SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (earliest event reported) December 10, 1998
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-23779 98-0149351
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
25 Impler Strasse, Munich, 81371, Germany
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(Address of principal executive offices)
Registrant's telephone number, including area code 011-49-89-72015100
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(Former name or former address, if changed since last report.)
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Item. 5. Other Events
Technical Environment Solutions, Inc., a Colorado corporation ("TES") and
Environmental Technologies and Software Solutions, Inc., a Colorado
corporation("ENTEC") and ENTEC's principal shareholders have entered into a
Letter of Intent to effect a transaction wherein ENTEC will be acquired by TES
through the merger of a newly formed wholly-owned subsidiary of TES ("NEWCO")
with and into ENTEC. Under the non-binding terms of the Letter of Intent, ENTEC,
its principal shareholders and TES shall enter into a Merger Agreement and a
Plan and Agreement of Merger whereby all the outstanding equity securities of
ENTEC shall be exchanged for outstanding equity securities of TES. The parties
expect to consummate the merge as soon as is practicable, but in no event later
than June 30, 1999.
(b) Exhibits
Exhibit 10 Letter of Intent dated December 10, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
(Registrant)
Date: December 30, 1998 /s/ Gerd Behrens
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(Signature)
Gerd Behrens, President
(Printed name and Title)
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INDEX TO EXHIBITS
Exhibit Description
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10 Letter of Intent dated December 10, 1998.
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LETTER OF INTENT
This LETTER OF INTENT, dated the 10th day of December, 1998, sets forth the
joint intention of Environmental Technologies and Software Solutions, Inc., a
Colorado corporation ("Entecs"), Entec's principal shareholders Gerd Behrens,
Karsten Behrens, Dieter Gastinger, Yvonne Marquard and Frank Behrens
(collectively the "Shareholders"), Technical Environmental Solutions, Inc., a
Colorado corporation ("TES"), and a newly formed corporation to be 100% owned by
TES ("Newco") to effect a transaction wherein Entecs will be acquired by TES
through the merger of Newco into Entecs (the "Merger") and all the outstanding
equity securities of Entecs shall be exchanged for outstanding equity securities
of TES.
I. Nonbinding Provisions.
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The following numbered paragraphs reflect the understanding of Entecs,
Shareholders and TES as to the matters described therein, but are not intended
to constitute a complete statement thereof, or a legally binding or enforceable
agreement or commitment on the part of Entecs, Shareholders or TES with respect
to the matters described therein.
A. Form of Transaction.
(1) Entecs, Shareholders and TES shall enter into a Merger Agreement
and a Plan and Agreement of Merger contemplating that, subject to the other
conditions hereinafter set forth, Newco will merge with and into Entecs (the
"Merger") as a result of which the stockholders of Entecs will cease to own any
shares of Entecs Common Stock ("Entecs Common Stock") and will receive shares of
TES Common Stock ("TES Common Stock").
(2) It is intended that the Merger qualify as a reorganization under
the provisions of section 368(a) of the United States Internal Revenue Code of
1986, as amended (the "Code") and that the parties desire to effectuate the
statutory merger of Newco into Entecs in accordance with the provisions of
Sections 368 (a)(1)(A) and 368(a)(2)(E) of the Code.
(3) The determination of the number of shares of TES Common Stock to
be issued to the existing shareholders of Entecs as a result of the merger shall
be based upon the total capital contributions of the Entec's Shareholders
compared to the total capital contributions of the TES Shareholders as are
reflected in the latest audited financial statements of TES and Entecs. The
parties believe that this approach is fair and reasonable to the respective
shareholders of the two companies. The specific exchange ratio shall be
calculated and agreed upon at the time that the parties enter into a definitive
agreement for the merger.
(4) The closing (the "Closing") of the proposed transactions shall be
as soon as practicable, but in any event on or before the 30th day of June,
1999, unless otherwise agreed to by the parties. The parties understand that TES
is required to prepare and file a Registration Statement with the United States
Securities and Exchange Commission ("SEC") to register the shares of TES Common
Stock to be issued to the Entec's Shareholders as a result of the Merger, and
that at the time that the SEC declares that Registration Statement effective it
will be necessary to provide each Entecs Shareholder with a copy of the
definitive proxy statement/Final Prospectus, and to schedule and hold a meeting
of the Entecs Shareholders to approve the Merger.
