SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 1, 1997
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Base Ten Systems, Inc.
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(Exact Name of Registrant as Specified in Charter)
New Jersey 0-7100 22-1804206
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(State of Other Jurisdiction (Commission (I.R.S. Employer
Of Incorporation) File Number) Identification No.)
One Electronics Drive, Trenton, New Jersey 08619
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (609)586-7010
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Inapplicable
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(Former Name of Former Address, if Changed Since Last Report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
On May 1, 1997, Base Ten Systems, Inc. (the "Registrant")
entered into an Operating Agreement with Jesse Upchurch (the "Operating
Agreement") whereby the Registrant became a minority owner of a limited
liability company (the "LLC"). Under the terms of the Operating Agreement, the
Registrant made a capital contribution to the LLC of its rights to the uPACS
technology in return for a 9% interest in the LLC and Jesse Upchurch made a
capital contribution of $2 million and agreed to make a further capital
contribution of $1 million on or before December 1, 1997 in return for a 91%
interest in the LLC. In connection with the formation of the LLC, the Registrant
entered into a Services and License Agreement whereby the Registrant has agreed
to complete the development of the uPACS technology and undertake to market,
sell and distribute systems using the uPACS technology. The LLC will pay the
Registrant its expenses in connection with such services and shall remit to the
LLC royalties in connection with the sale of systems using the uPACS technology.
After the LLC has distributed to Mr. Upchurch $4.5 million of its net cash flow,
the Registrant will become a 63% owner of the LLC and Mr. Upchurch will own a
37% interest in the LLC. Alexander Adelson, a director of the Company is to
receive $30,000 from the LLC after the closing and will be entitled to receive
1% of revenues generated by the LLC up to the first $45 million in revenues, in
consideration of his services in connection with establishing the LLC and
obtaining the capital funding therefor. There can be no assurance that uPACS
will be successful or that the LLC will operate profitably or that the funds
under the LLC will be sufficient for the further development and marketing of
uPACS.
The following exhibits are filed with this Form 8-K:
Exhibits
10 (u) Operating Agreement between the Registrant and Jesse Upchurch
dated May 1, 1997.
10 (v) License and Services Agreement between the Registrant and
uPACS, L.L.C. dated May 1, 1997.
10 (w) Compensation Agreement among uPACS, L.L.C., Andrew Garrett,
Inc. and Drew Sycoff dated May 1, 1997.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: June ___, 1997
BASE TEN SYSTEMS, INC.
By: /S/ MYLES KRANZLER
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Myles M. Kranzler
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibits
10 (u) Operating Agreement between the Registrant and Jesse Upchurch
dated as of May 1, 1997.
10 (v) License and Services Agreement between the Registrant and
uPACS, L.L.C. dated as of May 1, 1997.
10 (w) Compensation Agreement among uPACS, L.L.C., Andrew Garrett,
Inc. and Drew Sycoff dated as of May 1, 1997.
uPACS, L.L.C.
OPERATING AGREEMENT
THIS OPERATING AGREEMENT is entered into as of the 1st day of
May, 1997 (the "Effective Date") by and among BASE TEN SYSTEMS, INC., a New
Jersey corporation ("Base Ten"), and JESSE UPCHURCH, residing at
_____________________________________________ ________________("Upchurch") ")
with Base Ten and Upchurch referred to collectively as the "Members" and each
separately as a "Member").
WHEREAS, the Members are all of the Members of the limited
liability company formed under the laws of the State of New Jersey and known as
uPACS, L.L.C. (the "LLC"); and
WHEREAS, Base Ten has agreed to license to the LLC the
exclusive rights to certain technology referred to as "uPACS" with the objective
that the LLC will fund the development and the sales, marketing, and
distribution of a picture archiving and communication system (the "Technology");
and
WHEREAS, Upchurch has agreed to make a capital contribution
to the LLC of $3 million to fund the development, selling, marketing, and
distribution of the Technology; and
WHEREAS, the Members desire to set forth their respective
rights and obligations with respect to the LLC, as provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants stated herein, the parties agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall
have the following meanings:
1.1. "Accountants" shall mean the firm of independent
certified public accountants designated from time to time by the Manager to
serve as accountants for the LLC.
1.2. "Act" shall mean the New Jersey Limited Liability
Company Act.
1.3. "Affiliate" shall mean (i) any Person directly or
indirectly controlling, controlled by, or under common control with, the
referenced Person, (ii) any Person which has a 10% or more beneficial, or
voting, interest in the referenced Person or any Person in which the referenced
Person has a 10% or more beneficial, or voting, interest; (iii) any officer or
director of or partner or member in either the referenced Person or any Person
described in (i) or (ii) above, and (iv) any Person who would be a related
taxpayer to the referenced Person under Code Section 267. For purposes of the
above, the term "control" (including "controlling" and "controlled") shall mean
the possession, direct or indirect, of the power to direct or to cause the
direction of the management and policies of a Person, whether through the
ownership of voting interests, by contract, or otherwise.
1.4. "Agreement" shall mean this Operating Agreement.
1.5. "Business Plan" shall have the meaning provided in
Section 5.4.
1.6. "Capital Account" shall have the meaning provided in
Section 6.6.
1.7. "Code" shall mean the Internal Revenue Code of 1986, as
it may be amended or replaced from time to time.
1.8. "Member" or "Members" shall have the meanings provided
in the Preamble.
1.9. "Effective Date" shall have the meaning provided in the
Preamble.
1.10. "Event of Default" shall have the meaning provided in
Section 10.4.
1.11. "Events of Dissolution" shall have the meaning provided
in Section 10.1.
1.12. "Indemnified Party" shall have the meaning provided in
Section 4.6.
1.13. "Indemnifying Party" shall have the meaning provided in
Section 4.6.
1.14. "LLC" shall have the meaning provided in the Preamble.
1.15. "LLC Interest" shall refer to a Member's entire right,
title and interest in the LLC and including a Member's share in the Profits and
Losses and the right to receive distributions of LLC assets and to participate
in the management and affairs of the LLC.
1.16. "Liquidating Trustee" shall have the meaning provided
in Section 10.2.
1.17. "Manager" shall mean the Member designated as the
"manager" pursuant to Section 4.2.
