AGREEMENT AND PLAN
OF
MERGER
among
BCAM INTERNATIONAL, INC.,
LUNGCHECK HEALTH, INC.
and
LUNGCHECK, INC.
Dated as of September 15, 1999
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger, dated as of September 15, 1999, among
BCAM INTERNATIONAL, INC., a New York corporation ("BCAM"), LUNGCHECK HEALTH,
INC., a Delaware corporation and a wholly-owned subsidiary of BCAM ("LungCheck
Health"), and LUNGCHECK, INC., a Delaware corporation ("LungCheck")
(collectively, the "Corporations").
PRELIMINARY STATEMENTS
Pursuant to the provisions and subject to the conditions hereof and the
Plan of Merger attached hereto as Exhibit "A" (the "Plan of Merger"), LungCheck
will be merged with and into LungCheck Health (the "Merger"). The terms of the
Plan of Merger provide that each outstanding share of (i) LungCheck common
stock, par value $.001 per share ("LungCheck Common Stock") will be converted
into 0.0032958 share of BCAM Series B convertible preferred stock, par value
$.01 per share ("BCAM Series B Preferred Stock") and (ii) LungCheck preferred
stock, par value $.001 per share ("LungCheck Preferred Stock") will be converted
into 0.098884 share of BCAM Series A Convertible Preferred Stock, par value $.01
per share (the "BCAM Series A Preferred Stock"). The certificate of designation
of the BCAM Series A Preferred Stock and BCAM Series B Preferred Stock is
annexed hereto as Exhibit B. The parties hereto desire to enter into this
Agreement and Plan of Merger for the purpose of setting forth certain
representations, warranties, covenants and further agreements with respect to
the Merger.
In consideration of the mutual benefits to be derived from this
Agreement and of the representations, warranties, covenants and agreements
contained in it, each of the Corporations represent, warrant and agree as
follows:
ARTICLE I
The Merger
Subject to the termination provisions contained herein, as soon as
practicable after the fulfillment of all conditions contained herein (other than
such conditions as shall have been waived), the Certificate of Merger (the
"Certificate of Merger") shall be filed with the Secretary of State of Delaware
and the Merger shall become effective in accordance with the terms of the Plan
of Merger. The time and date of such filing is sometimes hereinafter referred to
as the "Effective Time of Merger", the "Closing" or the "Closing Date."
ARTICLE II
Representations and Warranties of LungCheck
LungCheck hereby represents and warrants to BCAM and LungCheck Health
as follows:
2.1 No Misstatements. The representations of LungCheck and information
supplied by LungCheck contained in this Agreement, the Exhibits attached to it
and the documents incorporated into it by reference do not contain any untrue
statement of a material fact or omit to state any fact necessary to make such
representations or information not materially misleading.
2.2 Validity of Actions. It is duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the authority to
carry on its business as currently conducted, and is qualified to do business in
all jurisdictions in which such qualification is necessary. It has full power
and authority to enter into this Agreement and to carry out all acts
contemplated by it. This Agreement and each of the documents provided for in it
to be delivered as part of this transaction, have been duly executed and have or
will be delivered pursuant to all appropriate corporate authorization on its
behalf and is, or will be, its legal, valid and binding obligation and is
enforceable against it in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or similar laws
affecting the enforcement or creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity. The execution and delivery of this Agreement,
and each of the documents to be executed and delivered by it pursuant to its
terms, and the consummation of the transactions contemplated by them will not
violate any provision of its Certificate of Incorporation, and all amendments
thereto, or Bylaws or, violate, conflict with or result in any breach of any of
the terms, provisions of or conditions of, or constitute a default or cause
acceleration of any indebtedness under, any indenture, agreement or instrument
to which it is a party or by which it or its assets may be bound, or, upon
filing the Plan of Merger with the appropriate governmental instrumentality,
cause a breach of any applicable law or governmental regulation, or any
applicable order, judgment, writ, award, injunction or decree of any court or
governmental instrumentality. The Certificate of Incorporation and Bylaws of
LungCheck, as presently in effect, are attached to as Schedule 2.2 to the
Disclosure Schedule delivered to BCAM and LungCheck Health simultaneously with
the execution and delivery of this Agreement (the "LungCheck Disclosure
Schedule").
2.3 Capitalization. The authorized capital stock of LungCheck consists
of (i) 35,000,000 shares of LungCheck Common Stock of which as of the date of
this Agreement, there were 22,285,990 shares issued and outstanding and no
shares were held in the treasury of LungCheck; and (ii) 10,000,000 shares of
LungCheck Preferred Stock, par value $.001 per share, of which as of the date of
this Agreement, there were 2,658,781 issued and outstanding and no shares were
held in the treasury of LungCheck. All outstanding shares of LungCheck Common
Stock have been validly issued by LungCheck and are fully paid and
nonassessable. Except for the LungCheck warrants and options listed on Schedule
2.3 of the LungCheck Disclosure Schedule, there are no subscriptions, options,
warrants, calls, rights, contracts, convertible securities, commitments,
understandings or arrangements relating to the issuance, sale or transfer by
LungCheck of any shares of its capital stock, including any right of conversion
or exchange under any outstanding security or other instrument.
2.4 LungCheck's Financial Statements
(a) Attached as Schedule 2.4(a)(1) to the LungCheck Disclosure
Schedule is LungCheck's unaudited balance sheet at June 30, 1999, and statements
of income and expense and cash flows for the two years then ending and the notes
thereto ("LungCheck's Unaudited Financial Statements"). Attached as Schedule
2.4(a)(2) to the Disclosure Schedule is LungCheck's unaudited balance sheet at
March 31, 1999 (LungCheck's Most Recent Balance Sheet") and statements of income
and expense and cash flow for the period then ending ("Most Recent Unaudited
Financial Statements"). LungCheck's Unaudited and Most Recent Unaudited
Financial Statements are collectively called the "Seller's Financial
Statements."
(b) LungCheck's Financial Statements: (i) accurately represent
the transactions appearing on the books and records of LungCheck, and (ii)
accurately present LungCheck's financial condition and its results of operations
at the times and for the periods presented, including normal adjustments
consistent with year end adjustments to properly reflect accruals through the
end of the period; provided, however, that LungCheck's Unaudited Financial
Statements do not contain footnotes and the related disclosures. LungCheck's
Unaudited Financial Statements and Most Recent Balance Sheet have been prepared
on the accrual basis in accordance with generally accepted accounting principles
consistently applied ("GAAP"), except as otherwise disclosed in them.
(c) There have been no material adverse changes in the
financial condition or in the operations, properties or assets of LungCheck
since the date of LungCheck's Most Recent Balance Sheets.
(d) LungCheck's Unaudited Financial Statements are in form and
substance ready and appropriate for review by LungCheck's independent public
accountants in order that such accountants may deliver an unqualified audit
opinion (which contains a going concern exception) thereon on or prior to the
closing (the "LungCheck Audit Opinion").
2.5 Liabilities of LungCheck. LungCheck has no liabilities, contingent
or otherwise, including, without limitation, liabilities for state or Federal
income, withholding, sales, or other taxes, except to the extent reflected,
reserved against, or provided for, in LungCheck's Most Recent Unaudited
Financial Statements, except for taxes, trade payables and other obligations
incurred after the date of LungCheck's Most Recent Unaudited Financial
Statements in amounts consistent in all material respects, with those incurred
in prior periods in the ordinary course of business or as disclosed on Schedule
2.5.
2.6 Assets of LungCheck. Except for the liens and encumbrances set
forth in Schedule 2.6 of the LungCheck Disclosure Schedule, LungCheck has good
title to all of its assets. All of its assets are owned free and clear of any
adverse claims, security interests, or other encumbrances or restrictions, and
liens for current taxes not yet due and payable, landlords' liens as provided
for in the relevant leases or by applicable law, or liens or similar security
interests granted as part of personal property financing agreements made in the
ordinary course of business and which in the aggregate are not material.
2.7 Facility and Facility Operations.
(a) Included as Schedule 2.7 of the LungCheck Disclosure
Schedule are copies of all real estate leases (the "Facility Leases") relating
to LungCheck's facilities (the "Facilities"). LungCheck's operations are
conducted solely at the Facilities and all of the tangible assets used in
connection with such operations are located at the Facilities. All of the
improvements located at the Facilities are in good operating condition and
repair, subject only to ordinary wear and tear. There is no pending or, to the
knowledge of LungCheck, threatened condemnation proceeding with respect to the
Facilities.
(b) Except for environmental law compliance (which is
addressed in Section 2.7(c) below) as to which no representation or warranty is
made in this Section 2.7(b), all activities at, and the physical condition of,
the Facilities are in compliance with all legal and regulatory requirements
applicable to the Seller, the conduct of its business, and the use of each
Facility, and LungCheck has not received any notice to the contrary. LungCheck
has paid for and obtained all licenses, permits, and other authorizations
material to the conduct of its business at the Facilities (the "Permits"). All
Permits currently in effect and pertaining to the Facilities or LungCheck's
activities at the Facilities are listed on Schedule 2.7(c) of the Disclosure
Schedule. The representations contained in this subsection 3 shall not apply to
incidental instances of non-compliance occurring in the ordinary course of
business without the actual knowledge of LungCheck, which are immaterial to its
operations and capable of being cured without significantly disrupting its
operations.
(c) To the best of the knowledge of LungCheck, there are no
Hazardous Substances1 in, on or under the Facilities except for those which are
used by LungCheck in compliance, in all material respects, with applicable law,
and LungCheck is not now engaged in any litigation, proceedings or
investigations, nor knows of any pending or threatened litigation, proceedings
or investigations regarding the presence of Hazardous Substances in, on or under
the Facilities. To the best of the LungCheck's knowledge, LungCheck has not
violated any law, statute, rule or regulation relating to the use, handling,
storage or disposition of any Hazardous Substance.
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1 The term "Hazardous Substance" shall include without limitation:
(i) Those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances," or
"solid waste" in CERCLA, RCRA, and the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801 et seq., and in the
regulations promulgated pursuant to said laws;
(ii) Those substances defined as "hazardous wastes" in any
Arizona Statute and in the regulations promulgated pursuant to any
Arizona Statute;
(iii) Those substances listed in the United States Department
of Transportation Table (49 CFR 172.101 and amendments thereto) or by
the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and amendments thereto);
(iv) Such other substances, materials and wastes which are or
become regulated under applicable local, state or federal law, or which
are classified as hazardous or toxic under federal, state, or local
laws or regulations; and
(v) Any material, waste or substance which is (A) petroleum,
(B) asbestos, (C) polychlorinated biphenyl, (D) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act,
33 U.S.C. ss.ss.1251 et seq. or listed pursuant to Section 307 of the
Clean Water Act, (E) flammable explosive, or (F) radioactive materials.
