SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933
PetHealth Systems, Inc.
(Exact name of registrant as specified in its charter)
Colorado 93-0969365
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(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
444 Madison Ave., Suite 1710,New York, New York 10022
Tel. 212-750-7878
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(Address and telephone of Principal Executive Offices)
1997 Stock Award Plan; Incentive Stock Option Plan
--------------------------------------------------
(Full title of plan)
Stephen E. Rounds, 4635 E. 18th Ave., Denver CO 80220
Tel. 303-377-6997
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(Name, address and telephone of agent for service of process)
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this registration statement is declared effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General instruction G, check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================
Title of each Proposed Proposed
class of maximum maximum Amount
securities Amount offering aggregate of
to be to be price offering regis.
registered registered per share price fee
===========================================================================================
<S> <C> <C> <C> <C>
Common, 400,000(1) $1.50(2) $450,000(3) $182(2)
without par shares
Common, 50,000(3) $1.50(2) $375,000(2) $ 23(2)
without par
Totals 450,000 $675,000 $205
</TABLE>
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(1) 400,000 shares of Common Stock are issuable under registrant's 1997 Stock
Award Plan. No shares have been issued under this Plan as of the date of filing
of this registration statement.
(2) Based on average of bid and ask prices per share of Common Stock in the
over-the-counter-market for the 5 business days prior to the filing of this
registration statemenet.
(3) 50,000 shares of Common Stock are issuable under registrant's Incentive
Stock Option Plan. No options have been issued under this ISOP as of the date of
filing of this registration statement.
All fees are calculated pursuant to Rule 457(c).
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Registrant hereby incorporates the documents listed in (a) through (c)
below by reference into this Form S-8 registration statement. All documents
subsequently filed by registrant pursuant to sections 13(a), 13(d), 14 and 15(d)
of the Securities Exchange Act of 1934, as amended ("Exchange Act"), prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in the registration
statement and to be part thereof from the date of filing such documents.
(a) Registrant's latest annual report (for fiscal year ended December
31, 1995).
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the registrant document
referred to in (a) above.
(c) The registrant's class of common stock is described in the Form 8-A
registration statement filed with the Commission on or about February 12, 1997,
including any amendment which may filed for the purpose of updating such
description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable (see Item 3(c) above).
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Colorado Business Corporation Act ("CBCA"), C.R.S. 7-109-101 et
seq., provides for indemnification of the registrant's officers, directors,
employees, and agents against liabilities which they may incur in such
capacities. A summarization of circumstances in which such indemnification may
be available follows, but is qualified by reference to registrant's Articles of
Incorporation and the text of the statute.
In general, any officer, director, employee, or agent may be indemnified
against expenses, fines, settlements, or judgments arising in connection with a
legal proceeding to which such person is a party, as a result of such
relationship, if that person's actions were in good faith, were believed by him
or her to be in or not opposed to the registrant's best interests, and in the
case of any criminal proceeding, he or she had no reasonable cause to believe
his or her conduct was unlawful. Unless such person is successful upon the
merits in such an action (in which event indemnification is mandatory),
indemnification may be awarded only after a determination by
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decision of the board of directors (by directors not at the time parties to the
proceeding) or by approval by vote of the shareholders, or by opinion of special
legal counsel.
In addition, the registrant has statutory authority to purchase
insurance to protect its officers, directors, employees, and agents against any
liabilities asserted against them, or incurred in connection with their service
in such capacities. Further, registrant may advance or reimburse funds to a
director who is a party to a proceeding, for reasonable expenses incurred in
connection with a proceeding.
Pursuant to the CBCA, indemnification is not permitted in connection
with a proceeding by or in the rights of the corporation in which the director
was adjudged liable to the corporation, or in connection with any other
proceeding charging that the individual derived an improper personal benefit,
whether or not involving action in an official capacity, in which proceeding the
person was adjudged liable on the basis that he or she derived an improper
personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
2.1 Agreement and Plan of Share Exchange (Triangle, Inc. and PetCare, Inc.)*
3.1 Articles of Incorporation [1]
3.2 Articles of Amendment to Articles of Incorporation*
3.3 Bylaws [1]
4.1 1997 Incentive Stock Option Plan (the 1988 Incentive Stock Option Plan,
as readopted February 7, 1997)*
4.2 1997 Stock Award Plan, as adopted February 7, 1997*
5.1 Opinion of Stephen E. Rounds, Esq.*
23.1 Consent of Schmidt & Associates, independent certified public
accountants*
23.2 Consent of Stephen E. Rounds, Esq.*
* Filed herewith.
[1] Incorporated by reference from the registrant's Registration Statement on
Form S-18 (exhibit number 3), declared effective on March 5, 1989 (33-25253).
ITEM 9. UNDERTAKINGS.
The registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
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(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(a)(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(a)(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of this offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the registrant, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense of
any action suit or proceeding) is asserted by such officer, director, or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this S-8 Registration Statement to be signed on its
behalf by the undersigned, duly authorized, in New York, New York, on February
17, 1997.
PetHealth Systems, Inc.
s/Ted A. Sprinkle, Jr.
Ted A. Sprinkle, Jr., President
and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
Signature Capacity Date
s/ Ted A. Sprinkle, Jr. President, CEO, 2/17/97
Ted. A. Sprinkle, Jr., CFO and Director
s/ Martin I. Saposnick Director 2/17/97
Martin I. Saposnick
s/ Joseph J. Messina Director 2/17/97
Joseph J. Messina
s/ Kenneth J. Rotondo Director 2/17/97
Kenneth J. Rotondo
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EXHIBIT 2.1
Agreement and Plan of
Share Exchange
This Agreement and Plan of Share Exchange ("Agreement"), dated as of
January 29, 1996, is entered into by and between (i) Triangle, Inc., a Colorado
corporation ("Triangle"); (ii) PetCare, Inc., a Delaware corporation
("PetCare"); and (iii) Thomas LeVine, Ted Sprinkle, Jr., Kenneth Rotondo, Joseph
J. Messina, and Martin I. Saposnick (hereafter together the "PetCare
Shareholders"), with the same business address as PetCare
R E C I T A L S
A. The Exchange and Subsequent Reverse Split. As of the Effective Time (as
defined in Section 1.4), the parties intend for Triangle to acquire all of the
3,000,000 issued and outstanding shares of Common Stock of PetCare ("PetCare
Shares"), in exchange for 600,000,000 shares of the Common Stock of Triangle
("Triangle Shares"). The Triangle Shares shall be voting stock, shall be
restricted from transfer without registration under the Securities Act of 1933,
as amended (the "1933 Act"), and shall be subject to escrow until PetCare
completes the acquisition of its first veterinarian hospital, as hereafter
provided.
