Banyan Rail Services Inc. – ‘PRES14A’ for 2/29/00

On:  Friday, 1/14/00   ·   For:  2/29/00   ·   Accession #:  950116-0-52   ·   File #:  1-09043

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Preliminary Proxy Solicitation Material — Special Meeting   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     Preliminary Proxy Solicitation Material -- Special    43    124K 
                          Meeting                                                

Document Table of Contents

PRES14A
1st Page of 43
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/                                                     
Filed by a Party other than the Registrant / /                                  

Check the appropriate box:                                                      

/X/ Preliminary Proxy Statement                                                 
/ / Confidential, for Use of the Commission Only (as permitted by               
Rule 14a-6(e)(2))                                                       
/ / Definitive Proxy Statement                                                  
/ / Definitive Additional Materials                                             
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12                 

B.H.I.T. Inc. 
-----------------------------------------------------------------------------   
(Name of Registrant as Specified in Its Charter)

----------------------------------------------------------------------------- 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

/X/ No fee required                                                             
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.    

1) Title of each class of securities to which transaction applies:      

    ----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:         

    ----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed     
   pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):        

    ----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:                     

    ----------------------------------------------------------------------

5) Total fee paid:                                                      

    ----------------------------------------------------------------------

/ / Fee paid previously with preliminary materials.                             
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule 
0-11(a)(2) and identify the filing for which the offsetting fee was     
paid previously. Identify the previous filing by registration statement 
number, or the Form or Schedule and the date of its filing.             

1) Amount Previously Paid:                                              

   ___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:                        

   ___________________________________________________________________________
3) Filing Party:                                                        

   ___________________________________________________________________________
4) Date Filed:                                                          

   ___________________________________________________________________________

PRES14A
2nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 2nd
NOTICE OF SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS OF 
B.H.I.T. INC. 
FORMERLY BANYAN HOTEL INVESTMENT FUND 
TO BE HELD FEBRUARY 29, 2000

To the Stockholders of B.H.I.T. Inc.                                            

NOTICE IS HEREBY GIVEN that a Special Meeting in lieu of the Annual Meeting of  
Stockholders of B.H.I.T. Inc. (the "Company") will be held on February 29, 2000,
at 10:00 A.M., local time, at __________________for the following purposes:     

1. To elect four (4) directors to hold office until the next Annual Meeting of  
Stockholders or until their respective successors have been duly elected and    
qualified;                                                                      

2. To consider and vote upon a proposal to amend and restate the Company's      
Certificate of Incorporation;                                                   

3. To consider and vote upon a proposal to amend and restate the By-Laws of the 
Company;                                                                        

4. To consider and vote upon a proposal to sell the Company's 50% interest in   
Metro Franchising Commissary, LLC; and                                          

5. To transact such other business as may properly come before the Meeting or   
any adjournment or adjournments thereof.                                        

Only stockholders of record at the close of business on January 24, 2000 are    
entitled to vote at the Meeting or any adjournments thereof.                    

IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING:                              

PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE   
PROVIDED FOR THAT PURPOSE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED    
STATES. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE  
PRESENT AT THE MEETING YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND 
EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.                              

                                 By Order of the Board of Directors,

                                   Celia Zisfein
                                   Secretary
January 28, 2000                                                                

PRES14A
3rd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 3rd
PROXY STATEMENT 
B.H.I.T. INC. 
FORMERLY BANYAN HOTEL INVESTMENT FUND 
SPECIAL MEETING IN LIEU OF ANNUAL MEETING 
OF STOCKHOLDERS 
TO BE HELD FEBRUARY 29, 2000

This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Directors of B.H.I.T. Inc. (the "Company") for use at the       
Meeting of Stockholders to be held on February 29, 2000, at __________, New     
York, New York, including any adjournment or adjournments thereof (the          
"Meeting"), for the purposes set forth in the accompanying Notice of Meeting.   
The Company has not had a meeting of Stockholders since 1993.                   

Management intends to mail this proxy statement and accompanying form of proxy  
to stockholders on or about January 28, 2000.                                   

Proxies in the accompanying form, duly executed and returned to the management  
of the Company and not revoked, will be voted at the Meeting. Any proxy given   
pursuant to such solicitation may be revoked by the stockholder at any time     
prior to the voting of the proxy by a subsequently dated proxy, by written      
notification to the Secretary of the Company, or by personally withdrawing the  
proxy at the Meeting and voting in person.                                      

The address and telephone number of the principal executive offices of the      
Company are:                                                                    

875 Avenue of the Americas, Suite 1808                                          
New York, New York 10001                                                        
(212) 736-7880                                                                  

OUTSTANDING STOCK AND VOTING RIGHTS 

Only stockholders of record at the close of business on January __, 2000 (the   
"Record Date") are entitled to notice of and to vote at the Meeting. As of the  
Record Date, there were issued and outstanding 12,403,565 shares of the         
Company's common stock, $.01 par value per share (the "Common Stock"), the      
Company's only class of voting securities. Each share entitles the holder to one
vote on each matter submitted to a vote at the Meeting.                         

VOTING PROCEDURES 

The Directors will be elected by the affirmative vote of a plurality of the     
shares of Common Stock, present in person or represented by proxy at the        
Meeting, provided a quorum exists. A quorum is present if, as of the Record     
Date, at least a majority of the outstanding shares of Common Stock are present 
in person or by proxy at the Meeting. The proposal to amend and restate the     
Company's Certificate of Incorporation will be approved                         

 -1-

PRES14A
4th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 4th
upon receiving the affirmative vote of the holders of a majority of the shares  
of Common Stock outstanding on the Record Date. The proposal to amend and       
restate the By-Laws of the Company will be approved upon receiving the          
affirmative vote of a plurality of the shares of Common Stock, present in person
or represented by proxy at the Meeting. The proposal to sell the Company's 50%  
interest in Metro Franchising Commissary LLC will be approved upon receiving the
affirmative vote of the holders of a majority of the shares present and voting  
at the Meeting (not including the shares owned by Mr. Polly, his wife and       
Sheltering Palms Foundation). All other matters at the Meeting will be decided  
by the affirmative vote of the holders of a majority of shares of Common Stock  
with respect thereto, provided a quorum exists. It is currently anticipated that
votes will be counted and certified by an Inspector of Election who is currently
expected to be an employee of the Company or its legal counsel. In accordance   
with Delaware law, abstentions and "broker non-votes" (i.e. proxies from brokers
or nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares as to a matter with   
respect to which the brokers or nominees do not have discretionary power to     
vote) will be treated as present for purposes of determining the presence of a  
quorum. For purposes of determining approval of a matter presented at the       
Meeting, abstentions will be deemed present and entitled to vote and will,      
therefore, have the same legal effect as a vote "against" a matter presented at 
the Meeting. Broker non-votes will be deemed not entitled to vote on the subject
matter as to which the non-vote is indicated. Because of the requirement for an 
absolute majority of the outstanding Common Stock to approve the proposal       
amending and restating the Certificate of Incorporation, broker non-votes will  
also have the same effect as a vote "against" the proposal amending and         
restating the Certificate of Incorporation. Broker non-votes will, however, have
no legal effect on the vote on any other particular matter which requires the   
affirmative vote of the holders of a majority of the shares of Common Stock     
represented at the Meeting.                                                     

The enclosed proxies will be voted in accordance with the instructions thereon. 
Unless otherwise stated, all shares represented by such proxy will be voted as  
instructed. Proxies may be revoked as noted above.                              

The entire cost of soliciting proxies, including the costs of preparing,        
assembling, printing and mailing this Proxy Statement, the proxy and any        
additional soliciting material furnished to stockholders will be borne by the   
Company. Arrangements will be made with brokerage houses and other custodians,  
nominees and fiduciaries to send proxies and proxy materials to the beneficial  
owners of stock, and such persons may be reimbursed for their expenses by the   
Company. Proxies may also be solicited by directors, officers or employees of   
the Company in person or by telephone,                                          

-2- 

PRES14A
5th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 5th
telegram or other means. No additional compensation will be paid to such        
individuals for these services.                                                 

ELECTION OF DIRECTORS 

At this year's Meeting, four (4) directors will be elected to hold office for a 
term expiring at the Annual Meeting of Stockholders to be held in the year 2000.
Each director will be elected to serve until a successor is elected and         
qualified or until the director's earlier resignation or removal.               

