SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 22, 1998
METROPOLITAN HEALTH NETWORKS, INC.
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(Exact name of registrant as specified in its charter)
Florida 0-28456 65-0635748
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
5100 Town Center Circle, Boca Raton, Florida 33486
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (561) 416-9484
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On November 30, 1997, Metropolitan Health Networks, Inc. (the
"Registrant" or the "Company"), Metcare, VI, Inc. ("Metcare"), a wholly-owned
subsidiary of the Company (Subsidiary) and Trident Medical Concepts, Inc.
("Trident") entered into a definitive merger agreement which Merger Agreement
was amended on January 13, 1998 and February 22, 1998 (collectively the "Merger
Agreement") pursuant to which Trident was merged into Metcare. Pursuant to the
Merger Agreement, each share of common and preferred stock of Trident issued and
outstanding immediately preceding February 27, 1998, the Effective Date, were
converted into the right to receive 1.15 shares of the Common Stock of the
Company for an aggregate amount of 7,539,869 shares. The principals followed in
determining the amount of shares issued to the shareholders of Trident include
the worth of the businesses considering their historical, present and future
business operations, and the market for the Company's shares, including the
depth and trading activity in the shares.
The Merger Agreement also provides that the Company shall have the
absolute right to cause the Merger to be unwound solely upon the occurrence of
any of the following events: (i) failure by Parent to receive the audited
Financial Statements described in Section 7.1(f) by March 3, 1998 in
substantially the same form as previously delivered in "draft" to Parent and
included herewith; or (ii) failure to obtain Lender's Consent to the Merger
Agreement, as amended, or to replace Lender by May 1, 1998; or (iii) the receipt
by Trident of a notice of Event of Default as described in the Financing
Agreement dated as of December 5, 1997.
Trident is an integrated, multi-disciplinary, medical management
company, which acquires and operates medical practices having a strong
orientation in General Medicine and the Neuromusculoskeltal specialties,
supported by appropriate diagnostic services such as Radiology and Physical
Therapy. The Company has developed a medical network in the three county area
comprising South Florida and intends to become the dominant provider of its
services in each of the markets in which its operates.
Pursuant to the Merger Agreement, Anthony J. Gigliotti, CEO of Trident
at the time of the transaction, will serve as Chairman of the board of directors
of the Company, and Randall P. Stern and Gerald Katz will also serve as
directors of the Company. Additionally, Christopher Harkins, the CFO of Trident
at the time of the transaction, will serve as Executive Vice President and
Principal Accounting Officer of the Company, and Roberto Palenzuela, Corporate
Counsel of Trident at the time of the transaction, will serve as Executive Vice
President and Corporate Counsel of the Company.
Noel Guillama, the Company's Chief Executive Officer and Chairman of
the Board at the time of the transaction who is also a principal shareholder of
the Company, and Bonnie Hilderbrand a 8.0% shareholder of the Company, also hold
3.8% and 7.6%, respectively, of the shares of Common Stock of Trident.
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The information herein is qualified in its entirety by reference to the
Merger Agreement and Promissory Note filed as part of this Form 8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) and (b) Financial Statements and Pro Forma Financial Information.
As of the date of filing of the Current Report on Form 8-K, it
is impracticable for the Registrant to provide the financial statements and Pro
Forma Financial Information required by this Item 7. In accordance with the Item
7(a)(4) of Form 8-K, such unaudited financial statements shall be filed by
amendment to this Form 8-K no later than 60 days after March 9, 1998, the date
hereof.
(c) Exhibits.
10.1 Agreement and Plan of Merger dated November 30, 1997
by and among the Company, Metcare VI, Inc. and Trident
Medical Concepts, Inc.
10.2 First Amendment to Merger Agreement dated January 13,
1998 by and among the Company, Metcare VI, Inc. and
Trident Medical Concepts, Inc.
10.3 Second Amendment to Merger Agreement dated February
22, 1998 by and among the Company, Metcare VI, Inc. and
Trident Medical Concepts, Inc.
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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.
METROPOLITAN HEALTH NETWORKS, INC.
By: /s/ Donald B. Cohen
-----------------------------
Donald B. Cohen
Executive Vice President and
Chief Financial Officer
Dated: March 9, 1998
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AGREEMENT AND PLAN OF MERGER
BETWEEN
METROPOLITAN HEALTH NETWORKS, INC.,
METCARE VI, INC.
AND
TRIDENT MEDICAL CONCEPTS, INC.
DATED
NOVEMBER 30, 1997
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
AGREEMENT AND PLAN OF MERGER........................................................................... 1
PRELIMINARY STATEMENT.................................................................................. 1
ARTICLE 1.................................................. 1
THE MERGER............................................................................................. 1
The Merger.................................................................................... 1
Effective Time................................................................................ 2
Effect of the Merger.......................................................................... 2
Articles of Incorporation; By-Laws............................................................ 2
Directors and Officers........................................................................ 2
Closing Date, Time and Place................................................................... 3
Consistency in Reporting...................................................................... 3
ARTICLE 2.................................................. 3
CONVERSION OF SECURITIES............................................................................... 3
Conversion of Securities....................................................................... 5
Stock Transfer Books.......................................................................... 5
Dissenting Shares............................................................................. 5
Treatment of Options.......................................................................... 5
Treatment of Preferred Stock.................................................................. 6
ARTICLE 3.................................................. 6
REPRESENTATIONS AND WARRANTIES OF TRIDENT.............................................................. 6
Organization and Qualification................................................................ 6
Articles of Incorporation and By-Laws......................................................... 6
Capitalization................................................................................. 6
Authority..................................................................................... 7
No Conflict; Required Filings and Consents.................................................... 7
Report and Financial Statements............................................................... 8
Absence of Certain Changes or Events.......................................................... 8
Compliance with Applicable Laws............................................................... 9
Certain Agreements and Compliance............................................................. 9
Employee Benefit Plans; Labor Matters......................................................... 9
Taxes......................................................................................... 10
Brokers....................................................................................... 11
Environmental Matters......................................................................... 11
SEC Requirements.............................................................................. 12
Intellectual Property......................................................................... 12
ARTICLE 4.................................................. 12
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REPRESENTATIONS AND WARRANTIES OF THE PARENT AND PARENT
SUB........................................................................................... 12
Organization and Qualification................................................................ 12
Articles of Incorporation and By-Laws......................................................... 12
Capitalization................................................................................ 12
Authority..................................................................................... 13
No Conflict; Required Filings and Consents.................................................... 13
Report and Financial Statements............................................................... 14
Absence of Certain Changes or Events.......................................................... 14
Compliance with Applicable Laws............................................................... 14
Compliance with Certain Agreements............................................................ 15
Employee Benefit Plans; Labor Matters......................................................... 15
Taxes......................................................................................... 16
Brokers....................................................................................... 17
Environmental Matters......................................................................... 17
ARTICLE 5.................................................. 18
COVENANTS.............................................................................................. 18
Affirmative Covenants......................................................................... 18
Approval of Trident Shareholders.............................................................. 18
Negative Covenants of Trident................................................................. 18
Access and Information........................................................................ 20
Additional Covenants of Parent and Parent Sub................................................. 20
Agreement with Respect to Affiliates.......................................................... 20
NASDAQ Listing................................................................................ 20
Negative Covenants of Parent.................................................................. 20
ARTICLE 6.................................................. 22
ADDITIONAL AGREEMENTS.................................................................................. 22
Appropriate Action; Consents; Filings......................................................... 22
Public Announcements.......................................................................... 23
Directors and Officers Indemnification........................................................ 23
Conveyance Taxes.............................................................................. 23
Restrictions on Transferability of Shares..................................................... 23
Directors..................................................................................... 24
ARTICLE 7.................................................. 24
CLOSING CONDITIONS..................................................................................... 24
Conditions to Obligations of Each Party Under this Agreement.................................. 24
No Lawsuits.......................................................................... 24
Government Approvals................................................................. 24
Shareholder Approval................................................................. 24
Dissenting Shares.................................................................... 24
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Pooling Letters...................................................................... 25
Financial Statements................................................................. 25
Due Diligence........................................................................ 25
Additional Conditions to Obligations of Parent and Parent Sub................................. 25
Representations and Warranties....................................................... 25
Agreements and Covenants............................................................. 25
Consent and Approvals................................................................ 26
The Merger........................................................................... 26
Corporate Proceedings................................................................ 26
Fairness Opinion..................................................................... 26
Employees............................................................................ 26
Additional Conditions to Obligations of Trident............................................... 26
Representations and Warranties....................................................... 26
Agreements and Covenants............................................................. 26
Consent and Approvals................................................................ 27
The Merger........................................................................... 27
Corporate Proceedings................................................................ 27
ARTICLE 8.................................................. 27
TERMINATION, AMENDMENT AND WAIVER...................................................................... 27
Termination................................................................................... 27
Effect of Termination......................................................................... 28
Amendment..................................................................................... 28
Waiver ..................................................................................... 28
ARTICLE 9.................................................. 28
GENERAL PROVISIONS..................................................................................... 28
Nonsurvival of Representations, Warranties and Agreements..................................... 28
Notices ..................................................................................... 29
Fees and Expenses............................................................................. 29
Headings ..................................................................................... 30
Severability.................................................................................. 30
Entire Agreement.............................................................................. 30
Assignment Guarantee of Merger Sub Obligations................................................ 30
Parties in Interest........................................................................... 30
Failure or Indulgence Not Waiver; Remedies Cumulative......................................... 30
Governing Law................................................................................. 31
Counterparts.................................................................................. 31
ARTICLE 10................................................. 31
RATIFICATION........................................................................................... 31
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made and entered
into as of 30th day of November, 1997 by and among Metropolitan Health Networks,
Inc., a corporation organized and existing under the laws of the State of
Florida ("Parent"), METCARE VI, INC., a Florida corporation organized and
existing under the laws of the State of Florida ("Parent Sub") and a
wholly-owned subsidiary of Parent, and Trident Medical Concepts, Inc., a
corporation organized and existing under the laws of the State of Delaware
("Trident").
