SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1996
Commission File Number 0-8401
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CACI International Inc
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(Exact name of Registrant
as specified in its charter)
Delaware
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(State or other jurisdiction of
incorporation or organization)
54-1345888
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(I.R.S. Employer Identification No.)
1100 North Glebe Road, Arlington, VA 22201
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(Address of principal executive offices)
(703) 841-7800
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(Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
CACI International Inc Common Stock, $0.10 par value
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(Title of each class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
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The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of August 31, 1996, was approximately $129,304,000.
Indicate the number of shares outstanding of each of the Registrant's classes
of Common Stock, as of August 31, 1996: CACI International Inc Common Stock,
$.10 par value, 10,278,000 shares.
Documents Incorporated by Reference
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(1) The information relating to directors and officers contained in the proxy
statement of the Registrant to be filed in connection with its 1996 Annual
Meeting of Shareholders is incorporated by reference into Part III, Items 10,
11, 12, and 13 of this Form 10-K.
(2) The financial information required in Items 6, 7, and 8 of this form are
contained in the Annual Report to Shareholders for the fiscal year ended June
30, 1996 and is incorporated herein as Exhibit 13.
<PAGE>
BUSINESS INFORMATION
Unless the context indicates otherwise, the terms "the Company" and "CACI",
as used in Section I, include both CACI International Inc and its wholly-
owned subsidiaries. The term "the Registrant", as used in Section I, refers
to CACI International Inc only.
PART I
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ITEM 1. BUSINESS
BACKGROUND
CACI International Inc (the "Registrant") was organized as a Delaware
corporation under the name of "CACI WORLDWIDE, INC." on October 8, 1985. By
a merger effected on June 2, 1986, the Registrant became the parent of CACI,
Inc., a Delaware corporation, and CACI N.V., a Netherlands corporation.
The Registrant is a holding company and its operations are conducted through
wholly-owned subsidiaries which are located in the United States and Europe.
OVERVIEW
CACI is strategically positioned in the information technology ("IT")
industry. With 1996 revenue of over $244 million, CACI serves clients in
major segments of government and commercial markets throughout North America
and Western Europe. Many of the Company's client relationships have existed
for five years or more.
Founded in 1962, CACI provides computer-based information technology,
products, and services. The Company's distinctive solutions include
enterprise process redesign; systems engineering; software reuse and
development; litigation support services; electronic commerce; systems
integration; simulation; market analysis; and imaging and document support.
The Company manufactures no equipment.
CACI's service and value has enabled the Company to sustain high rates of
repeat business and continuing client support. The Company believes that its
performance similarly enables it to compete effectively for new clients and
new contracts. The Company is organized to seek competitive business
opportunities and has designed its operations to support major programs.
CACI's primary markets -- both domestic and international -- are agencies of
national governments, major corporations, state and local governments, and
other business organizations. The client market for CACI's information
systems and high technology services is created by the need for solutions to
the complex systems and information environment in which the clients operate,
be it governmentally mandated programs or competitively driven needs in the
commercial arena.
CACI has structured its new business development organization to respond to
the globally competitive marketplace. The Company employs full-time
marketing, sales, and proposal development specialists who support Company
line operations' marketing and sales responsibilities.
The Company has continued to expand its portfolio of proprietary software and
database products. The Company offers marketing systems software and
database products, targeted to clients who need systems and analysis for
retail sales of consumer products, direct mail campaigns, franchise or branch
site location projects, and similar requirements. In CACI's simulation
technology business, the Company offers both computer-based simulation
languages and derivative simulation products that enable clients to visualize
the impact of proposed changes or new technologies before implementation.
The broad selection of simulation products includes solutions for the
manufacturing industry; for wide area communications networks (i.e., WANs),
including satellites and land lines; for local area computer networks (i.e.,
LANs); for the study of business processes; and for design of distributed
computer systems architectures. CACI's REenterprise technology management
solution combines technology tasks and methodologies to plan, integrate, and
manage technology change - without losing existing investments in technology.
CACI is one of the dominant providers of electronic commerce ("EC") solutions
to the federal government. The complete suite of EC products is available on
GSA schedules and provides a flexible but fully-featured configuration to
enable easy management of purchases and contracts.
As one of the world's largest providers of litigation support services, CACI
customizes these services to the unique needs of both government and
corporate clients.
CACI's proprietary product data management product, C-GATE (TM), is the de
facto standard in the federal government and is now in commercial use
internationally. The C-GATE (TM) system enables clients to standardize and
improve the way they manage the life cycle of systems, products, and material
assets, resulting in cost savings and increased productivity.
[The hyphen in the above trademark C-GATE represents the bullet point which
is an integral component of the mark and which cannot be printed due to
electronic transmission limitations.]
The Company operates through wholly-owned subsidiaries established to serve
specific market segments or conduct business in specific geopolitical
jurisdictions.
CACI's major operating subsidiary in Europe, CACI Limited, is headquartered
in London, England, and operates primarily in support of CACI information
systems, marketing systems, and simulation technology lines of business in
the United Kingdom and Western Europe.
The Company's American Legal Systems Corp. ("ALS") subsidiary specializes in
providing legal systems and litigation support services to law firms and
major corporations in the United States, and complements the Company's other
legal systems and litigation support business with government clients.
At June 30, 1996, CACI employed approximately 3,250 people. This total
includes 325 part-time employees. The corporation currently operates from
its headquarters at Three Ballston Plaza, 1100 N. Glebe Road, Arlington,
Virginia. CACI has operating offices and facilities in 60 additional
locations throughout the United States, Western Europe, and Canada.
GENERAL DESCRIPTION OF CACI SYSTEMS, TECHNOLOGIES, AND PRODUCTS
Representative systems applications include:
. Airport and airspace traffic planning
. Ammunition management information systems
. Automated document and records management systems
. Automated procurement
. Business process reengineering
. Business support systems
. Computer aided logistics/data information systems
. Electronic commerce
. Executive decision support systems
. Imaging services
. Information management systems
. Legal systems and litigation support services
. Manufacturing requirements planning systems
. Marketing and customer database management systems
. Product data management
. Retail market modeling
. Simulation languages and derivative products
. Site location planning and analysis systems
. Software development and reuse
. Systems reengineering
. Systems integration
. State motor vehicle registration and related management information
systems
. Weapon systems/equipment configuration management systems
. Year 2000 date reconfiguration systems
CACI products are installed in over 10,000 locations worldwide, and many are
designed to run on a variety of commercially available computers.
Representative CACI software and marketing systems include:
Simulation Technology:
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SIMFACTORY (R) II.5 General Factory Simulator. A software product for
factory planners to study alternative plant and equipment configurations.
COMNET II.5 (R) Network Simulation Software. A software product for
communications engineers to study wide area networks of satellites, land
lines, switching systems, and protocols.
COMNET III (TM) Network Simulation Software. An object-oriented (non-
programming) software product for the prediction of local and wide area
network performance.
NETWORK II.5 (R) Computer Architecture Simulation Software. A software
product for engineers to study alternative combinations of computers and data
storage devices.
SIMSCRIPT II.5 (R) Simulation Programming Language. A language designed
especially for analysts to build computer-based representations ("models") of
complex activities, e.g., airways and airport traffic; maintenance procedures
for fleets of ships; warfare studies of military equipment and tactics; and
communications networks.
SIMPROCESS (R) III Object-oriented Analytical Simulation Software. An
electronic prototyping tool for business process reengineering that enables
managers to model a current business process, then explore alternative
approaches before implementation.
MODSIM II (R) Simulation Programming Language. A computer programming and
graphics environment that provides an object-oriented approach to structuring
software. This approach provides an intuitive development framework to
programmers, one that allows code to be reused.
MODSIM III (TM) Simulation Programming Language. A graphical computer
programming and simulation environment that generates C++ code.
SIMOBJECT (R) Software System. A software framework for the reduction of
time and cost in building simulation models.
REenterprise (SM) Technology Management Solution. Services combining
proprietary methodologies and computer software to analyze and reconfigure an
organization's business process.
Marketing Systems Technology and Data and Information Systems Products:
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InSite (TM) for Windows (R) 95 (US and UK versions) Marketing and
Demographics Information System. PC-based geographic information systems
combining software, data, and mapping capabilities to enable planners to
determine the location of retail outlets, branch networks, sales territories,
potential customers, and competitors. [Windows is a registered trademark of
MicroSoft Corporation.]
ACORN (R) (A Classification of Residential Neighborhoods) Demographic
Information Services. Services that analyze consumers according to the type
of residential area in which they live, used to identify the prime prospects
for all types of consumer goods and services.
MARKET*MASTER (TM) Demographic Information System. A database marketing
system that enables companies to analyze their customer files by product
holding and usage for the purpose of cross-selling other products and
services.
SITE (R) Demographic Information Software and Reports. Detailed demographic
and applied market research database software and services for any geographic
area, such as county, zip code, TV broadcast area, congressional district, or
retail trade area.
Prophecy (TM) Financial Accounting Software. A financial accounting and
business software product distributed by CACI in the United Kingdom under
license from CSP Australia. [Prophecy is a trademark of CSP Australia.]