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2.8 Equipment Leases and Financing Agreements. All of the leases and
financing agreements to which LungCheck is a party are described in Schedule 2.8
(the "Financing and Related Agreements"). Copies of the Financing and Related
Agreements are attached to such Schedule or have been provided to BCAM. Except
as reflected in such LungCheck Disclosure Schedule, there have been no
modifications to any of the Financing and Related Agreements; LungCheck, or any
other party, is not in default in any material respect with respect to them; and
none of the interests of LungCheck in any of them is subject to any restriction
except as stated in the applicable document or as provided by applicable law.
2.9 Compliance with State and Federal Statutory Requirements. Attached
as Schedule 2.9 is a list of all Federal, state or other licenses, permits and
approvals, including, without limitation, all certifications granted to
LungCheck with respect to the conduct of its business (the "Certifications"),
and the governmental body or agency or other entity granting such Certification.
Copies of all such Certifications are attached to Schedule 2.9 of the LungCheck
Disclosure Schedule .
(a) Except for the Certifications, no license or approval is
material to the conduct of LungCheck's business operations as it is now being
operated. LungCheck has received no notice that any other license or approval
other than the Certifications is necessary for its continued operation or that
any of the Certifications will not be renewed.
(b) LungCheck is not aware of any investigation or review, or
any review of any of its Certifications whether by a party to any relevant
agreement, the issuer of such Certifications or otherwise except as described in
Schedule 2.9(b) to the LungCheck Disclosure Schedule .
(c) The transactions contemplated hereby will not cause any of
the Certifications to be modified, limited or terminated.
2.10 Trademarks, etc. Schedule 2.10 to the LungCheck Disclosure
Schedule is a list of all tradenames, trademarks, service marks, copyrights,
patents, trade secrets, other intellectual property and the registrations for
them owned or used by LungCheck in connection with its operations. To the best
knowledge of LungCheck, it has not infringed and is not now infringing, any
trademark, tradename, service xxxx, copyright, patents, trade secrets, or other
intellectual property belonging to any other person in connection with its
business operations. Except as set forth on such Schedule, LungCheck is not a
party to any license, agreement or arrangement, whether as licensor, licensee or
otherwise, with respect to any trademark, tradename, service xxxx, copyright,
patents, trade secrets, other intellectual property used by LungCheck in
connection with the operation of its business operations. To LungCheck's best
knowledge, LungCheck's operations may be conducted without license by others for
the use of any tradename, trademark, service xxxx, copyright, patents, trade
secrets, other intellectual property.
2.11 Material Contracts. Attached as Schedule 2.11 to the LungCheck
Disclosure Schedule is a (i) a schedule identifying all material contracts
relating to LungCheck's operations (the "Contracts"); (ii) a summary of all
material provisions of the Contracts that are oral and not reduced to written
documents; and (iii) a copy of all written Contracts. Except as disclosed in
such Schedule: (i) all of the Contracts remain unmodified and in full force and
effect, and (ii) LungCheck, nor any other party, is not in default of any
material nature (nor, to the best knowledge of LungCheck, does any state of
facts exist which, with the giving of notice, the passing of time, or otherwise,
would constitute a default by LungCheck, or any other party) with respect to any
of the Contracts.
2.12 Maintenance and Employment Agreements. Attached to the LungCheck
Disclosure Schedule as Schedule 2.12 is (i) a schedule of all written agreements
between the LungCheck and independent contractors, employees and agents who are
employed or engaged in the management or operation of LungCheck or the
Facilities; (ii) the names of all parties entitled to payments from LungCheck
under any such agreements or arrangements; (iii) the amounts payable by
LungCheck under the terms of all such agreements and arrangements, including
without limitation, the terms of employment and compensation, including vacation
and other employee benefit provisions and the cost of all employee benefits and
payroll taxes; and (iv) a copy of all written contracts for such services. There
are no material oral agreements in effect for any such services. Except as
disclosed on such Schedule: (x) there are no written agreements between any of
such contractors, employees or agents and LungCheck; (y) there is no party
entitled to compensation or remuneration for any such services arising from
LungCheck's business operations after the Closing; and (z) LungCheck's
agreements and arrangements providing for the services described on such
Schedule may be terminated by LungCheck at any time, with or without cause, and
without any obligation to pay any of said parties any amounts whatsoever except
as may be required by law (including, without limitation, severance pay or
accrued vacation pay or other benefits).
2.13 Employee Benefit Plans. LungCheck maintains employee benefit plans
as listed on Schedule 2.13 to the LungCheck Disclosure Schedule (the "Employee
Benefit Plans") with respect to employees involved in its business operations.
Copies of such plans have been previously delivered to BCAM. Except as listed on
such Schedule, LungCheck does not maintain any profit sharing, pension or other
employee benefit plan related to LungCheck's operations. LungCheck has no
unfunded obligations pursuant to any insurance, retirement, pension, profit
sharing or deferred compensation plan or program relating to LungCheck's
operations.
2.14 Labor. There is no existing labor dispute affecting the operations
of LungCheck. None of LungCheck's employees involved in its business operations
are covered by any union or collective bargaining agreement.
2.15 Insurance. A schedule of all of the policies of insurance
maintained by LungCheck in connection with its business operations of is
attached as Schedule 2.15 to the LungCheck Disclosure Schedule . The insurance
coverage provided by such policies complies in all material respects, with all
agreements to which LungCheck is a party, and applicable legal requirements to
which it is subject. All such policies are currently in effect.
2.16 Taxes. LungCheck has filed all Federal, state and local tax
returns which it is required to file and has no outstanding liability for any
Federal, state or local taxes or interest or penalties thereon, whether disputed
or not, except taxes not yet payable which have been provided for in accordance
with GAAP and are disclosed in LungCheck's Most Recent Balance Sheet or have
subsequently accrued in the normal course of business.
2.17 Actions Pending. Except as disclosed in Schedule 2.17 to the
LungCheck Disclosure Memorandum: (i) there are no actions, suits, proceedings or
claims pending or (to LungCheck's knowledge) threatened against LungCheck; (ii)
LungCheck is not the subject of any pending or threatened investigation relating
to any aspect of LungCheck's business operations, by any Federal, state or local
governmental agency or authority; (iii) LungCheck is not and has not been (to
LungCheck's knowledge) the subject of any formal or informal complaint,
investigation or inspection under the Equal Employment Opportunity Act or the
Occupational Safety and Health Act (or their state or local counterparts) or by
any other Federal, state or local authority.
2.18 No Guaranties. None of LungCheck's obligations or liabilities is
guaranteed by any other person, firm or corporation, nor has LungCheck
guaranteed the obligations or liabilities of any other person, firm or
corporation.
2.19 Bank Accounts and Deposit Boxes. Attached to the LungCheck
Disclosure Schedule as Schedule 2.19 are the names and addresses of all banks or
financial institutions in which LungCheck has an account, deposit or safety
deposit box with the names of all persons authorized to draw on these accounts
or deposits or to have access to the boxes, and an indication of which accounts
or deposits or boxes contain, in each case to the extent such accounts are used
in connection with its business operations.
2.20 Records. The books of account of LungCheck are complete and
correct in all material respects, and there have been no transactions which
properly should have been set forth therein which have not been accurately so
set forth.
2.21 No Appraisal Rights. No stockholder of LungCheck has, as of the
date hereof, any right to seek appraisal for the value of its shares under the
Delaware General Corporation Law, relating to the merge, nor will such rights
arise after the date hereof.
ARTICLE III
Representations and Warranties of BCAM International, Inc.
BCAM International, Inc. hereby represents and warrants to LungCheck as
follows:
3.1 No Misstatements. The representations of BCAM and information
supplied by BCAM contained in this Agreement, the Exhibits attached to it and
the documents incorporated into it by reference do not contain any untrue
statement of a material fact or omit to state any fact necessary to make such
representations or information not materially misleading.
3.2 Validity of Actions. It is duly organized, validly existing and in
good standing under the laws of the State of New York and has the authority to
carry on its business as currently conducted, and is qualified to do business in
all jurisdictions in which such qualification is necessary. It has full power
and authority to enter into this Agreement and to carry out all acts
contemplated by it. This Agreement and each of the documents provided for in it
to be delivered as part of this transaction, have been duly executed and have or
will be delivered pursuant to all appropriate corporate authorization on its
behalf and is, or will be, its legal, valid and binding obligation and is
enforceable against it in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, merger, moratorium or
similar laws affecting the enforcement or creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity. The execution and delivery of
this Agreement, and each of the documents to be executed and delivered by it
pursuant to its terms, and the consummation of the transactions contemplated by
them will not violate any provision of its Certificate of Incorporation, and all
amendments thereto, or Bylaws or, violate, conflict with or result in any breach
of any of the terms, provisions of or conditions of, or constitute a default or
cause acceleration of any indebtedness under, any indenture, agreement or
instrument to which it is a party or by which it or its assets may be bound, or,
upon filing the Plan of Merger with the appropriate governmental
instrumentality, cause a breach of any applicable law or governmental
regulation, or any applicable order, judgment, writ, award, injunction or decree
of any court or governmental instrumentality. The Certificate of Incorporation
and Bylaws of BCAM, as presently in effect, are attached as Schedule 3.2 to the
Disclosure Memorandum delivered to BCAM and LungCheck Health simultaneously with
the execution and delivery of this Agreement (the "BCAM Disclosure Schedule").
3.3 Capitalization. The authorized capital stock of BCAM consists of
65,000,000 common shares, 38,904,975 of which are outstanding, and 2,000,000
preferred shares of which 262,844.299 shares of BCAM Series A Preferred Stock
and 79,891.425 shares of BCAM Series B Preferred Stock have been issued to
LungCheck Health and no shares were held in the treasury of BCAM. All
outstanding shares of BCAM Common Stock have been validly issued by BCAM and are
fully paid and nonassessable. Except for the BCAM warrants, listed on Schedule
3.3 of the BCAM Disclosure Schedule, there are no subscriptions, options,
warrants, calls, rights, contracts, commitments, understandings or arrangements
relating to the issuance, sale or transfer by BCAM of any shares of its capital
stock, including any right of conversion or exchange under any outstanding
security or other instrument.
3.4 BCAM's Financial Statements
(a) Attached as Schedule 3.4(a)(1) to the BCAM Disclosure
Schedule are BCAM's audited balance sheets at December 31, 1997 and December 31,
1998, and statements of income and expense and cash flows for the years then
ending ("BCAM's Audited Financial Statements"). Attached as Schedule 3.4(a)(2)
is BCAM's unaudited balance sheet at June 30, 1999 (BCAM's Most Recent Balance
Sheet") and statements of income and expense and cash flow for the period then
ending (collectively, "BCAM's Most Recent Financial Statements"). BCAM's Audited
Financial Statements have been examined by a certified public accountant and
accompanied by a certificate of such accountant describing the scope of such
review. BCAM's Audited and Most Recent Unaudited Financial Statements are
collectively called BCAM's Financial Statements."
