SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 12, 1997
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Trident Rowan Group, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 0-2642 52-0466460
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
Two Worlds Fair Drive, Franklin Township, Somerset, New Jersey 08873
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(Address of principal executive offices)
Registrant's telephone number, including area code: (908) 868-9000
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Item 5. Other Events.
On August 14, 1996 Trident Rowan Group, Inc. (the "Company"), The Carey
Winston Company, a Delaware corporation and a subsidiary of the Company entered
into an Agreement and Plan of Merger providing for the acquisition by the
Company of Carey Winston for a purchase price valued at $7,600,000, subsequently
adjusted to 8,400,000, payable, to the extent of at least 80%, in common stock
of the Company and not more than 20% in cash. As part of the Agreement the
Company agreed to lend to Carey Winston prior to closing up to $2,000,000, of
which $1,000,000 was requested and advanced. On February 12, 1997 the parties
determined to terminate the Merger Agreement, with the Company's loan being
repayable, with interest, over 14 months and the Company being entitled to
liquidated damages in lieu of reimbursement for expenses of $200,000, and, if a
change of control of Carey Winston occurs within 15 months, liquidated damages
of $500,000 in lieu of potential claims for non-consummation of the merger.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) 99.1 Mutual Release and Settlement Agreement dated February 12, 1997
among Trident Rowan Group, Inc., The Carey Winston Company and
DTI Acquisition Corp.
99.2 Allonge dated February 12, 1997 to Promissory Note
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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.
Dated: , 1997 TRIDENT ROWAN GROUP, INC.
By: ________________________________
President
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MUTUAL RELEASE AND SETTLEMENT AGREEMENT
This Mutual Release and Settlement Agreement (this "Agreement") is made
and entered into this 12th day of February, 1997 by and among The Carey Winston
Company ("CW"), DTI Acquisition Corp. ("Subsidiary") and Trident Rowan Group,
Inc., formerly known as De Tomaso Industries, Inc. ("DTI") (CW, Subsidiary and
DTI are hereinafter collectively referred to as the "Parties"). The purpose of
this Agreement is to memorialize the terms and conditions under which the
Parties have agreed to terminate that certain Agreement and Plan of Merger,
dated as of August 14, 1996 (the "Merger Agreement"), including amendment of the
terms of that certain Promissory Note, dated September 17, 1996, in the
principal amount of $2,000,000, executed by CW in favor of DTI (the "Promissory
Note").
In consideration of the obligations undertaken by CW as set forth in this
Agreement, each of Subsidiary and DTI, for itself and for its respective
successors, assigns and predecessors, hereby releases and forever discharges CW
and all of its direct and indirect employees, agents, representatives,
attorneys, directors, officers, servants, successors, assigns, predecessors,
stockholders, subsidiaries, parents, divisions and affiliates (such persons
having such a relation to any of the Parties being referred to collectively as
their "Representatives"), from, and agrees to indemnify them for and hold them
harmless against, any and all claims, debts, demands, rights, liabilities,
causes of action, losses, damages, costs or expenses (including attorneys' fees)
of whatsoever kind and nature (collectively, "Losses"), directly or indirectly
arising from, resulting from, or relating in any way to the Merger Agreement or
the transactions contemplated thereunder, including, without limitation, any and
all Losses allegedly incurred by either or both of Subsidiary and DTI or any of
their respective Representatives as a result of, among other things, (i) the
breach by CW or any of its Representatives of any provisions of the Merger
Agreement, (ii) the breach of any other duty or obligation allegedly owed to
either or both of Subsidiary and DTI or any of their respective Representatives,
(iii) any alleged act or omission on the part of CW or any of its
Representatives related, directly or indirectly, to the business of Subsidiary
or DTI or the business relationships between or among any of the Parties, or
(iv) any communications made by CW or any of its Representatives to either or
both of Subsidiary and DTI or any of their respective Representatives, from the
beginning of time through the date hereof. In addition, Subsidiary and DTI
hereby release and forever discharge any third party with whom CW has had
conversations or other contacts regarding a possible merger with, or acquisition
of, CW from any and all claims directly or indirectly arising from such
conversations, including, without limitation, claims of tortious interference
with contractual relationship.
