_____________________
| OMB APPROVAL |
|_____________________|
|OMB NUMBER: 3235-0145|
UNITED STATES |EXPIRES: |
SECURITIES AND EXCHANGE COMMISSION | AUGUST 31, 1999|
Washington, D.C. 20549 |ESTIMATED AVERAGE |
|BURDEN HOURS |
|PER RESPONSE ...14.90|
|_____________________|
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Base Ten Systems, Inc.
____________________________________________________________
(Name of Issuer)
Class A Common Stock,
$1.00 par value
____________________________________________________________
(Title of Class and Securities)
069779 20 5
____________________________________________________________
(CUSIP Number)
Clark L. Bullock
Almedica International Inc.
75 Commerce Drive
Allendale, New Jersey 07401
(201) 995-9440
Copy to:
Richard T. Prins, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
(212) 735-3000
____________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 11, 1999
____________________________________________________________
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section
240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
SCHEDULE 13D
CUSIP No. 069779 20 5
___________________________________________________________________
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
Almedica International Inc.
___________________________________________________________________
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (X)
___________________________________________________________________
3. SEC USE ONLY
___________________________________________________________________
4. SOURCE OF FUNDS*
OO
___________________________________________________________________
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
___________________________________________________________________
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
___________________________________________________________________
7. SOLE VOTING POWER
NUMBER OF 3,950,000
SHARES _____________________________________
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY
EACH _____________________________________
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 3,950,000
WITH _____________________________________
10. SHARED DISPOSITIVE POWER
___________________________________________________________________
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,950,000
___________________________________________________________________
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
___________________________________________________________________
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
15.7%
___________________________________________________________________
14. TYPE OF REPORTING PERSON
CO
___________________________________________________________________
This statement on Schedule 13D is being filed pursuant to Rule 13d-1
of the Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Act") by Almedica International Inc., a Delaware corporation
("Almedica") with respect to the Class A common stock, par value $.01 per
share (the "Common Stock"), of Base Ten Systems, Inc., a New Jersey
corporation (the "Company").
Item 1. Security and Issuer
This Schedule 13D relates to the Common Stock of the Company.
The address of the principal executive office of the Company is One
Electronics Drive, Trenton, New Jersey 08619.
Item 2. Identity and Background
(a)-(c), (f) Pursuant to Rule 13d-1 of Regulation 13D-G of the
General Rules and Regulations under the Act, this statement is being filed
on behalf of Almedica, the principal business of which is packaging,
labeling and related services pertaining to pharmaceuticals used in
clinical trials. The address of Almedica's executive office and principal
place of business is 75 Commerce Drive, Allendale, New Jersey 07401.
Shelter Rock Partners, L.P. ("SRP"), a Delaware limited
partnership, owns 43.7% of the shares of common stock of Almedica. SRP's
principal business is the ownership of Almedica. The address of SRP's
executive office and principal place of business is 75 Commerce Drive,
Allendale, New Jersey 07401. The general partner of SRP is Shelter Rock
Investors Services Corporation ("SRISC"), a Delaware corporation. SRISC's
principal business is management services. The address of SRISC's
executive office and principal place of business is 75 Commerce Drive,
Allendale, New Jersey 07401.
Interpool, Inc. ("Interpool"), a Delaware corporation, owns 39.3%
of the shares of common stock of Almedica. Intepool's principal business
is container leasing. The address of Interpool's executive office and
principal place of business is 211 College Road East, Princeton, New Jersey
08540.
Information attached hereto as Schedule I contains information
concerning the executive officers, controlling persons and directors of
Almedica, SRISC and Interpool. Except where noted, each person listed in
Schedule I is a citizen of the United States. Further, each person
disclaims beneficial ownership of the Common Stock beneficially owned by
Almedica.
(d)-(e) None of Almedica, SRP, SRIC or Interpool or the executive
officers, controlling persons and directors of Almedica, SRP, SRISC
or Interpool including, without limitation, the persons identified on
Schedule I hereto, has, during the last five years, (i) ever been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
No funds were directly used in the acquisition by Almedica of the
Common Stock. See the response to Item 4 herein for a description of the
consideration paid by Almedica for the Common Stock and the method of such
acquisition.
Item 4. Purpose of Transaction.
On June 11, 1999 (the "Closing Date"), the merger contemplated by
the Agreement and Plan of Merger, dated as of June 11, 1999 (the "Merger
Agreement"), by and among the Company, Ex-BTS Clinical, Inc. ("Ex-BTS"),
Almedica and Almedica Technology Group Inc. ("ATG") (the "Merger") was
closed. Pursuant to the Merger Agreement, Ex-BTS, a wholly-owned
subsidiary of the Company, was merged with and into ATG. ATG, the
surviving corporation, became a wholly-owned subsidiary of the Company. In
connection therewith, all 736 shares of capital stock of ATG (that prior to
the Merger was owned by Almedica) has been converted into an aggregate of
3,950,000 shares of Common Stock.
