AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER made as of June 11, 1999, by and
among Base Ten Systems, Inc., a New Jersey corporation having its principal
office at One Electronics Drive, Trenton, New Jersey 08619, ("Base Ten"), Ex-BTS
Clinical, Inc., a New Jersey corporation wholly-owned by Base Ten having its
principal office at One Electronics Drive, Trenton, New Jersey 08619 ("BTSC")
(Base Ten and BTSC collectively referred to as the "Purchasers"), Almedica
International Inc., a Delaware corporation having its principal office at 75
Commerce Drive, Allendale, New Jersey 07401 ("Almedica"), and Almedica
Technology Group Inc., a New Jersey corporation wholly-owned by Almedica having
its principal office at 900 Lanidex Plaza, Suite 202, Parsippany, New Jersey
07054 ("ATG") (Almedica and ATG collectively referred to as the "Sellers").
WHEREAS, Almedica owns 736 shares of common stock, without par
value, of ATG, which Almedica represents constitute all of the issued and
outstanding capital stock of ATG; and
WHEREAS, Base Ten owns 100 shares of common stock, without par
value, of BTSC, which Base Ten represents constitute all of the issued and
outstanding capital stock of BTSC;
WHEREAS, Almedica desires to sell, and Base Ten desires to
purchase, ATG by means of a merger of BTSC with and into ATG (the "Merger") in
accordance with the laws of the State of New Jersey and the provisions of this
Agreement; and
WHEREAS, Capitalized terms used in this Agreement but not
defined upon their first usage are defined in Section 8.1.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger
(a) The Merger. At the Effective Time (as defined below), BTSC
will be merged with and into ATG. ATG shall be the surviving corporation in the
Merger and shall become a wholly-owned subsidiary of Base Ten.
At the Effective Time;
(i) the Certificate of Incorporation of ATG shall be
the certificate of incorporation of the surviving corporation;
(ii) the bylaws of ATG, as in force and effect
immediately prior to the Effective Time, shall be the bylaws of the surviving
corporation;
(iii) the Board of Directors of the surviving
corporation shall be those persons listed as directors on Schedule 1.1(a)(iii);
(iv) the officers of the surviving corporation and the
positions held by each of them shall be as set forth on Schedule 1.1(a)(iv); and
(v) the separate corporate existence of BTSC shall
cease, and ATG, as the surviving corporation, shall succeed to all of the
rights, privileges, powers and franchises, of a public as well as of a private
nature, of ATG and BTSC, and shall be responsible for all of the debts,
liabilities and duties of ATG and BTSC, all as more fully set forth in Chapter
10 of the New Jersey Business Corporation Act.
(b) Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of any stockholder of BTSC or ATG:
(i) each share of capital stock of BTSC issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one share of the surviving corporation;
(ii) all 736 shares of capital stock of ATG issued and
outstanding immediately prior to the Effective Time (the "ATG Shares") shall be
converted into and become an aggregate of 3,950,000 shares of Class A Common
Stock of Base Ten (the "Base Ten Shares"); and
(iii) each share of capital stock of ATG that is held
in the treasury of ATG shall be cancelled and retired and no capital stock of
Base Ten, cash or other consideration shall be paid or delivered in exchange
therefor.
(c) Fractional Shares. Base Ten shall not be required to issue
any fractional shares of Base Ten Shares in connection with the Merger and the
number of shares of Base Ten Shares to be issued to Almedica in connection with
the Merger shall be rounded down to the nearest whole number.
(d) Issuance of Certificates. At the Effective Time, Base Ten
shall make available to Almedica, and Almedica will be entitled to receive upon
surrender to Base Ten of one or more certificates representing the ATG Shares
for cancellation, certificates representing the Base Ten Shares, subject to
Section 1.4. The Base Ten Shares into which the ATG Shares shall be converted in
the Merger shall be issued by Base Ten free and clear of any encumbrances,
except as otherwise provided in Section 1.4.
(e) Name Change. Upon filing with the New Jersey Division of
Commercial Recording a certificate of merger in such form as required by, and
executed in accordance with, this Agreement and the New Jersey Business
Corporation Act (the "New Jersey Merger Certificate"), and as a part of the New
Jersey Merger Certificate, the name of the surviving corporation shall change to
"BTS Clinical, Inc." and the certificate of incorporation of the surviving
corporation shall be amended to read, in its entirety, in accordance with the
certificate of incorporation thereof attached thereto.
1.2 Tax Treatment. The Parties intend that the Merger qualify as a
tax-free reorganization within the meaning of Section 368 of the Code. Each
Party agrees that it will use all commercially reasonable efforts to assure that
the Merger shall so qualify, and Base Ten agrees that subsequent to the Closing,
neither it nor the surviving corporation will take any action, or take any
position in a Tax Return, that may reasonably be expected to result in the
failure of the Merger to so qualify.
1.3 Effective Time and Closing. The closing shall take place at the
offices of Pitney, Hardin, Kipp & Szuch, 200 Campus Drive, Florham Park, New
Jersey 07932-0950, concurrently with the execution hereof, commencing at 10:00
a.m. local time (the "Closing"). The date and time of the Closing are herein
referred to as the "Closing Date."
At the Closing:
(a) Purchasers shall deliver to Sellers:
(i) certificates representing the Base Ten Shares,
subject to delivery of a portion thereof, by Sellers, to the Escrow Agent in
accordance with Section 1.3(c).
(ii) an Officer's Certificate of Base Ten, dated the
Closing Date, stating the following:
(A) Each representation and warranty set
forth in Article 3 is true and correct in all material respects as of the
Closing;
(B) Purchasers have performed in all
material respects each covenant or other obligation required to be performed by
them pursuant to the Transaction Documents prior to the Closing;
(C) The consummation of the transactions
contemplated by the Transaction Documents will not be prohibited by any Legal
Requirement or subject Sellers to any penalty or liability arising under any
Legal Requirement or imposed by any Government Entity;
(D) No action, suit or proceeding is pending
or threatened before any Government Entity the result of which could prevent or
prohibit the consummation of any transaction pursuant to the Transaction
Documents, cause any such transaction to be rescinded following such
consummation or adversely affect Purchasers performance of their obligations
pursuant to the Transaction Documents, and no judgment, order, decree,
stipulation, injunction or charge having any such effect exists; and
(E) All filings, notices, licenses,
consents, authorizations, accreditation, waivers, approvals and the like of, to
or with any Government Entity or any other Person that are required for the
Purchasers to consummate the Merger or any other transaction contemplated by the
Transaction Documents or to own the ATG Shares or to conduct the Business
thereafter (the "Purchasers' Consents") have been duly made or obtained.
(iii) a copy of the resolutions duly adopted by Base
Ten's board of directors authorizing Base Ten's execution, delivery and
performance of the Transaction Documents to which Base Ten is a party and the
consummation the Merger and all other transactions contemplated by the
Transaction Documents, as in effect as of the Closing, certified by an officer
of Base Ten;
(iv) a copy of the resolutions duly adopted by BTSC's
board of directors authorizing BTSC's execution, delivery and performance of the
Transaction Documents to which BTSC is a party and the consummation of the
Merger and all other transactions contemplated by the Transaction Documents, as
in effect as of the Closing, certified by an officer of BTSC;
(v) a copy of the resolutions duly adopted by Base Ten
as the shareholder of BTSC approving the Merger and this Agreement, certified by
an officer of BTSC;
(vi) a certificate (dated not less than five business
days prior to the Closing) of the Treasurer of the State of New Jersey as to the
good standing of Base Ten and BTSC in New Jersey;
(vii) copies of the Purchasers' Consents;
(viii) such other documents relating to the
transactions contemplated by the Transaction Documents to be consummated at the
Closing as Sellers reasonably request.
(b) Sellers shall deliver to Purchasers:
(i) an Officer's Certificate of Almedica, dated the
Closing Date, stating the following:
(A) Each representation and warranty set
forth in Article 4 is true and correct in all material respects as of the
Closing;
(B) Sellers have performed in all material
respects each covenant or other obligation required to be performed by them
pursuant to the Transaction Documents prior to the Closing;
(C) The consummation of the transactions
contemplated by the Transaction Documents will not be prohibited by any Legal
Requirement or subject Purchasers, any of the ATG Shares or any of the Assets to
any penalty or liability arising under any Legal Requirement or imposed by any
Government Entity;
(D) No action, suit or proceeding is pending
or threatened before any Government Entity the result of which could prevent or
prohibit the consummation of any transaction pursuant to the Transaction
Documents, cause any such transaction to be rescinded following such
consummation or adversely affect Purchasers' right to conduct the Business or
Sellers' performance of their obligations pursuant to the Transaction Documents,
and no judgment, order, decree, stipulation, injunction or charge having any
such effect will exist; and
(E) All filings, notices, licenses,
consents, authorizations, accreditation, waivers, approvals and the like of, to
or with any Government Entity or any other Person that are required for the
Sellers to consummate the Merger or any other transaction contemplated by the
Transaction Documents or to own and transfer the ATG Shares or permit the
conduct of the Business by Purchasers thereafter (the "Sellers' Consents") have
been duly made or obtained.
(ii) a copy of the resolutions duly adopted by ATG's
board of directors authorizing ATG's execution, delivery and performance of the
Transaction Documents to which ATG is a party and the consummation the Merger
and all other transactions contemplated by the Transaction Documents, as in
effect as of the Closing, certified by an officer of ATG;
(iii) a copy of the resolutions duly adopted by
Almedica's board of directors authorizing Almedica's execution, delivery and
performance of the Transaction Documents to which Almedica is a party and the
consummation of the Merger and all other transactions contemplated by the
Transaction Documents, as in effect as of the Closing, certified by an officer
of Almedica;
(iv) a copy of the resolutions duly adopted by
Almedica as the shareholder of ATG approving the Merger and this Agreement,
certified by an officer of ATG;
(v) a certificate (dated not less than five business
days prior to the Closing) of the Secretary of State (or, as to New Jersey, the
Treasurer) of each state listed on Schedule 4.1(a) as to the good standing of
ATG in such states and a certificate (dated not less than five business days
prior to the Closing) of the Secretary of State of Delaware as to the good
standing of Almedica in Delaware;
(vi) the Books and Records; provided, however, to the
extent that the Books and Records are located at Almedica's principal office in
Allendale, New Jersey, such Books and Records shall be delivered to Purchasers
within 48 hours following the Closing;
(vii) copies of the Sellers' Consents;
(viii) written resignations from each director and
officer of ATG from such directorships and offices, to take effect as of the
Closing; and
(ix) such other documents relating to the transactions
contemplated by the Transaction Documents as Purchasers reasonably request.
(c) Almedica shall deliver to Escrow Agent certificates
representing the Base Ten Shares constituting the Escrow Amount (as defined
below), together with a stock power executed by Almedica in blank with respect
to each such certificate.
(d) Base Ten and each of Robert J. Bronstein, Fay
Mannon-Rahio, Alex Boyce, Tony Heeley and Garth Ralston shall have executed an
employment agreement and an option agreement.
(e) Purchasers and Sellers shall:
(i) file with the Division of Commercial Recording of
the State of New Jersey the New Jersey Certificate of Merger;
(ii) execute and deliver a supply agreement in form
and substance satisfactory to Almedica and Base Ten; and
(iii) execute and deliver the Registration Rights
Agreement (as defined below).
The date and time that the filing referred to in Section
1.3(e)(i) has been completed is herein referred to as the "Effective Time."
1.4 Escrow Amount. Of the Base Ten Shares, 1,580,000 shares otherwise
payable to Almedica pursuant to Section 1.1 (the "Escrow Amount") will be
retained by Pitney, Hardin, Kipp & Szuch, counsel to Purchasers, (the "Escrow
Agent") as security for the faithful performance of the indemnity obligations of
Almedica to Purchasers under Section 6.2 and, without prejudice to any other
rights of Purchasers, will be subject to recovery by Purchasers as specifically
provided in this Agreement. Subject to the terms of this Agreement and less any
shares which shall be subject to recovery as provided in Section 1.5, (i) the
shares constituting one-half of the Escrow Amount will be released by Escrow
Agent to Almedica, not later than ten business days after the completion of
thirteen full calendar months following the date of this Agreement (the "First
Release Date"), and (ii) the shares constituting the balance of the Escrow
Amount will be released by Escrow Agent to Almedica not later than ten business
days after the second anniversary of the date of this Agreement (the "Second
Release Date"). Cash dividends or stock dividends and any other distribution, if
any, payable on the shares of Base Ten's common stock comprising the Escrow
Amount will be held by Escrow Agent subject to the terms of this Section 1.5,
but Almedica shall have all voting rights with respect to the shares of Base
Ten's common stock comprising the Escrow Amount and any stock issued as stock
dividends with respect thereto and while it is so held by the Escrow Agent, but
any such shares so issued as dividends shall be subject to recovery as provided
in this Agreement. Base Ten and Almedica shall, in accordance with the Escrow
Agreement executed and delivered by them on the date hereof, provide joint
written instructions to the Escrow Agent on the First Release Date and the
Second Release Date with respect to distributions of the Escrow Amount as set
forth in the Section 1.4, unless any such distribution is subject to a dispute,
in which case Base Ten and Almedica will follow the procedures set forth in this
Agreement regarding notice and resolution of any such dispute.