Prior to the Closing Date, the board of directors of Triangle shall have
submitted to the shareholders of Triangle for their approval: (i) the proposed
reverse stock split, on a 1 for 200 basis, of the shares of Common Stock of
Triangle to be issued and outstanding after the Effective Time (hereafter
defined) of the Exchange, such that there shall be not more than 3,300,000
shares of Common Stock of Triangle outstanding after such reverse split is
effected; (ii) an amendment to the Articles of Incorporation of Triangle to
change the name of the corporation to PetHealth Systems, Inc.; (iii) relocation
of the corporate domicile of Triangle from Colorado to Delaware; and (iv) such
other matters as such board of directors may deem appropriate for consideration
by the shareholders of Triangle.
B. Tax Structure of the Transaction. It is the intention of the parties
that for federal income tax purposes the exchange of Triangle Shares for the
PetCare Shares as contemplated under this Agreement (hereafter referred to as
the "Exchange") shall qualify as a "reorganization" within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended ("Code").
C. Approvals. The respective Boards of Directors of Triangle and PetCare
have determined that this Agreement is in the best interests of Triangle or
PetCare, as the case may be, and its respective shareholders, and have duly
approved this Agreement and authorized its execution and delivery.
Now, Therefore, in consideration of the premises and of the
representations, warranties, covenants, and agreements set forth herein, the
parties agree as follows:
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A G R E E M E N T
Article I
The Exchange; Closing; Effective Time
1.1 The Exchange. Subject to the terms and conditions of this Agreement, at
the Effective Time (hereinafter defined), Triangle and PetCare and the PetCare
Shareholders shall consummate the Exchange by which PetCare shall become a 100
percent owned subsidiary of Triangle, without change in the separate existence
of PetCare as an operating corporation under the laws of the State of Delaware.
The Exchange shall have the effects specified in Section 7-111-102(4) of the
Colorado Business Corporation Act ("CBCA").
1.2 Effective Time. Promptly after all conditions to consummation of this
Agreement have been satisfied, Triangle shall prepare and file Articles of Share
Exchange with the Colorado Secretary of State, pursuant to CBCA Section
7-111-105. The Effective Time of the Exchange shall be the time and date of such
filing.
1.3 Closing. The closing of the Exchange ("Closing") shall take place at
the offices of PetCare, 444 Madison Avenue, Suite 1710, New York, New York
10022, at 10:30 a.m. on the first business day on which all the conditions set
forth in this Agreement (other than those that are waived by the party for whose
benefit such conditions exist) can be fulfilled, or at such other place and/or
time and/or on such other date to which the parties agree. The date upon which
the Closing shall occur is herein called the "Closing Date."
Article II
Articles of Incorporation and Bylaws
of Triangle and PetCare
2.1 Articles of Incorporation. The Articles of Incorporation of Triangle,
and of PetCare, in existence as of the date of this Agreement shall not be
affected by the Exchange as of the Closing Date. A proposed amendment to the
Articles of Incorporation of Triangle shall have been submitted to the
shareholders of Triangle for approval prior to the Closing Date, as set forth in
Section 7.3(v) of this Agreement. After the Closing Date, PetCare shall change
its name to PetHealth Management, Inc. or similar name.
2.2 Bylaws. The Bylaws of Triangle, and of PetCare, as of the date of this
Agreement shall not be affected by the Exchange.
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Article III
Directors and Officers
of Triangle and PetCare
3.1 Directors. The number of directors to serve on the board of directors
of Triangle shall be increased (from the current number of three) to five. At
the Closing, the current directors of Triangle shall elect Ted Sprinkle, Jr.,
Kenneth Rotondo, Joseph J. Messina, and Martin I. Saposnick as directors of
Triangle, and thereafter the current directors of Triangle shall resign. The
directors of PetCare shall remain in office.
3.2 Officers. The current officers of Triangle shall resign as of the
Closing, and new officers shall be appointed by the new directors of Triangle.
Article IV
Exchange Consideration; Conversion or Cancellation
of Shares in the Exchange
4.1 Exchange Consideration; Conversion or Cancellation of Shares. At the
Effective Time, by virtue of the Exchange and without any further action on the
part of any PetCare Shareholder, except for his execution of this Agreement
prior to the Closing Date, all of the PetCare Shares shall be exchanged for
Triangle Shares, at the rate of 200 Triangle Shares for 1 PetCare Share. From
and after the Effective Time, Triangle shall own all the outstanding PetCare
Shares.
4.2 Exchange of Share Certificates; Escrow of Shares Issuable to PetCare
Shareholders. PetCare shall deliver the certificates for all the issued and
outstanding shares of Common Stock of PetCare to Triangle. Triangle shall issue
instructions to its transfer agent, Corporate Stock Transfer, Denver, Colorado,
to issue certificates for the Triangle Shares in the names of the PetCare
Shareholders. Such Triangle Shares, and the certificates for such Triangle
Shares, shall be placed into escrow with counsel to Triangle, pursuant to an
Escrow Agreement, the form of which is attached to this Agreement as Exhibit 4.2
and incorporated herein by reference. The Triangle Shares shall be issued
without registration under the 1933 Act, and the certificates for such Shares
shall bear the customary 1933 Act restrictive legend. No fractional Triangle
Shares shall be issued in the Exchange.
4.3 Lockup of Shares of Triangle Held by Officers, Directors and Certain
Shareholders. As of the Effective Time, the issued and outstanding shares of
Common Stock of Triangle held by the officers, directors and holders of more
than 5% of such shares of Common Stock will be subjected to restrictions on
resale by such persons, pursuant to the Lockup Agreement to be executed and
delivered to PetCare. The form of Lockup Agreement is attached to this Agreement
as Exhibit 4.3.
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Article V
Representations and Warranties
5.1 Representations and Warranties of PetCare and Triangle. PetCare hereby
represents and warrants to Triangle, and Triangle represents and warrants to
PetCare that:
a. Corporation Organization and Qualification. Each is a corporation
duly organized and in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated, or the business
conducted by it requires such qualification, except for any such failure so to
qualify or be in good standing which is not reasonably likely to have a Material
Adverse Effect. "Material Adverse Effect" means an effect which would be
materially adverse to the properties, business, financial condition, results of
operations or prospects of PetCare or Triangle. Each corporation has the
requisite corporate power and authority to carry on its business as is now being
conducted. Each has made available to the other complete and correct copies of
its Articles of Incorporation and Bylaws, each as amended to date.
b. Capital Stock.
