Exhibit 2(c)
AGREEMENT OF MERGER dated
as of May 27, 1999, between CONCEPT
ACQUISITION CORPORATION, a Delaware
corporation ("Acquisition Sub"), and
CONCEPT DEVELOPMENT, INC., a Delaware
corporation (the "Company").
The Boards of Directors of Acquisition Sub and the Company
have each duly approved and adopted this Agreement, the Agreement and Plan of
Reorganization dated as of May 27, 1999, (the "Reorganization Agreement"),
among, GHS, Inc. a Delaware corporation ("Parent"), Acquisition Sub, a
wholly-owned subsidiary of Parent, the Company and the other parties thereto and
the proposed merger of Acquisition Sub with and into the Company in accordance
with this Agreement, the Reorganization Agreement and the Delaware General
Corporation Law (the "Delaware Statute"), whereby, among other things, the
issued and outstanding shares of common stock, no par value, of the Company (the
"Company Common Stock"), will be exchanged and converted into the right to
receive cash and shares of Series C preferred stock, $.01 par value, of Parent
(the "Parent Preferred Stock") in the manner set forth in this Agreement and the
Reorganization Agreement, upon the terms and subject to the conditions set forth
in this Agreement and the Reorganization Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and the Reorganization Agreement and the
representations, warranties, covenants, agreements, conditions and promises
contained herein and therein, the parties hereby agree as follows:
ARTICLE I
THE MERGER
Section 1. THE MERGER. In accordance with the provisions of this
Agreement, the Reorganization Agreement and the Delaware Statute, Acquisition
Sub shall be merged with and into the Company (the "Merger"), which at and after
the Effective Time (as defined in Article I, Section 2 hereof) shall be, and is
sometimes herein referred to as, the "Surviving Corporation". Acquisition Sub
and the Company are sometimes referred to as the "Constituent Corporations".
Section 2. THE EFFECTIVE TIME OF THE MERGER. Subject to the provisions
of the Reorganization Agreement, this Agreement shall be executed and delivered
to and filed with the Secretary of State of the State of Delaware by each of the
Constituent Corporations on the Closing Date in the manner provided under
Section 251 of the Delaware Statute. The Merger shall become effective (the
"Effective Time") upon the filing of this Agreement with the Secretary of State
of the State of Delaware and the issuance of a certificate of merger by the
Secretary of State of the State of Delaware.
Section 3. EFFECT OF MERGER. At the Effective Time the separate
existence of Acquisition Sub shall cease and Acquisition Sub shall be merged
with and into the Surviving
Corporation, and the Surviving Corporation shall possess all of the rights,
privileges, powers and franchises of a public as well as of a private nature,
and be subject to all the restrictions, disabilities and duties of each of the
Constituent Corporations as provided in Section 251 of the Delaware Statute.
Section 4. CHARTER AND BY-LAWS OF SURVIVING CORPORATION. From and
after the Effective Time, (i) the Charter of Acquisition Sub shall be the
Charter of the Surviving Corporation, unless and until altered, amended or
repealed as provided in the Delaware Statute or the Charter, (ii) the by-laws of
Acquisition Sub shall be the by-laws of the Surviving Corporation, unless and
until altered, amended or repealed as provided in the Delaware Statute, the
Charter or such by-laws, (iii) the directors of Acquisition Sub shall be the
directors of the Surviving Corporation, unless and until removed, or until their
respective terms of office shall have expired, in accordance with the Delaware
Statute, the Charter and the by-laws of the Surviving Corporation, as applicable
and (iv) the officers of the Acquisition Sub shall be the officers of the
Surviving Corporation, unless and until removed, or until their terms of office
shall have expired, in accordance with the Delaware Statute, the Charter and the
by-laws of the Surviving Corporation, as applicable.
Section 5. TAKING OF NECESSARY ACTION. Prior to the Effective Time, the
parties hereto shall do or cause to be done all such acts and things as may be
necessary or appropriate in order to effectuate the Merger as expeditiously as
reasonably practicable, in accordance with this Agreement, the Reorganization
Agreement and the Delaware Statute.