MIRACLE (TM) Financial Accounting System. A business software product
running on Data General proprietary systems.
UpFront (TM) Graphical Interface Software. A graphical user interface that
enables software to be used in an object-oriented manner.
Electronic Commerce Technology Products:
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SACONS (R) Automated Contracting System. A commercial off-the-shelf system
that provides clients an automated, cost effective, efficient way to complete
procurement activities and improve productivity.
SACONS-EDI (TM) Module. An automated, electronic commerce add-on module to
SACONS system that creates and receives data transmissions using standard
protocols.
SACONS-Gateway (TM) Module. An add-on module to the SACONS system that
centralizes protocols established by the U.S. Government as acceptable
standards for electronic procurement with the government.
QuickBid (R) II Automated Bid/Contracting System. A contracting system that
allows commercial trading partners to effectively identify and compete for
U.S. Government business via electronic data interchange ("EDI").
QuickBid (R) Net Automated Bid/Contracting System. A World Wide Web-based
value-added network ("VAN") that allows identification and competition for
U.S. Government business via the Internet.
Imaging and Document Management System Products:
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ADIIS (TM) Document Imaging Software System. A flexible document conversion
and management system that includes advanced imaging, document retrieval,
indexing, and work process management.
U.S. GOVERNMENT AGENCIES
CACI provides its entire range of information systems, technical services,
and proprietary products to defense and civilian agencies of the U.S.
Government. These activities require CACI's expert knowledge of agency
policies and operations. These assignments most often combine the wide range
of CACI's skills in information systems, systems engineering, logistics
sciences, weapons systems, simulation, and automated document management
systems. CACI also contracts with other national governments.
STATE AND LOCAL GOVERNMENT
CACI is a technological leader in the supply of automated information systems
for state governments' management of vehicle registration, licensing, and
wheeled vehicle revenue support, and for local governments' management of
false emergency alarm billing systems and housing registration systems. The
Company also offers its software and systems integration services to this
market segment.
MAJOR CORPORATIONS
CACI's commercial market base consists primarily of large corporations
(nominally characterized as the "Fortune 1000"). This market is a primary
target of CACI's proprietary software and database products in the Company's
marketing systems and simulation technology lines of business.
OTHER SERVICES
The Company operates a language training, translation, and interpretation
services organization.
CACI also provides information about its products and services on its World
Wide Web home page at http://www.caci.com.
FOUNDATION OF SUCCESS, CACI PEOPLE
CACI's business success is highly correlated with the Company's ability to
attract, recruit, motivate, and retain exceptional people at all levels of
the organization. The most valuable asset and resource the Company has is
its people. The Company is in continuing competition for the recruitment and
retention of highly skilled professionals.
For these reasons, the Company has endeavored to develop and maintain
competitive salary structures, incentive compensation programs and benefits,
and other individual recognition and award programs to highlight the
Company's intense interest in the success of its people in their careers.
In order to compete effectively in attracting and retaining such personnel,
the Company and its subsidiaries provide substantial benefits to their
employees. These benefits vary among the Company and its subsidiaries, but
generally include paid vacations and holidays, medical and life insurance,
incentive bonuses, and other benefits under retirement and stock purchase
plans.
At the same time, the Company has been forced by the current economic climate
to scrutinize and recast several of its compensation and benefit programs to
ensure a competitive balance of compensation, incentives, and benefits for
the costs incurred.
The Company recruits people from various market populations, including
experienced industry professionals, university graduates, trade and technical
school graduates, and seasoned technicians. The Company's professional
profile includes a high percentage of college graduates, many with advanced
degrees, including those at the masters and doctoral levels. The Company
seeks professionals with academically certified credentials in computer-based
information sciences, systems engineering, management systems, market
research, economics, environmental, military sciences, law, and other
scientific and research-oriented disciplines.
The Company has structured its promotion and advancement policies to meet the
current competitively driven market environment. Individuals advance in
relation to their abilities to perform as program managers, their
demonstrated exemplary leadership skills in technical endeavors, or their
managerial achievements against specified objectives, quotas, or other
defined targets.
CACI's advancement criteria incorporate specific requirements to demonstrate
a "client-service orientation" and the need to work synergistically within
the Company, in response to the wide range of client technical and
contractual requirements, or in development of solution approaches to new
client projects. This philosophy is consistent with CACI's current market,
and is a catalyst for individuals to support Company objectives.
The Company also requires all of its employees, consultants, officers, and
directors to subscribe annually to and affirm the Company's published Code of
Ethics and Business Conduct Standards. The Company has published and
enforced policies that set high standards for the conduct of all business
with clients, suppliers, vendors, and the public at large.
MARKETPLACE, DESCRIPTION AND SIGNIFICANT ACTIVITIES
CACI operates in an industry characterized by the presence of many highly
competitive firms. At the same time, CACI enjoys a respected position as one
of the larger public corporations in the segment of the information
technology industry that does not manufacture equipment. Although the
Company is a premier supplier of proprietary computer-based simulation
technology products and services, and is a major supplier of proprietary
marketing systems products and services in both the United States and the
United Kingdom, CACI is not primarily a software product developer-
distributor (See discussion following on Patents, Trademarks, Trade Secrets
and Licenses).
Competition for new contracts centers for reputation, responsiveness to
proposal requests, price, and many other factors. Competition for software
products and services centers on reputation, applicability to client needs,
and quality of product support and maintenance services, among other
elements.
The Company has established a distinctive reputation in combining
comprehensive knowledge of client challenges with the Company's significant
expertise in the design, development, and implementation of advanced
information technology solutions. This orientation provides CACI with
important opportunities to support large equipment manufacturers with the
systems integration and software services they frequently require to compete
for multi-million dollar contracts issuing from the U.S. Government.
CACI has also taken active steps to develop strategic relationships within
the industry with companies such as MicroSoft, Sun Microsystems, Lockheed
Martin, IBM, DEC, GE Information Systems, Unisys, BDM, PRC Inc., AT&T Global
Information Solutions, Lotus Development Corporation, Oracle, Sybase that
have business perspectives and objectives compatible with those of CACI. The
Company intends to continue the active cultivation of these relationships
wherever they support CACI's growth objectives. The Company also seeks to
expand its commercial business through these relationships.
Marketing and new business development for the Company is conducted by all
the officers and managers of the Company, including the CEO, executive
officers, vice presidents, division and department managers. CACI's
proprietary software and data products are sold primarily by full-time
salespeople. The Company has established value-added resale and distribution
agreements for the sale of certain products in specified domestic and
international markets. For its information systems and services markets, the
Company employs several marketing professionals who support the Company's
targeting of major contract opportunities, primarily in the U.S. Government
market.
CACI faces competition from a substantial number of firms, some of which are
larger in size and financial resources than CACI. The Company obtains much
of its business on the basis of proposals submitted in response to requests
for proposals from potential and current customers, who may also request
proposals for similar services from other firms. Additionally, the Company
may face indirect competition from certain government agencies that perform
services for themselves similar to those marketed by CACI. The Company knows
of no single competitor that is dominant in its fields of technology. The
Company has a relatively small share of the available worldwide market for
its products and services and has a goal of achieving growth through
increased market share.
CACI's sales of proprietary software and data products are generally
characterized by licenses of a fixed duration, or on a perpetual basis. The
Company generally prices its products in catalog fashion. Most often,
product prices are determined by the target computer on which the product
will run, by some form of multiple-site volume discount arrangement, or by
some frequency of usage arrangement in the case of data products.
For CACI's information systems and professional services contracts, the
Company submits bids for work and products to be delivered. Bids are
frequently negotiated as to terms and conditions for schedule, specification,
delivery, and payment. CACI's contracts and subcontracts take on a wide
range of contractual types, including firm fixed-price, cost reimbursement,
labor hour and materials expense, and variants thereof, including fixed unit
price, performance, and delivery contracts. In general, revenue for this
work is accrued as a percentage of completion, which is based upon costs
incurred in proportion to total expected costs.
Often, the form of contract and terms will be specified by the client. This
is especially the case with government clients. In these situations, the
Company may seek alternative arrangements or choose not to bid in those cases
where the contracting arrangement appears to expose the company to
inappropriate risk. By Company policy, fixed-price contracts require the
approval of a senior officer of the Company, and review and release approval
by the Chief Executive Officer.
At any one time, the Company may have several hundred separate contract
obligations. In FY 1996, the ten top revenue producing contracts accounted
for 50% of CACI's revenue, or $122.4 million. One contract for automated
litigation support to the Civil Division of the United States Department of
Justice ("DoJ"), accounted for 14.8% of total FY 1996 Company revenue.
In FY 1996, seventy-eight percent (78%) of CACI's business volume stemmed
from U.S. Government contracts, the remaining twenty-two percent (22%) coming
from commercial contracts and proprietary products sales. Fifty-four percent
(54%) of the Company's revenue came from U.S. Department of Defense ("DoD")
contracts, nineteen percent (19%) came from contracts with DOJ, and five
percent (5%) came from other civilian agency government clients.