1.18. "Percentage Interests" shall have the meaning set forth
in Section 7.1.
1.19. "Person" shall mean any person, firm, corporation,
partnership, limited liability company, association, company, trust, estate
custodian, nominee or other individual or entity.
1.20. "Profits" and "Losses" shall be determined in
accordance with the Regulations under Section 704(b) of the Code and generally,
pursuant thereto, shall mean amounts equal to the corresponding items of income,
gain, deductions and losses computed for federal income tax purposes, except
that such items of income, gain, deductions and losses with respect to assets
contributed by a Member to the LLC or owned by the LLC if and when the Members'
Capital Accounts are revalued, shall be computed by reference to such assets'
fair market value, determined by the Members, at the time of such contribution
or revaluation, all as provided in the Regulations under Section 704(b) of the
Code. The Manager shall determine, in its reasonable discretion, such Profits
and Losses with the assistance of the Accountants.
1.21. "Pro Forma" shall have the meaning provided in Section
5.3.
1.22. "Regulations" shall mean the final or temporary
regulations promulgated by the Treasury Department under the Code and as then in
effect.
1.23. "Regulatory Allocations" shall have the meaning
provided in Section 8.4.
1.24. "Reserves" shall have the meaning provided in Section
7.3.
1.25. "Royalties" shall mean the royalty compensation paid to
the LLC by Base Ten pursuant to the License and Service Agreement referred to in
Section 4.2.
1.26. "Services Agreement" shall have the meaning provided in
Section 4.2.
1.27. "Tax Matter Partner" shall have the meaning provided in
Section 6.5.
1.28. "Transfer" shall mean any sale, assignment,
hypothecation, mortgage, pledge, encumbrance or other transfer or disposition.
<PAGE>
ARTICLE II
CONTINUATION
2.1. Continuation. The Members have joined together as a
"limited liability company." The Manager has filed or caused to be filed a
certificate of formation with the Secretary of State of New Jersey substantially
in the form of Exhibit A attached hereto. The LLC shall conduct business as a
limited liability company pursuant to the terms of this Agreement and the
provisions of all applicable law.
2.2. Name. The business and affairs of the LLC shall be
conducted under the name "uPACS, L.L.C." and such name shall be used at all
times in connection with the business and affairs of the LLC.
2.3. Office. The LLC shall maintain its principal office at
such location as may be designated by the Manager.
2.4. Purpose. The purpose of the LLC shall be to fund the
development and the sales, marketing, and distribution of the Technology. The
LLC may do anything in furtherance of such purpose. The LLC shall not enter into
any business or activity other than as expressly permitted in this Agreement
without the prior written consent of Base Ten and Upchurch.
2.5. Other Businesses. This Agreement shall not prohibit any
Member from conducting other businesses or activities not related to the LLC
without accounting to the LLC or the other Members, whether or not such other
businesses or activities, directly or indirectly, compete with the business of
the LLC. Further, no Member shall be liable or accountable to the LLC or the
other Members for failure to disclose or make available to the LLC any business
opportunity that such Member becomes aware of in its capacity as a Member or
otherwise.
2.6. Title of Property. All tangible and intangible, real and
personal property owned by the LLC shall be owned by the LLC as an entity and,
insofar as permitted by applicable law, no Member shall have any ownership
interest in such property in its individual name or right, and each Member's
interest in the LLC shall be personal property for all purposes.
2.7. Term. The term of the LLC shall commence on the
Effective Date and shall continue until the winding up and liquidation of the
LLC in accordance with Section 10.1.
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ARTICLE III
CAPITAL CONTRIBUTIONS
3.1. Initial Contributions. Upon the execution of this
Agreement, the Members shall make the following initial capital contributions to
the LLC:
Base Ten An exclusive license to the rights to
the Technology as presently designed by
Base Ten and a nonexclusive license to
the rights to any patents applying the
Technology that Base Ten currently owns
and is obligated to maintain.
Upchurch $3 million (of which $2 million shall be
contributed within 5 days after the
execution of this Agreement and $1
million shall be contributed no later
than December 1, 1997).
3.2. No Other Contributions. No Member shall be required to
make any additional capital contributions to the LLC not specifically required
by Sections 3.1 and shall not be obligated or required under any circumstances
to restore the negative balance in its Capital Account.
3.3. No Interest. The Members shall not receive interest on
any capital contribution at any time made to the LLC or on the balance of their
respective Capital Accounts.
3.4. Financing. The Business Plan may identify expenditures
which are to be funded with financing from banks or other financial
institutions. Such financing shall be obtained on terms that the Manager
determines to be acceptable and approved by the Members in accordance with
Section 5.2, except that it is understood that initial funding has been arranged
by Andrew Garrett, Inc., which will receive such compensation as the Manager
shall determine, and Alex Adelson, who will receive an amount equal to 1% of the
initial contributions of Upchurch as set forth in Section 3.1.
<PAGE>
ARTICLE IV
MANAGEMENT AND OPERATIONS
4.1. Management. The Management of the LLC shall be vested in
the Members as provided in this Agreement, acting by a vote of Members having at
least 92% of the Percentage Interests when the Percentage Interests of the
Members are as set forth in Section 7.1 (a) and acting by a vote of Members
having at least 51% of the Percentage Interests when the Percentage Interests of
the Members are as set forth in Section 7.1 (b), which shall meet at such time
and location, and discuss such matters. The Members shall delegate specific
responsibilities to the Manager, as provided in this Agreement or to any
specific Member in a written document executed by all of the Members.
4.2. Manager. Base Ten is hereby designated, and accepts such
designation, as the "Manager" of the LLC, and shall serve as Manager until a
successor Manager has been approved by the Members in accordance with Section
5.2. The Manager shall use all reasonable efforts to effect all responsibilities
delegated to it by this Agreement, or otherwise by the Members, and shall have
the right to enter into and execute all contracts, documents and other
agreements on behalf of the LLC, which shall thereby fully bind the LLC, in
furtherance of such responsibilities. The Manager shall not be liable to the LLC
or the Members for errors in judgment or any acts or omissions, whether or not
disclosed, unless caused by gross negligence or willful misconduct. On the
Effective Date, the Manager shall cause the LLC to execute and deliver to Base
Ten and Base Ten shall execute and deliver to the LLC a License and Services
Agreement substantially in the form of Exhibit B attached hereto (the "Services
Agreement")
4.3. Duties of the Manager. The Manager shall, at the cost
and expense of the LLC, do the following:
(i) keep, or cause to be kept, all books of account and
other records of the LLC, in accordance with the terms of this Agreement;
(ii)prepare, or cause to be prepared, and deliver to
each of the Members periodic reports as required by Section 6.3;
(iii) prepare, or cause to be prepared, the federal,
state and local tax returns required of the LLC, and file the same after
approval by the Partners in accordance with Section 5.2.