At this year's Meeting, the proxies granted by stockholders will be voted       
individually for the election, as directors of the Company, of the persons      
listed below, unless a Proxy specifies that it is not to be voted in favor of a 
nominee for directors. In the event any of the nominees listed below shall be   
unable to serve, it is intended that the Proxy will be voted for such other     
nominees as are designated by the Board of Directors. Each of the persons named 
below has indicated to the Board of Directors of the Company that he or she will
be available to serve.                                                          

Name                                      Position                      
----                                      --------                      
Harvey Polly                                  President, Chief Executive Officer
                        and Director

Morton I. Kalb                                Vice President, Chief Financial   
                                Officer and Director

Willis G. Ryckman, III                        Director                          

Leo Yarfitz                                   Director                          

Harvey Polly, age 71, is a Director, President and Chief Executive officer of   
the Company. Mr. Polly also serves as Chief Executive Officer and a stockholder 
of H/R Industries, Inc. H/R Industries, Inc. is essentially a personal holding  
company which was formed in 1984 under the name Helena Rubinstein, Inc., and was
engaged from 1984 until 1988 in various aspects of the cosmetic business. In    
1988, the name of the corporation was changed to Elite Industries, Ltd., and in 
1990 the name was changed to H/R Industries, Inc. Mr. Polly has been involved in
the railroad business for approximately twenty five years. In 1973, he founded  
and became a major stockholder in Emons Industries, Inc., which was formed on   
the basis of the acquisition of the Maryland and Pennsylvania Railroad Company. 
Since the founding of Emons Industries, Inc., Mr. Polly has been involved in the
railroad freight car business. Mr. Polly has been, since 1975, Chief Executive  
Officer and a stockholder of Railway Freight Car Service, Inc., which is        
involved in the railroad boxcar leasing business. In 1994 and 1995, Mr. Polly   
was Chairman of CAGY Industries, Inc., the publicly held holding                

-3- 

PRES14A
6th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 6th
company for the Columbus and Greenville Railway, the Chattooga and Chicamauga   
Railway and the Redmont Railway and was the largest stockholder with            
approximately 40% of the outstanding shares of common stock. Mr. Polly sold his 
shares and resigned from the Board effective February 16, 1995. From 1988 to    
1997, he has served on the Board of Directors of the Delaware Otsego Corp.,     
which was a publicly held corporation that operated the New York Susquehanna and
Western Railroad. In prior years, Mr. Polly was also a stockholder and heavily  
involved in the operations of the Louisiana Midland Railroad. He is also        
presently a stockholder and officer of SLF of Martin County, Inc., a real estate
development company. From 1987 to 1990, he was a principal shareholder, Chief   
Executive Officer and Director of Hanover Bank of Florida, a publicly held      
corporation.                                                                    

Morton I. Kalb, age 66, is a Director, Vice President and Chief Financial       
Officer of the Company. Mr. Kalb has served as Vice President and Chief         
Financial Officer of the Company since 1995. Mr. Kalb served as Vice President  
of H/R Industries, Inc. since July 1984. Mr. Kalb is also a Certified Public    
Accountant.                                                                     

Willis G. Ryckman, age 54, is a Director of the Company. Mr. Ryckman has served 
as Chairman of the Board of Directors of Tri-Tech Labs since August 1990. From  
December 1966 through August 1990, Mr. Ryckman was Senior Vice President of     
Manufacturers Hanover Trust Company.                                            

Leo Yarfitz, age 83, is a Director of the Company. Mr. Yarfitz has been a       
financial consultant with Sterling Management of Florida since June 1990. From  
October 1987 until October 1989, Mr. Yarfitz served as Chief Financial Officer  
of Hanover Bank of Florida. From October 1989 until December 1989, Mr. Yarfitz  
served as President of Hanover Bank of Florida.                                 

Upon closing of the transactions between Mr. Polly, Sheltering Palms Foundation 
and Arrowhead Holdings Corporation described herein, it is anticipated that Mr. 
Yarfitz and Mr. Ryckman will resign as directors of the Corporation and that two
individuals designated by Arrowhead Holdings Corporation will be elected to     
serve as two members of a four member Board of Directors of the Company for the 
remainder of the term of such directors or until their successors are duly      
elected.                                                                        

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's     
officers and directors and persons who own more than 10% of a registered class  
of the Company's equity securities, to file reports of ownership and changes in 
ownership with the Securities and Exchange Commission ("SEC"). Officers,        
directors, and greater than 10% shareholders are required by SEC regulations to 
furnish the Company with copies of all Section 16(a) forms they file. Based     
solely on the Company's review of the copies of such forms received by the      
Company, the Company believes                                                   

-4- 

PRES14A
7th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 7th
that, during the year ended December 31, 1998, all filing requirements          
applicable to its officers, directors, and greater than 10% beneficial owners   
were complied with, except that Form 4's covering the transfer of 635,000 shares
by Mr. Polly were not timely filed.                                             

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR                    
THE ELECTION OF THE NOMINEES NAMED ABOVE.                                       

EXECUTIVE COMPENSATION

A.      DIRECTOR COMPENSATION                                                   

No arrangements currently exist with respect to payments to the Directors for   
their service on the Company's Board of Directors, and no fees have been paid in
1998 or 1997.                                                                   

B. EXECUTIVE COMPENSATION                                                       

Harvey Polly has served as President, Chief Executive Officer and a Director of 
the Company since February 1995 and has not received compensation for such      
services.                                                                       

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of December 1, 1999, the following persons or entities were known by the     
Company to be the beneficial owner of more than 5% of the outstanding shares of 
Common Stock of the Company:                                                    

                      Amount
  Name of                 and Nature
                    Beneficial              of Beneficial        Percent
Title of Class          Owner                   Ownership            of Class   

Shares of Common        Harvey Polly            2,745,983               22%     
Stock, $.01 Par                                                                 
Value                                                                           

The following table sets forth the ownership of shares owned directly or        
indirectly by the Directors and Principal Officers of the Company as of December
1, 1999:                                                                        

                      Amount
  Name of                 and Nature
                    Beneficial              of Beneficial        Percent
Title of Class          Owner                   Ownership            of Class   

Shares of Common        Harvey Polly            2,745,983(l)(2)         22%     
Stock, $.01 Par         Director,                  shares                       
Value                   President and                                           
Chief Executive                 
Officer                         

 -5-

PRES14A
8th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 8th
Shares of Common        Morton I. Kalb          75,000                   1%     
Stock, $.01 Par         Director,               shares                          
Value                   Vice President and                                      
Chief Financial                 
Officer                         

Shares of Common        Leo Yarfitz            100,000                   1%     
Stock, $.01 Par         Director                shares                          
Value                                                                           

Shares of Common        All Directors        2,920,983                  24%     
Stock, $.01 Par         and Officers of         shares                          
Value                   the Company as                                          
a group (6                      
persons)                        

(1) During 1998, Mr. Polly transferred 500,000 shares to Sheltering Palms       
  Foundation, a Charitable Trust of which he is President and a Director and
100,000 shares to his wife. These shares are not included in the above  
   figure. Mr. Polly also transferred 35,000 shares to unrelated parties which
are also not included above.                                            

(2) Does not include the 2,650,000 Option Shares which will be acquired by Mr.  
Polly and sold to Arrowhead Holdings Corporation upon conclusion of the 
arrangements with Arrowhead Holdings Corporation.                       

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Polly owns 2,745,983 shares of the Company's Common Stock and Sheltering    
Palms Foundation, (the "Foundation") a not for profit charitable entity         
controlled by Mr. Polly and his wife, owns 500,000 shares of the Company's      
Common Stock, a total of 3,245,983 shares (the "Polly Shares.) In 1995, Mr.     
Polly acquired the Polly Shares (not including 100,000 shares later transferred 
to his wife) pursuant to a tender offer and an agreement with the Company made  
on August 4, 1994, as amended. In May of 1998, Mr. Polly transferred 500,000 of 
such shares to the Foundation.                                                  

Under the terms of his agreement with the Company, Mr. Polly has the right to   
acquire an additional 2,650,000 shares of the Company's Common Stock at a       
purchase price of $.22 a share (the "Option Shares").                           

Since Mr. Polly acquired control of the Company in 1995, the Company has pursued
various acquisition and business combinations, but has been unable to conclude  
any transactions which management considered appropriate and in the best        
interest of the stockholders of the Company, other than the acquisition by the  
Company of its 50% interest in Metro Franchising Commissary LLC.                

-6- 

PRES14A
9th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 9th
Arrowhead Holdings Corporation is a diversified holding company, whose principal
holding is Vesper Corporation. Vesper Corporation is itself a diversified       
manufacturing and distributing corporation owning business entities which       
produce aircraft and air space ducting systems, gears, lubricating systems,     
steel lockers, storage systems and high performance strainers. In addition,     
Arrowhead also owns subsidiaries involved in commercial leasing and real estate 
and a variety of other investments.                                             

In order to further the interests of the stockholders of the Company, on August 
___, 1999, Mr. Polly and the Foundation entered into an agreement with Arrowhead
Holdings Corporation to sell the Polly Shares and the Option Shares to Arrowhead
Holdings Corporation. Upon exercise of the right to the Option Shares, Mr. Polly
will sell 5,370,563 shares for $1,540,276 and the Foundation will sell 500,000  
shares for $142,724. Upon closing of the transaction with Arrowhead Holdings    
Corporation, it will own a total of 5,870,563 shares or 39% of the total of the 
then outstanding shares of Common Stock of the company and will be in a position
to control the Company.                                                         

Arrowhead Holdings Corporation's obligation to conclude its arrangements to     
acquire the Polly Shares and the Option Shares is conditioned upon, among other 
things, approval by the stockholders of the Company to amend and restate the    
certificate of incorporation of the Company presented to the Meeting, approval  
to amend and restate the By-Laws of the Company and approval by the stockholders
(other than Mr. Polly, Mrs. Polly and the Foundation) of the sale of the        
Company's 50% interest in Metro Franchising Commissary LLC to Mr. Polly.        

APPROVAL OF THE SALE OF THE COMPANY'S 50% INTEREST IN 
METRO FRANCHISING COMMISSARY LLC

The Board of Directors of the Company unanimously recommends that the           
stockholders approve the proposal to sell the Company's 50% interest in Metro   
Franchising Commissary LLC ("Metro") to Mr. Polly. The Company acquired its     
interest for $1,005,000 in cash in May 1998. In negotiating the agreement to    
acquire the Polly Shares and the Option Shares, Arrowhead Holdings Corporation  
made divestiture of such interest a condition as the operations of Metro do not 
meet Arrowhead Holdings Corporation's strategic business objectives.            

