Exhibit 10(oo)
BASE TEN SYSTEMS, INC.
OMNIBUS CONVERTIBLE TERM DEBENTURE HOLDER
WAIVER AND CONSENT
REGARDING SALE OF THE GOVERNMENT TECHNOLOGY DIVISION
and
AMENDMENT NO.1 TO CONVERTIBLE TERM DEBENTURE
Base Ten Systems, Inc.
One Electronics Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Reference is made to that certain Securities Purchase Agreement (the
"Securities Agreement"), and to that certain Convertible Term Debenture (the
"Convertible Debenture"), each of which is dated as of May 30, 1997, and each
of which is by and between Base Ten Systems, Inc., a New Jersey corporation
(the "Company"), and each of The Tail Wind Fund, Ltd. ("Tail Wind") and RGC
International Investors, LDC ("RGC") (Tail Wind and RGC each being a
"Holder," and collectively, the "Holders").
1. The Company has informed each Holder that the Company intends to
sell all or substantially all of the assets of the Government Technology
Division ("GTD") of the Company ("Sale") to a newly-formed company
("Purchaser") that will be managed by certain members of the Company's senior
management who have been over time and currently are significantly involved
in the business and development of the GTD, on terms and conditions to be set
forth in a definitive Asset Purchase Agreement by and between the Company and
Purchaser.
2.(a) Pursuant to Section 4(j) of the Securities Agreement, the Company is
required to maintain its corporate existence except in the event of a merger,
consolidation or sale of all or substantially all of the assets of the
Company under certain instances, none of which exceptions is or would be
available with respect to the Sale.
(b) Each Holder hereby acknowledges that it has been given the
information it requires with respect to the Sale in order to knowingly waive
its rights with respect thereto. Subject to paragraph 4 hereof, each Holder
hereby waives its right to bring any cause of action for a breach of Section
4(j) by the Company in connection with or arising from the Sale or any other
matter contemplated by the Asset Purchase Agreement, and hereby agrees that
the Sale is not and will not be subject to Section 4(j) of the Securities
Agreement.
3.(a) Pursuant to Article VIII of the Convertible Debenture, the
consummation of any sale of all or substantially all of the assets of the
Company constitutes an Event of Default of the Convertible Debenture upon
which each Holder can demand payment of the Default Amount (as such herein is
defined in the Convertible Debenture).
(b) Subject to paragraph 4 hereof, each Holder hereby waives any right
to demand payment of such Default Amount upon the consummation of the Sale,
and hereby consents to the Sale by the Company.
4. As a condition precedent to the waiver and consent of each Holder
set forth above, the Company and each of the Holders agree that paragraph E
of Article III of each Convertible Debenture is hereby amended by inserting
the following additional sentences as the second, third and fourth sentences
thereof:
"Notwithstanding the foregoing, if the sale of all or substantially all of
the assets of the Government Technology Division of the Corporation (the
"Sale") to a newly-formed company that will be managed by certain members
of the Corporation's senior management is consummated, in no event shall
the Conversion Price exceed the product obtained by multiplying (x) a
fraction (not in excess of 1.00), the numerator of which is the average
of the Closing Bid Prices for the Class A Common Stock for the 10
consecutive trading days commencing on the first trading day following the
first public announcement by the Corporation of the proposed Sale (the
"Post-Announcement Period"), and the denominator of which is the average
of the Closing Bid Prices for the Class A Common Stock for the four
consecutive trading days, if any, commencing no earlier than October 21,
1997 (unless public announcement by the Corporation of the proposed Sale
is required by Nasdaq to be made prior to the close of trading on October
21, 1997, in which event October 20, 1997 shall be included) and ending on
the last trading day immediately preceding the first public announcement
by the Corporation of the proposed Sale (the "Pre-Announcement Period"),
by (y)(i) $13.50 with respect to any Conversion Date occurring prior to May
30, 1998, or (ii) $14.00 with respect to any Conversion Date occurring on
or after May 30, 1998. In no event shall the Conversion Price be increased
by reason of the foregoing sentence. In the event the Holder engages in
short sale transactions in the Class A Common Stock during the
Post-Announcement Period, the Holder will use its best efforts to conduct
such transactions so as to not complete or effect any such sale on any
trading day during such period at a price which is lower than the lowest
sale effected on such day by persons other than the Holder, and shall give
the Corporation access on a confidential basis to all trading records
reasonably necessary to monitor compliance with the foregoing. In the
event such a sale is completed or effected at a price lower than the
lowest sale effected on such day by persons other than the Holder, the
Corporation may elect not to include the Closing Bid Price for such day in
the foregoing calculation.''
5. Except as expressly consented to, amended or waived hereby, each and
every term, covenant and condition of the Securities Agreement and of the
Convertible Debenture shall continue in full force and effect. Neither the
request for, or execution or delivery of this Waiver and Consent and
Amendment No. 1 shall be deemed to create or imply any construction,
interpretation or application of the Securities Agreement or Convertible
Debenture as applied to
the Sale or any other future transaction or course of conduct between the
Company and the undersigned, other than as expressed in paragraph 4 above.
IN WITNESS WHEREOF, the undersigned hereby execute this Waiver and
Consent and Amendment No. 1 as of the day and year set forth below.
THE TAIL WIND FUND, LTD.
By: /s/ Xxxxxxxx Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxxxxx Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx,
Title: Authorized Signatory Director
RGC INTERNATIONAL INVESTORS, LDC
By: Xxxx Xxxx Capital Management L.P.
By: RGC General Partner Corp.
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
Agreed and Accepted:
BASE TEN SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman and CEO
Dated: October 20, 1997