B. Definitive Agreements.
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The terms, conditions and provisions governing the proposed transactions
will be contained in definitive agreements which will be prepared and executed
in form and substance satisfactory to Entecs, Shareholders and TES and their
respective legal counsel.
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(1) Representations and Warranties. The definitive agreements shall
contain usual and customary representations and warranties by each of Entecs and
TES about each such corporation, including but not limited to:
(a) due incorporation and good standing;
(b) due authorization of the transactions and agreements
relating thereto;
(c) authorization and effectiveness of the Merger;
(d) title of each such corporation to its assets;
(e) correctness of financial statements;
(f) condition of equipment and other material assets;
(g) absence of undisclosed or contingent liabilities (including
but not limited to, liabilities arising from environmental
matters);
(h) absence of any material adverse change since the date of its
most recent financial statements in the financial condition,
results or prospects of such corporation;
(i) absence of tax liabilities other than on a current basis;
(j) the number of shares or derivative securities outstanding in
each of the companies;
(k) continuing validity of contracts, licenses and permits; and
(l) such other matters as the parties deem necessary and
appropriate.
(2) Conditions to Closing. The definitive agreements shall contain as
conditions precedent to the closing of the described transactions, the following
matters:
(a) Each of Entecs and TES shall complete due diligence to the
satisfaction of each such corporation and its counsel, as to the assets,
liabilities, contracts, and financial condition and prospects of each other
entity.
(b) Entecs shall have obt ained the approval of a majority of its
shareholders at a duly called and convened shareholders meeting to effect
the merger, and the owners of no more than 10% of the issued and
outstanding shares of Entecs shall have indicated that they intend to
exercise their rights to dissent from the Merger;
(c) The obligations of Entecs and TES to close the definitive
agreements and the transactions contemplated herein and therein shall be
subject to customary closing conditions including but not limited to those
matters enumerated in paragraph 2 hereof, as well as the receipt of all
necessary consents of governmental authorities or third parties necessary
for the consummation of such transactions; compliance with all covenants
and agreements contained in the definitive agreements; and receipt of
satisfactory and customary legal opinions, closing certificates and other
documentation; and
(3) Other Terms and Provisions. The definitive agreements shall
contain the following terms and provisions:
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(a) Immediately following the Closing of the contemplated
transactions, the Board of Directors of TES shall remain unchanged, and the
Board of Directors of Entecs shall appoint such additional members of the
Board as are necessary to ensure that the Board of Directors of Entecs and
TES are identical with all other Entecs Directors resigning immediately
thereafter.
(b) TES and Entecs will maintain their corporate headquarters in
Munich, Germany.
(c) Each of Entecs and TES shall agree to indemnify the other against
any loss, damage, expense, judgment or payment (including expenses of
investigation, attorneys' fees and litigation expenses) resulting from the
inaccuracy of any representation or warranty made by such corporation in
the definitive agreements; provided however, that none of the
representations or warranties of any of the respective companies shall
survive the consummation of the merger.
II. Binding Provisions.
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Upon execution of counterparts of this Letter of Intent by Entecs and TES,
the following lettered paragraphs will constitute the legally binding and
enforceable agreement of Entecs, Shareholders and TES (in recognition of the
significant costs to be borne by Entecs and TES in pursuing this transaction and
further in consideration of their mutual undertakings as to the matters
described therein).
A. Access. Subject to the terms set forth in paragraph I below respecting
confidentiality and certain other matters, each of Entecs and TES will afford
the employees, auditors, legal counsel, and other authorized representatives of
the other all reasonable opportunity and access during normal business hours to
inspect, investigate, and audit the assets, liabilities, contracts, operations,
and business of such corporation before Closing. Each of Entecs and TES will
conduct this inspection, investigation and audit in a reasonable manner during
regular business hours of the respective corporation.
B. Consents. Each of Entecs and TES will cooperate with one another and
proceed, as promptly as is reasonably practicable, to prepare and file any and
all required government notifications, to seek to obtain all necessary consents
and approvals from lenders and landlords, and to endeavor to comply with all
other legal or contractual requirements for or preconditions to the execution
and consummation of the definitive agreements.
C. Best Efforts. Each of Entecs and TES will negotiate in good faith and
use its best efforts to arrive at mutually acceptable definitive agreements for
approval, execution, and delivery on the earliest reasonably practicable date.