(iv)any other matter delegated to the Manager by the
Members in accordance with Section 5.2.
The Manager shall make any expenditure or incur any obligation on
behalf of the LLC which are identified in a Business Plan.
4.4. Employees. The Manager may from time to time cause the
LLC to employ Persons, including any Affiliate of the Manager, to operate the
business of the LLC, including performing any function that the Manager would
otherwise perform, and to pay such Person any fee that the Manager determines to
be reasonable; provided, however, that no fee shall be paid to an Affiliate of a
Member, except as otherwise provided in Section 4.5 or as approved by the
Members in accordance with Section 5.2.
4.5. Other Compensation. No Member shall be entitled to any
fees, commissions or other compensation from the LLC for any services rendered
to or performed for the LLC, except as specifically provided in this Agreement
or as approved by the Members in accordance with Section 5.2. Notwithstanding
anything to the contrary contained in this Agreement, the Members hereby
acknowledge that Base Ten will be performing services for the LLC pursuant to
the Services Agreement and that all fees charged to the LLC pursuant to the
Services Agreement shall not in any way reduce any distribution of Cash Flow
otherwise due to Base Ten as a Member of the LLC.
4.6. Member Indemnification. Each Member and the Manager (the
"Indemnifying Party") shall indemnify the LLC and each other Member and the
Manager (the "Indemnified Party") for, and shall hold the Indemnified Party
harmless from and against, any and all liability to any Person incurred by the
Indemnified Party by reason of any fraudulent, criminal, or grossly negligent
act or omission of or breach of this Agreement by such Indemnifying Party or
Affiliates of such Indemnifying Party, and for, from and against all cost,
expense and loss incurred by the Indemnified Party in connection therewith.
4.7. LLC Indemnification. The LLC and each Member shall
indemnify the Manager and the other Members for, and shall hold the Manager and
each Member harmless from and against, any liability of the Manager or the
Members to any Person arising or incurred in connection with the good faith
discharge of the Manager's or the Member's obligations under this Agreement,
except for liability imposed on the Manager or such Member as a result of any
fraudulent, criminal, or grossly negligent act or omission of or breach of this
Agreement by the Manager.
<PAGE>
ARTICLE V
MEMBER'S RIGHTS
5.1. General. Except in the capacity as the Manager or as
specifically provided in writing by the Members, the Members shall not act
individually in the name of or as the representative of the LLC and shall not
deal with the LLC's assets in any way, and shall not incur any obligation for
which the LLC or the other Member will or may be liable, and the Members shall
not otherwise bind the LLC or the other Members, and any violation of this
sentence shall be deemed to constitute willful misconduct.
5.2. Consent. The Manager and the Members shall not do any of
the following without the express written consent of all of the Members (other
than the Defaulting Members):
(i) acquire any real property;
(ii) obtain any financing;
(iii) make any expenditure or incur any obligation by or
for the LLC which is not authorized in the Business Plan;
(iv) enter into contracts or other agreements on behalf
of the LLC which are not in the Business Plan;
(v) select any successor Managing Partner;
(vi) dissolve or wind up the LLC;
(vii) amend this Agreement;
(viii) admit any other Members to the LLC;
(ix) transfer an LLC Interest; and
(x) resign, dissolve or otherwise withdraw from the LLC.
5.3. Pro Forma. As soon as reasonably possible after the
Effective Date, the Manager shall prepare a pro forma (the "Pro Forma") which
includes the estimated costs for effecting the purpose of the LLC and costs of
operating the LLC. The Manager shall revise the Pro Forma as deemed appropriate
by the Manager, but no less frequently than once each calendar quarter, to
reflect the then current estimate of such costs for the LLC, and shall, within
ten (10) days after the end of each such quarter, provide a copy of such revised
Pro Forma to all of the Members. Each Pro Forma will be deemed to be approved by
the Members unless a Member provides notice to all Members that it objects to a
Pro Forma within ten (10) days after receipt; in which event the Members shall
use all reasonable efforts to reconcile such objections in a timely fashion. A
Pro Forma approved by the Members in accordance with this Section 5.3 shall
replace all prior Pro Formas.
5.4. Business Plan. As soon as reasonably possible after the
Effective Date, the Manager shall prepare a conceptual plan (the "Business
Plan") for the business funded by the LLC. The Business Plan shall include a
copy of the then current Pro Forma. The Business Plan shall be revised from time
to time as deemed appropriate by the Manager but no less frequently than
annually. Each Business Plan will be deemed to be approved by the Members unless
a Member provides notice to all Members that it objects to a Business Plan
within ten (10) days after receipt; in which event the Members shall use all
reasonable efforts to reconcile such objections in a timely fashion. A Business
Plan approved by the Members in accordance with this Section 5.4 shall replace
all prior Business Plans. The Members and the Manager hereby acknowledge that it
is the objective of the LLC to reach profitability within the second year after
the Effective Date.
5.5. Tax Returns. Each federal, state and local tax return of
the LLC shall be delivered by the Manager to the Members in accordance with
Section 6.4 shall be deemed to be approved by the Members unless a Member
provides notice to all Members that it objects to a tax return within (10) days
after receipt. The Accountants shall determine if the tax returns should be
revised to remedy any objection raised by a Member and the decision of the
Accountants shall be final and binding on the Members.
<PAGE>
ARTICLE VI
ACCOUNTING, REPORTS AND TAX MATTERS
6.1. Fiscal Year. The fiscal year of the LLC shall be
November 1 to October 31, unless a calendar year is required by law or
applicable regulations.