1.5 Recovery Against Escrow Amount. Base Ten shall give notice in
writing to Almedica of any claim against the Escrow Amount (such notice to
contain the details of the claim giving rise thereto and the calculation
thereof), and will proceed to recover the amount of such claim against Almedica
in the event that Almedica does not respond in writing within 60 days after
receipt of such notice. In the event Almedica disputes the claim, Almedica will
be entitled (a) if such dispute is attributable to accounting issues, to engage
a firm of independent public accountants at the expense of Almedica to examine
the claimed recovery and to deliver a notice to Base Ten confirming or disputing
its validity or the amount thereof, or (b) if such dispute is not attributable
to accounting issues, to deliver a notice to Base Ten disputing its validity or
amount thereof (in either case, the "Dispute Notice"). The Dispute Notice shall
be given within 60 days after Base Ten's original notice of such claim. Base Ten
shall provide Almedica and any independent public accountants retained by
Almedica with access to such books and records of ATG as may be reasonably
requested by Almedica for purposes of verifying Base Ten's claim. Almedica and
duly authorized representatives of Base Ten shall in good faith meet at
reasonable times and places agreed to by them so as to come to a settlement of
the matter. In the event a settlement is not achieved within 30 days after the
date of the Dispute Notice, (x) if the dispute relates to or otherwise
encompasses accounting issues, Base Ten and Almedica's independent public
accountants will have 30 additional days in which to engage another firm of
independent public accountants which is unaffiliated with Base Ten or Almedica
(and which has not performed any work for any of the foregoing or any of their
Affiliates within the 24-month period preceding the date of the Dispute Notice),
which expenses shall be borne jointly by Base Ten and Almedica, to render a
binding opinion on the dispute, and (y) if the dispute does not relate to or
otherwise encompass accounting issues, the Parties may pursue any and all rights
or remedies available to them at law or in equity. In the event any proposed
recovery is pending on the First Release Date or the Second Release Date, a
portion of the Escrow Amount scheduled to be released on that date which is
reasonably necessary to satisfy such pending claim may be retained by the Escrow
Agent until the claim is resolved, and shall thereafter be distributed by the
Escrow Agent in accordance with the joint instructions of Base Ten and Almedica
in accordance with the resolution of such dispute. Notwithstanding the
foregoing, the resolution of any indemnification claims attributable to a claim
by a third party shall be resolved pursuant to Sections 6.1 and 6.4, and the
resolution thereof shall not be subject to further dispute under this Section
1.5.
1.6 Registration Rights. The Base Ten Shares will be entitled to
registration rights, as and to the extent provided in the registration rights
agreement to be executed on the Closing Date in the form attached hereto as
Exhibit A (the "Registration Rights Agreement").
1.7 Listing Base Ten Shares. Base Ten shall, within 20 days after the
date hereof, apply to The Nasdaq Stock Market, for listing thereon of the Base
Ten Shares if Base Ten is then eligible for such listing.
1.8 Restrictions on Transferability of Base Ten Shares. The Base Ten
Shares to be issued and delivered to Almedica pursuant to this Agreement
(including the Escrow Amount), will not have been registered under the
Securities Act, or under the securities laws of any state. Accordingly, such
shares of Base Ten (together with any other shares of Base Ten received pursuant
to stock splits, stock dividends or other reclassifications or changes thereof,
or consolidations or reorganizations of Base Ten) will not be transferable
except upon the conditions specified in this Agreement, which conditions are
intended to insure compliance with the provisions of the Securities Act in
respect of any transfer thereof.
1.9 Legend. Each certificate comprising the Base Ten Shares issued to
Almedica shall bear a legend in substantially the following form (the "Legend"):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY
STATE. SUCH SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE
OR OTHERWISE HYPOTHECATED OR DISTRIBUTED EXCEPT (A) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER THE SECURITIES ACT, OR (B) PURSUANT TO A VALID
EXEMPTION FROM SUCH REGISTRATION UNDER THE SECURITIES ACT
AND UNDER THE SECURITIES LAW OF ANY STATE AND UPON RECEIPT
BY BASE TEN SYSTEMS, INC. OF AN OPINION OF COUNSEL
SATISFACTORY IN FORM AND SUBSTANCE TO IT THAT ANY SUCH SALE
IS IN COMPLIANCE WITH, OR NOT SUBJECT TO, THE SECURITIES ACT
AND STATE SECURITIES LAWS."
The Legend shall be removed and Base Ten shall issue, or shall
cause to be issued, certificates without the Legend, if (a) the shares can be
sold pursuant to Rule 144, other than Rule 144(k), Almedica provides Base Ten
with reasonable assurances that the shares can be so sold without restriction,
and a registered broker dealer provides to Base Ten's transfer agent and counsel
copies of (i) a "will sell" letter satisfying the guidelines established by the
SEC and its staff from time to time, (ii) a customary seller's representation
letter with respect to such a sale to be made pursuant to Rule 144 and (iii) a
Form 144 in respect of the shares executed by Almedica and filed (or mailed for
filing) with the SEC, or (b) the shares can be sold pursuant to Rule 144(k).
ARTICLE 2
CONFIDENTIALITY
The Parties acknowledge their respective continuing obligations
pursuant to the confidentiality agreement between Base Ten and Almedica dated
January 26, 1999 (the "Confidentiality Agreement").
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
As a material inducement to Sellers to enter into this Agreement,
Purchasers hereby represent and warrant to Sellers that:
3.1 Organization.
(a) Base Ten is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey. Base Ten has the
requisite corporate power and authority and all licenses, permits and
authorizations necessary to enter into, deliver and carry out its obligations
pursuant to the Transaction Documents to which it is a party.
(b) BTSC is a corporation duly organized, validly existing and
in good standing under the laws of the State of New Jersey and is duly qualified
to do business in the State of New Jersey. BTSC has the requisite corporate
power and authority and all licenses, permits and authorizations necessary to
enter into, deliver and carry out its obligations pursuant to the Transaction
Documents to which it is a party. BTSC was formed by Base Ten for the purpose of
entering into the transactions contemplated by the Transaction Documents, and
except for the rights and obligations created by this Agreement, BTSC has no
assets, liabilities or operations of any nature. BTSC has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated by this Agreement.
3.2 Capitalization.
(a) The authorized capital stock of Base Ten consists of (i)
60,000,000 shares of Class A Common Stock, $1.00 par value per share, (ii)
2,000,000 shares of Class B Common Stock, $1.00 par value per share, and (iii)
994,200.9375 shares of Preferred Stock, $1.00 par value per share, of which
15,203.66584473 shares have been designated as Convertible Preferred Shares,
Series B. As of May 27, 1999, there were 21,231,834 shares of Base Ten's Class A
Common Stock outstanding, 71,144 shares of Base Ten's Class B Common Stock
outstanding, and 15,203.66584473 shares of Base Ten's Convertible Preferred
Shares, Series B outstanding. As of May 27, 1999, a total of 10,658,779 shares
of Base Ten's Class A Common Stock were reserved for issuance pursuant to
outstanding securities that are convertible into or exchangeable for shares of
Base Ten's Class A Common Stock, and no shares of Base Ten's Class B Common
Stock were reserved for issuance pursuant to outstanding securities that are
convertible into or exchangeable for shares of Base Ten's Class B Common Stock.
Except for interests pursuant to which shares have been reserved for issuance as
set forth in the preceding sentence, there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights or other contracts or commitments that could require Base Ten to
issue, sell or otherwise cause to become outstanding any of its capital stock or
equity interests or other instruments convertible into such interests.
(b) The authorized capital stock of BTSC consists of 2,500
shares of common stock, without par value, of which 100 shares are issued and
outstanding. All of such issued and outstanding shares are owned by Base Ten.
3.3 Validity of Base Ten Shares. The Base Ten Shares to be issued in
the Merger are duly authorized and will, when issued in accordance with the
terms hereof, be validly issued, fully paid and non-assessable, and free and
clear of any pre-emptive rights of the stockholders of Base Ten.
3.4 Authorization; Binding Effect; No Breach.
(a) Base Ten's execution, delivery and performance of each
Transaction Document to which it is a party has been duly authorized by it. Each
Transaction Document to which Base Ten is a party constitutes a valid and
binding obligation of Base Ten which is enforceable against Base Ten in
accordance with its terms. The execution, delivery and performance by Base Ten
of the Transaction Documents to which it is a party do not and will not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) result in a violation of, or (iv) require
any authorization, consent, approval, exemption or other action by or
declaration or notice to any Government Entity pursuant to, the charter or
bylaws of Base Ten or any agreement, instrument, or other document, or any Legal
Requirement, to which Base Ten or any of its assets is subject.
(b) BTSC's execution, delivery and performance of each
Transaction Document to which it is a party has been duly authorized by it. Each
Transaction Document to which BTSC is a party constitutes a valid and binding
obligation of BTSC which is enforceable against BTSC in accordance with its
terms. The execution, delivery and performance by BTSC of the Transaction
Documents to which it is a party do not and will not (i) conflict with or result
in a breach of the terms, conditions or provisions of, (ii) constitute a default
under, (iii) result in a violation of, or (iv) require any authorization,
consent, approval, exemption or other action by or declaration or notice to any
Government Entity pursuant to, the charter or bylaws of BTSC or any agreement,
instrument, or other document, or any Legal Requirement, to which BTSC or any of
its assets is subject.
3.5 Governmental Filings. Other than the filing of the New Jersey
Merger Certificate, no notices, reports or other filings are required to be made
by Purchasers with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by Purchasers from, any Government Entity
in connection with the execution and delivery of this Agreement by Purchasers
and the consummation of the transactions contemplated by the Transaction
Documents.
3.6 Base Ten Reports; Financial Statements. Base Ten has filed with the
SEC each registration statement, report, proxy statement or information
statement required to be filed by it since January 1, 1999 through the date
hereof, including (i) Base Ten's Annual Report on Form 10-K for the year ended
December 31, 1998, as amended, (ii) Base Ten's Quarterly Report on Form 10-Q for
the calendar quarter ended March 31, 1999, and (iii) Base Ten's Proxy Statement
for its 1999 Annual Meeting of Stockholders (collectively, the "Base Ten
Reports"), copies of which have been made available to Sellers. As of their
respective dates, the Base Ten Reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading. As of their respective dates, the
consolidated financial statements included in the Base Ten Reports complied as
to form in all material respects with then applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Each of
the consolidated balance sheets included in or incorporated by reference into
the Base Ten Reports (including the related notes and schedules) fairly presents
in all material respects the consolidated financial position of Base Ten and its
subsidiaries as of its date and each of the consolidated statements of income
and of changes in cash flows included in or incorporated by reference into the
Base Ten Reports (including any related notes and schedules) fairly presents in
all material respects the results of operations and changes in cash flows, as
the case may be, of Base Ten for the periods set forth therein (subject, in the
case of unaudited statements, to the absence of notes and normal year-end audit
adjustments), in each case in accordance with GAAP, except as may be noted
therein.
3.7 Absence of Certain Changes. Except as disclosed in the Base Ten
Reports filed prior to the date hereof, since January 1, 1999 Base Ten and its
subsidiaries have conducted their respective businesses only in, and have not
engaged in any material transaction other than in, the ordinary and usual course
of such businesses and there has not been any material adverse change in the
financial condition, business, prospects or results of operations of Base Ten
and its subsidiaries from January 1, 1999 through the date of this Agreement.
3.8 Litigation. There are no civil, criminal or administrative actions,
suits, claims, hearing, investigations, arbitrations, or proceedings pending or,
to the knowledge of Purchasers, threatened against Purchasers preventing, or
which, if determined adversely to Base Ten would prevent Base Ten or BTSC from
consummating the transactions contemplated by the Transaction Documents.
3.9 Brokerage. There is no claim for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
the Transaction Documents which is binding upon Base Ten or any of its
subsidiaries.
3.10 Disclosure. Neither this Article 3 nor any certificate or other
item delivered to Sellers by or on behalf of Purchasers with respect to the
transactions contemplated by the Transaction Documents contains any untrue
statement of a material fact or omits a material fact which is necessary to make
any statement contained herein or therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS
As a material inducement to Purchasers to enter into this Agreement,
Sellers, jointly and severally, hereby represent and warrant to Purchasers that:
4.1 Organization and Power; The Shares; Corporate Documents.
(a) ATG is a corporation duly organized, validly existing and
in good standing under the laws of the State of New Jersey. ATG is duly
qualified to do business in each jurisdiction in which its ownership of property
or conduct of business requires it to so qualify. Schedule 4.1(a) attached
hereto lists every jurisdiction where ATG is duly qualified to do business. ATG
has the requisite corporate power necessary to own and operate its properties,
carry on the Business and enter into, deliver and carry out the transactions
contemplated by the Transaction Documents. Almedica is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Almedica is duly qualified to do business in each jurisdiction in
which its ownership of property or conduct of business requires it to so
qualify. Almedica has the requisite corporate power necessary to enter into,
deliver and carry out the transactions contemplated by the Transaction
Documents.