Each of Entecs and TES will pursue its due diligence investigation of the
business, financial condition and prospects of the other party in good faith and
with reasonable dispatch. Each party hereto will also use its best efforts
(subject to all the terms and conditions hereof and the definitive agreements)
to effect the Closing and to proceed with the transactions contemplated in the
definitive agreements as promptly as is reasonably practicable.
D. Costs. Entecs and TES will each be solely responsible for and bear all
of its own respective expenses, including, without limitation, expenses of legal
counsel, accountants, financial and other advisors, incurred at any time in
connection with pursuing or consummating the definitive agreements and the
transactions contemplated herein. Except as expressly agreed to in writing by
the party to be charged, neither Entecs nor TES shall be obligated or otherwise
liable in respect of any commission, broker's fee, finder's fee or other similar
fee or expense with respect to the transactions contemplated herein.
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E. Public Disclosure. Before the Closing, neither Entecs nor TES shall make
any public release of information regarding the matters contemplated herein
except (i) that press releases in agreed form shall be issued by Entecs and TES
as promptly as is practicable after the execution of this letter, (ii) that
Entecs and TES may each continue such communications with employees, customers,
suppliers, franchisees, lenders, lessors, shareholders, and other particular
groups as may be legally required or necessary or appropriate and not
inconsistent with the best interests of the other party or the prompt
consummation of the transactions contemplated by this letter, (iii) that TES may
make such disclosure of the transactions contemplated by this letter of intent
in filings with the SEC under the Securities Exchange Act of 1934, as amended,
as it deems necessary and appropriate, and (iv) as otherwise required by law.
F. Confidentiality. Each of Entecs and TES agrees to treat all information
(including but not limited to any information identified as "confidential" in
writing and any such information which by its content or from the manner in
which it is provided could reasonably be deemed to be confidential) concerning
the other furnished, or to be furnished, by or on behalf of the other in
accordance with the provisions of this paragraph (collectively, the
"Information"), and to take, or abstain from taking, other actions set forth
herein. The Information will be used solely for the purpose of evaluating the
proposed transactions, and will be kept confidential by each corporation and its
officers, directors, employees, representatives, agents, and advisors; provided
that (i) any of such Information may be disclosed by either corporation to its
officers, directors, employees, representatives, agents, and advisors who need
to know such information for the purpose of evaluating the proposed
transactions, (ii) any disclosure of such information may be made to which each
corporation consents in writing, (iii) such information may be disclosed if so
required by law and (iv) such obligation of confidentiality shall expire upon
such confidential information becoming public by means other than a breach of
this paragraph I. If the proposed transactions are not consummated, each of
Entecs and TES will promptly return all documents, contracts, records, or
properties to the other.
G. Notices. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to be duly given (i) on the
date of delivery if hand delivered or sent via facsimile or (ii) three days
thereafter if sent by first class mail registered or certified mail (return
receipt requested), postage prepaid, as follows (unless subsequently changed by
written notice):
If to ENTECS:
Environmental Technologies and Software Solutions, Inc.
Attn.: Mr. Frank Behrens
370 Seventeenth Street, Suite 4250
Denver, Colorado 80202
If to Shareholders:
c/o Mr. Gerd Behrens
25 Impler Strasse
81371 Munich, Germany
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If to TES:
Technical Environment Solutions, Inc.
Attn.: Mr. Gerd Behrens
370 Seventeenth Street, Suite 4250
Denver, Colorado 80202
With Copies to:
Paul Maricle, Esq.
Rossi & Maricle, P.C.
370 Seventeenth Street, Suite 4250
Denver, Colorado 80202
Henry F. Schlueter, Esq.
Schlueter & Associates, P.C.
1050 Seventeenth Street, Suite 1700
Denver, Colorado 80265
EXECUTED as of the date first above written to confirm the mutual understandings
and agreements as set forth in this letter.
TECHNICAL ENVIRONMENT SOLUTIONS, INC.
By: /s/ Gerd Behrens
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Gerd Behrens, President
ENVIRONMENTAL TECHNOLOGIES AND SOFTWARE SOLUTIONS, INC.
By: /s/ Frank Behrens
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Frank Behrens, Secretary
Entecs SHAREHOLDERS
/s/ Gerd Behrens
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Gerd Behrens
/s/ Karsten Behrens
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Karsten Behrens
/s/ Frank Behrens
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Frank Behrens
/s/ Dieter Gastinger
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Dieter Gastinger
/s/ Yvonne Marquard
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Yvonne Marquard
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