The Company is endeavoring to continue expansion of its diversified business
portfolio. While desiring to decrease its dependence on DoD work, the
Company nonetheless, will, aggressively seek additional work from this large
agency. In FY 1996, the DoD revenue grew by 9% ($10.3 million) as a result
of the September 1, 1995 acquisition of Automated Sciences Group, Inc.
("ASG") and the January 1, 1996 acquisition of IMS Technologies, Inc.
("IMS"), coupled with internally generated revenues.
The Company is expanding its contract support to DoJ providing advanced
automated litigation support services to DoJ's Environment and Natural
Resources Division and the Executive Office for U.S. Attorneys. This work
has demanded increasingly sophisticated project management processes and
high-technology infusions to keep pace with client caseloads. In view of
this requirement, the Company developed the ADIIS (TM) document imaging
software system, which improves the productivity for high-quality litigation
support for the DoJ attorneys.
The Company believes it is the largest supplier of litigation support and
related automation services to the U.S. Government. The Company intends to
seek additional work from the U.S. Government and offer significant economies
to the Government through its specialization in this field.
During the past fiscal year, the Company examined a number of friendly
acquisition opportunities. On September 1, 1995, the Company acquired ASG
and its subsidiary for $4.9 million payable in cash over four years. ASG
provides information technology, engineering and environmental services to
DoD and U.S. Department of Energy ("DoE").
On January 1, 1996, the Company acquired IMS and two wholly-owned
subsidiaries for $6.5 million in cash. IMS provides a wide range of
information technology and engineering services to the U.S. Navy, DoJ,
Department of Education ("DoEd"), the Drug Enforcement Administration, the
Social Security Administration, and the Internal Revenue Service.
SEASONAL NATURE OF BUSINESS
The Company's business in general is not seasonal, although the summer and
winter holiday seasons affect both sales and revenue of the Company because
of their impact on the Company's labor sales and on product and service
sales by the Company's European operations. Unusually heavy blizzards during
the first few weeks of 1996 temporarily affected client activity in the
Company's Washington, D.C. operations area. Variations in the Company's
business also may occur at the expiration of major contracts until such
contracts are renewed or new contracts obtained. Prior to FY 1996, the U.S.
Government budget cycle had not significantly impacted the Company's
revenues. However, indecision over the last government budget and the
resulting workforce furloughs had a negative impact on FY '96 revenues and
resulted in administrative delays in a number of procurement actions.
RESEARCH AND DEVELOPMENT
During fiscal years 1996, 1995, and 1994, the Company spent $833,000,
$984,000, and $1,094,000, respectively, for research and development on
current and future products.
ENVIRONMENTAL PROTECTION REQUIREMENTS
There has been no significant adverse impact on the Company's business as a
result of laws that have been enacted for the protection of the environment.
PATENTS, TRADEMARKS, TRADE SECRETS, AND LICENSES
The Company owns one United States patent. While the Company believes that
its patent is valid, it does not consider that its business is dependent on
patent protection in any material way.
The Company believes that its business is dependent to a significant extent
on its technical and organizational knowledge, practices, and procedures, in
some of which it claims proprietary interests.
The Company claims copyright, trademark, and proprietary rights in each of
its proprietary computer software and data products and documentation.
The Company presently owns approximately 65 registered United States
trademarks and service marks. All of the Company's registered United States
trademarks and service marks may be renewed indefinitely. The Company is a
party to agreements which give it the right to distribute computer software
and other products owned by other companies, and receive income therefrom.
The Company has developed and holds proprietary rights in a number of
computer software packages, databases and methodologies, including, but not
limited to: ACORN*, ADIIS, C-GATE#, COMNET II.5*, COMNET III, COSTPRO*,
DORIS*, FAR-TRIEVE*, InSite USA, L-NET*#, Legal Workbench, MARKET*MASTER,
MODSIM II*, MODSIM III, NETOBJECT, NETWORK II.5*, Perfect-Mail*#, QuickBid*,
REenterprise, RENovate, RESTORE 2000, SACONS*, SACONS-EDI, SACONS-FEDERAL*,
SIDE, SIMANIMATION*, SIMBASE, SIMFACTORY*, SIMFACTORY* II.5, SIMFLOW*,
SIMGRAPHICS*, SIMLAB*, SIMOBJECT*, SIMPROCESS*, SIMPROCESS* III,
SIMSCENARIO*, SIMSCRIPT II.5*, SIMSNIPS*, SIMSTRUCTOR*, SimTrainer*,
SIMVIDEO, SITELINE*, SITE-POTENTIAL*#, SUPERSITE*, and ZIP DEMOGRAPHICS*.
[* The marks above indicated with a terminal asterisk (*) are registered
service marks or trademarks or trademarks of CACI International Inc or its
subsidiaries. All others are service marks or trademarks of CACI
International Inc or its subsidiaries.]
[# The marks above indicated with a terminal pound sign (#) contain a hyphen
to represent the bullet point which is an integral component of each mark and
which cannot be printed due to electronic transmission limitations.]
In addition, subsidiaries of the Company claim foreign copyright, trademark,
and proprietary rights in the Company's proprietary computer software
products. These subsidiaries hold proprietary rights in computer software
products and databases including, but not limited to, ACORN* (and the related
Arts*ACORN*, Change*ACORN*, Custom*ACORN*, Financial*ACORN*, Holiday*ACORN*,
Household*ACORN*, Investor*ACORN*, Property*ACORN*, Scottish*ACORN*), ACORN
Lifestyles*, ALEX*, CACI MARKET MASTER*, CACI National Mortgage Database*,
CACI Savings Market Database*, Charity Focus, FINPIN*, GEO-MARKETING*,
GEOMATCH*, GEOREAD*, GEOTRIEVE*, InSite, Lifestyle*Plus (and the related
Auto*Plus, Fuel*Plus, HouseAge*Plus, and MailOrder*Plus), Listline, MIRACLE,
MONICA*, PayCheck, PIN*, PINPOINT*, PINPOINT ADDRESS CODE*, ScoreBoards,
SITE*, SITE-POTENTIAL*, and UpFront*.
Some of these subsidiaries are parties to agreements pursuant to which they
may have the right to distribute computer software products owned by others
and obtain income therefrom.
[* The marks above indicated with a terminal asterisk (*) are registered
service marks or trademarks of CACI International Inc or its subsidiaries.
All others are service marks or trademarks of CACI International Inc or its
subsidiaries.]
BACKLOG
The Company's backlog as of July 31, 1996 was $705 million, of which $84
million was for orders believed to be firm. Total backlog as of July 31,
1995 was $590 million, of which $75 million represented firm orders. The
source of backlog is primarily contracts with the U.S. Government. It is
presently anticipated that all of the firm backlog will be filled during the
fiscal year ending June 30, 1997.
BUSINESS SEGMENTS, FOREIGN OPERATIONS, AND MAJOR CUSTOMER
The business segment, foreign operations, and major customer information
provided in the Company's Consolidated Financial Statements contained in this
Report are incorporated herein by reference. In particular, see Note 12,
Segment Information, of the Notes to Consolidated Financial Statements.
The following information is provided about the amounts of revenue
attributable to firm fixed price contracts (including proprietary software
product sales), time and materials contracts, and cost reimbursable contracts
of the Company during each of the last three fiscal years: (dollars in
thousands)
Fiscal Year Firm Time and Cost
Ended June 30, Fixed Price Materials Reimbursable Total
- -------------- ----------- --------- ------------ --------
1996 $56,813 $109,429 $78,373 $244,615
1995 62,607 106,869 63,488 232,964
1994 51,428 64,109 68,163 183,700
ITEM 2. PROPERTIES
As of June 30, 1996, CACI leased office space at 53 locations containing an
aggregate of approximately 582,000 square feet of space located in 20 states
and the District of Columbia. In five countries outside the United States,
CACI leased eight offices containing about 28,000 square feet of space.
CACI's leases expire primarily over the next six years. In most cases, CACI
anticipates that leases will be renewed or replaced by other leases.
All of CACI's offices are in modern and well-maintained buildings. The
facilities are substantially utilized and adequate for present operations.
As of June 30, 1996, CACI International Inc maintained its corporate
headquarters in approximately 158,000 square feet of space at 1100 North
Glebe Road, Arlington, Virginia. See Note 9, Lease Commitments, of the Notes
to Consolidated Financial Statements, for additional information regarding
the Company's lease commitments.
ITEM 3. LEGAL PROCEEDINGS
Pentagen Technologies International, Ltd. v. CACI International Inc, et al.
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Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending March 31, 1996, for the
most recently filed information concerning the lawsuit filed on July 1, 1993,
against the Registrant by Pentagen Technologies International, Ltd.
("Pentagen") in the Supreme Court for the State of New York alleging
conversion of intellectual property and violation of statutory duties as to
appropriation of computer software, and the lawsuit filed December 10, 1993
against the Registrant in the United States District Court for the Southern
District of New York alleging copyright and trademark infringement and
violation of the Major Fraud Against the United States Act. Since the filing
of the Registrant's report indicated above, the information reported therein
has changed as set forth below.
By Order of August 2, 1996, Judge Mukasy of the Southern District of New York
dismissed with prejudice all counts of both cases running against the CACI
defendants.