Section 6. TAX FREE REORGANIZATIONS. For Federal income tax purposes,
the parties intend that the Merger be treated as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), by reason of Section 368(a)(2)(E) of the Code.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 1. TOTAL CONSIDERATION; EFFECT ON CAPITAL STOCK. The entire
consideration payable by Parent with respect to all outstanding shares of
capital stock of the Company and for all options, warrants, rights, calls,
commitments, agreements or arrangements of any character to which the Company is
a party or by which it is bound calling for the issuance of shares of capital
stock of the Company or any securities convertible into or exercisable or
exchangeable for, or representing the right to purchase or otherwise receive,
directly or indirectly, any such capital stock, or other arrangement to acquire,
at any time or under any circumstance, capital stock of the Company or any such
other securities (hereinafter collectively referred to as the "Fully Diluted
Company Shares,") other than any capital stock of the Company owned or held by
Parent or any Affiliate of Parent, shall be an aggregate of (A) 50,000 shares of
Parent Preferred Stock (the "Total Parent Share Amount") and (B) $2,000,000
MINUS the $200,000 to be paid to Swidler, Berlin, Shereff, Friedman, LLP on the
date hereof, (the "Aggregate Cash Consideration") in cash (the Aggregate Cash
Consideration, together with the Total Parent Share Amount, being sometimes
hereinafter collectively referred to as the "Aggregate Purchase Price"). For
purposes of the calculation of the exchange ratio for Parent Preferred Stock
under
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Article II, Section 1(c)(i), it is assumed that the number of Fully Diluted
Company Shares is one (1) (the "Fully Diluted Company Share Amount"). At the
Effective Time, subject and pursuant to the terms and conditions of this
Agreement and the Reorganization Agreement, by virtue of the Merger and without
any action on the part of the Constituent Corporations or the holders of the
capital stock or options to purchase capital stock of the Constituent
Corporations:
(a) CAPITAL STOCK OF ACQUISITION SUB. Each issued and
outstanding share of common stock, $.01 par value per share, of Acquisition Sub
shall be converted into one share of common stock, $.01 par value per share, of
the Surviving Corporation;
(b) CANCELLATION OF CERTAIN SHARES OF COMPANY STOCK. Each
share of capital stock of the Company that is authorized but unissued shall
cease to exist and no Parent Preferred Stock or other consideration shall be
delivered in exchange therefor.
(c) EXCHANGE OF COMPANY STOCK. Subject to Article II, Section
2 hereof, each share of Company Common Stock issued and outstanding at the
Effective Time, including all accrued and unpaid dividends thereon, shall be
exchanged and converted into the right to receive:
(i) 50,000 shares of Parent Preferred Stock which are
deliverable at the Closing and are subject to the repurchase rights set forth in
the Repurchase Agreement; and
(ii) $2,000,000 MINUS the $200,000 to be paid to
Swidler, Berlin, Shereff, Friedman, LLP which shall be payable at the Closing.
For convenience of reference, the shares of Parent Preferred Stock to be issued
upon the exchange and conversion of Company Common Stock in accordance with this
Section 2.1(c) are sometimes hereinafter collectively referred to as the "Merger
Shares".
(d) SHARES OF DISSENTING SHAREHOLDERS. Each issued and
outstanding share of Company Stock held by a Dissenting Stockholder, if any,
shall not be exchanged and converted as described in Article II, Section 1(c)
hereof but shall become the right to receive such consideration as may be
determined to be due to such Dissenting Stockholder pursuant to the Delaware
Statute; provided, however, that each share of Company Stock issued and
outstanding at the Effective Time and held by a Dissenting Stockholder who or
which shall, after the Effective Time, withdraw his or its demand for appraisal
or lose or fail to perfect his or its right of appraisal as provided in the
Delaware Statute shall be deemed, as of the Effective Time, to be exchanged and
converted into Parent Preferred Stock as provided in Article II, Section 2(d),
without interest. After the Effective Time, as provided in Section 262 of the
Delaware Statute, no Dissenting Stockholder will be entitled to vote the shares
of Company Common Stock subject to such Dissenting Stockholder's demand for
appraisal for any purpose or be entitled to the payment of dividends or other
distributions on such shares. The Company shall give Parent prompt notice of any
demands received by the Company for fair value of such Company Stock, and Parent
shall have the right to participate in all the negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Parent, make any payment (except to the extent that any such payment
is pursuant to a court order) with respect to, or settle or offer to settle, any
such demands.
Section 2. ESCROW DEPOSIT; EXCHANGE OF CERTIFICATES.
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(a) ESCROW AGREEMENTS. At the Effective Time, the
Stockholder, Parent and State Street Bank and Trust Company (the "Escrow Agent")
shall enter into an escrow agreement in the form of Exhibit B to the
Reorganization Agreement (the "Escrow Agreement"). The Escrow Agreement is being
entered into for the purpose of securing the indemnification obligations of the
Stockholders under Article VII of the Reorganization Agreement.