(b) BCAM's Financial Statements: (i) accurately represent the
transactions appearing on the books and records of BCAM, and (ii) accurately
present in all material respects BCAM's financial condition and its results of
operations at the times and for the periods presented, including normal
adjustments consistent with year end adjustments to properly reflect accruals
through the end of the period; provided, however, that BCAM's Most Recent
Financial Statements do not contain footnotes and the related disclosures.
BCAM's Most Recent Financial Statements have been prepared on the accrual basis
in accordance with generally accepted accounting principles consistently applied
("GAAP"), except as otherwise disclosed in the reports accompanying them or in
the notes attached to them.
(c) There have been no material adverse changes in the
financial condition or in the operations, properties or assets of BCAM since the
date of BCAM's Most Recent Balance Sheets.
3.5 Liabilities of BCAM. BCAM has no liabilities, contingent or
otherwise, including, without limitation, liabilities for state or Federal
income, withholding, sales, or other taxes, except to the extent reflected,
reserved against, or provided for, in BCAM's Most Recent Balance Sheet, except
for taxes, trade payables and other obligations incurred after the date of
BCAM's Most Recent Balance Sheet in amounts consistent in all material respects,
with those incurred in prior periods in the ordinary course of business.
3.6 Assets of BCAM. Except for the liens and encumbrances set forth in
Schedule 3.6 of the BCAM Disclosure Schedule, BCAM has good title to all of its
assets. All of its assets are owned free and clear of any adverse claims,
security interests, or other encumbrances or restrictions, and liens for current
taxes not yet due and payable, landlords' liens as provided for in the relevant
leases or by applicable law, or liens or similar security interests granted as
part of personal property financing agreements made in the ordinary course of
business and which in the aggregate are not material. BCAM will, prior to
closing, transfer all of its technology assets to a wholly-owned subsidiary, and
distribute all of its interest in such subsidiary to its then stockholders.
3.7 Facility and Facility Operations.
(a) Included as Schedule 3.7 to the BCAM Disclosure Schedule
are copies of the real estate leases (the "BCAM Facility Leases") relating to
BCAM's facilities (the "BCAM Facilities"). BCAM's operations are conducted
solely at the BCAM Facilities and all of the tangible assets used in connection
with such operations are located at the BCAM Facilities. To the best of BCAM's
knowledge and belief, all of the improvements located at the BCAM Facilities are
in good operating condition and repair, subject only to ordinary wear and tear.
There is no pending or, to the knowledge of BCAM, threatened condemnation
proceeding with respect to the BCAM Facilities.
(b) Except for environmental law compliance (which is
addressed in Section 3(c) below) as to which no representation or warranty is
made in this Section 3(b), all activities at, and the physical condition of, the
BCAM Facilities are in compliance with all legal and regulatory requirements
applicable to the Seller, the conduct of its business, and the use of each BCAM
Facility, and BCAM has not received any actual notice to the contrary. BCAM has
paid for and obtained all licenses, permits, and other authorizations material
to the conduct of its business at the Facilities (the "Permits"). All Permits
currently in effect and pertaining to the BCAM Facilities or BCAM's activities
at the BCAM Facilities are listed on Schedule 3.9 of the BCAM Disclosure
Schedule. The representations contained in this subsection 3 shall not apply to
incidental instances of non-compliance occurring in the ordinary course of
business without the actual knowledge of BCAM, which are immaterial to its
operations and capable of being cured without significantly disrupting its
operations.
(c) To the best of the knowledge of BCAM, there are no
Hazardous Substances in, on or under the BCAM Facilities except for those which
are used by BCAM in compliance, in all material respects, with applicable law,
and BCAM is not now engaged in any litigation, proceedings or investigations,
nor knows of any pending or threatened litigation, proceedings or investigations
regarding the presence of Hazardous Substances in, on or under the BCAM
Facilities. To the best of BCAM's knowledge, BCAM has not violated any law,
statute, rule or regulation relating to the use, handling, storage or
disposition of any Hazardous Substance.
3.8 Equipment Leases and Financing Agreements. All of the leases and
financing agreements to which BCAM is a party and which relate to the operations
of BCAM are described in Schedule 3.8 of the BCAM Disclosure Schedule (the
"Financing and Related Agreements"). Copies of the Financing and Related
Agreements are attached to such Schedule or have been provided to BCAM. Except
as reflected in such BCAM Disclosure Schedule, there have been no modifications
to any of the Financing and Related Agreements; BCAM is not in default in any
material respect with respect to them; and none of the interests of BCAM in any
of them is subject to any restriction except as stated in the applicable
document or as provided by applicable law.
3.9 Compliance with State and Federal Statutory Requirements. Attached
as Schedule 3.9 to the BCAM Disclosure Schedule is a list of all Federal, state
or other licenses, permits and approvals, including, without limitation, all
certifications granted to BCAM with respect to the conduct of its business (the
"Certifications"), and the governmental body or agency or other entity granting
such Certification. Copies of all such Certifications are attached to Schedule
3.9 to the BCAM Disclosure Schedule.
(a) Except for the Certifications, no license or approval is
material to the conduct of BCAM's business operations as it is now being
operated. BCAM has received no notice that any other license or approval other
than the Certifications is necessary for its continued operation or that any of
the Certifications will not be renewed.
(b) BCAM is not aware of any investigation or review, or any
review of any of its Certifications whether by a party to any relevant
agreement, the issuer of such Certifications or otherwise except as described in
Schedule 3.9(b) to the BCAM Disclosure Schedule.
3.10 Trademarks, etc. Attached to the BCAM Disclosure Schedule as
Schedule 3(a) is a list of all tradenames, trademarks, service marks,
copyrights, patents, trade secrets and other intellectual property and the
registrations for them owned or used by BCAM in connection with its operations.
To the best knowledge of BCAM, it has not infringed and is not now infringing,
any trademark, tradename, service xxxx, copyright, patents, trade secrets or
other intellectual property belonging to any other person in connection with its
business operations. Except as set forth on such Schedule, BCAM is a party to
any license, agreement or arrangement, whether as licensor, licensee or
otherwise, with respect to any trademark, tradename, service xxxx, copyright
patents, trade secrets or other intellectual property used by BCAM in connection
with the operation of its business operations. To BCAM's best knowledge, BCAM's
operations may be conducted without license by others for the use of any
tradename, trademark, service xxxx, copyright, patents, trade secrets or other
intellectual property.
3.11 Material Contracts. Attached as Schedule 3.10 to the BCAM
Disclosure Schedule is a (i) a schedule identifying all material contracts
relating to BCAM's operations not otherwise specifically identified in the other
Schedules to the BCAM Disclosure Schedule (the "Contracts"); (ii) a summary of
all material provisions of the Contracts that are oral and not reduced to
written documents; and (iii) a copy of all written Contracts. Except as
disclosed in such Schedule: (i) all of the Contracts remain unmodified and in
full force and effect, and (ii) BCAM, nor any other party, is not in default of
any material nature (nor, to the best knowledge of BCAM, does any state of facts
exist which, with the giving of notice, the passing of time, or otherwise, would
constitute a default by BCAM, or any other party) with respect to any of the
Contracts.
3.12 Maintenance and Employment Agreements. Attached to the BCAM
Disclosure Schedule as Schedule 3.12 is (i) a schedule of all written agreements
between the BCAM and independent contractors, employees and agents who are
employed or engaged in the management or operation of BCAM or the Facilities,
including all non-competition, non-disclosure and ownership of intellectual
property agreements; (ii) the names of all parties entitled to payments from
BCAM under any such agreements or arrangements; (iii) the amounts payable by
BCAM under the terms of all such agreements and arrangements, including without
limitation, the terms of employment and compensation, including vacation and
other employee benefit provisions and the cost of all employee benefits and
payroll taxes; and (iv) a copy of all written contracts for such services. There
are no material oral agreements in effect for any such services. Except as
disclosed on such Schedule: (x) there are no written agreements between any of
such contractors, employees or agents and BCAM; (y) there is no party entitled
to compensation or remuneration for any such services arising from BCAM's
business operations after the Closing; and (z) BCAM's agreements and
arrangements providing for the services described on such Schedule may be
terminated by BCAM at any time, with or without cause, and without any
obligation to pay any of said parties any amounts whatsoever except as may be
required by law (including, without limitation, severance pay or accrued
vacation pay or other benefits).
3.13 Employee Benefit Plans. BCAM maintains employee benefit plans as
listed on Schedule 3.13 of the BCAM Disclosure Schedule (the "Employee Benefit
Plans") with respect to employees involved in its business operations. Copies of
such plans have been previously delivered to LungCheck. Except as listed on such
Schedule, BCAM does not maintain any profit sharing, pension or other employee
benefit plan related to BCAM's operations. BCAM has no unfunded obligations
pursuant to any insurance, retirement, pension, profit sharing or deferred
compensation plan or program relating to BCAM's operations.
3.14 Labor. There is no existing labor dispute affecting the operations
of BCAM. None of BCAM's employees involved in its business operations are
covered by any union or collective bargaining agreement.
3.15 Insurance. A schedule of all of the policies of insurance
maintained by BCAM in connection with its business operations of is attached as
Schedule 3.15 to the BCAM Disclosure Schedule. The insurance coverage provided
by such policies complies in all material respects, with all agreements to which
BCAM is a party, and applicable legal requirements to which it is subject. All
such policies are currently in effect.
3.16 Taxes. BCAM has filed all Federal, state and local tax returns
which it is required to file and (to the best of BCAM's knowledge) has no
outstanding liability for any Federal, state or local taxes or interest or
penalties thereon, whether disputed or not, except taxes not yet payable which
have been provided for in accordance with GAAP and are disclosed in BCAM's Most
Recent Balance Sheet or have subsequently accrued in the normal course of
business.
3.17 Actions Pending. Except as disclosed in Schedule 3.17 to the BCAM
Disclosure Schedule: (i) there are no actions, suits, proceedings or claims
pending or (to BCAM's knowledge) threatened against BCAM which, if determined
adversely to BCAM , would (A) have a material adverse effect on BCAM's assets,
or its business operations, or (B) prevent or delay the consummation of any of
the transactions contemplated by this Agreement; (ii) BCAM is not the subject of
any pending or threatened investigation relating to any aspect of BCAM's
business operations, by any Federal, state or local governmental agency or
authority; (iii) BCAM is not and has not been (to BCAM's knowledge) the subject
of any formal or informal complaint, investigation or inspection under the Equal
Employment Opportunity Act or the Occupational Safety and Health Act (or their
state or local counterparts) or by any other Federal, state or local authority.