Metro is engaged in the business of opening Dunkin Donuts Quick Service         
Restaurant locations in Exxon service stations in the New York, New Jersey and  
Connecticut areas. It has leased property in Long Island City where Dunkin      
Donuts Products are baked for delivery to various locations. The retail         
locations are selected by Metro with Dunkin Donuts and Exxon's approval. Each   
retail location is renovated and equipped by Metro and operated by the station  
operator. All baked products are purchased from                                 

-7- 

PRES14A
10th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 10th
Metro and the station operator pays Metro a royalty fee based on sales, a       
portion of which is remitted to Dunkin Donuts. Metro's baking facility was fully
operational on December 31, 1998. The first retail location commenced operations
in December 1998 and at the present time, there are seven retail locations of a 
group of sixteen locations originally anticipated.                              

The Metro unaudited statement of operations for the six months ended June 30,   
1999 show a net loss of $58,082 and members' capital at the end of such         
six-month period of $847,202. The bulk of Metro's assets are represented by     
property and equipment and franchise and license fees. Present indications are  
that operations of Metro will continue to be unprofitable until additional      
retail locations are established and that substantial additional capital will be
required to complete the desired number of retail locations.                    

The Company has approached several unrelated entities with a view to the sale   
and divestiture of its interest in Metro and has received only one indication of
interest for $800,000. Mr. Polly has agreed to acquire the Metro interest for   
$1,000,000 in connection with the consummation of the transactions contemplated 
by the agreement with Arrowhead Holdings Corporation.                           

The Company's agreement to the consideration to be paid by Mr. Polly for the    
Company's interest in Metro is based upon an assessment of the financial value  
of its interest in Metro. To insure that the Company receives fair market value,
the Company has engaged Value Management Inc. to evaluate the fairness, from a  
financial point of view, to the stockholders of the consideration to be paid by 
Mr. Polly. Value Management Inc. has extensive experience in undertaking        
valuations and fairness opinions.                                               

In formulating an opinion on the matter, Value Management Inc., among other     
things, (1) reviewed and considered the current operations of Metro; (2)        
reviewed and considered certain financial and operating data, including         
financial forecasts concerning Metro and provided by the management of Metro;   
and (3) held discussions with the management of Metro and the Company concerning
the past and present operations and financial condition and prospects of Metro. 

In an opinion letter dated November 30, 1999, Value Management Inc. concluded   
that the consideration to be paid by Mr. Polly in respect to the sale of the    
Company's interest in Metro is fair, from a financial point of view, to the     
stockholders of the Company.                                                    

A copy of such fairness opinion setting forth the assumptions made, the matters 
considered, the scope and limitations of the review undertaken and the          
procedures followed by Value Management Inc. in rendering its opinion is        
attached to the proxy statement as Exhibit A.                                   

-8- 

PRES14A
11th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 11th
In accordance with the Delaware Corporation Law, Section 271, the sale of       
Company's 50% interest in Metro is required by Delaware state law or the by-laws
of the Company to be submitted to a stockholder vote. Due to the related party  
interest and conflict, the potential impact on the Company, the advice and      
counsel and by resolution of the Board of Directors, the sale is submitted to   
the Company's stockholders for approval by a majority of the shares present and 
voting at the meeting (not including the Polly Shares and the shares owned by   
Mr. Polly's wife and Sheltering Palms Foundation) although, under Delaware law, 
only the affirmative vote of at least a majority of the total number of shares  
present and voting at the meeting would be required to adopt this proposal. If  
the stockholders do not approve the divestiture proposal, the agreement with    
Arrowhead Holdings Corporation may be terminated at Arrowhead Holdings          
Corporation's discretion and if so terminated would be of no further force and  
effect.                                                                         

THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL TO SELL THE COMPANY'S 50%     
INTEREST IN METRO TO MR. POLLY IS IN THE BEST INTERESTS OF THE COMPANY AND      
UNANIMOUSLY RECOMMENDS A VOTE FOR ITS APPROVAL.                                 

PROPOSAL TO AMEND AND RESTATE THE COMPANY'S CERTIFICATE OF
INCORPORATION WHICH AMONG OTHER THINGS WILL LIMIT 
THE NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY 
OWNED BY ANY STOCKHOLDER OF THE COMPANY 

The certificate of incorporation of the Company currently in effect was designed
and adopted to implement the Company's operation as a real estate investment    
trust ("REIT"). The Company discontinued its REIT status in 1995 and the current
certificate of incorporation contains provisions which have no application in   
light of the Company's present operations. Arrowhead Holdings Corporation and   
the Company believe that it is in the best interests of the stockholders of the 
Company to amend and restate the certificate of incorporation of the Company in 
the manner set forth in Exhibit B. Among the changes reflected in the proposed  
amendment and restatement to the Company's certificate of incorporation are     
provisions to protect the Company from a possible limitation on its net         
operating loss carry forwards under Section 382 of the Internal Revenue Code.   
The amended and restated certificate of incorporation enables the Board of      
Directors of the Company to cause the Company to refuse to recognize an         
acquisition of the Common Stock of the Company by any person or entity, directly
or indirectly, which would cause such person or entity (1) to be treated as a   
"5% shareholder" within the meaning of Section 382 of the Internal Revenue Code;
(2) to be treated as a holder of Common Stock of the Company in an amount that  
could otherwise result in a limitation on the use of, or loss of, the Company's 
net operating loss carry forwards; or (3) to be the beneficial owner (as such   
term is defined in Rule 13d-3 promulgated under the Securities Act of 1934, as  
amended or any successor or replacement                                         

-9- 

PRES14A
12th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 12th
rule) of more than 4.5% of the outstanding shares of the Common Stock of the    
Company.                                                                        

Arrowhead Holdings Corporation and the Company regard the Company's net         
operating loss carry forwards as a valuable asset of the Company and believe    
that it is in the best interests of the stockholders of the Company to amend and
restate the certificate of incorporation in the manner set forth in Exhibit B.  

THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSED AMENDMENT AND RESTATEMENT OF  
THE COMPANY'S CERTIFICATE OF INCORPORATION IS IN THE BEST INTERESTS OF THE      
COMPANY AND UNANIMOUSLY RECOMMENDS A VOTE FOR ITS APPROVAL.                     

PROPOSAL TO AMEND AND RESTATE THE COMPANY'S BY-LAWS 

The By-Laws of the Company currently in effect were designed and adopted to     
implement the Company's operations as a real estate investment trust ("REIT").  
The Company discontinued its REIT status in 1995 and the current By-Laws contain
many provisions which have no application in light of the Company's present     
operations. Arrowhead Holdings Corporation and the Company believe that it is in
the best interests of the shareholders of the Company to amend and restate the  
By-Laws of the Company in the manner set forth in Exhibit C.                    

THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL TO AMEND AND RESTATE THE      
BY-LAWS OF THE COMPANY IS IN THE BEST INTERESTS OF THE COMPANY AND UNANIMOUSLY  
RECOMMENDS A VOTE FOR ITS APPROVAL.                                             

OTHER MATTERS 

The Board is not aware of any matter not referred to in the enclosed form of    
proxy that will be presented for action at the meeting. If any such matter      
properly comes before the meeting, the proxies in the accompanying form will be 
voted with respect thereto in accordance with the judgment of the person or     
persons voting such proxies.                                                    

The Company's Transfer Agent is to perform certain services in connection with  
the solicitation of the proxies, including tabulation of proxies and personal or
telephone inquiries to stockholders or brokers, banks or other persons acting as
custodians. For these services, the Transfer Agent will receive a fee at its    
customary rate and reimbursement of certain out-of-pocket expenses. Brokers,    
banks and other persons acting as custodians may be reimbursed for certain      
expenses incurred by them in obtaining instructions from beneficial owners of   
the Company's Common Stock. In addition to use of the mails, directors and      
officers of the Company may, without compensation other than their regular      
compensation, solicit proxies from stockholders by telephone or in person. All  
costs of solicitation will be borne by the Company.                             

-10-

PRES14A
13th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 13th
STOCKHOLDER PROPOSALS 

A proposal by a stockholder intended for inclusion in the Company's proxy       
statement for the 2000 annual meeting must be received by the Company at the    
address noted immediately above, to the attention of _______________, Secretary,
on or before April 30, 2000, in order to be eligible for such inclusion.        

ANNUAL REPORT 

The Company's 1998 Annual Report to Stockholders, which includes a copy of the  
Company's Annual Report on Form 10-K for 1998 (including the financial          
statements and schedules thereto), as filed with the Securities and Exchange    
Commission ("1998 Annual Report") is being delivered concurrently with this     
Proxy Statement. Stockholders are urged to review carefully the financial       
information contained in the 1998 Annual Report.                                

Please sign the proxy and return it promptly in the enclosed envelope to which  
no postage need be affixed if mailed within the United States.                  

New York,       New York                                                        
_____________, 2000.                                                            

PRES14A
14th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 14th
                                                                       EXHIBIT A

Value                                                                           
Management                                                                      
Inc.                                           The Business Valuation Specialist
================================================================================

November 30, 1999                                                               

B.H.I.T., Inc.                                                                  
c/o: William L. Weiss                                                           
110 East 59th St.                                                               
New York, NY 10022                                                              

Re: Fairness of Sale of B.H.I.T.'s Interest in Metro Franchising Commissary, LLC
--------------------------------------------------------------------------------

Dear Mr. Weiss:                                                                 

As you requested, we have prepared an opinion on the proposed sale of B.H.I.T., 
Inc.'s (referred to herein as "BHIT") fifty percent (50%) interest in Metro     
Franchising Commissary, LLC (referred to herein as "Metro or the "Company") to  
Mr. Harvey Polly. The purpose of this opinion is to establish the fairness to   
BHIT's stockholders, from a financial point of view, of the proposed sale to Mr.
Polly. Mr. Polly has agreed to acquire BHIT's fifty percent (50%) interest in   
Metro for one million dollars ($1,000,000). This letter will present the factors
considered and approaches utilized in making this determination. The findings of
this valuation are subject to certain limiting conditions (Exhibit 1).          

