Exhibit 10.1
================================================================================
Amendment No. 3
to
Amended and Restated
Agreement and Plan of Merger
among
Base Ten Systems, Inc.
Newco B10, Inc.
and
ConvergenceHealth.com
August 1, 2002
12
AMENDMENT NO. 3
TO
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
This AMENDMENT NO. 3 ("Amendment No. 3") TO AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER dated as of January 18, 2002 (the "Original Merger
Agreement") is entered into as of August 1, 2002 by and among Base Ten Systems,
Inc., a New Jersey corporation having its principal office at 535 East County
Line Road, Suite 16, Lakewood, New Jersey 08701 ("Base Ten"), Newco B10, Inc., a
Nevada corporation wholly-owned by Base Ten having its principal office at 535
East County Line Road, Suite 16, Lakewood, New Jersey 08701 ("Newco," and
together with Base Ten, the "Purchasers"), and ConvergenceHealth.com, a Nevada
corporation having its principal office at 774 Mays Boulevard, Suite 386,
Incline Village, Nevada 89451 (the "Company," and together with the Purchasers,
the "Parties").
WHEREAS, the Parties amended the Original Merger Agreement pursuant to
(a) an Amended and Restated Agreement and Plan of Merger dated as of February 1,
2002 (the "Amended and Restated Merger Agreement"), (b) an Amendment No. 1 to
the Amended and Restated Agreement and Plan of Merger dated as of March 7, 2002
("Amendment No. 1") and (c) an Amendment No. 2 to the Amended and Restated
Agreement and Plan of Merger dated as of June 18, 2002 ("Amendment No. 2");
WHEREAS, the Original Merger Agreement, as amended by the Amended and
Restated Merger Agreement, Amendment No. 1 and Amendment No. 2 are referred to
herein collectively as the "Merger Agreement";
WHEREAS, the Parties desire to further amend the terms of the Merger
Agreement pursuant to this Amendment No. 3 to provide for (a) certain loans by
Base Ten to the Company, (b) the elimination of certain rights of the Company to
terminate the Merger Agreement and abandon the transactions contemplated thereby
(the "Transactions"), (c) conditions to the Company's entitlement to reinstate
the eliminated rights in certain events and (d) certain related modifications to
the provisions of the Merger Agreement;
WHEREAS, Section 8.2 of the Merger Agreement provides for its amendment
only by a written instrument executed by all the Parties;
WHEREAS, the Board of Directors of each of the Parties has duly
approved this Amendment No. 3 and the transactions contemplated hereby; and
WHEREAS, unless otherwise defined in this Amendment No. 3, capitalized
terms contained herein have the respective meanings set forth in the Merger
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth in this Amendment No. 3, the Parties hereby agree as
follows:
SECTION 1. Initial Loan to the Company. Concurrent with the execution
of this Amendment No. 3, Base Ten shall provide an unsecured demand loan of
$125,000 to the Company (the "Initial Loan") on the terms and subject to
delivery to Base Ten of a promissory note in the form of Exhibit A hereto, duly
executed on behalf of the Company (the "Initial Note").
13
SECTION 2. Subsequent Loans to the Company. In the event the
Transactions are not consummated on or prior to September 30, 2002, Base Ten
shall provide the Company with an additional unsecured demand loan in the
aggregate principal amount of $50,000 for each month during the four-month
period commencing September 30, 2002, and ending January 31, 2003, in which the
Transactions are not consummated (the "Subsequent Funding Period"); provided
that (a) the Merger Agreement has not theretofore been terminated in accordance
with its terms, as amended hereby, and (b) the Company is not in default of its
undertakings in Section 5.12 and Section 5.13(a) of the Merger Agreement. Each
loan required during the Subsequent Funding Period (each, a "Subsequent Loan")
shall be funded within five business days of end of each month in the Subsequent
Funding Period during which the Closing does not occur (each, a "Funding Date").