3.18 No Guaranties. None of BCAM's obligations or liabilities is
guaranteed by any other person, firm or corporation, nor has BCAM guaranteed the
obligations or liabilities of any other person, firm or corporation.
3.19 Bank Accounts and Deposit Boxes. Attached to the BCAM Disclosure
Schedule as Schedule 3.19 are the names and addresses of all banks or financial
institutions in which BCAM has an account, deposit or safety deposit box with
the names of all persons authorized to draw on these accounts or deposits or to
have access to the boxes, and an indication of which accounts or deposits or
boxes contain, in each case to the extent such accounts are used in connection
with its business operations.
3.20 Records. The books of account of BCAM are complete and correct in
all material respects, and there have been no transactions which properly should
have been set forth therein which have not been accurately so set forth.
3.21 SEC Filings. All registration statements, prospectuses, reports,
proxy statements and other documents required to be filed by BCAM with the
Securities and Exchange Commission, other than any filings required by Section
14 of the Securities Exchange Act of 1934, have been so filed including, without
limitation, form 10-K and 10-Q for each of the last three reporting years (the
"BCAM SEC Filings"). The BCAM SEC Filings did not at the time they were filed,
and any other reports or proxy statements hereafter filed prior to the Closing
Date will not at the time they are filed, contain any untrue statements of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
3.22 Subsidiaries. The BCAM Filings set forth the name of each
subsidiary of BCAM and BCAM owns all of the outstanding capital stock of each
BCAM subsidiary, free and clear of any pledge agreements, except as noted
therein.
3.23 Effect of Spin-Off. Prior to the effectiveness of the Merger, BCAM
shall have transferred substantially all of its assets, including, but not
limited to, trademarks, patents, patent applications and intellectual property,
to ISTX, Inc., its subsidiary ("ISTX") and assigned its license and other
technology agreements, to ISTX, and has distributed its ISTX common stock to the
BCAM shareholders, so that BCAM will not own any of such assets upon the
effectiveness of the Merger (the "Spinoff").
ARTICLE IV
Representations and Warranties of LungCheck Health
LungCheck Health hereby represents and warrants to LungCheck as
follows:
4.1 Validity of Actions. It is duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the authority to
carry on its business as currently conducted, and is qualified to do business in
all jurisdictions in which such qualification is necessary. It has full power
and authority to enter into this Agreement and to carry out all acts
contemplated by it. This Agreement and each of the documents provided for in it
to be delivered as part of this transaction, have been duly executed and have or
will be delivered pursuant to all appropriate corporate authorization on its
behalf and is, or will be, its legal, valid and binding obligation and is
enforceable against it in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium or similar laws
affecting the enforcement or creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity. The execution and delivery of this Agreement,
and each of the documents to be executed and delivered by it pursuant to its
terms, and the consummation of the transactions contemplated by them will not
violate any provision of its Articles of Incorporation, and all amendments
thereto, or Bylaws or, violate, conflict with or result in any breach of any of
the terms, provisions of or conditions of, or constitute a default or cause
acceleration of any indebtedness under, any indenture, agreement or instrument
to which it is a party or by which it or its assets may be bound, or, upon
filing the Plan of Merger with the appropriate governmental instrumentality,
cause a breach of any applicable law or governmental regulation, or any
applicable order, judgment, writ, award, injunction or decree of any court or
governmental instrumentality.
4.2 Capitalization.
The authorized capital stock of LungCheck Health consists of
100 shares of Common Stock, $0.01 par value per share, of which as of the date
of this Agreement, there were 100 shares issued and outstanding and no shares
were held in the treasury of LungCheck Health. All outstanding shares of
LungCheck Health Common Stock have been validly issued by LungCheck Health and
are fully paid, nonassessable and free of preemptive rights. There are no
subscriptions, options, warrants, calls, rights, contracts, commitments,
understandings or arrangements relating to the issuance, sale or transfer by
LungCheck Health of any shares of its capital stock, including any right of
conversion or exchange under any outstanding security or other instrument.
4.3 Actions Pending. There are no actions, suits, proceedings,
investigations or claims pending or threatened against it which, if determined
adversely to it would (A) have a material adverse effect on its operations, or
(B) prevent or delay the consummation of any of the transactions contemplated by
this Agreement.
ARTICLE V
Covenants of the Parties
5.1 Confidentiality. Until the effective time the Merger or this
Agreement is terminated, each of the parties will, and will cause its employees
and agents, to hold in strict confidence, unless compelled to disclose by
Judicial or administrative process or, in the opinion of its counsel, by other
requirements of law, all Confidential Information (as hereinafter defined) and
will not disclose the same to any person. If this Agreement is terminated, BCAM
will promptly return to LungCheck, and LungCheck will promptly return to BCAM
all Confidential Information. For the purposes hereof, "Confidential
Information" shall mean all information of any kind concerning BCAM or
LungCheck, wherever obtained, except (i) information ascertainable or obtained
from public or published information, (ii) received from a third party not under
an obligation to keep such information confidential, (iii) which is or becomes
known to the public (other than through a breach of this Agreement), (iv) which
BCAM or LungCheck can demonstrate was in its possession prior to the disclosure
thereof in connection with the Merger, or (v) which BCAM or LungCheck can
demonstrate was independently developed by it. This paragraph shall survive
termination of this Agreement.
5.2 Conduct of Each of the Parties Prior to the Closing. Pending
consummation of the Plan of Merger or prior to termination of this Agreement,
each of the Parties to this Agreement agrees, without prior written consent of
the other parties to this Agreement, given in a letter which specifically refers
to this Section of the Agreement:
(a) not to (i) perform any act or omit to take any act that
would make any of the representations made above, inaccurate in any material
respect or materially misleading as of the Effective Date, or (ii) make any
payment or distribution except for the payment of liabilities incurred in the
ordinary course of business.
(b) to conduct its business in the ordinary and regular
course, and keep its books of account, records and files in substantially the
same manner as at present other than as provided for in the reorganizations of
LungCheck and BCAM as described in Schedule 5.2 of the BCAM Disclosure Schedule.
5.3 Notice. Pending the consummation of the transactions contemplated
in this Agreement or prior to termination of this Agreement, each party agrees
that it will promptly advise the others of the occurrence of any condition or
event which would make any of its representations contained in this Agreement
inaccurate, incorrect, or materially misleading.
5.4 Access. Prior to the Closing, Each party shall afford to the other
parties to this Agreement (and their respective officers, attorneys, accountants
and other authorized representatives), upon reasonable notice, free and full
access during usual business hours to its relevant offices, personnel, books and
records and other data, financial or otherwise, so that each such party may have
full opportunity to make such investigation as it shall desire of the assets and
the business and operations of the other parties, provided that such
investigation shall not unreasonably interfere with the operations of such
parties. The scope of the investigation will include, but not be limited to,
verification of the accounts, books and records of each party. Duly authorized
representatives shall also be entitled to discuss with officers of each party,
its counsel, employees and independent public accountants, all of its books,
records and other corporate documents, contracts, pricing and service policies,
commitments and future prospects. Representatives of each party will furnish to
the other parties to this Agreement and such other persons, copies of all
materials relating to the business affairs, operations, assets and liabilities
of each party which may be reasonably requested from time to time and will cause
representatives and employees of each party to assist in such investigation. All
information obtained in connection with the transactions contemplated by this
Agreement or in the course of their investigations, whether obtained before or
after the date of this Agreement (the "Evaluation Material") shall be used only
in connection with this Agreement and the subsequent operation of the combined
entity and the other parties to this Agreement shall assure that all Evaluation
Material will be otherwise kept strictly confidential by each of them and their
respective representatives, as provided in Section 5.1 hereof.
5.5 Additional Documents. At the request of any party, each party will
execute and deliver any additional documents and perform in good faith such acts
as reasonably may be required in order to consummate the transactions
contemplated by this Agreement and to perfect the conveyance and transfer of any
property or rights to be conveyed or transferred or perfect the assumption of
any liabilities assumed under the terms of this Agreement.
5.6 Filing of Returns; Additional Information. Each party will file on
a timely basis all tax returns, notices of sale and other documentation required
by law in connection with the transactions provided for in this Agreement or
otherwise required by law, regulation or pursuant to the terms of any agreement
to which it is a party. Each party will supplement any previous filing made by
it in accordance with legitimate requests made by applicable agencies or parties
to the extent required by the relevant law, regulation or agreement.
5.7 Compliance with Conditions to Closing. Subsequent to the execution
and delivery of this Agreement and prior to the Closing Date, each of the
parties to this Agreement will execute such documents and take such other
actions as reasonably may be appropriate to fulfill the conditions to the
Closing Date provided for in Article V of this Agreement.
5.8 Further Assurances. Consistent with the terms and conditions
hereof, each party hereto will execute and deliver such instruments and take
such other action as the other parties hereto may reasonably require in order to
carry out this Agreement and the Plan of Merger and the transactions
contemplated hereby and thereby.
5.9 Securities Exchange Act of 1934. BCAM shall as soon as practicable
distribute to its shareholders all appropriate notifications in accordance with
New York law and in compliance with the Securities Exchange Act of 1934 which
shall be at the sole cost and expense of BCAM.
5.10 Filing of Merger Documents. Subject to the terms and conditions of
this Agreement, as soon as practicable following the approval of the Plan of
Merger by the shareholders of each of LungCheck and LungCheck Health and the
approval of the issuance of the shares of BCAM Common Stock pursuant to this
Agreement and the Plan of Merger by the Board of Directors of BCAM, LungCheck
and LungCheck Health shall cause the Certificate of Merger to be filed with the
Secretary of State of Delaware.
5.11 Stock Dividend. Prior to the Effective Date of the Merger, BCAM
shall cause the organization and incorporation of ISTX to which BCAM shall
transfer its existing technology and which BCAM shall then "spin-out" by
declaring a stock dividend to its existing shareholders prior to the Merger in
accordance with the stock dividend declaration described in Schedule 5.11.
5.12 Further Assurances. Consistent with the terms and conditions
hereof, each party hereto will execute and deliver such instruments and such
other action, as the other party hereto may reasonably require in order to carry
out this Agreement and the Plan of Merger and the transactions contemplated
thereby.
5.13 Recapitalization of BCAM. As soon as practicable subsequent to the
Effective Date of the Merger, BCAM shall amend its Articles of Incorporation in
order to effect a combination of its outstanding available authorized common
stock to an amount sufficient to allow for the conversion of BCAM Series A
Convertible Preferred Stock and BCAM Series B Convertible Preferred Stock into
BCAM Common Stock.
5.14 Board of Directors. The persons named on Schedule 5.14 shall be
elected as directors of LungCheck Health's Board of Directors, subject only to
their respective acceptances and the consummation of the transactions provided
for in this Agreement.