6.2. Accounting Method. The books and records of the LLC
shall be maintained on the method of accounting approved by the Members in
accordance with Section 5.2 and otherwise in accordance with generally accepted
accounting principles consistently applied and shall show all items of income
and expense. The Manager shall maintain at the LLC's principal office full and
accurate books and records of the LLC's business.
6.3. Reports. Within forty-five (45) days after the end of
each of the first three fiscal quarters and within one hundred twenty (120) days
after the end of the fourth fiscal quarter, the Manager shall provide the
Members with a report of the LLC's operations, which shall include profit and
loss income statements and balance sheet data of the LLC for such year to date
and the most recent Business Plan and Pro Forma. All such reports shall be at
the expense of the LLC. Each Member and its respective attorneys, accountants
and other advisors, shall have the right once during each fiscal quarter, during
usual business hours and upon reasonable notice, to examine, review, audit, and
make copies of the books and records of the LLC. Each Member shall maintain all
information relating to the LLC contained in such reports, the Business Plan,
the Pro Forma and books and records in strict confidence. Each Member making
such examination, review, audit or copying shall bear all of the expenses
incurred by such Member, the other Member, the Manager and the LLC in any such
examination, review, audit and copying.
6.4. Tax Status. Each of the Members hereby recognizes that
the LLC will be recognized as a partnership for Federal and New Jersey tax
purposes and will be subject to all provisions of Subchapter K of Chapter 1 of
Subtitle A of the Code. The Manager shall use all reasonable efforts to cause
the Accountants to prepare and make timely filings of all tax returns and
statements which the Accountants determine must be filed on behalf of the LLC
with any taxing authority. The Manager shall use all reasonable efforts to
provide a copy of such returns and statements to each Member prior to the due
date (computed without regard to any extensions thereof) and actual filing of
such return.
6.5. Tax Matters Member. The Manager shall be the "tax
matters partner" for purposes of the Code and shall notify the other Member of
any audit or other matters of which the Manager is notified or becomes aware.
6.6. Capital Accounts. An account (a "Capital Account") shall
be established and maintained for each Member in accordance with Regulations
Section 1.704-1(b) of the Code. Accordingly, each Member's Capital Account shall
be increased by (i) the amount of money contributed by such Member to the LLC,
(ii) the fair market value (as determined by both Members) of property
contributed by such Member to the LLC (net of the liabilities secured by such
contributed property that the LLC is considered to assume or take subject to
under Code Section 752), and (iii) allocations to such Member of Profits; and
shall be decreased by (iv) the amount of money distributed to such Member by the
LLC, (v) the fair market value (as determined by both Members) of the property
distributed to such Member by the LLC (net of liabilities secured by such
distributed property that such Member is considered to assume or take subject to
under Code Section 752), and (vi) allocations to such Member of Losses.
<PAGE>
ARTICLE VII
DISTRIBUTIONS
7.1. Percentage Interests. (a) The Members shall initially
have the following Percentage Interests:
Base Ten 9%
Upchurch 91%
(b) After Upchurch has received $4,500,000 of distributions
of Cash Flow made to the Members as set forth herein, the Percentage Interests
shall be as follows:
Base Ten 63%
Upchurch 37%
7.2. Distributions of Cash Flow. From time to time, but no
less frequently than once a year, the Manager shall cause the LLC to distribute
the Cash Flow of the LLC (the (Royalties after reserves, expenses and other
payments required to be paid by the LLC), to the Members as follows: (a) the
first $4.95 million in Cash Flow shall be distributed 10/11ths to Upchurch and
1/11th to Alex Adelson, (b) the Cash Flow of the LLC after the LLC has
distributed $4.5 million to Upchurch, Cash Flow shall be distributed to Upchurch
in proportion to his Percentage Interests as set forth in Section 7.1(b), and to
Base Ten, subject to such agreements into which the LLC shall have entered, as
executed by the Manager, requiring distributions of Royalties, in proportion to
its Percentage interests as set forth in Section 7(b). Notwithstanding the
foregoing of this Section 7.2, distributions made upon the termination or
dissolution of the LLC shall be made in accordance with Section 10.2 of this
Agreement.
7.3. Reserves. Notwithstanding anything to the contrary
contained in Section 7.2, the Manager may defer the distribution of the Cash
Flow otherwise required to be distributed pursuant to Section 7.1 and use the
Cash Flow to establish reasonable reserves as provided in the Pro Forma (the
"Reserves") for the payment of LLC expenses, debt payments, capital
improvements, replacements, distribution, contingencies and all other purposes
all as determined by the Manager. The Manager shall, at all times during the
existence of the LLC, retain $50,000 in reserve to cover the costs of
liquidating the LLC.
<PAGE>
ARTICLE VIII
ALLOCATIONS
8.1. Profits. Except as otherwise required by Section 8.3,
Profits shall be allocated to the Members in proportion to the distribution of
Cash Flow received by the Members as provided in Section 7.2 above. Payments by
the LLC which, pursuant to the terms hereof are described in terms of Cash Flow
but are distributed to persons or entities which are not Members, shall, for the
purpose of allocating Profits, be deemed to be expenses of the LLC and shall be
treated as Expenses of the LLC for all tax purposes.
8.2. Losses. Except as otherwise required by Section 8.3,
Losses shall be allocated to the Members in proportion to the distribution of
Cash Flow received by the Members as provided in Section 7.2 above.
8.3. Regulatory Allocations. Special allocations shall be
made if and to the extent necessary to comply with the Regulations under Section
704(b) of the Code.
8.4. Curative Allocations. The allocations required by
Section 8.3 (the "Regulatory Allocations") are intended to comply with the
requirements of Regulations under Code Section 704(b) and shall be interpreted
consistently with such Regulations. Notwithstanding any other provision of this
Article VIII, other items of Profits and Losses shall be allocated among the
Members so that, to the extent possible without violating the purpose of the
Regulatory Allocations, the net amount of Profits and Losses allocated to each
Member shall be equal to the net amount that would have been allocated to each
such Member if the Regulatory Allocations had not been made.
8.5. Tax Allocations. All items of income, gains, losses and
deductions computed for federal income tax purposes shall be allocated to the
Members in accordance with the allocation of the corresponding item of Profits
or Losses and all other allocations shall be made in proportion to the Members'
Percentage Interests. In the event that property with a fair market value that
differs from its adjusted tax basis is contributed to the LLC by a Member or
owned by the LLC if and when the Members' Capital Accounts are revalued, then
the items of income, gain, loss and deduction with respect to such property
shall be allocated in accordance with Section 704(c) of the Code and the
Regulations thereunder. All other allocations shall be made in proportion to the
Members' Percentage Interests.