(i) Triangle. Triangle has an authorized capital stock of 100,000,000
preferred shares, $.10 par value, none of which are issued or outstanding,
and 800,000,000 common shares, no par value, of which 57,006,090 are issued
and outstanding as of the date of this Agreement. There shall be not more
than 60,000,000 shares of Common Stock of Triangle issued and outstanding
as of the Closing Date. All issued and outstanding shares of Common Stock
of Triangle have been duly authorized and validly issued and are fully paid
and nonassessable. Triangle has reserved 10,000,000 shares of Common Stock
for issuance under the Triangle Incentive Stock Option Plan; no options
have been issued as of the date of this Agreement. Triangle has outstanding
no bonds, debentures or other obligations the holders of which have any
right to vote with the shareholders of Triangle on any matter. Triangle has
issued and outstanding no bonds, debentures or other obligations which are
convertible or exchangeable into or which are exercisable for securities of
Triangle having the right to vote.
(ii) PetCare. PetCare has an authorized capital stock of 3,000,000
shares of Common Stock, $.001 par value, all of which are issued and
outstanding. All issued and outstanding shares of PetCare Common Stock have
been duly authorized and validly issued and are fully paid and
nonassessable. PetCare has outstanding no bonds, debentures or other
obligations the holders of which have any right to vote with the
shareholders of PetCare on any matter. PetCare has issued and outstanding
no bonds, debentures or other obligations which are convertible or
exchangeable into or exercisable for securities of PetCare having the right
to vote.
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c. Corporate Authority. Subject only to the approval of this Agreement
by the holders of all of the issued and outstanding shares of Common Stock of
PetCare, PetCare and Triangle each has the requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated herein.
d. Governmental Filings; No Violations.
(i) Other than filings required to be made by Triangle under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and a
filing with the Securities and Exchange Commission ("SEC") of a notice on
Form D of the SEC promulgated under the 1933 Act, no notices, reports or
other filings are or will be required to be made by Triangle or PetCare
with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Triangle or PetCare from any
governmental or regulatory authority, agency, court, commission or other
entity, domestic or foreign, in connection with this Agreement, the failure
to make or obtain any or all of which, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect.
(ii) The execution, delivery and performance by Triangle or by PetCare
of this Agreement does not, and the consummation by either corporation of
any of the transactions contemplated herein will not constitute or result
in (x) a breach or violation of, or a default under, its Articles of
Incorporation or Bylaws, or (y) a breach or violation of, or acceleration
or creation of a security interest or other encumbrance on its assets
pursuant to any material agreement, lease or other obligation or any law,
ordinance, regulation or judgment or decree or permit to which it is
subject.
e. Reports; Financial Statements; No Undisclosed Liabilities.
(i) Triangle has delivered to PetCare each report, prepared by it
since December 31, 1995 (the "Reports") and filed with the SEC. As of their
respective dates (but including any change therein due to a Form 8
Amendment to a Report), the Reports of Triangle did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. All
of the Triangle financial statements included or incorporated by reference
into its Reports fairly present the financial position of Triangle as of
the date and for the periods set forth therein, in each case in accordance
with generally accepted accounting principles.
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(ii) PetCare has delivered to Triangle unaudited financial statements
prepared by PetCare for the period from inception through December 31,
1996. The PetCare financial statements fairly present the financial
position of PetCare as of the date and for the period set forth therein, in
accordance with generally accepted accounting principles.
(iii) To the knowledge of its executive officers, except as disclosed
in the Reports of Triangle, or in the case of PetCare as disclosed in the
PetCare financial statements, neither corporation has any liabilities,
whether or not accrued, contingent or otherwise, that, individually or in
the aggregate, are reasonably likely to have a Material Adverse Effect.
(iv) Since December 31, 1995, Triangle has filed with the SEC on a
timely basis (including any extended filing date allowed by SEC Rule
12b-25) all quarterly, annual and interim Reports.
f. Absence of Certain Events and Changes. Except as disclosed in its
Reports filed with the SEC prior to the date of this Agreement, since December
31, 1995 Triangle has conducted its business only in the ordinary and usual
course, and there has not been any change or development which is reasonably
likely to result in a Material Adverse Effect. PetCare has conducted its
business only in the ordinary and usual course, and there has not been any
change or development which is reasonably likely to result in a Material Adverse
Effect.
g. Compliance with Laws. Each has complied with all applicable laws,
regulations, ordinances, judgments, orders or decrees applicable to it or its
business, except where the failure to comply is not reasonably likely to have a
Material Adverse Effect. To the knowledge of its officers, each has all permits
and has made all filings, applications, and registrations with governmental or
regulatory bodies that are required in order to permit it to carry on business
as presently conducted, except for such failures which are not reasonably likely
to have a Material Adverse Effect.
h. Title to Assets. Each has good and marketable title to its assets
(other than leased property), including intellectual property assets in the case
of PetCare, except for such defects in title that are not reasonably likely to
have a material adverse effect, and in the case of Triangle except for such
title matters as are disclosed in its Reports.
i. Litigation. In the case of Triangle, except as disclosed in its
Reports filed with the SEC prior to the date hereof, and in the case of PetCare,
except as disclosed in its financial statements or otherwise as has been
disclosed in writing to Triangle, there are no suits, investigations or
proceedings pending or, to the knowledge of its executive officers, threatened
against it that, individually or in the aggregate, are reasonably likely to have
a Material Adverse Effect. Except, in the case of
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Triangle, as may be disclosed in its Reports, and in the case of PetCare, as may
have been disclosed in writing to Triangle, there are no judgments or
outstanding injunctions, or awards against it, its properties or business, which
are reasonably likely to have a Material Adverse Effect.
j. Taxes. All material federal, state, local and foreign tax returns
required to be filed by or on behalf of it have been timely filed or requests
for extensions have been timely filed and any such extension requests have been
granted and not have expired. All such filed returns are complete and accurate
in all material respects. All material taxes required to be shown on returns
filed by it have been paid in full or have been recorded on its balance sheet
and statement of earnings or income (in accordance with generally accepted
accounting principles). As of the date of this Agreement, in the case of
Triangle, there is no outstanding audit examination, deficiency, or refund
litigation with respect to any taxes of it that, individually or in the
aggregate, is reasonably likely to have a material adverse effect. All material
taxes, interest, additions, and penalties due with respect to completed and
settled examinations or concluded litigation relating to it have been paid in
full or have been recorded on its balance sheet and statement of earnings or
income (in accordance with generally accepted accounting principles).
k. Employee Benefits. The Reports filed by Triangle with the SEC, and
the PetCare financial statements, disclose all bonus, deferred compensation,
retirement, employee stock ownership, and other stock plans, as well as all
material employment or similar provisions in any consulting plan.
l. Brokers and Finders. Neither Triangle nor PetCare has employed any
broker or finder in connection with the Exchange.