In consideration of the obligations undertaken by Subsidiary and DTI as
set forth in this Agreement, CW, for itself and for its successors, assigns and
predecessors, hereby releases and forever discharges Subsidiary and DTI and all
of their respective Representatives from, and agrees to indemnify them for and
hold them harmless against, any and all Losses, directly or indirectly arising
from, resulting from, or relating in any way to the Merger Agreement or the
transactions contemplated thereunder, including, without limitation, any and all
Losses allegedly incurred by CW or any of its Representatives as a result of,
among other things, (i) the breach by either or both of Subsidiary or DTI or any
of their respective Representatives of any provisions of the Merger Agreement,
(ii) the breach of any other duty or obligation
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allegedly owed to CW or any of its Representatives, (iii) any alleged act or
omission on the part of either or both of Subsidiary and DTI or any of their
respective Representatives related, directly or indirectly, to the business of
CW or the business relationships between or among any of the Parties, or (iv)
any communications made by either or both of Subsidiary or DTI or any of their
respective Representatives to CW or any of its Representatives, from the
beginning of time through the date hereof.
Each of the Parties agrees and understands that it may have suffered
damages as a result of the matters referred to above that are unknown to it at
present. Each Party acknowledges that the release and other consideration
received by such Party under this Agreement is intended to and does release and
discharge any claims by such Party in regard to such unknown damages, including
effects or consequences thereof, and regardless of mistake or fact of law, and
each Party does hereby waive any rights to assert in the future any such claims.
Notwithstanding anything contained herein to the contrary, none of the
Parties hereto is releasing the others from any obligation expressly arising
under (a) the terms of this Agreement, (b) the Promissory Note, as amended by
the Allonge (as defined in Section 3 hereof), or (c) the Confidentiality
Agreement (as defined in subsection 6.b hereof).
Furthermore, and in consideration of the obligations undertaken in this
Agreement, the Parties also agree as follows:
1. Reimbursement of Expenses. CW hereby agrees to pay to DTI, not later
than close of business February 18, 1997, Two Hundred Thousand Dollars
($200,000), as liquidated damages in lieu of reimbursement for expenses incurred
by DTI in connection with the negotiation and preparation of the Merger
Agreement. In the event of the failure to pay this amount when due, such payment
shall accrue interest at an annual rate of fourteen percent (14%) until paid in
full.
2. Change of Control. In the event that CW experiences a Change of Control
at any time subsequent to the date hereof through May 11, 1998, the following
provisions shall apply:
a. CW shall provide DTI with written notice of such Change of Control not
later than the effective date of such Change of Control.
b. As additional liquidated damages in lieu of any potential claims for
Losses to DTI attributable to the non-consummation of the transactions
contemplated by the Merger Agreement, CW agrees to pay an additional
amount (the "Change of Control Fee") to DTI as of the effective date of
such Change of Control of Five Hundred Thousand Dollars ($500,000).
c. In the event that CW fails to notify DTI of a Change of Control as
provided for in subsection 2.a. above or fails to pay the Change of
Control Fee when due pursuant to Subsection 2.b. above, the Change of
Control Fee shall accrue interest from and after
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the effective date of the Change of Control at an annual rate of fourteen
percent (14%) until such Change of Control Fee is paid by CW in full.
d. For purposes of this Section 2, a "Change of Control" shall mean (i) a
merger or consolidation to which CW is a party with a third party which
results in a transfer of ownership of a majority of the outstanding shares
of voting common stock of CW, (ii) any acquisition by a third party of a
majority of the outstanding shares of voting common stock of CW, or (iii)
a sale of all or substantially all of the assets of CW to a third party
(including for this purpose the sale of stock of material subsidiaries).
3. Allonge to Promissory Note. On the date hereof, CW and DTI shall
execute, and CW shall deliver to DTI, the Allonge to Promissory Note (the
"Allonge") in the form attached hereto as Exhibit A.
4. Termination of Merger Agreement. Effective immediately upon execution
of this Agreement by each of the Parties, the Merger Agreement, and all rights
and obligations of each of the Parties thereunder, shall terminate and be of no
further force and effect and the sole binding and enforceable rights and
obligations of the Parties to each other shall be those rights and obligations
provided for in this Agreement, the Promissory Note, as amended by the Allonge,
and the Confidentiality Agreement.