DEFINITION OF FAIR MARKET VALUE                                                 
-------------------------------                                                 

In rendering this opinion, we considered the fair market value of Metro. The    
definition of "fair market value" employed in this appraisal is the price at    
which an interest in Metro would change hands between a willing buyer and       
willing seller, when the former is not under any compulsion to buy and the      
latter is not under any compulsion to sell, both parties having reasonable      
knowledge of relevant facts.                                                    

OPINION                                                                         
-------                                                                         

In the course of preparing this opinion, we spoke with Stuart Cohen, one of the 
managers of Metro, about the history and evolution of Metro, its operations,    
financial performance, competition, markets and marketing efforts, and its      
outlook for the future. We visited one of the Company's retail franchises       
(located at 1550 Bedford Ave., Brooklyn, NY) and                                

113 Fox Hill Dr. o Newtown, PA 18940-3648 o 2009 Chestnut St. 
 Philadelphia, PA o 19103-3307 o Tel (215) 598-9310 o Fax (215) 598-0589

A-1 

PRES14A
15th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 15th
contacted each of the other locations. We have been supplied with copies of:    

o    Compiled financial statements for Metro Franchising Commissary, LLC for the
    six months ended June 30, 1999 and for the nine months ended September 30,
1999, as prepared by the certified public accounting firm of Nemiroff,
Cosmas & Company, LLP;                                                

o    A copy of an Operating Agreement for Metro Franchising Commissary, LLC     
   dated May 28, 1998 by and among Metro Franchising Bakery, LLC, Subex, LLC
and B.H.I.T., Inc.                                                    

o    A listing by address of Metro's current seven retail locations, its baking 
     center and the addresses of three potential sites for new retail locations.

o    Copies of several written correspondences involving Harvey Polly, President
of BHIT, including: a letter dated 2/22/99 to Don Kleila of FKB Donuts
    asking if Mr. Kleila was interested in purchasing BHIT's stock in Metro; a
   letter dated 2/22/99 to Paul Waltzer and Stuart Cohen asking if they were
   interested in purchasing BHIT's stock in Metro; a letter dated 5/25/99 to
 Paul Waltzer and Stuart Cohen asking them to provide an explanation for
     the shortfall in capital and for the longer-than-planned development period
   of Metro; a letter dated 6/2/99 from Paul Waltzer and Stuart Cohen to Mr.
Polly in response to his letter to them dated 5/25/99; a letter dated 
   6/8/99 from Mr. Polly to William Colianni of Holding Capital Corp. asking
  if he would have an interest in buying the Metro stock from Mr. Polly if
 Mr. Polly sold his BHIT stock; and, a letter to Mr. Polly from James W.
     Donaghy, President of Subex, LLC, stating that Subex would have an interest
in purchasing BHIT's stock in Metro at book value.                    

Additionally, the Company furnished other data we considered relevant in the    
preparation of this appraisal. We have relied upon the accuracy and the         
completeness of the material furnished to us and have not independently verified
the information contained in such material.                                     

In establishing the opinion determined herein, we have taken into consideration 
IRS Revenue Ruling 59-60, which establishes guidelines for appraising stock of a
closely-held company. This revenue ruling states that no general formula is     
applicable to the many different valuation situations. Various factors, both    
endogenous and exogenous to the Company, must be considered. Such factors are to
include:                                                                        

o    An understanding of the business and its evolution over time. Knowledge of 
  the Company's development may shed insight as to its future performance.

o    Degree and level of competition.                                           

                                                                             VMI
                                                                             ===
A-2 

PRES14A
16th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 16th
o    Book value.                                                                

o    The financial condition of the business.                                   

o    The earnings and cash flow capacity of the Company.                        

o    Transactions in the stock of the Company.                                  

o    The condition and outlook of the economy in the Company's market area.     

o    The condition and outlook of the industry to which the Company belongs.    

o    The attitude of investors toward companies which are comparative to the    
subject Company.                                                      

The valuation methods considered in rendering our opinion include: the net asset
value of Metro, the present value of the Company's expected cash flows, and an  
examination of the private transaction market for sales of similar companies.   

Based on all factors, it is our opinion that $1,000,000 for BHIT's fifty percent
interest in Metro is not less than current fair market value. Stated otherwise, 
we believe that a purchase price of $1,000,000 for BHIT's fifty percent interest
in Metro Franchising Commissary, LLC is fair to BHIT stockholders.              

Respectfully submitted,                                                         

Value Management Inc.                                                           

/s/ Andrew Wilusz                               /s/ Edward A. Wilusz            
------------------------                        ----------------------------    
Andrew Wilusz                                   Edward A. Wilusz, ASIA, CFA     
Financial Analyst                               President                       

                                                                             VMI
                                                                             ===

A-3 

PRES14A
17th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 17th
                                                                       EXHIBIT B

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
B.H.I.T., INC.

        The Certificate of Incorporation of B.H.I.T., Inc. is hereby amended and
restated in its entirety, in compliance with the requirements of the Delaware   
General Corporation Law, to read as follows:                                    

1. The name of the corporation (hereinafter referred to as the  
"Corporation") shall continue to be B.H.I.T., Inc.                              

       2. The address of the registered office of the Corporation in the State
of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington,   
Delaware 19801. The name of its registered agent at such address shall be The   
Corporation Trust Company.                                                      

   3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General     
Corporation Law.                                                                

       4. The total number of shares of stock which the Corporation shall have
authority to issue is 20,000,000. All such shares are to be Common Stock, par   
value of $0.01 per share and are to be of one class.                            

      5. In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors of the Corporation is     
expressly authorized to make, alter and repeal the by-laws of the Corporation,  
subject to the power of the stockholders of the Corporation to alter or repeal  
any by-laws whether adopted by them or otherwise.                               

       6. A director of the Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a      
director, expect to the extent such exemption from liability or limitation      
thereof is not permitted under the Delaware General Corporation Law as the same 
exists or may hereafter be amended. Any amendment, modification or repeal of the
foregoing sentence shall not adversely affect any right or protection of a      
director of the Corporation hereunder in respect of any act or omission         
occurring prior to the time of such amendment, modification or repeal.          

     7. (a) Each holder of shares of any class of stock of the Corporation
shall upon demand disclose to the Board of Directors in writing such information
with respect to direct and indirect ownership of such shares as the Board of    
Directors deems necessary to enforce the provisions of this Section 7.          

          (b) Whenever it is deemed by the Board of Directors to be reasonably
necessary to protect the Corporation from a possible limitation on its net      
operating loss carry forwards or built in losses (collectively, "NOLS") under   
Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), any  
regulation thereunder or any replacement or similar provision of any federal or 
state tax law or regulation, the Board of Directors may require a statement or  

B-1 

PRES14A
18th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 18th
affidavit from each proposed transferee of shares of any class of stock of the  
Corporation setting forth the number of shares of all classes of stock of the   
Corporation already owned, or treated as owned under Section 382 of the Code, by
such proposed transferee in a form specified by the Board of Directors, and, in 
connection therewith, if the proposed transfer may result in a limitation on the
use of, or a loss of, any NOLs, the Board of Directors shall have the right, but
not the duty, to cause the Corporation to refuse to transfer such shares to the 
proposed transferee. All contracts for the sale or other transfer of shares     
shall be subject to the provisions of this Section 7. For purposes of this      
Section 7, the term "shares" includes any option, contingent purchase right,    
warrant, convertible debt instrument, put, contract or similar interest or      
instrument with respect to shares.                                              

          (c) Notwithstanding any other provision of this Amended and Restated
Certificate of Incorporation to the contrary, and subject to the provisions of  
subsection 7(d), there shall be a limit on the number of shares of capital stock
of the Corporation owned by any shareholder of the Corporation as set forth in  
the following sentence, such limitation herein referred to as the "Limit." No   
person or entity shall at any time directly or indirectly acquire any shares of 
any class of stock of the Corporation which could cause such person or entity   
(1) to be treated as a "5-percent shareholder" within the meaning of Section 382
of the Code, (2) to be treated as a holder of capital stock of the Corporation  
in an amount that could otherwise result in a limitation on the use of, or loss 
of, the Corporation's NOLs, or (3) to be the beneficial owner (as such term is  
defined in Rule l3d-3 promulgated under the Securities Exchange Act of 1934, as 
amended or any successor or replacement rule) of more than 4.5% of the          
outstanding shares of capital stock of the Corporation. Shares of any class of  
stock of the Corporation which are proposed to be acquired by a person in excess
of the Limit at any time shall be deemed "Excess Shares."                       

