless and pay and
reimburse AES, and its officers, directors, employees, agents and controlling
persons, from and against (i) any and all losses, obligations, liabilities,
damages, claims, deficiencies, costs and expenses (including, but not limited
to, the amount of any settlement entered into pursuant hereto and all
reasonable legal and other expenses incurred in connection with the
investigation, prosecution, or defense of the matter), which may be asserted
against or sustained or incurred by any or all of the indemnified parties in
connection with, arising out of or relating to any breach or alleged breach
of any of the representations, warranties, agreements and covenants made by
any or all of the indemnifying parties in connection with this Agreement,
(ii) any untrue or alleged untrue statement of a material fact contained in
the Information Statement or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading (a "Violation") and (iii) any and all costs
and expenses (including, but not limited to, reasonable legal fees and
expenses) incurred by any or all of the indemnified parties in connection
with the enforcement of their rights under this Section 10 (all amounts
described in preceding clauses (i), (ii) and (iii) above to be hereafter
collectively referred to as "Losses").
Section 10.2. AES INDEMNIFICATION. AES agrees to indemnify, hold
harmless, pay and reimburse Teletrak and Helm and their officers, directors,
employees, agents and controlling persons from and against a Violation to the
extent that such Violation shall occur in respect of information furnished to
Teletrak by AES expressly for use in the Information
30
Statement.
Section 10.3. PARTIES FOR INDEMNIFICATION. In the event that any
claim is asserted against any party hereto, or any party hereto is made a
party defendant in any action or proceeding, and such claim, action or
proceeding involves a matter which is the subject of this indemnification,
then such party (an "Indemnified Party") shall give written notice to the
other parties hereto (the "Indemnifying Parties") of such claim, action or
proceeding, and such Indemnifying Parties shall have the right to join in the
defense of said claim, action or proceeding at such Indemnifying Parties' own
cost and expense and, if the Indemnifying Party agrees in writing to be bound
by and to promptly pay the full amount of any final judgment from which no
further appeal may be taken and if the Indemnified Party is reasonably
assured of the Indemnifying Parties' ability to satisfy such agreement, then
at the option of the Indemnifying Parties, such Indemnifying Parties may take
over the defense of such claim, action or proceeding, except that, in such
case, the Indemnified Party shall have the right to join in the defense of
said claim, action or proceeding at its own cost and expense. So long as the
Indemnifying Parties are reasonably contesting any claim in good faith, the
Indemnified Party shall not pay or settle any such claim unless it shall
waive any right to indemnity therefor from or by the Indemnifying Parties.
ARTICLE 11
GENERAL PROVISIONS
Section 11.1. SURVIVAL. The representations and warranties in this
Agreement shall survive the Effective Time for a period of 18 months. The
covenants and agreements contained herein shall survive indefinitely.
Section 11.2. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if (i) when delivered, if
delivered personally, (ii) one day after being given if sent by reputable
overnight courier service, (iii) upon being telecopied (which is confirmed),
or (iv) five days after being mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) If to Teletrak, Helm or Acquisition Sub, to:
c/o Helm Capital Group Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxxx
with a copy to Xxxxx X. Xxxxxx, Esq.
Facsimile No.:(000) 000-0000
(b) If to AES, to:
x/x Xxxxx & Xxxxxxxxx
#0 Xxxxxx Xxxx
00
Xxxxxxx, Xxxxxxxxxxxxx 01570-1190
Attn.: Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
Section 11.3. MISCELLANEOUS. This Agreement (including the documents
and instruments referred to herein) (i) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof other than the Confidentiality Agreement; (ii) shall not be assigned
by operation of law or otherwise; and (iii) shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts executed in and to be fully performed in such State, without giving
effect to its conflicts of law, rules or principles except to the extent the
provisions of this Agreement are expressly governed by the MBCL.
Section 11.4. INTERPRETATION; DEFINITIONS. When a reference is made
in this Agreement to Articles, Sections or Schedules, such reference shall be
to an Article or a Section or Schedule of this Agreement, respectively,
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation". "Person" shall
mean any natural person, corporation, business trust, joint venture,
association, company, firm, partnership, or other Person. The term
"Subsidiary" of a Person shall mean any corporation or other Person
(including partnerships and other business associations) of which at least a
majority of the outstanding capital stock or other voting securities having
voting power under ordinary circumstances to elect directors or similar
members of the governing body of such corporation or other entity shall at
the time be held, directly or indirectly, by such Person. The term "Teletrak
Subsidiary" shall mean the Subsidiaries of Teletrak. The terms "Affiliate"
and "Associate" shall have the respective meanings set forth in Rule 405 of
the Securities Act (except as otherwise specifically defined herein).
Section 11.5. COUNTERPARTS; EFFECT. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
Section 11.6. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce
29
specifically the terms and provisions of this Agreement in any court
of the United States located in the State of New York or in New York state
court, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal court located in
the State of New York or any New York state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny such personal
jurisdiction by motion or other request for leave from any such court and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of New York.
Section 11.7. NO THIRD PARTY BENFICIARIES. Nothing contained herein
is intended to or shall confer on any Person which is not a party to this
Agreement any rights under this Agreement.
Section 11.8. ASSIGMENT. Except as expressly set forth herein,
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties hereto. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
30
IN WITNESS WHEREOF, AES, Teletrak, Helm and Acquisition Sub
have caused this Agreement to be signed by their respective officers thereunto
duly authorized as of the date first written above.
ADVANCED ENVIRONMENTAL SYSTEMS, INC
By:
--------------------------------------
Name:
Title:
TELETRAK ADVANCED TECHNOLOGY SYSTEMS, INC.
By:
--------------------------------------
Name:
Title:
HELM CAPITAL GROUP, INC.
By:
--------------------------------------
Name:
Title:
AES ACQUISITION CORP.
By:
--------------------------------------
Name:
Title:
31