5. Press Release. DTI shall promptly issue a press release regarding the
termination of the Merger Agreement and the transactions contemplated
thereunder, which press release shall be in the form attached hereto as Exhibit
B and made a part hereof. Each Party covenants and agrees not to make any
statements to third parties inconsistent with the terms of such press release or
which disparage or otherwise reflect poorly on the other Parties. DTI's press
release shall not be disseminated by DTI to any media located in the
Washington-Baltimore metropolitan areas (except pursuant to national
distribution).
6. Other Provisions.
a. The Parties acknowledge and agree that this Agreement is in settlement
of potential claims for Loss, and is in no way an admission of liability
by any Party with regard to such potential claims, liability for which is
expressly denied.
b. Each of CW and DTI hereby agree that the terms and conditions of the
Mutual Non-Disclosure and Confidentiality Agreement, dated June 12, 1996,
between CW and DTI (the "Confidentiality Agreement") shall survive
execution of this Agreement and shall remain in full force and effect.
Furthermore, except as provided in Section 5 above, the Parties agree that
all communications among the Parties and their respective counsel relating
to this Agreement and the subject matter hereof, the terms and conditions
of this Agreement, and all negotiations relating thereto, are privileged
and confidential and shall not be discussed, commented upon, referred to
or disclosed in any manner to anyone other than the Parties and their
counsel, accountants and other advisors, unless such disclosure is
compelled by a court order or otherwise by law, and
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shall not, under any circumstances, be disclosed, mentioned or in any
manner used in any subsequent proceeding between the parties, except for
the purpose of enforcing this Agreement; provided, however, that the
parties may disclose, without further comment, that the business
relationship between CW, on the one hand, and Subsidiary and DTI, on the
other hand, has been voluntarily terminated pursuant to a confidential
agreement among the Parties. Notwithstanding the foregoing, CW may
disclose the terms of this Agreement to any person or entity that is
interested in engaging in a Change of Control transaction with CW and each
of CW and DTI may make such disclosure of the terms of this Agreement as
is required by applicable law. In addition, each Party shall be entitled
to disclose to its employees and contractors the circumstances surrounding
the termination of the Merger Agreement.
c. This Agreement shall be binding upon each Party and its successors,
assigns, and predecessors.
d. Each Party hereby represents and warrants to the other Parties that it
has the authority and is duly authorized to execute, deliver and perform
this Agreement.
e. This Agreement is to be interpreted and governed by the laws of the
State of Maryland.
f. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been
duly given when delivered if by hand, by express delivery or facsimile
transmission (with a copy by mail) or three business days after the same
is mailed, by certified or registered mail with postage prepaid:
If to CW, to: The Carey Winston Company
6700 Rockledge Drive, 4th Floor
Bethesda, Maryland 20817
Fax: (301) 656-0112
Attn: Thomas L. Nordlinger,
President and CEO
With copies to: Christopher Sanger, Executive Vice
President and General Counsel
6700 Rockledge Drive, 4th Floor
Bethesda, Maryland 20817
Fax: (301) 656-0112
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and
Tucker, Flyer & Lewis
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
Fax: (202) 429-3231
Attn: Michael R. Flyer, Esq.
or to such other person or address as CW shall furnish to DTI in writing.
If to DTI or
Subsidiary, to: Trident Rowan Group, Inc.
Finprogetti S.p.A.
Via Fieno 8
20123 Milano, Italy
Fax: 39-272010136
Attn: Howard E. Chase, President
With a copy to: Morrison Cohen Singer
& Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
Fax: (212) 735-8708
Attn: Stephen I. Budow, Esq.
or to such other person or address as DTI shall furnish to CW in writing.
g. If, as a result of a breach of any of the provisions of this Agreement,
legal action shall be commenced, the prevailing party thereto shall be
entitled to recover all costs and expenses from the other party,
including, without limitation, all reasonable attorneys' fees.
h. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
i. In the event of the failure by CW to pay any amount owed to DTI under
Section 1 hereof when due, or any amount owed to DTI under Section 2
hereof within five (5) business days after same is due, CW hereby
irrevocably authorizes and appoints DTI as its true and lawful
attorney-in-fact, to confess judgment against CW in the full amount so due
in favor of DTI in any Court of Record in the State of Maryland. CW
expressly waives summons and other process and consents to the immediate
execution of said judgment. The authority herein granted to confess
judgment shall not be exhausted by any exercise thereof but shall continue
from time to time and at all times until full
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payment of all amounts due hereunder. CW hereby ratifies and confirms the
acts of said attorney-in-fact as fully as if done by CW itself.