              (i) Any contract for the sale or other transfer of shares of any
class of stock of the Corporation which would, if consummated, result in a      
transferee owning Excess Shares, and any transfer of shares of any class of     
stock of the Corporation which would result in a transferee owning Excess Shares
shall, as to the Excess Shares, be null and void and be deemed an acquisition by
such transferee of such Excess Shares for the account of the Corporation. All   
Excess Shares held by such transferee for the account of the Corporation shall  
cease to be outstanding and shall cease to be entitled to dividends, voting     
rights and other benefits with respect to such Excess Shares, excepting only the
holder's right to payment from the Corporation of the price determined and      
payable as set forth below.                                                     

            (ii) Upon receipt of notice of the existence of Excess Shares,
the Corporation, at the direction of the Board of Directors, by notice to the   
holder thereof, may demand that the holder deliver the Excess Shares to the     
Corporation. Upon issuance of such demand, the Excess Shares shall be deemed    
cancelled and the holder shall be entitled to receive from the Corporation a    
price determined and payable as hereinafter set forth. Subject to the limitation
on payment set forth below, the price of each Excess Share called for delivery  
shall be the average daily per share closing sales price if the class of stock  
of the Corporation comprising the Excess Share is listed on a national          
securities exchange, or on the National Association of Securities Dealers Inc.  
Automated Quotation system or any similar or successor system and if such class 
of stock is not so listed, shall be the mean between the average                

B-2 

PRES14A
19th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 19th
published per share closing bid and asked prices, in each case during the thirty
day calendar period ending on the business day prior to receipt by the holder of
the notice for delivery, or if there have been no sales on a national securities
exchange or such system and no published bid and asked quotations with respect  
to such class of stock of the Corporation during such thirty-day calendar       
period, the price shall be the price determined by the Board of Directors in    
good faith.                                                                     

               (iii) Unless the Board of Directors shall determine that it is in
the interest of the Corporation to make earlier payment of all of the amount    
determined as the price per share in accordance with subsection 7(c)(ii), the   
price shall be payable only upon the liquidation of the Corporation and shall   
not exceed an amount which is the sum of the per share distributions designated 
as liquidation distributions and return of capital distributions declared with  
respect to other shares of the Corporation of the same class or series, and no  
interest shall accrue with respect to the period subsequent to the issuance by  
the Corporation of the demand to the date of such payment.                      

        (d) The Board of Directors in their discretion may exempt from the
Limit (i) ownership of certain designated shares while owned by a person or     
entity who has provided the Board of Directors with evidence and assurance      
acceptable to the Board of Directors that no NOLs of the Corporation would be   
lost or limited thereby, or (ii) any other ownership if the Board of Directors  
determine that such exception is in the best interests of the Corporation.      

       (e) Nothing contained in its Amended and Restated Certificates of
Incorporation, or in this Section shall limit the authority of the Board of     
Directors to take such other action as they deem necessary or advisable to      
protect the value of the NOLs to the Corporation.                               

         (f) if any provision of this Section or any application of any such
provision is determined to be invalid by an federal or state court having       
jurisdiction over the issues, the validity of the remaining provisions shall not
be affected and other applications of such provisions shall be affected only to 
the extent necessary to comply with the determination of such court. To the     
extent this Section may be inconsistent with any other provision, this Section  
shall be controlling.                                                           

   8. The Corporation reserves the right at any time, and from time to
time, to amend, alter, change or repeal any provision contained in this         
Certificate of Incorporation, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or inserted, in the manner  
now or hereafter prescribed by law.                                             

 B-3

PRES14A
20th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 20th
     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed this ________________________day of ______________________________,    
____________________.                                                           

              B.H.I.T., INC.

                                   By: _______________________________
             Name:
              Title:

 B-4

PRES14A
21st Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 21st
                                                                       EXHIBIT C

AMENDED AND RESTATED

BY-LAWS 

OF

B.H.I.T., INC.
EFFECTIVE _____________ __, ____

ARTICLE I - OFFICES 
------------------- 

       Section 1.1 Registered Office. The registered office of the Corporation
shall be as stated in the Certificate of Incorporation or at such other location
within the State of Delaware to which the registered office shall be changed by 
action of the Board of Directors.                                               

        Section 1.2 Other Offices. The Corporation may also have offices at such
other places, within or without the State of Delaware, as the Board of Directors
may, from time to time, determine or the business of the Corporation may        
require.                                                                        

 ARTICLE II - SHAREHOLDERS' MEETINGS
 -----------------------------------

     Section 2.1 Place of Shareholders' Meetings. Meetings of shareholders
shall be held at such places within or without the State of Delaware as may be  
fixed from time to time by the Board of Directors.                              

 C-1

PRES14A
22nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 22nd
Section 2.2 Annual Meeting. A meeting of the shareholders of the
Corporation shall be held, on such date and at such time as the Board of        
Directors may determine, or as stated in the notice of the meeting.             

      Section 2.3 Special Meetings. Special meetings of the shareholders may
be called at any time:                                                          

        (a) By the Chairman of the Board or the President of the
Corporation; or                         

(b) By a majority of the Board of Directors; or 

             (c) By shareholders entitled to cast at least 20% of the vote
                  that all shareholders are entitled to cast at the meeting.

    Upon the written request of any person or persons entitled to call a
special meeting, which request shall set forth the purpose for which the meeting
is desired, it shall be the duty of the Secretary to fix the date of such       
meeting to be held at such time, not less than five nor more than sixty days    
after the receipt of such request, as the Secretary may determine, and to give  
due notice thereof. If the Secretary shall neglect or refuse to fix the date of 
such meeting and to give notice thereof within five days after receipt of such  
request, the person or persons calling the meeting may do so.                   

     Section 2.4 Notices of Shareholders' Meetings. Written notice stating
the date, place and hour and, if required by law or these By-laws, the purpose, 
of any meeting of the shareholders, shall be given to each shareholder of record
entitled to vote at the meeting at least five days prior to the day named for   
the meeting, unless otherwise required by law. When a                           

 C-2

PRES14A
23rd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 23rd
meeting is adjourned, it shall not be necessary to give any notice of the       
adjourned meeting or of the business to be transacted at an adjourned meeting,  
other than by announcement at the meeting at which such adjournment is taken.   

       Section 2.5 Quorum of and Action by Shareholders. Shareholders entitled
to cast at least a majority of the votes which all shareholders are entitled to 
cast on the particular matter shall constitute a quorum for the purpose of      
considering such matter, and, unless otherwise specifically provided by law, the
acts, at a duly organized meeting, of the shareholders present, in person or by 
proxy, entitled to cast at least a majority of the votes which all shareholders 
present are entitled to cast, shall be the acts of the shareholders. The        
shareholders present at a duly organized meeting can continue to do business    
until adjournment, notwithstanding the withdrawal of enough shareholders to     
leave less than a quorum. If a meeting cannot be organized because a quorum has 
not attended, those present may, except as otherwise provided by law, adjourn   
the meeting to such time and place as they may determine, but in the case of any
meeting called for the election of Directors, those shareholders who attend any 
such adjourned meeting, although less than a quorum as fixed in this Section    
shall nevertheless constitute a quorum for the purpose of electing Directors.   

Section 2.6 Voting. At least five days before any meeting of    
shareholders, the officer or agent having charge of the transfer books of the   
Corporation shall make a complete list of the shareholders entitled to vote at  
such meeting, arranged in alphabetical order with the address of and the number 
of shares held by each, which list shall be kept on file at the registered      
office of the Corporation and shall be subject to inspection by any shareholder 
at any time during usual business hours. Such list shall also be produced and   
kept open at the time and place of the                                          

 C-3

PRES14A
24th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 24th
meeting and shall be subject to the inspection of any shareholder during the    
whole time of the meeting.                                                      

       At all shareholders' meetings, shareholders entitled to vote may attend
and vote either in person or by proxy. All proxies shall be in writing, executed
by the shareholder or by a duly authorized attorney in fact, and shall be filed 
with the Secretary of the Corporation. A proxy, unless coupled with an interest,
shall be revocable at will, notwithstanding any other agreement or any provision
in the proxy to the contrary, but the revocation of a proxy shall not be        
effective until the notice thereof has been given to the Secretary of the       
Corporation. No unrevoked proxy shall be valid after eleven months from the date
of execution, unless a longer time is expressly provided therein; but in no     
event shall a proxy, unless coupled with an interest, be voted on after three   
years from the date of its execution.                                           

    Except as otherwise specifically provided by law, all matters coming
before the meeting shall be determined by a vote of shares. Such vote shall be  
taken by voice unless a shareholder demands before the election begins that it  
be taken by ballot, in which event the vote shall be taken by written ballot,   
and the Judge or Judges of Election or, if none, the Secretary of the Meeting   
shall tabulate and certify the results of such vote.                            