PRELIMINARY STATEMENT:
WHEREAS, the Board of Directors of Trident has determined that the
merger of Trident with Parent Sub is consistent with and in furtherance of the
long-term business strategy of Trident and is fair to, and in the best interests
of, Trident and its shareholders, and has approved and adopted this Agreement
and the transactions contemplated hereby; and
WHEREAS, the Board of Directors of Parent has determined that the
merger is consistent with and in furtherance of the long-term business strategy
of Parent and is fair to, and in the best interests of, Parent and its
shareholders, and has approved and adopted this Agreement and the transactions
contemplated hereby; and
WHEREAS, pursuant to the merger, each outstanding share (a "Share") of
Trident's common stock, $.001 par value ("Trident's Common Stock"), each
outstanding share of Trident's Preferred Stock ("Trident Preferred Stock") and
each outstanding option and/or warrant to purchase Shares of Trident's Common
Stock ("Trident Options/Warrants") shall be converted into the right to receive
merger consideration (as set forth in Section 2.1) upon the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with applicable law, at the
Effective Time (as defined in Section 1.2 hereof), Trident shall be merged with
and into Parent Sub (the
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"Merger"). As a result of the Merger, the separate corporate existence of
Trident shall cease and Parent Sub shall continue as the surviving company in
the Merger (the "Surviving Corporation") and shall continue its existence under
the provisions of the Florida General Corporation Act ("FGCA"). The name of the
Surviving Corporation shall be "TRIDENT MEDICAL CONCEPTS, INC." or such other
name as Parent and Trident shall determine.
SECTION 1.2 Effective Time. On the Closing Date (as defined in Section
1.6 hereof), the parties hereto shall cause the Merger to be consummated by
filing articles of merger (the "Articles of Merger") with the Secretary of State
of the States of Florida and Delaware in such form as is reasonably acceptable
to the parties hereto and required by, and executed, in accordance with the
relevant provisions of FGCA (the time of the filing being the "Effective Time").
SECTION 1.3 Effect of the Merger. At the Effective Time, the Merger
shall have the effects provided by the corporate laws of the State of Florida,
this Agreement and the Articles of Merger. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time, except as otherwise
specifically set forth herein, all the property, rights, privileges, powers and
franchises of Parent Sub and Trident shall vest in the Surviving Corporation,
and all debts, liabilities and duties of Parent Sub and Trident shall become the
debts, liabilities and duties of the Surviving Corporation.
SECTION 1.4 Articles of Incorporation; By-Laws. At the Effective Time,
the Articles of Incorporation and the By-Laws of Parent Sub (in form acceptable
to all parties hereto), as in effect immediately prior to the Effective Time,
shall be the Articles of Incorporation and the By-Laws of the Surviving
Corporation, until amended as provided by law, except that the Articles of
Incorporation shall be amended pursuant to the Merger to delete Article First
thereof in its entirety and to substitute in lieu thereof the following: "First:
The name of the corporation is TRIDENT MEDICAL CONCEPTS, INC.".
SECTION 1.5 Directors and Officers. Directors of Parent Sub immediately
prior to the Effective Time, namely Noel Guillama, Robert Kagan, Donald Cohen
and Kenneth Hall, and Anthony Gigliotti and Gerald Katz, and a designee of
Burnham Securities, Inc., chosen by Trident, shall serve as the only directors
of the Surviving Corporation and Parent ^, each to hold office in accordance
with the Articles of Incorporation and By-Laws of the Surviving Corporation and
Parent, until their resignation, death or disqualification or until their
respective successors shall have been duly elected and shall have been
qualified. The officers of Surviving Corporation immediately prior to the
Effective Time shall continue as the only officers of the Surviving Corporation
until their successors shall have been duly elected or appointed and qualified,
and the officers of Parent at the Effective Time shall be Anthony Gigliotti,
Chairman of the Board, and Noel Guillama, President.
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SECTION 1.6 Closing Date, Time and Place. Unless this Agreement shall
have been terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 8.1 and subject to the satisfaction or waiver of
the conditions set forth in Article 7, the consummation of the Merger will take
place on December 31, 1997 at the offices of Atlas, Pearlman, Trop & Borkson,
P.A.; 200 East Las Olas Boulevard; Suite 1900; Fort Lauderdale; Florida 33301,
or at another time or place mutually agreed upon by the parties hereto.
SECTION 1.7 Consistency in Reporting.
(a) Each party hereto agrees that: (i) the Merger is
intended to qualify as a tax-free reorganization under Internal Revenue Code of
1986; (ii) the Merger shall be reported for Federal income tax purposes as a
tax-free reorganization; (iii) for purposes of all financial statements, tax
returns and reports, and communications with third parties, the transactions
contemplated in this Agreement and all ancillary or collateral transactions will
be treated as a tax-free reorganization; and (iv) if the characterization of any
transaction contemplated in this Agreement or any ancillary or collateral
transaction is challenged, each party hereto will testify, affirm, and ratify
that the characterization contemplated in such Agreement was the
characterization intended by the parties; provided, however, that nothing herein
shall be construed as giving rise to any obligation and party hereto if the
reporting position is determined to be incorrect by final decision of a court of
competent jurisdiction.
(b) To the extent that a characterization of a particular
transaction is not expressed or contemplated by this Agreement or by an
agreement executed in connection with the transaction contemplated herein, and
the transaction is not ancillary or collateral to a transaction that is so
characterized, the treatment of such a transaction shall be as agreed to by the
parties or, lacking agreement, as the chartered accountants of Parent determine
to be most equitable.
ARTICLE 2
CONVERSION OF SECURITIES
SECTION 2.1 Conversion of Securities
(a) At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Parent Sub, Trident or the holders of
any of the following securities:
(i) Each Share issued and outstanding immediately prior
to the Effective Time and excluding Shares owned by holders who have properly
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exercised their rights of appraisal within the meaning of Section 607.1301 of
the FBCA ("Dissenting Shares"), shall be converted into the right to receive
ninety-five hundredths (.95) of a share of validly issued, fully paid and
nonassessable share ("Parent Share(s)") of the common stock $.001 par value per
share, of Parent (the "Exchange Ratio"). The Exchange Ratio shall be adjusted to
reflect fully the effect of any stock split, reverse split, stock dividends
(including any dividends or distribution of securities convertible into Parent
Shares), reorganization, recapitalization or other like change with respect to
Parent Shares occurring after the date hereof and prior to the Effective Time.
(ii) Each share of common stock $.001 par value per
share of Parent Sub outstanding immediately prior to the Effective Time shall
remain issued and outstanding, and, as a result of the Merger and without any
action on the part of the holder thereof, shall remain and thereafter constitute
all of the issued and outstanding shares of capital stock of the Surviving
Corporation.
(b) As soon as practicable after the Effective Time, each
holder of a certificate that prior thereto represented Shares shall be entitled,
upon surrender thereof to Parent in the manner set forth in Section 2.1(d)
hereof, to receive in exchange therefor, in accordance with Section 2.1(a)(i)
hereof, a certificate representing an amount of Parent Shares equal to the
Exchange Ratio multiplied by the number of Shares represented by such
certificate, as provided in Section 2.1(a)(i) hereof. Until so surrendered, each
such certificate that, prior to the Effective Time, represented Shares shall be
deemed from and after the Effective Time, for all corporate purposes, to
evidence ownership of the Parent Shares into which Shares shall have been
converted; provided, however, that no dividends with respect to the Shares shall
be paid until the holders shall furnish certificates therefor, at which time the
holder shall be paid the amount of dividends, if any, without interest, which
shall theretofore have become payable with respect to the Parent Shares into
which such Shares have been converted.
(c) At the Effective Time, Parent will deliver or cause to
be delivered to each holder of record of a Share certificate or Share
certificates: (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to a Share certificate shall pass,
only upon proper delivery of such Share certificate to Parent or Parent's
transfer agent and shall be in such form and have such other provisions as
Parent may reasonably specify; and (ii) instructions for use in effecting the
surrender of such Share certificate in exchange for Parent Shares. Upon
surrender of a Share certificate to Parent together with such a letter of
transmittal, duly executed and completed in accordance with the terms thereof,
and such other documents as may be required pursuant to such instructions, the
holder of such Share certificate shall be entitled to receive in exchange
therefor a stock certificate representing the number of shares of Parent Shares
which such holder has the right to receive pursuant to Section 2.1(a)(i) hereof
and the Share certificate so surrendered shall forthwith be canceled.
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(d) None of Parent, Surviving Corporation, Trident or their
transfer agents shall be liable to a holder of Shares for any amount properly
paid to a public official pursuant to applicable escheat or similar laws.
(e) All shares of Parent Shares delivered upon conversion
of the Shares in accordance with the terms hereof shall be deemed to have been
paid in full satisfaction of all rights pertaining to such Shares.
(f) No fractional Parent Shares shall be issued in
connection with the Merger but, in lieu of any fractional shares, each holder of
Shares who would otherwise have been entitled to a fraction of a share of Parent
Shares upon surrender of stock certificates as provided in Section 2.1 upon such
surrender be paid an amount of cash (without interest) equal to the product of
(i) such fraction, multiplied by (ii) the Closing Market Price as defined herein
as of the Effective Time.
SECTION 2.2 Stock Transfer Books. At the Effective Time, the stock
transfer books of Trident shall be closed and there shall be no further
registration of transfers of shares of the Shares on the records of Trident. If,
after the Effective Time, certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged for certificates representing
Parent Shares as provided in this Section 2.
SECTION 2.3 Dissenting Shares. Notwithstanding anything to the contrary
contained in this Agreement, in the event appraisal rights are available to
Trident's shareholders any Shares held by a person who objects to the Merger,
whose Shares were not voted in favor of the Merger and who complies with all of
the applicable law provisions concerning the rights of such persons to dissent
from the Merger and to require appraisal of such person's Shares ("Dissenting
Shares") shall not be converted pursuant to Section 2.1 but shall become the
right to receive such consideration as may be determined to be due to the holder
of such Dissenting Shares pursuant to applicable law, provided, however, that
each Dissenting Share held by a person at the Effective Time who shall, after
the Effective Time, withdraw the demand for appraisal or lose the right of
appraisal, in either case pursuant to applicable law, shall be deemed to be
converted, as of the Effective Time, into the applicable per share amount as set
forth in Section 2.1, without any interest thereon.
SECTION 2.4 Treatment of Options. Each Trident Option/Warrant issued
and outstanding immediately prior to the Effective Time shall be converted into
the right to receive an option or warrant, as the case may be, to purchase
ninety-five hundredths (.95) of a Parent Share of Common Stock (the "Option
Exchange Ratio") on the same terms and conditions contained in the Trident
Options/Warrants, as the case may be. The Option Exchange Ratio shall be
adjusted to reflect fully the effect of any stock split, reverse split, stock
dividends (including any dividends or distribution of securities convertible
into Parent
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Shares), reorganization, recapitalization or other like change with respect to
Parent Shares occurring after the date hereof and prior to the Effective Time.