IN WITNESS WHEREOF, the undersigned have entered into this Agreement, by
their respective duly authorized officers, as of the day and year first above
written.
ATTEST: TRIDENT ROWAN GROUP, INC.
F/k/a DE TOMASO INDUSTRIES, INC.
_______________________________ By: ________________________________
Howard E. Chase, President
ATTEST: DTI ACQUISITION CORP.
_______________________________ By: ________________________________
Howard E. Chase, President
ATTEST: THE CAREY WINSTON COMPANY
_______________________________ By: ________________________________
Thomas L. Nordlinger,
President and Chief Executive
Officer
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EXHIBIT B
Press Release
TRG and The Carey Winston Company ("CW") have decided to terminate the
agreement pursuant to which TRG was to acquire CW. The termination was mutually
agreed to by the parties in accordance with the terms of their agreement.
CW will pay to TRG $1.2 million, representing repayment of a loan
previously made and a payment in respect of expenses incurred, and an additional
sum payable under certain cirumstances.
TRG and CW are actively collaborating in the development of real estate
services business opportunities in Europe.
EXHIBIT A
ALLONGE TO PROMISSORY NOTE
THIS ALLONGE TO PROMISSORY NOTE (this "Allonge") is made and entered into
this 12th day of February, 1997, to be attached to, modify, and be a part of
that certain Promissory Note in the original principal sum of up to Two Million
Dollars ($2,000,000.00) dated February 17, 1996 (the "Note"), made by THE CAREY
WINSTON COMPANY (the "Borrower"), payable to the order of DE TOMASO INDUSTRIES,
INC. (the "Lender"), the terms and conditions of which Promissory Note are
hereby modified and amended as follows:
1. The Note is hereby amended by deleting the reference to "$2,000,000" in
the left-hand corner of the Note and replacing it with "$1,000,000".
2. The first paragraph of the Note is hereby amended by deleting it in its
entirety and inserting in lieu thereof the following:
FOR VALUE RECEIVED, the undersigned, THE CAREY WINSTON COMPANY, a Delaware
corporation having an address at 6700 Rockledge Drive, Suite 400A,
Bethesda, Maryland 20817 (the "Borrower"), hereby promises to pay to the
order of TRIDENT ROWAN GROUP, INC., F/k/a DE TOMASO INDUSTRIES, INC., a
Maryland corporation having an address at c/o Finprogetti S.p.A., Via
Fieno 8, 20123 Milano, Italy (the "Lender"), the principal sum of ONE
MILLION AND 00/100 DOLLARS ($1,000,000.00), together with interest thereon
from time to time as provided herein.
The principal sum hereof shall be repaid in the following installments:
(a) Three Hundred Thousand Dollars ($300,000) on or before May 12, 1997;
(b) Three Hundred Fifty Thousand Dollars ($350,000) on or before October
31, 1997;
(c) Fifty Thousand Dollars ($50,000) on or before December 31, 1997; and
(d) Three Hundred Thousand Dollars ($300,000) on or before April 1,
1998.
Notwithstanding the foregoing, in the event of a "Change of Control" as
defined in that certain Mutual Release and Settlement Agreement by and
among Borrower, Lender and DTI Acquisition Corp. of even date of this
Allonge, any unpaid principal sum hereof and all accrued and unpaid
interest shall be immediately due and payable in full. In addition, in the
event that Borrower shall receive a bridge loan or similar financing from
a party interested in entering into a Change of Control transaction with
Borrower,
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Borrower shall use the first proceeds of such financing (up to the
remaining amounts owed hereunder) as a prepayment of the amounts due
hereunder.
3. The second paragraph of the Note is hereby deleted in its entirety.
4. The third paragraph of the Note is hereby amended by deleting the third
sentence in its entirety.