8.6. Binding Effect. The Members are aware of the income tax
consequences of the allocations made by this Article VIII and hereby agree to be
bound by the provisions of this Article VIII in reporting their shares of LLC
income, gain, loss and deduction for federal income tax purposes.
8.7. Amendment. The Members shall consent to any amendment to
this Article VIII proposed by the Manager which the Manager reasonably
determines to be in the best interests of the Members and to be necessary or
advisable to comply with the requirements of the Code or the Regulations
regarding the allocation of Profits and Losses and all tax items including items
of income, gain, deduction, loss or credit; provided, however, that such
amendment shall not change the Members' respective Percentage Interests.
8.8. Change in Percentage Interests. In the event that the
Members' Percentage Interests change during the year, then the allocations of
Profits and Losses required by this Article VIII shall be modified to account
for such changes in accordance with Section 706(d) of the Code.
8.9. Election. The Manager shall make all elections for
federal income tax purposes that the Manager reasonably determines to be in the
best interest of the Members and to be advisable.
<PAGE>
ARTICLE IX
TRANSFERS OF LLC INTERESTS
9.1. Transfers of LLC Interests. No Member may Transfer all
or any part of its LLC Interest (including without limitation any Transfer
between Members) unless and until such Transfer has been approved in writing by
all of the Members (other than Defaulting Members). Any purported Transfer made
in violation of this Section 9.1 shall be void ab initio (from the beginning)
and without effect. Any Member who purports to Transfer all or any part of its
LLC Interest in violation of this Section 9.1 shall be deemed to be a
"Defaulting Member."
9.2. Withdrawals. No Member may resign, dissolve or otherwise
withdraw from the LLC unless and until such resignation, dissolution or
withdrawal has been approved in writing by all of the Members (other than
Defaulting Members). Any other provision of this Agreement to the contrary
notwithstanding, if a Member resigns, dissolves or otherwise withdraws from the
LLC without such approval, such Member shall thereafter be deemed to be a
"Defaulting Member."
9.3. Assignments. Notwithstanding the prohibition on
Transfers of LLC Interests provided by Section 9.1, a Member may, without the
consent of the other Members, assign its right to the allocation of Profits and
Losses of, and distributions of cash and other assets from, the LLC; provided,
that the assignee acknowledges in writing that such assignee shall not be a
"member" of the LLC, or have the right to act as a member of the LLC, until all
of the Members consent to the admission of such assignee as a "member."
<PAGE>
ARTICLE X
DISSOLUTION
10.1. Events of Dissolution. The LLC shall continue until
dissolved upon the earliest to occur of the following events (the "Events of
Dissolution"):
(i) October 31, 2022; or
(ii) the sale, exchange, or other disposition by the LLC
of all or substantially all of the LLC's assets; or
(iii)the agreement of Base Ten and Upchurch to terminate
and dissolve the LLC; or
(iv) when the LLC has insufficient funds to continue
operation and no further investment in the LLC can be arranged after diligent
efforts have been made; or
(v) when there is only one Member.
10.2. Liquidating Distributions. Upon an Event of
Dissolution, the Manager or a Person designated by the Manager (the "Liquidating
Trustee") shall take full account of the assets and liabilities of the LLC as of
the date of such Event of Dissolution and shall proceed with reasonable
promptness to liquidate the LLC's assets and terminate its business. The cash
proceeds from such liquidation, together with any other net assets of the LLC,
shall be applied first to the payment of expenses of the LLC, including all
items relating to such liquidation and all reserves that the Liquidating Trustee
determines, in its discretion, to be appropriate. Amounts remaining after such
payments have been made, shall be distributed to the Members in accordance with
Section 7.2(b); provided, however, that if the LLC is liquidated prior to
receipt by Upchurch of an amount equal to 1.5 times the initial capital
contributions of Upchurch (or $4.5 million), the remaining amounts, less any
amounts due to Base Ten under the Services Agreement, shall be distributed to
Upchurch until Upchurch has received a total of $4.5 million calculated by
adding all prior distributions from the LLC to Upchurch together with the amount
of the liquidation distribution, after Upchurch has received such amount, the
remaining amount shall be distributed to the Members as follows: 100% to Base
Ten. On the liquidation of the LLC, the Liquidating Trustee shall be responsible
for fulfilling all open contracts that cannot be sold prior to the liquidation.
10.3. Tax Termination. In the event of a termination of the
LLC for federal income tax purposes under Section 708 of the Code resulting from
the transfer of an interest in the LLC, the LLC shall nevertheless remain in
full force and effect hereunder and the Capital Accounts shall govern the
constructive liquidation for federal income tax purposes and new Capital
Accounts shall be redetermined in accordance with Section 6.6.
10.4. Default. If a Member fails to perform any of its
obligations under this Agreement or violates any of the terms of this Agreement
(an "Event of Default") the other Member, shall have the right (in addition to
all of its other rights and remedies under this Agreement, at law or in equity)
to give the Member written notice of such default at any time prior to the
curing of such default. Unless the Member cures such default within ten (10)
days after receipt of such notice, then the Member shall be a "Defaulting
Member" hereunder. Notwithstanding the foregoing of this Section 10.4, in the
event that a Member violates the terms of this Agreement and such violation
constitutes gross negligence or willful misconduct then such Member shall
immediately be deemed to be a "Defaulting Member" and shall not be entitled to
receive notice of such default or an opportunity to cure such default. If a
Member is a Defaulting Member as that term is defined in this Section 10.4 or
elsewhere in this Agreement, the other Member may do one or more of the
following, at the same or different times, in addition to all of its or their
other rights and remedies:
(i) bring any proceeding in the nature of specific
performance, injunction or other equitable remedy it being acknowledged by each
of the Members that damages at law may be an inadequate remedy for an Event of
Default under this Agreement and the Defaulting Member may be compelled to cure
such default;
(ii) bring any action at law by or on behalf of the
Member or the LLC, individually or collectively, as may be permitted in order to
recover damages and the Defaulting Member shall be liable for all damages
suffered by the LLC and the other Member as a result of such default; and
(iii) require, by written notice from such other Member
to the LLC, that any amount otherwise payable from the LLC to the Defaulting
Member shall be paid to the other Member or the Manager in an amount equal to
the amount (including damages) owing from the Defaulting Member to the other
Member, the Manager or to the LLC.