SECTION 2.5 Treatment of Preferred Stock. Each Trident Preferred Stock
issued and outstanding immediately prior to the Effective Time and excluding
Trident Preferred Stock owned by holders of the FBCA, shall be converted into
the right to receive ninety-five hundredths (.95) of a share of Parent Share of
Common Stock (the "Preferred Exchange Ratio). The Preferred Exchange Ration
shall be adjusted to reflect fully the effect of any stock split, reverse split,
stock dividends (including any dividends or distribution of securities
convertible into Parent Shares), reorganization, recapitalization or other like
change with respect to Parent Shares occurring after the date hereof and prior
to the Effective Time.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TRIDENT
Trident hereby represents and warrants to Parent and Parent Sub as
follows:
SECTION 3.1 Organization and Qualification. Trident is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has the requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now being
conducted and is duly qualified to do business in any other jurisdiction by
virtue of the nature of the businesses conducted by it or the ownership or
leasing of its properties, except where the failure to be so qualified will not,
when taken together with all other such failures, have a material adverse effect
on the business, operations, properties, assets, financial condition or results
of operation of Trident and its subsidiaries taken as a whole. (Any such
material adverse effect being hereinafter referred to as "Trident Material
Adverse Effect").
SECTION 3.2 Articles of Incorporation and By-Laws. Trident has
furnished to Parent complete and correct copies of its Articles of Incorporation
and By-Laws, as amended or restated to date and each are a complete and correct
copy of such document as in effect on the date hereof. Trident is not in
violation of any of the provisions of its Articles of Incorporation or By-Laws.
SECTION 3.3 Capitalization.
(a) The authorized and outstanding capital stock of Trident
is set forth in Section 3.3 of the Disclosure Schedule. All Shares have been
duly authorized and are validly issued, and are fully paid and nonassessable,
and free of preemptive rights.
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(b) Except pursuant to this Agreement, and as set forth in
Section 3.3 of the Disclosure Schedule, as of the date hereof there are not now
outstanding options, warrants, rights to subscribe for, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any class of capital stock of Trident, or
agreements, understandings or arrangements to which Trident is a party, or by
which Trident is or may be bound, to issue additional shares of its capital
stock or options, warrants, scrip or rights to subscribe for, calls or
commitment of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of any class of its capital
stock.
(c) Each shareholder of Trident is an "accredited investor"
as such term is defined in Rule 501(c) under the Securities Act.
SECTION 3.4 Authority. Trident has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby subject to the
required approval of Trident's shareholders (the "Trident Shareholder
Approval"). The execution and delivery of this Agreement by Trident and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other corporate proceedings on the part
of Trident is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby except the Trident Shareholder Approval. This
Agreement has been duly executed and delivered by Trident and constitutes the
legal, valid and binding obligation of Trident enforceable against Trident in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Trident
does not, and the performance by Trident of its obligations hereunder will not:
(i) conflict with or violate the Articles of Incorporation or By-Laws of
Trident; (ii) conflict with, breach or violate any federal, state, foreign or
local law, statute, ordinance, rule, regulation, order, judgment or decree
(collectively, "Laws") in effect as of the date of this Agreement and applicable
to Trident or by which any of its properties or assets are bound; or (iii)
result in any breach of, constitute a default (or an event that with notice or
lapse of time or both would become a default) under, give to any other entity
any right of termination, amendment, acceleration or cancellation of, require
payment under, or result in the creation of a lien or encumbrance on any of the
properties or assets of Trident pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Trident is a party or by Trident or any of its
properties or assets is bound. Excluding from the foregoing clauses (ii) and
(iii) such
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violations, conflicts, breaches, defaults, terminations, accelerations,
creations of liens, or incumbence that would not, in the aggregate, have a
Trident Material Adverse Effect.
(b) Except as set forth in Section 3.5 of the Disclosure
Schedule, the execution and delivery of this Agreement by Trident does not, and
the performance by Trident does not require Trident to obtain any consent,
registration, approval, authorization or permit of, to make any filing with, or
to give notification to, any person, including any governmental or regulatory
authority, agency, court or commission, domestic or foreign (collectively,
"Governmental Entities"), based on any Law or other requirement of any
Government Entity in effect as of the date of this Agreement.
SECTION 3.6 Report and Financial Statements. Trident has made available
to Parent a copy of each report, schedule and definitive proxy statement filed
by Trident with the Securities and Exchange Commission since May 31, 1995 as
follows: (i) Form 10- KSB for the year ended May 31, 1995, and Forms 10-QSB for
quarterly periods ended August 31, 1995, November 30, 1995 and February 29, 1996
(collectively, "Trident SEC Reports"). As of their respective dates, Trident SEC
Reports complied in all material respects with the requirements of the laws,
rules and regulations applicable to such Trident SEC Reports. As of their
respective dates, Trident SEC Reports 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 statement therein, in light of the circumstances under
which they were made, not misleading. The audited consolidated financial
statements and unaudited interim financial statements of Trident included in
Trident SEC Reports have been prepared in accordance with general accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or on the notes thereto and except with respect to unaudited statements
permitted by Form 10-Q of the SEC). Trident has also heretofore delivered to
Parent: (i) an audited pro forma balance sheet of Trident as at May 31, 1996 and
1997, including statements of income and changes in stockholders' equity of
Trident, for the years ending December 1996 and 1997, together with notes
thereto; and (ii) an unaudited pro forma balance sheet of Trident as of
September 30, 1997 and unaudited pro forma statements of income, changes in
stockholders' equity for the period then ended (together with the financial
statements contained in the Trident SEC Reports, the "Financial Statements"),
which Financial Statement fairly present the assets, liabilities, and financial
position of Trident as of the dates thereof and the results of their operations
and changes in financial position for the periods than ended, subject, in the
case of the unaudited financial statements, to normal year end and audit
adjustments and any other adjustments described therein.
SECTION 3.7 Absence of Certain Changes or Events. Except as set forth
in Section 3.7 of the Disclosure Schedule and the unaudited Financial Statements
from September 30, 1997 through the date hereof, there has not been any Trident
Material Adverse Effect.
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SECTION 3.8 Compliance with Applicable Laws. Except as set forth in
Section 3.8 of the Disclosure Schedule, Trident is not in violation of, or, to
the knowledge of Trident is under investigation with respect to or has been
given notice or has been charged with the violation of any Law of a Governmental
Entity, except for violations which individually or in the aggregate do not have
a Trident Material Adverse Effect. Section 3.8 of the Disclosure Schedule sets
forth that Trident has all material permits, licenses, franchises and other
governmental authorizations, consents and approvals necessary to conduct its
business as presently conducted except those the absence of which would not,
individually or in the aggregate, have a Trident Material Adverse Effect.
SECTION 3.9 Certain Agreements and Compliance. Section 3.9 of the
Disclosure Schedule sets forth that as of the date hereof, Trident is not in
breach or in violation of or in default in the performance or observance of any
term or provision of, and no event has occurred which, with the lapse of time or
action by a third party, could result in default under (i) the Articles of
Incorporation or Bylaws of Trident; or (ii) Section 3.9 of the Disclosure
Schedule sets forth that any contract, commitment, agreement, indenture,
mortgage, loan agreement, bond, or other instrument to which Trident is a party
or by which it is bound or to which its property is subject, which breach,
violation or default, in the case of clause (ii) of this Section 3.9 would have,
in the aggregate with all such other breaches, violations or defaults, a Trident
Material Adverse Effect.
SECTION 3.10 Employee Benefit Plans; Labor Matters.
(a) Section 3.10(a) of the Disclosure Schedule describes
all "employee pension benefit plans" (as defined in Section 3(2) of ERISA),"
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA) and all
other employee benefit, deferred compensation, stock option, restricted stock or
other compensation plans, programs, policies, arrangements and contracts
(including, without limitation, any "employee benefit plan," as defined in
Section 3(3) of ERISA) maintained, sponsored, contributed to or required to be
contributed to by Trident as of the Effective Time. Trident does not have any
liability or obligation with respect to any employee benefit plan, program,
policy, agreement, commitment or arrangement, deferred compensation plan,
program or arrangement, compensation plan or payroll arrangement which is not a
Benefit Plan. With respect to each Benefit Plan, Trident has made available to
Parent a true and correct copy of: (i) the most recent annual report (Form 5500)
filed with the IRS; (ii) the current text and agreement for such Benefit Plan;
(iii) each trust agreement relating to such Benefit Plan; (iv) the most recent
summary plan description for each Benefit Plan for which a summary plan
description is required; and (v) the most recent determination letter, if any,
issued by the IRS with respect to any Benefit Plan qualified under Section
401(a) of the Code.
(b) Neither Trident nor any person under common control
with Trident, within the meaning of Section 4001 of ERISA, maintains or
contributes to as
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of the Effective Time, as has at any time prior to the Effective Time maintained
or contributed to a Benefit Plan subject to Title IV of ERISA or a
multi-employer benefit plan within the meaning of Section 3(37) or 4001(a)(3) of
ERISA.
(c) With respect to the Benefit Plans, no event has
occurred and there exists no condition or set of circumstances, in connection
with which Trident could be subject to any liability under the terms of such
Benefit Plans, ERISA, the Code or any other applicable Law.
(d) Trident has made available to Parent all collective
bargaining or other labor union contracts to which Trident is a party applicable
to persons employed by Trident and no collective bargaining agreement is being
negotiated by Trident. Schedule 3.10(d) sets forth an accurate and complete list
of all such contracts and agreements. There is no pending or, to the knowledge
of Trident, threatened labor dispute, strike or work stoppage against Trident
nor its representatives or employees, has committed any unfair labor practices
in connection with the operation of the business of Trident, and there is no
pending or, to the knowledge of Trident, threatened charge or complaint against
Trident by the National Labor Relations Board or any comparable state agency.
SECTION 3.11 Taxes. (i) Section 3.11 of the Disclosure Schedule sets
forth a list of all tax returns filed by Trident and delivered to Parent. Except
as set forth in Section 3.11 of the Disclosure Schedule, Trident has timely
filed all returns and reports required to be filed by Trident with any taxing
authority with respect to Taxes for any period ending on or before the date
hereof, and all such filings were made timely taking into account any extension
of time to file granted to or obtained on behalf of Trident; (ii) all Taxes
payable on such returns or reports that are due prior to the Closing Date have
been paid or will be paid; (iii) adequate provision will be made prior to the
Closing Date on the books of Trident for all liabilities for Taxes payable on
such returns or reports that are due on or after the Closing Date; (iv) as of
the date hereof, no deficiency for any Taxes has been asserted or assessed by a
taxing authority against Trident, and there is no outstanding audit examination,
deficiency or refund litigation with respect to any Taxes of Trident; and (v)
all liabilities for Taxes of Trident that are or will become due or payable with
respect to periods covered by the Financial Statements referred to in Section
3.6 hereof have been paid or adequately reserved for on such Financial
Statements. Trident has not executed an extension or waiver of any statute of
limitations on the assessment or collection of any material Tax due that is
currently in effect. For purposes of this Agreement, "Tax" or "Taxes" means any
and all taxes, charges, fees and levies payable to any federal, state, local or
foreign taxing authority or agency, including, without limitation, (i) income,
franchise, profits, gross receipts, minimum, alternative minimum, ad valorem,
sales, use, real or personal property, payroll, withholding workers
compensation, unemployment compensation, and any excise taxes, (ii) customs
duties, charges, levies,
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or other similar assessment of any kind, and (iii) interest, penalties and
additions to tax imposed with respect thereto.