CACI International Inc, et al. v. Pentagen Technologies, Ltd., et al.
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Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending March 31, 1996 for the
most recently filed information concerning the lawsuit filed on December 22,
1993, in the United States District Court for the Eastern District of
Virginia against Pentagen Technologies International, Ltd., Baird
Technologies, Inc., John C. Baird and Mitchell R. Leiser (principals of
Pentagen and Baird).
As previously reported, the Court granted Summary Judgment in favor of CACI
holding that: (i) CACI's marketing of certain work to the United States Army
Materiel Command did not infringe Pentagen's MENTIX copyright or infringe any
trademark held by Pentagen; (ii) CACI's proprietary RENovate (TM) software
reengineering methodology does not infringe Pentagen's MENTIX copyright;
(iii) CACI's work on the Army's Sustaining Base Information Services ("SBIS")
contract does not infringe Pentagen's MENTIX copyright; and (iv) Pentagen and
its principals, John C. Baird and Mitchell R. Leiser, are liable for both
compensatory and punitive damages for defamation per se. By Per Curium
Opinion dated November 16, 1995 the Fourth Circuit Court of Appeals affirmed
the decision of the Eastern District in all respects.
By Order dated February 1, 1996, Chief Judge Cacheris of the Eastern District
found Pentagen Vice President Mitchell R. Leiser to be in Civil Contempt of
Court. Mr. Leiser has been ordered to pay $12,250.50 in damages caused by
the contempt.
Since the filing of Registrant's report indicated above, the information
reported therein has changed as follows: The finding of contempt and damage
order have been appealed to the Fourth Circuit Court of Appeals. Argument
has not yet been set.
United States of America, ex rel., Pentagen Technologies International, Ltd.
v. CACI International Inc, et al.
- ----------------------------------------------------------------------------
Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending March 31, 1996 for the
most recently filed information concerning the lawsuit filed on April 21,
1994 in the U.S. District Court for the Southern District of New York against
CACI International Inc and its wholly-owned subsidiaries, CACI Systems
Integration Inc. and CACI, INC.-FEDERAL, International Business Machines
Corporation ("IBM"), Loral Corporation ("Loral"), American Telephone and
Telegraph Company ("AT&T"), PRC, Inc., I-Net, Inc., and Statistica, Inc.,
asserting the same factual allegations that Pentagen asserted against CACI in
the cases described above, and alleging that the defendants violated the
False Claims Act, 31 USC Section 3732, in connection with the performance of
the SBIS contract and certain marketing efforts to the Army Materiel Command.
After the Government declined to intervene in the case, and after the U.S.
District Court for the Eastern District of Virginia ruled against Pentagen on
the factual allegations which underlie the case, the case was unsealed and
Pentagen served an Amended Complaint on June 5, 1995, which changed the
wording but not the substance of the allegations of the original Complaint.
By Opinion and Order dated November 21, 1995 (and amended on January 4, 1996
to correct certain scrivener errors), Judge Carter of the United States
District Court for the Southern District of New York granted defendants'
motions to dismiss all counts of the case on the grounds that Pentagen failed
to meet the subject matter jurisdiction requirements for the case under the
False Claims Act. The court also denied defendants' requests for sanctions
against Pentagen.
On December 7, 1995 in an effort to avoid final dismissal of its case,
Pentagen filed a motion to reconsider the decision, grant relief from the
final judgment dismissing the case, amend its complaint for the second time,
and to add a party to the lawsuit.
Since the filing of Registrant's report indicated above, the information
therein has changed as follows:
By Order of June 3, 1996, Judge Carter denied all of Pentagen's motions. On
July 2, 1996, Pentagen appealed the dismissal of the case and the denial of
its motions to the Second Circuit Court of Appeals.
Ceridian Corporation v. CACI Systems Integration Inc.
- -----------------------------------------------------
Reference is made to Part II, Item 1, Legal Proceedings, in the Registrant's
Quarterly Report on Form 10-Q for the period ending March 31, 1996 for the
most recently filed information concerning the suit filed on October 6, 1995
by Ceridian Corporation ("Ceridian") in the District Court for Hennepin
County, Minnesota, against Registrant's wholly-owned subsidiary, CACI Systems
Integration Inc. ("CACI"), alleging breach of contract, breach of warranty
and repudiation by CACI in connection with a contract for the development of
a manufacturing software system. On January 26, 1996, CACI filed its Answer
and Counterclaims, denying Ceridian's allegations and seeking damages from
Ceridian for breach of contract, intentional and negligent misrepresentation,
and tortious interference with contract.
Since the filing of Registrant's report indicated above, the information
reported therein has not changed.
CACI, INC.-FEDERAL v. Arizona Department of Transportation
- ------------------------------------------------------------
On June 25, 1996, in the wake of termination of its contract to provide
certain software and systems development, the Registrant's wholly-owned
subsidiary, CACI, INC.-FEDERAL ("CACI"), filed suit in Superior Court for
Maricopa County, Arizona, against the Arizona Department of Transportation
("ADOT"), seeking: (i) a declaratory judgement that the disputes procedure
mandated by the Arizona Procurement Code is unconstitutional; (ii) a
declaratory judgment that ADOT cannot assert claims against CACI under the
mandated disputes procedure; (iii) a declaratory judgment that ADOT is not
entitled to recover consequential damages in connection with the dispute;
(iv) $2,938,990 plus interest in breach of contract damages; (v) the return
of CACI property seized by ADOT in connection with the termination of the
contract; and (vi) lawyer's fees.
On July 12, 1996, ADOT filed a Motion to Dismiss the case on grounds that
CACI failed to exhaust its administrative remedies by failing to avail itself
of the mandated disputes procedure. Because that Motion raised factual
issues, the parties are engaged in limited discovery on matters related to
the mandated disputes procedure. Hearing on the Motion is expected to be
held on or after November 15, 1996.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth
quarter of the Registrant's fiscal year ended June 30, 1996, through the
solicitation of proxies or otherwise.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Registrant's Common Stock became publicly traded on June 2, 1986,
replacing paired units of Common Stock of CACI, Inc. and beneficial interests
in Common shares of CACI N.V. which had been traded in the over-the-counter
market.
From July 1, 1994 to June 30, 1996, Common Shares of the Registrant have been
quoted on the NASDAQ National Market System. The range of high and low sales
prices for each quarter during this period are as follows:
Fiscal 1996 Fiscal 1995
Quarter High Low Quarter High Low
------------------------- -----------------------
1st 13-7/8 11-1/4 1st 11-1/8 7-1/2
2nd 13-1/2 11-1/4 2nd 12 9
3rd 12-1/4 9-1/2 3rd 10-7/8 8-7/8
4th 15-3/4 12-1/4 4th 12-7/8 8-3/4
The Registrant has never paid a cash dividend. The present policy of the
Registrant is to retain earnings to provide funds for the operation and
expansion of its business. The Registrant does not intend to pay any cash
dividends at this time.
At August 31, 1996, the number of record shareholders of the Registrant's
Common Stock was approximately 1,187.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is included on page 14 of the Company's
1996 Annual Report to Shareholders and is incorporated herein as Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations is included in the section so titled on pages 15 through 17 of the
Company's 1996 Annual Report to Shareholders and is incorporated herein as
Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is included on pages 18 through 28 of
the Company's 1996 Annual Report to Shareholders and is incorporated herein
as Exhibit 13.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company had no disagreements with its independent accountant on
accounting principles, practices or financial statement disclosures.
PART III
--------
The Information required by Items 10, 11, 12, and 13 of Part III of Form 10-K
has been omitted in reliance on General Instruction G(3) and is incorporated
herein by reference to the Company's definitive proxy statement to be filed
with the SEC pursuant to Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended.
<PAGE>
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Report:
1. Financial Statements. The following financial statements,
together with the report of Deloitte and Touche, LLP, appearing in the
indicated portions of the Company's 1996 Annual Report to Shareholders, are
incorporated herein by reference and filed as Exhibit 13.
A. Independent Auditors' Report (Annual Report page 17)
B. Consolidated Statement of Operations (Annual Report page 18)
C. Consolidated Balance Sheets (Annual Report page 19)
D. Consolidated Statement of Shareholders' Equity (Annual Report
page 21)
E. Consolidated Statement of Cash Flows (Annual Report page 20)
F. Notes to Consolidated Financial Statements (Annual Report
pages 22 through 28)
2. Financial Statement Schedules. The following additional
financial data should be read in conjunction with the Consolidated Financial
Statements in the Annual Report. Schedules other than those listed below
have been omitted because they are inapplicable or are not required.
Statement regarding computation of
per share earnings Exhibit 11
Selected Financial Information Exhibit 13
Management's Discussion and Analysis Exhibit 13
Valuation and Qualifying Accounts Schedule II to Exhibit 13
Independent Auditors' Consent to
incorporation of the financial
information related to the
Independent Auditors' Report by
reference from the Annual Report
to Shareholders Exhibit 13
Independent Auditors' Report on
Consolidated Financial Statement
Schedule Exhibit 13
(a)(3) Exhibits (listed by numbers corresponding to the exhibit table of
Item 601 regulation S-K).