5.15 No Transfer. Neither the BCAM Series A Preferred Stock, the BCAM
Series B Preferred Stock, nor the BCAM Common Stock, into which the same may be
converted, shall be transferred on the books of record of BCAM for a period of
one (1) year from the effective date of the Merger. If this provision is waived
or modified for any one or more shareholders, it shall be similarly waived or
modified for all shareholders (i.e., proportionately).
ARTICLE VI
Conditions to the obligations of the parties
The obligation of each of BCAM and LungCheck Health, on the one hand,
and LungCheck on the other hand, to consummate the transactions contemplated by
this Agreement shall be subject to compliance with or satisfaction of the
following conditions by the other, to the extent applicable:
6.1 Bring Down. The representations and warranties set forth in this
Agreement shall be true and correct in all material respects on and at the
Closing as if then made by the relevant party (except for those representations
and warranties made as of a given date, which shall continue to be true and
correct as of such given date).
6.2 Compliance. Each party shall have complied in all material respects
with all of the covenants and agreements in this Agreement on its or their part,
respectively, to be complied with as of or prior to the Closing Date.
6.3 No Material Adverse Changes. Since the date of this Agreement,
there shall not have occurred any material adverse change in the condition or
operations (financial or otherwise) of LungCheck, on the one hand, or of BCAM
and LungCheck, on the other.
6.4 LungCheck Health's Certificates. There shall be delivered to LungCheck:
(a) a certificate executed by the President and Secretary of
LungCheck Health, dated the Effective Date, certifying that the conditions to be
fulfilled by each of them set forth in this Article VI have been fulfilled;
(b) a certificate of incumbency for LungCheck Health executed
by its President and by the Secretary of such entity, listing the officers of
such entity authorized to execute (to the extent applicable) the Agreement and
the other documents, certificates, schedules and instruments to be delivered on
behalf of such entity, and their respective offices, and containing the genuine
signature of each such person set forth opposite his name; and
(c) good standing certificate, certified charter document and
By-Laws of LungCheck Health of recent date, from the Secretary of State of
Delaware.
The certificates described in subsections (a), (b), and (c) above are hereafter
referred to collectively as "LungCheck Health's Certificates."
6.5 BCAM's Certificates. There shall be delivered to LungCheck:
(a) a certificate executed by the President and Secretary of
BCAM, dated the Effective Date, certifying that the conditions to be fulfilled
by each of them set forth in this Article VI have been fulfilled;
(b) a certificate of incumbency for BCAM, executed by its
President and by the Secretary of such entity, listing the officers of such
entity authorized to execute (to the extent applicable) the Agreement and the
other documents, certificates, schedules and instruments to be delivered on
behalf of such entity, and their respective offices, and containing the genuine
signature of each such person set forth opposite his name; and
(c) good standing certificate and certified charter document
of BCAM of recent date, from the Secretary of State of New York.
The certificates described in subsections (a), (b), and (c) above are hereafter
referred to collectively as "BCAM's Certificates."
6.6 LungCheck's Certificates. There shall be delivered to BCAM and
LungCheck Health:
(a) a certificate executed by the President and Secretary of
LungCheck, dated the Closing Date, certifying that the conditions to be
fulfilled by it as set forth in this Article VI have been fulfilled;
(b) a certificate of incumbency for LungCheck executed by its
President and by the Secretary of LungCheck, listing the officers of such entity
authorized to execute (to the extent applicable) the Agreement and the other
documents, certificates, schedules and instruments to be delivered on behalf of
such entity, and their respective offices, and containing the genuine signature
of each such person set forth opposite his name; and
(c) good standing certificate and certified charter document
of LungCheck of recent date, from the Secretary of State of Delaware.
The certificates described in subsections (a), (b), and (c) above, are hereafter
referred to collectively as "LungCheck's Certificates."
6.7 No Suits. No action or proceeding shall have been instituted in any
court or before any Federal, state or local governmental agency against any
party seeking to restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or which could have a material adverse effect on
any of the parties, which shall not have been dismissed or withdrawn prior to
the Effective Time of the Merger.
6.8 Documents. All documents required to be delivered to each of the
parties to this Agreement, at or prior to Closing shall have been so delivered.
6.9 Authority. There shall be in full force and effect on the
resolutions of the Boards of Directors of each of the parties to this Agreement
approving this Agreement the other documents executed and delivered by each of
them in connection with this Agreement and the transactions contemplated in it.
At or prior to the Closing, each party will deliver to the other a copy of the
resolutions of its Board of Directors approving the execution and delivery of
this Agreement and the other documents to be delivered pursuant to this
Agreement and the consummation of all of the transactions contemplated hereby,
duly certified by an appropriate officer.
6.10 Bankruptcy, Dissolution, etc. No petition or other commencement of
proceedings in bankruptcy or proceedings for dissolution, termination,
liquidation or an arrangement, merger or readjustment of any party's debts under
any state or Federal law enacted for the relief of debtors or otherwise, whether
instituted by or against a party, has been effected or commenced by or against
any party.
6.11 BCAM Preferred Stock. The certificates hereto as Exhibit B and C
shall have been filed with the Secretary of State of New York.
6.12 Spinoff. The Spinoff shall have been effected.
6.13 Audit Opinion. BCAM shall have received the LungCheck Audit
Opinion.
6.14 Stockholder Approval. All requisite approval shall have
been obtained from the shareholders of LungCheck and LungCheck Health.
6.15 LungCheck Debt. The holders of at least $192,000 of
LungCheck debt shall have agreed to convert the same into shares of LungCheck
Common Stock.
6.16 LungCheck Options and Warrants. The holders of LungCheck options
and warrants shall have agreed to modify the same to remove their
"anti-dilution" provisions.
6.17 Additional Financing. Binding agreements shall have been entered
into and funded relating to an investment of an aggregate of at least $1,100,000
in BCAM, LungCheck, Inc. and LungCheck Health in exchange for shares of
LungCheck Common Stock BCAM Series B Convertible Preferred Stock and BCAM Common
Stock.
6.18 Employment Agreement. An amended employment agreement shall have
been entered into with Xxxxxxx Xxxxxxx providing for options shall have been
issued to Xxxxxxx Xxxxxxx for the purchase of 800,000 shares of BCAM Common
Stock at $0.15 per share, or a memorandum of the same shall be entered into.
6.19 Repricing Rights. Repricing rights as to shares of BCAM
Common Stock shall have been terminated.
6.20 Proxies. The holders of at least a majority of LungCheck's Common
Stock have delivered to Xxxxxxx Xxxxxxx (or his designee) a voting proxy in
favor of amending BCAM's charter to provide for a 1:15 reverse common stock
split.
6.21 Questionnaires. LungCheck shall have delivered to BCAM Investment
Questionnaires executed by each of LungCheck's shareholders pursuant to which
each such shareholder represents that such shareholder qualifies as an
"accredited investor" as such term is defined by the SEC.
ARTICLE VII
Closing
7.1 Time and Place; Effective Date. The closing shall take place
immediately upon satisfaction of the conditions to closing and the certificate
of merger shall be filed immediately at the closing.
7.2 Deliveries at Closing. At the Closing, BCAM and LungCheck Health
shall deliver to LungCheck and LungCheck shall deliver to BCAM and LungCheck
Health the certificates and other documents and instruments provided to be
delivered under the provisions hereof, and LungCheck shall cause the Certificate
of Merger to be filed in accordance with the provisions of the Delaware
Corporation Act (or such other jurisdiction as may be applicable) and shall take
any other lawful actions and do any other lawful things necessary to effect the
Merger and to enable the Merger to become effective.
ARTICLE VIII
Termination and Rights and Remedies on Default
8.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned prior to the Closing: (i) by the mutual consent of
the parties to this Agreement; (ii) by BCAM and LungCheck Health, if LungCheck
is in material default which continues for 10 days notice; (iii) by LungCheck if
either BCAM or LungCheck Health is in material default which continues for 10
days after notice; (iv) by any party (other than a party that is in breach of
its obligations under this Agreement) if the Closing shall not have occurred on
or before the Termination Date. The Termination Date shall be September 15,
1999. If this Agreement is terminated pursuant to clause (i) of this Article
VIII all obligations of the parties hereunder shall terminate without any
further liability or obligation of either party to the other except as limited
by the preceding sentence, the exercise by any party of the right to terminate
this Agreement shall not terminate or limit any remedy that such party may have
pursuant to applicable law, including any rights with respect to damages or
specific performance.
8.2 Nature of Remedies Cumulative. Except as otherwise provided in this
Agreement, all rights and remedies granted in this Agreement or available under
applicable law shall be deemed concurrent and cumulative and not alternative or
exclusive remedies, to the full extent permitted by law and this Agreement, and
any party may proceed with any number of remedies at the same time or in any
order. The exercise of any one right or remedy shall not be deemed a waiver or
release of any other right or remedy, and any party, upon the occurrence of an
event of default by another party under this Agreement, may proceed at any time,
under any agreement, in any order and with any available remedy.
ARTICLE IX
Finders Fees
Except as otherwise disclosed in Schedule 9A as to LungCheck, or
Schedule 9B as to BCAM, each of the parties represents and warrants to the other
that such party has not employed any finder or broker in connection with
transactions contemplated by this Agreement. Each party agrees to indemnify and
hold harmless the others from and against any claim, damages, liabilities, and
expenses (including without limitation, attorneys' fees and disbursements)
arising from any claim or demand asserted by any person or entity on the basis
of its employment as a finder or broker by the respective party.
ARTICLE X
Notices
All notices or other communications required or permitted under the
terms of this Agreement shall be made in writing and shall be deemed given upon
(i) hand delivery or (ii) three days after deposit of same in the Certified
Mail, Return Receipt Requested, first class postage and registration fees
prepaid and correctly addressed to the parties at the following addresses:
If to BCAM or LungCheck Health: BCAM International, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
With a Copy to: Ruskin, Moscou, Xxxxx &
Faltischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to LungCheck: 0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
With a Copy to: Xxxxxx X. Xxxxx, Esq.
Xxxxxxxxx Xxxxxxx, P.A.
000 Xxxxx Xxxxxxx Xxxxx,
Xxxxx 000 Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
or to such other address as any of the parties hereto may designate by
notice to the others.