SECTION 3.12 Brokers. Except as disclosed in Section 3.12 of the
Disclosure Schedule, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Trident.
SECTION 3.13 Environmental Matters.
(a) Trident is in compliance with all applicable Laws
relating to pollution control and environmental contamination including, but not
limited to, all Laws governing the generation, use, collection treatment,
storage, transportation, recovery, removal, discharge or disposal of Hazardous
Substances and all Laws with regard to record-keeping notification and reporting
requirements respecting Hazardous Substances, except where the failure to be in
compliance with such Laws, would not have a Trident Material Adverse Effect.
(b) Trident is not subject to any order or decree of and
has not received any written notice from any Governmental Entity with respect to
any alleged violation by or remedial obligation of Trident under any applicable
environmental or health or safety Laws.
(c) Trident has not filed with or made any notification to
any Governmental Entity respecting, and Trident has no knowledge with respect to
any Facility of, (i) any burying, dumping, leaking, tank failure, spillage,
evaporation, underground injection, or disposal of any Hazardous Substances,
(ii) any unpermitted discharge or release of any Hazardous Substances from or
related to the businesses of Trident, or (iii) any soil or groundwater
contamination.
(d) Trident does not own or possess or control any PCB's or
PCB-contaminated fluid or PCB-contaminated or PCB-contaminating equipment, nor
does any Facility contain in or on its premises any waste, scrap, raw material,
work-in-progress, inventory, product, residue or other material or substance
containing PCB's. Trident does not own, possess or control, directly or
indirectly, any asbestos or asbestos- containing material, nor does any Facility
contain in or on its premises any waste, scrap, raw material, work-in-progress,
inventory, product, residue or other material containing asbestos.
(e) As used in Section "Hazardous Substances" shall mean,
collectively, contaminates, pollutants, toxic or hazardous chemicals, petroleum
products, polychlorinated biphenyls and asbestos.
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SECTION 3.14 SEC Requirements. Trident acknowledges that Parent is a
publicly held company and that Trident has received Parent's SEC Reports."
SECTION 3.15 Intellectual Property. Section 3.15 of the Disclosure
Schedule lists Trident's Intellectual Property (as defined herein). Trident owns
or has valid, binding, enforceable and adequate rights to use all material
patents, trademarks, trade names, service marks, service names, copyrights,
other proprietary intellectual property rights, applications therefor and
licenses or other rights in respect thereof ("Intellectual Property") used or
held for use or necessary in connection with its business without any conflict
with the rights of others. Trident has not received any notice from any other
person pertaining to or challenging the right of Seller to use any Intellectual
Property or any trade secrets, proprietary information, inventions, know-how,
processes and procedures owned or used by or licensed to it.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND PARENT SUB
The Parent and Parent Sub hereby jointly and severally represent and
warrants to Trident as follows:
SECTION 4.1 Organization and Qualification. The Parent and Parent Sub
are corporations duly organized, validly existing and in good standing under the
laws of the State of Florida, and have the requisite corporate power and
authority to own, lease and operate their properties and to carry on their
business as it is now being conducted and are duly qualified to do business in
any other jurisdiction by virtue of the nature of the businesses conducted by
them or the ownership or leasing of the properties, except where the failure to
be so qualified will not, when taken together with all other such failures, have
a material adverse effect on the business, operations, properties, assets,
financial condition or results of operation of the Parent and its subsidiaries
taken as a whole. (Any such material adverse effect being hereinafter referred
to as "Parent Material Adverse Effect").
SECTION 4.2 Articles of Incorporation and By-Laws. The Parent has
furnished to Trident complete and correct copies of the Articles of
Incorporation and ByLaws of the Parent and Parent Sub, as amended or restated to
date and each is a complete and correct copy of such document as in effect on
the date hereof. The Parent and Parent Sub are not in violation of any of the
provisions of its Articles of Incorporation or By-Laws.
SECTION 4.3 Capitalization.
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(a) The authorized and outstanding capital stock of Parent
and Parent Sub is set forth in Section 4.3 of the Disclosure Schedule. All
Shares have been duly authorized and are validly issued, and are fully paid and
nonassessable, and free of preemptive rights.
(b) Except pursuant to this Agreement, as set forth in the
Parent SEC Reports (as hereinafter defined) and in Section 4.3 of the Disclosure
Schedule, as of the date hereof, there are not now outstanding options,
warrants, rights to subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of any class of capital stock of the Parent or Parent Sub, or
agreements, understandings or arrangements to which the Parent or Parent Sub is
a party, or by which the Parent or Parent Sub is or may be bound, to issue
additional shares of its capital stock or options, warrants, scrip or rights to
subscribe for, calls or commitment of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, any shares of any
class of its capital stock.
SECTION 4.4 Authority. The Parent and Parent Sub have all requisite
corporate power and authority to execute and deliver this Agreement, to perform
the obligations hereunder and to consummate the transactions contemplated hereby
subject to the required approval of Parent's shareholders ("Parent Shareholder
Approval") as and if required. The execution and delivery of this Agreement by
the Parent and Parent Sub and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Parent and Parent Sub is necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
except the Parent Shareholder Approval. This Agreement has been duly executed
and delivered by the Parent and Parent Sub and constitutes the legal, valid and
binding obligation of Parent and Parent Sub enforceable against the Parent and
Parent Sub in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally and general principles of equity.
SECTION 4.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Parent and Parent Sub does not, and the performance by the Parent and Parent Sub
of their obligations hereunder will not: (i) conflict with or violate the
Articles of Incorporation or By-Laws of the Parent or Parent Sub; (ii) conflict
with, breach or violate any federal, state, foreign or local law, statute,
ordinance, rule, regulation, order, judgment or decree (collectively, "Laws") in
effect as of the date of this Agreement and applicable to the Parent and Parent
Sub or by which any of their properties or assets are bound; or (iii) result in
any breach of, constitute a default (or an event that with notice or lapse of
time or both would become a default) under, give to any other entity any right
of termination, amendment, acceleration or cancellation of, require payment
under, or result in the creation of a lien or
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encumbrance on any of the properties or assets of the Parent or Parent Sub
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the Parent
or Parent Sub is a party or by the Parent or Parent Sub or any of their
properties or assets is bound. Excluding from the foregoing clauses (ii) and
(iii) such violations, conflicts, breaches, defaults, terminations,
accelerations, creations of liens, or incumbence that would not, in the
aggregate, have a Parent Material Adverse Effect.
(b) Except as set forth in the Parent SEC Reports or
Section 3.5 of the Disclosure Schedule, the execution and delivery of this
Agreement by the Parent and Parent Sub does not, and the performance by the
Parent or Parent Sub does not require the Parent or Parent Sub to obtain any
consent, registration, approval, authorization or permit of, to make any filing
with, or to give notification to, any person, including any governmental or
regulatory authority, agency, court or commission, domestic or foreign
(collectively, "Governmental Entities"), based on any Law or other requirement
of any Government Entity in effect as of the date of this Agreement.
SECTION 4.6 Report and Financial Statements. The Parent has made
available to Trident a copy of each report, schedule and definitive proxy
statement filed by the Parent with the Securities and Exchange Commission since
February 13, 1997 (collectively, the "Parent SEC Reports"). As of their
respective dates, the Parent SEC Reports complied in all material respects with
the requirements of the laws, rules and regulations applicable to such Parent
SEC Reports. As of their respective dates, the Parent SEC Reports 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 statements therein, in light
of the circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
the Parent included in the Parent SEC Reports ("the Parent Financial
Statements") have been prepared in accordance with general accepted accounting
principles applied on a consistent basis (except as may be indicated therein or
on the notes thereto and except with respect to unaudited statements permitted
by Form 10-Q of the SEC) and fairly present the financial position of the Parent
as of the dates thereof and the results of their operations and changes in
financial position for the periods than ended, subject, in the case of the
unaudited interim financial statements, to normal year end and audit adjustments
and any other adjustments described therein.
SECTION 4.7 Absence of Certain Changes or Events. Except as set forth
in Section 4.7 of the Disclosure Schedule and except as disclosed in the Parent
SEC Reports, from September 30, 1997 through the date hereof, there has not been
any Parent Material Adverse Effect.
SECTION 4.8 Compliance with Applicable Laws. Except as set forth in
Section 4.8 of the Disclosure Schedule and except as disclosed in the Parent SEC
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Reports, the Parent is not in violation of, or, to the knowledge of the Parent
is under investigation with respect to or has been given notice or has been
charged with the violation of any Law of a Governmental Entity, except for
violations which individually or in the aggregate do not, have a Parent Material
Adverse Effect. The Parent has all material permits, licenses, franchises and
other governmental authorizations, consents and approvals necessary to conduct
its business as presently conducted except those the absence of which would not,
individually or in the aggregate, have a Parent Material Adverse Effect.
SECTION 4.9 Compliance with Certain Agreements. Except as set forth in
Section 4.9 of the Disclosure Schedule and except as disclosed in the Parent SEC
Reports, as of the date hereof, the Parent is not in breach or in violation of
or in default in the performance or observance of any term or provision of, and
no event has occurred which, with the lapse of time or action by a third party,
could result in default under (i) the Articles of Incorporation or Bylaws of the
Parent or (ii) any contract, commitment, agreement, indenture, mortgage, loan
agreement, bond, or other instrument to which the Parent is a party or by which
it is bound or to which its property is subject, which breach, violation or
default, in the case of clause (ii) of this Section 4.9 would have, in the
aggregate with all such other breaches, violations or defaults, a Parent
Material Adverse Effect.
SECTION 4.10 Employee Benefit Plans; Labor Matters.
(a) Section 4.10(a) of the Disclosure Schedule and the
Parent SEC Reports describes all "employee pension benefit plans" (as defined in
Section 3(2) of ERISA)," "employee welfare benefit plans" (as defined in Section
3(1) of ERISA) and all other employee benefit, deferred compensation, stock
option, restricted stock or other compensation plans, programs, policies,
arrangements and contracts (including, without limitation, any "employee benefit
plan," as defined in Section 3(3) of ERISA) maintained, sponsored, contributed
to or required to be contributed to by the Parent as of the Effective Time. The
Parent does not have any liability or obligation with respect to any employee
benefit plan, program, policy, agreement, commitment or arrangement, deferred
compensation plan, program or arrangement, compensation plan or payroll
arrangement which is not a Benefit Plan. With respect to each Benefit Plan, the
Parent has made available to Trident a true and correct copy of: (i) the most
recent annual report (Form 5500) filed with the IRS; (ii) the current text and
agreement for such Benefit Plan; (iii) each trust agreement relating to such
Benefit Plan; (iv) the most recent summary plan description for each Benefit
Plan for which a summary plan description is required; and (v) the most recent
determination letter, if any, issued by the IRS with respect to any Benefit Plan
qualified under Section 401(a) of the Code.