(3) Articles of Incorporation and By-laws:
3.1 Certificate of Incorporation of the Registrant, as amended
to date.
3.2 By-laws of the Registrant, as amended to date.
(4) Instruments Defining the Rights of Security Holders:
4.1 Clause FOURTH of the Registrant's Certificate of
Incorporation, incorporated above as Exhibit 3.1.
(10) Material Contracts:
10.1 The 1986 Employee Stock Incentive Plan of the Registrant
is incorporated by reference to the Registration Statement on Form S-8 filed
with the Commission on October 13, 1987 (File No. 33-17864).
10.2 The CACI Monthly Stock Investment Plan is incorporated by
reference to the Registration Statement on Form S-8 filed with the Commission
on June 24, 1988 (File No. 33-22766).
10.3 Employment Agreement between the Registrant and Dr. J. P.
London dated August 17, 1995, is incorporated by reference from Exhibit 10.3
of the Registrant's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended June 30, 1995.
10.4 Form of Stock Option Agreement between the Registrant and
certain employees is incorporated by reference from Exhibit 10.6 of the
Registrant's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the fiscal year ended June 30, 1991.
10.5 Stock Purchase Agreement dated September 1, 1995, between
the Registrant, CACI, Inc., Automated Sciences Group, Inc., and Conrad
Hipkins.
10.6 Acquisition and Merger Agreement dated December 21, 1995,
between the Registrant, IMS Technologies, Inc., and certain other parties.
10.7 Revolving Credit Agreement dated July 26, 1996, between
the Registrant, NationsBank, N.A., and certain other parties.
(11) Computation of Earnings per Common and Common Equivalent Share.
(13) 1996 Annual Report to Shareholders, financial portions of which
have been incorporated by reference into this Form 10-K.
(21) The significant subsidiaries of the Registrant, as defined in
Section 1-02(w) of regulation S-X, are:
CACI, Inc., a Delaware Corporation
CACI, INC.-FEDERAL, a Delaware Corporation
CACI, INC.-COMMERCIAL, a Delaware Corporation
CACI Products Company, a Delaware Corporation
American Legal Services Corp., a Delaware Corporation
CACI Field Services, Inc., a Delaware Corporation
CACI N.V., a Netherlands Corporation
CACI Limited, a U.K. Corporation
Automated Sciences Group, Inc., a Delaware Corporation
IMS Technologies, Inc., a Delaware Corporation
(27) Financial Data Schedule
(b) The Registrant filed a Current Report on Form 8-K on July 18, 1995,
in which the Registrant reported that it had signed a letter of intent to
acquire all of the stock of Automated Sciences Group, Inc.
The Registrant filed a Current Report on Form 8-K on September 7,
1995, in which the Registrant reported that it had acquired all of the stock
of Automated Sciences Group, Inc.
The Registrant filed a Current Report on Form 8-K on October 27,
1995, in which the Registrant reported that it had signed a letter of intent
to acquire all of the stock of IMS Technologies, Inc.
The Registrant filed a Current Report on Form 8-K/A on November 8,
1995, in which the Registrant amended its report of the acquisition of all of
the stock of Automated Sciences Group, Inc.
The Registrant filed a Current Report on Form 8-K on January 16,
1996, in which the Registrant reported that it had acquired all of the stock
of IMS Technologies, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the 26th day
of September, 1996.
CACI International Inc
By: /s/
------------------------------
J. P. London
Chairman of the Board and President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in capacities and on the dates indicated.
Signature Title Date
/s/ Chairman of the Board, September 26,1996
- ----------------------- President and Director -----------------
J.P. London (Principal Executive Officer)
/s/ Executive Vice President, September 26,1996
- ----------------------- Chief Financial Officer, -----------------
James P. Allen and Treasurer
(Principal Financial and
Accounting Officer)
/s/ Director September 26, 1996
- ----------------------- ------------------
Paul J. Coleman, Jr.
/s/ Director September 26, 1996
- ----------------------- ------------------
Alan S. Parsow
/s/ Director September 26, 1996
- ----------------------- ------------------
Larry L. Pfirman
/s/ Director September 26, 1996
- ----------------------- ------------------
Warren R. Phillips
/s/ Director September 26, 1996
- ----------------------- ------------------
Charles P. Revoile
/s/ Director September 26, 1996
- ----------------------- ------------------
William K. Sacks
/s/ Director September 26, 1996
- ----------------------- ------------------
John M. Toups
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
of
CACI International Inc <FN1>
THE UNDERSIGNED INCORPORATOR(S), in order to form a corporation for
the purposes hereinafter stated, under and pursuant to the
provisions of the General Corporation Law of the State of Delaware,
do hereby certify as follows:
FIRST: The name of the corporation is CACI International Inc <FN1>
SECOND: The registered office of the corporation is to be located
at 306 South State Street, in the City of Dover in the County of
Kent, in the State of Delaware, 19901. The name of its registered
agent at the address is the United States Corporation Company.
THIRD: The objects and purposes of the corporation are to engage
in any lawful business and activity for which a corporation may be
organized under the General Corporation Law of Delaware, including:
The corporation shall have the power to do any and all acts and
things necessary or useful to its business and purposes, and shall
have the general, specific and incidental powers and privileges
granted to it by statute, including:
To enter into and perform contracts; to acquire and exploit
patents, trademarks, rights of all kinds and related and other
interests; to acquire, use, deal in and with, encumber and dispose
of real and personal property without limitation including
obligations and/or securities; to borrow and lend money for its
corporate purposes; to invest and reinvest its funds, and take,
hold and deal with real and personal property as security for the
payment of funds loaned or invested, or otherwise; to vary any
investment or employment of capital of the corporation from time to
time; to create and/or participate with other corporations and
entities for the performance of all undertakings, as partner, joint
venturer, or otherwise, and to share or delegate control therewith
or thereto.
To pay pensions and establish and carry out pension, profit
sharing, stock option, stock purchase, stock bonus, retirement,
benefit, incentive or commission plans, trust and provisions for
any or all of its directors, officers and employees, and for any or
all of the directors, officers and employees of its subsidiaries;
and to provide insurance for its benefit on the life of any of its
directors, officers or employees, or on the life of a stockholder
for the purpose of acquiring at his death shares of its stock owned
by such stockholder.
To invest in and merge or consolidate with any corporation in such
manner as may be permitted by law; to aid in any manner any
corporation whose stocks, bonds or other obligations are held or in
any manner guaranteed by this corporation, or in which this
corporation is in any way interested; to do any other acts or
things for the preservation, protection, improvement or enhancement
of the value of any such stock, bonds or other securities; and
while owner of any such stock, bonds or other securities to
exercise all the rights, powers and privileges of ownership
thereof, and to exercise any and all voting powers thereon; and to
guarantee the indebtedness of others and the payment of dividends
upon any stock, the principal or interest or both of any bonds or
other securities, and the performance of any contracts.
To do all and everything necessary, suitable and proper for the
accomplishment of any of the purposes or the attainment of any of
the objects or the furtherance of any of the powers hereinbefore
set forth, either alone or in association with other corporations,
firms, partnerships or individuals, and to do every other act and
thing incidental or appurtenant to or growing out of or connected
with the aforesaid business or powers or any part or parts thereof,
to the extent permitted by the laws of Delaware under which this
corporation is organized, and to do all such acts and things and
conduct business and have one or more offices and exercise its
corporate powers in any and all places, without limitation.
FOURTH: <FN2> The total number of shares of all classes which the
corporation shall have the authority to issue is Ninety Million
(90,000,000), consisting of Forty Million (40,000,000) shares of
Class A Common Stock of the par value of $0.10 per share
(hereinafter called "Class A Common Stock"), Forty Million
(40,000,000) shares of Class B Common Stock of the par value of
$0.10 per share (hereinafter called "Class B Common Stock"), and
Ten Million (10,000,000) shares of preferred stock (hereinafter
called "Preferred Stock") of the par value of $0.10 per share.
The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of this Article FOURTH, to
provide for the issuance of the shares of Preferred Stock in
series, and by filing a certificate pursuant to the applicable law
of the State of Delaware, to establish from time to time the number
of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each
series and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall
include, but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of payment of
dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such
voting rights;
(d) Whether that series shall have conversion privileges, and,
if the terms and conditions of such conversion, including provision
for adjustment of the conversion rate in such events as the Board
of Directors shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions and at
different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the
terms and amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of
the corporation, and the relative rights of priority, if any, of
payment of shares of that series;
(h) Any other relative rights, preferences and limitations of
that series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be
paid or declared and set apart for payment on the common shares
with respect to the same dividend period.
If upon voluntary or involuntary liquidation, dissolution or
winding up of the corporation, the assets available for
distribution to holders of shares of Preferred Stock of all series
shall be insufficient to pay such holders the full preferential
amount to which they are entitled, then such assets shall be
distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts
(including unpaid cumulative dividends, if any) payable with
respect thereto.