<PAGE>
ARTICLE XI
GENERAL
11.1 Notices. Unless otherwise provided in this Agreement,
notices shall be deemed given if in writing and either delivered personally
(with receipt acknowledged) or mailed certified mail, return receipt requested,
postage prepaid, to the Member to whom the notice is to be given at such
Member's address as set forth below or such other address designated by such
Member to the other Member by notice hereunder.
If to Base Ten: Base Ten Systems, Inc.
One Electronics Drive
Trenton, New Jersey 08619
Attention: President
If Upchurch: c/o Drew Sycoff
Andrew Garrett, Inc.
310 Madison Avenue, Suite 406
New York, New York 10017
11.2 Waiver. No consent or waiver, express or implied, by any
Member to or of any breach or default by any other Member in the performance by
any other Member of its obligations hereunder shall be deemed or construed to be
a consent to or waiver of any other breach or default in the performance by such
other Member of the same or any other obligation of such Member hereunder.
Failure on the part of a Member to complain of any act or failure to act of any
other Member or to declare such other Member in default, irrespective of how
long such failure continues, shall not constitute a waiver by such Member of its
rights hereunder.
11.3 Severability. If any of this Agreement or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions
to other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
11.4 Binding Agreement. Subject to the restrictions on
Transfers set forth herein, this Agreement shall inure to the benefit of and be
binding upon the Members and their respective heirs, executors, legal
representatives, successors and assigns. None of the provisions of this
Agreement is intended to be, nor shall the provisions be construed to be, for
the benefit of any third party. Whenever, in this Agreement, a reference to any
party or Member is made, such reference shall be deemed to include a reference
to the permitted heirs, executors, legal representatives, successors and assigns
of such party or Member.
11.5 Additional Remedies. The rights and remedies of any
Member hereunder shall not be mutually exclusive, i.e., the exercise of one or
more of the provisions hereof shall not preclude the exercise of any other
provisions hereof. The respective rights and obligations hereunder shall be
enforceable by specific performance, injunction or other equitable remedy, but
nothing herein contained is intended to, nor shall it, limit or affect any other
rights in equity or any rights at law or by statute or otherwise of any party
aggrieved as against the other for breach or threatened breach of any provision
hereof, it being the intention of this Section 11.5 to make clear the agreement
of the Members that the respective rights and obligations of the Members
hereunder shall be enforceable in equity as well as at law or otherwise.
11.6 Further Actions. Each of the Members hereby agrees to
hereafter execute and deliver such further instruments and do such further acts
and things as may be required or appropriate to carry out the intent and purpose
of this Agreement and which are not inconsistent with the terms hereof.
11.7 Prohibition Against Partition. Each of the Members
hereby permanently waives and relinquishes any and all rights it may have to
cause all or any part of the property or assets of the LLC, to be partitioned,
it being the intention of the Members to prohibit any Member from bringing a
suit for partition against the other Members, or any of them.
11.8 Use of Certain Terms. The definitions in Article I apply
equally to both the singular and the plural; any pronoun shall include the
corresponding masculine, feminine and neuter; the words "include" and
"including" shall be deemed to be followed by the phrase "without limitation";
and the terms "hereof" and "herein" shall refer to the particular agreement or
document in which such term appears.
11.9 Brokers. Each of the parties represents to the other
that they have had no contacts with any broker that could result in the
obligation to pay a commission with respect to the transactions contemplated by
this Agreement. Each party shall indemnify and hold harmless the other party for
any claims for such a commission, and all expenses relating thereto, relating to
the indemnifying party's contacts.
11.10 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the LLC. No variations,
modifications, or changes herein nor any waiver of any provision hereof shall be
binding unless set forth in a document duly executed by or on behalf of each of
the Members. Any written document dated after the Effective Date and executed by
all of the Members shall be considered as part of this Agreement, unless
otherwise specifically provided in such document.
11.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey (other than its
rules as to conflicts of law to the extent that such rules would result in the
application of the laws of some other jurisdiction).
11.12 Counterparts. This Agreement may be executed in one or
more counterparts with all such counterparts considered to be one Agreement.
IN WITNESS WHEREOF, the parties hereto executed this
Agreement effective as of the Effective Date.
BASE TEN SYSTEMS, INC.
By: /s/ Myles M. Kranzler
----------------------------
Myles M. Kranzler, President
/s/ Jesse Upchurch
-------------------------
JESSE UPCHURCH
<PAGE>
Exhibit A
Certificate of Formation
CERTIFICATE OF FORMATION
OF
uPACS, L.L.C.
The undersigned, in order to form a limited liability company
pursuant to the provisions of the New Jersey Limited Liability Company Act,
hereby certifies:
FIRST: The name of the limited liability company is: uPACS,
L.L.C.
SECOND: The address of the limited liability company's
initial registered office is One Electronics Drive, Trenton, New Jersey 08619,
and the name of the limited liability company's initial registered agent at such
address is Edward Klinsport.
THIRD: The limited liability company shall have two or more
members at all times.
FOURTH: The limited liability company shall be dissolved no
latter than 30 years after the date of formation.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Formation, this 25th day of April, 1997.
/s/ Myles M. Kranzler
---------------------
MYLES M. KRANZLER
<PAGE>
Exhibit B
License and Services Agreement
LICENSE AND SERVICES AGREEMENT
THIS LICENSE AND SERVICES AGREEMENT (this "Agreement"), dated
as of the 1st day of May, 1997, is by and between BASE TEN SYSTEMS, INC., a New
Jersey corporation, having a principal place of business and chief executive
office at One Electronics Drive, Trenton, New Jersey 08619 ("Base Ten"), and
uPACS, L.L.C., a New Jersey limited liability company (the "LLC").