(b) ESCROW DEPOSIT. At the Effective Time, Parent
shall cause to be deposited with the Escrow Agent (i) 5,000 shares of Parent
Preferred Stock ("Escrow Shares") and (ii) three stock powers duly endorsed in
blank for transfer on behalf of the stockholder, and the stockholder by her
execution and delivery of the Reorganization Agreement authorizes and directs
Parent to make such deposit on her behalf.
(c) PROCEDURE FOR EXCHANGE. Immediately following the
Effective Time, Parent shall deliver to the Stockholder, other than Parent or
any subsidiary of Parent, of a certificate or certificates which immediately
prior to the Effective Time represented issued and outstanding shares of Company
Common Stock (each, an "Old Certificate") a certificate (a "New Certificate")
representing that number of Merger Shares (other than the Escrow Shares) which
such holder has the right to receive pursuant to Article II, Section 1(c)(i)
with respect to such Old Certificate against receipt by Parent of (i) such Old
Certificate for cancellation and (ii) an executed letter of transmittal, and the
Old Certificate so surrendered shall forthwith be canceled (the certificates
representing the Escrow Shares having therefore been deposited on behalf of the
Stockholder into escrow as contemplated by Article II, Section 2(b). In the
event of a transfer of ownership of shares of Company Common Stock which is not
registered on the transfer records of the Company, a New Certificate
representing the proper number of shares of Parent Preferred Stock may be issued
to a transferee if the Old Certificate representing such Company Common Stock is
presented to Parent, accompanied by all documents required to evidence and
effect such transfer and by evidence that any applicable stock or other transfer
taxes have been paid. Until surrendered as contemplated by Article II, Section
2, each Old Certificate shall be deemed, on and after the Effective Time, to
represent only the right to receive upon such surrender, New Certificates
representing Merger Shares (other than the Escrow Shares) as contemplated by
Article II, Section 1(c)(i), without interest. All Escrow Shares shall be held
by, and distributed in accordance with, the terms and provisions of the Escrow
Agreement.
(d) NO FURTHER OWNERSHIP RIGHTS IN COMPANY STOCK. All
Shares of Parent Preferred Stock issued upon the surrender for exchange of
shares of Company Common Stock in accordance with the terms of this Article II
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock. If, after the Effective Time,
any Old Certificate is presented to the Surviving Corporation for any reason,
such Old Certificate shall be canceled and exchanged as provided in this Article
II.
(e) NO LIABILITY. None of Parent, Acquisition Sub or
the Company shall be liable to any holder of shares of Company Common Stock or
Parent Preferred Stock, as the case may be, for shares (or dividends or
distributions with respect thereto) of Parent Preferred Stock to be issued in
exchange for Company Common Stock pursuant to this Article II, Section 2, if, on
or after the expiration of six months following the Effective Time, such shares
are delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
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(f) LOST, STOLEN OR DESTROYED COMPANY CERTIFICATES.
In the event any Old Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit to that effect by the person claiming such Old
Certificate to be lost, stolen or destroyed and, if required by Parent, the
posting by such person of a bond in such amount as Parent may reasonably direct
as indemnity against any claim that may be made against it with respect to such
Old Certificate, Parent will issue in exchange for such lost, stolen or
destroyed Old Certificate the Merger Shares and cash in lieu of fractional
shares deliverable in respect thereof pursuant to this Agreement.
ARTICLE III
MISCELLANEOUS
Section 1. ENTIRE AGREEMENT. This Agreement and the Reorganization
Agreement (including the Company Disclosure Schedule and the Exhibits attached
thereto) and the other writings referred to therein contain the entire agreement
among the parties hereto with respect to the transactions contemplated hereby
and supersede all prior agreements or understandings, written or oral, among the
parties with respect thereto including, but not limited to, the Original
Reorganization Agreement.
Section 2. NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by nationally-recognized overnight courier or by registered
or certified mail, postage prepaid, return receipt requested or by telecopier,
with confirmation as provided above addressed as follows:
(i) if to Parent or Acquisition Sub, to:
GHS, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier: (000) 000-0000
with copies to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000;
(b) if to the Company, to:
Concept Development, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000;
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with a copy to:
Swidler, Berlin, Shereff Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
Telecopier: (000) 000-0000
Section 3. COUNTERPARTS. This Agreement may be executed in any number
of counterparts by original or facsimile signature, each such counterpart shall
be an original instrument, and all such counterparts together shall constitute
one and the same agreement.
Section 4. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed wholly therein (without regard to principles
of conflicts of laws) except for those terms and conditions that specifically
relate to Merger as described in Article I of the Reorganization Agreement,
which shall be governed by and construed in accordance with the General
Corporation Law of the State of Delaware (without regard to principles of
conflicts of laws).
Section 5. AMENDMENT, MODIFICATION AND WAIVER. The Reorganization
Agreement shall not be altered or otherwise amended except pursuant to (a) an
instrument in writing signed by Parent and the Company prior to the Effective
Date, if Article VII of the Reorganization Agreement is not affected by such
alteration or amendment and (b) an instrument in writing signed by (i) Parent,
(ii) the Company and (iii) the Stockholders, if Article VII of the
Reorganization Agreement is affected thereby or the alteration or amendment
occurs subsequent to the Effective Date; provided, however, that after the
approval and adoption of this Agreement and the Merger by the Stockholders, no
amendment of this Agreement shall be made which pursuant to the Delaware Statute
or other law requires the further approval of the Stockholders; provided
further, however, that any party to the Reorganization Agreement may waive any
obligation owed to it by any other party under the Reorganization Agreement. The
waiver by any party hereto of a breach of any provision of the reorganization
Agreement shall not operate or be construed as a waiver of any subsequent
breach.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement of Merger to be executed and delivered on its behalf as of the date
first above written.
CONCEPT ACQUISITION CORPORATION
By: /s/ Xxxx Polish
--------------------------
Name: Xxxx Polish
Title: President
CONCEPT DEVELOPMENT, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
Title: President
OFFICERS CERTIFICATE
OF
CONCEPT ACQUISITION CORPORATION
(A Delaware corporation)
--------------------------------------
Xxxx Polish hereby certifies that:
1. Xxxx Polish is the President and Secretary of CONCEPT
ACQUISITION CORPORATION, a Delaware corporation (the "Corporation").
2. The Corporation has only one class of shares and the total
number of outstanding shares is 100.
3. The principal terms of the Agreement of Merger to which
this certificate is attached, having been duly approved by the Board of
Directors of the Corporation, was then submitted to the sole shareholder of the
Corporation for approval and adoption by written consent in lieu of a
Shareholder meeting, and the sole shareholder of the Corporation adopted and
approved the Agreement of Merger by executing a written consent dated May 26,
1999, all in accordance with the Delaware General Corporations Law.
4. The percentage vote required of the outstanding shares of
common stock of the Corporation was more than 50%.
5. Equity securities of the Corporation's parent corporation,
GHS, Inc., a Delaware corporation, are to be issued in the Merger (as defined in
the Agreement of Merger) and no vote of the stockholders of the parent
corporation was required.
I further declare under penalty of perjury under the laws of
the State of Delaware that the matters set forth in this certificate are true
and correct and of our own knowledge.
May 27, 1999
/s/ Xxxx Polish
----------------------------------
Xxxx Polish
President, Secretary and Treasurer
OFFICER'S CERTIFICATE
OF
CONCEPT DEVELOPMENT, INC.
(A Delaware corporation)
Xxxxxxx Xxxxxx and Xxxxxx Xxxxxxx certify that:
1. Xxxxxxx Xxxxxx is the President of CONCEPT DEVELOPMENT, INC., a
Delaware corporation (the "Corporation") and Xxxxxx Xxxxxxx is the Secretary of
the Corporation.
2. The number of outstanding shares of the Corporation at May 27, 1999,
the date of the approval and adoption of the Agreement of Merger to which this
certificate is attached by written consent in lieu of a shareholder meeting, was
100 shares of Common Stock.
3. The principal terms of the Agreement of Merger to which this
certificate is attached, having been duly approved by the Board of Directors of
the Corporation, was then submitted to the shareholders of the Corporation for
approval and adoption by written consent in lieu of a shareholder meeting, and
shareholders of the Corporation holding a number of outstanding shares of each
class equaling or exceeding the vote required in accordance with the Delaware
Corporations Code adopted and approved the Agreement of Merger by executing and
delivering a written consent dated May __, 1999.
4. The percentage vote required of the outstanding shares was more than
50% of the outstanding shares of Common Stock, voting as a single class.
We further declare under penalty of perjury under the laws of the State
of Delaware that the matters set forth in this certificate are true and correct
and of our own knowledge.
Dated: May 27, 1999
/s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
President
/s/ Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxxx
Secretary