ARTICLE III - BOARD OF DIRECTORS
--------------------------------

Section 3.1 Number, Election and Term. Except as otherwise provided in the      
Certificate of Incorporation, the number of directors which shall constitute the
whole Board of Directors shall be not less than three (3) nor more than nine    
(9), as may be determined from time to time by resolution of the Board of       
Directors. The directors shall be elected at the annual                         

 C-4

PRES14A
25th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 25th
meeting of shareholders, except as provided in Section 3.11. Each Director shall
hold office for a term of one year or until the election and qualification of   
his successor. At each Annual Meeting of Shareholders, the Shareholders shall   
elect successors to the Directors, unless the number of Directors is then being 
reduced. Directors may be re-elected without limit as to the number of times. A 
Director shall be an individual at least 21 years of age who is not under legal 
disability. Unless otherwise required by law or by action of the Directors, no  
Director shall be required to give bond, surety or security in any jurisdiction 
for the performance of any duties or obligations hereunder. The Directors in    
their capacity as Directors shall not be required to devote their entire time or
any specified portion of their time to the business and affairs of the          
Corporation. Directors need not be residents of the State of Delaware or        
shareholders of the Corporation.                                                

       Section 3.2 Place of Meeting. Meetings of the Board of Directors may be
held at such place within the State of Delaware or elsewhere as a majority of   
the Directors may from time to time appoint or as may be designated in the      
notice calling the meeting.                                                     

Section 3.3 Regular Meetings. A regular meeting of the Board of 
Directors shall be held annually, immediately following the annual meeting of   
shareholders, at the place where such meeting of the shareholders is held or at 
such other place, date and hour as a majority of the newly elected Directors may
designate. At such meeting, the Board of Directors shall elect officers of the  
Corporation. In addition to such regular meeting, the Board of Directors shall  
have the power to fix by resolution the place, date and hour of other regular   
meetings of the Board.                                                          

 C-5

PRES14A
26th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 26th
        Section 3.4 Special Meetings. Special meetings of the Board of Directors
shall be held whenever ordered by the Chairman of the Board, President, or by a 
majority of the Directors in office.                                            

  Section 3.5 Participation in Meetings by Conference Telephone. Any
Director may participate in any meeting of the Board of Directors or of any     
committee (provided such Director is otherwise entitled to participate), be     
counted for the purpose of determining a quorum thereof and exercise all rights 
and privileges to which a Director might be entitled were the Director          
personally in attendance, including the right to vote, by means of conference   
telephone or other similar communications equipment by means of which all       
persons participating in the meeting can hear each other.                       

Section 3.6 Notices of Meeting of Board of Directors.           

                (a) Regular Meetings. No notice shall be required to be given of
any regular meeting, unless the same is held at other than the time or place for
holding such meetings as fixed in accordance with Section 3.3 of these By-laws, 
in which event one day's notice shall be given of the time and place of such    
meeting.                                                                        

                (b) Special Meetings. Written notice stating the date, place and
hour of any special meeting of the Board of Directors shall be given at least   
one day prior to the date named for the meeting.                                

  Section 3.7 Quorum. A majority of the Directors in office shall be
necessary to constitute a quorum for the transaction of business, and the acts  
of a majority of the Directors present at a meeting at which a quorum is present
shall be considered the acts of the Board of                                    

C-6 

PRES14A
27th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 27th
Directors. If there is no quorum present at a duly convened meeting of the Board
of Directors, the majority of those present may adjourn the meeting from time to
time and place to place.                                                        

       Section 3.8 Informal Action by the Board of Directors. Any action which
may be taken at a meeting of the Directors may be taken without a meeting if a  
consent or consents in writing, setting forth the action so taken, shall be     
signed by all of the Directors and shall be filed with the Secretary of the     
Corporation. Insertion in the minute book of the Corporation shall be deemed    
filing with the Secretary regardless of whether the Secretary or some other     
authorized person has actual possession of the minute book. Written consents by 
all of the Directors executed pursuant to this Section 3.8 may be executed in   
any number of counterparts and shall be deemed effective as of the date set     
forth therein.                                                                  

        Section 3.9 Powers. The business and affairs of the Corporation shall be
managed by its Board of Directors, which may exercise all such powers of the    
Corporation and do all such lawful acts and things as are not by law or by the  
Certificate of Incorporation or by these By-laws directed or required to be     
exercised or done by the shareholders.                                          

      Section 3.10 Removal of Directors by Shareholders. The entire Board of
Directors or any individual Director may be removed from office without         
assigning any cause by the vote of shareholders entitled to cast at least a     
majority of the votes which all shareholders would be entitled to cast at any   
annual election of Directors or such class of Directors. In case the Board of   
Directors or such class of the Board of Directors or any one or more Directors  
is so removed, new Directors may be elected at the same time.                   

C-7 

PRES14A
28th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 28th
      Section 3.11 Vacancies. Vacancies in the Board of Directors, including
vacancies resulting from an increase in the number of Directors, maybe filled by
a majority of the remaining members of the Board of Directors though less than a
quorum, and each person so elected shall be a Director until his successor is   
duly elected by the shareholders, who may make such election at the next annual 
meeting of the shareholders or at any special meeting duly called for that      
purpose and held prior thereto, or until his earlier resignation or removal.    

ARTICLE IV - OFFICERS 
--------------------- 

      Section 4.1 Election and Office. The Corporation shall have a Chairman
of the Board, President, a Secretary and a Treasurer who shall be elected by the
Board of Directors. The Board of Directors may elect as additional officers one 
or more Executive Vice Presidents, and one or more other officers or assistant  
officers. Any number of offices may be held by the same person.                 

      Section 4.2 Term. The officers and assistant officers shall each serve
at the pleasure of the Board of Directors and until the annual meeting of the   
Board of Directors following the next annual meeting of shareholders unless     
removed from office by the Board of Directors during their respective tenures.  

      Section 4.3 The Chairman of the Board: Powers and Duties. The Chairman
of the Board shall be the Chief Executive Officer of the Corporation. The       
Chairman shall preside at all meetings of the Board of Directors and all        
meetings of the shareholders at which the Chairman is present. The Chairman of  
the Board shall exercise general supervision of the President and shall         

C-8 

PRES14A
29th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 29th
have responsibility for directing and coordinating the long-range planning and  
policy-making aspects of the management of the Corporation, including the       
development and review of long-term strategic financial, marketing, production  
and organizational plans, consistent with the aims and policies of the Board of 
Directors generally. The Chairman of the Board, subject to the general authority
of the Board of Directors, shall direct other officers, employees and agents of 
the Corporation in developing, implementing and carrying out such plans and     
policies. In addition, the Chairman of the Board shall be an ex officio member  
of any committees and may execute on behalf of the Corporation all documents and
instruments which may be executed by the President.                             

      Unless otherwise determined by the Board of Directors, the Chairman of
the Board shall have full power and authority on behalf of the Corporation to   
attend and to act and to vote at any meeting of the shareholders of any         
corporation in which the Corporation may hold stock, and, at any such meeting,  
shall possess and may exercise any and all the rights and powers incident to the
ownership of such stock and which, as the owner thereof, the Corporation might  
have possessed and exercised.                                                   

       Section 4.4 The President: Powers and Duties. The President, subject to
the control of the Board of Directors and the Chairman of the Board, shall be   
the principal operating officer of the Corporation and shall have the duties of 
active control and supervision of the regular day-to-day operations of the      
Corporation. The President shall see that all the orders and resolutions of the 
Board of Directors are carried into effect subject, however, to the right of the
directors to delegate any specific powers to any other officer or officers of   
the Corporation. The President shall sign certificates of stock with the        
Secretary or Assistant Secretary, and shall sign and                            

 C-9

PRES14A
30th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 30th
execute, on behalf of the Corporation, all deeds, mortgages, bonds, contracts   
and other instruments. The President shall make reports of the Corporation's    
business to the Board of Directors at such times as the Board shall require. In 
the absence of the Chairman, the President shall preside at all meetings of the 
Board of Directors at which the President is present.                           

Section 4.5 Powers and Duties of the Secretary. Unless otherwise
determined by the Board of Directors, the Secretary shall be responsible for the
keeping of the minutes of all meetings of the Board of Directors, shareholders  
and all committees, in books provided for that purpose, and for the giving and  
serving of all notices for the Corporation. The Secretary shall have charge of  
the corporate seal, the certificate books, transfer books and stock ledgers, and
such other books and papers as the Board of Directors may direct. The Secretary 
shall perform all other duties ordinarily incident to the office of Secretary   
and shall have such other powers and perform such other duties as may be        
assigned by the Board of Directors.                                             

Section 4.6 Powers and Duties of the Treasurer. Unless otherwise
determined by the Board of Directors, the Treasurer shall have charge of all the
funds and securities of the Corporation which may come into his hands. When     
necessary or proper, unless otherwise determined by the Board of Directors, the 
Treasurer shall endorse for collection on behalf of the Corporation checks,     
notes, and other obligations, and shall deposit the same to the credit of the   
Corporation in such banks or depositories as the Board of Directors may         
designate and shall sign all receipts and vouchers for payments made to the     
Corporation. The Treasurer shall supervise and oversee the signing of all checks
made by the Corporation, which checks shall be signed consistent with the manner
the Board of Directors shall direct. The Treasurer shall be responsible for the 
regular entry in books of the Corporation to be kept for such purpose, full and 

C-10

PRES14A
31st Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 31st
accurate account of all funds and securities received and paid on account of the
Corporation. Whenever required by the Board of Directors, the Treasurer shall   
render a statement of the financial condition of the Corporation. The Treasurer 
shall have such other powers and shall perform such other duties as may be      
assigned from time to time by the Board of Directors. The Treasurer shall give  
such bond, if any, for the faithful performance of duties as shall be required  
by the Board of Directors and any such bond shall remain in the custody of the  
President.                                                                      

        Section 4.7 Powers and Duties of Vice Presidents and Assistant Officers.
Unless otherwise determined by the Board of Directors, each Vice President and  
each assistant officer shall have the powers and perform the duties of his      
respective superior officer. Vice Presidents and assistant officers shall have  
such rank and perform such duties as may be designated by the Board of          
Directors, the Chairman or the President.                                       

     Section 4.8 Vacancies. The Board of Directors shall have the power to
fill any vacancies in any office occurring from whatever reason.                