ARTICLE XI
Mediation and Arbitration
11.1 Mediation and Arbitration.
(a) Any party may give the other party written notice of any
dispute not resolved in the normal course of business. Within five (5) days
after delivery of the notice, the party receiving the notice shall submit a
written response to the other party. The notice and the response shall include
(i) a statement of each party's position and a summary of arguments supporting
that position and (ii) the name and title of the executive who represents that
party and of any other person who will accompany the executive. Within five (5)
days after delivery of the response, the executives of both parties shall meet
at a mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary to attempt to resolve the dispute. All reasonable
requests for information made by one party to the other will be honored. If the
matter has not been resolved within fifteen (15) days of the disputing party's
notice, either party may initiate arbitration of the controversy or claim as
provided hereinafter. All negotiations pursuant to this clause are confidential
and shall be treated as compromise and settlement negotiations for purposes of
the Federal Rules of Evidence.
(b) Any disputes between any of the parties to it with respect
to the agreements contained in it, or as modified in the future, are to be
settled by binding arbitration conducted in New York City, State of New York,
pursuant to the commercial arbitration rules of the American Arbitration
Association. In any such arbitration the scope and timing of any discovery shall
be determined by the arbitrators. Such arbitration is to be the sole remedy for
the settlement of such disputes.
ARTICLE XII
Miscellaneous
12.1 Miscellaneous Provisions
(a) Successors. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned prior to Closing without
the prior written consent of the other parties hereto.
(b) Expenses. Except as otherwise provided in this Agreement,
each of the parties to this Agreement shall be responsible for any and all of
the respective fees, costs and expenses incurred by each, in connection with the
negotiation, preparation or performance of this Agreement.
(c) Entire Agreement. This Agreement incorporates by this
reference the Plan of Merger, all Exhibits and schedules hereto and all
documents executed and/or delivered at Closing. This Agreement and the documents
so incorporated into it contain the parties' entire understanding and agreement
with respect to the subject matter hereof; and any and all conflicting or
inconsistent discussions, agreements, promises, representations and statements,
if any, between the parties or their representatives that are not incorporated
in this Agreement shall be null and void.
(d) Amendments Only in Writing. No amendment, modification,
waiver or discharge of this Agreement or any provision of this Agreement shall
be effective against any party, unless such party shall have consented thereto
in writing.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original, but all of which
together shall constitute a single agreement.
(f) Cooperation. Each of the parties to this Agreement, when
requested by another party, shall give all reasonable and necessary cooperation
with respect to any reasonable matters relating to the transactions contemplated
by this Agreement.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, exclusive of its
choice of law provisions.
(h) Headings. The various section headings are inserted for
purposes of reference only and shall not affect the meaning or interpretation of
this Agreement or any provision hereof.
(i) Gender; Number. All references to gender or number in this
Agreement shall be deemed interchangeably to have a masculine, feminine, neuter,
singular or plural meaning, as the sense of the context requires.
(j) Severability. The provisions of this Agreement shall be
severable, and any invalidity, unenforceability or illegality of any provision
or provisions of this Agreement shall not affect any other provision or
provisions of this Agreement, and each term and provision of this Agreement
shall be construed to be valid and enforceable to the full extent permitted by
law.
(k) Survival. Except as otherwise expressly provided in this
Agreement, the liabilities and obligations of each party with respect to any and
all of its representations, warranties, covenants and agreements set forth in
this Agreement and/or in any document incorporated into it shall not be merged
into, affected or impaired by the Closing under this Agreement. All of the
representations, warranties, covenants and agreements set forth in this
Agreement shall survive the Closing for the period thereafter until two (2)
years from the date first above written.
(l) No Third Party Beneficiaries. This Agreement has been
entered into solely for the benefit of the parties that have executed it, and
not to confer any benefit or enforceable right upon any other party or entity.
Accordingly, no party or entity that has not executed this Agreement shall have
any right to enforce any of the provisions of it.
ARTICLE XIII
Securities Law/Corporate Matters
13.1 Legends. The certificates representing the BCAM Series A
Convertible Preferred Stock, the BCAM Series B Convertible Preferred Stock and
the BCAM Common Stock into which the same are convertible shall bear the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), IN RELIANCE UPON THE EXEMPTION PROVIDED BY SECTION
4(2) OF THE ACT AND MAY BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF BY A SHAREHOLDER ONLY IN COMPLIANCE WITH BOTH
FEDERAL AND STATE SECURITIES LAWS. THE COMPANY IS UNDER NO
OBLIGATION TO SHAREHOLDERS TO REGISTER THESE SHARES UNDER THE
ACT OR TO CAUSE AN EXEMPTION TO BE AVAILABLE TO SHAREHOLDERS.
BCAM shall place stop transfer orders with its transfer agent with respect to
such certificate in accordance with federal securities laws.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by an officer duly authorized to do so, all as of the day and year
first above written.
BCAM INTERNATIONAL, INC.
By:/s/
----------------------
Authorized Signatory
LUNGCHECK HEALTH, INC.
By:/s/
---------------------
Authorized Signatory
LUNGCHECK, INC.
By:/s/
---------------------
Authorized Signatory
EXHIBIT "A"
Plan of Merger
PLAN OF MERGER
Plan of Merger (the "Plan"), dated as of September 22, 1999, between
LungCheck, Inc., a Delaware corporation ("LungCheck"), and LungCheck Health,
Inc., a New York corporation ("LungCheck Health"), (LungCheck and LungCheck
Health are sometimes referred to herein as the "Constituent Corporations").
LungCheck is a corporation duly organized and validly existing under
the laws of the State of Delaware with authorized capital stock consisting of
35,000,000 shares of common stock, par value $.001 per share ("LungCheck Common
Stock"), of which as of the date of this Plan of Merger there were 24,240,374
shares issued and outstanding and no shares were held in the treasury of
LungCheck.
LungCheck Health is a corporation duly organized and validly existing
under the laws of the State of Delaware with authorized capital stock consisting
of 200 shares of common stock, $.01 par value per share (the "LungCheck Health
Common Stock"), 100 shares are issued and outstanding and owned by BCAM
International, Inc., a New York corporation ("BCAM").
The respective Boards of Directors of LungCheck and LungCheck Health,
and LungCheck Health's sole shareholder, BCAM, deem it advisable that LungCheck
be merged with and into LungCheck Health (the "Merger") as provided herein and
in the Agreement and Plan of Merger dated as of September 14, 1999 (the
"Agreement and Plan"), which sets forth certain representations, warranties and
agreements in connection with the Merger and related transactions.
LungCheck and LungCheck Health, in order to effectuate the foregoing,
have adopted a plan of merger in accordance with the provisions of Section
368(a) of the Internal Revenue Code, as amended.
In consideration of the mutual benefits to be derived from this Plan,
the Agreement and Plan and the mutual agreements hereinafter contained,
LungCheck and LungCheck Health on the terms and conditions contained herein, and
in connection herewith, agree as follows:
ARTICLE I
SURVIVING CORPORATION
In accordance with the applicable provisions of the business
corporation laws of the State of Delaware ("Corporation Laws"), LungCheck shall
be merged with and into LungCheck Health. LungCheck Health shall be and is
herein sometimes referred to as the "Surviving Corporation."
ARTICLE II
EFFECTIVENESS OF THE MERGER
Section 2.1 Effective Time of the Merger. Subject to the provisions of
this Plan and the Agreement and Plan, as soon as practicable on or after the
Closing Date (as defined in Article I of the Agreement and Plan), a certificate
of merger (the "Certificate of Merger"), together with this Plan, shall be
executed by LungCheck and LungCheck Health and delivered to the Secretary of
State of the State of Delaware for filing as provided in the Corporation Laws.
The Merger shall become effective upon completion of the filing of Certificate
of Merger with the Secretary of State of the State of Delaware (the "Effective
Time of the Merger").
Section 2.2 Effects of the Merger. At the Effective Time of the Merger:
(i) the separate existence of LungCheck shall cease and LungCheck shall be
merged with and into LungCheck Health; and (ii) the Merger shall, from and after
the Effective Time of the Merger, have all the effects provided by applicable
Delaware law.
Section 2.3 Additional Actions. 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 or any other acts are necessary or
desirable: (a) to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, title to and possession of any property or right of
LungCheck acquired or to be acquired by reason of, or as a result of, the
Merger; or (b) otherwise to carryout the purposes of this Plan, LungCheck and
its proper officers and directors shall be deemed to have granted to the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such proper deeds, assignments and assurances and to do all acts necessary
or proper to vest, perfect or confirm title to and possession of such property
or rights in the Surviving Corporation and otherwise to carryout the purposes of
this Plan; and the proper officers and directors of the Surviving Corporation
are fully authorized in the name of LungCheck or otherwise to take any and all
such action.
ARTICLE III
EFFECT OF MERGER ON CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
Section 3.1 Conversion of Stock of LungCheck and LungCheck Health. At the
Effective Time of the Merger:
a. Each share of LungCheck Common Stock then issued and
outstanding shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into 0.0032958 shares of BCAM Series B
convertible preferred stock, $.01 par value ("BCAM Series B Preferred Stock"),
each one of which is convertible into 1,500 shares of Common Stock of BCAM,
subject to certain conditions; and
b. Each share of LungCheck Preferred Stock then issued and
outstanding shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into 0.098884 shares of BCAM Series A
convertible preferred stock ("BCAM Series A Preferred Stock"), each one of which
is convertible into 150 shares of common stock of BCAM, subject to certain
conditions, of the Surviving Corporation.
