SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 and 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 10, 1997
PetHealth Systems, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Colorado 33-25253 93-0969365
- ------------------------- ------------ ------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation)
444 Madison Avenue, Suite 1710
New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 750-7878
Triangle Inc.
830 Northeast Loop 410, Suite 305B
San Antonio, TX 78209
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(Former Name, Former Address or Former Fiscal Year,
if Changed From Last Report)
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Item 1. Change in Control of Registrant.
(a) On February 10, 1997 the registrant filed Articles of
Share Exchange with the Colorado Secretary of State, reflecting a
change in control of the registrant pursuant to the consummation,
as of February 10, 1997, of the Agreement and Plan of Share
Exchange ("Agreement") between the registrant and PetCare, Inc.
dated January 29, 1997.
Pursuant to the Agreement, (i) the registrant has issued
600,000,000 shares of Common Stock to five individuals in exchange
for all of the outstanding stock of PetCare, Inc. owned by such
persons (see subparagraph (b) below); (ii) all outstanding shares
of Common Stock (including the 600,000,000 newly issued shares)
have been subjected to a 1 for 200 reverse stock split (to take
effect as of Monday February 23, 1997, such that as of such date
3,285,030 shares shall be issued and outstanding); (iii) as of
February 7, 1997 the directors and officers of the registrant
elected the following persons to the board of directors and to
serve as officers, and the former directors and officers resigned
their positions:
Name Position
---- --------
Ted A. Sprinkle, Jr. President and the Chief
Executive Officer,
Director
Kenneth J. Rotondo Executive Vice President,
Chief Operating Officer,
Secretary, Treasurer, Chief
Financial Officer, Director
Joseph J. Messina Director
Martin I. Saposnick Director
(iv) the name of the registrant was changed to PetHealth Systems,
Inc.; and (v) the registrant may change its legal domicile from
Colorado to Delaware at a subsequent date.
Pursuant to the closing of the Agreement, PetCare, Inc. (which
shall change its name to PetHealth Management, Inc.) has become a
wholly-owned subsidiary of the registrant, and the business of the
registrant shall be the acquisition and operation of companion pet
veterinarian hospitals and related business activities.
The five individuals to whom the registrant issued 3,000,000
(post reverse split) shares of Common Stock had acquired the shares
of PetCare, Inc. which were exchanged for such 3,000,000 shares of
the registrant, for a total of $3,000 cash (their personal funds).
(b) The number of issued and outstanding shares of Common
Stock of the registrant, and the percentage of the total of the
outstanding shares, owned by (i) each officer and director of the
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registrant, (ii) each person known to the registrant to own 5% or
more of the total issued and outstanding shares of Common Stock of
the registrant, and (iii) the officers and directors of the
registrant as a group, are stated below. All numbers are stated as
if the 1 for 200 reverse stock split (approved by the shareholders
of the registrant on February 7, 1997) had taken effect as of the
date of filing this Form 8-K Report (such reverse split shall take
effect on Monday February 23, 1997).
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class
- -------------- ------------------- -------------------- ----------
Common, no par Ted A. Sprinkle, Jr.* 700,000 21.3
444 Madison Ave. direct
Suite 1710
New York, New York
10022
" Joseph J. Messina* 700,000 21.3
444 Madison Ave. direct
Suite 1710
New York, New York
10022
" Martin I. Saposnick* 700,000 21.3
444 Madison Ave. direct
Suite 1710
New York, New York
10022
" Kenneth J. Rotondo* 700,000 21.3
444 Madison Ave. direct
Suite 1710
New York, New York
10022
" Thomas LeVine 200,000 6.0
444 Madison Ave. direct
Suite 1710
New York, New York 10022
" Officers and directors
as group (4 persons) 2,800,000 85.2%
_______________________________
* Officer and/or director
All of the 3,000,000 shares are subject to escrow until
closing of the registrant's acquisition of the first veterinarian
hospital.
Item 2. Acquisition or Disposition of Assets.
As described under Item 1, the registrant has acquired
PetCare, Inc. as a wholly-owned subsidiary. The only assets of
PetCare, Inc. acquired in connection with the transaction consist
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of minimal cash and the rights (under separate letters of intent)
to acquire two companion pet veterinarian hospitals in upstate New
York (one is presently owned by Dr. Rotondo, an officer and
director of the registrant). As of the date of this Form 8-K
Report, the terms for such acquisitions (amounts of cash,
securities, and assumption of indebtedness) have not been finalized
as between the registrant and the sellers of the two hospitals.
Item 7. Financial Statements and Exhibits.
(a) and (b) Financial statements of the acquired company
PetCare, Inc., and pro forma financial information, will be filed
by amendment to this Form 8-K Report before April 27 (i.e., the
expiration of 60 days from the date this initial Form 8-K Report
was required to be filed).
(c) Exhibits.
The Agreement and Plan of Share Exchange (without its
exhibits) is filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report on Form 8-K 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.
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Ted A. Sprinkle, Jr., President
and Chief Executive Officer
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.
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.
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.
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.
(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
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 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 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.
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
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 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.
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
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
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
s/Joseph Messina
______________________
Joseph J. Messina
s/Martin Saposnick
______________________
Martin I. Saposnick