(b) Neither the Parent nor any person under common control
with the Parent, within the meaning of Section 4001 of ERISA, maintains or
contributes to
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as of the Effective Time, as has at any time prior to the Effective Time
maintained or contributed to a Benefit Plan subject to Title IV of ERISA or a
multi-employer benefit plan within the meaning of Section 3(37) or 4001(a)(3) of
ERISA.
(c) With respect to the Benefit Plans, no event has
occurred and there exists no condition or set of circumstances, in connection
with which the Parent could be subject to any liability under the terms of such
Benefit Plans, ERISA, the Code or any other applicable Law.
(d) The Parent has made available to Trident all collective
bargaining or other labor union contracts to which the Parent is a party
applicable to persons employed by the Parent and no collective bargaining
agreement is being negotiated by the Parent. Schedule 3.10(d) sets forth an
accurate and complete list of all such contracts and agreements. There is no
pending or, to the knowledge of the Parent, threatened labor dispute, strike or
work stoppage against the Parent nor its representatives or employees, has
committed any unfair labor practices in connection with the operation of the
business of the Parent, and there is no pending or, to the knowledge of the
Parent, threatened charge or complaint against the Parent by the National Labor
Relations Board or any comparable state agency.
SECTION 4.11 Taxes. (i) The Parent has timely filed all returns and
reports required to be filed by the Parent with any taxing authority with
respect to Taxes for any period ending on or before the date hereof, and all
such filings were made timely taking into account any extension of time to file
granted to or obtained on behalf of the Parent; (ii) all Taxes payable on such
returns or reports that are due prior to the Closing Date have been paid or will
be paid; (iii) adequate provision will be made prior to the Closing Date on the
books of the Parent for all liabilities for Taxes payable on such returns or
reports that are due on or after the Closing Date; (iv) as of the date hereof,
no deficiency for any Taxes has been asserted or assessed by a taxing authority
against the Parent, and there is no outstanding audit examination, deficiency or
refund litigation with respect to any Taxes of Parent; and (v) all liabilities
for Taxes of Parent that are or will become due or payable with respect to
periods covered by the Financial Statements referred to in Section 4.6 hereof
have been paid or adequately reserved for on such Financial Statements. The
Parent has not executed an extension or waiver of any statute of limitations on
the assessment or collection of any material Tax due that is currently in
effect. For purposes of this Agreement, "Tax" or "Taxes" means any and all
taxes, charges, fees and levies payable to any federal, state, local or foreign
taxing authority or agency, including, without limitation, (i) income,
franchise, profits, gross receipts, minimum, alternative minimum, ad valorem,
sales, use, real or personal property, payroll, withholding, workers
compensation, unemployment compensation, and any excise taxes, (ii) customs
duties, charges, levies, or other similar assessment of any kind, and (iii)
interest, penalties and additions to tax imposed with respect thereto.
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SECTION 4.12 Brokers. Except as disclosed in Section 4.12 of the
Disclosure Schedule, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Parent.
SECTION 4.13 Environmental Matters.
(a) The Parent is in compliance with all applicable Laws
relating to pollution control and environmental contamination including, but not
limited to, all Laws governing the generation, use, collection treatment,
storage, transportation, recovery, removal, discharge or disposal of Hazardous
Substances and all Laws with regard to record-keeping notification and reporting
requirements respecting Hazardous Substances, except where the failure to be in
compliance with such Laws, would not have a Parent Material Adverse Effect.
(b) The Parent is not subject to any order or decree of and
has not received any written notice from any Governmental Entity with respect to
any alleged violation by or remedial obligation of the Parent under any
applicable environmental or health or safety Laws.
(c) The Parent has not filed with or made any notification
to any Governmental Entity respecting, and the Parent has no knowledge with
respect to any Facility of, (i) any burying, dumping, leaking, tank failure,
spillage, evaporation, underground injection, or disposal of any Hazardous
Substances, (ii) any unpermitted discharge or release of any Hazardous
Substances from or related to the businesses of the Parent, or (iii) any soil or
groundwater contamination.
(d) The Parent does not own or possess or control any PCB's
or PCB-contaminated fluid or PCB-contaminated or PCB-contaminating equipment,
nor does any Facility contain in or on its premises any waste, scrap, raw
material, work-in-progress, inventory, product, residue or other material or
substance containing PCB's. The Parent does not own, possess or control,
directly or indirectly, any asbestos or asbestos- containing material, nor does
any Facility contain in or on its premises any waste, scrap, raw material,
work-in-progress, inventory, product, residue or other material containing
asbestos.
(e) As used in Section "Hazardous Substances" shall mean,
collectively, contaminates, pollutants, toxic or hazardous chemicals, petroleum
products, polychlorinated biphenyls and asbestos.
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ARTICLE 5
COVENANTS
SECTION 5.1 Affirmative Covenants. Prior to the Effective Time or the
earlier termination of this Agreement, pursuant to Article 8 hereof, unless
otherwise specifically provided in this Agreement or consented to in writing by
Parent or Trident, Parent and Trident each shall: (i) operate its business and
conduct its affairs only in the usual and ordinary course consistent with past
practices, and in such manner as shall be consistent with all representations
and warranties of Trident so that the same remain true and accurate as of the
Closing Date; (ii) preserve substantially intact its business organization,
maintain its rights and franchises, use its reasonable efforts to retain the
services of its officers and key employees and maintain its relationships with
its customers and suppliers.
SECTION 5.2 Approval of Trident Shareholders. Trident shall, as soon as
reasonably practicable: take all steps reasonably necessary to call, give notice
of, convene and hold a special meeting of its shareholders for the purpose of
approving this Agreement and the transactions contemplated hereby, and for such
other purposes as may be necessary or desirable.
SECTION 5.3 Negative Covenants of Trident. Except as specifically
provided in this Agreement or otherwise consented to in writing by Parent (which
consent shall not be unreasonably withheld) from the date of this Agreement
until the Effective Time, or until the earlier termination of this Agreement,
Trident shall not do any of the following:
(a) (i) increase the compensation payable or to become
payable to any director of officer; (ii) grant any severance or termination pay
to, or enter into any employment or severance agreement with, any director,
officer or employee; or (iii) establish, adopt, enter into, or amend, any
Benefit Plan except as may be required by applicable Law except in any case for
customary bonus or increases in the ordinary course of business or as required
by contract;
(b) declare, set aside or pay any dividend on, or make any
other distribution in respect of, outstanding shares of capital stock;
(c) (i) redeem, purchase or otherwise acquire any shares of
its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options, warrants or
conversion or other rights to acquire any shares of its capital stock or any
such securities or obligations; (ii) effect any reorganization or
recapitalization; or (iii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities.
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(d) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of, or in any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets of any other person;
(e) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its material assets, except for
dispositions of assets in the ordinary course of business and consistent with
past practice;
(f) initiate, solicit, encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any competing transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquires or otherwise
with respect to a competing transaction, or agree to or endorse any competing
transaction, or authorize or permit any of the officers, directors or employees
of Seller or any investment banker, financial advisor, attorney, accountant or
other representative retained by Seller to take any such action; notwithstanding
the foregoing, Trident and its directors may, to the extent required by their
fiduciary duties under applicable law, participate in discussions or
negotiations with, furnish information to and afford access to properties, books
and records of Trident and its subsidiaries to, any person in connection with a
competing transaction by such person.
(g) propose or adopt any amendments to its Articles of
Incorporation or By-Laws;
(h) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business consistent with
past practice, and except in connection with obtaining a credit agreement with
Providers Financing & Systems, Cerberus, GE Capital, Bank Parabas or Nations
Credit up to the aggregate principal amount of $45,000,000 on terms acceptable
to Parent;
(i) (i) change any of its methods of accounting in effect
at May 31, 1997, (ii) make or rescind any express or deemed election relating to
taxes, or (iii) change any of its methods of reporting income or deductions for
federal income tax purposes from those employed in the preparation of the
federal income tax returns for the taxable year ended May 31, 1997, except, in
the case of clause (i) or (ii) as may be required by Law or generally accepted
accounting principles;
(j) agree in writing or otherwise to do any of the
foregoing.
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SECTION 5.4 Access and Information. Trident and Parent shall: (i)
provide to each party and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Representatives") reasonable access at reasonable times upon reasonable prior
notice to the officers, employees, agents, properties, offices and other
facilities of the other party and to the books and records thereof; (ii) furnish
promptly to the other party and their Representatives such information
concerning the business, properties, contracts, records and personnel of the
other party (including, without limitation, financial, operating and other data
and information) as may be reasonably requested, from time to time, by such
party; each party shall keep such information confidential in accordance with
the terms of the respective confidentiality letters, dated June 12, 1997 (the
"Confidentiality Letters"), between Parent and Trident. Each party agrees that
the Confidentiality Letters shall remain in full force and effect.
SECTION 5.5 Additional Covenants of Parent and Parent Sub. Until the
Effective Time or earlier termination of this Agreement
(a) Parent shall furnish to Trident copies of its Financial
Statements and reports and filings made pursuant to the Exchange Act;
(b) Parent and Parent Sub shall not take or agree in
writing or otherwise take any action which would make any of the representations
or warranties of Parent or Parent Sub contained in this Agreement untrue or
incorrect or prevent Parent or Parent Sub from performing or causing or cause
Parent or Parent Sub not to perform their covenants hereunder.
SECTION 5.6 Agreement with Respect to Affiliates. Trident shall
identify in a letter to Parent, all persons who are, at the Closing Date,
"Affiliates" of Trident as such term is used in Rule 145 under the Securities
Act. Trident shall use its best efforts to cause such Affiliates to deliver to
Trident on or prior to the Closing Date a written agreement in connection with
the restrictions of Affiliates under Rule 145 under the Securities Act, in form
and substance reasonably satisfactory to Parent and Trident.