5.2 Additional Representations and Warranties of PetCare. PetCare
represents and warrants to Triangle that:
a. PetCare Business Plan. The PetCare Business Plan has been carefully
prepared by the officers and directors of PetCare. To the knowledge of such
persons, after due inquiry of special counsel to PetCare, the proposed
acquisition by PetCare of (or the management by PetCare of) the operating
business assets of veterinary hospitals is legally viable in the State of New
York, by means of a 'management contract' structure or otherwise.
b. Letters of Intent to Acquire Veterinary Hospitals. The separate
letters of intent for the acquisitions by PetCare of two veterinarian hospitals
(Animal Health Center, Clifton Park, New York, and Saratoga Veterinary Hospital,
Saratoga Springs, New York), copies of which have been delivered to Triangle,
are in effect and shall be in effect as of the Effective Time. The officers and
directors of PetCare believe that the financial statements of Animal Health
Center, copies of which have been delivered to Triangle prior to the date
hereof, fairly present the financial position of Animal Health Center as of the
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date and for the periods set forth therein, in accordance with generally
accepted accounting principles.
5.3 Representations and Warranties of the PetCare Shareholders. Each
PetCare Shareholder represents and warrants to Triangle as follows:
(a) He is acquiring the Triangle Shares for his account as a
principal, for investment purposes only. No other person has an indirect
beneficial interest in such shares.
(b) He understands that the offer and sale of the Triangle Shares, by
Triangle, pursuant to this Agreement is intended to be exempt from registration
under the 1933 Act by virtue of Section 4(2) of the Act and the provisions of
SEC Regulation D promulgated thereunder. In furtherance thereof, he represents
and warrants to and agrees with Triangle as follows:
(i) He has the financial ability to bear the economic risk of the
investment in Triangle and he has no current need for liquidity with
respect to the investment;
(ii) He has read and understood the PetCare Business Plan, this
Agreement, and the Reports of Triangle filed by Triangle since December 31,
1995. He acknowledges that the Triangle Shares are "restricted securities"
under the 1933 Act, and accordingly cannot be resold absent registration
under the 1933 Act or the availability of an exemption from such
registration, which would have to be established to the reasonable
satisfaction of Triangle.
Article VI
Covenants
6.1 Interim Operations. Triangle and PetCare each covenants and agrees that
from and after the date hereof until the Closing Date, or the termination of
this Agreement, except as the other party otherwise consents or as otherwise may
be contemplated by this Agreement:
a. PetCare will continue to develop and implement its business plan,
as set forth in the PetCare Business Plan previously delivered to Triangle.
b. Triangle will continue to maintain existing relations with its
stock transfer agent and audit firm.
c. It will not (i) amend its Articles of Incorporation or Bylaws; (ii)
split, combine or reclassify any outstanding capital stock; (iii) declare, set
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aside or pay any dividend with respect to its capital stock; or (iv) repurchase
shares of capital stock or securities convertible or exercisable for capital
stock.
d. It will not issue any shares of, or securities convertible or
exchangeable for, or options, puts, warrants, calls, commitments or rights of
any kind to acquire any shares of capital stock.
e. PetCare will not sell, mortgage or dispose of property or assets or
encumber any property or assets or incur or modify any indebtedness or other
liability other than in the ordinary course of business.
f. In the case of Triangle, except as required by agreements disclosed
in its Reports or otherwise disclosed in writing to PetCare, and in the case of
PetCare except as required by agreements disclosed in the PetCare financial
statements or otherwise disclosed in writing to Triangle, grant severance or
termination pay to a director or officer.
6.2 Information Supplied. PetCare agrees that none of the information to be
supplied by it to Triangle concerning the PetCare Business Plan, or the officers
or directors or holders of more than 5% of the outstanding securities of
PetCare, or other information relating to PetCare, for use by Triangle in filing
Reports, shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
6.3 Filing of Triangle Form 8-K Report. Triangle agrees to promptly prepare
and file with the SEC a Current Report on Form 8-K upon the execution and
delivery of this Agreement by the parties, including financial information about
PetCare and pro forma financial information, as required by Form 8-K and the
rules of the SEC.
6.4 Access. Each party agrees to afford each other party's officers and
other authorized representatives access until the Closing Date to its
properties, books and records, and furnish information concerning its business,
properties and personnel as may be reasonably requested. Each party will not use
information obtained for any purpose unrelated to the transactions contemplated
by this Agreement.
6.5 Notification of Certain Matters. Each party will give prompt notice to
the other party of any event that is reasonably likely to result in any Material
Adverse Effect.
6.6 Publicity. PetCare acknowledges Triangle will control distribution to
the public of information concerning this Agreement and the transactions
hereunder.
9
<PAGE>
6.7 Expenses. Each party shall pay its own expenses in connection with the
Exchange, except that PetCare shall pay the travel expenses of counsel to
Triangle.
Article VII
Conditions to Closing, Closing Procedures, and Post-Closing Matters
7.1 Conditions to Each Party's Obligation to Effect the Reorganization. The
respective obligations of Triangle and PetCare to consummate the Exchange are
subject to the following conditions.
(a) Any consent or approval of third persons required for or in
connection with this Agreement shall have been obtained.
(b) No material litigation shall have been initiated against either
party.
(c) The representations and warranties of each party set forth in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date.
7.2 Closing Procedures. At the Closing,
(a) Certificates for the shares of Common Stock of Triangle in the
names of the officers, directors, and certain other persons (which shares are
subject to the Lockup Agreement), and the Lockup Agreement as executed by such
shareholders of Triangle, shall be delivered to counsel to Triangle.
(b) Certificates of Representations and Warranties by the officers of
PetCare shall be delivered to Triangle, and Certificates of Representations and
Warranties by the officers of Triangle shall be delivered to PetCare, in each
instance confirming the representations and warranties made by PetCare and
Triangle as of the date of this Agreement.