Section 3.2 Exchange of Certificates. After the Effective Time of the
Merger, each holder of a certificate or certificates theretofore evidencing
outstanding shares of LungCheck Common Stock, upon surrender of the same to
Ruskin, Moscou, Xxxxx & Faltischek, P.C. ("RMEF") as agent for LungCheck or such
other agent or agents as shall be appointed by LungCheck Health shall be
entitled to receive in exchange therefor a certificate or certificates
representing the number of shares of BCAM Series A or B Preferred Stock,
including fractional shares, as the case may be for which the shares of
LungCheck Common Stock or LungCheck Preferred Stock theretofore represented by
the certificate or certificates so surrendered shall have been converted as
provided in this Article III. As soon as practicable after the Effective Time of
the Merger, RMEF or such other agent(s), as the case may be, shall mail to each
holder of record of an outstanding certificate which immediately prior to the
Effective Time of the Merger evidences shares of LungCheck Common Stock or
LungCheck Preferred Stock (a "Certificate"), and which is to be exchanged for
BCAM Series A and Series B Preferred Stock as provided in Section 3.1 hereof, a
form of 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 RMEF), advising such shareholder of the terms of
the exchange effected by the Merger and the procedure for surrendering to RMEF
or such other agent(s), as the case may be, such Certificate in exchange for
certificates evidencing the BCAM Series A and Series B Preferred Stock. Until so
surrendered, each outstanding Certificate will be deemed for all corporate
purposes of BCAM to evidence ownership of the number of full shares of BCAM
Series A and Series B Preferred Stock and the right to receive the cash value of
any fraction of a share into which the shares of LungCheck Common Stock or
LungCheck Preferred Stock represented thereby were converted; provided, however,
until such outstanding Certificates are surrendered, no dividend payable to
holders of record of BCAM Series A and Series B Preferred Stock as of any record
date subsequent to the Effective Time of the Merger shall be paid to the holder
of such outstanding Certificates in respect thereof. After the Effective Time of
the Merger, there shall be no further registration of transfers on the records
or stock transfer books of LungCheck of shares of LungCheck Common Stock or
LungCheck Preferred Stock and, if a Certificate representing such shares is
presented, it shall be canceled and exchanged for certificates representing
shares of BCAM Preferred Series A and Series B Stock as herein provided. Subject
to the provisions of this Section 3.2 and to applicable law, upon surrender of
Certificates there shall be paid to the record holder of the certificates of
BCAM Series A and Series B Preferred Stock issued in exchange therefor: (i) at
the time of such surrender, the amount of any dividends or distributions
theretofore paid with respect to such full shares of BCAM Preferred Series A and
Series B Stock as of any record date subsequent to the Effective Time of the
Merger to the extent the same has not yet been paid to a public official
pursuant to abandoned property laws; and (ii) at the appropriate payment date or
as soon as practicable thereafter, the amount of dividends or 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 shares of
BCAM Series A and Series B Preferred Stock. All such dividends or distributions,
if held by RMEF, or such other agent(s), as the case may be, for payment or
delivery to the holders of unsurrendered Certificates and unclaimed at the end
of one year from the Effective Time of the Merger, shall at such time be paid or
redelivered by RMEF or such other agent(s), as the case may be, to LungCheck
Health acting solely in its corporate capacity, and after such time any holder
of a Certificate who has not surrendered such Certificate to RMEF or such other
agent(s), as the case may be, shall, subject to applicable law, look as a
general creditor only to LungCheck Health for payment or delivery of such
dividends or distributions or cash, as the case may be. All shares of BCAM
Series A and Series B Preferred Stock and rights to receive cash, if any, into
and for which shares of LungCheck Common Stock or LungCheck Preferred Stock
shall have been converted and exchanged pursuant to this Section 3.2 shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
converted and exchanged shares of LungCheck Common Stock or LungCheck Preferred
Stock.
Section 3.4 Certificates in Other Names. If any certificate evidencing
shares of BCAM Series A and Series B Preferred Stock is to be issued in a name
other than that in which the Certificate surrendered in exchange therefor is
registered, it shall be a condition of the issuance thereof that the Certificate
so surrendered shall be properly endorsed and otherwise in proper form for
transfer and that the person requesting such exchange pay to RMEF or such other
agent(s), as the case may be, or LungCheck Health acting solely in its corporate
capacity, as the case may be, any transfer or other taxes required by reason of
the issuance of a certificate for shares of BCAM Series A and Series B Preferred
Stock in any name other than that of the registered holder of the Certificate
surrendered or otherwise required or establish to the satisfaction of RMEF or
such other agent(s), as the case may be, or LungCheck Health acting solely in
its corporate capacity, as the case may be, that such tax has been paid or is
not payable.
ARTICLE IV
CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION
The Certificate of Incorporation of the Surviving Corporation shall
continue to be its Certificate of Incorporation from and after the Effective
Time of the Merger until changed in accordance with applicable law.
ARTICLE V
BOARD OF DIRECTORS OF SURVIVING CORPORATION
The Board of Directors of the Surviving Corporation shall consist of
the following directors from and after the Effective Time of the Merger until
changed in accordance with applicable law:
________________
ARTICLE VI
MISCELLANEOUS
Section 6.1 Termination. This Plan shall terminate in the event of and
upon the termination of the Agreement and Plan.
Section 6.2 Headings. The descriptive headings of the several Articles
and Sections of this Plan are inserted for convenience only and do not
constitute a part of this Plan.
Section 6.3 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if sent by certified or
registered mail, postage prepaid, addressed as follows:
(a) If to LungCheck : 0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
(b) If to LungCheck Health: BCAM International, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
or such other addresses as shall be furnished in writing by either party, and
any such notice of communication shall be deemed to have been given as of the
date so mailed.
Section 6.4 Assignment. This Plan and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Plan nor any of
the rights, interest, or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties.
Section 6.5 Complete Agreement. This Plan, and the Agreement and Plan,
including the schedules, exhibits or other writings referred to therein or
delivered pursuant thereto, contain the entire understanding of the parties
hereto with respect to the Merger and the related transactions and supersede all
prior arrangements or understandings with respect thereto and all letters and
other agreements relating to the protection of Confidential Information (as
defined in the Agreement and Plan) of LungCheck and LungCheck Health. There are
no restrictions, agreements, promises, warranties, covenants or undertakings
between the parties hereto other than those expressly set forth herein or in the
Agreement and Plan.
Section 6.6 Modifications, Amendments and Waivers. At any time prior to
the Effective Time of the Merger (notwithstanding any shareholder approval), if
authorized by their respective Boards of Directors and to the extent permitted
by law: (i) the parties hereto may, by written agreement, modify, amend or
supplement any term or provision of this Plan and (ii) any term or provision of
this Plan may be waived by the party which is, or whose shareholders are,
entitled to the benefits thereof. Any written instrument or agreement referred
to in this section shall be validly and sufficiently authorized for the purposes
of this Plan if signed on behalf of LungCheck and LungCheck Health by a person
authorized to sign this Plan.
Section 6.7 Counterparts. This Plan may be executed by facsimile in two
or more counterparts all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
Section 6.8 Governing Law. This Plan shall be governed by the laws of
the State of Delaware (regardless of the laws that might be applicable under
principles of conflicts of law) as to all matters, including but not limited to
matters of validity, construction, effect and performance.
IN WITNESS WHEREOF, LungCheck and LungCheck Health have caused this
Plan of Merger to be executed by their duly authorized officers, respectively.
LUNGCHECK, INC.
ATTEST:
BY: /s/
Secretary ----------------
Authorized Signatory
LUNGCHECK HEALTH, INC.
ATTEST:
BY:/s/
Secretary ----------------
Authorized Signatory
EXHIBIT "B"
Certificate of Amendment
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION OF
BCAM INTERNATIONAL, INC.
Under Section 805 of the Business Corporation Law
------------------
The undersigned, being the President and Secretary of BCAM
INTERNATIONAL, INC., hereby certify:
First: The name of the corporation is BCAM INTERNATIONAL, INC. The
corporation was organized under the name BIOMECHANICS CORPORATION OF AMERICA.
Second: The Certificate of Incorporation of the corporation was filed with
the Department of State on February 22, 1984.
Third: The Certificate of Incorporation of the corporation is amended, as
authorized by Section 805 of the Business Corporation Law, to designate Series A
and B Acquisition Preferred Stock. To effectuate such change, Article FOURTH
Paragraph (d) of the Certificate of Incorporation of the corporation is as
follows:
d. Acquisition Preferred Stock. The aggregate number of shares
of Acquisition Preferred Stock the corporation shall have the authority
to issue is seven hundred fifty thousand (750,000) shares of
Acquisition Preferred Stock, par value One ($.01) cent per share,
issuable by the Board of Directors, from time to time, in one or more
series. The Acquisition Preferred Stock shall only be issued as
consideration pursuant to a statutory merger or consolidation as to
which the corporation of substantially all the assets or business of
another entity or the acquisition by the corporation of 50% or more of
the voting securities of another entity. The Board of Directors hereby
designates Series A Acquisition Convertible Preferred Stock and Series
B Acquisition Convertible Preferred Stock with the following rights:
(i) Series A Acquisition Convertible Preferred Stock
1. Dividends. The shares of Series A Acquisition Convertible Preferred
Stock (the "Series A Preferred Stock") shall only be entitled to dividends
(whether in cash or property or securities, other than dividends which are paid
or intended to be paid in connection with distributions of the Corporation's
assets upon the voluntary or involuntary liquidation, dissolution or winding up
of the Corporation) when declared by the Corporation's Board of Directors on the
Common Stock, on an as converted basis, and before any payment is made to the
holders of the Common Stock. Each share of Series A Preferred Stock with respect
to dividend payments shall be equal in every respect to every other share of
Series A Preferred Stock. All dividends or distributions which are paid or
intended to be paid in connection with a liquidation, dissolution or winding up
of the Corporation shall be preferred, as provided in Sections 3(a) and 3(b)
hereof.
2. Voting Rights; No Preemptive Rights. The holders of Series A
Preferred Stock shall, by virtue of their ownership thereof, be entitled to cast
that number of votes equal to the number of shares of Common Stock into which
the Series A Preferred Stock is convertible on each matter submitted to the
Corporation's shareholders for voting. Such votes shall be cast together with
those cast by the holders of Common Stock as one class, except as required by
law. The Series A Preferred Stock shall not have cumulative voting rights. The
holders of Series A Preferred Stock shall not have any preemptive rights upon
the issuance or sale of any securities.
3. Liquidation Rights.
(a) If the Corporation shall be voluntarily or involuntarily
liquidated, dissolved or wound up at any time when any of the Series A Preferred
Stock shall be outstanding, the holders of the then outstanding Series A
Preferred Stock shall have a preference against the assets (including cash,
securities and property) of the Corporation available for distribution to the
holders of the Common Stock equal to the sum of (i) $17.20 per share and (ii) an
amount equal to all declared but unpaid dividends; or, if greater, a portion of
the remaining assets of the Corporation which are distributable to the holders
of the Common Stock equal to an amount which would have been distributed if the
Series A Preferred Stock had been converted into Common Stock immediately prior
to the date of such liquidation or dissolution (the "Preference Amount");
provided, however, that any reduction of the authorized or issued shares of the
stock of the Corporation of any class, whether now or hereafter authorized,
shall not be deemed to be a liquidation of the Corporation within the meaning of
any of the provisions of this Section 3; and provided, further, however, that a
liquidation for the purposes of this Section shall not be deemed to occur upon:
(a) the consolidation or merger of the Corporation into or with any corporation
or corporations wherein the holders of the Series A Preferred Stock are to
receive preferred securities of the merged or consolidated entity having
substantially similar rights, preferences and protections as those of the Series
A Preferred Stock (as contemplated herein); (b) the merger of the Corporation
with another corporation in which the Corporation is the surviving corporation
and which does not result in any reclassification or change -- other than a
change in par value, or from par value to no par value or from no par value to
par value, or as a result of a subdivision or combination -- of outstanding
shares of the Corporation's Common Stock; or (c) the transfer, assignment or
contribution of the Corporation's assets in connection with, or the creation of,
any joint venture or limited liability entity in exchange for an equity interest
shall not be deemed to be a liquidation for the purposes of this Section.