SECTION 5.7 Negative Covenants of Parent. Except as specifically
provided in this Agreement or otherwise consented to in writing by Trident
(which consent shall not be unreasonably withheld) from the date of this
Agreement until the Effective Time, or until the earlier termination of this
Agreement, excluding those items previously reported, disclosed, recorded in the
books of the corporation, or as noted in any filing with the SEC, NASDAQ or
NASD, Parent shall not do any of the following:
(a) (i) increase the compensation payable or to become
payable to any director of officer; (ii) grant any severance or termination pay
to, or enter
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into any employment or severance agreement with, any director, officer or
employee; or (iii) establish, adopt, enter into, or amend, any Benefit Plan
except as may be required by applicable Law except in any case for customary
bonus or increases in the ordinary course of business or as required by
contract;
(b) declare, set aside or pay any dividend on, or make any
other distribution in respect of, outstanding shares of capital stock;
(c) (i) redeem, purchase or otherwise acquire any shares of
its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options, warrants or
conversion or other rights to acquire any shares of its capital stock or any
such securities or obligations; (ii) effect any reorganization or
recapitalization; or (iii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities.
(d) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of, or in any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets of any other person;
(e) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its material assets, except for
dispositions of assets in the ordinary course of business and consistent with
past practice;
(f) initiate, solicit, encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any competing transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquires or otherwise
with respect to a competing transaction, or agree to or endorse any competing
transaction, or authorize or permit any of the officers, directors or employees
of Seller or any investment banker, financial advisor, attorney, accountant or
other representative retained by Seller to take any such action; notwithstanding
the foregoing, Parent and its directors may, to the extent required by their
fiduciary duties under applicable law, participate in discussions or
negotiations with, furnish information to and afford access to properties, books
and records of Parent and its subsidiaries to, any person in connection with a
competing transaction by such person.
(g) propose or adopt any amendments to its Articles of
Incorporation or By-Laws;
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(h) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business consistent with
past practice, and except in connection with obtaining a credit agreement with
Providers Financing Services, Cerberus, or Nations Credit up to the aggregate
principal amount of $45,000,000;
(i) (i) change any of its methods of accounting in effect
at June 30, 1997, (ii) make or rescind any express or deemed election relating
to taxes, or (iii) change any of its methods of reporting income or deductions
for federal income tax purposes from those employed in the preparation of the
federal income tax returns for the taxable year ended June 30, 1997, except, in
the case of clause (i) or (ii) as may be required by Law or generally accepted
accounting principles;
(j) agree in writing or otherwise to do any of the
foregoing.
ARTICLE 6
ADDITIONAL AGREEMENTS
SECTION 6.1 Appropriate Action; Consents; Filings.
(a) The parties hereto shall use their reasonable
commercial efforts to: (i) take, or cause to be taken, all appropriate action,
and do, or cause to be done, all things necessary, proper or advisable under
applicable Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement; (ii) obtain from any Governmental Entities any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made in connection with the authorization, execution
and delivery of this Agreement and the consummation of the transactions
contemplate hereby, including, without limitation, the Merger; and (iii) make
all necessary filings, and thereafter make any other required submissions, with
respect to this Agreement and the Merger required under any applicable Law and
the parties hereto shall cooperate in connection with the making of all such
filings. Each of Parent and Trident shall have the right to review in advance,
and to the extent practicable each will consult with the other on, in each case
subject to applicable laws relating to the exchange of information as advised by
counsel, all the information relating to the other parties and any of their
respective subsidiaries or affiliates which are to appear in any filing to be
made with, or written materials to be submitted to, any third party or any
Governmental Entity in connection with the transactions contemplated by this
Agreement. Subject to applicable laws relating to the exchange of information as
advised by counsel, Trident and Parent shall furnish all information required
for any application or other filing to be made pursuant
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to the rules and regulations of any applicable Law in connection with the
transactions contemplated by this Agreement.
(b) The parties hereto shall cooperate and use their or its
reasonable commercial efforts to contest and resist any action, including
legislative, administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order (whether
temporary, preliminary or permanent) (an "Order") that is in effect and that
restricts, prevents or prohibits the consummation of the Merger or any other
transactions contemplated by this Agreement, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal
and all available legislative action.
(c) The parties hereto shall: (i) give any notices to third
parties, and use their or its reasonable commercial efforts to obtain all third
party consents, waivers, approvals, authorizations and orders required in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the Merger; and (ii) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement.
SECTION 6.2 Public Announcements. Unless otherwise required by
applicable law, the SEC or NASDAQ, the parties hereto shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to the Merger and shall not issue any such press release or make
any such public statement prior to such consultation.
SECTION 6.3 Directors and Officers Indemnification. The Articles of
Incorporation and Bylaws for the Surviving Corporation shall contain provisions
no less favorable with respect to indemnification of directors, officers,
employees and agents that are set forth in the current Articles of Incorporation
and Bylaws of the Surviving Corporation, which provisions shall not be amended,
repealed, or otherwise modified for a period of six (6) years from the Effective
Time, unless such modification is required by law.
SECTION 6.4 Conveyance Taxes. Parent and Trident shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications,
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, reporting,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated hereby that are required or
permitted to be filed at or before the Effective Time.
SECTION 6.5 Restrictions on Transferability of Shares. The Shares and
Preferred Stock issued pursuant to this Agreement shall be subject to
restrictions on
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transferability as follows: no Trident Shareholder shall directly or indirectly,
offer to sell, sell, grant any option for the sale of, assign, transfer, pledge,
hypothecate or otherwise encumber any of their Shares of Common Stock (either
pursuant to Rule 144 of the Rules and Regulations or otherwise) or dispose of
any beneficial interest therein until May 13, 1999 or three (3) months after the
Parent shareholders (other than the shareholders who presently hold registered
shares) are able to transfer their shares of Common Stock of Parent, whichever
is earlier; and (ii) no Trident Preferred Shareholder shall directly or
indirectly, offer to sell, sell, grant any option for the sale of, assign,
transfer, pledge, hypothecate or otherwise encumber any of their Shares of
Common Stock (either pursuant to Rule 144 of the Rules and Regulations or
otherwise) or dispose of any beneficial interest therein until February 13,
1999.
SECTION 6.6 Directors. Parent shall with the consent of Trident, cause
two independent directors to be appointed to Parent's Board of Directors in
order to comply with the NASDAQ governance requirements.
ARTICLE 7
CLOSING CONDITIONS
SECTION 7.1 Conditions to Obligations of Each Party Under this
Agreement. The obligations of each party hereto to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) No Lawsuits. No Governmental Entity or court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any Order (whether temporary, preliminary or permanent) which is in
effect or which is pending and which makes the Merger illegal or otherwise
prohibits consummation of the Merger.
(b) Government Approvals. All authorizations, consents,
orders or approvals of, or declarations, registrations, or filings with, or
expiration of waiting periods imposed by, any Governmental Entity necessary for
the consummation of the Merger shall have been obtained, filed or occurred.
(c) Shareholder Approval. The approval of this Agreement by
the holders of the Shares shall have been obtained in accordance with applicable
law and the Articles of Incorporation and By-laws of Trident, and such approval
shall not have been modified, amended or rescinded.
(d) Dissenting Shares. The aggregate number of Dissenting
Shares and cash in lieu of fractional shares of Parent Shares issuable in the
Merger shall
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not be such as to result in the Merger not constituting a reorganization within
the meaning of Section 368 of the Internal Revenue Code.
(e) Pooling Letters. The Parent and Trident shall have
received from their accountants in their capacity as auditors to the parties, a
letter in form and substance satisfactory to each party stating that the
transaction contemplated by this Agreement is eligible to be accounted for as a
pooling of interests.
(f) Financial Statements. Receipt by Parent of (i) balance
sheets, related statements of income, retained earnings and changes in financial
position of Trident as required by Parent for regulatory purposes, including the
Securities and Exchange Commission, audited by BDO Seidman, L.L.P., independent
public auditors for Trident or by independent public auditors acceptable to
Parent, and (ii) an unaudited balance sheet and related statements of income
retained earnings and changes in financial position of Trident for an interim
period since the date of such audited Financial Statements, in each case which
are not materially adverse compared to the tax returns and unaudited pro forma
financial statements provided by Trident to Parent for the relevant periods.
(g) Due Diligence. Satisfactory completion of each party
and their advisor's legal and accounting due diligence.
SECTION 7.2 Additional Conditions to Obligations of Parent and Parent
Sub. The obligations of Parent and Parent Sub to effect the Merger are also
subject to the following conditions unless waived by Parent:
(a) Representations and Warranties. The representations and
warranties of Trident contained in this Agreement shall be true and correct or
complied with in all material respects as of the date hereof and as of the
Effective Time as though made at and as of the Effective Time, except (i) as
contemplated or permitted by this Agreement; (ii) representations and warranties
which address matters only as a particular date, (which shall have been true and
correct as of such date, subject to clause (iii)); and (iii) where the failure
to be true and correct could not reasonably be expected to have a Trident
Material Adverse Effect. Parent shall have received a certificate of the
President and Chief Financial Officer of Trident to such effect.
(b) Agreements and Covenants. Trident shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with at or prior to the Effective
Time. Parent shall have received a certificate of the President and Chief
Financial Officer of Trident to such effect.
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(c) Consent and Approvals. All consents, approvals,
authorizations and waivers required to be obtained to consummate the Merger and
the other transactions contemplated hereby shall have been obtained, except
where a failure to have received such consents, approvals, authorizations or
waivers could not reasonably be expected to have (i) a Trident or Parent
Material Adverse Effect or (ii) significantly delay or prevent the consummation
of the Merger.
(d) The Merger. All conditions precedent to the obligations
of Parent and Parent Sub to consummate the Merger shall have been satisfied or
waived.
(e) Corporate Proceedings. All corporate and other
proceedings required to be taken on the part of Trident to authorize and carry
out this Agreement shall have been taken.
(f) Fairness Opinion. The fairness opinion delivered to
Parent and its Board of Directors dated August 18, 1997, shall not have been
withdrawn.
(g) Employees. All Employee/Physicians of Trident shall
agree to become employee/physicians of Parent.
SECTION 7.3 Additional Conditions to Obligations of Trident. The
obligations of Trident to effect the Merger are also subject to the following
conditions unless waived by Trident:
(a) Representations and Warranties. The representations and
warranties of the Parent and Parent Sub contained in this Agreement shall be
true and correct or complied with in all material respects as of the date hereof
and as of the Effective Time as though made at and as of the Effective Time,
except (i) as contemplated or permitted by this Agreement; (ii) representations
and warranties which address matters only as a particular date, (which shall
have been true and correct as of such date, subject to clause (iii); and (iii)
with a failure to be true and correct could not reasonably be expected to having
the Parent Material Adverse Effect. Trident shall have received a certificate of
the President and Chief Financial Officer of the Parent to such effect.
(b) Agreements and Covenants. Parent and Parent Sub shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by any of
them at or prior to the Effective Time. Trident shall have received a
certificate of the President and Chief Financial Officer of the Parent to that
effect.