The powers, preferences and rights, and the qualifications,
limitation and restrictions thereof, of each class of common stock,
are as follows:
1. Voting
(a) While any shares of Class B Common Stock are issued and
outstanding, and subject to the provisions of the following
paragraph (b), at every meeting of the stockholders every holder of
Class A Common Stock shall be entitled to one (1) vote in person or
by proxy for each share of Class A Common Stock standing in his
name on the stock transfer records of the corporation, and every
holder of Class B Common Stock shall be entitled to ten (10) votes
in person or by proxy for each share of Class B Common Stock
standing in his name on the stock transfer records of the
corporation, provided that at every meeting of the stockholders
called for the election of directors the holders of Class A Common
Stock, voting separately as a class, shall be entitled to elect
one-quarter (1/4) of the number of directors to be elected at such
meeting. If one-quarter (1/4) of such number of directors is not
a whole number, then the holders of Class A Common Stock, voting
separately as a class, shall be entitled to elect the next higher
whole number of directors to be elected at such meeting. The
holders of Class B Common Stock voting as a class shall be entitled
to elect the remaining number of directors constituting the full
board. Directors elected by the holders of a Class of Common
Stock, voting separately as a class, may be removed, with or
without cause, only by a vote of the holders of a majority of the
shares of such Class of Common Stock then outstanding, voting
separately as a class. If, during the interval between annual
meetings of stockholders for the election of directors, the number
of directors who have been elected by the holders of either Class
of Common Stock voting separately as a class shall, by reason of
resignation, death or removal, be reduced, the vacancy or vacancies
in the directors elected by the holders of such Class of Common
Stock voting separately as a class shall be filled by a majority
vote of the remaining directors representing such Class then in
office, even if less than a quorum, and if not so filled within
forty (40) days after the creation of such vacancy or vacancies,
the Secretary of the corporation shall call a special meeting of
the holders of such Class of Common Stock and such vacancy or
vacancies shall be filled at such special meeting. Any director
elected to fill any such vacancy by the remaining directors then in
office may be removed from office by vote of the holders of a
majority of the shares of the represented Class of Common Stock
then outstanding, voting separately as a class.
(b) If, while any shares of Class B Common Stock are issued and
outstanding, Herbert W. Karr shall cease to be a holder of Class B
Common Stock, or if any "Conversion Event", as defined in
subparagraph (c) of paragraph 4 below, shall occur as to Herbert W.
Karr, then and in any such event (a "Change-over Event"), the
number of directors which may be elected by each Class of Common
Stock shall be adjusted as follows:
(i) Prior to the first annual meeting of stockholders
following the first anniversary of the Changeover Event (the
"Second Annual Meeting"), the holders of Class A Common Stock and
Class B Common Stock shall be entitled to elect directors as
provided in the preceding paragraph (a).
(ii) Commencing with the Second Annual Meeting, and prior
to the annual meeting following the second anniversary of the
Change-over Event (the "Third Annual Meeting"), the holders of
Class B Common Stock shall be entitled to elect the largest whole
number of directors which is equal to or less than five-eighths
(5/8) of the full Board, and the holders of Class A Common Stock
shall be entitled to elect the remaining directors.
(iii) Commencing with the Third Annual Meeting, and prior
to the Conversion Date (defined hereinafter), the holders of Class
B Common Stock shall be entitled to elect the largest whole number
of directors which is equal to or less than one-half (1/2) of the
full Board, and the holders of Class A Common Stock shall be
entitled to elect the remaining directors.
(iv) At the close of business on the date (the
"Conversion Date") that is sixty-one (61) days prior to the date on
which the annual meeting following the third anniversary of the
Changeover Event would be held in accordance with the certificate
of incorporation and the by-laws of the corporation, all issued and
outstanding shares of Class B Common Stock, and all shares of Class
B Common Stock held in treasury, shall be deemed to be converted
into an equal number of shares of Class A Common Stock, immediately
and without further action; and thereafter no share of Class B
Common Stock shall be issued. Commencing on the Conversion Date
and continuing thereafter, the holders of Class A Common Stock
shall be entitled to elect all the directors of the corporation as
provided in subparagraph (d) of this paragraph 1.
(c) At any time when the number of issued and outstanding
shares of Class A Common Stock is less than 10% of the aggregate
number of issued and outstanding shares of Common Stock of both
Class A and Class B, then the provisions of the preceding
paragraphs (a) and (b) shall not be applicable to the election of
directors, and all holders of Common Stock of Class A and Class B
shall be entitled to vote as a single class for the election of
directors, with each share of Common Stock of either class having
one (1) vote. Directors elected by the holders of both Classes of
Common Stock may be removed, with or without cause, only by a vote
of the holders of a majority of both Classes of Common Stock voting
together as a single class.
(d) If and whenever there are no shares of Class B Common Stock
issued and outstanding, every holder of Class A Common Stock shall
be entitled to one (1) vote on all matters, including the election
of directors, for each share of Class A Common stock standing in
his name on the stock transfer records of the corporation.
(e) Every reference in this certificate of incorporation to a
majority or other proportion of shares of stock shall refer to such
majority or other proportion of the votes of such shares of stock
of any applicable class.
2. Dividends
(a) No cash dividend shall be declared or paid with respect to
shares of Class B Common Stock unless a cash dividend with respect
to Class A Common Stock, equal in amount per share to one hundred
ten per cent (110%) of the amount per share declared with respect
to the Class B Common Stock, is declared and paid for the same
dividend period.
(b) In the event of any stock split, stock dividend or similar
adjustment to either Class of Common Stock, the voting rights and
dividend preferences of such Class shall be proportionately
adjusted to maintain the voting rights and dividend rights of the
two Classes of Common Stock in the same proportions as they existed
immediately prior to said adjustment; provided, no such
proportionate adjustment shall be made on account of the 30% stock
dividend (the "Exchange Offer Dividend") described in the Form S-4
registration statement of the corporation filed with the Securities
and Exchange Commission in October 1985.
(c) In the event of any stock split, stock dividend (other than
the Exchange Offer Dividend) or similar adjustment to either Class
of Common Stock, the Offer Price (as defined in subparagraph (b) of
paragraph 4) and the conversion ratio for the conversion of Class
B Common Stock into Class A Common Stock shall be equitably
adjusted by the Board of Directors.
3. Restrictions on Transfer
(a) No person holding shares of Class B Common Stock
(hereinafter called a "Class B Holder") may transfer, and the
corporation shall not register the transfer of such shares of Class
B Common Stock, whether by sale, assignment, gift, bequest,
appointment or otherwise, except to a Permitted Transferee of such
Class B Holder, which term shall have the following meanings:
(i) Except as provided in the following clause (ii),
"Permitted Transferee" shall mean only a person who, immediately
before the registration of any such Transfer, is a holder of record
of one or more shares of Class B Common Stock.
(ii) With respect to shares of Class B Common Stock which
are the subject of the Shareholders' Agreement dated as of December
1, 1985 among the corporation, Herbert W. Karr ("Karr"), J.P.
London ("London"), and certain other holders of Class B Common
Stock (the "Shareholders' Agreement"), "Permitted Transferee" shall
mean a person to whom, in the opinion of counsel to the
corporation, shares of Class B Common Stock may be transferred in
conformity with the provisions of the Shareholders' Agreement.
(b) Notwithstanding anything to the contrary set forth herein,
any Class B Holder may pledge such Holder's shares of Class B
Common Stock to a pledgee pursuant to a bona fide pledge of such
shares as collateral security for indebtedness due to the pledgee,
provided that such shares shall not be transferred to or registered
in the name of the pledgee and shall remain subject to the
provisions of this paragraph 3. In the event of foreclosure or
other similar action by the pledgee, or the transfer, pursuant to
an attachment, lien or similar process, of Class B Common Stock to
a bona fide creditor of any Class B Holder in satisfaction of an
obligation owed to said creditor, such shares of Class B Common
Stock must, as soon as reasonably practicable, be either (i)
transferred to a Permitted Transferee of the pledger or creditor or
(ii) converted into shares of Class A Common Stock, as the pledgee
or creditor may elect, in accordance with the restrictions on
transfer and conversion as stated herein.
(c) Any purported transfer of shares of Class B Common Stock
not permitted hereunder shall be void and of no effect, and the
purported transferee shall have no rights as a stockholder of the
corporation and no other rights against or with respect to the
corporation. The corporation may, as a condition to the transfer
or the registration of transfer of shares of Class B Common Stock
to a purported Permitted Transferee, require the furnishing of such
affidavits or other proof as it deems necessary to establish that
such transferee is a Permitted Transferee. The corporation may
note on the certificates for shares of Class B Common Stock the
restrictions on transfer and registration of transfer set forth in
this paragraph 3.
4. Conversion of Class B to Class A
(a) Each share of Class B Common Stock may at any time be
converted into one (1) fully paid and nonassessable share of Class
A Common Stock subject to the provisions of this paragraph 4. Such
right shall be exercised by the surrender to the corporation of the
certificate representing such share of Class B Common Stock to be
converted, at any time during normal business hours at the
principal executive offices of the corporation, or if an agent for
the registration of transfer of shares of Class B Common Stock is
then duly appointed and acting (said agent being hereinafter called
the "Transfer Agent") then at the office of the Transfer Agent,
accompanied by (i) a written notice of the election by the holder
thereof to convert, (ii) evidence satisfactory to the corporation's
counsel of compliance with the provisions of the following
paragraph (b), and (iii) (if so required by the corporation or the
Transfer Agent) instruments of transfer in form satisfactory to the
corporation and to the Transfer Agent, duly executed by such holder
or his duly authorized attorney, and transfer tax stamps or funds
therefor, if required pursuant to subparagraph (i) below.