WHEREAS, uPACS, L.L.C. (the "LLC") has been formed for the
purpose developing, selling, marketing, and distribution of the "uPACS" picture
archiving and communication system ("PACS") ; and
WHEREAS, Base Ten has agreed to transfer to the LLC (i)
exclusive rights to its uPACS PACS technology (the "Technology"), and (ii) a
non-exclusive license to any patents applying the Technology (the "Ancillary
Technology"); and
WHEREAS, in addition to granting to the LLC the exclusive
right to the Technology , Base Ten will, pursuant to the terms and conditions of
this Agreement, complete the development of the Technology and thereafter market
and sell the Technology;
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 agree as follows:
1. Grant of Rights in the Technology. Base Ten hereby grants
to the LLC, during the Term of this Agreement, the exclusive rights to the
Technology and the LLC hereby grants to Base Ten the exclusive right to use the
Technology for the purposes of fulfilling its obligations under this Agreement
and for no other purpose. Upon the termination of this Agreement, all of the
LLC's rights in and to the Technology shall automatically and completely revert
to Base Ten.
2. Grant of Rights in the Ancillary Technology. Base Ten
hereby grants to the LLC, during the Term of this Agreement, the non-exclusive
rights to the Ancillary Technology and the LLC hereby grants to Base Ten the
non-exclusive right to use the Ancillary Technology for the purposes of
fulfilling its obligations under this Agreement and for no other purpose. Upon
the termination of this Agreement, all of the LLC's rights in and to the
Ancillary Technology shall automatically and completely revert to Base Ten.
3. Term. This Agreement shall become effective as of the date
and year first above written and shall not be terminated except in accordance
with the provisions of Section 9 of this Agreement (the "Term").
4. Development of Technology. Base Ten hereby agrees, during
the Term of this Agreement, to complete the development of the Technology, and
to submit to the LLC quarterly reports in connection with the progress of such
development and the costs (as hereinafter defined) incurred by Base Ten.
5. Market Development and Sales. During the term of this
Agreement, Base Ten shall undertake to sell, market, and distribute systems
using the Technology (the "Systems"). Base Ten shall provide technical, sales,
administrative and management resources in connection with sales of the Systems.
6. Royalty. Base Ten shall pay to the LLC with respect to the
Technology, an annual royalty of 11% of gross receipts for allocated sales in
accordance with the definitions herein. For the purpose of this Section 6:
"Gross Receipts" means the total of all charges invoiced in an
arms length transaction for sales of the Technology in a product ("Product") in
a direct sale to an end user or to a nonaffiliated distributor less all
allowances for any defective or returned Product, normal trade discounts
actually granted, and all VAT, sales taxes, excise taxes, duties or levies paid
or absorbed and royalties or license fees paid to a third party other than the
LLC for third party intellectual property that is an integral part of the
Product.
"Allocated Sales" means a portion of the Gross Receipts. Where
the Product includes hardware and software, the Allocated Sales will be for all
software that utilizes the Technology calculated by using the list price of the
software and hardware to determine a software allocation ratio. In the case of
the bundling of multiple products in a single sale which includes software and
hardware products that do not utilize the Technology, the Allocated Sales will
be that portion of the Gross Receipts calculated by using the list price of each
product to determine a product allocation ratio followed by the calculation of
the software allocation ratio if applicable.
----------------------
Example:
List Price Total Product: $7,500
List Price Technology Based Product: $5,000
List Price Non-Technology Based Product $2,500
Product Allocation Ration: .67
Software Portion of Technology Based Product $3000
Hardware Portion of the Technology Based Product $2000
Software Allocation Ratio: .60
Gross Receipts of Total Product: $6,500
Allocated Sales: $6,500 x .67 x .6 = $2,613
Royalty = $2613 x 11% = $ 287
----------------------
7. Costs. Base Ten shall render to the LLC an annual statement
of its "Costs" in connection with the development, sales, marketing, and
distribution of the Technology. For the purposes of this Agreement, the term
"Costs" shall include Base Ten's reasonable direct costs, overhead, and SG&A
expenses, all allocated in accordance with Base Ten's normal allocation
procedures. Base Ten shall render monthly statements of its Costs to the LLC
which the LLC shall pay to Base Ten within 20 days of receipt thereof. If the
annual statement shall indicate that the LLC overpaid for the Costs based on the
quarterly statements, Base Ten shall remit to the LLC any such overpayment
within 20 days of the date of the annual statement. If the annual report shall
indicate that the LLC underpaid for the Costs based on the quarterly statements,
the LLC shall remit to Base Ten any such amount due within 20 days of the date
of the annual statement.
8. Exclusivity. In no event shall anything set forth in
this Agreement be deemed to prohibit or prevent Base Ten from developing,
manufacturing, selling, marketing, or distributing any products or technology
other that the Technology or the Systems to any other person or entity.
9. Default and Termination.
(a) A party to this Agreement shall be in default under
this Agreement if any of the following (each, a "Default") shall occur: (i) such
party fails to perform any of its material obligations hereunder and such
failure continues for more than ninety (90) days after receipt of written notice
from the other party; (ii) such party files a petition under any bankruptcy or
insolvency law, or such a petition is filed against such party and is not
dismissed within sixty (60) days thereafter; or (iii) such party becomes
insolvent, is dissolved or ceases to do business as a going concern.
(b) If a Default described in clause (ii) or (iii) of
Section 8(a) above shall occur, this Agreement automatically shall terminate,
and the LLC's rights to the Technology shall automatically and completely revert
to Base Ten and the LLC's rights to the Ancillary Technology shall automatically
and completely terminate. Upon a Default, the LLC shall pay to Base Ten all
Costs which remain unpaid as of the date this Agreement is terminated, whether
or not such Costs have previously been invoiced to the LLC.
10. Force Majeure. Base Ten shall not be liable for delay in
or failure of performance of its obligations hereunder due to an act of God,
regulation of any state or federal regulatory authority or government, war,
riots, civil commotion, strike or other substantial labor disturbance,
destruction of production facilities or materials by fire, earthquake, storm or
like catastrophe, or other equivalent event. The delivery obligations of Base
Ten hereunder shall be extended hereunder to the extent (but only to the extent)
that the performance of such obligations was actually prevented thereby,
provided that should any delay resulting from such extension exceed ninety (90)
days, then the LLC may by written notice to Base Ten cancel any outstanding
purchase order hereunder and/or terminate this Agreement. Upon the happening of
any condition described in this Section 10, Base Ten shall promptly send written
notice of such condition to the LLC and shall use its best efforts to remove the
cause thereof.