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(c) Consent and Approvals. All consents, approvals,
authorizations and waivers required to be obtained to consummate the Merger and
the other transactions contemplated hereby shall have been obtained, except
where a failure to have received such consents, approvals, authorizations or
waivers could not reasonably be expected to have (i) a Trident or Parent
Material Adverse Effect; or (ii) significantly delay or prevent the consummation
of the Merger.
(d) The Merger. All conditions precedent to the obligations
of Trident to consummate the Merger shall have been satisfied or waived.
(e) Corporate Proceedings. All corporate and other
proceedings required to be taken on the part of the Parent and Parent Sub to
authorize and carry out this Agreement shall have been taken.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time:
(a) by mutual written consent of Parent and Trident;
(b) by either Parent or Trident, upon a material breach of
any representation, warranty, covenant or agreement on the part of Trident or
Parent, respectively, set forth in this Agreement, or if any representation or
warranty of Trident or Parent, respectively, shall have become untrue, in either
case such that any of the conditions set forth in Section 7.2 or 7.3 hereof
would not be satisfied (a "Terminating Breach"), and such breach shall, if
capable of cure, not have been cured within ten (10) days after receipt by the
party in breach of a notice from the non-breaching party setting forth in detail
the nature of such breach;
(c) by either Parent or Trident, if there shall be any
Order which has become final and nonappealable except if the party seeking to
terminate this Agreement pursuant to this Section 8.1(c) has not complied with
its obligations under Section 6.1(b) hereof; or
(d) by either Parent or Trident, if the Merger shall not
have been consummated before December 31, 1997; provided, however, that this
Agreement may be extended by written notice of either Parent or Trident to a
date not later than January 12, 1998 after the date hereof, if the Merger shall
not have been consummated as a result of Trident or Parent having failed to
receive all required approvals or consents
27
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with respect to the Merger or as a result of the entering of an Order; provided,
however, that the right to terminate this Agreement under this Paragraph 8.1(d)
shall not be available to any party whose failure to fulfill any obligations
under this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before this date.
(e) by Trident, if, as a result of a tender offer by a
party other than Parent or any of its affiliates or an offer with respect to a
merger, sale of assets or other business combination by a party other than
Parent or any of its affiliates, the Board of Directors of Trident determines
the transaction to be more favorable to the shareholders of Trident than the
transaction proposed by Parent.
SECTION 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1 hereof, there shall be no liability on
the party of Parent or Trident or any of their respective officers, directors
agents or other representatives and all rights and obligations of any party
hereto shall cease, except that (a) the provisions of Sections 6.2 and 9.3 and
the parties' Confidentiality Letters shall survive any such termination, and (b)
nothing herein shall relieve any party of any liability for any breach of this
Agreement.
SECTION 8.3 Amendment. This Agreement may be amended by the parties
hereto any time prior to the Effective Time provided that the Exchange Ratio
shall not be amended after Trident's shareholders and the Parent's shareholders
have formally consented hereto. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.4 Waiver. At any time prior to the Effective Time, Parent or
Trident, as appropriate, may: (a) extend the time for the performance of any of
the obligations or other acts of Trident, Parent or Parent Sub, as the case may
be; (b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto which have been made to it
or them; and (c) waive compliance with any of the agreements or conditions
contained herein for its or their benefit. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by the party or
parties to be bound hereby.
ARTICLE 9
GENERAL PROVISIONS
SECTION 9.1 Nonsurvival of Representations, Warranties and Agreements.
All representations, warranties and agreements in this Agreement shall not
survive the Merger except as otherwise provided in this Agreement and except for
the agreements contained in this Section 9.1 and in Article 2 and Sections 5.8,
6.3, 8.2 and 9.3 hereof. Any
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disclosure made with reference to one or more sections of Trident Disclosure
Schedule shall be deemed disclosed with respect to any section with such
disclosure reschedule to which such disclosure reasonably relates.
SECTION 9.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made when sent, if sent by certified mail, postage pre-paid, return receipt
requested, or when received, if sent by facsimile or recognized commercial
courier service, same day or overnight delivery, to a party at one of the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to Parent or Parent Sub:
Metropolitan Health Networks, Inc.
5100 Town Center Circle
Suite 560
Boca Raton, Florida 33486-1008
Attn: Noel Guillama
with a copy to:
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard
Suite 1900
Fort Lauderdale, Florida 33301
(b) If to Trident:
Trident Medical Concepts, Inc.
1601 Belvedere Road
Suite 500 East
West Palm Beach, Florida 33406
Attn: Anthony Gigliotti
with a copy to:
Holland and Knight
701 Brickell Avenue
Miami, FL 33131
SECTION 9.3 Fees and Expenses. Each of the parties hereto shall be
responsible for their own out-of-pocket expenses (including, without limitation,
all fees and
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expenses of counsel, accountants, investment bankers, experts and consultants)
incurred in connection with or related to the authorization, preparation,
negotiation, execution or performance of this Agreement and all other matters
related to the closing of the transactions contemplated hereby, except Trident
agrees to pay one-half (1/2) of the cost of obtaining the Fairness Opinion from
Stenton Leigh Capital Corp.
SECTION 9.4 Headings. 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.
SECTION 9.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any such term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
SECTION 9.6 Entire Agreement. This Agreement (together with the
Schedules, certificates and documents referred to herein) constitute the entire
agreement of the parties and supersede all prior agreements and undertakings,
other than the Confidentiality Letters, both written and oral, between the
parties, or any of them, with respect to the subject matter hereof.
SECTION 9.7 Assignment Guarantee of Merger Sub Obligations. This
Agreement shall not be assigned by operation of law or otherwise. Parent
guarantees the full and punctional performance by Parent Sub of all the
obligations of Parent Sub.
SECTION 9.8 Parties in Interest. This Agreement shall be binding upon
the inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 9.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall nay single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
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SECTION 9.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida, without giving
effect to applicable principles of conflicts of law.
SECTION 9.11 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
ARTICLE 10
RATIFICATION
SECTION 10.1 Final Parent Ratification. This Agreement must be ratified
by the Board of Directors of Parent prior to 9:00 a.m. on December 5, 1997
("Ratification Time") and such ratification must be certified by the Secretary
of Parent prior to the Ratification Time, or this Agreement will thereby become
null and void.
SECTION 10.2 Review by Counsel. The Parties agree to have their
respective legal counsels review the form and structure of this merger and work
jointly on any modifications necessary to comply with state, federal or their
respective corporate by-laws. This Plan of Merger will remain as executed if not
modified jointly by the parties before 5:00 p.m. EST December 5, 1997.
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IN WITNESS WHEREOF, Parent, Parent Sub and Trident have as of the date
first written above executed this Agreement.
PARENT:
METROPOLITAN HEALTH NETWORKS, INC.,
A FLORIDA CORPORATION
By: /s/ Noel J. Guillama
-------------------------------------
Noel J. Guillama, President
PARENT SUB:
METCARE VI, INC.,
a Florida corporation
By: /s/ Noel J. Guillama
-------------------------------------
Noel J. Guillama, President
TRIDENT MEDICAL CONCEPTS, INC., a
Delaware a corporation
By: /s/ Anthony J. Gigliotti
-------------------------------------
Anthony J. Gigliotti, President
32
FIRST AMENDMENT TO MERGER AGREEMENT
THIS FIRST AMENDMENT TO MERGER AGREEMENT dated January __, 1998, by and
among METROPOLITAN HEALTH NETWORKS, INC., a Florida corporation ("Parent"),
METCARE VI, INC., a Florida corporation and a wholly-owned subsidiary of Parent
("Parent Sub"), and TRIDENT MEDICAL CONCEPTS, INC., a Delaware corporation
("Trident").
RECITALS
WHEREAS, the parties have entered into a Merger Agreement dated as of
November 26, 1997 (the "Merger Agreement") and have agreed to amend certain
provisions of the Merger Agreement as set forth below.
NOW, THEREFORE, in consideration of the agreements contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
conclusively acknowledged, the parties intending to be legally bound, agree as
follows:
1. The provisions of this First Amendment shall govern and control over
any conflicting or inconsistent provisions in the Merger Agreement, but except
as modified hereby, all provisions of the Merger Agreement remain unmodified and
in full force and effect and are hereby reaffirmed by each of the parties
hereto. Unless otherwise defined herein, all capitalized terms shall have the
meanings as provided therefor in the Merger Agreement.
2. Clause (iii) of Section 6.5 of the Merger Agreement is amended as
follows:
(iii) No Trident Preferred Shareholder shall directly
or indirectly offer to sell, sell, grant any option for the sale of, assign,
transfer, pledge, hypothecate or otherwise encumber any of their Shares of
Common Stock (either pursuant to Rule 144 of the Rules and Regulations or
otherwise) or dispose of any beneficial interest until one (1) year from the
Effective Time of the Merger.
3. Section 8.1(d) of the Merger Agreement is amended as follows:
(d) by either Parent or Trident, if the Merger shall not have
been consummated before January 31, 1998; provided, however, that this Agreement
may be extended by written notice of either Parent or Trident to a date not
later than February 10, 1998 after the date hereof, if the Merger shall not have
been consummated as a result of Trident or Parent having failed to receive all
required approvals or consents ^with respect to the Merger or as a result of the
entering of an Order; provided, however, that the right to terminate this
Agreement under this Paragraph 8.1(d) shall not be available to any party whose
failure to fulfill any obligations under this Agreement has
<PAGE>
been the cause of, or resulted in, the failure of the Effective Time to occur on
or before this date.
4. Each party represents and warrants the other as follows:
(a) The execution, delivery and performance of this First
Amendment
(i) has been duly authorized by all necessary or
appropriate acts or proceedings, corporate or otherwise; and
(ii) does not violate or result in a breach or
default under any contract, understanding judgment, order writ, law regulation
that is applicable to the representing party for its assets.
(b) This First Amendment is a valid legal and binding
obligation and agreement of the representing party, and is enforceable against
it in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to the Merger Agreement this 13 day of January, 1998.
PARENT:
METROPOLITAN HEALTH NETWORKS, INC.
By:/s/ Noel J. Guillama
-----------------------------
Name: Noel J. Guillama
Title: President
PARENT SUB: TRIDENT:
METCARE VI, INC. TRIDENT MEDICAL CONCEPTS, INC.
By:/s/ Noel J. Guillama By: /s/ Anthony J. Gigliotti
----------------------------- ------------------------------
Name: Noel J. Guillama Name: Anthony J. Gigliotti
Title: President Title: President
2
SECOND AMENDMENT TO MERGER AGREEMENT
THIS SECOND AMENDMENT TO MERGER AGREEMENT ("Second Amendment") dated
February 22, 1998, by and among METROPOLITAN HEALTH NETWORKS, INC., a Florida
corporation ("Parent"), METCARE VI, INC., a Florida corporation and a
wholly-owned subsidiary of Parent ("Parent Sub"), and TRIDENT MEDICAL CONCEPTS,
INC., a Delaware corporation ("Trident").