Pursuant to the Merger, Almedica has the right to designate a
nominee to the Company's Board of Directors (the "Base Ten Board") so long
as Almedica continues to hold at least 10% of the then outstanding Class A
Common Stock of the Company. Almedica has designated Clark L. Bullock, the
Chairman of Almedica, as its nominee to the Base Ten Board. Mr. Bullock
and any successor designated as nominee to the Base Ten Board by Almedica
will serve in accordance with and for the time period specified by the
Company's charter and bylaws.
Almedica acquired the shares for investment purposes. Almedica
has determined to make available up to 790,000 shares of Common Stock to
employees of ATG, under a contingent performance program under which grants
are dependent on satisfaction by ATG of certain benchmarks in a software
development program and/or continued employment by ATG. Except as set
forth in this Item 4, Almedica has no present plans or proposals which
relate to or would result in any transaction, change or event specified in
clauses (a)through (j) of Item 4 of the Schedule 13D form. However,
Almedica reserves the right to acquire additional securities and to
participate in future transactions with respect to the Company's
securities. In the event of a material change in Almedica's plans or other
matters affecting its investment in the Common Stock, Almedica will amend
this Schedule 13D.
Neither the filing of this statement nor any of its contents
shall be deemed an admission that any person is part of a "group" with the
Reporting Persons either for the purpose of Schedule 13D of the Securities
and Exchange Act of 1934, as amended, or for any other purpose with respect
to Common Stock.
Item 5. Interest in the Securities of the Issuer.
(a)-(b) The aggregate number of shares of the Common Stock that
Almedica has the sole power to vote and dispose of (and as a result, may,
under Rule 13d-3 under the Act, be deemed the beneficial owner of) is
3,950,000, which constitutes approximately 15.7% of the 25,154,514 shares
of such Common Stock outstanding as of June 11, 1999. This aggregate
amount of Common Stock is the addition of the 21,204,514 shares outstanding
as of April 30, 1999 (as disclosed in the Company's Quarterly Report on
Form 10-Q dated May 17, 1999, for the quarter ended March 31, 1999) and the
3,950,000 shares that were issued pursuant to the Merger.
(c) Almedica has not effected any transactions in the
Common Stock in the past 60 days other than Almedica's receipt of the
Common Stock pursuant to the Merger (as described in Items 3 and 4 of this
Schedule 13D). The closing market price of the shares of Common Stock on
the Closing Date was $ 29/32, which may be deemed to be the price per share
for which Almedica acquired such shares.
(d) No other person is known by Almedica to have the right
to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Common Stock received by Almedica in the
Merger.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except as set forth in this Schedule 13D, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) among
the filing persons or between any of the filing persons and any other
person, with respect to the shares of the Common Stock.
The Common Stock received by Almedica pursuant to the Merger has
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be sold or offered for sale or otherwise
hypothecated or distributed except pursuant to either an effective
registration statement or a valid exemption from such registration under
the Securities Act. However, the Common Stock will be entitled to certain
demand and piggyback registration rights as set forth in a registration
rights agreement, dated as of June 11, 1999 (the "Registration Rights
Agreement"), by and between the Company and Almedica.
Pursuant to the Merger Agreement, 1,580,000 shares of the Common
Stock (the "Escrow Amount") will be retained in escrow by an escrow agent
as security for the indemnity obligations of Almedica (the "Indemnity
Obligations") under the Merger Agreement. Half of the Escrow Amount
(790,000 shares) less any shares that are subject to recovery pursuant to
the Indemnity Obligations (the "Recovery") will be released 13 months after
the Closing Date and the balance of the Escrow Amount, less any additional
Recovery, will be released within ten days of the second anniversary of the
Closing Date. An aggregate of 3,160,000 shares of Common Stock are subject
to the Indemnity Obligations (except to the extent Almedica pays cash).
Except for fraud or intentional misrepresentation, the Indemnity
Obligations can not exceed $3,160,000. For purposes of indemnification,
each share of Common Stock is valued at $1.00. As such, except for fraud,
Almedica is never at risk to lose more than the Common Stock.
The Merger Agreement, the Registration Rights Agreement and the
terms of the grants of Common Stock each contain other terms and
conditions. The foregoing description of such agreements is qualified in
its entirety by reference to the text of such agreements. The Merger
Agreement, the Registration Rights Agreement and a form of employee grant
are filed as exhibits to this Schedule 13D and are incorporated herein by
reference.
Item 7. Material to be Filed as Exhibits.
EXHIBIT No. DESCRIPTION
EXHIBIT 1. Agreement and Plan of Merger, dated as of June 11, 1999, by
and among the Company, Ex-BTS, Almedica and ATG.