(b) The authorized capital stock of ATG consists solely of
2,500 shares of Common Stock, without par value, of which only the ATG Shares
are issued and outstanding. The ATG Shares are duly authorized, validly issued,
outstanding, fully paid and nonassessable. Almedica owns the ATG Shares,
beneficially and of record, free and clear of all Liens. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights or other contracts or commitments
that could require ATG to issue, sell or otherwise cause to become outstanding
any of its capital stock or equity interests or other instruments convertible
into such interests. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation or similar rights with respect to the
capital stock of ATG. There are no voting trusts, proxies or other agreements or
understandings with respect to the voting of the capital stock of ATG. Neither
Almedica nor ATG nor any of their respective Affiliates has entered into any
agreement, or is bound by any obligation of any kind whatsoever, to transfer or
dispose of the ATG Shares, the Business of ATG (or any substantial portion
thereof) to any Person other than Base Ten, and neither has entered into any
agreement, nor are either of them bound by any obligation of any kind
whatsoever, to issue any capital stock of ATG to any Person. Except as otherwise
set forth on the attached Schedule 4.1(b), since January 1, 1999 (i) ATG has not
declared or made any payment of any dividend or other distribution in respect of
its capital stock, and (ii) there has not been any split, combination or
reclassification or any shares of the capital stock of ATG.
(c) Schedule 4.1(c) attached hereto lists the directors and
officers of ATG and includes correct and complete copies of the articles of
incorporation and bylaws of ATG, including all amendments thereto. The minute
books and stock transfer ledgers of ATG made available to Base Ten contain a
true and complete record of all action taken at all meetings and by all written
consents in lieu of meetings of the stockholders, the board of directors and the
committees of the board of directors and all transfers in the capital stock of
ATG.
4.2 Authorization; Binding Effect; No Breach.
(a) ATG's execution, delivery and performance of each
Transaction Document to which it is a party has been duly authorized by ATG.
Each Transaction Document to which ATG is a party constitutes a valid and
binding obligation of ATG which is enforceable against ATG in accordance with
its terms. Except as set forth on the attached Schedule 4.2, the execution,
delivery and performance of the Transaction Documents to which ATG is a party do
not and will not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii) result in
the creation of any Lien upon any of the ATG Shares or any of the Assets under,
(iv) give any third party the right to modify, terminate or accelerate any
liability or obligation of ATG under, (v) result in a violation of, or (vi)
require any authorization, consent, approval, exemption or other action by or
declaration or notice to any Government Entity pursuant to, the charter or
bylaws of ATG or any agreement, instrument or other document, or any Legal
Requirement, to which ATG, any of the ATG Shares or any of the Assets is
subject. Without limiting the generality of the foregoing, neither ATG nor any
of its Affiliates has entered into any agreement, or is bound by any obligation
of any kind whatsoever, directly or indirectly, to transfer or dispose of the
ATG Shares or, whether by sale of stock or assets, assignment, merger,
consolidation or otherwise, the Business or the Assets (or any substantial
portion thereof) to any Person other than Base Ten, and neither ATG nor any of
its Affiliates has entered into any agreement, nor is any such Person bound by
any obligation of any kind whatsoever, to issue any capital stock of ATG to any
Person.
(b) Almedica's execution, delivery and performance of each
Transaction Document to which it is a party has been duly authorized by
Almedica. Each Transaction Document to which Almedica is a party constitutes a
valid and binding obligation of Almedica which is enforceable against Almedica
in accordance with its terms. Except as set forth on the attached Schedule 4.2,
the execution, delivery and performance of the Transaction Documents to which
Almedica is a party do not and will not (i) conflict with or result in a breach
of the terms, conditions or provisions of, (ii) constitute a default under,
(iii) result in the creation of any Lien upon any of the ATG Shares or any of
the Assets under, (iv) give any third party the right to modify, terminate or
accelerate any liability or obligation of Almedica under, (v) result in a
violation of, or (vi) require any authorization, consent, approval, exemption or
other action by or declaration or notice to any Government Entity pursuant to,
the charter or bylaws of Almedica or any agreement, instrument or other
document, or any Legal Requirement, to which Almedica or any of the ATG Shares
or any of the Assets is subject. Without limiting the generality of the
foregoing, neither Almedica nor any of its Affiliates has entered into any
agreement, or is bound by any obligation of any kind whatsoever, directly or
indirectly, to transfer or dispose of the ATG Shares, or, whether by sale of
stock or assets, assignment, merger, consolidation or otherwise, the Business or
the Assets (or any substantial portion thereof) to any Person other than Base
Ten, and neither Almedica nor any of its Affiliates has entered into any
agreement, nor is any such Person bound by any obligation of any kind
whatsoever, to issue any capital stock of ATG to any Person.
4.3 Subsidiaries; Investments. ATG does not own or hold any rights to
acquire any capital stock or any other security, interest or Investment in any
other Person other than investments which constitute cash or cash equivalents.
ATG does not have, and has never had, a Subsidiary.
4.4 Financial Statements and Related Matters.
(a) Financial Statements. Attached to this Agreement as
Schedule 4.4 are: (i) the audited balance sheets of ATG as of 1996, 1997 and
1998, and the audited related statements of income and cash flows for the
respective 12-month periods then ended (the "Audited Financial Statements"),
(ii) the unaudited balance sheet of ATG as of May 31, 1999 (the "Latest Balance
Sheet") and the related unaudited statements of income and cash flows for the
nine-month period then ended (collectively, the "Financial Statements"). Except
as set forth on the attached Schedule 4.4, each of the Financial Statements
(including in all cases the notes thereto, if any) presents fairly in all
material respects the financial condition of ATG as of the dates of such
statements and the results of operation for such periods, is accurate and
complete, is consistent with the books and records of ATG (which, in turn, are
accurate and complete) and has been prepared in accordance with GAAP applied on
a consistent basis throughout the periods covered thereby except as noted
therein (subject, in the case of the Latest Balance Sheet and related unaudited
statements of income and cash flows, to the absence of notes and audit
adjustments).
(b) Receivables. The notes and accounts receivable of ATG on
the Closing Date represent actual transactions, will be valid receivables, will
be current and collectible, will not be subject to valid counterclaims or
setoffs and will be collected in accordance with their terms at the aggregate
amount recorded on ATG's books and records as of the Closing, net of an amount
of allowances for doubtful accounts set forth on the Latest Balance Sheet, as
adjusted for the passage of time through the Closing Date in accordance with
GAAP.
(c) Inventory. Except as set forth on the attached Schedule
4.4, the inventory of ATG of the date of the Latest Balance Sheet, net of the
reserves applicable to such inventory set forth on the Latest Balance Sheet, as
adjusted for the passage of time through the Closing Date in accordance with
GAAP, consists of a quantity and quality which is usable and salable in the
ordinary course of business, and the items of such inventory are not defective,
slow-moving, obsolete or damaged and are merchantable and fit for their
particular use.
(d) Reserves. Except as set forth on the attached Schedule
4.4, the allowance for possible other reserves set forth on the Latest Balance
Sheet was adequate at the time to cover all known or reasonably anticipated
contingencies.
4.5 Absence of Undisclosed Liabilities. Except as set forth on the
attached Schedule 4.5, as of the Closing Date ATG does not have any liability
(whether accrued, absolute, contingent, unliquidated or otherwise, whether or
not known to Sellers, whether due or to become due, and regardless of when
asserted) other than: (a) the liabilities set forth on the face of the Latest
Balance Sheet, (b) current liabilities which have arisen after the date of the
Latest Balance Sheet, in the ordinary course of business and consistent with
ATG's past practice, as applicable (none of which is a liability resulting from
breach of contract, breach of warranty, tort, infringement, violation of law,
claim or lawsuit), all of which have been disclosed in writing to Purchasers,
and (c) other liabilities and obligations expressly disclosed and quantified in
the other Schedules to this Agreement.
4.6 Assets. Except as set forth on the attached Schedule 4.6:
(a) the Assets, together with the Proprietary Rights and other
assets reflected in the Books and Records, constitute all of the assets and
rights which are used or useful in the Business as currently conducted and
presently proposed to be conducted;
(b) ATG has good and marketable title to, or a valid leasehold
interest in or other rights to use (which other rights to use are described on
the attached Schedule 4.6), all properties and assets used by it in the
Business, located on its premises, shown on the Latest Balance Sheet or acquired
by ATG since the date of the Latest Balance Sheet, in the each case free and
clear of all Liens, other than Permitted Liens, and other than (i) properties
and assets disposed of in the ordinary course of business and consistent with
ATG's past practice by ATG since the date of the Latest Balance Sheet (which
disposals do not exceed $25,000 in the aggregate) and (ii) Liens disclosed on
the Latest Balance Sheet (including any notes thereto);
(c) ATG's equipment and other tangible assets are in good
operating condition (subject to normal wear and tear) and fit for use in the
ordinary course of business of ATG and consistent with its past practice; and
(d) All programming and development of the Software included
in the Proprietary Rights was performed by persons who, at the time they
performed the work, were employees of ATG, or engaged by ATG, under agreements
by which ATG was assigned all ownership in the work, or was performed pursuant
to a license from a third-party, which license was validly in effect at the time
the work was performed and pursuant to which any work performed did not and will
not revert to the third-party licensor. The attached Schedule 4.6 contains a
complete and accurate list of all Software included in the Proprietary Rights
that is in commercial release, all of which performs in accordance with its
specifications without errors which materially adversely affect its performance.
The Books and Records contain a true and complete list of problem reports and
field problems and resolutions that have occurred within the past 3 years. The
Software included in the Proprietary Rights shall record, store, process and
present calendar dates falling on or after January 1, 2000 in the same manner
and with the same functionality as such Software records, restores, processes
and presents calendar dates falling on or before December 31, 1999, and in all
other aspects, the Software shall not in any way lose functionality or degrade
in performance as a consequence of such Software operating at a date later than
December 31, 1999. The Assets and Proprietary Rights include any compatibility
information and technical information, including without limitation software
interfaces and source codes, that is required to (i) perform regular maintenance
of the Software included in the Proprietary Rights and (ii) design equipment
and/or software which is functionally interconnectable with the Software
included in the Proprietary Rights. The codes and manuals included in the
Software describe in reasonable detail all of the application programs and
operating programs included in the Software. Except for escrows of source codes
in favor of licensees disclosed on Schedule 4.10, the source codes are free and
clear of all Liens and are not subject to any escrow agreements or arrangements.
4.7 Absence of Certain Developments. Except as set forth on the
attached Schedule 4.7, since January 1, 1999, there has been no adverse change
in the financial condition, operating results, assets, customer or supplier
relations, employee relations or business prospects of ATG and, to the best of
Sellers' Knowledge, no customer or vendor has any plans to terminate its
relationship with ATG. Without limiting the generality of the preceding
sentence, except as expressly contemplated by this Agreement or as set forth on
the attached Schedule 4.7, since the date of the Latest Balance Sheet, Sellers
have not:
(a) engaged in any activity which has resulted in (i) any
acceleration or delay of the collection of ATG's accounts or notes receivable,
(ii) any delay in the payment in ATG's accounts payable or (iii) any increase in
ATG's purchases of raw materials, in each case as compared with ATG's custom and
practice in the conduct of the Business immediately prior to the date of the
Latest Balance Sheet;
(b) discharged or satisfied any Lien or paid any obligation or
liability, other than current liabilities paid in the ordinary course of
business and consistent with ATG's past practice;
(c) mortgaged or pledged any of the ATG Shares or any Asset or
subjected any of the ATG Shares or any Asset to any Lien;
(d) sold, assigned, conveyed, transferred, canceled or waived
any property, tangible asset, Proprietary Right or other intangible asset or
right of ATG other than in the ordinary course of business and consistent with
ATG's past practice;
(e) waived any right of ATG other than in the ordinary course
of business or consistent with ATG's past practice;
(f) made commitments for capital expenditures by ATG which, in
the aggregate, would exceed $50,000;
(g) made any loan or advance to, or guarantee for the benefit
of, or any Investment in, any other Person on behalf of ATG;
(h) granted any bonus or any increase in wages, salary or
other compensation to any employee of ATG (other than any increase in wages or
salaries granted in the ordinary course of business and consistent with ATG's
past practice granted to any employee who is not affiliated with ATG other than
by reason of such Person's employment by ATG);
(i) made any charitable contributions on behalf of ATG;
(j) suffered damages, destruction or casualty losses which, in
the aggregate, exceed $50,000 (whether or not covered by insurance) to any
Asset;
(k) received any indication from any material supplier of ATG
to the effect that such supplier will stop, or materially decrease the rate of,
supplying materials, products or services to ATG (whether or not the Merger is
consummated), or received any indication from any material customer of ATG to
the effect that such customer will stop, or materially decrease the rate of,
buying materials, products or services from ATG (whether or not the Merger is
consummated);
(l) entered into any transaction other than in the ordinary
course of business and consistent with ATG's past practice, or entered into any
other material transaction, whether or not in the ordinary course of business,
which may adversely affect ATG;
(m) declared, set aside, or paid any dividend or made any
distribution with respect to ATG's capital stock or equity interests or
redeemed, purchased, or otherwise acquired any of ATG's capital stock or equity
interests;
(n) adopted or amended any employee benefit or welfare plan
relating to the Employees; or
(o) received any indication from any key employee to the
effect that such key employee will terminate employment with ATG; or
(p) agreed to do any act described in any of clauses 4.7(a)
through (o).