(c) Certificates for the Triangle Shares to be issued to the
shareholders of PetCare on the Closing Date, and the Escrow Agreement as
executed by all of the former shareholders of PetCare, shall be delivered to
counsel to Triangle.
(d) Triangle shall deliver to counsel for PetCare the resolutions of
the board of directors of Triangle (i) approving the execution and delivery of
this Agreement; (ii) authorizing the issuance of the Triangle Shares to the
shareholders of PetCare as set forth on Exhibit 4.2; (iii) setting the record
date for a Special Meeting of the shareholders of Triangle to vote upon a
reverse stock split of the outstanding shares of Common Stock of Triangle, on a
1 for 200 basis, amending the Articles of Incorporation of Triangle to change
its corporate name, and such other matters as determined by the board of
directors of Triangle, (iv) directing preparation and distribution of the Notice
of Special Meeting to the shareholders of record of Triangle on such
10
<PAGE>
record date; and (v) appointing those persons who are the current directors of
PetCare to the board of directors of Triangle, and accepting the subsequent
resignations of the current directors of Triangle.
(e) Counsel to Triangle shall deliver to PetCare, and counsel to PetCare
shall deliver to Triangle, their respective legal opinions to the effects that:
(i) Triangle, or PetCare, is a corporation duly organized and in good
standing in the jurisdiction of its incorporation, and all issued and
outstanding shares have been, and in the case of Triangle, the Triangle
Shares to be issued at the Closing Date will be, issued as fully paid and
nonassessable shares of the Common Stock of the corporation;
(ii) The board of directors of the corporation has duly authorized
this Agreement, and the exhibits hereto, and this Agreement is a valid
agreement and is enforceable against the corporation (except in the event
of proceedings commenced in bankruptcy or under other insolvency laws). The
consummation of the transactions contemplated by this Agreement will not
conflict with or result in a breach of any of the terms, conditions, or
provisions of, or constitute a default under, the Articles of Incorporation
or Bylaws of the corporation, or any note, indenture, mortgage, deed of
trust or other agreement or instrument (however characterized or described)
to which the corporation or its property is bound, or any law, order, or
regulation known to such counsel of any agency, arbitration tribunal or
court, domestic or foreign, having jurisdiction over the corporation or its
property.
(f) Triangle and PetCare shall execute and deliver to counsel for
Triangle Articles of Share Exchange pursuant to Section 7-111- 105 of the CBCA,
in the form attached to this Agreement as Exhibit 7.2(e).
7.3 Post-Closing Procedures. After the Closing,
(a) Counsel for Triangle shall file the Articles of Exchange with the
Colorado Secretary of State.
(b) Counsel for PetCare shall file such instruments or documents with
the Delaware Secretary of State as may be required by the General Corporation
Law of the State of Delaware.
(c) The board of directors of Triangle shall elect new officers for
Triangle, and shall notify the stock transfer agent (Corporate Stock Transfer,
Inc., Denver, Colorado) of the change in directors and officers of such
corporation.
(d) Upon approval of the reverse split of the outstanding shares of
Common Stock of Triangle and the subsequent filing of the Articles of Amendment
to the Articles of Incorporation of Triangle, counsel to Triangle shall deliver
11
<PAGE>
to Corporate Stock Transfer, Inc.(the stock transfer agent for Triangle) all of
the certificates for the Triangle Shares which are subject to the Escrow
Agreement and all of the certificates for the shares of Common Stock of Triangle
which are subject to the Lockup Agreement, for reissue in the names of the
record holders of such shares (taking into effect the reverse split and change
of name of the corporation). Counsel to Triangle shall (i) cause the legend
required by the Lockup Agreement to be placed on the new share certificates, and
deliver the originals of such legended certificates to the persons and entities
named in the Lockup Agreement; and (ii) hold the new share certificates for the
shares subject to the Escrow Agreement pursuant to the terms thereof.
(e) Subject to availability of the form, Triangle shall file with the
SEC a registration statement on Form S-8 to register such number of shares of
Common Stock of Triangle as may determined by the board of directors for
issuance to employees and others.
Article VIII
Termination
8.1 Termination by Mutual Consent. This Agreement may be terminated and the
Exchange may be abandoned at any time prior to the Effective Time by the mutual
consent of the boards of directors of PetCare and Triangle.
8.2 Termination by Either PetCare or Triangle. This Agreement may be
terminated and the reorganization may be abandoned by action of the board of
directors of either PetCare or Triangle if the Exchange shall not have been
consummated by January 31, 1997.
8.3 Effect of Termination and Abandonment. If this Agreement is terminated
pursuant to this Article VIII, no party shall have liability or further
obligation to any other party, except for liability resulting from material and
willful breach of any covenant, or the material falsity of any representation
and warranty, contained herein. Each party shall bear its own expenses in the
event of termination absent material and willful breach of any covenant, or the
material falsity of any representation and warranty, contained herein.
Article IX
Miscellaneous and General
9.1 Survival. Only those agreements and covenants of the parties which by
their express terms apply in whole or in part after the Effective Time,
including but not limited to the Lockup Agreement and the Escrow Agreement,
shall survive the Effective Time. All other representations, warranties,
agreements and covenants shall be deemed only to be conditions of the Exchange
and shall not survive the Effective Time.
12
<PAGE>
9.2 Modification or Amendment. At any time prior to the Closing Date, the
parties may modify or amend this Agreement, by written agreement executed and
delivered.
9.3 Waiver of Conditions. The conditions to each party's obligation to
consummate the Exchange are for the sole benefit of such party and may be waived
by such party in whole or in part.
9.4 Counterparts. This Agreement may be executed in any number of separate
counterparts.
9.5 Governing Laws. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
9.6 Notices. Any notice or document to be given hereunder shall be in
writing and shall be deemed to have been duly given on the date of delivery if
delivered personally upon confirmation of receipt, or on the third business day
following the date of mailing if delivered by certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to other instructions agreed upon.
a. If to PetCare:
PetCare, Inc.
444 Madison Avenue, Suite 1710
New York, New York 10022
b. If to Triangle:
Triangle, Inc.
830 Northeast Loop 410, Suite 305B
San Antonio, Texas 78209
9.7 Entire Agreement. This Agreement (a) constitutes the entire agreement
and supersedes all other prior agreements, understandings, representations and
warranties, both written and oral, among the parties, with respect to the
subject matter hereof, and (b) shall not be assignable by operation of law or
otherwise.