ARTICLE V - Committees of Directors 
----------------------------------- 

        Section 5.1 Committees. The Board of Directors may, by resolution passed
by a majority of the Directors, designate one or more special or standing       
committees, including an Audit Committee. Each such committee shall consist of  
one or more of the Directors of the Corporation. Each such committee shall have 
and may exercise such of the powers of the Board of Directors in the management 
of the business and affairs of the Corporation as may be provided in such       
resolution, except as may be prohibited by law.                                 

C-11

PRES14A
32nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 32nd
ARTICLE VI - CAPITAL STOCK
--------------------------

Section 6.1 Share Certificates. Certificates for shares of the  
Corporation shall be in such form as approved by the Board of Directors. Every  
share certificate shall be signed by the Chairman of the Board or the President 
and by the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary and 
sealed with the corporate seal, which may be a facsimile, engraved or printed,  
but where such certificate is signed by a transfer agent or a registrar, the    
signature of any corporate officer upon such certificate may be a facsimile,    
engraved or printed. The share register or transfer books and blank short       
certificates shall be kept by the Secretary or by any transfer agent or         
registrar designated by the Board of Directors for that purpose.                

   Section 6.2 Transfer of Shares. Except as otherwise provided in the
Certificate of Incorporation, transfer of shares shall be made on the books of  
the Corporation only upon surrender of the share certificate, duly endorsed or  
with duly executed stock powers attached and otherwise in proper form for       
transfer, which certificate shall be cancelled at the time of the transfer.     

        Section 6.3 Determination of Shareholders of Record and Closing Transfer
Books. The Board of Directors may fix a time, not more than fifty days prior to 
the date of any meeting of shareholders, or the date fixed for the payment of   
any dividend or distribution, or the date for the allotment of rights, or the   
date when any change or conversion or exchange of shares will be made or go into
effect, as a record date for the determination of the shareholders entitled to  
notice of or to vote at any such meeting, or entitled to receive payment of any 
such dividend or distribution, or to receive any such allotment of rights, or to
exercise the rights in respect to any                                           

C-12

PRES14A
33rd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 33rd
such change, conversion or exchange of shares or otherwise. In such case, only  
such shareholders as shall be shareholders of record on the date so fixed shall 
be entitled to notice of or to vote at such meeting, or to receive payment of   
such dividend, or to receive such allotment of rights, or to exercise such      
rights, as the case may be, notwithstanding any transfer of any shares on the   
books of the Corporation after any record date fixed as aforesaid. The Board of 
Directors may close the books of the Corporation against transfers of shares    
during the whole or any part of such period, and, in such case, written or      
printed notice thereof shall be mailed at least ten (10) days before the closing
thereof to each shareholder of record at the address appearing on the records of
the Corporation or supplied by the shareholder to the corporation for the       
purpose of notice. While the stock transfer books of the Corporation are closed,
no transfer of shares shall be made thereon. Unless a record date is fixed by   
the Board of Directors for the determination of shareholders entitled to receive
notice of, or vote at, a shareholders' meeting, transferees of shares which are 
transferred on the books of the Corporation within ten days next preceding the  
date of such meeting shall not be entitled to notice of or to vote at such      
meeting. The Corporation may treat the registered owner of each share of stock  
as the person exclusively entitled to vote, to receive notifications and        
otherwise to exercise all the rights and powers of the owner thereof.           

        Secion 6.4 Lost Share Certificates. Unless waived in whole or in part by
the Board of Directors, any person requesting the issuance of a new certificate 
in lieu of an alleged lost, destroyed, mislaid or wrongfully taken certificate  
shall (1) give to the Corporation bond of indemnity with an acceptable surety;  
and (2) satisfy such other reasonable requirements as may be imposed by the     
Corporation. Thereupon, a new share certificate shall be issued to the          

C-13

PRES14A
34th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 34th
registered owner or his assigns in lieu of the alleged lost, destroyed, mislaid 
or wrongfully taken certificate, provided that the request therefor and issuance
thereof have been made before the Corporation has notice that such shares have  
been acquired by a bona fide purchaser.                                         

 ARTICLE VII - NOTICES; COMPUTING TIME PERIODS
 ---------------------------------------------

   Section 7.1 Contents of Notice. Whenever any notice of a meeting is
required to be given pursuant to these By-laws or the Articles of Incorporation 
or otherwise, the notice shall specify the place, day and hour of the meeting   
and, in the case of a special meeting of shareholders or where otherwise        
required by law, the general nature of the business to be transacted at such    
meeting.                                                                        

       Section 7.2 Method of Notice. All notices shall be given to each person
entitled thereto, either personally or by sending a copy thereof through the    
mail or by telegraph, charges prepaid, to such person's address appearing on the
books of the Corporation, or supplied by such person to the Corporation for the 
purpose of notice. If notice is sent by mail or telegraph, it shall be deemed to
have been given to the person entitled thereto when deposited in the United     
States Mail or with the telegraph office for transmission.                      

       Section 7.3 Computing Time Periods. In computing the number of days for
purposes of these By-laws, all days shall be counted, including Saturdays,      
Sundays or holidays; provided, however, that if the final day of any time period
falls on a Saturday, Sunday or holiday, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or holiday. In computing the number
of days for the purpose of giving notice of any meeting, the date upon which the
notice is given shall be counted but the day set for the meeting shall not be   
counted.                                                                        

C-14

PRES14A
35th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 35th
Notice given twenty-four hours before the time set for a meeting shall be deemed
one day's notice.                                                               

ARTICLE VIII - LIMITATION OF DIRECTORS LIABILITY AND
 ---------------------------------------------------

INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
--------------------------------------------------------

      Section 8.1 Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit 
or proceeding (hereinafter, a "proceeding"), whether civil, criminal,           
administrative or investigative, including, without limitation, an action or    
suit by or in the right of the Corporation, by reason of the fact that he or    
she, or a person of whom he or she is the legal representative, is or was a     
Director or Officer of the Corporation or is or was serving at the request of   
the Corporation as a Director or Officer of another Corporation, or of a        
partnership, joint venture, trust or other enterprise, including service with   
respect to employee benefit plans, whether the basis of such proceeding is      
alleged action in an official capacity as Director or Officer or in any other   
capacity, shall be indemnified and held harmless by the Corporation to the      
fullest extent and manner authorized or permitted by the Delaware General       
Corporation Law, as the same exists or may hereafter be amended (but, in the    
case of any such amendment, only to the extent that such amendment permits the  
Corporation to provide broader indemnification rights than said law permitted   
the Corporation to provide prior to such amendment), against all expense,       
liability and loss (including attorneys' fees, judgments, penalties, fines,     
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)   
reasonably incurred or suffered by such person in connection therewith and such 
indemnification                                                                 

C-15

PRES14A
36th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 36th
shall continue as to a person who has ceased to be a Director or Officer and    
shall inure to the benefit of his or her heirs, executors and administrators;   
provided, however, that, except as provided in Section 5 hereof, the Corporation
shall indemnify any such person seeking indemnification in connection with a    
proceeding (or part thereof) initiated by such person only if such proceeding   
(or part thereof) was authorized by the Board of Directors of the Corporation.  
The right to indemnification conferred in this Article shall be a contract right
and each person to whom this right to indemnification applies shall be a third  
party beneficiary of such right and shall be entitled to enforce against the    
Corporation all indemnification and other rights granted to such person by this 
Article. Such right shall include the right to be paid by the Corporation the   
expenses (including attorneys' fees) incurred in any such proceeding in advance 
of its final disposition; provided, however, that, if the Delaware General      
Corporation Law requires, the payment of such expenses incurred by a Director or
Officer in advance of the final disposition of a proceeding shall be made only  
upon delivery to the Corporation of an undertaking, by or on behalf of such     
Director or Officer, to repay all amounts so advanced if it shall ultimately be 
determined that such Director or Officer is not entitled to be indemnified under
this Article or otherwise. Such expenses (including attorneys' fees) incurred by
former Directors and Officers or other employees and agents may be so paid upon 
such terms and conditions, if any, as the Corporation deems appropriate. The    
Corporation may, by action of its Board of Directors, provide indemnification to
employees, agents or fiduciaries of the Corporation or to any person who is or  
was serving at the request of the Corporation as an employee, agent or fiduciary
of another Corporation, or of a partnership, joint venture, trust or other      
enterprise, including service with respect to any employee benefit plan, with   
the same or lesser scope and effect as set forth                                

C-16

PRES14A
37th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 37th
herein and in the other sections of this Article. If and to the extent that the 
Delaware General Corporation Law requires that indemnification be provided in a 
given instance only if the person acted in good faith and in a manner he or she 
reasonably believed to be in or not opposed to the best interests of the        
Corporation, and, with respect to any criminal proceeding, had no reasonable    
cause to believe his or her conduct was unlawful, then termination of any       
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo   
contendere or its equivalent, shall not of itself create a presumption that the 
person did not act in good faith and in a manner which he or she reasonably     
believed to be in or not opposed to the best interests of the Corporation, and, 
with respect to any criminal proceeding, that he or she had reasonable cause to 
believe that his or her conduct was unlawful. If the Delaware General           
Corporation Law so requires, then any person who is otherwise entitled to       
indemnification hereunder with respect to any threatened, pending or completed  
proceeding by or in the right of the Corporation shall be indemnified in respect
of any claim, issue or matter as to which such person shall have been adjudged  
to be liable to the Corporation only if and only to the extent that the Court of
Chancery or the court in which such proceeding was brought shall determine upon 
application that, despite the adjudication of liability but in view of all the  
circumstances of the case, such person is fairly and reasonably entitled to     
indemnity for such expenses which the Court of Chancery or such other court     
shall deem proper.                                                              

      Section 8.2 Determination of Right to Indemnification. Indemnification
under Section 1 above shall be made by the Corporation only as authorized in the
specific case upon a determination, reasonably and promptly made, that          
indemnification of a present or former Director or Officer is proper in the     
circumstances because the person has met the applicable                         

C-17

PRES14A
38th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 38th
standard of conduct for indemnification under this Article and under applicable 
law. Such determination shall be made, with respect to a person who is a        
director or officer at the time of such determination, only (i) by the Board of 
Directors by a majority vote of Directors who were not parties to such          
proceeding ("Disinterested Directors"), even though less than a quorum, or (ii) 
by a Committee of the Disinterested Directors designated by majority vote of the
Disinterested Directors, even though less than a quorum, or (iii) if there are  
no the Disinterested Directors, or if the Disinterested Directors so direct, by 
independent legal counsel in a written opinion or (iv) by the Stockholders.     