4.8 Tax Matters. All references to ATG in this Section 4.8 refer both
to ATG and, to the extent that Almedica as the parent corporation of ATG is or
may be responsible for the Tax liabilities of ATG, to Almedica. Except as set
forth in the attached Schedule 4.8:
(a) ATG has filed all Tax Returns and other reports which it
was required to file and each such return or other report was correct and
complete in all respects, and ATG has paid all Taxes due and owing by it
(whether or not shown on any Tax Return or other report) and has withheld and
paid over all Taxes which it is obligated to withhold from amounts paid or owing
to any employee, independent contractor, stockholder, partner, creditor or other
third party;
(b) no Tax audits are pending or being conducted with respect
to ATG;
(c) there are no Liens other than Permitted Liens on any of
the ATG Shares or any of the Assets that arose in connection with any failure
(or alleged failure) to pay any Tax;
(d) no information related to Tax matters has been requested
by any Taxing authority and ATG has not received notice indicating an intent to
open an audit or other review from any Taxing authority;
(e) there are no unresolved disputes or claims concerning the
Tax liability of ATG;
(f) no claim has ever been made by any jurisdiction in which
ATG does not file Tax Returns to the effect that ATG is or may be subject to any
Tax imposed by that jurisdiction;
(g) ATG is not a party to any agreement that could obligate it
to make any payments that would not be deductible pursuant to Code Section 280G,
and the completion of the transactions contemplated by this Agreement would not
obligate ATG to make any payments that would not be deductible pursuant to Code
Section 280G;
(h) ATG has not made an election pursuant to Code Section
341(f);
(i) ATG has not waived any statute of limitations in respect
of Taxes or agreed to an extension of time with respect to any Tax assessment or
deficiency; and
(j) ATG is not a party to any Tax sharing or allocation
agreement, and ATG has no liability for the Taxes of any person under Section
1.1502-6 of the Treasury Regulations (or any similar provision of state, local
or foreign law), as a transferee or successor, by contract, or otherwise.
4.9 Contracts and Commitments.
(a) Contracts. Other than this Agreement and the agreements
described on the attached Schedule 4.9, neither ATG nor, to the extent that
Almedica as the parent corporation of ATG obligates ATG, Almedica, is a party to
any written or oral:
(i) pension, profit sharing, stock option, employee
stock purchase or other plan or arrangement providing for deferred or other
compensation to employees or any other employee benefit, welfare or stock plan
or arrangement which is not described on the attached Schedule 4.15, or any
contract with any labor union, or any severance agreement;
(ii) contract for the employment or engagement as an
independent contractor of any Person on a full-time, part-time, consulting or
other basis;
(iii) contract pursuant to which ATG has advanced or
loaned funds, or agreed to advance or loan funds, to any other Person;
(iv) contract or indenture relating to any
Indebtedness or the mortgaging, pledging or otherwise placing a Lien on any of
the ATG Shares or any of the Assets;
(v) contract pursuant to which ATG is the lessee of,
or holds or operates, any real or personal property owned by any other Person;
(vi) contract pursuant to which ATG is the lessor of,
or permits any third party to hold or operate, any real or personal property
owned by ATG or of which ATG is a lessee;
(vii) assignment, license, indemnification or other
contract with respect to any intangible property (including any Proprietary
Right) which is material to the Business and is not described on the attached
Schedule 4.10;
(viii) contract or agreement with respect to services
rendered or goods sold or leased to or from others, other than any customer
purchase order accepted in the ordinary course of business and in accordance
with ATG's past practice;
(ix) contract prohibiting ATG from freely engaging in
any business anywhere in the world;
(x) independent sales representative or
distributorship agreement with respect to the Business; or
(xi) executory contract (other than one described in
Sections 4.9(a)(i) through 4.9(a)(x)) which is material to ATG or involves a
consideration in excess of $25,000.
(b) Enforceability. Each item described on the attached
Schedule 4.9 (the "Contracts") is a valid and binding agreement of ATG
enforceable by the Sellers in accordance with its terms, except as such
enforceability against the other parties thereto may be limited by (i)
applicable insolvency, bankruptcy, reorganization, moratorium or other similar
laws affecting creditors' rights generally and (ii) applicable equitable
principles (whether considered in a proceeding at law or in equity).
(c) Compliance. ATG has performed all material obligations
required to be performed by it under each Contract, and, to the best of Sellers'
Knowledge, ATG is not in any material respect in default under or in breach of
(nor is it in receipt of any claim of any such default under or breach of) any
such obligation. Except as set forth on the attached Schedule 4.9, no event has
occurred which with the passage of time or the giving of notice (or both) would
result in a material default, breach or event of noncompliance under any
obligation of ATG pursuant to any Contract. ATG has no present expectation or
intention of not fully performing any obligation of ATG pursuant to any
Contract, and Sellers have no Knowledge of any breach or anticipated breach by
any other party to any Contract.
(d) Leases. With respect to each Contract which is a lease of
personal property, ATG holds a valid and existing leasehold interest under such
lease for the term thereof.
(e) Affiliated Transactions. Except as set forth on the
attached Schedule 4.9(e), no officer, director, stockholder or Affiliate of
Sellers (and no individual related by blood or marriage to any such Person, and
no entity in which any such Person or individual owns any beneficial interest)
is a party to any agreement, contract, commitment or transaction with ATG (other
than this Agreement) or has any material interest in any material property used
by ATG.
(f) Copies. Purchasers' legal counsel has been supplied with a
true and correct copy of each written Contract, each as currently in effect.
4.10 Proprietary Rights. All references to ATG in this Section 4.10
refer both to ATG and, to the extent that Almedica as the parent corporation of
ATG owns or licenses Proprietary Rights used in connection with the Business, to
Almedica.
(a) Schedule. The attached Schedule 4.10 contains a complete
and accurate list of all material Proprietary Rights, including but not limited
to (i) all patented or registered Proprietary Rights owned by ATG or used in
connection with the Business, (ii) all pending patent applications and
applications for registrations of other Proprietary Rights filed by or on behalf
of ATG or used in connection with the Business, (iii) all trade names, corporate
names and unregistered trade names and service marks owned by ATG or used in
connection with the Business, and (iv) all unregistered copyrights and computer
software which are material to the financial condition, operating results,
assets, customer or supplier relations, employee relations or business prospects
of ATG. The attached Schedule 4.10 also contains a complete and accurate list of
all material licenses and other rights granted by ATG to any third party, all
material licenses and other rights granted by any third party to ATG, with
respect to any Proprietary Rights, a general description of all agreements or
arrangements of escrows of source codes in favor of licensees together with a
description of the location of copies of all such agreements. The Proprietary
Rights comprise all intellectual property rights which are used or useful in the
operation of the Business.
(b) Ownership; Claims. Except as set forth on the attached
Schedule 4.10, ATG owns and possesses all right, title and interest in and to
(or has the right to use pursuant to a valid and enforceable license) all
Proprietary Rights described on the attached Schedule 4.10 which are necessary
or desirable for the operation of ATG's business as presently conducted and as
presently proposed to be conducted, and ATG has taken all necessary actions to
maintain and protect its interest in all the Proprietary Rights. To the best of
Sellers' Knowledge, the owners of the Proprietary Rights licensed to ATG have
taken all necessary actions to maintain and protect the Proprietary Rights which
are subject to such licenses. Except as indicated on the attached Schedule 4.10:
(i) ATG owns or has the right to use all of the
Proprietary Rights described on such Schedule and each other Proprietary Right
which is material to the conduct of the Business (in each case free and clear of
all Liens and free of all claims to the use by others),
(ii) there have been no claims made against ATG
asserting the invalidity, misuse or unenforceability of any of such Proprietary
Rights, and there are no grounds known to Sellers for any such claim,
(iii) ATG has not received any notice of (nor is it
aware of any facts which indicate a likelihood of) any infringement or
misappropriation by, or conflict with, any Person with respect to any of such
Proprietary Rights (including any demand or request that ATG license rights from
any Person),
(iv) to the best of Sellers' Knowledge, the conduct of
the Business has not infringed or misappropriated, and does not infringe or
misappropriate in any material respect, any proprietary right of any other
Person, nor would Purchasers' conduct of the Business as presently conducted
infringe or misappropriate in any material respect any proprietary right of any
other Person,
(v) to the best of Sellers' Knowledge, such
Proprietary Rights have not been infringed or misappropriated in any material
respect by any other Person, and
(vi) the consummation of the transactions contemplated
by this Agreement will have no adverse effect on any such Proprietary Right.
4.11 Certain Litigation. Except as set forth on the attached Schedule
4.11, there is no action, suit, proceeding, order, investigation or claim
pending (or, to the best of Sellers' Knowledge, threatened) against or affecting
ATG or the Business (or to the best of Sellers' Knowledge, pending or threatened
against or affecting any officer, director or employee of ATG), at law or in
equity, or before or by any Government Entity, including (a) with respect to the
transactions contemplated by the Transaction Documents, or (b) concerning the
design, manufacture, rendering or sale by ATG of any product or service or
otherwise concerning the conduct of the Business, and, in the case of
subsections (a) and (b), to the best of Sellers' Knowledge, there is no basis
for any of the foregoing.
4.12 Brokerage. Except at set forth on the attached Schedule 4.12,
there is no claim for brokerage commissions, finders' fees or similar
compensation in connection with the transactions contemplated by the Transaction
Documents which is binding upon Sellers or to which ATG or any of the ATG Shares
or any of the Assets is subject.
4.13 Insurance. The attached Schedule 4.13 contains a description of
each insurance policy maintained by Sellers with respect to ATG, its properties,
assets or business, and each such policy is in full force and effect. Sellers
are not in default of any obligation pursuant to any insurance policy described
on Schedule 4.13.
4.14 Employees.
(a) Continued Employment. To the best of Sellers' Knowledge,
no executive or key employee of ATG or any group of employees of ATG has any
plans to terminate employment with ATG.
(b) Compliance and Restrictions. ATG has complied with all
laws relating to the employment of labor, including provisions of such laws
relating to wages, hours, equal opportunity, collective bargaining and the
payment of social security and other taxes, and ATG has no material labor
relations problem (including any union organization activities, threatened or
actual strikes or work stoppages or material grievances). Except as set forth on
the attached Schedule 4.14, neither ATG nor any employees of ATG are subject to
any noncompete, nondisclosure, confidentiality, employment, consulting or
similar agreement relating to, affecting, or in conflict with, the Business
activities as presently conducted or as proposed to be conducted.
4.15 ERISA. All references to ATG in this Section 4.15 refer both to
ATG and, to the extent that Almedica as the parent corporation of ATG is or may
be responsible for the employment matters of ATG identified in this Section
4.15, to Almedica. Except as set forth on the attached Schedule 4.15, with
respect to all current employees (including those on lay-off, disability or
leave of absence), former employees, and retired employees of ATG (the
"Employees"):
(a) ATG neither maintains nor contributes to any (i) employee
welfare benefit plans (as defined in Section 3(1) of ERISA) ("Employee Welfare
Plans"), or (ii) any plan, policy or arrangement which provides nonqualified
deferred compensation, bonus or retirement benefits, severance or "change of
control" (as set forth in Code Section 280G) benefits, or life, disability
accident, vacation, tuition reimbursement or other material fringe benefits
("Other Plans");
(b) ATG does not maintain, contribute to, or participate in
any defined benefit plan or defined contribution plan which are employee pension
benefit plans (as defined in Section 3(2) of ERISA) ("Employee Pension Plans");
(c) ATG does not contribute to or participate in any
multiemployer plan (as defined in Section 3(37) of ERISA) (a "Multiemployer
Plan");
(d) ATG does not maintain or have any obligation to contribute
to or provide any post-retirement health, accident or life insurance benefits to
any Employee, other than limited medical benefits required to be provided under
Code Section 4980B;
(e) all Plans (and all related trusts and insurance contracts)
comply in form and in operation in all material respects with the applicable
requirements of ERISA and the Code;
(f) all required reports and descriptions (including all Form
5500 Annual Reports, Summary Annual Reports, PBGC-1s and Summary Plan
Descriptions) with respect to all Plans have been properly filed with the
appropriate Government Entity or distributed to participants, and ATG has
complied substantially with the requirements of Code Section 4980B;
(g) with respect to each Plan, all contributions, premiums or
payments which are due on or before the Closing Date have been paid to such
Plan; and
(h) ATG has not incurred any liability to the Pension Benefit
Guaranty Corporation (the "PBGC"), the United States Internal Revenue Service,
any multiemployer plan or otherwise with respect to any employee pension benefit
plan or with respect to any employee pension benefit plan currently or
previously maintained by members of the controlled group of companies (as
defined in Sections 414(b) and (c) of the Code) that includes ATG (the
"Controlled Group") that has not been satisfied in full, and no condition exists
that presents a material risk to ATG or any member of the Controlled Group of
incurring such a liability (other than liability for premiums due the PBGC)
which could reasonably be expected to have any adverse effect on Base Ten or any
of the ATG Shares or any of the Assets after the Closing.