Each Subsequent Loan shall be on substantially the terms and subject to delivery
to Base Ten of a promissory note in the principal amount of the Subsequent Loan
and in substantially the form of the Initial Note, duly executed on behalf of
the Company (each, a "Subsequent Note"). In the event any Subsequent Loan
required hereunder is not made by Base Ten within five business days after the
applicable Funding Date and the Company is not in default of its undertakings in
Section 5.12 and Section 5.13(a) of the Merger Agreement, the Company may elect,
upon written notice to Base Ten, to terminate the Merger Agreement, subject to
and conditioned upon its contemporaneous repurchase of 800,000 BT Purchased
Shares at a repurchase price of $100,000. In that event, without demand or other
notice from Base Ten, the Initial Loan and any outstanding Subsequent Loans
shall be payable, together with all interest thereon in accordance with the
terms of the Initial Note and any Subsequent Notes, 90 days after the
termination date.
SECTION 3. Cash Equivalents. Section 6.2(n) of the Merger Agreement is
hereby amended to reduce the $400,000 cash maintenance condition required
thereby to an amount equal to $400,000 minus the aggregate principal amount of
the Initial Loan and all Subsequent Loans outstanding at the Effective Time.
SECTION 4. Shareholder Proxies. The effectiveness of this Amendment No.
3 shall be subject to receipt from Byron Gehring and Kenneth Waltzer, each a
shareholder and an officer of the Company (the "Principals"), of their
irrevocable proxies in the form of Exhibit B hereto, duly executed by the
Principals (the "Proxies"). In connection with the Proxies, the Company
represents and warrants that approval of the Merger requires the receipt of
affirmative votes from holders of a majority of the shares entitled to vote at
the Company Meeting.
SECTION 5. Updated Representations. The references to "December 31,
2000" in Section 3.8 and Section 4.8 of the Merger Agreement are hereby amended
to read "December 31, 2001."
SECTION 6. Events of Termination. Section 7.1(b), Section 7.1(c) and
Section 7.1(d) of the Merger Agreement (the "Company Termination Rights") are
hereby deleted in their entirety, subject to reinstatement pursuant to Section 7
hereof. Except as otherwise provided in Section 7 and Section 8 hereof, the
Company hereby waives its right to terminate the Merger Agreement pursuant to
Section 7.1(f) thereof based on Base Ten's failure to fulfill the condition set
forth in Section 6.2(a) thereof pertaining to its representations and warranties
under Article III of the Merger Agreement, except for its representations and
warranties in Section 3.8 thereof ("Company Termination for Adverse
Development"). The Certificate required by Section 6.2(f) shall be modified
accordingly. Any Company Termination for Adverse Development shall be subject to
and conditioned upon the Company's contemporaneous repurchase of 800,000 BT
Purchased Shares at a repurchase price of $100,000. In that event, without
demand or other notice from Base Ten, the Initial Loan and any outstanding
Subsequent Loans shall be payable, together with all interest thereon in
accordance with the terms of the Initial Note and any Subsequent Notes, 90 days
after the termination date.
SECTION 7. Conditional Reinstatement of Company Termination Rights. In
the event the Company obtains third-party financing prior to consummation of the
Transactions, it may elect, upon written notice to Base Ten, to reinstate the
Company Termination Rights, terminate the Merger Agreement and deliver
revocations of the Proxies by the Principals, subject to and conditioned upon
its contemporaneous (a) repayment in full of the Initial Loan and any
outstanding Subsequent Loans, together with all interest thereon in accordance
with the terms of the Initial Note and any Subsequent Notes, (b) repurchase of
all 1,160,000 BT Purchased Shares at a repurchase price of $290,000 and (c)
payment of a break-up to Base Ten in the amount of $100,000.
14
SECTION 8. Additional Company Termination Rights. In the event the
Transactions are not consummated on or prior to September 30, 2003 and neither
Party has theretofore terminated the Merger Agreement in accordance with its
terms, as amended hereby, the Company may elect, upon written notice to Base
Ten, to reinstate the Company Termination Rights, terminate the Merger Agreement
and deliver revocations of the Proxies by the Principals.