(b) All of the Preference Amount to be paid to the holders of
Series A Preferred Stock as provided in this Section 3 shall be paid or set
apart for payment before the payment or setting apart for payment of any amount
for, or the distribution of any property of the Corporation to, the holders of
any Common Stock, whether now or hereafter authorized, in connection with such
liquidation, dissolution or winding up.
4. Redemption. The Corporation shall not redeem, purchase or otherwise
acquire, directly or indirectly through a subsidiary or otherwise, any of the
Series A Preferred Stock without the consent of all of the then holders of the
Series A Preferred Stock. No shares of Series A Preferred Stock redeemed or
purchased by the Corporation pursuant to this Section 4 shall be reissued by the
Corporation.
5. Conversion.
(a) Optional Conversion. The holder of any shares of Series A
Preferred Stock may at any time after the Corporation effectuates a 1:15 reverse
split of its Common Stock, convert, at such holder's option, all or any portion
of such shares of Series A Preferred Stock into Common Stock at the Conversion
Ratio. At the time of conversion, the Corporation shall pay in cash to each
holder of Series A Preferred Stock so converted an amount equal to all unpaid
dividends, accrued thereon to the date of conversion, if such dividend was
declared by the Board of Directors of the Corporation. In the event of
conversion, the Corporation shall forthwith transmit to each holder of Series A
Preferred Stock a certificate or certificates for the shares of Common Stock
issued as a result thereof dated the date of conversion against delivery of the
certificate or certificates representing the Series A Preferred Stock to be
converted at the principal office of the Corporation (or at such other place as
the Corporation may designate in a written notice sent to the holder by
first-class mail, postage prepaid, at its address shown on the books of the
Corporation), and such holders shall be deemed for all purposes to be the
holders of such Common Stock as of the date of conversion.
(b) Stock Fully Paid; Reservation of Shares. All shares of
Common Stock which may be issued upon conversion of Series A Preferred Stock
will, upon issuance, be duly issued, fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof. At all times
that any Series A Preferred Stock is convertible, the Corporation shall have
authorized, and shall have reserved for the purpose of issuance upon such
conversion, a sufficient number of shares Common Stock.
(c) Reclassification, Consolidation or Merger. In the case of
any reclassification or change (a "Reclassification") of outstanding Common
Stock issuable upon conversion of Series A Preferred Stock (other than a change
in par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), including any
Reclassification in the case of any consolidation or merger of the Corporation
with or into another corporation which does not constitute a liquidation under
Section 3, the Series A Preferred Stock shall, without payment of additional
consideration therefor, be deemed modified so as to provide that upon the
Optional Conversion provided herein, each share of the Series A Preferred Stock
shall procure, at the time of the Optional Conversion, in lieu of each share of
Common Stock theretofore issuable upon such conversion, the kind and amount of
shares of stock, other securities, options, rights, warrants, money and property
receivable upon such Reclassification, by the holder of one share of Common
Stock. The provisions of this subsection shall similarly apply to successive
Reclassifications.
(d) Subdivision or Combination of Shares. If the Corporation,
at any time or times while any of the Series A Preferred Stock is outstanding,
shall subdivide or combine its Common Stock, the then Conversion Ratio of the
Series A Preferred Stock shall be proportionately reduced or increased, as of
the effective date of such subdivision or combination.
6. No Reissuance of Series A Preferred Stock. No shares of Series A
Preferred Stock which have been converted into Common Stock shall be reissued by
the Corporation; provided, however, that each such share, after being retired
and cancelled, shall be restored to the status of an authorized but unissued
share of preferred stock without designation as to series and may thereafter be
issued as a share of preferred stock not designated Series A Preferred Stock
upon proper authorization.
7. Definitions. As used herein with respect to the Series A Preferred
Stock, the following terms have the following meanings:
(a) "Common Stock" shall mean the Corporation's Common Stock,
$.01 par value, and any stock into which such Common Stock may hereafter be
changed.
(b) "Conversion Ratio" shall mean, initially, one hundred
fifty shares of Common Stock for each share of Series A Preferred Stock (150:1),
which Conversion Ratio shall be subject to adjustment in accordance with Section
5 hereof, including for the 1:15 reverse split referred to in Section 5(a).
(c) "Person" shall mean an individual, a corporation, a
partnership, a limited liability entity, a trust, an unincorporated organization
or a government organization or an agency or political subdivision thereof.
(d) "Securities" shall mean any debt or equity securities of
the Corporation, whether now or hereafter authorized, and any instrument
convertible into or exchangeable for Securities or a Security. The term
"Security" shall mean one of the Securities.
(ii) Series B Acquisition Convertible Preferred Stock
1. Dividends. The shares of Series B Acquisition Convertible Preferred
Stock (the "Series B Preferred Stock") shall only be entitled to dividends
(whether in cash or property or securities, other than dividends which are paid
or intended to be paid in connection with distributions of the Corporation's
assets upon the voluntary or involuntary liquidation, dissolution or winding up
of the Corporation) when declared by the Corporation's Board of Directors on the
Common Stock, on an as converted basis. Each share of Series B Preferred Stock
with respect to dividend payments shall be equal in every respect to every other
share of Series B Preferred Stock. All dividends or distributions which are paid
or intended to be paid in connection with a liquidation, dissolution or winding
up of the Corporation shall be preferred, as provided in Section 3 hereof.
2. Voting Rights; No Preemptive Rights. The holders of Series B
Preferred Stock shall, by virtue of their ownership thereof, be entitled to cast
that number of votes equal to the number of shares of Common Stock into which
the Series B Preferred Stock is convertible on each matter submitted to the
Corporation's shareholders for voting. Such votes shall be cast together with
those cast by the holders of Common Stock as one class, except as required by
law. The Series B Preferred Stock shall not have cumulative voting rights. The
holders of Series B Preferred Stock shall not have any preemptive rights upon
the issuance or sale of any securities.
3. Liquidation Rights. If the Corporation shall be voluntarily or
involuntarily liquidated, dissolved or wound up at any time when any of the
Series B Preferred Stock shall be outstanding, the holders of the then
outstanding Series B Preferred Stock shall not have a preference against the
assets (including cash, securities and property) of the Corporation available
for distribution to the holders of the Common Stock.
4. Redemption. The Corporation shall not redeem, purchase or otherwise
acquire, directly or indirectly through a subsidiary or otherwise, any of the
Series B Preferred Stock without the consent of all of the then holders of the
Series B Preferred Stock. No shares of Series B Preferred Stock redeemed or
purchased by the Corporation pursuant to this Section 4 shall be reissued by the
Corporation.
5. Conversion.
(a) Mandatory Conversion. All issued and outstanding shares of
Series B Preferred Stock shall automatically convert into Common Stock at the
Conversion Ratio, as adjusted in this Section 5, immediately after the
Corporation effectuates a 1:15 reverse split of its Common Stock, and no action
if any person shall be required to effectuate such conversion. At the time of
conversion, the Corporation shall pay in cash to each holder of Series B
Preferred Stock so converted an amount equal to all unpaid dividends, accrued
thereon to the date of conversion, if such dividend was declared by the Board of
Directors of the Corporation. In the event of conversion, the Corporation shall
forthwith transmit to each holder of Series B Preferred Stock a certificate or
certificates for the shares of Common Stock issued as a result thereof dated the
date of conversion against delivery of the certificate or certificates
representing the Series B Preferred Stock to be converted at the principal
office of the Corporation (or at such other place as the Corporation may
designate in a written notice sent to the holder by first-class mail, postage
prepaid, at its address shown on the books of the Corporation), and such holders
shall be deemed for all purposes to be the holders of such Common Stock as of
the date of conversion.
(b) Stock Fully Paid; Reservation of Shares. All shares of
Common Stock which may be issued upon conversion of Series B Preferred Stock
will, upon issuance, be duly issued, fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof. At all times
that any Series B Preferred Stock is outstanding, the Corporation shall have
authorized, and shall have reserved for the purpose of issuance upon such
conversion, a sufficient number of shares Common Stock.
(c) Reclassification, Consolidation or Merger. In the case of
any reclassification or change (a "Reclassification") of outstanding Common
Stock issuable upon conversion of Series B Preferred Stock (other than a change
in par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination), including any
Reclassification in the case of any consolidation or merger of the Corporation
with or into another corporation which does not constitute a liquidation under
Section 3, the Series B Preferred Stock shall, without payment of additional
consideration therefor, be deemed modified so as to provide that upon the
Mandatory Conversion provided herein, each share of the Series B Preferred Stock
shall procure, at the time of the Mandatory Conversion, in lieu of each share of
Common Stock theretofore issuable upon such conversion, the kind and amount of
shares of stock, other securities, options, rights, warrants, money and property
receivable upon such Reclassification, by the holder of one share of Common
Stock. The provisions of this subsection shall similarly apply to successive
Reclassifications.
(d) Subdivision or Combination of Shares. If the Corporation,
at any time or times while any of the Series B Preferred Stock is outstanding,
shall subdivide or combine its Common Stock, the Conversion Ratio of the Series
B Preferred Stock shall be proportionately reduced or increased, as of the
effective date of such subdivision or combination.
6. No Reissuance of Series B Preferred Stock. No shares of Series B
Preferred Stock which have been converted into Common Stock shall be reissued by
the Corporation; provided, however, that each such share, after being retired
and cancelled, shall be restored to the status of an authorized but unissued
share of preferred stock without designation as to series may thereafter be
issued as a share of preferred stock not designated Series B Preferred Stock
upon proper corporate and shareholder authorization.
7. Definitions. As used herein with respect to the Series B Preferred
Stock, the following terms have the following meanings:
(a) "Common Stock" shall mean the Corporation's Common Stock,
$.01 par value, and any stock into which such Common Stock may hereafter be
changed.
(b) "Conversion Ratio" shall mean, initially, one thousand
five hundred shares of Common Stock for each share of Series B Preferred Stock
(1,500:1), which Conversion Ratio shall be subject to adjustment in accordance
with Section 5 hereof, including for the 1:15 reverse split referred to in
Section 5(a) hereof.
(c) "Person" shall mean an individual, a corporation, a
partnership, a limited liability entity, a trust, an unincorporated organization
or a government organization or an agency or political subdivision thereof.
(d) "Securities" shall mean any debt or equity
securities of the Corporation, whether now or hereafter authorized, and any
instrument convertible into or exchangeable for Securities or a Security. The
term "Security" shall mean one of the Securities.
Fourth: This amendment to the Certificate of Incorporation of the
corporation was authorized by the written consent of the Board of Directors of
the corporation.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Amendment to the Certificate of Incorporation and affirm the foregoing as true
under the penalties of perjury, as of this ____ day of September, 1999.
BCAM INTERNATIONAL, INC.
/s/
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XXXXXXX XXXXXXX, Chairman and
Chief Executive Officer
/s/
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XXXXX XXXXXXX, Secretary