4.16 Real Estate.
(a) Owned Properties. ATG does not own any real property.
(b) Leased Property. The attached Schedule 4.16(b) lists and
describes briefly all real property leased or subleased to ATG and all other
real property which is used in the Business and not owned by ATG (the "Leased
Real Property"). ATG has delivered to Purchasers' legal counsel correct and
complete copies of the leases and subleases listed on Schedule 4.16(b)
(collectively, the "Leases"). With respect to the Leased Real Property and each
of the Leases, except as set forth on the attached Schedule 4.16(b):
(i) such Lease is legal, valid, binding, enforceable,
and in full force and effect;
(ii) such Lease is fully assignable to Base Ten
without the need for any consents or authorizations and will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the Merger;
(iii) no party to such Lease is in material breach or
default, and no event has occurred which, with notice or lapse of time, would
constitute such a breach or default or permit termination, modification, or
acceleration of such Lease;
(iv) no party to such Lease has repudiated any
provision thereof;
(v) there are no disputes, oral agreements, or
forbearance programs in effect as to such Lease;
(vi) to the best of Sellers' Knowledge, in the case of
each Lease which is a sublease, the representations and warranties set forth in
clauses 4.16(b) (i) through (v) are true and correct with respect to the
underlying lease;
(vii) ATG has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold or
subleasehold created pursuant to such Lease;
(viii) none of the Leases has been modified in any
respect, except to the extent that such modifications are in writing and have
been delivered or made available to Purchasers;
(ix) to the best of Sellers' Knowledge, all buildings,
improvements and other structures located upon the Leased Real Property have
received all approvals or Governmental Entities, including licenses and permits,
required in connection with the operation of the Business thereon and have been
operated and maintained in accordance with all applicable Legal Requirements and
the terms and conditions of the Leases; and
(x) all buildings, structures and other improvements
located upon the Leased Real Property, including all components thereof, are in
good operating condition subject to the provision of usual and customary
maintenance in the ordinary course of business with respect to buildings,
structures and improvements of like age and construction and all water, gas,
electrical, steam, compressed air, telecommunication, sanitary and storm sewage
and other utility lines and systems serving the Leased Real Property are
sufficient to enable the continued operation of the Leased Real Property in the
manner currently being used in connection with the operation of the Business.
4.17 Compliance with Laws.
(a) Generally. Except as set forth on the attached Schedule
4.17(a), ATG has not violated any Legal Requirement in any material respect, and
Sellers have not received notice alleging any such violation.
(b) Required Permits. ATG in all material respects has
complied with (and is in compliance with) all permits, licenses and other
authorizations required for the occupation of ATG's facilities and the operation
of the Business. The items described on the attached Schedule 4.17(b) constitute
all of the permits, filings, notices, licenses, consents, authorizations,
accreditation, waivers, approvals and the like of, to or with any Government
Entity which are required for the consummation of the Merger, or any other
transaction contemplated by the Transaction Documents or the conduct of the
Business (as it is presently conducted by ATG) in all material respects
thereafter.
(c) Environmental and Safety Matters. Without limiting the
generality of Sections 4.17(a) and (b):
(i) ATG has complied and is in compliance with all
Environmental and Safety Requirements in all material respects.
(ii) Without limiting the generality of the foregoing,
ATG has obtained and complied with, and is in compliance with, in all material
respects all material permits, licenses and other authorizations that may be
required pursuant to Environmental and Safety Requirements for the occupation of
its facilities and the operation of the Business. A list of all such permits,
licenses and other authorizations is set forth on the attached Schedule 4.17(b).
(iii) ATG has not received any written or oral notice,
report or other information regarding any liabilities (whether accrued,
absolute, contingent, unliquidated or otherwise) or investigatory, remedial or
corrective obligations, relating to it or its facilities and arising under
Environmental and Safety Requirements.
(iv) Except as set forth on the attached Schedule
4.17(c), to the best of Sellers' Knowledge none of the following exists at any
property or facility owned, operated or occupied by ATG:
1) underground storage tanks or surface
impoundments
2) asbestos-containing material in any form or
condition; or
3) materials or equipment containing
polychlorinated biphenyls.
(v) ATG has not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled, or Released any
substance, including any Hazardous Substance, or owned or operated any facility
or property, so as to give rise to liabilities of ATG for response costs,
natural resource damages or attorneys' fees pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or similar state or local Environmental and Safety Requirements.
(vi) To the best of Sellers' Knowledge, neither this
Agreement nor the consummation of the Merger will result in any obligations for
site investigation or cleanup, or notification to or consent of any Government
Entity or third parties, pursuant to any so-called "transaction-triggered" or
"responsible property transfer" Environmental and Safety Requirements.
(vii) ATG has not, either expressly or, to the best of
Sellers' Knowledge, by operation of law, assumed or undertaken any liability,
including any obligation for corrective or remedial action, of any other Person
relating to any Environmental and Safety Requirements.
(viii) No Environmental Lien has attached to any
property now or previously owned, leased or operated by ATG.
(ix) Without limiting the foregoing, to the best of
Sellers' Knowledge, no facts, events or conditions relating to the Leased Real
Property, or other past or present facilities, properties or operations of ATG
will prevent, hinder or limit continued compliance with Environmental and Safety
Requirements, give rise to any investigatory, remedial or corrective obligations
pursuant to Environmental and Safety Requirements, or give rise to any other
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise)
pursuant to Environmental and Safety Requirements, including any relating to
onsite or offsite Releases or threatened Releases of Hazardous Substances,
personal injury, property damage or natural resource damage.
(x) ATG's Standard Industry Code (or "SIC") is 8099.
4.18 Product Warranty. Except as set forth on the attached Schedule
4.18, all products manufactured, serviced, distributed, sold or delivered by ATG
have been manufactured, serviced, distributed, sold and/or delivered in material
conformity with all applicable contractual commitments and all express and
implied warranties. To the best of Sellers' Knowledge, no material liability of
ATG exists for replacement or other damages in connection with any such product.
4.19 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of ATG.
4.20. Bank Accounts. Schedule 4.20 identifies the names and locations
of all banks, depositories and other financial institutions in which ATG, or
Almedica or any other Person on behalf of ATG, has an account or safe deposit
box and the names of all persons authorized to draw on such accounts or to have
access to such safe deposit boxes.
4.21 Purchase for Investment. The Base Ten Shares will be acquired by
Almedica for its own account for the purpose of investment, it being understood
that the right to dispose of such Base Ten Shares shall be entirely within the
discretion of Almedica, except with respect to the Escrow Amount in accordance
with the provisions of this Agreement. Almedica will refrain from transferring
or otherwise disposing of any of the Base Ten Shares, or any interest therein,
in such manner as to cause Base Ten to be in violation of the registration
requirements of the Securities Act, or applicable state securities or blue sky
laws. Almedica acknowledges that the Base Ten Shares have not been registered,
and in connection with the transactions contemplated by this Agreement will not
be registered, under the Securities Act and, therefore, cannot be resold unless
they are registered under the Securities Act or unless an exemption from
registration is available.
4.22 Disclosure. Neither this Article 4 nor any schedule, attachment,
written statement, certificate or similar item supplied to Purchasers by or on
behalf of Sellers with respect to the transactions contemplated by the
Transaction Documents contains any untrue statement of a material fact or omits
a material fact necessary to make each statement contained herein or therein not
misleading. Sellers have not deliberately withheld from Purchasers information
of which any director or officer of Sellers is specifically aware which is
likely in Sellers' good faith judgment to cause a material adverse effect upon
the assets of ATG or its ability to operate its business. No current customer,
supplier or employee of ATG has stated that it intends to terminate its
relationship with ATG whether in connection with the Merger or otherwise.
ARTICLE 5
ACCESS TO RECORDS
To the extent reasonably required for any bona fide business purpose,
each Party will allow, and will use its reasonable efforts to cause its
Affiliates to allow, the other Party (and the other Party's agents,
representatives and Affiliates) access to all business records and files
concerning ATG which relate to the period prior to the Closing Date and will
permit such Persons to make copies of the same. Such access will be granted upon
reasonable advance notice, during normal business hours, and in such a manner so
as not to interfere unreasonably with the operations of the Person affording
such access. Without limiting the generality of the foregoing, if either Party
or any of its Affiliates actively is contesting or defending against any charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand in
connection with (a) any transaction contemplated by the Transaction Documents,
or (b) any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction on or
prior to the Closing relating to ATG, then the other Party will cooperate, and
use its reasonable efforts to cause its Affiliates to cooperate, with the
contesting or defending Person and its counsel in such contest or defense, make
available such other Party's and its Affiliates' personnel and provide such
testimony and access to books and records as are reasonably requested in
connection with such contest or defense, all at the contesting or defending
Person's expense (unless the contesting or defending Person is entitled to
indemnification therefor pursuant to Section 6.2 or 6.3).
ARTICLE 6
SURVIVAL AND INDEMNIFICATION
6.1 Survival of Representations and Warranties.
(a) Survival Term. All representations and warranties
contained herein or made in writing by any Party in connection herewith shall
survive the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (regardless of any investigation made by any
Party or on its behalf) and will continue in full force and effect for:
(i) perpetuity, in the case of the representations and
warranties in Section 3.3, the first sentence of each of Sections 3.4(a),
3.4(b), 4.2(a) and 4.2(b), and Section 4.1(b);
(ii) the period prescribed by the applicable statute
of limitations, in the case of the representations and warranties in Sections
4.8, 4.15 and 4.17(a); and
(iii) for a period of two years following the Closing
Date for all other representations and warranties set forth in Articles 3 and 4.
(b) Special Rule for Fraud. Notwithstanding anything in this
Section 6.1 to the contrary, in the event of a breach by any Party of a
representation or warranty which breach is intentional, or constitutes fraud,
the representation or warranty that has been breached will survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby (regardless of any investigation made by any Party or on its
behalf) and will continue in full force and effect for six years following the
Closing Date.
(c) No Waiver. Neither a Party's participation in the
consummation of any transaction pursuant to any Transaction Document nor any
waiver of any condition to such participation (including any condition that a
representation or warranty of any other Party be true and correct) will
constitute a waiver by such participating Party of any representation or
warranty of any Party or otherwise affect the survival of any such
representation or warranty.
6.2 Indemnification Obligations of Almedica.
(a) Specific Indemnifiable Losses. In addition to any other
right or remedy available to Purchasers at law or in equity, Almedica will
indemnify Purchasers and their Affiliates, stockholders, officers, directors,
employees, agents, representatives and permitted successors and assigns
(collectively, the "Base Ten Indemnitees") in respect of, and save and hold each
Base Ten Indemnitee harmless against and pay on behalf of or reimburse each Base
Ten Indemnitee as and when incurred, any Loss which any Base Ten Indemnitee
suffers, sustains or becomes subject to as a result of, in connection with,
relating or incidental to or by virtue of, without duplication:
(i) subject to the survival provisions of Section 6.1,
any misrepresentation or breach of any representation or warranty (other than
intentional misrepresentations or breaches of representations and warranties
arising out of fraud) by Sellers set forth in this Agreement or any Schedule,
certificate or other instrument or document furnished to Purchasers by Sellers
pursuant to any Transaction Document;
(ii) any intentional misrepresentation or breach of
any representation or warranty arising out of fraud by Sellers set forth in this
Agreement or any Schedule, certificate or other instrument or document furnished
to Purchasers by Sellers pursuant to any Transaction Document;
(iii) any nonfulfillment or breach of any covenant or
agreement of Sellers set forth in any Transaction Document;
(iv) any liability in connection with the consummation
of the transactions contemplated herein to any prospective buyer with whom
Sellers or any of their agents have had discussions regarding the disposition of
ATG; or
(v) any liabilities of ATG of any nature, whether
accrued, absolute, contingent or otherwise, existing at Closing and undisclosed
in the Transaction Documents.