SECTION 9. Remedies on Termination. Section 7.3 of the Merger Agreement
shall be deemed to be amended to reflect the termination remedies provided
herein.
SECTION 10. Releases from Principal Shareholders. Base Ten will use its
best efforts to obtain general releases from Jesse Upchurch, the Constance J.
Upchurch Family Trust and Almedica International, Inc., providing for the
release of Base Ten and its successors, directors and officers from any claims
or liabilities arising from the conduct of its business prior to the Closing.
SECTION 11. Miscellaneous.
(a) Waivers, Amendments to be in Writing. No waiver,
amendment, modification or supplement of this Amendment No. 3 will be binding
upon a Party unless such waiver, amendment, modification or supplement is set
forth in writing and is executed by such Party.
(b) Successors and Assigns. Except as otherwise expressly
provided in this Amendment No. 3, all covenants and agreements set forth in this
Amendment No. 3 by or on behalf of the Company and Base Ten will bind and inure
to the benefit of the respective successors and assigns of the Company and Base
Ten, whether so expressed or not. Notwithstanding the foregoing, neither this
Amendment No. 3 nor any of the rights, interests or obligations hereunder may be
assigned by either party without the prior written consent of the other party.
(c) Governing Law. This Amendment No. 3 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 Amendment No. 3, even if
under any choice of law or conflict of law analysis, the substantive law of some
other jurisdiction would ordinarily apply.
(d) 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 Amendment No. 3, (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
Amendment No. 3 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.
(e) Ratification; Interpretation. Except as expressly
modified by this Amendment No. 3, the Merger Agreement shall remain in full
force and effect, and the terms and provisions thereof are hereby ratified and
affirmed in all respects. Without limiting the generality of the foregoing, the
parties agree that in the event of a conflict between any provision of the
Merger Agreement and this Amendment No. 3, the provisions of this Amendment No.
3 shall control.
15
(f) Severability of Provisions. If any provision of this
Amendment No. 3 is held to be invalid for any reason whatsoever, then such
provision will be eemed severable from the remaining provisions of this
Amendment No. 3 and will in no way affect the validity or enforceability of any
other provision of this Amendment No. 3.
(g) Counterparts. The Parties may execute this Amendment
No. 3 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.
(h) Headings. The headings used in this Amendment No. 3
are for the purpose of reference only and will not affect the meaning or
interpretation of any provision of this Amendment No. 3.
IN WITNESS WHEREOF, the Parties have executed this Amendment
No. 3 as of August 1, 2002.
CONVERGENCEHEALTH.COM
By: ______________________________
Kenneth Waltzer,
Chief Medical Officer
BASE TEN SYSTEMS, INC.
By: _____________________________
Edward J. Klinsport,
Chief Executive Officer
NEWCO B10, INC.
By: _______________________________
Kenneth W. Riley,
President
16
Exhibit A
FORM OF PROMISSORY NOTE
-----------------------
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (II)
RECEIPT BY THE COMPANY AT THE PAYEE'S SOLE COST AND EXPENSE OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION
UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER AND THAT
SUCH ISSUANCE IS NOT IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS
LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.
CONVERGENCEHEALTH.COM
DEMAND PROMISSORY NOTE
$_________ ____________, 2002
Incline Village, Nevada
(c) FOR VALUE RECEIVED, CONVERGENCEHEALTH.COM, a Nevada
corporation (the "Company" or "Maker") promises to pay to the
order of Base Ten Systems, Inc. (the "Payee" or the "holder of
this Note") the principal amount of $__________, in such coin
or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and
private debts, together with interest as set forth in Section
1 of this Note, at such times and in such amounts as set
--------- forth in Section 2 of this Note, at the Payee's
address designated in Section 5 of this Note or at such other
place as --------- the Payee shall have notified the Company
in writing at least ninety (90) days before such payment is
due. This Note is issued pursuant to the terms of an Amendment
No. 3 of even date herewith to the Agreement and Plan of
Merger dated as of January 18, 2002 among the Payee, its
subsidiary and the Company (as amended and restated, the
"Merger Agreement").