9.8 Captions and Exhibits. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement, and shall not be deemed to limit or otherwise affect any of the
provisions hereof. The specific terms of any exhibit to this Agreement shall
control the subject matter thereof, and shall supersede the description of the
effect or operation any exhibit contained in the principal text of this
Agreement.
9.9 . Specific Performance. In the event of actual or threatened default in
or breach of any term of this Agreement, the party which is or is to be thereby
aggrieved shall have the right of specific performance and injunctive relief
giving effect to its rights under this Agreement, in addition to other rights
and remedies at law or in equity. All such rights and remedies shall
13
<PAGE>
be cumulative. The parties agree that the remedies at law for any breach or
threatened breach, including monetary damages, are inadequate compensation for
any loss, and that any defense in any action for specific performance that a
remedy at law would be ages, are inadequate compensation for any loss, and that
any defense in any action for specific performance that a performance that a
remedy at law would be adequate is waived.adequate is waived.remedy at law would
be adequate is waived.adequate is waived.
9.10 Severability. If any provision of this Agreement or the application
thereof to any person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or otherwise not enforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired, or invalidated thereby, so long as the economic or legal
substance of the transaction contemplated hereby is not affected in any manner
substantially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
9.11 No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer any benefit, right or remedies on
any person except for the parties hereto.
9.12 Legal Proceedings. In the event of litigation hereunder, the
prevailing party shall be entitled to recover, as part of the judgement on the
dispute, reasonable attorneys' fees, and all costs of investigation and all
court costs, from the adverse party or parties.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the corporate parties hereto, and by the other
parties to this Agreement, on the date first above written.
PetCare, Inc. Triangle, Inc.
s/Ted Sprinkle, Jr. s/Robert K. Ellis
_____________________________ ________________________________
By: Ted Sprinkle, Jr., By: Robert K. Ellis, President
President
PetCare Shareholders
s/Thomas LeVine
______________________
Thomas LeVine
s/Ted Sprinkle, Jr.
______________________
Ted Sprinkle, Jr.
s/Kenneth Rotondo
______________________
Kenneth Rotondo
14
<PAGE>
s/Joseph Messina
______________________
Joseph J. Messina
s/Martin Saposnick
______________________
Martin I. Saposnick
15
EXHIBIT 3.2
MAIL TO: SECRETARY OF STATE
CORPORATIONS SECTION
1560 BROADWAY, SUITE 200
DENVER, CO 80202 FOR OFFICE USE ONLY
(303) 894-2251
MUST BE TYPED FAX (303) 894-2242
FILING FEE: $25.00
MUST SUBMIT TWO COPIES
ARTICLES OF AMENDMENT
PLEASE INCLUDE A TYPED TO THE
SELF-ADDRESSED ENVELOPE ARTICLES OF INCORPORATION
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is Triangle, Inc.
SECOND: The following amendment to the Articles of Incorporation was adopted on
Friday February 7, 1997, as prescribed by the Colorado Business Corporation Act,
in the manner marked with an X below:
___ No shares have been issued or Directors Elected - Action by Incorporators
___ No shares have been issued but Directors Elected - Action by Directors
___ Such amendment was adopted by the board of directors where shares
have been issued.
XX Such amendment was adopted by a vote of the shareholders. The number of
- ---- shares voted for the amendment was sufficient for approval.
Article I. The name of the corporation shall be PetHealth Systems, Inc.
THIRD: The manner, if not set forth in such amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the amendment
shall be effected, is as follows:
Each 200 issued and outstanding shares of Common Stock shall be
converted into 1 share of issued and outstanding Common Stock (1 for 200 reverse
stock split).
If these amendments are to have a delayed effective date, please list that date:
Not applicable. (Not to exceed ninety (90) days from the date of filing)
- ---------------
Triangle, Inc.
By: s/Robert K. Ellis
--------------------------
Robert K. Ellis, President
EXHIBIT 4.1
INCENTIVE STOCK OPTION PLAN
This Incentive Stock Option plan of Triangle, Inc., a Colorado
corporation ("Corporation") is dated March 3, 1988. The purpose of this Plan is
to help attract, keep and motivate superior personnel.
ARTICLE I
STOCK SUBJECT TO OPTION
The total number of Shares in the Corporation which may be issued under
incentive stock options ("options") granted pursuant to this plan is 10,000,000
common shares having no par value.
ARTICLE II
EMPLOYEES ELIGIBLE TO RECEIVE OPTIONS
Section 2.1 All Employees. All employees of the Corporation, its parent
or subsidiaries, if any, shall be eligible to receive options to purchase stock
under this Plan.
Section 2.2 10% Shareholders. Employees directly or indirectly owning
more than 10% of the stock of the Corporation, its parent or subsidiaries, if
any, shall be eligible to receive options to purchase stock under this Plan. For
purposes of this Plan, an employee is considered to own those shares which are
owned by his siblings, spouse, ancestors, and lineal descendants, and a
proportionate amount of those shares owned by or for a corporation, partnership,
estate or trust of which he is a shareholder, partner or beneficiary.
ARTICLE III
ANNUAL LIMIT ON OPTIONS
An employee receiving options under this Plan may receive options for
stock having a fair market value of no more than $100,000 per calendar year. To
the extent that the above limit exceeds the value of options granted to an
employee in any calendar year, 50% of the excess for that individual employee
may be carried over to the succeeding three calendar years.
<PAGE>
ARTICLE IV
OPTION PRICE
Section 4.1 Minimum Price. The minimum option price for the purchase of
any stock pursuant to an option granted under this Plan shall be 100% of the
fair market value of the stock at the time the option is granted.
Section 4.2 Price for 10% Shareholders. The minimum option price for 10%
Shareholders shall be at least 110% of the fair market value of the stock at the
time the option is granted.
ARTICLE V
OPTION LIFE
Section 5.1 Time of Grant. All options granted under this plan must be
granted within ten years from the date the Board of Directors adopt this Plan,
or the date the Shareholders approve this Plan, whichever is earlier.
Section 5.2 Time of Exercise. An option granted under this Plan must
provide that it is to be exercised within a period less than ten years after the
date the option is granted. however, if an optionee directly or indirectly owns
more than 10%, not including stock obtainable under the option, of the stock of
the Corporation, its parent or subsidiaries, if any, the option must provide
that it is to be exercised within a period of less than five years after the
date the option is granted.