(b) Limitation of Liability and Source of Indemnification.
(i) In no event, except with respect to any claim
described in Sections 6.2(a)(ii) and 6.1(b) of this Agreement, shall any
indemnification be made under Section 6.2 until the aggregate amount of Losses
with respect to an indemnity obligation of Almedica exceeds $50,000, then
indemnification for such obligation shall be made to the full extent of Losses
in excess of $50,000. In no event, except with respect to any claim described in
Sections 6.2(a)(ii) and 6.1(b) of this Agreement, shall the indemnity obligation
of Almedica under this Agreement exceed, in the aggregate, $3,160,000.
(ii) The Base Ten Indemnitees' remedy for any
indemnification hereunder, including any claim described in Sections 6.2(a)(ii)
and 6.1(b), may be satisfied as follows: Almedica's indemnification obligations
shall be satisfied first by recourse to the Base Ten Shares comprising the
Escrow Amount (except to the extent Almedica pays such amount in cash), and
then, for any balance, by payment in cash by Almedica or in Base Ten Shares, if
any, still owned by Almedica. For purposes of this Section, the value of each of
the Base Ten Shares shall be $1.00 per share.
6.3 Indemnification Obligations of Purchasers.
(a) Specific Indemnifiable Losses. Purchasers will indemnify
Sellers and their Affiliates, stockholders, officers, directors, employees,
agents, representatives and permitted successors and assigns (collectively, the
"Almedica Indemnitees") and hold each of them harmless against any Loss which
Almedica Indemnitee suffers, sustains or becomes subject to as a result of, in
connection with, relating to or by virtue of, without duplication:
(i) subject to the survival provisions of Section 6.1,
any misrepresentation or breach of any representation or warranty (other than
intentional misrepresentations or breaches of representations and warranties
arising out of fraud) by Purchasers set forth in this Agreement or any
certificate furnished to Sellers by Purchasers pursuant to any Transaction
Document;
(ii) any intentional misrepresentation or breach of
any representation or warranty arising out of fraud by Purchasers set forth in
this Agreement or any certificate furnished to Sellers by Purchasers pursuant to
any Transaction Document;
(iii) any nonfulfillment or breach of any covenant or
agreement of Purchasers set forth in any Transaction Document; or
(iv) the ownership and/or the operation of ATG after
the Closing.
(b) Limitation of Liability. In no event, except with respect
to any claim described in Sections 6.3(a)(ii) and 6.1(b) of this Agreement,
shall any indemnification be made under Section 6.2 until the aggregate amount
of Losses with respect to an indemnity obligation of Purchasers exceeds $50,000,
then indemnification for such obligation shall be made to the full extent of
Losses in excess of $50,000. In no event, except with respect to any claim
described in Sections 6.3(a)(ii) and 6.1(b) of this Agreement, shall the
indemnity obligation of Purchasers under this Agreement exceed, in the
aggregate, $3,160,000.
6.4 Indemnification Procedures.
(a) Notice of Claim. Any Person making a claim for
indemnification pursuant to Section 6.2 or 6.3 above (an "Indemnified Party")
must give the Party from whom indemnification is sought (an "Indemnifying
Party") written notice of such claim (an "Indemnification Claim Notice")
promptly after the Indemnified Party receives any written notice of any action,
lawsuit, proceeding, investigation or other claim (a "Proceeding") against or
involving the Indemnified Party by a Government Entity or other third party or
otherwise discovers the liability, obligation or facts giving rise to such claim
for indemnification; provided, that the failure to notify or delay in notifying
an Indemnifying Party will not relieve the Indemnifying Party of its obligations
pursuant to Section 6.2 or 6.3, as applicable, except to the extent that such
failure actually harms the Indemnifying Party. Such notice must contain a
description of the claim and the nature and amount of such Loss (to the extent
that the nature and amount of such Loss is known at such time).
(b) Control of Defense; Conditions. With respect to the
defense of any Proceeding against or involving an Indemnified Party in which a
Government Entity or other third party in question seeks only the recovery of a
sum of money for which indemnification is provided in Section 6.2 or 6.3, at its
option an Indemnifying Party may appoint as lead counsel of such defense any
legal counsel selected by the Indemnifying Party; provided, that before the
Indemnifying Party assumes control of such defense it must first:
(i) enter into an agreement with the Indemnified Party
(in form and substance satisfactory to the Indemnified Party) pursuant to which
the Indemnifying Party agrees to be fully responsible (with no reservation of
any rights other than the right to be subrogated to the rights of the
Indemnified Party) for all Losses relating to such Proceeding and
unconditionally guarantees the payment and performance of any liability or
obligation which may arise with respect to such Proceeding or the facts giving
rise to such claim for indemnification, and
(ii) furnish the Indemnified Party with evidence that
the Indemnifying Party, in the Indemnified Party's sole judgment, is and will be
able to satisfy any such liability.
(c) Control of Defense; Related Matters. Notwithstanding
Section 6.4(b):
(i) the Indemnified Party will be entitled to
participate in the defense of such claim and to employ counsel of its choice for
such purpose at its own expense; provided, that the Indemnifying Party will bear
the reasonable fees and expenses of such separate counsel incurred prior to the
date upon which the Indemnifying Party effectively assumes control of such
defense;
(ii) the Indemnifying Party will not be entitled to
assume control of the defense of such claim, and will pay the reasonable fees
and expenses of legal counsel retained by the Indemnified Party, if
(A) the Indemnified Party reasonably
believes that an adverse determination of such Proceeding could be materially
detrimental to or injure the Indemnified Party's reputation or future business
prospects, or
(B) a court of competent jurisdiction rules
that the Indemnifying Party has failed or is failing to prosecute or defend
vigorously such claim; and
(iii) the Indemnifying Party must obtain the prior
written consent of the Indemnified Party (which the Indemnified Party will not
unreasonably withhold) prior to entering into any settlement of such claim or
Proceeding or ceasing to defend such claim or Proceeding.
ARTICLE 7
OTHER COVENANTS
7.1 Transaction Expenses. Purchasers will be responsible for all costs
and expenses incurred by Purchasers in connection with the negotiation,
preparation and entry into the Transaction Documents and the consummation of the
transactions to be consummated pursuant to the Transaction Documents. Almedica
will pay (a) all transfer, sales, use and other Taxes imposed by reason of the
transactions contemplated by this Agreement, (b) all stamp and recording taxes,
fees and expenses, settlement fees, escrow fees and other miscellaneous closing
fees or costs associated therewith, and (c) all costs and expenses incurred by
Sellers in connection with the negotiation, preparation and entry into the
Transaction Documents and the consummation of the transactions to be consummated
pursuant to the Transaction Documents.
7.2 Further Assurances. From and after the Closing, Sellers will, and
will cause their Affiliates to, execute all documents and take any other action
which it is reasonably requested to execute or take to further effectuate the
transactions contemplated by the Transaction Documents.
7.3 Announcements. Sellers will not make any public announcement of or
regarding the transactions contemplated by this Agreement without the prior
approval of Purchasers as to the timing and content of such announcement (which
approval Purchasers may not unreasonably withhold or delay).
7.4 [Intentionally Omitted]
7.5 Non-Competition. In consideration for, and as a condition to, Base
Ten's agreement to enter into this Agreement, Almedica agrees as follows:
(a) Scope of Agreement. Almedica agrees that during the period
beginning on the Closing Date and ending on the fifth anniversary of the Closing
Date (the "Non-Competition Period"), Almedica will not, directly or indirectly,
either for itself or for any other Person, participate in, or permit its name to
be used by, any business or enterprise (other than the development by Base Ten
of software for Almedica's account) identical to or similar to the Business
which is engaged in by ATG as of the date of this Agreement and which is located
in North America. Purchasers and their respective successors shall give prompt
notice to Almedica following a determination by Purchasers during the
Non-Competition Period to no longer update and support any software application
or product devised or marketed by ATG (or any successor controlled by Base Ten
or any of its successors) and used by any customer of Almedica with respect to
the services provided by Almedica to such customers, and, following the
provision of such notice, Purchasers and Almedica shall agree to meet and use
all commercially reasonable efforts to establish a course of action with respect
to the provision of services by Almedica to its clients who use or have used and
request such software applications or products. For purposes of this Agreement,
the term "participate" includes any direct or indirect interest in any
enterprise, whether as an officer, director, employee, partner, sole proprietor,
agent, representative, independent contractor, consultant, franchisor,
franchisee, creditor, owner or otherwise; provided, that the term "participate"
shall not include ownership of less than two percent of the stock of a
publicly-held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market. Almedica agrees that this covenant
is reasonable with respect to its duration, geographical area and scope.
(b) Specific Performance. The parties hereto agree that Base
Ten would suffer irreparable harm from a breach by Almedica of any of the
covenants or agreements contained in this Section 7.5. In the event of an
alleged or threatened breach by Almedica of any of the provisions of this
Section 7.5, Base Ten or its successors or assigns may, in addition to all other
rights and remedies existing in its favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce or prevent any violations of the provisions hereof (including the
extension of the Non-Competition Period by a period equal to the length of the
violation of this Section 7.5). In the event of an alleged breach or violation
by any such Persons of any of the provisions of this Section 7.5, the
Non-Competition Period described above will be tolled until such alleged breach
or violation is resolved. Almedica agrees that these restrictions are
reasonable.
(c) Reasonableness. If, at the time of enforcement of any of
the provisions of this Section 7.5, a court holds that the restrictions stated
therein are unreasonable under the circumstances then existing, the Parties
hereto agree that the maximum period, scope or geographical area reasonable
under such circumstances will be substituted for the stated period, scope or
area.
(d) Survival. Almedica agrees that the covenants made in
Section 7.5(a) shall be construed as an agreement independent of any other
provision of this Agreement and shall survive any order of a court of competent
jurisdiction terminating any other provision of this Agreement.
7.6 Board Representation. At the Closing, Clark Bullock will be
appointed to serve as a director of Base Ten. Base Ten shall include Mr. Bullock
in the slate of directors recommended by the management of Base Ten in the proxy
statement for the next held annual meeting for the election of directors.
Almedica shall have the right, provided Almedica continues to hold Base Ten
Shares constituting at least 10% of the then outstanding Class A Common Stock of
Base Ten, to nominate one director to the Board of Directors of Base Ten by
giving written notice to Base Ten of such nomination together with the written
consent of such nominee to serve as director not less than 120 days prior to the
date that Base Ten's proxy statement in connection with its annual meeting of
shareholders for the election of directors is to be mailed to shareholders of
record. Base Ten shall include such nominee in the slate of directors
recommended by the management of Base Ten in the proxy statement for the next
held annual meeting for the election of directors. In the event that either (a)
Almedica's nominee is not elected to Base Ten's Board of Directors or (b)
Almedica determines not to nominate any person to be a director of Base Ten or
no longer has the right to nominate any such Person but Almedica and its
customers account for more than 20% of the revenues of ATG and its successors,
then Almedica shall have the right to have one Person appointed or elected to
the board of directors of ATG or such successor for as long as either clause (a)
or (b) is satisfied.
7.7 SEC. Almedica acknowledges that following the Closing Date Almedica
will have obligations to file certain reports pursuant to Section 13 and Section
16 of the Securities Exchange Act of 1934, as amended.
7.8 Cooperation on SEC Filings. Base Ten and Sellers acknowledge that
Base Ten may now or in the future be required to include information concerning
Sellers in SEC reports or other filings. Sellers shall provide Base Ten with any
information, certificates, documents or other materials about Sellers that are
reasonably necessary to be included in such SEC reports or other filings.
Almedica will provide to Base Ten, within 30 days following the Closing, with
respect to ATG, (i) audited balance sheets and audited statements of income and
cash flows for each of the last three fiscal years, (ii) unaudited balance sheet
and statements of income and cash flows as of May 31, 1999, and (iii) manually
executed auditor's reports with respect to the audited periods and consents of
the auditor to include any such reports in any SEC reports or other filings by
Base Ten.
7.9 Use of Almedica Name. Neither Base Ten nor any of its Affiliates
shall utilize after the Closing the name of Almedica or any variant thereof in
or in association with its name or the name of any Software, other product or
service provided thereby or in any marketing, advertising or promotional
materials thereof.
7.10 Severance. Any person who is an employee of ATG at the time of the
Closing and whose employment by ATG is terminated within twelve months following
the Closing, shall be entitled to severance payments in accordance with Base
Ten's then existing policies, but in no event shall such severance payments be
less than four weeks pay.
7.11 Public Information. In the event that Base Ten either fails to or
is not obligated to comply with the reporting requirements of Sections 13 or
15(d) of the Exchange Act, Base Ten shall use commercially reasonable efforts to
provide comparable financial information to Almedica and any assignee that owns
more than 5% of the then outstanding Base Ten Shares.