1. Interest. Interest on the principal amount hereof shall accrue at
the rate of 10% per annum, compounded monthly, from the date hereof until the
principal hereof is paid in full. Interest as aforesaid shall be calculated on
the basis of actual number of days elapsed over a year of 360 days and shall be
payable as set forth in Section 2 of this Note.
2. Payment. The principal balance of this Note, plus all accrued and
unpaid interest thereon, shall be due in full on the date occurring on the
earlier of (a) termination of the Merger Agreement by the Company under
conditions requiring payment hereof as specified therein, (b) 90 days after
termination of the Merger Agreement by the Company under conditions requiring
payment hereof 90 days after such termination or (b) ninety (90) days following
written demand from Payee, provided that no demand shall be made during the
pendency of the transactions contemplated by the Merger Agreement. All payments
in respect of this Note shall be made to the Payee without set-off counterclaim
and free and clear of and without any deductions of any kind.
17
3. Miscellaneous.
A. This Note is not subject to offset and may not be changed
orally, but only by an agreement in writing signed by the Maker and the Payee.
The Maker hereby waives diligence, presentment, protest and notice of any
protest, demand, dishonor and nonpayment in the enforcement of this Note. No
failure by the Payee to exercise any right or remedy hereunder, whether before
or after a default, shall constitute a waiver thereof, and no waiver of any past
default shall constitute waiver of any future or other default.
B. This Note and the rights evidenced hereby shall inure to
the benefit of the holder of this Note and its assigns. This Note shall be
construed in accordance with and governed by the laws of the State of New Jersey
without regard to conflict of laws considerations. It is the intent of the
parties that this Note be enforced to the fullest extent permitted under of the
laws and public policy of the State of New Jersey.
C. All notices, requests, consents and demands shall be made
by registered mail, return receipt requested, and shall be deemed effective
seven-two (72) hours after deposit in the United State mail, and properly
addressed with postage prepaid, as follows:
To PAYEE
--------
Base Ten Systems
Attn: Kenneth Riley, CFO
535 East County Line Road, #16
Lakewood, NJ 08701
To MAKER
--------
ConvergenceHealth.com
Attn: Byron Gehring
774 Mays Blvd., #10
PMB #386
Incline Village NV 89451
IN WITNESS WHEREOF, this Note has been executed and delivered on the
date specified above by the duly authorized representative of the Company.
CONVERGENCEHEALTH.COM
By: ______________________________
Name: Byron Gehring
Title: Chief Executive Officer
18
Exhibit B
FORM OF PROXY
-------------
IRREVOCABLE PROXY
The undersigned, a stockholder and director of ConvergenceHealth.com, a Nevada
corporation (the "Company"), does hereby appoint Andrew G. Sycoff and Edward J.
Klinsport and each of them as Proxies with full power of substitution in each of
them, in the name, place and stead of the undersigned, to vote all of the shares
of the Company's Common Stock, Series A-1 Preferred Stock, Series A-2 Preferred
Stock, and Series A-3 Preferred Stock that the undersigned would be entitled to
vote if personally present at any meeting of the stockholders of the Company
(however such meeting is called and regardless of whether such meeting is a
special or annual meeting of the stockholders of the Company) or upon the
solicitation of consents of the stockholders of the Company in accordance with
and solely with respect to the following instructions:
The undersigned hereby instructs said proxies or their substitutes to vote FOR
the approval of the transactions contemplated in the Agreement and Plan of
Merger dated as of January 18, 2002 among Base Ten Systems, Inc., Newco B10,
Inc. and the Company, as amended and restated (the "Merger Agreement"). This
Proxy is coupled with an interest and is revocable only under the limited
conditions therefor set forth in the Merger Agreement.
Dated: August 1, 2002
By:_______________________
19