EXHIBIT 2. Registration Rights Agreement, dated as of June 11, 1999, by
and between the Company and Almedica.
EXHIBIT 3. Form of Grant of Shares of Common Stock.
Schedule I
Almedica International Inc.
Individual Present Principal Occupation
---------- -----------------------------
Clark L. Bullock Director, Chairman and Secretary
75 Commerce Drive
Allendale, New Jersey 07401
Stephen P. Novak Director, President and
75 Commerce Drive Treasurer
Allendale, New Jersey 07401
Warren A. Pritchet Assistant Secretary
75 Commerce Drive
Allendale, New Jersey 07401
Thomas A. Melfe Director
Piper & Marbury LLP
1251 Avenue of the Americas
New York, NY 10020-1104
Martin Tuchman Director
c/o Interpool, Inc.
211 College Road East
Princeton, NJ 08540
Raoul Witteveen(1) Director
c/o Interpool, Inc.
633 Third Avenue
New York, NY 10017
Shelter Rock Investors Services Corporation
-------------------------------------------
Individual Present Principal Occupation
---------- ----------------------------
Clark L. Bullock Director, Chairman and Secretary
75 Commerce Drive
Allendale, New Jersey 07401
Stephen P. Novak Director, President and
75 Commerce Drive Treasurer
Allendale, New Jersey 07401
Lorinda de Roulet Director
P.O. Box 777
Powerhouse Road
Manhasset, NY 11030
Thomas G. Wymann Director
375 Park Avenue
New York, NY 10152-0172
---------------------------
1 This individual is a Dutch citizen.
Control Persons Percentage Owned
--------------- ----------------
Clark L. Bullock 38.89%
RR3 Box 229
Oak Summit Road
Millbrook, NY 12545
Stephen P. Novak 38.89%
75 Commerce Drive
Allendale, New Jersey 07401
Interpool, Inc.
---------------
Individual Present Principal Occupation
---------- ----------------------------
Martin Tuchman Director, Chairman and CEO
211 College Road East
Princeton, NJ 08540
Raoul Witteveen(1) Director, President and COO
633 Third Avenue
New York, NY 10017
Peter D Halstead Director
c/o Summit Bank
301 Carnegie Center Dr.
4th Floor
Princeton, NJ 08540
Mitchell I. Gordon Director
211 College Road East
Princeton, NJ 08540
Joseph J. Whalen Director
7 Ladwood Drive
Holmdel, NJ 07733
Warren L. Serenbetz Director
633 Third Avenue
New York, NY 10017
Arthur L. Burns Director, General Counsel and
633 Third Avenue Secretary
New York, NY 10017
William A. Geoghan Senior Vice President
633 Third Avenue
New York, NY 10017
Sheldon Landy Vice President
c/o Rallpool
208 South LaSalle Street
Chicago, Il 60604
-------------------------
1 This individual is a Dutch citizen.
SIGNATURE
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is
true, complete and correct.
Dated: June 18, 1999
ALMEDICA INTERNATIONAL INC.
By: /s/ Stephen P. Novak
------------------------
Name: Stephen P. Novak
Title: President
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.
By: /s/ Clark L. Bullock
---------------------------------
Name: Clark L. Bullock
Title: Chairman
ATG
Almedica Technology Group, Inc.
By: /s/ Clark L. Bullock
---------------------------------
Name: Clark L. Bullock
Title: Chairman
BASE TEN
Base Ten Systems, Inc.
By: /s/ Thomas E. Gardner
-------------------------------------
Thomas E. Gardner
President and Chief Executive Officer
BTSC
Ex-BTS Clinical, Inc.
By: /s/ Thomas E. Gardner
-------------------------------------
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 _______ (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: _______________________________
William F. Hackett
Senior Vice President
ALMEDICA INTERNATIONAL INC.
By: _______________________________
Clark L. Bullock
Chairman of the Board
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
June 11, 1999, 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: /s/ William F. Hackett
______________________________
William F. Hackett
Senior Vice President
ALMEDICA INTERNATIONAL INC.
By: /s/ Clark L. Bullock
______________________________
Clark L. Bullock
Chairman of the Board
[Grantee's Name]
FORM OF GRANT OF SHARES OF
COMMON STOCK
No. of Shares: _______ As of June __, 1999
Almedica International Inc. (the "Company") hereby agrees to
grant to [Grantee's Name] (the "Grantee") [insert number (#)] shares of
Common Stock of Base 10 Systems, Inc. ("Base Ten") (the "Shares"), subject
to the terms and conditions set forth herein and in the Agreement and Plan
of Merger (the "Merger Agreement"), made as of [June __, 1999], by and
among Base Ten, BTS Clinical, Inc. ("BTSC"), the Company and Almedica
Technology Group Inc. ("ATG") (the "Grant"). The Grant is made in
conjunction with both the purchase by Base 10 of ATG from the Company by
means of the merger of BTSC with and into ATG, and the Grantee's employment
with ATG or any successor thereto or affiliate thereof (the "Employer") as
of the Effective Time (as defined in the Merger Agreement).
i. GRANTS. The Company shall grant to the Grantee the Shares only if,
and to the extent, that the following terms and conditions have been
satisfied.