RECITALS
WHEREAS, the parties have entered into a Merger Agreement dated as of
November 30, 1997 (the "Merger Agreement") and a First Amendment to Merger
Agreement dated as of January 13, 1998 ("First Amendment" and collectively with
the Merger Agreement the "Agreements");
WHEREAS, as of the date hereof Trident has not obtained the consent of
Madeleine LLC., Trident's Lender (the "Lender's Consent") to consummate the
transaction contemplated by the Agreements;
WHEREAS, the parties have determined that it is in the best interest of
the parties and their shareholders to close the Merger as of the date hereof;
WHEREAS, the parties have agreed that in the event that Trident has not
obtained Lender's Consent or otherwise replaced Lender on or before May 1, 1998
or as otherwise provided for herein ("Ending Date") then and in that event the
Merger will be unwound as provided for herein; and
WHEREAS, to protect the interest of the parties during the period from
the date hereof ("Closing Date") through the Ending Date (the "Transitional
Period") neither Parent, Parent Sub or Trident shall take any action that would
materially adversely effect the business or assets of Parent, Parent Sub or
Trident without the consent of Parent, Parent Sub and Trident.
NOW, THEREFORE, in consideration of the agreements contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
conclusively acknowledged, the parties intending to be legally bound, agree as
follows:
1. The provisions of this Second Amendment shall govern and control
over any conflicting or inconsistent provisions in the Merger Agreement or First
Amendment, but except as modified hereby, all provisions of the Merger Agreement
and First Amendment remain unmodified and in full force and effect and are
hereby reaffirmed by each of the parties hereto. Unless otherwise defined
herein, all capitalized terms shall have the meanings as provided therefor in
the Merger Agreement.
<PAGE>
2. Section 1.6 of the Merger Agreement is amended as follows:
SECTION 1.6 Closing Date, Time and Place. The closing and consummation
of the Merger will take place on February 22, 1998 ("Closing Date") at the
offices of Atlas, Pearlman, Trop & Borkson, P.A., 200 East Las Olas Boulevard,
Suite 1900, Fort Lauderdale, Florida 33301, or at another time or place mutually
agreed upon by the parties hereto.
3. A new section, Section 6.7, shall be added to the Merger Agreement
and read as follows:
SECTION 6.7 Covenants as to Transitional Period
(a) Affirmative Covenants. Prior to the Ending Date, unless
otherwise specifically provided in the Agreement or consented to in writing by
Parent or Trident, Parent and Trident shall: (i) operate its business and
conducts its affairs only in the usual and ordinary course consistent with past
practices, and in such manner as shall be consistent with all representations
and warranties of Trident so that the same remain true and accurate as of the
Ending Date; (ii) preserve substantially intact its business organization,
maintain its rights and franchises, use its reasonable efforts to retain the
services of its officers and key employees and maintain its relationships with
its customers and suppliers.
(b) Negative Covenants of Trident. Except as specifically
provided in this Agreement or otherwise consented to in writing by Parent (which
consent shall not be unreasonably withheld) from the Closing Date of this
Agreement until the Ending Date. Trident/Parent Sub shall not do any of the
following:
(1) (i) increase the compensation payable or to become
payable to any director of officer; (ii) grant any severance or termination pay
to, or enter into any employment or severance agreement with, any director,
officer or employee; or (iii) establish, adopt, enter into, or amend, any
Benefit Plan except as may be required by applicable Law except in any case for
customary bonus or increases in the ordinary course of business or as required
by contract;
(2) declare, set aside or pay any dividend on, or make
any other distribution in respect of, outstanding shares of capital stock;
(3) (i) redeem, purchase or otherwise acquire any
shares of its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options, warrants or
conversion or other rights to acquire any shares of its capital stock or any
such securities or obligations; (ii) effect any reorganization or
recapitalization; or (iii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities.
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<PAGE>
(4) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of, or in any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets of any other person;
(5) sell, lease, exchange, mortgage, pledge, transfer
or otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its material assets, except for
dispositions of assets in the ordinary course of business and consistent with
past practice;
(6) initiate, solicit, encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any competing transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquires or otherwise
with respect to a competing transaction, or agree to or endorse any competing
transaction, or authorize or permit any of the officers, directors or employees
of Trident/Parent Sub or any investment banker, financial advisor, attorney,
accountant or other representative retained by Trident/Parent Sub to take any
such action; notwithstanding the foregoing, Trident/Parent Sub and its directors
may, to the extent required by their fiduciary duties under applicable law,
participate in discussions or negotiations with, furnish information to and
afford access to properties, books and records of Trident/Parent Sub and its
subsidiaries to, any person in connection with a competing transaction by such
person.
(7) propose or adopt any amendments to its Articles of
Incorporation or By-Laws;
(8) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business consistent with
past practice, except for issuance of Trident Sub promissory note or preferred
stock convertible into shares and warrants in approximate amount of $1,000,000
of Metropolitan or Trident after the Ending Date, as the case may be;
(9) (i) change any of its methods of accounting in
effect at the Closing Date, (ii) make or rescind any express or deemed election
relating to taxes, or (iii) change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year ended May 31,
1997, except, in the case of clause (i) or (ii) as may be required by Law or
generally accepted accounting principles;
(10) agree in writing or otherwise to do any of the
foregoing.
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<PAGE>
(c) Negative Covenants of Parent. Except as specifically
provided in this Agreement or otherwise consent to in writing by Trident/Parent
Sub (which consent shall not be unreasonably withheld) from the Closing Date
until the Ending Date, excluding those items previously reported, disclosed,
recorded in the books of the corporation, or as noted in any filing with the
SEC, NASDAQ or NASD, Parent shall not do any of the following:
(1) (i) increase the compensation payable or to become
payable to any director of officer; (ii) grant any severance or termination pay
to, or enter into any employment or severance agreement with, any director,
officer or employee; or (iii) establish, adopt, enter into, or amend, any
Benefit Plan except as may be required by applicable Law except in any case for
customary bonus or increases in the ordinary course of business or as required
by contract;
(2) declare, set aside or pay any dividend on, or make
any other distribution in respect of, outstanding shares of capital stock;
(3) (i) redeem, purchase or otherwise acquire any
shares of its capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options, warrants or
conversion or other rights to acquire any shares of its capital stock or any
such securities or obligations; (ii) effect any reorganization or
recapitalization; or (iii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities.^
(4) sell, lease, exchange, mortgage, pledge, transfer
or otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its material assets, except for
dispositions of assets in the ordinary course of business and consistent with
past practice;
(5) initiate, solicit, encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any competing transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquires or otherwise
with respect to a competing transaction, or agree to or endorse any competing
transaction, or authorize or permit any of the officers, directors or employees
of Parent or any investment banker, financial advisor, attorney, accountant or
other representative retained by Parent to take any such action; notwithstanding
the foregoing, Trident/Parent Sub and its directors may, to the extent required
by their fiduciary duties under applicable law, participate in discussions or
negotiations with, furnish information to and afford access to properties, books
and records of Trident/Parent Sub and its subsidiaries to, any person in
connection with a competing transaction by such person.
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<PAGE>
(6) propose or adopt any amendments to its Articles of
Incorporation or By-Laws;
(7) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business consistent with
past practice and except in connection with obtaining up to an aggregate of
$3,000,000 obtained in connection with the issuance of preferred shares of
Parent;
(8) (i) change any of its methods of accounting in
effect at the Closing Date, (ii) make or rescind any express or deemed election
relating to taxes, or (iii) change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year ended May 31,
1997, except, in the case of clause (i) or (ii) as may be required by Law or
generally accepted accounting principles;
(9) agree in writing or otherwise to do any of the
foregoing.
4. Article II, Section 2.1(a)(1), Section 2.4 and Section 2.5 is
amended to provide for an exchange rate of 1.15.
5. A new section, Article 11, Additional Matters, shall be added to the
Merger Agreement and read as follows:
ARTICLE 11
ADDITIONAL MATTERS
Section 11.1 Waiver. The parties have expressly agreed that the
following Closing conditions set forth in Article 7 shall be waived:
Section 7.1(e) Pooling Letters
Section 7.1(f) Financial Statements, except as provided in
Section 11.2 hereof
Section 11.2 Rights to Unwind.
(a) Parent shall have the absolute right to cause the
Merger to be unwound as provided for in Section 11.3 herein solely upon the
occurrence of any of the following events:
(i) failure by Parent to receive the audited Financial
Statements described in Section 7.1(f) by March 3, 1998 in substantially the
same form as previously delivered in "draft" to Parent and included herewith; or
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<PAGE>
(ii) failure to obtain Lender's Consent to the Merger
Agreement, as amended, or to replace Lender by May 1, 1998;or
(iii) the receipt by Trident of a notice of Event of
Default as described in the Financing Agreement dated as of December 5, 1997.
(b) To exercise the rights under this Article 11, notice shall
be given as provided in Section 9.2 of the Merger Agreement.
Section 11.3 Unwind. In the event that the Merger Agreement should be
unwound for any of the events set forth in Section 11.2, the parties shall take
such action, the results of which shall be to place Parent, Parent Sub, Trident
and the Trident Shareholders in the same or similar financial condition as they
would have been if the transactions contemplated under the Merger Agreement had
not been consummated. Each of the parties shall use their best efforts to take
such actions in order to effectuate, carry out and comply with all the terms and
provisions of this Section.
Section 11.4 Exhibits and Schedules
Parties agree that all exhibits and schedules shall be
prepared and exchanged on or before March 3, 1998 and all parties acknowledge
that they are aware of:
(i) Form 10-Q of Parent and current financial status of
Trident;
(ii) as to Parent matters relating to Kunan, Milian, Ward
and NASD; and
(iii) as to Trident, matters relating to telephone claim
and MDIA.
Section 11.5 Appointment to Board of Directors
Providing Merger Agreement is not unwound, after Ending Date,
Roberto Palenzuela shall become a member of Parent Board of Directors.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment to the Merger Agreement this 22nd day of February, 1998.
PARENT:
METROPOLITAN HEALTH NETWORKS, INC.
By: /s/ Noel J. Guillama
-------------------------------
Name: Noel J. Guillama
Title: President and CEO
PARENT SUB: TRIDENT:
METCARE VI, INC. TRIDENT MEDICAL CONCEPTS, INC.
By: /s/ Noel J. Guillama By: /s/ Anthony J. Gigliotti
------------------------------- -------------------------------
Name: Noel J. Guillama Name: Anthony J. Gigliotti
Title: President and CEO Title: President and CEO
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