Section 5.3 Sequence of Exercise. An option may not be exercised while
there is a prior outstanding incentive stock option issued by the Corporation,
its parent of subsidiaries, if any. For purposes of this Section, an incentive
stock option is treated as outstanding until it either has been exercised or has
expired by lapse of time.
ARTICLE VI
EMPLOYMENT STATUS
All incentive stock options granted under this Plan must be granted in
connection with an optionee's employment status. Employment by the Corporation,
its parent or subsidiaries, if any, must continue from the time of the grant
until three months before the option is exercised.
2
<PAGE>
However, if an optionee becomes disabled, an option may be exercised by a
disabled employee up to twelve months after termination of employment.
ARTICLE VII
HOLDING PERIOD
All shares of stock purchased by an employee pursuant to the exercise of
an option granted under this Plan shall be eligible for the special tax
treatment provided by Section 422A of the Internal Revenue Code of 1954, only if
that employee does not dispose of those shares for at least two years after the
option is granted and at least one year after the date the shares are
transferred to the employee.
ARTICLE VIII
NONTRANSFERABILITY
Options granted under this Plan may not be assigned and may be
transferred only by will or by laws of descent and distribution. During the
employee's life, the options are exercisable only by him.
ARTICLE IX
ADMINISTRATION OF PLAN
This Plan shall be administered by the Board of Directors of the
Corporation or a Compensation Committee appointed by the Board of Directors. The
Directors of the Corporation or the Compensation Committee shall have the
exclusive power to select the employees to be granted options, the time at which
an option may be granted, the number of Shares for which an option is granted,
and the term of any option. In granting options, the Directors or the
Compensation Committee may take into consideration the value of the services
rendered by the employees, their present and potential contributions to the
Corporation's success, and such other factors deemed relevant in accomplishing
the purposes of this Plan. All decisions and determinations made by the
Directors or the Compensation Committee shall be final and binding upon all
parties, including the Corporation, its shareholders and its employees.
3
<PAGE>
ARTICLE X
AMENDMENT OF PLAN
This Plan may be amended at any time by the Board of Directors without
the approval of the Corporation's Shareholders, other than an amendment of the
provisions regarding the number of optionable shares, the class of eligible
employees, the minimum option prices, or the $100,000 ceiling on grants. If any
provision of this Plan is determined to disqualify the options or shares which
may be purchased upon exercise of the options granted under this Plan so that
the special tax treatment provided by Section 422A is not available, then this
Plan shall be deemed to be automatically amended so as to delete the
disqualifying provision as if it had never been inserted in this Plan, and to
incorporate by reference the modification necessary to qualify the options or
shares under Section 422A.
This Plan shall be effective as of the date and year first written
above.
TRIANGLE, INC.,
a Colorado corporation
By: s/ Arthur N. Havers
---------------------------
Arthur N. Havers, President
ATTEST:
s/ Robert D. Wieder
- ----------------------------
Robert D. Wieder, Secretary
4
EXHIBIT 4.2
PetHealth Systems, Inc.
1997 Stock Award Plan
This 1997 Stock Award Plan (the "Plan") of PetHealth Systems, Inc. (the
"Company") is adopted by the directors of the Company as of February 7, 1997,
which is the date of its approval by the shareholders of the Company. The
Company formerly was named "Triangle, Inc." The Company is a Colorado
corporation with principal executive offices located at 444 Madison Avenue,
Suite 1710, New York, New York 10022
Whereas, from time to time the Company intends to obtain the services of
individuals as directors, officers, employees, or consultants, and to compensate
such individuals with cash and the issuance of shares of Common Stock of the
Company, the following Plan is adopted:
1. Reservation of Shares. The Company hereby reserves and sets aside
400,000 shares of Common Stock, without par value, for issuance under this Plan.
2. Issuance of Shares; Valuation of Services. Shares of Common Stock shall
be issued only to individuals who have served or have agreed to serve as
directors and/or officers and/or employees of the Company, or who have provided
or agreed to provide consulting or advisory services to the Company. The number
of shares of Common Stock to be issued shall be determined by the written
resolution of the disinterested directors of the Company, who shall estimate the
value of the services to be rendered to the Company and set the number of shares
issued therefor based on the average of the bid and ask market prices of the
Common Stock for the 5 business days prior to the resolution of the
disinterested directors. The issuance of shares based upon such valuations shall
constitute income to the individuals receiving such shares, for purposes of
state and federal income taxes. The issuance of shares shall be reported by the
Company to the IRS for the receiving individuals on Form W-2 or Form 1099, as
appropriate, and deducted as an expense on the books of the Company.
All shares issued under this Plan shall be issued as fully paid and
nonassessable shares of Common Stock of the Company.
3. Status of Securities.
(a) Except for transactions which comply with subparagraph (b) below, all
shares issued under the Plan shall be issued as restricted securities as such
term is defined under the rules and regulations of the Securities and Exchange
Commission ("SEC") as promulgated pursuant to the Securities Act of 1933, as
amended ("1933 Act"). Certificates for all shares issued under this subparagraph
(a) shall bear a restrictive legend in form customary to restricted securities.
<PAGE>
(b) If the Company has registered the issuance of shares under the Plan
with the SEC by the filing of a registration statement therefor pursuant to the
1933 Act on Form S-8, all shares issued while such registration statement is in
effect shall be issued as unrestricted securities provided
(i) that the information delivery and record retention requirements as
specified by SEC Rule 428 have been met by the Company in connection
with the issuance of shares under this Plan (a copy of Rule 428 is
attached hereto and incorporated herein by reference);
(ii) that a copy of this Plan and of Rule 428 has been delivered to
each individual receiving shares hereunder, and such individual has
acknowledged such receipt by execution of the acknowledgement form
accompanying this Plan; and
(iii) that resale of any shares issued under this Plan which
constitute "control securities" (as defined in General Instruction C
to Form S-8), which shares have been acquired by any "affiliate" (as
defined in SEC Rule 405) of the Company, shall be effected by such
affiliate only by means of a separate prospectus (the "reoffer
prospectus"). The reoffer prospectus must be prepared by the Company
and filed with the SEC as part of the initial registration statement
on Form S-8 or as a post-effective amendment thereto, and qualified
under state law as applicable.
4. Status as a Rule 16b-3 Plan. The acquisition of shares pursuant to this
Plan by an officer or director of the Company is intended to qualify as a
transaction in the equity securities of the Company which is exempt from Section
16(b) of the Securities Exchange Act of 1934 ("Exchange Act") pursuant to SEC
Rule 16b- 3(d)(1).