7.12 Taxes. The Parties agree that (i) Almedica shall be responsible
for the payment of all Taxes to become due following the Closing which relate to
ATG in the period prior to the Closing Date, except to the extent reserved
against on the Latest Balance Sheet and not thereafter reduced, and (ii) Base
Ten shall be responsible for the payment of all Taxes to become due following
the Closing which relate to ATG in the period on and after the Closing Date;
provided, however, (i) Almedica shall only be responsible for the payment of all
Taxes with respect to withholding and other deductions required by law for each
payroll met by ATG prior to the Closing, and (ii) Base Ten shall only be
responsible for the payment of all Taxes with respect to withholding and other
deductions required by law for each payroll to be met by ATG following the
Closing.
7.13 Joint and Several Liability. With respect to joint and several
liability among Sellers, Almedica acknowledges that following the Closing it
will have no claim for indemnification or contribution from ATG.
ARTICLE 8
DEFINITIONS
8.1 Definitions. For purposes hereof, the following terms, when used
herein with initial capital letters, shall have the respective meanings set
forth herein:
"Affiliate" of any Person means any other Person controlling,
controlled by or under common control with such first Person.
"Agreement" means this Agreement and Plan of Merger, including
all Schedules hereto, as it may be amended from time to time in accordance with
its terms.
"Assets" mean the assets of ATG shown on the Latest Balance
Sheet or acquired by ATG since the date of the Latest Balance Sheet, less any
assets disposed of by ATG in the ordinary course of business since the date of
the Latest Balance Sheet.
"Books and Records" means all lists, records and other
information pertaining to accounts, personnel and referral sources of ATG, all
lists and records pertaining to suppliers and customers of ATG, and all other
books, ledgers, files and business records of every kind relating or pertaining
to the Business, in each case whether evidenced in writing, electronically
(including by computer) or otherwise.
"Business" means ATG's business of developing, producing,
manufacturing and selling clinical label and materials management software,
including Almedica Drug Labeling System (ADLS), Clinical Materials Inventory
System (CMIS), AlmediCLaSS, and AlmediFAX.
"Code" means the United States Internal Revenue Code of 1986,
as amended.
"Environmental and Safety Requirements" means all federal,
state, local and foreign statutes, regulations, ordinances and other provisions
having the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law, in each case
concerning public health and safety, worker health and safety and pollution or
protection of the environment (including all those relating to the presence,
use, production, generation, handling, transport, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, Release, threatened
Release, control, or cleanup of any Hazardous Substance.
"Environmental Lien" means any Lien, whether recorded or
unrecorded, in favor of any Government Entity relating to any liability arising
under any Environmental and Safety Requirement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"GAAP" means, at a given time, United States generally
accepted accounting principles, consistently applied.
"Government Entity" means the United States of America or any
other nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government.
"Hazardous Substance" means any hazardous, toxic, radioactive
or chemical materials, mixtures, substances or wastes; and (whether or not
included in the foregoing), any pesticides, pollutants, contaminants, petroleum
products or by-products, asbestos, polychlorinated biphenyls (or PCBs), noise or
radiation.
"Indebtedness" of any Person means, without duplication: (a)
indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise (other than trade payables and
other current liabilities incurred in the ordinary course of business) and any
commitment by which such Person assures a creditor against loss, including
contingent reimbursement obligations with respect to letters of credit; (b)
indebtedness guaranteed in any manner by such Person, including a guarantee in
the form of an agreement to repurchase or reimburse; (c) obligations under
capitalized leases in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations such Person assures a creditor against loss; and (d) any unsatisfied
obligation of such Person for "withdrawal liability" to a "multiemployer plan,"
as such terms are defined under ERISA.
"Investment" means, with respect to any Person, any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or other ownership or beneficial interest
(including partnership interests and joint venture interests) of any other
Person, and any capital contribution by such Person to any other Person.
"Knowledge" means, with respect to a Person, (a) the actual
knowledge of such Person (which includes the actual knowledge of all partners(if
the Person is a Partnership), executive officers, directors and executive
employees of such Person) and (b) the knowledge which a prudent business person
would have obtained in the conduct of his or her business after making
reasonable inquiry and reasonable diligence with respect to the particular
matter in question.
"Legal Requirement" means any requirement arising under any
action, law, treaty, rule or regulation, determination or direction of an
arbitrator or Government Entity, including any Environmental and Safety
Requirement.
"Lien" means any mortgage, pledge, security interest,
encumbrance, easement, restriction on use, restriction on transfer, charge, or
other lien; provided, however, with respect to any Asset that is not owned,
"Lien" means any mortgage, pledge, security interest, encumbrance, easement,
restriction on use, restriction on transfer, charge, or other lien on the right
of ATG to use or have possession thereof.
"Loss" means, with respect to any Person, any diminution in
value, consequential or other damage, liability, demand, claim, action, cause of
action, cost, damage, deficiency, Tax, penalty, fine or other loss or expense,
whether or not arising out of a third party claim, including all interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid or
incurred in connection with any action, demand, proceeding, investigation or
claim by any third party (including any Government Entity) against or affecting
such Person or which, if determined adversely to such Person, would give rise
to, evidence the existence of, or relate to, any other Loss and the
investigation, defense or settlement of any of the foregoing, together with
interest thereon from the date on which such Person provides the written notice
of the related claim as described in Section 6.4 through and including the date
on which the total amount of the claim, including such interest, is recovered or
recouped pursuant to Article 6.
"Officer's Certificate" of any Person means a certificate
signed by such Person's president or chief financial officer (or an individual
having comparable responsibilities with respect to such Person) stating that (a)
the individual signing such certificate has made or has caused to be made such
investigations as are necessary in order to permit such individual to verify the
accuracy of the information set forth in such certificate and (b) to the best of
such individual's Knowledge, such certificate does not misstate any material
fact and does not omit to state any fact necessary to make the fact stated
therein not misleading.
"Permitted Lien" means, as to the ATG Shares, and, as to other
Assets, (i) any Lien for Taxes not yet due or delinquent or being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, (ii) any statutory Lien arising in the
ordinary course of business by operation of Law with respect to a Liability that
is not yet due or delinquent and (iii) any minor imperfection of title or
similar Lien which individually or in the aggregate with other such Liens could
not reasonably be expected to materially adversely affect the Business.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Plans" means all Employee Pension Plans, Employee Welfare
Plans, Other Plans and Multiemployer Plans to which ATG contributes or is a
party.
"Proprietary Rights" means all of the following owned by,
issued to or licensed to ATG: (a) all inventions (whether or not patentable or
reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof; (b) all trademarks, service marks, trade dress, logos, trade names, and
corporate names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith; (c) all
copyrightable works (including software developed by ATG for use in the
Business), all copyrights, and all applications, registrations, and renewals in
connection therewith; (d) all mask works and all applications, registrations,
and renewals in connection therewith; (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals);
(f) the Software; (g) all other proprietary rights; and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Release" has the meaning set forth in CERCLA.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities of 1933, as amended.
"Software" means all computer programs, software, data bases,
source codes, magnetic tape, diskettes and punchcards used by or useful to ATG
in the conduct of the Business as currently conducted and presently proposed to
be conducted.
"Subsidiary" of any Person means any corporation, partnership,
association or other business entity which such Person, directly or indirectly,
controls or in which such Person has a majority ownership interest. For purposes
of this definition, a Person is deemed to have a majority ownership interest in
a partnership, association or other business entity if such Person is allocated
a majority of the gains or losses of such entity or is or controls the managing
director or general partner of such entity.
"Taxes" means any federal, state, county, local or foreign
taxes, charges, fees, levies, other assessments or withholding taxes or charges
imposed by any governmental entity and includes any interest and penalties
(civil or criminal) on or additions to any such taxes.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto and any amendment thereof.
"Transaction Documents" means this Agreement, and all other
agreements, instruments, certificates and other documents to be entered into or
delivered by any Party in connection with the Merger.
"Treasury Regulations" means the United States Treasury
Regulations promulgated pursuant to the Code.
8.2 Other Definitional Provisions.
(a) Accounting Terms. Accounting terms which are not defined
herein have the meanings given to them under GAAP. To the extent that the
definition of an accounting term set forth in this Agreement is inconsistent
with the meaning of such term under GAAP, the definition in this Agreement will
control. To the extent that the Financial Statements were prepared in accordance
with GAAP, no change in accounting principles shall be made from those utilized
in preparing the Financial Statements (without regard to materiality) including
with respect to the nature of accounts, level of reserves or level of accruals.
For purposes of the preceding sentence, "changes in accounting principles"
includes all changes in accounting principles, policies, practices, procedures
or methodologies with respect to financial statements, their classification or
their display, as well as all changes in practices, methods, conventions or
assumptions (unless required by objective changes in underlying events) utilized
in making accounting estimates.
(b) "Hereof," etc. The terms "hereof," "herein" and
"hereunder" and terms of similar import are references to this Agreement as a
whole and not to any particular provision of this Agreement. Section, clause and
Schedule references contained in this Agreement are references to Sections,
clauses and Schedules in or to this Agreement, unless otherwise specified.
(c) "Including". The term "including" means including, without
limitation.
(d) Successor Laws. Any reference to any particular Code
section or any other law or regulation will be interpreted to include any
revision of or successor to that section regardless of how it is numbered or
classified.
ARTICLE 9
OTHER AGREEMENTS
9.1 Rights and Remedies. No course of dealing between the Parties or
failure or delay in exercising any right, remedy, power or privilege (each, a
"right") pursuant to this Agreement will operate as a waiver of any rights of
any Party, nor will any single or partial exercise of any right under this
Agreement preclude any other or further exercise of such right or the exercise
of any other right. Except as expressly set forth herein, the rights provided
pursuant to this Agreement are cumulative and not exhaustive of any other rights
which may be provided by law.
9.2 Waivers, Amendments to be in Writing. No waiver, amendment,
modification or supplement of this Agreement will be binding upon a Party unless
such waiver, amendment, modification or supplement is set forth in writing and
is executed by such Party.
9.3 Successors and Assigns. Except as otherwise expressly provided in
this Agreement, all covenants and agreements set forth in this Agreement by or
on behalf of Almedica and Base Ten will bind and inure to the benefit of the
respective successors and assigns of Almedica and Base Ten, whether so expressed
or not, except that neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by Almedica without the prior written
consent of Base Ten.
9.4 Governing Law. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of New Jersey, without giving
effect to any choice of law or conflict rule of any jurisdiction that would
cause the laws of any other jurisdiction to be applied. In furtherance of the
foregoing, the internal law of the State of New Jersey will control the
interpretation and construction of this Agreement, even if under any choice of
law or conflict of law analysis, the substantive law of some other jurisdiction
would ordinarily apply.
9.5 Jurisdiction. Each of the Parties hereby (i) irrevocably submits to
the jurisdiction of the state courts of, and the federal courts located in, the
State of New Jersey in any action or proceeding arising out of or relating to,
this Agreement, (ii) waives, and agrees to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court, and waives and agrees not
to seek any review by any court of any other jurisdiction which may be called
upon to grant an enforcement of the judgment of any such court.
9.6 Notices.
(a) All demands, notices, communications and reports
("notices") provided for in this Agreement will be in writing and will be either
personally delivered, mailed by first class mail (postage prepaid) or sent by
reputable overnight courier service (delivery charges prepaid) to any Party at
the address specified below, or at such address, to the attention of such other
Person, and with such other copy, as the recipient party has specified by prior
written notice to the sending Party pursuant to the provisions of this Section
9.6.
If to Sellers:
Almedica International Inc.
75 Commerce Drive
Allendale, New Jersey 07401
Attention: President
Facsimile Number: (201) 995-0728
with a copy, which will not constitute notice to Almedica or
ATG (prior to the Closing), to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Richard T. Prins
Facsimile Number: (212) 735-2000
If to Purchasers:
Base Ten Systems, Inc.
One Electronics Drive
Trenton, New Jersey
Attention: President
Facsimile Number: (609) 586-3677
with a copy, which will not constitute notice to Base Ten,
BTSC or ATG (following the Closing), to:
Pitney, Hardin, Kipp & Szuch
200 Campus Drive
P.O. Box 1945
Morristown, New Jersey 07962-1945
Attention: Joseph Lunin
Facsimile Number: (973) 966-1550
(b) Any such notice will be deemed to have been given when
delivered personally, on the third business day after deposit in the U.S. mail
or on the business day after deposit with a reputable overnight courier service,
as the case may be.
9.7 Severability of Provisions. If any provision of this Agreement is
held to be invalid for any reason whatsoever, then such provision will be deemed
severable from the remaining provisions of this Agreement and will in no way
affect the validity or enforceability of any other provision of this Agreement.
9.8 Schedules. The Schedules constitute a part of this Agreement and
are incorporated into this Agreement for all purposes.
9.9 Counterparts. The Parties may execute this Agreement in separate
counterparts (no one of which need contain the signatures of all Parties), each
of which will be an original and all of which together will constitute one and
the same instrument.