(a) On or as soon as practicable following November 30, 1999,
the Company shall grant the Grantee 85% of the Shares:
(i) upon the delivery to the Company of the software currently
known as "ADMS 2.0" (as defined in that certain Functional Specifications
Document between ATG and the Company, attached hereto as Annex A), together
with validation and with successful OSQ (i.e., on- site qualification),
prior to November 30, 1999 (the "Delivery Date") . In the event delivery
is not made on the Delivery Date, and such failure is due to the Company
and/or its personnel, then the Delivery Date may be extended by the board
of directors of the Company (the "Directors"), in its sole discretion;
(ii) upon the upgrade of the software known as ADLS 5.3 to a new
release (presumably 5.4) ("Upgraded ADLS") which will be capable of
"populating" the tables in ADMS 2.0, as determined in clause (i) above, and
the release of Upgraded ADLS by the Delivery Date. As in clause (i) above,
it shall be necessary for Upgraded ADLS to be validated and have a
successful OSQ at the Company Site. In the event the release is not
effected by the Delivery Date, and such failure is due to the Company
and/or its personnel, than the Delivery Date may be extended by the
Directors, in their sole discretion; and
(iii) only if the Grantee has been continuously employed with
the Employer through November 30, 1999.
(b) On or as soon as practicable following May 31, 2000, the
Company shall grant the Grantee the remaining 15% of the Shares
(i) upon a release by May 31, 2000 of ADMS 3.0 which release
will be capable of easily providing to clients via electronic means
information with respect to their clinical trial materials inventory and
prepared materials approved for distribution in a manner consistent with
industry practice. In the event such release is not effected by the
Delivery Date, and such failure is due to the Company and/or its
personnel, than such Delivery Date may be extended by the Directors, in
their sole discretion; and
(ii) only if the Grantee has been continuously employed with the
Employer through May 31, 2000.
ii. Confidentiality. Notwithstanding anything in this Agreement to the
contrary, the Company will not be required to grant the Shares described
herein if the Grantee discloses any material terms of this Agreement,
subject to the sole discretion of the Directors.
iii. NO TRANSFERABILITY. No certificates for the Shares will be issued to
the Grantee until Base 10, the Employer and/or the Company have completed
all steps required by law to be taken in connection with the issue and sale
of the shares, including without limitation, receipt of any agreements or
representations from the Grantee necessary to prevent a resale or
distribution of the Shares in violation of federal or state securities
laws, or in violation of any provision of the Merger Agreement.
iv. EQUITABLE ADJUSTMENT OF SHARES. The Shares that are the subject of
this Grant are shares of the common stock of Base 10 as constituted on the
date hereof, subject to such equitable adjustment as the Company deems
appropriate.
v. MISCELLANEOUS. Notices hereunder shall be mailed or delivered to the
Company at its principal place of business, 75 Commerce Drive, Allendale,
NJ 07401, Attention: President, and shall be mailed or delivered to the
Grantee at the Grantee's address set forth below, or in either case at such
other address as one party may subsequently furnish to the other party in
writing. Notwithstanding anything in the Grant to the contrary, in the
event that any inconsistency arises between any term or provision of the
Merger Agreement and any term or provision of the Grant, then the
applicable term or provision of the Merger Agreement shall control. This
Grant shall not confer upon the Grantee any right with respect to
continuance of employment by the Employer, nor shall it interfere in any
way with any right of the Employer to terminate the Grantee's employment at
any time.
vi. INCOME TAX WITHHOLDING. In connection with the Grant of the Shares
granted hereunder, the Company is expressly authorized to take any and all
steps it deems necessary to comply with its tax withholding obligations
under state and federal laws including without limitation (i) conditioning
the delivery of Shares (and any other securities hereunder) to the Grantee
upon the payment to the Company of an amount sufficient to satisfy the
Company's tax withholding obligations with respect to the Grantee and this
Grant, or (ii) reducing the number of Shares (and any other securities
hereunder) deliverable to the Grantee by such number as is sufficient in
value to satisfy the Company's tax withholding obligations with respect to
the Grantee and this Grant.
ALMEDICA INTERNATIONAL INC.
By:_____________________
[name ]
[title ]
Receipt of the foregoing Grant is hereby acknowledged and accepted and the
Grant's terms and conditions are hereby agreed to as of ___________, 1999.
_____________________
[Grantee's Name]
____[Address]________
_____________________