11. Miscellaneous.
(a) Notices. All notices required or permitted to be
given hereunder shall be in writing and shall be mailed by registered or
certified mail, return receipt requested, addressed to the party to whom such
notice is required or permitted to be given or to such other person or address
as may be designated by notice given in accordance with this Section 11(a). All
notices shall be deemed to have been given when mailed.
(b) Assignment. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto; provided, however, that no party may transfer or assign its rights or
delegate its performance hereunder without the prior written consent of the
other party. This Agreement shall be for the sole benefit of the parties and
their respective successors and assigns, and shall not be construed to provide
any benefits to any third parties.
(c) Entire Agreement. This Agreement and the Exhibits
hereto constitutes the entire agreement and sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all prior
agreements, covenants, arrangements, letters, communications, representations or
warranties, whether oral or written, by any officer, employee or representative
of any party, and may not be modified, amended or terminated except by mutual
consent of the parties by a written agreement specifically referring to this
Agreement and signed by the parties.
(d) Governing Law. This Agreement shall be governed by
and construed in accordance with internal laws of the State of New Jersey
applicable to contracts made and to be performed therein.
(e) Status. It is understood and agreed: (i) that each
of the parties hereto is an independent contractor; (ii) that neither party
hereto is nor shall be considered to be an agent, distributor or representative
of the other party for any purpose whatsoever; (iii) that nothing in this
Agreement shall be construed to create a relationship of employer/employee
between either of the parties and the employees of the other party; and (iv)
that any contrary claim or representation, directly or indirectly made by either
party to such effect, shall be cause for termination of this Agreement and all
purchase orders placed hereunder.
(f) Counterparts This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which taken together will constitute one and the same instrument.
(g) Severability. Should any provision of this Agreement
for any reason be declared invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of any other
provisions of this Agreement, which other provisions shall remain in full force
and effect; and the application of any such invalid or unenforceable provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable shall be valid and be enforced to the fullest extent of the law.
IN WITNESS WHEREOF, the parties hereto have, by their duly
authorized officers, executed this Agreement as of the day and year first above
written.
BASE TEN SYSTEMS, INC.
By: /s/ Myles M. Kranzler
-------------------------------
Myles M. Kranzler, President
uPACS, L.L.C.
By Base Ten
Systems, Inc., a Member
By: /s/ Myles M. Kranzler
-------------------------------
Myles M. Kranzler, President
By: /s/ Jesse Upchurch
-----------------------------
Jesse Upchurch, a Member
COMPENSATION AGREEMENT
THIS COMPENSATION AGREEMENT (this "Agreement"), dated as of the 1st day
of May, 1997, is by and between uPACS, L.L.C., a New Jersey limited liability
company (the "LLC"), ANDREW GARRETT, INC., a New York corporation ("Andrew
Garrett") and DREW SYCOFF, an individual with an address c/o Andrew Garrett, 310
Madison Avenue, Suite 406, New York, New York 10017 ("Sycoff").
WHEREAS, Andrew Garrett and Sycoff have been instrumental in
finding an investor for the LLC; and
WHEREAS, the LLC proposes to compensate Andrew Garrett and
Sycoff for services to the LLC;
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 agree as follows:
1. Payment of Commission. The LLC hereby agrees to pay to
Andrew Garrett a commission equal to ten percent (10%) of the aggregate amount
that Jesse Upchurch contributes as an initial capital contribution to the LLC
which amount shall be payable to Andrew Garrett within ten (10) days from the
date that the LLC receives each of the initial capital contributions from Jesse
Upchurch.
2. Payment of Expenses. The LLC hereby agrees to pay to Andrew
Garrett and amount equal to three percent (3%) of the aggregate amount that
Jesse Upchurch contributes to the LLC which amount shall be payable to Andrew
Garrett within ten (10) days from the date that the LLC receives one or more
capital contributions from Jesse Upchurch, in consideration of Andrew Garrett's
expenses of effecting the location of funding for the LLC and its review of all
related documents.
3. Royalties. During the Term of the License and Services
Agreement between Base Ten Systems, Inc. ("Base Ten") and the LLC dated as of
May 1, 1997 (the "Services Agreement") and after such time as Jesse Upchurch has
received 150% of his initial capital contribution to the LLC, the LLC shall pay
to Sycoff and amount equal to 37% of "Royalties" (as defined in the Services
Agreement).
4. Miscellaneous.
(a) Expenses of the LLC. All payments under this
Agreement are expenses of the LLC and therefore do not make Andrew Garrett or
Sycoff members of the LLC.
(b) Notices. All notices required or permitted to be
given hereunder shall be in writing and shall be mailed by registered or
certified mail, return receipt requested, addressed to the party to whom such
notice is required or permitted to be given or to such other person or address
as may be designated by notice given in accordance with this Section 4(b). All
notices shall be deemed to have been given when mailed.
(c) Assignment. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto; provided, however, that no party may transfer or assign its rights or
delegate its performance hereunder without the prior written consent of the
other party. This Agreement shall be for the sole benefit of the parties and
their respective successors and assigns, and shall not be construed to provide
any benefits to any third parties.
(d) Entire Agreement. This Agreement constitutes the
entire agreement and sets forth the entire understanding of the parties with
respect to the subject matter hereof, supersedes all prior agreements,
covenants, arrangements, letters, communications, representations or warranties,
whether oral or written, by any officer, employee or representative of any
party, and may not be modified, amended or terminated except by mutual consent
of the parties by a written agreement specifically referring to this Agreement
and signed by the parties.
(e) Governing Law. This Agreement shall be governed by
and construed in accordance with internal laws of the State of New Jersey
applicable to contracts made and to be performed therein.
(f) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed and original, but all of
which taken together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
uPACS, L.L.C.
By Base Ten Systems, Inc., a Member
By: /s/ Myles M. Kranzler
----------------------------
Myles M. Kranzler, President
ANDREW GARRETT, INC.
By: /s/ Andrew Sycoff
---------------------------
Andrew Sycoff
/s/ Andrew Sycoff
----------------------------
ANDREW SYCOFF