5. The sixth paragraph of the Note is hereby amended by deleting it in its
entirety and substituting in lieu thereof the following:
The occurrence of any of the following events shall constitute an Event of
Default by Borrower hereunder:
1. the Borrower shall default in the payment of the principal of
this Note, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise and such default shall continue for
a period of five (5) days after written notice; or
2. the Borrower shall default in the payment of interest on this
Note according to its terms, when and as the same shall become due and
payable and such default shall continue for a period of five (5) days
after written notice; or
3. an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (a)
relief in respect of the Borrower, or of a substantial part of its
property or assets, under any Federal or state bankruptcy, insolvency,
receivership or similar law, (b) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower,
or for a substantial part of his property or assets, or (c) the winding up
or liquidation of the Borrower's business; and such proceeding or petition
shall continue undismissed for 60 days, or an order or decree approving or
ordering any of the foregoing shall be entered; or
4. the Borrower shall (a) voluntarily commence any proceeding or
file any petition seeking relief under any Federal or state bankruptcy,
insolvency, receivership or similar law, (b) consent to the institution
of, or fail to contest in a timely and appropriate manner, any proceeding
or the filing of any petition described in paragraph 3 above, (c) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower, or for a
substantial part of its property or assets, (d) file an answer admitting
the material allegations of a
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petition filed against it in any such proceeding, (e) make a general
assignment for the benefit of creditors, (f) become unable, admit in
writing its inability or fail generally to pay its debts as they become
due or (g) take any action for the purpose of effecting any of the
foregoing; or
5. the Borrower shall have failed to notify the Lender that a
"Change of Control" has occurred as required pursuant to the terms of that
certain Mutual Release and Settlement Agreement by and among Borrower,
Lender and DTI Acquisition Corp. of even date of this Allonge.
6. The seventh paragraph of the Note is hereby amended by deleting it in
its entirety and substituting in lieu thereof the following:
Upon the occurrence of an Event of Default the entire unpaid principal
amount of this Note, together with accrued interest and all obligations of
the Borrower hereunder to the Lender, may be declared by the Lender to be
immediately due and payable, provided that upon the occurrence of an Event
of Default described in paragraph number 3 or 4 above, the outstanding
principal of and all accrued interest on this Note shall automatically
become immediately due and payable. Upon the occurrence of an Event of
Default under this Note, and until payment in full of the amount due
hereunder, the rate of interest accruing on the unpaid principal balance
shall be fourteen percent (14%) per annum, from and after the date of the
Event of Default, regardless of whether Lender elects to accelerate the
unpaid principal balance in accordance herewith.
7. The eighth paragraph of the Note is hereby amended by deleting it in
its entirety and substituting in lieu thereof the following:
Upon the occurrence of any one or more Events of Default, the Lender may
proceed to protect and enforce its rights hereunder by suit in equity,
action at law or by other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Note or in aid
of the exercise of any power granted in this Note, or may proceed to
enforce the payment of this Note, or to enforce any other legal or
equitable right of the Lender. No remedy herein conferred upon the Lender
is intended to be exclusive of any other remedy and each and every such
remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute or otherwise. No course of dealing between the Borrower and the
Lender or any delay on the part of the Lender in exercising any rights
hereunder shall operate as a waiver of any right. Upon the occurrence of
an Event of Default hereunder, Borrower hereby irrevocably authorizes
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and appoints Lender as its true and lawful attorney-in-fact, to confess
judgment against Borrower in the full amount due under this Note in favor
of Lender in any Court of Record in the State of Maryland. Borrower
expressly waives summons and other process and consent to the immediate
execution of said judgment. The authority herein granted to confess
judgment shall not be exhausted by any exercise thereof but shall continue
from time to time and at all times until full payment of all amounts due
hereunder. Borrower hereby ratifies and confirms the acts of said
attorney-in-fact as fully as if done by Borrower itself.
8. The thirteenth paragraph of the Note is hereby deleted in its entirety.
All other terms and conditions of the Note shall, except as herein or
heretofore modified, remain in full force and effect and all rights, duties,
obligations, and responsibilities of the parties shall be governed and
determined by the Note as the same has been modified by this Allonge.
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IN WITNESS WHEREOF the undersigned has executed and delivered this Allonge
as of the date first above written.
THE CAREY WINSTON COMPANY
By: ________________________________
Name: Thomas L. Nordlinger
Title: President and Chief
Executive Officer
ACCEPTED AND AGREED TO:
TRIDENT ROWAN GROUP, INC.
F/k/a DE TOMASO INDUSTRIES, INC.
By: ___________________________________
Howard E. Chase, President
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