(b) No share of Class B Common Stock shall be converted to
Class A Common Stock unless the holder thereof has first offered to
sell that share to the other Class B Holders and to the
corporation, as follows:
(i) The Class B Holder wishing to convert (the "Converting
Holder") shall give to the Secretary of the corporation a written
notice (the "Notice") to that effect, which Notice shall be deemed
to constitute an offer to sell, to the Offerees, at the Offer Price
and upon the terms and conditions hereinafter set forth, the Class
B shares that the Converting Holder proposes to convert (the
"Offered Shares"). As promptly as practicable after the date on
which he receives the Notice (the "Date of Receipt"), and in any
event not more than five (5) days after the Date of Receipt, the
Secretary shall (x) establish a record date not more than sixty
(60) days prior to the Date of Receipt for purposes of determining
the record holders of Class B Common Stock entitled to purchase
their pro rata portion of the Offered Shares (the "Offerers"), and
(y) give written notice simultaneously to all Offerees, informing
each Offeree of the Converting Holder's offer to sell to that
Offeree a pro rata portion of the Offered Shares, at an "Offer
Price" per share equal to the mean between the high and low prices
(or, if applicable, the mean between the closing bid and asked
prices) for Class A Common Stock, as reported by NASDAQ or by any
national securities exchange on which the Class A Common Stock is
listed, on the business day immediately preceding the Date of
Receipt. Simultaneous notice shall be deemed to have been given to
all Offerees on the date (the "Offer Date") on which the Secretary
sends to all Offerees, by delivery in hand or by deposit in the
United States mail, registered or certified and postage prepaid,
addressed to each Offeree at that Offeree's address appearing in
the corporation's stock records as of the applicable record date,
written notice as aforesaid. For purposes of this paragraph (b),
the pro rata portion of Offered Shares to be offered to each
Offeree shall be determined by the proportion that the amount of
shares held of record by that Offeree as of the applicable record
date bears to the aggregate amount of shares held of record by all
Offerees as of that record date; provided, that the Secretary may
apply rounding to avoid offering fractional shares.
(ii) Each Offeree may elect to purchase any or all of the
shares offered to him by giving written notice thereof to the
Secretary and the Converting Holder within fifteen (15) days after
the Offer Date. Any shares so purchased shall be delivered against
tender of the Offer Price in cash, certified or bank check, or wire
transfer within seven (7) days after the giving of notice by the
Offeree.
(iii) Commencing on the sixteenth (16th) day after the
Offer Date, and continuing for fifteen (15) days until and
including the thirtieth day after the Offer Date, the Notice given
by the Converting Holder pursuant to the preceding clause (i) shall
be deemed to constitute an offer to sell to the corporation at the
Offer Price any and all of the Offered Shares that have been
offered to but not accepted by the Offerees. The corporation may
elect to purchase any or all of the Offered Shares within the
fifteen (15) days described in the immediately preceding sentence.
(iv) Any shares of Class B Common Stock which have been
offered to and have not been purchased by the Offerees and the
Company, as provided in the preceding clauses (i)-(iii), shall be
converted to shares of Class A Common Stock.
(c) Except as provided in clause (ii) of this paragraph (c),
upon the occurrence of a Conversion Event, as defined in clause (i)
of this paragraph (c), any and all shares of Class B Common Stock
held by the shareholder as to whom the Conversion Event occurs
shall be converted immediately and without further action into an
equal number of shares of Class A Common Stock. Thereafter, any
outstanding certificate representing any shares of Class B Common
Stock so converted shall represent the corresponding shares of
Class A Common Stock; and any holder of any such certificate shall
be entitled to surrender it for issue of a certificate or
certificates for shares of Class A Common Stock as provided in
subparagraph (f) of this paragraph 4.
(i) A "Conversion Event" shall mean, as to any holder of
Class B Common Stock, his death, or his permanent mental
incapacity, or his being adjudged bankrupt, or the appointment of
any receiver, agent, or other custodian of all or any part of his
property that may include Class B Common Stock under any insolvency
or similar law of any jurisdiction.
(ii) A Conversion Event shall not result in automatic
conversion of any shares under this paragraph (c) if, before the
occurrence of the Conversion Event, the affected shareholder had
entered into a binding agreement to sell those shares (including a
binding option to sell) to any Permitted Transferee, as defined in
paragraph 3 of this Article FOURTH; provided, however, that if the
sale is not consummated within sixty (60) days after the Conversion
Event, then the shares shall be automatically converted as provided
in this paragraph (c).
(d) If and whenever the aggregate amount of shares of Class B
Common Stock held of record by Karr and London, plus the number of
shares of Class B Common Stock which Karr or London has a present
or future right to acquire pursuant to a binding agreement, is less
than twenty-five percent (25%) of the total amount of issued and
outstanding Class B Common Stock, plus the number of shares of
Class B Common Stock which Karr or London has a present or future
right to acquire pursuant to a binding agreement, then all issued
and outstanding shares of Class B Common Stock, and all shares of
Class B Common Stock held in treasury, shall be deemed to be
converted into an equal number of shares of Class A Common Stock,
immediately and without further action; and thereafter no share of
Class B Common Stock shall be issued.
(e) The Board of Directors may at any time declare that each
issued and outstanding share of Class B Common Stock is converted
into 1.3 shares of Class A Common Stock, immediately and without
further action, if the Board determines that such action is in the
best interest of the stockholders generally. Without limiting the
generality of the foregoing, the Board may do so if it determines
that the existence of classes of shares with unequal voting power
substantially impairs the maintenance of a public market for shares
of Class A Common Stock. The Board may make reasonable provision
to avoid conversion into fractional shares, including without
limitation provision for rounding of conversion amounts, or for
payment of cash in lieu of fractional shares.
(f) As promptly as practicable after the surrender for
conversion of a certificate representing shares of Class B Common
Stock, the corporation will deliver or cause to be delivered at the
office of the Transfer Agent to or upon the written order of the
holder of such certificate, a certificate or certificates
representing the number of full shares of Class A Common Stock
issuable upon such conversion, issued in such name or names as such
holder may direct. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of the
surrender of the certificate representing shares of Class B Common
Stock, and all rights of the holder of such shares as such holder
shall cease at such time and the person or persons in whose name or
names the certificate or certificates representing the shares of
Class A Common Stock are to be issued shall be treated for all
purposes as having become the record holder or holders of such
shares of Class A Common Stock at such time; provided, however,
that any such surrender and payment on any date when the stock
transfer books of the corporation shall be closed shall constitute
the person or persons in whose name or names the certificate or
certificates representing shares of Class A Common Stock are to be
issued as the record holder or holders thereof for all purposes
immediately prior to the close of business on the next succeeding
day on which such stock transfer books are open.
(g) No adjustments in respect of dividends shall be made upon
the conversion of any share of Class B Common Stock; provided,
however, that if a share shall be converted subsequent to the
record date for the payment of a dividend or other distribution on
shares of Class B Common Stock but prior to such payment, the
registered holder of such share at the close of business on such
record date shall be entitled to receive the dividend or other
distribution payable on such share on the payment date
notwithstanding the conversion thereof or the corporation's default
in payment of the dividend due on the payment date.
(h) The corporation covenants that it will at all times reserve
and keep available, solely for the purpose of issue upon conversion
of the outstanding shares of Class B Common Stock, such number of
shares of Class A Common Stock as shall be issuable upon the
conversion of all such outstanding shares; provided, that nothing
contained herein shall be construed to preclude the corporation
from satisfying its obligations in respect of the conversion of the
outstanding shares of Class B Common Stock by delivery of purchased
shares of Class A Common Stock which are held in the treasury of
the corporation. The corporation covenants that if any shares of
Class A Common Stock, required to be reserved for purposes of
conversion hereunder, require registration with or approval of any
governmental authority under any federal or state law before such
shares of Common Stock may be issued upon conversion the
corporation will cause such shares to be duly registered or
approved, as the case may be. The corporation will endeavor to
list the shares of Class A Common Stock required to be delivered
upon conversion prior to such delivery upon each national
securities exchange, if any, upon which the outstanding Class A
Common Stock is listed at the time of such delivery. The
corporation covenants that all shares of Class A Common Stock which
shall be issued upon conversion of the shares of Class B Common
Stock will, upon issue, be fully paid and nonassessable and not
subject to any preemptive rights.
(i) The issuance of certificates for shares of Class A Common
Stock upon conversion of shares of Class B Common Stock, shall be
made without charge for any stamp or other similar tax in respect
of such issuance. However, if any such certificate is to be issued
in a name other than that of the holder of the share or shares of
Class B Common Stock converted, the person or persons requesting
the issuance thereof shall pay to the corporation the any tax which
may be payable in respect of any transfer involved in such issuance
or shall establish to the satisfaction of the corporation that such
tax has been paid.