     Section 8.3 Expenses in Successful Defense. Notwithstanding any other
provisions of this Article, to the extent that a present or former Director or  
Officer of the Corporation has been successful on the merits or otherwise in    
defense of any proceeding referred to in Section 1 above or in defense of any   
claim, issue or matter therein, he or she shall be indemnified against expenses 
(including attorneys' fees) actually and reasonably incurred by him or her in   
connection therewith.                                                           

        Section 8.4 Request for Indemnification. To request indemnification, the
person seeking indemnification shall submit to the Secretary of the Corporation 
a written claim or request. Such written claim or request shall contain         
sufficient information to reasonably inform the Corporation about the nature and
extent of the indemnification or advance sought. The Secretary of the           
Corporation shall promptly advise the Board of Directors of such request.       

       Section 8.5 Right of Claimant to Bring Suit. If a claim under Section 1
of this Article is not paid in full by the Corporation within thirty days after 
a written claim has been received by                                            

C-18

PRES14A
39th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 39th
the Corporation, the claimant may at any time thereafter bring suit against the 
Corporation to recover the unpaid amount of the claim and, if successful in     
whole or in part, the claimant shall be entitled to be paid also the expense of 
prosecuting such claim. It shall be a defense to any such action (other than an 
action brought to enforce a claim for expenses incurred in defending any        
proceeding in advance of its final disposition where the required undertaking,  
if any is required, has been tendered to the Corporation) that the claimant has 
not met the standards of conduct which make it permissible under the Delaware   
General Corporation Law for the Corporation to indemnify the claimant for the   
amount claimed, but the burden of proving such defense shall be on the          
Corporation. Neither the failure of the Corporation (including its Board of     
Directors, a Committee thereof, independent legal counsel, or its Stockholders) 
to have made a determination prior to the commencement of such action that      
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the Delaware General    
Corporation Law, nor an actual determination by the Corporation (including its  
Board of Directors, a Committee thereof, independent legal counsel, or its      
Stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has  
not met the applicable standard of conduct.                                     

        Section 8.6 Non-Exclusivity of Rights. The rights to indemnification and
the payment of expenses incurred in a proceeding in advance of its final        
disposition conferred in this Article shall not be exclusive of any right which 
any person may have or hereafter acquire under any statute, provision of the    
Certificate of Incorporation, By-Law, agreement, vote of Stockholders or        
Disinterested Directors, or otherwise.                                          

C-19

PRES14A
40th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 40th
     Section 8.7 Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any Director, Officer, employee, agent or        
fiduciary of the Corporation or of another Corporation, or of a partnership,    
joint venture, trust or other enterprise against any expense, liability or loss,
whether or not the Corporation would have the power to indemnify such person    
against such expense, liability or loss under the Delaware General Corporation  
Law.                                                                            

Section 8.8 Interpretation. For purposes of this Article:       

    (a) References to the "Corporation," in this Article VII shall, upon
written resolution of the Corporations Board of Directors, include, in addition 
to the Corporation, any constituent Corporation (including any constituent of a 
constituent) absorbed in a consolidation or merger which, if its separate       
existence had continued, would have had the power and authority to indemnify its
Directors or Officers, so that any person who is or was a Director or Officer of
such constituent Corporation, or is or was serving at the request of such       
constituent Corporation as a Director or Officer of another Corporation, shall  
for purposes of this Article be deemed to hold the same position in the         
Corporation as he or she held in such constituent Corporation.                  

(b) A person who acted in good faith and in a manner he or she  
reasonably believed to be in the interest of the participants and beneficiaries 
of an employee benefit plan shall be deemed to have acted in a manner "not      
opposed to the best interests of the Corporation" as referred to in this        
Article.                                                                        

  Section 8.9 Amendment or Repeal. This Article VII may hereafter be
amended or repealed; provided, however, that no amendment or repeal shall       
reduce, terminate or otherwise adversely affect the right of a person who is or 
was a Director or Officer to obtain indemnification or advancement of expenses  
with respect to a proceeding that pertains to or                                

C-20

PRES14A
41st Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 41st
arises out of actions or omissions that occur prior to the effective date of    
such amendment or repeal, which date cannot be retroactive.                     

ARTICLE IX - FISCAL YEAR
------------------------

   The fiscal year of the Corporation shall end December 31 each year.

ARTICLE X - AMENDMENTS
----------------------

        The shareholders entitled to vote thereon shall have the power to alter,
amend, or repeal these By-laws, by the vote of shareholders entitled to cast at 
least a majority of the votes which all shareholders are entitled to cast       
thereon, at any regular or special meeting, duly convened after notice to the   
shareholders of such purpose. The Board of Directors, by a majority vote of     
those voting, shall have the power to alter, amend, and repeal these By-laws, at
any regular or special meeting duly convened after notice of such purpose,      
subject always to the power of the shareholders to further alter, amend or      
repeal these By-laws.                                                           

ARTICLE XI - INTERPRETATION OF BY-LAWS
--------------------------------------

     All words, terms and provisions of these By-laws shall be interpreted
and defined by and in accordance with the Delaware General Corporation Law, as  
amended, and as amended from time to time hereafter.                            

C-21

PRES14A
42nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 42nd
PROXY 

B.H.I.T. INC. (Formerly Banyan Hotel Investment Fund) 

PROXY FOR SPECIAL MEETING IN LIEU OF ANNUAL MEETING 
OF SHAREHOLDERS OF B.H.I.T. INC.
JANUARY __, 2000

SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS                                   

The undersigned hereby appoints Harvey Polly and Morton I. Kalb and each or any 
one of them (with powers of substitution), proxies for the undersigned to vote  
all shares of common Stock held of record on ________________, 2000 of B.H.I.T. 
Inc. (the "Corporation") which the undersigned would be entitled to vote if     
personally present at the Special Meeting in Lieu of Annual Meeting of          
Shareholders (the "Meeting") to be held in New York, New York on ______________,
2000, and any adjournment thereof, upon the matters set forth in the Notice of  
and Proxy Statement for said Meeting, copies of which have been received by the 
undersigned, and in their discretion, upon all other matters which may properly 
come before said meeting. Without otherwise limiting the generality of the      
foregoing, said proxies are directed to vote as follows:                        

Please mark your votes            FOR            AGAINST             ABSTAIN    
as in this example                [ ]              [ ]                 [ ]      

1. Election of Directors                                                        

For, except vote withheld from the following nominee(s):                  
________________________________                                                

Nominees: Harvey Polly, Morton I. Kalb, Leo Yarfitz, Willis G. Ryckman.   

2. Adoption of amended            FOR            AGAINST             ABSTAIN    
and restated                   [ ]              [ ]                 [ ]   
Certificate of                                                            
Incorporation                                                             

3. Adoption of Amended            FOR            AGAINST             ABSTAIN    
and Restated By-Laws           [ ]              [ ]                 [ ]   

4. Approve the sale of the        FOR            AGAINST             ABSTAIN    
Corporation's 50%              [ ]              [ ]                 [ ]   
ownership in Metro                                                        
Franchising, LLC to                                                       
Harvey Polly                                                              

5. In their discretion to         FOR            AGAINST             ABSTAIN    
act upon such other            [ ]              [ ]                 [ ]   
matters as may properly                                                   
come before the Meeting                                                   
or any adjournment thereof                                                

-1- 

PRES14A
Last Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 43rd
This proxy, when properly executed, will be voted in the manner directed herein 
by the shareholder. If no specification is made, this proxy will be voted for   
the nominees listed for Directors and in favor of the above proposals.          

Your proxy is important to assure a quorum at the Meeting whether or not you    
plan to attend the Meeting in person. You may revoke this proxy at any time, and
the giving of it will not affect your right to attend the Meeting and vote in   
person.                                                                         

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED   
ENVELOPE.                                                                       

SIGNATURE(S)______________________  DATE _________________                      

NOTE: Please sign exactly as name appears. When shares are held as joint        
tenants, both should sign. When signing as attorney, executor, administrator,   
trustee or guardian, please give full title as such. If a corporation, please   
sign in full corporate name by president or other authorized officer and if a   
partnership, please sign in the partnership name by authorized person.          

-2- 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PRES14A’ Filing		Date		First		Last			Other Filings
		4/30/00		13
For Period End:		2/29/00		2		3
		1/28/00		2		3
		1/24/00		2
Filed on:		1/14/00
		12/1/99		7
		11/30/99		10		14
		9/30/99		15					10QSB
		6/30/99		10		15			10QSB
		12/31/98		7		10			10KSB
		5/28/98		15
		2/16/95		6
		8/4/94		8
									List all Filings