9.10 No Third-Party Beneficiaries. Except as otherwise expressly
provided in this Agreement, no Person which is not a Party will have any right
or obligation pursuant to this Agreement.
9.11 Headings. The headings used in this Agreement are for the purpose
of reference only and will not affect the meaning or interpretation of any
provision of this Agreement.
9.12 Merger and Integration. Except as otherwise provided in this
Agreement, this Agreement sets forth the entire understanding of the Parties
relating to the subject matter hereof, and all prior understandings, whether
written or oral, are superseded by this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement
and Plan of Merger as of the date first written above.
ALMEDICA
Almedica International Inc.
CLARK L. BULLOCK
By: ______________________________
Name: CLARK L. BULLOCK
Title: Chairman
ATG
Almedica Technology Group, Inc.
CLARK L. BULLOCK
By: _____________________________
Name: CLARK L. BULLOCK
Title: Chairman
BASE TEN
Base Ten Systems, Inc.
THOMAS E. GARDNER
By: _______________________________
Thomas E. Gardner
President and Chief Executive Officer
BTSC
Ex-BTS Clinical, Inc.
THOMAS E. GARDNER
By: ______________________________
Thomas E. Gardner
President
Exhibit A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
, is by and between Base Ten Systems, Inc., a New Jersey corporation
(the "Company") and Almedica International Inc., a Delaware corporation
("Almedica").
WHEREAS, the Company, Ex-BTS Clinical, Inc., a New Jersey corporation
("BTSC"), Almedica and Almedica Technology Group Inc., a New Jersey corporation
("ATG") are parties to that certain Agreement and Plan of Merger, dated as of
June 11, 1999 (the "Merger Agreement"); and
WHEREAS, unless otherwise defined in this Agreement, capitalized terms
used in this Agreement shall have the meanings ascribed to such terms in the
Merger Agreement; and
WHEREAS, the Merger Agreement provides for the merger of BTSC with and
into ATG; and
WHEREAS, the 736 shares of capital stock of ATG issued and outstanding
immediately prior to the Effective Time (the "ATG Shares") shall be converted
into and exchanged for an aggregate of 3,950,000 shares of Class A Common Stock,
par value $1.00 per share, of the Company (the "Base Ten Shares") to Almedica;
and
WHEREAS, the Company desires to grant to Almedica certain registration
rights in certain circumstances with respect to such Base Ten Shares (the
"Registrable Securities");
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties to this Agreement hereby agree as follows:
1. Registration Rights.
(a) Registration Conditions. Almedica shall not be entitled to
any registration rights pursuant to this Agreement until June 12, 2000 and
unless a period of 12 months has elapsed since the Closing Date, and the number
of the Registrable Securities then beneficially owned by Almedica constitutes
10% or more of the Company's then outstanding Class A Common Stock. The
conditions set forth in this Section 1(a) shall be referred to as the
"Registration Conditions."
(b) Mandatory Registration. Provided that the Registration
Conditions have been satisfied, the Company shall, within 45 days following
receipt of a written request by Almedica, file a Registration Statement on Form
S-3 (if such form is then available for use by the Company, or if such form is
not then available for use by the Company, such form as is available to the
Company) permitting the registration of all or a portion of the Registrable
Securities for resale by Almedica in the manner reasonably designated by
Almedica; provided, however, the Company shall not be required to use any form
other than a Form S-3 (or such other form) so long as the Company's inability to
use a Form S-3 is solely a result of Almedica's breach of Section 7.8 of the
Merger Agreement. Almedica shall only be entitled to make one demand pursuant to
this Section 1(b), notwithstanding the fact that its one demand may cover only a
portion of the Registrable Securities then beneficially owned by Almedica;
provided, however, that a demand shall not be treated as a demand unless a
registration statement covering all of the shares as to which such demand was
made becomes effective for the full period covered by the following sentence.
Once effective, the Company shall use commercially reasonable efforts to keep
such registration statement continuously effective under the Securities Act of
1933 (the "Securities Act") until the earlier of (i) the date on which all of
the Registrable Securities have been sold, or (ii) 360 days after the
effectiveness of such registration statement (the "Registration Period").
(c) Piggyback Registration. Provided that the Registration
Conditions have been satisfied, the Company shall, at least 30 days prior to the
filing of any registration statement under the Securities Act (other than a
registration statement on Form S-8 or Form S-4 or any comparable or successor
forms) relating to the public offering of its Common Stock by the Company or any
of its security holders, give written notice of such proposed filing and of the
proposed date thereof to Almedica, and if, on or before the 20th day following
the date on which such notice is given, the Company shall receive a written
request from Almedica requesting that the Company include among the securities
covered by such registration statement some or all of the Registrable
Securities, the Company shall include such Registrable Securities in such
registration statement, if filed, so as to permit such Registrable Securities to
be sold or disposed of in the manner and on the terms of the offering thereof
set forth in such request. If the managing underwriter advises the Company in
writing that the inclusion in such registration of some or all of the
Registrable Securities sought to be registered by Almedica creates a substantial
risk that the proceeds or price per share that will be derived from such
registration will be reduced or that the number of shares to be registered at
the insistence of Almedica, plus the number of shares of Common Stock sought to
be registered by the Company and any other stockholders of the Company is too
large a number to be reasonably sold, then, in such event, the number of shares
sought to be registered for the stockholders of the Company shall be reduced,
pro rata in proportion to the number of shares sought to be registered to the
number of shares recommended be sold by the managing underwriter. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration. With respect to any excluded or withdrawn
Registrable Securities and any Registrable Securities not covered by Almedica's
request for inclusion in such registration statement, Almedica shall remain
entitled to receive additional notices pursuant to this Section 1(c) until all
Registrable Securities have been included in a registration statement either
pursuant to Section 1(b) or 1(c) of this Agreement. Once effective, the Company
shall use commercially reasonable efforts to keep such registration statement
continuously effective under the Securities Act during the Registration Period.
2. Terms and Conditions of Registration. Except as otherwise provided
herein, in connection with any registration statement filed pursuant to Section
1 above, the following provisions shall apply:
(a) In connection with a registration statement filed
pursuant to Section 1(c) above, the Company will enter into an underwriting
agreement with the underwriters for such offering, such agreement to be
reasonably satisfactory in form and substance to the Company, Almedica and the
underwriters, and to contain such representations, warranties and covenants by
the Company and such other terms as are customarily contained in such agreements
used by the managing underwriter, including, without limitation, restrictions of
sales of Class A Common Stock or other securities by the Company as may be
reasonably agreed to between the Company and such underwriters. Almedica shall
be a party to any underwriting agreement relating to an underwritten sale of the
Registrable Securities and may, at Almedica's option, require that any or all of
the representations, warranties and covenants of the Company to or for the
benefit of such underwriters, shall also be made to and for the benefit of
Almedica. All representations and warranties of Almedica shall be made to or for
the benefit of the Company.
(b) The Company shall provide a transfer agent and
registrar (which may be the same entity) for the Registrable Securities, not
later than the effective date of such registration.
(c) All expenses in connection with the preparation
and filing of such registration statement shall be borne solely by the Company,
except for any transfer taxes payable with respect to the disposition of such
Registrable Securities, and any underwriting discounts and selling commissions
applicable solely to such sales of Registrable Securities, which shall be paid
by Almedica.
(d) Following the effective date of such registration
statement, the Company shall, upon the request of Almedica, forthwith supply
such number of prospectuses (including exhibits thereof and preliminary
prospectuses and amendments and supplements thereto) meeting the requirements of
the Securities Act and such other documents as are referred to in the prospectus
as shall be reasonably requested by Almedica to permit Almedica to make a public
distribution of the Registrable Securities.
(e) The Company shall prepare, if necessary, and file
such amendments and supplements to such registration statement, as may be
necessary to keep such registration statement effective, subject to applicable
laws, rules and orders, during the Registration Period.
(f) The Company shall use commercially reasonable
efforts to register the Registrable Securities covered by such registration
statement under such securities or Blue Sky laws in addition to those in which
the Company would otherwise sell shares, as Almedica reasonably requests, except
that neither the Company nor Almedica shall for any such purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction where it is not so qualified. The
filing fees incurred in connection with such registration shall be borne by the
Company.
(g) Almedica shall cooperate fully with the Company
and provide the Company with all information reasonably requested by the Company
for inclusion in the registration statement or as necessary to comply with the
Securities Act.
(h) The Company shall notify Almedica, at any time
after effectiveness when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of circumstances then existing (and upon receipt of such
notice and until a supplemented or amended prospectus as set forth below is
available, Almedica shall not offer or sell any securities covered by such
registration statement and shall return all copies of such prospectus to the
Company if requested to do so by it), and at the request of Almedica prepare and
furnish Almedica promptly a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances than existing.
(i) The Company will use commercially reasonable
efforts to comply with the reporting requirements of Sections 13 and 15(d) of
the Securities Exchange Act of 1934, as amended, to the extent it shall be
required to do so pursuant to such sections, and at all times while so required
shall use commercially reasonable efforts to comply with all other public
information reporting requirements of U.S. Securities and Exchange Commission
(the "Commission") Rule 144 promulgated by the Commission under the Securities
Act from time to time in effect to provide Almedica with the availability of an
exemption from the Securities Act for the sale of any of the Company's common
stock held by Almedica. The Company will also cooperate with Almedica in
supplying such information and documentation as may be necessary for Almedica to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act for the sale of any Company common stock held by
Almedica.
(j) In the event of any registration pursuant to this
Agreement, the Company agrees to indemnify and hold harmless, to the extent
permitted by law, Almedica and each person who controls Almedica (within the
meaning of the Securities Act) against all losses, claims, damages, liabilities
and expenses to which Almedica or such controlling person may become subject
under the Securities Act which are caused by any untrue or alleged untrue
statement of material fact contained in the registration statement, or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished to the Company by
or on behalf of Almedica or such controlling person for use therein.
3. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent of Almedica to such amendment, action or omission to act.
(b) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns, but not transferees of the Registrable Securities who
are then present or former employees of Almedica or any entity that is then or
was a subsidiary of Almedica.
(c) Notices. All notices and other communications provided for
in this Agreement will be in writing and will be either personally delivered,
mailed by first class mail (postage prepaid) or sent by reputable overnight
courier service (delivery charges prepaid) to any party at the address specified
below, or at such other address or to such other person as provided by prior
written notice:
If to the Company:
Base Ten Systems, Inc.
One Electronics Drive
Trenton, New Jersey
Attention: President
Facsimile Number: (609) 586-3677
With a copy to:
Pitney, Hardin, Kipp & Szuch
200 Campus Drive
P.O. Box 1945
Morristown, New Jersey 07962-1945
Attention: Joseph Lunin
Facsimile Number: (973) 966-1550
If to Almedica:
Almedica International Inc.
75 Commerce Drive
Allendale, New Jersey 07401
Attention: President
Facsimile Number: (201) 995-0728
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Richard T. Prins
Facsimile Number: (212) 451-7519
Any such notice will be deemed to have been given when delivered personally, on
the third business day after deposit in the U.S. mail or on the business day
after deposit with a reputable overnight courier service, as the case may be.
(d) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(e) Severability. If any provision of this Agreement is held
to be invalid for any reason whatsoever, then such provision will be deemed
severable from the remaining provisions of this Agreement and will in no way
affect the validity or enforceability of any other provision of this Agreement.
(f) Counterparts. The parties to this Agreement may execute
this Agreement in separate counterparts (no one of which need contain the
signatures of all parties), each of which will be an original and all of which
together will constitute one and the same instrument.
(g) Governing Law. This Agreement will be governed by and
construed in accordance with the domestic laws of the State of New Jersey,
without giving effect to any choice of law or conflict rule of any jurisdiction
that would cause the laws of any other jurisdiction to be applied. In
furtherance of the foregoing, the internal law of the State of New Jersey will
control the interpretation and construction of this Agreement, even if under any
choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.
(h) Jurisdiction. Each of the parties hereby (i) irrevocably
submits to the jurisdiction of the state courts of, and the federal courts
located in, the State of New Jersey in any action or proceeding arising out of
or relating to, this Agreement, (ii) waives, and agrees to assert, by way of
motion, as a defense, or otherwise, in any such suit, action or proceeding, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution, that
the suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this Agreement or
the subject matter hereof may not be enforced in or by such court, and waives
and agrees not to seek any review by any court of any other jurisdiction which
may be called upon to grant an enforcement of the judgment of any such court.
(i) Merger and Integration. Except as otherwise provided in
this Agreement, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
whether written or oral, are superseded by this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Registration Rights Agreement as of the date first written above.
BASE TEN SYSTEMS, INC.
By: _______________________________
Name: William F. Hackett
Title: Senior Vice President
ALMEDICA INTERNATIONAL INC.
By: _______________________________
Name: Clark L. Bullock
Title: Chairman of the Board