5. Further Issue
(a) Except as otherwise provided in this paragraph 5, the
directors may at any time and from time to time issue shares of
authorized and unissued Class A Common Stock and Class B Common
Stock upon such terms and for such lawful consideration as they may
determine.
(b) If any Change-over Event (as defined in subparagraph (b) of
paragraph 1 above) shall occur, then and thereafter no share of
Class B Common Stock shall be issued except pursuant to the
conversion or exercise, as the case may be, of convertible
securities, options, warrants or other rights to acquire such
shares that were outstanding or in existence on the date of the
Change-over Event.
(c) After the completion of the contemplated exchange offer
described in the Form S-4 registration statement of the corporation
filed with the Securities and Exchange Commission in October 1985,
no share of authorized and unissued Class B Common Stock, no
security convertible into or exchangeable for shares of Class B
Common Stock, and no option, warrant or other right to subscribe
for, purchase or otherwise acquire shares of Class B Common Stock
shall be issued except with the approval of the holders of a
majority of the issued and outstanding shares of Class B Common
Stock, voting as a class. The issuance of Class B Common Stock
pursuant to the conversion or exercise of convertible securities,
options, warrants or other rights previously approved in accordance
with the preceding sentence shall not require additional approval
at the time of such conversion or exercise.
(d) After the completion of the contemplated exchange offer
described in the Form S-4 registration statement of the corporation
filed with the Securities and Exchange Commission in October 1985,
no more than five million (5,000,000) shares of authorized and
unissued Class B Common Stock shall be issued except with the
approval of the holders of a majority of the issued and outstanding
shares of Class A Common Stock, voting as a class; provided,
however, that the following shares of Class B Common Stock shall
not be included in the limitation provided in this paragraph (d):
(i) previously issued and reacquired shares sold by the
Company from treasury shares;
(ii) shares issued and sold in exchange for a like number
of shares of Class A Common Stock or issued and sold for a
consideration per share not less than the fair market value of
Class A Common Stock, determined as the mean between the high and
low prices (or, if applicable, the mean between the closing bid and
asked prices) for Class A Common Stock, as reported by NASDAQ or by
any national securities exchange on which Class A Common Stock is
listed, on the business day of the issuance;
(iii) shares issued in connection with a stock split,
stock dividend, or other similar pro rata distribution made on
substantially equivalent terms to holders of Class A Common Stock
and holders of Class B Common Stock; and
(iv) shares issued pursuant to the terms of an employee
stock incentive plan or similar employee benefit plan of the
corporation.
6. No Preemptive Rights. No stockholder of the corporation
shall be entitled as of right to subscribe for, purchase, or take
any part of any new or additional issue of stock of any class.
7. Liquidation. Except as otherwise provided in this Article
FOURTH, shares of Common Stock of Class A and Class B shall be
equal in right. Without limiting the generality of the foregoing,
all shares of Common Stock of Class A and Class B shall be entitled
to share equally and ratably in the proceeds of any liquidation of
the corporation.
FIFTH: The corporation is to have perpetual existence.
SIXTH: The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent whatever
and they shall not be personally liable for the payment of the
corporation's debts except as they may be liable by reason of their
own conduct or acts.
SEVENTH: The following provisions are inserted for the management
of the business and for the conduct of the affairs the corporation,
and for further definition, limitation and regulation of the powers
of the corporation and of its directors and stockholders.
(1) The number of directors comprising the Board of Directors
of the corporation shall be such as from time to time shall be
fixed by or in the manner provided in the by-laws, but shall not be
less than five (5). Election of directors need not be by ballot
unless the by-laws so provide.
(2) The Board of Directors shall have the power, unless and to
the extent that the Board may from time to time by Resolution
relinquish or modify the power, without the assent or vote of the
stockholders:
(a) To make, alter, amend, change, add to, or repeal the
by-laws of the corporation, except any by-law which pursuant to law
or the by-laws of the corporation is required to be adopted,
amended or repealed by the stockholders; to fix and vary the amount
of capital of the corporation to be reserved for any proper
purpose; to authorize and cause to be executed mortgages and liens
upon all or any part of the property of the corporation; to
determine the use and disposition of any surplus or net profits;
and to fix the times for the declaration and payments of dividends,
and
(b) To determine from time to time whether, and to what
extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the corporation (other than
the stock ledger) or any of them shall be open to the inspection of
the stockholders.
(3) The Board of Directors in its discretion may submit any
contract or act for approval or ratification at any annual meeting
of the stockholders or at any meeting of the stockholders called
for the purpose of considering such act or contract, and any
contract or act that shall be approved or be ratified by the vote
of the holders of a majority of the stock of the corporation which
is represented in person or by proxy at such meeting and entitled
to vote thereat (provided that a lawful quorum of stockholders be
there represented in person or by proxy) shall be as valid and
binding upon the corporation and upon all stockholders as though it
had been approved or ratified by every stockholder of the
corporation, whether or not the contract or act would otherwise be
open to legal attack because of directors' interest, or for any
other reason.
(4) No contract or transaction between this corporation an one
or more of its directors or officers, or between this corporation
and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void
or voidable solely for this reason or solely because the director
or officer is present at or participates in the meeting of the
board of committee thereon which authorizes the contract or
transaction, or solely because his or their votes are counted for
such purpose, if the contract or transaction is fair as to the
corporation and/or if the material facts relating thereto are
disclosed to and/or known by the directors and/or stockholders
and/or approved thereby, pursuant to Section 144 of Title 8 of the
Delaware Code.
(5) In addition to the powers and authorities hereinbefore or
by statute expressly conferred upon them, the Board of Directors is
hereby empowered to exercise all such powers and to do all such
acts and things as may be exercised or done by the corporation;
subject, nevertheless, to the provisions of the statutes of
Delaware, of this certificate, and to any by-laws from time to time
made by the stockholders; provided, however, that no by-law so made
shall invalidate any prior act of the Board which would have been
valid if such by-law had not been made.
3/ (6) No director of the Board of Directors of the corporation
shall be held liable for the monetary damages for breach of
fiduciary duty while acting as a director on behalf of the
corporation, except for:
1. Breach of the director's duty of loyalty to the
corporation or its stockholders;
2. Acts or omissions not committed in good faith;
3. Acts or omissions which involve intentional misconduct
or a knowing violation of law;
4. Acts taken in violation of Section 174 of Title 8,
Delaware Code, as amended from time to time (dealing with the
distribution of dividends and stock repurchases); or
5. Transactions from which the director derived an
improper personal benefit.
<FN3> EIGHTH: The corporation may, to the full extent permitted by
Section 145 of the Delaware General Corporation Law, as amended
from time to time, indemnify or advance the expenses of all persons
whom it may indemnify or for whom it may advance expenses.
NINTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or
between this corporation and its stockholders or any class of them,
any court of equitable jurisdiction within the State of Delaware
may, on the application in a summary way of this corporation or of
any receiver or receivers appointed for this corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on
the application of trustees in dissolution or of any receiver or
receivers appointed for this corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the
creditors or class of creditors, and/or of the stockholders or
class of stockholders of this corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority
in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement, the
said compromise or arrangement and the said reorganization shall,
if sanctioned by the court to which the said application has been
made, be binding on all the creditors or class of creditors, and/or
on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation.
TENTH: The corporation reserves the right to amend, alter, change
or repeal any provision contained in this certificate of
incorporation in the manner now or hereafter prescribed by law, and
all rights and powers conferred herein on stockholders, directors
and officers are subject to this reserved power.
ELEVENTH: The name(s) and addresses of the incorporator(s) are as
follows:
Charles P. Revoile 1815 North Fort Myer Drive
Arlington, Virginia 22209
The powers of the incorporators shall terminate upon filing the
certificate of incorporation, and the name and address of each
person who is to serve as a director until the first annual meeting
of stockholders or until his or their successors are elected and
qualify, shall be as follows:
Joseph S. Annino 1815 North Fort Myer Drive
Arlington, Virginia 22209
J. H. Berkson 1815 North Fort Myer Drive
Arlington, Virginia 22209
Herbert W. Karr 1815 North Fort Myer Drive
Arlington, Virginia 22209
J. P. London 1815 North Fort Myer Drive
Arlington, Virginia 22209
Robert F. McIntosh 1815 North Fort Myer Drive
Arlington, Virginia 22209
Warren R. Phillips 1815 North Fort Myer Drive
Arlington, Virginia 22209
John DeNigris 1815 North Fort Myer Drive
Arlington, Virginia 22209
IN WITNESS WHEREOF, I have hereunto set my hand and seal, this 3rd
day of October, 1985.
/s/ (L.S.)
----------------------------
Charles P. Revoile
<FN1> Name changed from CACI Worldwide, Inc. to CACI, Inc. by
Amendment to the Certificate of Incorporation dated June 2, 1986;
and from CACI, Inc. to CACI International Inc by Amendment to the
Certificate of Incorporation dated December 23, 1986.
<FN2> