SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
February 21, 1998
Commission File Number 1-12992
NuMED HOME HEALTH CARE, INC.
(Exact name of small business issuer as specified in its charter)
STATE OF NEVADA 34-1711764
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
5770 Roosevelt Blvd., Suite, 700, Clearwater, FL 34620
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (813) 524-3227
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Item 1. CHANGE IN CONTROL OF REGISTRANT
On February 18, 1998: NuMED Home Health Care, Inc. ("NuMED") signed
a definitive agreement to merge with Banyan Healthcare Services Inc., a
Delaware corporation ("Banyan") whereby, subject to stockholder approval,
NuMED shareholders shareholder approval, NuMED shareholders of record
prior to the merger will participate in a recapitalization of the Company
pursuant to which each existing share of the Company will be exchanged for
1/10 of one share of new common stock, 1/10 of one share of new preferred
stock with a face amount of $10.00 per share, and a warrant to purchase
1/10 of one share of new common stock at $0.40 per 1/10 share.
Additionally, following the recapitalization but prior to the merger with
Banyan, NuMED will declare a dividend to holders of record of new common
stock immediately prior to the merger in the form of $15.00 in cash per
share of new common stock which will be paid following the closing of the
merger. Banyan shareholders will receive one share of post-
recapitalization and post-dividend NuMED common stock in exchange for each
share of Banyan common stock. If Banyan shares trade at $6.00 per share
for seven consecutive days, Banyan can compel exercise or redemption of
the warrants. In effect, existing NuMED shareholders will hold
approximately 4-7% of the common stock of the combined entity as well as
their warrants and preferred stock. Banyan shareholders will hold between
93-96% of the common stock of the combined entity.
ITEM 7. FINANCIAL STATEMENT, PROFORMA FINANCIALS AND EXHIBITS
Financial Statements
(a) Banyan financials are being audited and will be filed as soon as
available
(b) Pro Forma Financial Information
It is impractical to provide the required pro forma financial
information at the time of the filing of this report. The required
pro forma financials will be filed within 60 days.
(c) Exhibits
Definitive Agreement and Plan of Merger by and among NuMED Home
Health Care, Inc. and Banyan Acquisition Corporation and Banyan
Healthcare Services Inc. dated
February 17, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
NUMED HOME HEALTH CARE, INC.
Date: February 21, 1998 By: /s/ Jugal K. Taneja
Jugal K. Taneja
Chairman & Chief Executive Officer
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
NUMED HOME HEALTH CARE, INC.,
BANYAN ACQUISITION CORP.
AND
BANYAN HEALTHCARE SERVICES, INC.
FEBRUARY 17, 1998
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TABLE OF CONTENTS
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE RECAPITALIZATION AND PRE-MERGER DIVIDEND . . . . . . . . . . . . .
1.1 Recapitalization . . . . . . . . . . . . . . . . . . . . . .
1.2 Recapitalization and Declaration of the Dividend . . . . . .
ARTICLE II
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . .
2.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . .
2.4 Certificate of Incorporation and By-laws . . . . . . . . . . .
2.5 Directors . . . . . . . . . . . . . . . . . . . . . . . . . .
2.6 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.7 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . . . . . . . .
3.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . . .
(a) Cancellation of Company and Parent Owned Stock and Rights . .
(b) Conversion of Shares . . . . . . . . . . . . . . . . . . . . .
(c) Shares of Dissenting Stockholders . . . . . . . . . . . . . .
(d) Options and Warrants Currently Outstanding . . . . . . . . . .
3.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . .
(a) Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . .
(b) Payment of Merger Consideration . . . . . . . . . . . . . . .
(c) Exchange Procedure . . . . . . . . . . . . . . . . . . . . . .
(d) Distributions with Respect to Unexchanged Banyan Shares . . .
(e) No Further Ownership Rights in Banyan Shares . . . . . . . . .
(f) Merger Consideration for Unexchanged Banyan Shares . . . . . .
(g) Options Under Option Plans . . . . . . . . . . . . . . . . . .
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . .
4.1 Representations and Warranties of the Company . . . . . . . .
(a) Organization, Standing and Power . . . . . . . . . . . . . . .
(b) Financial Statements and Other Financial Information
Provided is Accurate
(c) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
(d) Capital Structure . . . . . . . . . . . . . . . . . . . . . .
(e) Authority; Non-contravention . . . . . . . . . . . . . . . . .
(f) Information Supplied . . . . . . . . . . . . . . . . . . . . .
(g) Absence of Super Majority Provision . . . . . . . . . . . . .
(h) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . .
(i) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . .
(j) Undisclosed Liabilities . . . . . . . . . . . . . . . . . . .
4.2 Representations and Warranties of Parent and Sub . . . . . . .
(a) Organization, Standing and Power . . . . . . . . . . . . . . .
(b) Financial Statements and Other Financial Information
Provided are Accurate
(c) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
(d) Earlier Mergers and Acquisitions . . . . . . . . . . . . . . .
(e) Capital Structure . . . . . . . . . . . . . . . . . . . . . .
(f) Authority; Non-contravention . . . . . . . . . . . . . . . . .
(g) Information Supplied . . . . . . . . . . . . . . . . . . . . .
(h) Absence of Certain Changes or Events . . . . . . . . . . . . .
(i) Absence of Super Majority Provision . . . . . . . . . . . . .
(j) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . .
(k) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . .
(l) Absence of Changes in Benefit Plans . . . . . . . . . . . . .
(m) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . .
(n) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(o) No Excess Parachute Payments . . . . . . . . . . . . . . . . .
(p) Environmental Matters . . . . . . . . . . . . . . . . . . . .
(q) Compliance with Laws . . . . . . . . . . . . . . . . . . . . .
(r) Material Contracts and Agreements . . . . . . . . . . . . . .
(s) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . .
(t) Title to Properties, etc. . . . . . . . . . . . . . . . . . .
(u) Intellectual Property . . . . . . . . . . . . . . . . . . . .
(v) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . .
(w) Undisclosed Liabilities . . . . . . . . . . . . . . . . . . .
(x) Transactions with Affiliates . . . . . . . . . . . . . . . . .
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . . . . . . . . .
5.1 Conduct of Business. . . . . . . . . . . . . . . . . . . . . .
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . .
(b) Changes in Employment Arrangements . . . . . . . . . . . . . .
(c) Severance . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2 Other Actions . . . . . . . . . . . . . . . . . . . . . . . .
5.3 Advice of Changes . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VI
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . .
6.1 Stockholder Approval; Preparation of the Joint Proxy
Statement/Prospectus . . . . . . . . . . . . . . . . . . .
6.2 Letter of the Company's Accountants . . . . . . . . . . . . .
6.3 Letter of Parent's Accountants . . . . . . . . . . . . . . . .
6.4 Access to Information. . . . . . . . . . . . . . . . . . . . .
6.5 Reasonable Efforts; Notification . . . . . . . . . . . . . . .
6.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . .
6.7 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . .
6.8 Public Announcements . . . . . . . . . . . . . . . . . . . . .
6.9 Stockholder Litigation . . . . . . . . . . . . . . . . . . . .
ARTICLE VII
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . .
7.1 Conditions to Each Party's Obligation to Effect the Merger . .
(a) Company Stockholder Approval and New Common Stockholder
Approval . . . . . . . . . . . . . . . . . . . . . . . . .
(b) No Injunctions or Restraints . . . . . . . . . . . . . . . . .
(c) Joint Proxy Statement/Prospectus Effectiveness . . . . . . . .
(d) Exchange Listing . . . . . . . . . . . . . . . . . . . . . . .
7.2 Conditions of Parent . . . . . . . . . . . . . . . . . . . . .
(a) Compliance . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) Certifications and Opinion . . . . . . . . . . . . . . . . . .
(c) Representations and Warranties True . . . . . . . . . . . . .
(d) Affiliate Letters . . . . . . . . . . . . . . . . . . . . . .
(e) Corporate Dividend Laws . . . . . . . . . . . . . . . . . . .
(f) Consents, etc. . . . . . . . . . . . . . . . . . . . . . . . .
(g) No Litigation . . . . . . . . . . . . . . . . . . . . . . . .
(h) Dissenting Stockholders . . . . . . . . . . . . . . . . . . .
(i) Satisfactory Due Diligence . . . . . . . . . . . . . . . . . .
(j) No Material Adverse Change . . . . . . . . . . . . . . . . . .
(k) Opinion of Financial Advisor . . . . . . . . . . . . . . . . .
(l) Employment Agreement . . . . . . . . . . . . . . . . . . . . .
(m) Lender Approval . . . . . . . . . . . . . . . . . . . . . . .
7.3 Conditions of the Company . . . . . . . . . . . . . . . . . .
(a) Compliance . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) Certifications and Opinion . . . . . . . . . . . . . . . . . .
(c) Representations and Warranties True . . . . . . . . . . . . .
(d) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . .
(e) Dissenting Stockholders . . . . . . . . . . . . . . . . . . .
(f) Satisfactory Due Diligence . . . . . . . . . . . . . . . . . .
(g) No Material Adverse Change . . . . . . . . . . . . . . . . . .
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . .
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SPECIAL PROVISIONS AS TO CERTAIN MATTERS . . . . . . . . . . . . . . .
9.1 No Solicitation . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1 Survival of Representations and Warranties . . . . . . . . .
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.3 Definitions . . . . . . . . . . . . . . . . . . . . . . . . .
10.4 Interpretation . . . . . . . . . . . . . . . . . . . . . . .
10.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . .
10.6 Entire Agreement: No Third-Party Beneficiaries . . . . . . .
10.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . .
10.8 Assignment . . . . . . . . . . . . . . . . . . . . . . . . .
10.9 Enforcement of the Agreement . . . . . . . . . . . . . . . .
10.10 Severability . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of February 17, 1998 (the
"Agreement"), by and among NUMED HOME HEALTH CARE, INC., a Nevada
corporation (the "Parent"), BANYAN ACQUISITION CORP., a Nevada corporation
to be formed ("Sub") and BANYAN HEALTHCARE SERVICES, INC., a Delaware
corporation (the "Company") (the Parent, the Sub and the Company are
individually referred to as a "Party" and collectively referred to as the
"Parties").
WHEREAS, prior to the Closing (as defined in Section 2.2) the Board
of Directors of Parent will approve: (i) a class of non-voting redeemable
preferred stock (the "Preferred Stock") having a par value of $0.01 per
share, a face amount of $10.00 per share, an annual cumulative dividend of
$1.00 and which shall become convertible into a debenture having a
principal amount of $10.00, a five year term and ten percent interest
rate; (ii) a new class of common stock (the "New Common Stock") having a
par value of $0.01 per share; and, (iii) a new class of warrants which
shall carry the right to purchase one tenth (.10) of one share of New
Common Stock for a price of $0.40 per share (the "Warrants"); and
WHEREAS, contingent upon the Closing, the Board of Directors of
Parent will approve a recapitalization of Parent (the "Recapitalization")
pursuant to which each share of the Common Stock, par value $0.001 (the
"Old Common Stock"), shall be exchanged for: (i) one-tenth (.10) of one
share of New Common Stock; (ii) one-tenth (.10) of a share of Preferred
Stock; and, (iii) one Warrant; and
WHEREAS, contingent upon the Closing, the Board of Directors of
Parent will declare a dividend to holders of record of New Common Stock
immediately prior to the Closing (the "Pre-Merger Dividend") at the rate
of $15.00 per share of New Common Stock in cash; and
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of the Sub with and into the Company by
Parent (the "Merger") on the terms and subject to the conditions of this
Agreement, whereby each of the issued and outstanding shares of the
Company's Common Stock, $0.001 par value (the "Banyan Shares"), shall be
exchanged for one (1) share of New Common Stock; and
WHEREAS, for federal tax purposes, it is intended that the Merger
will qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code") with respect to
pre-merger stockholders of the Company; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Merger
and also to prescribe various conditions to the Merger; and
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the Parties
agree as follows:
ARTICLE I
THE PRE-MERGER RECAPITALIZATION AND DIVIDEND
1.1 Recapitalization. Prior to the Closing, the Board of Directors
of the Parent shall approve a recapitalization pursuant to which each
share of Old Common Stock, par value $0.001, shall be exchanged for the
following:
(a) one-tenth (.10) of one share of New Common Stock, par value
$0.01;
(b) one-tenth (.10) of one share of Preferred Stock, face
amount $10.00, par value $0.01; and
(c) one Warrant to purchase one-tenth (.10) of one share of New
Common Stock at $0.40 per share with a two (2) year expiration period and
a forced exercise provision in the event the New Common Stock's closing
price exceeds $6.00 per share for seven consecutive trading days on the
principal registered stock exchange or recognized electronic inter-dealer
quotation medium on which shares of New Common Stock are traded.
1.2 Fractional Shares and Warrants. Parent will not issue
fractional shares of New Common Stock, Preferred Stock or fractional
Warrants. The Parent will issue a full share or Warrant in lieu of
fractional shares or Warrants.
1.3 The Declaration of the Dividend. Immediately after the
Recapitalization and prior to the Closing, the Board of Directors of the
Parent shall declare a dividend to holders of record of the New Common
Stock in the form of $15.00 per share in cash, to be paid after the
Closing.
ARTICLE II
THE MERGER
2.1 The Merger. Upon the terms and subject to the conditions hereof
and in accordance with the Nevada General Corporation Law ("NGCL") and the
Delaware General Corporation Law (the "DGCL"), the Sub shall be merged
with and into the Company at the Effective Time of the Merger (as
hereinafter defined). Following the Merger, the separate corporate
existence of the Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to
and assume all the rights and obligations of the Sub in accordance with
the NGCL.
2.2 Effective Time. As soon as practicable following the
satisfaction or, to the extent permitted hereunder, waiver of the
conditions set forth in Article VII, the Surviving Corporation shall file
the certificates of merger (the "Certificates of Merger") required by the
NGCL and the DGCL with respect to the Merger and other appropriate
documents (the "Articles of Merger") executed in accordance with the
relevant provisions of the NGCL and the DGCL. The Merger shall become
effective on the date of the Closing at which time the Certificates of
Merger will be duly filed with the Delaware Secretary of State and the
Nevada Secretary of State, or at such other time as the Sub and the
Company shall agree should be specified in the Articles of Merger and the
Certificates of Merger (the time the Merger becomes effective being the
"Effective Time of the Merger"). The closing of the Merger (the "Closing")
shall take place at the offices of Foley & Lardner in Tampa, Florida,
approximately fifteen days after the latest to occur of: (a) the meeting
of stockholders of the Company contemplated by this Agreement to approve
the Merger (the "Company's Stockholders Meeting"); (b) the meeting of the
stockholders of the Parent (the "Parent's Stockholders Meeting"), or, (c)
if any of the conditions set forth in Article VII have not been satisfied,
then as soon as practicable thereafter, or at such other time and place or
such other date as Parent and the Company shall agree (the "Closing
Date"). At the Closing, the Parties will authorize the filing of the
Certificates of Merger, to become effective as agreed by the Parties.
2.3 Effects of the Merger. The Merger shall have the effects set
forth in the NGCL and the DGCL. If at any time after the Effective Time
of the Merger, the Surviving Corporation shall consider or be advised that
any further assignments or assurances in law or otherwise are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, all rights, title and interests in all real estate
and other property and all privileges, powers and franchises of the
Company and the Sub, the Surviving Corporation and its proper officers and
directors, in the name and on behalf of the Company and the Sub, shall
execute and deliver all such proper deeds, assignments and assurances in
law and do all things necessary and proper to vest, perfect or confirm
title to such property or rights in the Surviving Corporation and
otherwise to carry out the purpose of this Agreement, and the proper
officers and directors of the Surviving Corporation are fully authorized
in the name of the Company and Sub or otherwise to take any and all such
action.
2.4 Certificate of Incorporation and By-laws.
(a) The Certificate of Incorporation of the Company as in
effect immediately prior to the Effective Time of the Merger shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The By-laws of the Company as in effect immediately prior
to the Effective Time of the Merger shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(c) Any reasonable amendments to the Certificate of
Incorporation and By-Laws of the Parent deemed necessary or appropriate by
the Company to protect the interests of the Company's Stockholders shall
be made by the Parent and submitted to the Parent's stockholders at
Parent's Stockholders' Meeting with the approval of the Parent's Board of
Directors, which approval shall not be unreasonably withheld.
2.5 Directors. The Board of Directors of the Company immediately
prior the Closing shall be the Board of Directors of the Surviving
Corporation. The Board of Directors of the Parent following the Closing
shall consist of two designees of the pre-merger Board of the Parent who
shall be, subject to approval at the Parent's Stockholders Meeting, Mr.
Jugal K. Taneja and Ms. Susan J. Carmichael, and five designees of the
stockholders of the Company, to be named by the Company's Board of
Directors (collectively the "Post Merger Board").
2.6 Officers. The officers of the Company immediately prior to the
Effective time of the Merger shall be the officers of the Surviving
Corporation immediately following the Effective Time of the Merger. The
officers of the Parent immediately following the Closing shall be
appointed by the Post-Merger Board immediately after the Closing and shall
hold office in accordance with the Certificate of Incorporation and By-
laws of the Parent until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the
case may be.
2.7 Vacancies. If at the Effective Time of the Merger a vacancy
shall exist in the Board of Directors or in any of the offices of the
Surviving Corporation, such vacancy may thereafter be filled in the manner
provided by the NGCL and the Certificate of Incorporation and By-laws of
the Surviving Corporation.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock. As of the Effective Time of the Merger,
by virtue of the Merger and without any action on the part of the holder
of any stock of the Company (the "Banyan Shares"):
(a) Cancellation of Company and Parent Owned Stock and Rights.
All Banyan Shares and any rights that are held in treasury by the Company
or are owned by any wholly-owned subsidiary of the Company and any Banyan
Shares and any rights to acquire Banyan Shares owned by Parent or any
other wholly-owned subsidiary of Parent or Sub shall be canceled and no
consideration shall be delivered in exchange therefor.
(b) Conversion of Shares. Subject to Sections 3.1(a), (c) and
(d), each issued and outstanding Banyan Share shall be converted into the
right to receive one Share of New Common Stock upon the surrender of the
certificate formerly representing such Banyan Share pursuant to Section
3.2 (the "Merger Consideration").
(c) Shares of Dissenting Stockholders. Notwithstanding anything
in this Agreement to the contrary, any holder of Banyan Shares outstanding
immediately prior to the Effective Time of the Merger who is entitled to
demand and elects to demand appraisal rights under Section 262 of the DGCL
and who has fully complied with the provisions thereof and who has not
effectively withdrawn or lost such right (a "Dissenting Stockholder"),
shall not receive the Merger Consideration, but shall be entitled to
receive from the Surviving Corporation such consideration as may be
determined to be due to such Dissenting Stockholder pursuant to Section
262 of the DGCL; provided, however, that each Banyan Share outstanding
immediately prior to the Effective Time of the Merger and held by a
Dissenting Stockholder who, after the Effective Time of the Merger,
withdraws his demand for appraisal under Section 262 of the DGCL, in
writing delivered to the Surviving Corporation (subject to the written
approval of the Surviving Corporation to the extent required by Section
262 of the DGCL) or otherwise loses his right of appraisal, in either case
pursuant to the DGCL, shall be deemed to be converted, as of the Effective
Time of the Merger, into the right to receive the Merger Consideration.
The Company shall give Parent prompt notice of any written demands for
appraisal received by the Company.
(d) Options and Warrants Currently Outstanding. As of the date
of this Agreement:
(i) there are no outstanding options or warrants to
acquire additional Banyan Shares; and
(ii) the exercise price per share and the number of shares
issuable upon exercise of existing options and warrants of the Parent
shall be adjusted in accordance with the terms of each such security.
3.2 Exchange of Certificates.
(a) Exchange Agent. The Parent's current stock transfer agent
(or such other person who may be so appointed) will act as the exchange
agent (the "Exchange Agent") for the issue of the Merger Consideration
upon surrender of certificates representing Banyan Shares.
(b) Delivery of Merger Consideration. Parent shall take all
steps necessary to enable and cause there to be provided to the Exchange
Agent on a timely basis, as and when needed after the Effective Time of
the Merger, certificates for the New Common Stock to be issued upon the
conversion of the Banyan Shares pursuant to Section 3.1.
(c) Exchange Procedure. As soon as reasonably practicable after
the Effective Time of the Merger, the Exchange Agent shall mail to each
holder of record of a certificate or certificates that immediately prior
to the Effective Time of the Merger represented outstanding Banyan Shares
(the "Certificates"), other than the Company, Parent Sub and any wholly
owned subsidiary of the Company , Parent or Sub:
(i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent
and shall be in a form and have such other provisions as Parent and the
Company may reasonably specify); and,
(ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration.
Upon surrender of a Certificate for cancellation to the Exchange Agent or
to such other agent or agents as may be appointed by the Surviving
Corporation, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive the Merger
Consideration in exchange therefor, and the Certificate so surrendered
shall immediately be canceled. If the Merger Consideration is to be
issued to a person other than the person in whose name the Certificate so
surrendered is registered, it shall be a condition of exchange that such
Certificate shall be properly endorsed or otherwise in proper form for
transfer and that the person requesting such exchange shall pay any
transfer or other taxes required by reason of the exchange to a person
other than the registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or
is not applicable. Until surrendered as contemplated by this Section 3.2,
each Certificate shall be deemed at any time after the Effective Time of
the Merger to represent only the right to receive upon such surrender the
Merger Consideration into which the Banyan Shares theretofore represented
by such Certificate shall have been converted pursuant to Section 3.1.
The Exchange Agent shall not be entitled to vote or exercise any rights of
ownership with respect to the Parent Shares held by it from time to time
hereunder, except that it shall receive and hold all dividends or other
distributions paid or distributed with respect thereto for the account of
persons entitled thereto.
(d) Distributions with Respect to Unexchanged Certificates.
None of the Merger Consideration and no dividends or other distributions
declared or made after the Effective Time of the Merger with a record date
after the Effective Time of the Merger with respect to the Parent Shares
shall be paid to the holder of any Certificate with respect to the New
Common Stock represented thereby until the holder of record of such
Certificate surrenders such Certificate. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall
be paid to the record holder of the Certificates representing the New
Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the Merger Consideration; (ii) the amount of
dividends or other distributions, if any, with a record date after the
Effective Time of the Merger theretofore paid with respect to such New
Common Stock; and (iii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective
Time of the Merger but prior to surrender and a payment date subsequent to
surrender payable with respect to such New Common Stock.
(e) No Further Ownership Rights in Banyan Shares. All Shares of
New Common Stock issued upon the surrender of Certificates in accordance
with the terms of this Article III, together with any dividends payable
thereon to the extent contemplated by this Section 3.2, shall be deemed to
have been exchanged and paid in full satisfaction of all rights pertaining
to the Banyan Shares theretofore represented by such Certificates and, at
the Effective Time of the Merger, there shall be no further registration
of transfers on the stock transfer books of the Company of the Banyan
Shares that were outstanding immediately prior to the Effective Time of
the Merger. If, after the Effective Time of the Merger, Certificates are
presented to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Article III.
(f) Merger Consideration for Unexchanged Certificates. At any
time more than six months after the Effective Time of the Merger, if the
Exchange Agent holds any Merger Consideration or any dividends or other
distributions in respect of post merger New Common Stock with respect to
which the holder of record of a Certificate therefor has not surrendered
such Certificate, the Surviving Corporation, on written notice, may direct
the Exchange Agent to deliver such Merger Consideration and all such
dividends and other distributions to the Surviving Corporation. Upon
receipt thereof, the Surviving Corporation shall have no obligation to
segregate any cash so received and the holder who has not surrendered such
Certificate shall look solely to the Surviving Corporation for payment of
the Merger Consideration and any applicable dividends or other
distributions.
(g) Options under Option Plans. The Company does not have any
options outstanding under any option plans, or otherwise.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, Parent and Sub as follows:
(a) Organization, Standing and Power. Each of the Company and
each of its subsidiaries is a corporation duly organized, validly existing
and in good standing under the law of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to carry
on its business as now being conducted. Each of the Company and each of
its subsidiaries is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to
be so qualified or licensed to do business (individually or in the
aggregate) would not have a material adverse effect on the Company. As
part of the Company's due diligence obligations, the Company will deliver
to Parent complete and correct copies of its Certificate of Incorporation
and By-laws and the articles or certificates of incorporation, by-laws or
other similar organizational and governing documents of its subsidiaries.
(b) Financial Statements and Other Financial Information
Provided is Accurate. All of the financial statements, including the
notes contained therein or annexed thereto (the "Company Financial
Statements"), and other financial information (the "Company Financial
Information"), hereafter provided to Parent, will be true, complete,
accurate, prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis, prepared in accordance
with the books and records of the Company, and fairly present, in
accordance with GAAP, the assets, liabilities and financial position, the
results of operations and cash flows of the Company as of the dates and
for the periods indicated.
(c) Subsidiaries. Section 4.1(c) of the Disclosure Schedule
lists each direct or indirect subsidiary of the Company. The Company has
no subsidiaries that are not corporations. All the outstanding shares of
capital stock of the Company's subsidiaries that are corporations have
been duly authorized and validly issued and are fully paid and non-
assessable and were not issued in violation of any preemptive rights or
other preferential rights of subscription or purchase of any person.
Except as set forth in Section 4.1 (c) of the Disclosure Schedule, all
such stock and ownership interests are owned of record and beneficially by
the Company or the Company's subsidiary identified on such schedule as
owning such interest, free and clear of all liens, pledges, security
interests, charges, claims and other encumbrances of any kind or nature
("Liens"). Except as set forth in Section 4.1(c) of the Disclosure
Schedule, no person other than the Company or a subsidiary of the Company
holds any equity interest of any kind in a subsidiary of the Company.
Except for the capital stock of its subsidiaries and except for the
ownership interests set forth in Section 4.1 (c) of the Disclosure
Schedule, the Company does not own, directly or indirectly, any capital
stock, equity interest or other ownership interest in any corporation,
partnership, association, joint venture, limited liability company or
other entity.
(d) Capital Structure. The authorized capital stock of the
Company consists of 25,000,000 Banyan Shares and 5,000,000 shares of
Preferred Stock, $0.001 par value ("Preferred Stock"). At the close of
business on February 16, 1998, there were no shares of Preferred Stock
outstanding, approximately 4,500,000 Banyan Shares were issued and
outstanding, and no Banyan Shares were reserved for issuance pursuant to
options or warrants. All outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable and not subject
to preemptive rights. Except as disclosed to Parent and Sub prior to or
at the Closing, no capital stock has been issued by the Company since
February 16, 1998. Except as disclosed in Section 4.1(d) of the
Disclosure Schedule prior to or at the Closing, there are no outstanding
or authorized securities, options, warrants, calls, rights, commitments,
preemptive rights, agreements, arrangements or undertakings of any kind to
which the Company or any of its subsidiaries is a party, or by which any
of them is bound, obligating the Company or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, any
shares of capital stock or other equity or voting securities of the
Company or of any of its subsidiaries or obligating the Company or any of
its subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. No such rights or options as described in the previous
sentence are outstanding on the date hereof. Neither the Company nor any
of its subsidiaries are parties to, and to the best knowledge of the
Company, no other person is party to, any voting trust, voting agreement,
or similar voting agreement or arrangement relating to any equity security
of the Company or any subsidiary.
(e) Authority; Non-contravention. The Company has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject to
Banyan Stockholder Approval (as defined in Section 4.1(g)). This Agreement
has been duly and validly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer or similar
laws affecting the enforcement of creditors' rights generally and pursuant
to general equitable principles. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, conflict with,
or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Company or any of its subsidiaries under,
any provision of (i) the Certificate of Incorporation or By-Laws of the
Company or any of its subsidiaries, (ii) except as set forth in Section
4.1(e) of the Disclosure Schedule, any loan or credit agreement, note,
bond, mortgage, indenture, lease, municipal contract or other agreement,
instrument, permit, concession, franchise or license applicable to the
Company or any of its subsidiaries or their respective properties or
assets or (iii) subject to governmental filing and other matters referred
to in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation or arbitration award applicable to the
Company or any of its subsidiaries or their respective properties or
assets, other than, in the case of clause (ii), any such conflicts,
violations, defaults, rights or liens, security interests, charges or
encumbrances that individually or in the aggregate would not have a
material adverse effect on the Company and would not materially impair the
ability of the Company to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. No consent,
approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign, including local
authorities (a "Governmental Entity"), is required by or with respect to
the Company or any of its subsidiaries in connection with the execution
and delivery of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby, except for (i) the
distribution of (A) a proxy or information statement relating to the
Stockholder Approval (such proxy or information statement as amended or
supplemented from time to time, the "Joint Proxy Statement/Prospectus"),
and (B) such reports under Section 13(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as may be required in connection
with this Agreement and the transactions contemplated hereby, (ii) the
filing of the Certificates of Merger with the Delaware Secretary of State
and the Nevada Secretary of State with respect to the Merger as provided
in the DGCL and the NGCL and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do
business and (iv) such other consents, approvals, orders, authorizations,
registrations, declarations, filings and notices as are set forth in
Section 4.1(e) of the Disclosure Schedule.
(f) Information Supplied. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference
in the Joint Proxy Statement/Prospectus (as defined in Section 6.1 (b))
will, at the time the Joint Proxy Statement/Prospectus is filed with the
SEC, and at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act, 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 not misleading.
The information supplied by the Company in the Joint Proxy
Statement/Prospectus will not, at the date the Joint Proxy
Statement/Prospectus is first mailed to the Company's Stockholders and at
the time of the Company's Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not misleading.
With regard to information supplied by the Company, the Joint Proxy
Statement/Prospectus will comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder. For purposes of this Agreement, the Parties agree that the
statements made and information in the Joint Proxy Statement/Prospectus
(other than information provided by Parent or any subsidiary of Parent in
each case concerning Parent or such subsidiary expressly for inclusion
therein) relating to the Federal income tax consequences of the
transactions contemplated hereby to the holders of Banyan Shares shall be
deemed to be supplied by the Company and not by Parent.
(g) Absence of Super Majority Provision. Except for the
approval of the Merger by the holders of a majority of the outstanding
Banyan Shares ("Banyan Stockholder Approval"), no other stockholder action
on the part of the Company is required for approval of the Merger and the
transactions contemplated hereby. No provision of the Company's
Certificate of Incorporation or By-laws or other governing instruments of
its subsidiaries or the terms of any rights plan or other takeover defense
mechanism of the Company would, directly or indirectly, restrict or impair
the ability of Parent to vote, or otherwise to exercise the rights of a
stockholder with respect to, securities of the Company and its
subsidiaries that may be acquired or controlled by Parent or permit any
stockholder to acquire securities of the Company on a basis not available
to Parent in the event that Parent were to acquire securities of the
Company.
(h) Brokers. Except for The Harbor Group, Inc., no broker,
investment banker or other person is entitled to receive from the Company
or any of its subsidiaries any investment banking, brokerage or finder's
fees in connection with this Agreement or the transactions contemplated
hereby.
(i) Litigation. To the best of the Company's knowledge, after
due investigation, there is no suit, action, proceeding or investigation
pending or threatened against or affecting the Company or any of its
subsidiaries or any of their respective properties or employee benefit
plans or fiduciaries thereof that could reasonably be expected to have a
material adverse effect on the Company or prevent, hinder or materially
delay the ability of the Company to consummate the transactions
contemplated by this Agreement (and the Company is not aware of any basis
for any such suit, action, proceeding or investigation), nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its subsidiaries or
any of their respective properties or employee benefit plans or
fiduciaries thereof having, or which, insofar as reasonably can be
foreseen, in the future could have, any such effect.
(j) Undisclosed Liabilities. To the best of the Company's
knowledge, after due investigation, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature, including
liabilities under ERISA or federal or state environmental statutes,
(whether accrued, absolute, contingent or otherwise) or which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the Company; except those incurred in the
ordinary course of business consistent with past operations and not
related to the borrowing of money. The Company undertakes to notify the
Parent of any change in this representation as soon as practicable after
the Company learns or any potential liability. Neither the Company nor
any of its subsidiaries maintains any employee benefit plans covered under
ERISA.
(k) Taxes. The Company is unaware of any material unpaid tax
liability of itself and any of its subsidiaries not in the normal course
of business. To the extent the Company learns of any such liability, or
the Company acquires any business with such possible liability, the
Company undertakes to inform the Parent and Sub of the possible extent of
such liability as soon as practicable after the Company learns of any such
liability.
4.1 Representations and Warranties of Parent and Sub. Parent
represents and warrants to, and agrees with, the Company as follows:
(a) Organization, Standing and Power. The Parent and each of
its subsidiaries is a corporation duly organized, validly existing and in
good standing under the law of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to carry
on its business as now being conducted. The Parent and each of its
subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to
be so qualified or licensed to do business (individually or in the
aggregate) would not have a material adverse effect on the Company. The
Parent will deliver to the Company complete and correct copies of its
Certificate of Incorporation and By-laws and the articles or certificates
of incorporation, by-laws or other similar organizational and governing
documents of its subsidiaries.
(b) Financial Statements and Other Financial Information
Provided is Accurate. All of the financial statements, including the
notes contained therein or annexed thereto (the "Parent Financial
Statements"), and other financial information (the "Parent Financial
Information"), heretofore or hereafter provided by the Parent or Sub to
the Company, are and will be true, complete, accurate, prepared in
accordance with generally accepted accounting principals ("GAAP") applied
on a consistent basis, prepared in accordance with the books and records
of the Parent, and fairly present, in accordance with GAAP, the assets,
liabilities and financial position, the results of operations and cash
flows of the Parent as of the dates and for the periods indicated.
(c) Subsidiaries. Section 4.2(c) of the Disclosure Schedule
lists each direct or indirect subsidiary of the Parent. Each of the
Parent's subsidiaries that is not a corporation is duly organized under
the laws of its jurisdiction of organization and has all requisite power
and authority to carry on its business as it is now being conducted, and
to own, operate and lease the assets that it now owns, operates or holds
under lease. All the outstanding shares of capital stock of the Parent's
subsidiaries that are corporations have been duly authorized and validly
issued and are fully paid and non-assessable and were not issued in
violation of any preemptive rights or other preferential rights of
subscription or purchase of any person. All of the Parent's direct or
indirect ownership interests in the Parent's subsidiaries that are not
corporations have been duly authorized and validly issued or vested, were
not issued in violation of any preemptive rights or other preferential
rights of subscription or purchase of any person, are fully paid and,
except as set forth in Section 4.2(c) of the Disclosure Schedule, are non-
assessable. Except as set forth in Section 4.2 (c) of the Disclosure
Schedule, all such stock and ownership interests are owned of record and
beneficially by the Parent or the Parent's subsidiary identified on such
schedule as owning such interest, free and clear of all liens, pledges,
security interests, charges, claims and other encumbrances of any kind or
nature ("Liens"). Except as set forth in Section 4.2(c) of the Disclosure
Schedule no person other than the Parent or a subsidiary of the Parent
holds any equity interest of any kind in a subsidiary of the Parent.
Except for the capital stock of its subsidiaries and except for the
ownership interests set forth in Section 4.2 (c) of the Disclosure
Schedule, the Parent does not own, directly or indirectly, any capital
stock, equity interest or other ownership interest in any corporation,
partnership, association, joint venture, limited liability company or
other entity.
(d) Earlier Mergers and Acquisitions. To the best of the
Parent's knowledge, after due investigation, all of the prior business
combinations to which the Parent was a party are effective and were made
in accordance with the laws applicable to such Prior Business
Combinations.
(e) Capital Structure. The authorized capital stock of the
Parent consists of 48,000,000 Shares of Old Common Stock and 2,000,000
shares of Preferred Stock, $0.001 par value ("Preferred Stock"). At the
close of business on February 16, 1998, there were no shares of Preferred
Stock Outstanding and (i) 4,958,502 of Old Common Stock were issued and
outstanding, and (ii) 3,942,880 Shares of Old Common Stock were reserved
for issuance pursuant to options (the "Parent Options") and warrants (the
"Parent Warrants") granted and currently outstanding as set forth in
Section 4.2(e) of the Disclosure Schedule. All outstanding shares of
capital stock of the Parent are, and all such shares issuable upon
exercise of the Parent Options and Parent Warrants will, if and when
issued in accordance with the terms of their respective governing
agreements, be, validly issued, fully paid and nonassessable and not
subject to preemptive rights. No capital stock has been issued by the
Parent since February 16, 1998, other than shares of Common Stock issued
upon exercise of the Parent Options or the Parent Warrants, in accordance
with their terms at such date. Except for the Parent Options and the
Parent Warrants, there were no outstanding or authorized securities,
options, warrants, calls, rights, commitments, preemptive rights,
agreements, arrangements or undertakings of any kind to which the Parent
or any of its subsidiaries is a party, or by which any of them is bound,
obligating the Parent or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, any shares of capital
stock or other equity or voting securities of the Parent or of any of its
subsidiaries or obligating the Parent or any of its subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. Neither the
Parent nor any of its subsidiaries are parties to, and to the best
knowledge of the Parent no other person is party to, any voting trust,
voting agreement, or similar voting agreement or arrangement relating to
any equity security of the Parent or any subsidiary.
(f) Authority; Non-contravention. The Parent and the Sub have
all requisite corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Parent and the Sub and the consummation
by the Parent and the Sub of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Parent and the Sub, subject to Stockholder Approval (as defined in Section
4.2(i)). This Agreement has been duly and validly executed and delivered
by the Parent and the Sub and constitutes a valid and binding obligation
of the Parent and the Sub, enforceable against the Parent and the Sub in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer or similar laws affecting the
enforcement of creditors' rights generally and pursuant to general
equitable principles. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to loss
of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or
assets of the Parent or any of its subsidiaries under, any provision of
(i) the Certificates of Incorporation or By-Laws of the Parent or the Sub
or any provision of the comparable organizational documents of its
subsidiaries, (ii) except as set forth in Section 4.2(f) of the Disclosure
Schedule, any loan or credit agreement, note, bond, mortgage, indenture,
lease, municipal contract or other agreement, instrument, permit,
concession, franchise or license applicable to the Parent, the Sub or any
of its subsidiaries or its respective properties or assets or (iii)
subject to governmental filing and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance,
rule or regulation or arbitration award applicable to the Parent, the Sub
or any of its subsidiaries or its respective properties or assets, other
than, in the case of clause (ii), any such conflicts, violations,
defaults, rights or liens, security interests, charges or encumbrances
that individually or in the aggregate would not have a material adverse
effect on the Parent or the Sub and would not materially impair the
ability of the Parent or the Sub to perform their obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or other governmental authority or agency, domestic or foreign, including
local authorities (a "Governmental Entity"), is required by or with
respect to the Parent, the Sub or any of its subsidiaries in connection
with the execution and delivery of this Agreement by the Parent or the Sub
or the consummation by the Parent or the Sub of the transactions
contemplated hereby, except for (i) the distribution of (A) the Joint
Proxy Statement/Prospectus, and (B) such reports under Section 13(a) of
the Exchange Act, as may be required in connection with this Agreement and
the transactions contemplated hereby, (ii) the filing of the Certificates
of Merger with the Delaware Secretary of State and the Nevada Secretary of
State with respect to the Merger as provided in the DGCL and the NGCL and
appropriate documents with the relevant authorities of any other states in
which the Parent is qualified to do business and (iv) such other consents,
approvals, orders, authorizations, registrations, declarations, filings
and notices as are set forth in Section 4.2(f) of the Disclosure Schedule.
(g) Information Supplied. None of the information supplied or
to be supplied by the Parent for inclusion or incorporation by reference
in the Joint Proxy Statement/Prospectus will, at the time the Joint Proxy
Statement/Prospectus is filed with the SEC, and at any time it is amended
or supplemented or at the time it becomes effective under the Securities
Act, 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 not misleading, and the Joint Proxy Statement/
Prospectus will, at the date the Joint Proxy Statement/Prospectus is first
mailed to the Parent's stockholders and at the time of the Parent's
Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. With regard to information
supplied by the Parent and the Sub, the Joint Proxy Statement/Prospectus
will comply as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder. For purposes
of this Agreement, the Parties agree that the statements made and
information in the Joint Proxy Statement/Prospectus (other than
information provided by Company or any subsidiary of the Company in each
case concerning the Company or such subsidiary expressly for inclusion
therein) relating to the Federal income tax consequences of the
transactions contemplated hereby to the holders of Parent Shares shall be
deemed to be supplied by the Parent and not by the Company.
(h) Absence of Certain Changes or Events. To the best of the
Parent's and the Sub's knowledge, after due investigation, since December
31, 1997, the Parent has conducted its business only in the ordinary
course consistent with past practice, and there has not been (i) any
material adverse change with respect to the Parent, (ii) any declaration,
setting aside or payment of any dividend (whether in cash, stock or
property) with respect to any of the Parent's capital stock, (iii) (A) any
granting by the Parent or any of its subsidiaries to any executive officer
of the Parent or any of its subsidiaries of any increase in compensation,
(B) any granting by the Parent or any of its subsidiaries to any such
executive officer of any increase in severance or termination pay, or (C)
any entry by the Parent or any of its subsidiaries into any employment,
severance or termination agreement with any such executive officer, (iv)
any damage, destruction or loss, whether or not covered by insurance, that
has or could reasonably be expected to have a material adverse effect on
the Parent, (v) any change in accounting methods, principles or practices
by the Parent materially affecting its assets, liabilities or business,
except insofar as may have been required by a change in generally accepted
accounting principles, (vi) any condition, event or occurrence which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the Parent or give rise to a material adverse
change with respect to the Parent, (vii) any event which, if it had taken
place following the execution of this Agreement, would not have been
permitted by Article V, or (viii) any condition, event or occurrence
which, individually or in the aggregate, could reasonably be expected to
prevent, hinder or materially delay the ability of the Parent to
consummate the transactions contemplated by this Agreement. Parent and
Sub undertake to inform the Company in the event of any change in this
representation as soon as practicable after the Parent is aware of such a
change.
(i) Absence of Super Majority Provision. Except for the
approval of the Merger by the holders of a majority of the outstanding
Parent Shares ("Parent Stockholder Approval"), and the approval by the
stockholder of Sub, no other stockholder action on the part of the Parent
or the Sub is required for approval of the Merger and the transactions
contemplated hereby. No provision of the Parent's Certificate of
Incorporation or By-laws or other governing instruments of its
subsidiaries or the terms of any rights plan or other takeover defense
mechanism of the Parent would, directly or indirectly, restrict or impair
the ability of Company to vote, or otherwise to exercise the rights of a
stockholder with respect to, securities of the Parent and its subsidiaries
that may be acquired or controlled by the Company or permit any
stockholder to acquire securities of the Parent on a basis not available
to the Company in the event that the Company were to acquire securities of
the Parent.
(j) Brokers. Except for a fee equal to three percent (3%) of
the transaction payable in post acquisition stock to be paid to Financial
Services Group, Incorporated by Parent, no broker, investment banker or
other person is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent.
(k) Litigation. To the best of Parent's knowledge, there is no
suit, action, proceeding or investigation pending or threatened against or
affecting the Parent or any of its subsidiaries or any of their respective
properties or employee benefit plans or fiduciaries thereof that could
reasonably be expected to have a material adverse effect on the Parent or
prevent, hinder or materially delay the ability of the Parent to
consummate the transactions contemplated by this Agreement (and the Parent
is not aware of any basis for any such suit, action, proceeding or
investigation), nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against the
Parent or any of its subsidiaries or any of their respective properties or
employee benefit plans or fiduciaries thereof having, or which, insofar as
reasonably can be foreseen, in the future could have, any such effect.
(l) Absence of Changes in Benefit Plans. To the best of
Parent's and Sub's knowledge, after due investigation, since December 31,
1997, there has not been any adoption or amendment in any respect by the
Parent or any of its subsidiaries of any collective bargaining agreement
or any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical dependent care, cafeteria, employee assistance,
scholarship program or other plan arrangement or understanding (whether or
not legally binding) providing benefits to any current or former employee
or director of the Parent or any of its subsidiaries (collectively,
"Benefit Plans").
Except as disclosed in Section 4.2(l) of the Disclosure
Schedule, there exist no employment, consulting, severance, termination or
indemnification agreements, arrangements or understandings between the
Parent or any of its subsidiaries and any officer, director or employee of
the Parent or any of its subsidiaries.
(m) Taxes.
Except as set forth in Section 4.2 (m) of the Disclosure
Schedule, each of the Parent and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for Tax (as defined
below) purposes of which the Parent or any of its subsidiaries is or has
been a member, has timely filed all Tax Returns (as defined below)
required to be filed by it and has timely paid (or the Parent has paid on
its behalf) all Taxes which are due (whether or not shown on a Tax
Return). Each of the Tax Returns filed by the Parent or any of its
subsidiaries is accurate and complete in all material respects. The most
recent consolidated financial statements of the Parent reflect an adequate
reserve for all Taxes payable by the Parent and its subsidiaries for all
taxable periods and portions thereof through the date of such financial
statements and through the Closing Date whether or not shown as being due
on any Tax Returns. The consummation of the Merger will not cause the
Parent to recognize any gain or income, including, without limitation,
recognition of income or gain resulting from an excess loss account,
deferred intercompany transaction or similar transactions. Except as
described in Section 4.2(m) of the Disclosure Schedule, no deficiencies
for any Taxes have been proposed, asserted or assessed against the Parent
or any of its subsidiaries, and no requests for waivers of the time to
assess any such Taxes have been granted or are pending. None of the
Federal income Tax Returns of the Parent and its subsidiaries consolidated
in such Tax Returns have been examined by the IRS. Except as set forth in
Section 4.2(m) of the Disclosure Schedule, there are no current
examinations of any Tax Return of the Parent or any of its subsidiaries
being conducted and there are no settlements or any prior examinations
which could adversely affect any taxable period for which the statute of
limitations has not run. As used herein, "Tax" or "Taxes" shall mean all
taxes of any kind, including, without limitation, those on or measured by
or referred to as income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value added, property or windfall
profits taxes, customs, duties or similar fees, assessments or charges of
any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any Governmental Entity,
domestic or foreign. As used herein, "Tax Return" shall mean any return,
report or statement required to be filed with any governmental authority
with respect to Taxes.
(n) No Excess Parachute Payments. Any amount that could be
received (whether in cash or property or the vesting of property) as a
result of any of the transactions contemplated by this Agreement by any
employee, officer or director of the Parent or any of its affiliates who
is a "disqualified individual" (as such term is defined in Section
280(G)(c) of the Code) under any employment, severance or termination
agreement, other compensation arrangement or Benefit Plan currently in
effect would not be characterized as an "excess parachute payment" (as
such term is defined in Section 280G(b)(1) of the Code).
(o) Compliance with Laws. To the best of the Parent's
knowledge, after due investigation, the Parent and its subsidiaries hold
all required, necessary or applicable permits, licenses, variances,
exemptions, orders, franchises and approvals of all Governmental Entities
to own, lease and operate all of their properties and assets and to
conduct their business as now being conducted, except where the failure to
so hold would not have a material adverse effect on the Parent (the
"Parent Permits"). The Parent and its subsidiaries are in compliance with
the terms of the Parent Permits except where the failure to so comply
would not have a material adverse effect on the Parent. Neither the Parent
nor any of its subsidiaries has violated or failed to comply with any
statute, law, ordinance, regulation, rule, permit or order of any Federal,
state or local government, domestic or foreign, or any Governmental
Entity, any arbitration award or any judgment, decree or order of any
court or other Governmental Entity, applicable to the Parent or any of its
subsidiaries or their respective businesses, assets or operations, except
for violations and failures to comply that could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on
the Parent.
(p) Material Contracts and Agreements. The Parent will make
available to the Company copies, and will provide a true and correct list
to the Company, of all contracts and agreements with Governmental Entities
and of all other material contracts, agreements, commitments,
arrangements, leases, policies or other instruments to which it or any of
its subsidiaries is a party or by which it or any such subsidiary is bound
("Material Contracts"). Neither the Parent nor any of its subsidiaries
is, or has received any notice or has any knowledge that any other party
is, in default in any respect under any such Material Contract, and there
has not occurred any event that with the lapse of time or the giving of
notice or both would constitute such a default, except for those defaults
which could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect with respect to the Parent.
(q) Insurance. Parent will provide the Company with copies of
all policies of insurance currently in effect relating to the business,
operations, properties or assets of the Parent and its subsidiaries.
(r) Title to Properties, Parent and Sub do not own any
real property. To the best of the Parent's and Sub's knowledge, Parent
and Sub are in full compliance with all Leases.
(s) Intellectual Property. Neither the Parent the Sub nor any
of their Subsidiaries have any rights to any intellectual property of any
description..
(t) Labor Matters. To the best of the Parent's knowledge,
there are no collective bargaining agreements or other labor union
agreements or understandings to which the Parent or any of its
subsidiaries is a party or by which any of them is bound, nor is it or any
of its subsidiaries the subject of any proceeding asserting that it or any
subsidiary has committed an unfair labor practice or seeking to compel it
to bargain with any labor organization as to wages or conditions. Except
as set forth in Section 4.2(t) of the Disclosure Schedule, neither the
Parent nor any of its subsidiaries has encountered any labor union
organizing activity, or had any actual or threatened employee strikes,
work stoppages, slowdowns or lockouts and no such actions are threatened
at present.
(v) Undisclosed Liabilities. To the best of Parent's
knowledge, after due investigation, none of the Parent or any of its
subsidiaries has any liabilities or obligations of any nature, including
liabilities under ERISA or federal or state environmental statutes,
(whether accrued, absolute, contingent or otherwise) or which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the Parent; except those incurred in the
ordinary course of business consistent with past operations and not
related to the borrowing of money. The Parent undertakes to notify the
Company of any change in this representation as soon as practicable after
the Parent learns of any potential liability. None of the Parent or any
of its subsidiaries maintains any employee benefit plans covered under
ERISA..
(w) Transactions with Affiliates. Except for compensation and
employee benefit arrangements, or as set forth in Section 4.2(w) of the
Disclosure Schedule, no affiliate, officer or director of the Parent has
had or has any interest in any person which has had transactions with the
Parent or a subsidiary within the past three years.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 Conduct of Business.
(a) Ordinary Course. During the period from the date of this
Agreement to the Effective Time of the Merger (except as otherwise
specifically required by the terms of this Agreement), the Parent shall
and shall cause its subsidiaries to carry on its respective businesses in
the usual, regular and ordinary course in substantially the same manner as
heretofore conducted and, to the extent consistent therewith, use all
reasonable efforts to preserve intact their current business
organizations, keep available the services of their current officers and
employees and preserve their relationships with customers, Governmental
Entities, suppliers, insurers, licensors, licensees, distributors and
others having business dealings with them, in each case consistent with
past practice, to the end that their goodwill and ongoing businesses shall
be unimpaired to the fullest extent reasonably possible at the Effective
Time of the Merger. Without limiting the generality of the foregoing, and
except as otherwise expressly set forth in this Agreement, during such
period, the Parent shall not, and shall not permit any of its subsidiaries
to:
(i) (A) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of their capital stock,
(B) split, combine or reclassify any of their capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of
or in substitution for shares of their capital stock or (C) purchase,
redeem or otherwise acquire any shares of capital stock of the Parties or
any of their subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of their capital stock, any other voting securities or any
securities convertible into any such shares; or issue, deliver, sell or
grant any rights, warrants or options to acquire any such shares, voting
securities or convertible securities; or issue, deliver, sell or grant any
stock appreciation rights, phantom stock or similar rights or enter into
any agreement to do any of the foregoing, except for the issuance of
Parent Shares upon the exercise of the Parent Options or the Parent
Warrants, all as outstanding on the date of this Agreement in accordance
with their current terms;
(iii) amend their Certificates or Articles of
Incorporation, By-laws or other comparable charter or organizational
document;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the stock or
assets of, or by any other manner, any business or any corporation,
partnership, association, joint venture, limited liability company or
other entity or division thereof or (B) any assets that would be material,
individually or in the aggregate, to the Parent and its subsidiaries taken
as a whole, except purchases of supplies and inventory in the ordinary
course of business consistent with past practice;
(v) sell, lease, mortgage, pledge, grant a Lien on or
otherwise encumber or otherwise dispose of any of their properties or
assets, except sales of inventory in the ordinary course of business
consistent with past practice;
(vi) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of
the Parties or any of their subsidiaries, guarantee any debt securities of
another person, or (B) make any loans, advances or capital contributions
to, or investments in, any other person, other than to the Company or any
direct or indirect wholly owned subsidiary of the Company;
(vii) make or incur any new capital expenditure or
expenditures not set forth in the Parent's capital budget for fiscal 1998,
or in an amount in excess of that set forth for any such item in such
capital budgets (a true and correct copy of which budget has been
previously furnished to the other Parties), except for capital
expenditures not in excess of $5,000 as to any single item and $10,000 in
the aggregate;
(viii) make any election relating to Taxes or settle or
compromise any Tax liability;
(ix) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the
notes thereto) of the Parent or incurred in the ordinary course of
business consistent with past practice;
(x) waive the benefits of, or agree to modify in any
manner, any confidentiality, standstill or similar agreement to which the
Parent or any of its subsidiaries is a party;
(xi) terminate or amend in any material respect any
contract or agreement material to the Parent;
(xii) adopt a plan of complete or partial liquidation
or resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(xiii) except as expressly permitted by this Agreement,
enter into any new collective bargaining agreement or any successor
collective bargaining agreement to any collective bargaining agreement
disclosed in Section 4.2(t) of the Disclosure Schedule;
(xiv) change any material accounting principle used by
the Parent, except insofar as any such change is required by generally
accepted accounting principles or by the rules and regulations of the SEC;
(xv) settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than settlements or
compromises: (A) of litigation where the amount paid in settlement or
compromise does not exceed $10,000, or (B) in consultation and cooperation
with the Company, and, with respect to any such settlement, with the prior
written consent of the Company;
(xvi) authorize any of, or commit or agree to take any
of, the foregoing actions; or
(xvii) excluding inventory purchased for resale in the
ordinary course of business, the Parent will not enter into any contracts
or other material business obligations or commitments in excess of
$10,000, or for a term longer than one year.
(b) Changes in Employment Arrangements. Except as set forth in
Section 5.1(b) of the Disclosure Schedule, neither the Parent nor any of
its subsidiaries shall (except as may be required in order to give effect
to the requirements of Section 6.6) adopt or amend (except as may be
required by law, rule or regulation) any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or other
arrangement (including any Benefit Plan) for the benefit or welfare of any
employee, director or former director or employee or, other than increases
for individuals (other than officers and directors) in the ordinary course
of business consistent with past practice, increase the compensation or
fringe benefits of any director, employee or former director or employee
or pay any benefit not required by any existing plan, arrangement or
agreement by more than $10,000 for any individual and $20,000 in the
aggregate for all such individuals. The Parent will maintain the
employment of its current executive officers through the Closing Date.
(c) Severance. Except as reflected in Section 5.1(b) of the
Disclosure Schedule, neither the Parent nor any of its subsidiaries shall
grant any new or modified severance or termination arrangement or increase
or accelerate any benefits payable under their severance or termination
pay policies in effect on the date hereof.
5.2 Other Actions. The Parties shall not, and shall not permit any
of their subsidiaries to, take any action that would, or that could
reasonably be expected to, result in any of the representations and
warranties of the respective Party set forth in this Agreement that are
qualified as to materiality becoming untrue or inaccurate in any respect
or in any of the representations and warranties set forth in this
Agreement that are not so qualified becoming untrue in any material
respect.
5.3 Advice of Changes. The Parties shall promptly advise the other
Parties orally and in writing of any change or event having, or which,
insofar as can reasonably be foreseen, could have, a material adverse
effect on either the Parent or the Company, or which contradicts any of
such Party's representations and warranties in this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Stockholder Approval; Preparation of the Joint Proxy
Statement/Prospectus.
(a) The Company and the Parent shall each, as soon as
practicable following the execution and delivery of this Agreement on a
date to be agreed upon between Parent and the Company, which date shall be
set taking into account the status of pending regulatory matters
pertaining to the transactions contemplated hereby, duly call, give notice
of, convene and hold Stockholders Meetings of the Company and the Parent
for the purpose of approving the Merger and the transactions contemplated
thereby. The Company and the Parent will, through their respective Boards
of Directors, recommend to their stockholders the approval and adoption of
the Merger and the related transactions.
(b) Promptly following the date of this Agreement, the Company
and Parent shall prepare and file with the SEC a registration statement
containing a Joint Proxy Statement/Prospectus on Form S-4 (the "Joint
Proxy Statement/Prospectus"). Each of the Company and Parent shall use
its reasonable efforts to have the Joint Proxy Statement/Prospectus
declared effective under the Securities Act as promptly as practicable
after such filing, subject to the setting of the date for the Company's
Stockholders Meeting and the Parent's Stockholders Meeting as provided in
Section 6.1(a). The Company and the Parent will use their reasonable
efforts to cause the Joint Proxy Statement/Prospectus to be mailed to
their respective stockholders as promptly as practicable after the Joint
Proxy Statement/Prospectus is declared effective under the Securities Act.
Parent shall also take such reasonable actions (other than qualifying to
do business in any jurisdiction in which it is not now so qualified) as
may be required to be taken under any applicable state securities laws in
connection with the issuance of New Common Stock as Merger Consideration,
and the Company shall furnish all information concerning the Company and
the holders of the Banyan Shares as may be reasonably requested in
connection with any such action. Each Party will notify the other Party
promptly of the receipt of any written or oral comments from the SEC or
its staff and of any request by the SEC or its staff for amendments or
supplements to the Joint Proxy Statement/Prospectus or for additional
information and will supply the other with copies of all correspondence
between the Party or any of its representatives, on the one hand, and the
SEC or its staff, on the other hand, with respect to the Joint Proxy
Statement/Prospectus or the Merger.
(c) The Company will cause its transfer agent to make stock
transfer records relating to the Company available to the extent
reasonably necessary to effectuate the intent of this Agreement.
6.2 Letter of the Company's Accountants. The Company shall use its
best efforts to cause to be delivered to Parent a letter of BDO Seidman,
LLP, the Company's independent public accountants, dated a date within two
business days before the date on which the Joint Proxy
Statement/Prospectus shall become effective and addressed to Parent and
customary in scope and substance for letters delivered by independent
public accountants in connection with registration statements similar to
the registration statement containing the Joint Proxy
Statement/Prospectus. In connection with the Company's efforts to obtain
such letter, if requested by BDO Seidman, LLP, Parent shall provide a
representation letter to BDO Seidman, complying with Statements on
Auditing Standards ("SAS") 72 and 76, if then required.
6.3 Letter of Parent's Accountants. Parent shall use its best
efforts to cause to be delivered to the Company a letter of Ernst & Young,
LLP, Parent's independent public accountants, dated a date within two
business days before the date on which the Joint Proxy
Statement/Prospectus shall become effective and addressed to the Company
and customary in scope and substance for letters delivered by independent
public accountants in connection with registration statements similar to
the registration statement containing the Joint Proxy
Statement/Prospectus. In connection with Parent's efforts to obtain such
letter, if requested by Ernst & Young, LLP, the Company shall provide a
representation letter to Ernst & Young, LLP complying with SAS 72 and 76,
if then required.
6.4 Access to Information.
(a) The Parties shall, and shall cause each of their
subsidiaries, officers, employees, counsel, financial advisors and other
representatives to, afford to the other Party, and to the other Party's
accountants, counsel, financial advisors and other representatives,
reasonable access during the period from the date hereof to the Effective
Time of the Merger to the Party's and its subsidiaries' respective
officers, employees, representatives, properties, books, contracts,
commitments and records and, during such period, the Parties shall, and
shall cause each of their subsidiaries, officers, employees, counsel,
financial advisors and other representatives to, furnish promptly to the
other Party (i) a copy of each report, schedule, registration statement
and other document filed by it during such period pursuant to the
requirements of Federal or state securities laws and (ii) all other
information concerning its business, properties, financial condition,
operations and personnel as such party may from time to time reasonably
request. The Parties agree to advise the other Party of all material
developments with respect to the Parties, their subsidiaries and their
respective assets and liabilities from the date hereof to the Effective
Time of the Merger.
(b) Except as required by law, each of the Parties shall hold,
and cause their respective directors, officers, employees, accountants,
counsel, financial advisors and representatives and affiliates to hold,
any non-public information in confidence. Any investigation by any Party
of the assets and business of the other Party and its subsidiaries shall
not affect any representations and warranties hereunder.
(c) The Parties agree to permit members of the other Party's
audit team to review and examine the work papers of each other's
independent public accountants with respect to such Party and its
subsidiaries.
(d) Each Party shall also promptly notify the other Party of
any notices from or investigations of which such Party is aware by
Governmental Entities that could materially affect such Party's business
or assets. The Parties will promptly notify the other Party of any
notices from or investigations by Governmental Entities that could
materially affect the consummation of the Merger. In the event of the
termination of this Agreement, each Party promptly will deliver to the
other Party (and destroy all electronic data reflecting the same) all
documents, work papers and other material (and any reproductions or
extracts thereof and any notes or summaries thereto) obtained by such
Party or on its behalf from such other Party or its subsidiaries as a
result of this Agreement or in connection therewith so obtained before or
after the execution hereof.
6.5 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, except to the extent otherwise provided in this Section
6.5, each of the Parties agrees to use reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other Parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger, and the other
transactions contemplated by this Agreement, including (i) the obtaining
of all necessary actions or non-actions, waivers, consents and approvals
from Governmental Entities and the making of all necessary registrations
and filings (including filings with Governmental Entities, if any) and the
taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental
Entity, (ii) the obtaining of all necessary consents, approvals or waivers
from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the transactions contemplated hereby,
including seeking to have any stay or temporary restraining order entered
by any court or other Governmental Entity vacated or reversed and (iv) the
execution and delivery of any additional instruments (including any
required supplemental indentures) necessary to consummate the transactions
contemplated by this Agreement. In connection with and without limiting
the foregoing, the Company and its Board of Directors shall (i) take all
action necessary to ensure that no state takeover statute or similar
statute or regulation is or becomes applicable to the Merger, (ii) if any
state takeover statute or similar statute or regulation becomes applicable
to the Merger, take all action necessary to ensure that the Merger may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or
regulation on the Merger and (iii) cooperate with Parent in the
arrangements for refinancing any indebtedness of, or obtaining any
necessary new financing for, the Company, it being understood that the
failure to obtain any such financing or refinancing shall not be a basis
for terminating this Agreement.
(b) The Company shall give prompt notice to Parent, and Parent
shall give prompt notice to the Company, of (i) any representation or
warranty made by it contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply
with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement;
provided, however, that no such notification shall affect the
representations or warranties or covenants or agreements of the Parties or
the conditions to the obligations of the Parties hereunder.
6.6 Indemnification. Parent agrees that all rights to
indemnification for acts or omissions occurring prior to the Effective
Time of the Merger now existing in favor of the current or former
directors or officers of the Company and its subsidiaries as provided in
their respective Certificates of Incorporation or By-laws, as in effect on
the date hereof, shall survive the Merger.
6.7 Fees and Expenses. Except as provided in Article IX, all fees
and expenses incurred in connection with the Merger, this Agreement and
the transactions contemplated hereby shall be paid by the Party incurring
such fees and expenses, whether or not the Merger is consummated,
provided, however, that nothing herein contained shall relieve any Party
hereto for any liability for breach of this Agreement.
6.8 Public Announcements. Parent, on the one hand, and the Company,
on the other hand, will consult with each other before issuing any press
release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement and shall not issue any such
press release or make any such public statement prior to such
consultation, except that each Party may respond to questions from
stockholders may respond to inquiries from financial analysts and media
representatives in a manner consistent with its past practice and each
Party may make such disclosure as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange or association without prior consultation to the extent such
consultation is not reasonably practicable. The Parties agree that the
initial press release or releases to be issued in connection with the
execution of this Agreement shall be mutually agreed upon prior to the
issuance thereof.
6.9 Stockholder Litigation. The Parties shall give the other
Parties the opportunity to participate in the defense or settlement of any
stockholder litigation against the Parties and their directors relating to
the transactions contemplated by this Agreement until the Effective Time
of the Merger, and thereafter, the Surviving Corporation shall direct the
defense of such litigation but will give the former directors of the
Parent an opportunity to participate in such litigation; provided,
however, that no settlement of litigation under which persons who were
Parent's directors prior to the Effective Time of the Merger will be
agreed to without such person's consent, which shall not be unreasonably
withheld.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each Party to effect the Merger is subject to the
satisfaction or waiver by each Party on or prior to the Closing Date of
the following conditions:
(a) Company Stockholder Approval and New Common Stockholder
Approval. The Company Stockholder Approval and the New Common Stockholder
Approval shall have been obtained.
(b) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect; provided,
however, that the parties hereto shall, subject to Section 6.5, use
reasonable efforts to have any such injunction, order, restraint or
prohibition vacated.
(c) Joint Proxy Statement/Prospectus Effectiveness. The Joint
Proxy Statement/Prospectus shall be effective under the Securities Act on
the Closing Date, and all post-effective amendments filed shall have been
declared effective or shall have been withdrawn; and no stop-order
suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the
knowledge of the Parties, threatened by the SEC.
(d) Exchange Listing. The New Common Stock to be issued as
Merger Consideration shall have been approved for listing on the NASDAQ
Small Cap Market.
(e) Blue Sky Filings. There shall have been obtained any and
all material permits, approvals and consents of securities or "blue sky"
authorities of any jurisdiction that are necessary so that the
consummation of the Merger and the transactions contemplated thereby will
be in compliance with applicable laws, the failure to comply with which
would have a material adverse effect on Parent or the free transferability
of the Parent Shares (other than Parent Shares of holders who were
"affiliates", within the meaning of Rules 144 and 145(c) under the
Securities Act, of the Company or who are "affiliates" of Parent).
7.2 Conditions of Parent. Subject to waiver by the Parent, the
obligation of Parent to consummate the Merger are further subject to the
satisfaction at the Effective Time of the Merger, of the following
conditions:
(a) Compliance. The agreements and covenants of the Company to
be complied with or performed on or before the Closing Date pursuant to
the terms hereof shall have been duly complied with or performed in all
material respects and Parent shall have received a certificate dated the
Closing Date and executed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.
(b) Certifications and Opinion. The Company shall have
furnished Parent with:
(i) a certified copy of a resolution or resolutions duly
adopted by the Board of Directors of the Company approving this Agreement
and consummation of the Merger and the transactions contemplated hereby
and directing the submission of the Merger to a vote of the stockholders
of the Company;
(ii) a certified copy of a resolution or resolutions duly
adopted by the holders of a majority of the outstanding Banyan Shares
approving the Merger and the transactions contemplated hereby;
(iii) a favorable opinion dated the Closing Date, in
customary form and substance, of Spector, Gadon & Rosen, P.C., counsel for
the Company, dated the Closing Date to the effect that:
(A) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has corporate power to own its properties and assets and to
carry on its business as presently conducted and as described in the Joint
Proxy Statement/Prospectus;
(B) The Company has the requisite corporate power to
effect the Merger as contemplated by this Agreement; the execution and
delivery of this Agreement did not, and the consummation of the Merger
will not, violate any provision of the Company's Articles of Incorporation
or By-Laws; and upon the filing by the Surviving Corporation of the
Articles of Merger, the Merger shall become effective;
(C) Each of the Company's subsidiaries is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has corporate power to
own its properties and assets and to carry on its business as presently
conducted and all of the outstanding capital stock of each subsidiary is
owned of record and, to the best of such counsel's knowledge, beneficially
by the Company and/or another subsidiary, free and clear of all liens,
security interests and other encumbrances; and
(D) The Board of Directors of the Company has taken
all action required by the DGCL and its Articles of Incorporation or its
By-Laws to approve the Merger and to authorize the execution and delivery
of this Agreement and the transactions contemplated thereby; the Board of
Directors and the stockholders of the Company have taken all action
required by the DGCL and its Articles of Incorporation and By-Laws to
authorize the Merger in accordance with the terms of this Agreement; and
this Agreement is a valid and binding Agreement of the Company enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer or similar laws affecting the
enforcement of creditors' rights generally and pursuant to general
equitable principles.
(c) Representations and Warranties True. To the best of the
Company's knowledge, the representations and warranties of the Company
contained in this Agreement (other than any representations and warranties
made as of a specific date) that are qualified as to materiality shall be
true in all respects and the representations and warranties of the Company
contained in this Agreement (other than any representations and warranties
made as of a specific date) that are not so qualified shall be true in all
material respects, in each case on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
and as of such date, the representations and warranties of the Company
contained in the Agreement made as of a specific date shall remain true as
of such date, and Parent shall have received a certificate to that effect
dated the Closing Date and executed on behalf of the Company by the chief
executive officer and the chief financial officer of the Company.
(d) Tax Opinion. Parent shall have received an opinion of
Foley & Lardner in form and substance satisfactory to Parent, to the
effect that the tax consequences to holders of Old Common Stock of the
transactions contemplated by this Agreement as described in Joint Proxy
Statement/Prospectus are more likely than not to be the ultimate tax
consequences.
(e) Affiliate Letters. Parent shall have received from the
Company a list of such persons, if any, as counsel for the Company state
may be "affiliates" of the Company, within the meaning of Rules 144 and
145(c) under the Securities Act, and shall have received from such persons
undertakings in writing to the effect that no disposition will be made by
such persons of any Parent Shares received or to be received pursuant to
the Merger except in compliance with the applicable provisions of the
Securities Act and the rules and regulations thereunder. Parent shall not
be required to maintain the effectiveness of the Joint Proxy
Statement/Prospectus for the purpose of resale by stockholders of the
Company who may be "affiliates" pursuant to Rule 145 under the Securities
Act and Parent may require that the certificate for any Parent Shares to
be received by such affiliates as Merger Consideration contain a legend
that such Parent Shares may not be transferred except in compliance with
such undertaking.
(f) Corporate Dividend Laws. Parent shall have received an
opinion of Ernst & Young, LLP that the Pre-Merger Dividend will not
violate any statutory or case law governing the declaration and payment of
dividends or other distributions by the Parent.
(g) Consents, etc. Parent shall have received evidence, in
form and substance reasonably satisfactory to it, that such licenses,
permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and other third parties as are necessary in
connection with the transactions contemplated hereby have been obtained,
except such licenses, permits, consents, approvals, authorizations,
qualifications and orders which are not, individually or in the aggregate,
material to Parent or the Company or the failure of which to have received
would not (as compared to the situation in which such license, permit,
consent, approval, authorization, qualification or order had been
obtained) materially detract from the aggregate benefits to Parent of the
transactions reasonably contemplated hereby.
(h) No Litigation. There shall not be pending or threatened by
any Governmental Entity any suit, action or proceeding (or by any other
person any suit, action or proceeding which has a reasonable likelihood of
success) (i) challenging or seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions contemplated
by this Agreement or seeking to obtain from Parent or any of its
subsidiaries any damages that are material in relation to Parent and its
subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Company, Parent or any of their respective
subsidiaries of any material portion of the business or assets of the
Company, Parent or any of their respective subsidiaries, to dispose of or
hold separate any material portion of the business or assets of the
Company, Parent or any of their respective subsidiaries, as a result of
the Merger or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on the ability of Parent to
acquire or hold, or exercise full rights of ownership as to any shares of
Common Stock of the Surviving Corporation, including, without limitation,
the right to vote the Common Stock of the Surviving Corporation on all
matters properly presented to the stockholders of the Surviving
Corporation or (iv) seeking to prohibit Parent or any of its subsidiaries
from effectively controlling in any material respect the business or
operations of the Company or its subsidiaries.
(i) Dissenting Stockholders. The holders of not more than 5% of
the outstanding Banyan Shares shall have given proper notice of their
intent to exercise appraisal rights to require the purchase of their
Banyan Shares as contemplated by Section 3.1(e) (in calculating the
foregoing, holders of Banyan Shares who give notice but subsequently waive
their rights in accordance with Section 262 of the DGCL to require
purchase of their Banyan Shares, shall not be included).
(j) Satisfactory Due Diligence. The results of due diligence
conducted by Parent with respect to the Company shall be satisfactory to
Parent.
(k) No Material Adverse Change. There shall not have occurred
any material adverse change with respect to the Company since December 31,
1997.
(l) Opinion of Financial Advisor. Parent shall have received
the opinion of McDonald & Company, prior to the mailing of the Proxy
Statements, to the effect that the terms of the Merger are fair to the
holders of the New Common Stock from a financial point of view.
(m) Employment Agreements. The Surviving Corporation shall
buy-out the employment agreements between the Parent and Jugal K. Taneja
and Susan J. Carmichael on mutually agreeable terms upon Closing and shall
enter into one year employment agreements with Mr. Taneja and Ms.
Carmichael pursuant to which Mr. Taneja shall receive fifty percent (50%)
of his current annual salary and Ms. Carmichael shall receive one hundred
percent (100%) of current annual salary.
(n) Lender Approval. To the extent required, all lenders to
Parent and the Company shall have approved the consummation of the Merger
or shall have waived any objection or right to object with respect
thereto.
7.3 Conditions of the Company. Subject to waiver by the Company,
the obligations of the Company to consummate the Merger are further
subject to the satisfaction at the Effective Time of the Merger of the
following conditions:
(a) Compliance. The agreements and covenants of Parent to be
complied with or performed on or before the Closing Date pursuant to the
terms hereof shall have been duly complied with or performed in all
material respects and the Company shall have received a certificate dated
the Closing Date on behalf of Parent by the President and the Chief
Financial Officer of Parent to such effect.
(b) Certifications and Opinion. Parent shall have furnished
the Company with:
(i) a certified copy of a resolution or resolutions duly
adopted by the Board of Directors or a duly authorized committee thereof
of Parent approving this Agreement and consummation of the Merger and the
transactions contemplated hereby, including the issuance, listing and
delivery of the Parent Shares pursuant hereto;
(ii) a certified copy of a resolution or resolutions duly
adopted by the holders of a majority of the outstanding Old Common Stock
approving the Merger and the transactions contemplated hereby;
(iii) a favorable opinion, dated the Closing Date, in
customary form and substance, of Foley & Lardner, counsel for Parent and
Sub to the effect that:
(A) Parent and Sub are corporations duly organized,
validly existing and in good standing under the laws of the State of
Nevada and have corporate power to own their properties and assets and to
carry on their business as presently conducted and as described in the
Joint Proxy Statement/Prospectus. Parent and Sub have the requisite
corporate power to carry out their obligations under this Agreement. The
execution and delivery of this Agreement did not, and the consummation of
the Merger will not, violate any provision of Parent's or the Sub's
Certificate of Incorporation or By-Laws;
(B) Parent and Sub have taken all action required by
the NGCL, their Certificates of Incorporation or their By-Laws to
authorize such execution and delivery and the transactions contemplated by
this Agreement, including the Merger in accordance with the terms of this
Agreement; and this Agreement is a valid and binding agreement of Parent
and Sub enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer or similar
laws affecting the enforcement of creditors' rights generally or pursuant
to general equitable principles; and
(C) Each of the Parent's subsidiaries is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has corporate power to
own its properties and assets and to carry on its business as presently
conducted and all of the outstanding capital stock of each subsidiary is
owned of record and, to the best of such counsel's knowledge, beneficially
by the Parent and/or another subsidiary, free and clear of all liens,
security interests and other encumbrances; and
(D) The New Common Stock to be issued pursuant to the
Merger will be duly authorized and, when issued and delivered as
contemplated hereby, will have been legally and validly issued and will be
fully paid and non-assessable and no stockholder of Parent will have any
preemptive right of subscription or purchase in respect thereof under
Nevada law or Parent's Certificate of Incorporation or By-laws.
(c) Representations and Warranties True. To the best of the
Parent's knowledge, the representations and warranties of Parent contained
in this Agreement (other than any representations and warranties made as
of a specific date) that are qualified as to materiality shall be true in
all respects and the representations and warranties of Parent contained in
this Agreement (other than any representations and warranties made as of a
specific date) that are not so qualified shall be true in all material
respects, in each case on and as of the Closing Date with the same effect
as though such representations and warranties had been made on and as of
such date, except as contemplated or permitted by this Agreement, and the
Company shall have received a certificate to that effect dated the Closing
Date and executed on behalf of Parent by the President, any Vice President
or the Treasurer of Parent.
(d) Tax Opinion. The Company shall have received an opinion of
Spector, Gadon & Rosen, P.C. in form and substance satisfactory to the
Company, to the effect that for federal income tax purposes and
conditioned upon certain representations of managements of the Company and
Parent as to certain customary facts and circumstances regarding the
Merger; (i) the Merger will qualify as a "reorganization" within the
meaning of Section 368(a) of the Code; (ii) no gain or loss will be
recognized by the Company as a result of the Merger; (iii) no realized
loss will be recognized by stockholders of the Company upon the receipt by
them of the Merger Consideration in exchange for their Banyan Shares
pursuant to the Merger; (iv) any realized gain will be recognized by a
stockholder of the Company to the extent of the cash portion of the Merger
Consideration received pursuant to the Merger; (v) the aggregate tax bases
of Parent Shares received by the stockholders of the Company will be the
same as the aggregate tax bases of the Banyan Shares surrendered in
exchange therefor and increased by the gain recognized on the Merger; and
(vi) the holding period of Parent Shares received by the stockholders of
the Company will include the period during which the Banyan Shares
surrendered in exchange therefor were held, provided the Banyan Shares
were held as a capital asset at the Effective Time of the Merger.
(e) Dissenting Stockholders. If applicable, the holders of not
more than 5% of the outstanding Old Common Stock shall have given proper
notice of their intent to exercise appraisal rights to require the
purchase of their Old Common Stock as contemplated by Section 3.1(e) (in
calculating the foregoing, holders of Old Common Stock who give notice but
subsequently waive their rights in accordance with Section ____ of the
NGCL to require purchase of their Old Common Stock, shall not be
included).
(f) Satisfactory Due Diligence. The results of due diligence
conducted by the Company with respect to Parent shall be satisfactory to
the Company.
(g) No Material Adverse Change. There shall not have occurred
any material adverse change with respect to Parent since December 31,
1997.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time of the Merger, whether before or after approval of
matters presented in connection with the Merger by the Stockholders of the
Company and the Parent:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the stockholders of the Company or the Parent fail
to give any required approval of the Merger and the transactions
contemplated hereby upon a vote at a duly held meeting of stockholders of
the Company or the Parent or at any adjournment thereof;
(ii) if any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency or body shall
have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become final and
nonappealable; or
(iii) if the Merger shall not have been consummated on
or before August 1, 1998, (to be extended by consent of the parties if
delayed by review by regulatory bodies) unless the failure to consummate
the Merger is the result of a material breach of this Agreement by the
Party seeking to terminate this Agreement;
(iv) by Parent or the Company, as the case may be based
upon the material breach of any representation, warranty, covenant or
agreement contained in the Agreement by the other Party; a material
adverse change with respect to the other Party or the failure to satisfy
all conditions precedent unless such failure is waived by the Party whose
performance is conditioned thereon;
(c) by the Parties pursuant to a sale submitted under Article
IX hereof; or
(d) by the Parent or the Company pursuant to Section 9.1(c).
ARTICLE IX
SPECIAL PROVISIONS AS TO CERTAIN MATTERS
9.1 No Solicitation.
(a) The Parties shall not, nor shall they permit any of their
subsidiaries to, nor shall they authorize or permit any officer, director
or employee of or any investment banker, attorney or other advisor, agent
or representative of such Party or any of their subsidiaries to, directly
or indirectly, (i) solicit, initiate or encourage the submission of any
takeover proposal, (ii) enter into any agreement (other than
confidentiality and standstill agreements in accordance with the
immediately following proviso) with respect to any takeover proposal, or
(iii) participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes,
or may reasonably be expected to lead to, any takeover proposal; provided,
however, in the case of this clause (iii), that prior to the vote of
stockholders of the Company and the stockholders of the Parent for
approval of the Merger (and not thereafter if the Merger is approved
thereby) to the extent required by the fiduciary obligations of the Board
of Directors of the Party, determined in good faith by a majority of the
disinterested members thereof based on the advice of outside counsel, the
Party may, in response to an unsolicited request therefor, furnish
information to any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) pursuant to a confidentiality and standstill
agreement reasonably satisfactory to the other Party. Without limiting
the foregoing, the Parties understood that any violation of the
restrictions set forth in the preceding sentence by any officer, director
or employee of the Parties or any of their subsidiaries or any investment
banker, attorney or other advisor, agent or representative of the Parties,
whether or not such person is purporting to act on behalf of such Party or
otherwise, shall be deemed to be a material breach of this Agreement by
such Party. As consideration for their foregoing respectve agreement to
"stand still," each of the Company and the Parent, shall cause a warrant
to be issued in the name of the other for the purchase of 250,000 shares
of common stock at their respective bid closing prices on January 27,
1998. For purposes of this Agreement, "takeover proposal" means (i) any
proposal, other than a proposal by another Party or any of their
affiliates, for a merger or other business combination involving a Party,
(ii) any proposal or offer, other than a proposal or offer by another
Party or any of its affiliates, to acquire from the Party or any of its
affiliates in any manner, directly or indirectly, an equity interest in
the Party or any subsidiary, any voting securities of the other Party or
any subsidiary or a material amount of the assets of the Party and its
subsidiaries, taken as a whole, or (iii) any proposal or offer, other than
a proposal or offer by another Party or any of its affiliates, to acquire
from the stockholders of the Party by tender offer, exchange offer or
otherwise more than 5% of the outstanding shares of such Party.
(b) Neither the Board of Directors of any Party nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to the other Parties the approval or
recommendation by the Board of Directors of such Party or any such
committee of this Agreement or the Merger or take any action having such
effect or (ii) approve or recommend, or propose to approve or recommend,
any takeover proposal. Notwithstanding the foregoing, in the event the
Board of Directors of a Party receives a takeover proposal that, in the
exercise of its fiduciary obligations (as determined in good faith by a
majority of the disinterested members thereof based on the advice of
outside counsel), it determines to be a superior proposal, the Board of
Directors of such Party may withdraw or modify its approval or
recommendation of this Agreement or the Merger and may (subject to the
following sentence) terminate this Agreement, in each case at any time
after the fifth business day following the other Party's receipt of
written notice (a "Notice of Superior Proposal") advising the other Party
that the Board of Directors has received a takeover proposal which it has
determined to be a superior proposal, specifying the material terms and
conditions of such superior proposal (including the proposed financing for
such proposal and a copy of any documents conveying such proposal) and
identifying the person making such superior proposal. The Party may
terminate this Agreement pursuant to the preceding sentence only if the
stockholders of the Party shall not yet have voted upon the Merger and the
Party shall have paid the amounts provided for in Section 9.2(a). Nothing
contained herein shall prohibit a Party from taking and disclosing to its
stockholders a position contemplated by Rule 14e--2(a) prior to the sixth
business day following such Party's receipt of a Notice of Superior
Proposal provided that the Party does not withdraw or modify its position
with respect to the Merger or take any action having such effect or
approve or recommend a takeover proposal.
(c) In the event that the Board of Directors of a Party or any
committee thereof shall in full compliance with Sections 9.1(a) and (b),
(i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to the other Parties, the approval or recommendation by the Board
of Directors of the Party or any such committee of this Agreement or the
Merger or take any action having such effect or (ii) approve or recommend,
or propose to approve or recommend, any takeover proposal, the other Party
may terminate this Agreement.
(d) For purposes of this Agreement, a "superior proposal" means
any bona fide takeover proposal to acquire, directly or indirectly, all of
the shares of such Party then outstanding or all or substantially all the
assets of the Party, and otherwise on terms which a majority of the
disinterested members of the Board of Directors of the Party determines in
its good faith reasonable judgment (based on the written advice of a
financial advisor of nationally recognized reputation, a copy of which
shall be provided to the other Party) to be more favorable to the Party's
stockholders than the Merger.
(e) In addition to the obligations of the Parties set forth in
paragraph (b), the Parties shall promptly advise the other Party orally
and in writing of any takeover proposal or any inquiry with respect to or
which could lead to any takeover proposal, the material terms and
conditions of such inquiry or takeover proposal (including the financing
for such proposal and a copy of such documents conveying such proposal),
and the identity of the person making any such takeover proposal or
inquiry. The Party will keep the other Party fully informed of the status
and details of any such takeover proposal or inquiry.
9.2 Expense Reimbursements.
(a) In the event this Agreement is terminated by the failure of
a Party's stockholders to approve the Merger or in the event that this
Agreement is terminated pursuant to Section 9.1(c) or 9.1(d), the Party
shall pay to the other Party the sum of $250,000 as liquidated damages and
not as a penalty.
(b) Except as set forth in this Section 9.2, neither Parent nor
the Company shall have any obligation or liability to the other as a
result of the termination of this Agreement pursuant to Section 8.1,
except that (i) the provisions of Section 6.4(c), 6.8, 6.9 and 9.2 shall
survive termination and (ii) nothing herein and no termination pursuant to
Article VIII shall relieve any party from liability for breach of this
Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations and Warranties. All of the
representations and warranties in this Agreement or in any instrument
delivered by the Company or Parent pursuant to this Agreement shall
survive the Effective Time of the Merger. This Section 10.1 shall not
limit any covenant or agreement of the Parties which by its terms
contemplates performance after the Effective Time of the Merger.
10.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by
facsimile or sent by overnight courier to the parties at the following
addresses (or at such other address for a party as shall be specified by
like notice):
(a) if to Parent, to
NuMED Home Health Care, Inc.
5770 Roosevelt Blvd., Suite 700
Clearwater, Florida 34620
Telephone: (813) 524-3227
Facsimile: (813) 524-3349
Confirm: (813) 524-3227
Attention: Jugal K. Taneja, Chairman and CEO
Susan J. Carmichael, President
Thomas V. Chema, Director
with copies (which shall not constitute notice) to:
Foley & Lardner
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
Telephone: (813) 229-2300
Facsimile: (813) 221-4210
Confirm: (813) 229-2300 ext. 206
Attention: Martin A. Traber, Esq.
(b) if to the Company, to
Banyan Healthcare Services, Inc.
1701 Locust Street
Suite 409
Philadelphia, PA 19103
Telephone: (215) 732-4007
Facsimile: (215) 732-6876
Confirm:
Attention: John P. Serubo, President
with a copy (which shall not constitute notice) to:
Spector, Gadon & Rosen, P.C.
Seven Penn Center - 7th Floor
Philadelphia, Pennsylvania 19103
Telephone: (215) 241-8888
Facsimile: (215) 241-8844
Confirm: (215) 241-8888
Attention: Christopher P. Flannery, Esq.
10.3 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, such first person;
(b) "material adverse effect" or "material adverse change"
means, when used in connection with any person, any change or effect (or
any development that, insofar as can reasonably be foreseen, could
reasonably be expected to result in any change or effect) that is
materially adverse to the business, properties, assets, condition
(financial or otherwise), results of operations or prospects of that
person and its subsidiaries, taken as a whole;
(c) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization or other entity;
(d) a "subsidiary" of any person means any corporation,
partnership, association, joint venture, limited liability company or
other entity in which such person has an ownership interest.
10.4 Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed
to be followed by the words "without limitation".
10.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
10.6 Entire Agreement: No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (b) except for the provisions of Section
6.7, is not intended to confer upon any person other than the parties any
rights or remedies hereunder.
10.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida, regardless
of the laws that might otherwise govern under applicable principles of
conflicts of laws thereof.
10.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other Parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the Parties and their respective
successors and assigns.
10.9 Enforcement of the Agreement. The Parties agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the Parties
shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof
in any court of the United States located in the State of Florida or in
any other Florida state court, this being in addition to any other remedy
to which they are entitled at law or in equity. In addition, each of the
Parties hereto agrees that it will not bring any action relating to this
Agreement in any court other than a Federal or state court sitting in the
Middle District of Florida.
10.10 Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected
or impaired thereby. The Parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
NUMED HOME HEALTH CARE, INC.
By: /s/ Jugal K. Taneja
Name: Jugal K. Taneja
Title: Chairman and Chief Executive
Officer
BANYAN ACQUISITION CORP.
By: /s/ Jugal K. Taneja
Name: Jugal K. Taneja
Title: Chairman and Chief Executive
Officer
BANYAN HEALTHCARE SERVICES, INC.
By: /s/ John P. Serubo
Name: John P. Serubo
Title: President