5. Section 16(a) Reporting. Each acquisition of shares pursuant to this
Plan by an officer or director of the Company shall be reported pursuant to
Section 16(a) of the Exchange Act, by the filing with the SEC by such person of
a Form 4 by the tenth day of the month following the month wherein the board of
directors of the Company authorized the issuance of shares to such person under
this Plan. The date of such authorization shall be the date of acquisition of
such shares by such person, for purposes of Section 16(a) and Form 4. Each
disposition of such shares by such person shall also shall be reported by the
filing of a Form 4 by the tenth day of the month following the month wherein the
disposition has been effected.
2
<PAGE>
The foregoing 1997 Stock Award Program has been adopted by the directors by
consent in lieu of a meeting, effective as of the date first stated above.
s/ Ted A. Sprinkle, Jr. s/ Kenneth J. Rotondo
- ----------------------------- -----------------------------
Ted A. Sprinkle, Jr. Kenneth J. Rotondo
s/ Joseph J. Messina s/ Martin I. Saposnick
- ----------------------------- -----------------------------
Joseph J. Messina Martin I. Saposnick
3
<PAGE>
Form of Acknowledgment
The undersigned acknowledges receipt of a copy of the 1997 Stock Award Plan
of PetHealth Systems, Inc. ("Company"), the Form 10-KSB Report as filed by the
Company with the Securities and Exchange Commission ("SEC") pursuant to the
Securities Exchange Act of 1934 ("Exchange Act") for the most recent fiscal
year, the interim reports on Form 10-QSB filed by the Company with the SEC since
the end of the most recent fiscal year, the proxy statement prepared pursuant to
Schedule 14A or the information statement prepared pursuant to Schedule 14C of
the SEC rules promulgated under the Exchange Act, and the reports on Form 8-K
filed by the Company with the SEC since the end of the most recent fiscal year.
The undersigned (check one) ___ is ___ is not an "affiliate" of the
Company.
_________________________ Date: _____________, 199__.
Signature of Recipient
_________________________
Print name and address
(and title if an entity)
_________________________
_________________________
_________________________
_________________________
Social Security Number
or Employer Identification
Number
Acknowledgment Received
PetHealth Systems, Inc.
_________________________
Authorized Officer
_________________________
Print name
4
EXHIBIT 5.1
STEPHEN E. ROUNDS
ATTORNEY AT LAW
4635 EAST EIGHTEENTH AVENUE TELEPHONE (303) 377-6997
DENVER, COLORADO 80220 USA FACSMILE (303) 377-0231
February 14, 1997
PetHealth Systems, Inc.
444 Madison Avenue
Suite 1710
New York, New York
Re: Registration Statement on Form S-8
Gentlemen:
PetHealth Systems, Inc. ("Company"), a Colorado corporation, proposes to
issue shares of Common Stock as follows:
(i) up to 50,000 shares of Common Stock upon exercise of stock options
which may be granted in the future under the Incentive Stock Option Plan (as
readopted by the shareholders of the Company as of February 7, 1997, hereafter
the "ISOP"); and
(ii) Up to 400,000 shares of Common Stock under the 1997 Stock Award Plan
which may be issued in the future for services to the Company.
DOCUMENTS REVIEWED
I have examined originals, certified copies or other copies identified to
my satisfaction, of the following:
1. Articles of Incorporation, and Articles of Amendment to the Articles of
Incorporation, of the Company.
2. Bylaws of the Company.
3. The ISOP and the 1997 Stock Award Plan.
4. Certain minutes of proceedings of the board of directors of the Company.
5. The Registration Statement on Form S-8 to be filed by the Company with
the Securities and Exchange Commission to register (a) the issuance of shares of
Common Stock pursuant to exercise of options to be granted under the ISOP, and
(b) the issuance of shares of Common Stock for services provided to the
Corporation.
6. Such other papers (including public documents) as I deem appropriate
under the circumstances.
<PAGE>
PetHealth Systems, Inc.
February 14, 1997
Page 2
I have also consulted with officers and directors of the Company, and
received representations and assurances concerning the preceding documents.
Although I have not undertaken an independent verification of the matters
covered by this paragraph, I have no reason to believe that the representations
and assurances received are materially inaccurate or false.
OPINION
A. Subject to the next paragraph, based on my review of the foregoing, it
is my opinion that (i) the shares of Common Stock to be sold by the Company
after date hereof on exercise of options to be granted under the ISOP; and (ii)
shares of Common Stock to be issued after date hereof as payment for services
provided to the Company after the date hereof, will be duly and validly issued
as fully paid and non-assessable shares of Common Stock of the Company, when
sold and paid for (with cash or services, as the case may be) in accordance with
the terms of the ISOP or the 1997 Stock Award Program.
My opinion assumes that after date hereof, the Company delivers to each
person participating in such Award or ISOP the information required by Section
10(a) of the Securities Act of 1933 and Part I of Form S-8, prior to such
person's written election to participate in such ISOP or Award by paying
(whether with cash or services) for the shares of Common Stock to be issued to
such person.
Yours Sincerely,
s/ Stephen E. Rounds
Stephen E. Rounds
Schmidt + Associates
A Professional Corporation of Certified Public Accountants
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the use of our
report dated March 11, 1996, on the financial statements of Triangle, Inc. as of
December 31, 1995 and 1994, included in or made part of this Registration
Statement on Form S-8.
s/ Schmidt & Associates, P.C.
February 21, 1997
Greenwood Village, Colorado
7100 East Belleview Ave., Suite 307, Greenwood Village, CO 80111
302+741-5600 Fax 303+741-3320
EXHIBIT 23.2
STEPHEN E. ROUNDS
ATTORNEY AT LAW
4635 EAST EIGHTEENTH AVENUE TELEPHONE (303) 377-6997
DENVER, COLORADO 80220 USA FACSIMILE (303) 377-0231
February 14, 1997
PetHealth Systems, Inc.
444 Madison Avenue
Suite 1710
New York, New York 10022
Re: Registration Statement on Form S-8
Gentlemen:
CONSENT OF COUNSEL
I hereby consent to the filing of my opinion as an exhibit to the
Registration Statement on Form S-8 filed by PetHealth Systems, Inc. However, I
do not admit that I am in the category of those persons whose consent is
required to be so filed by Section 7(a) of the Securities Act of 1933.
Yours Sincerely,
s/ Stephen E. Rounds
Stephen E. Rounds
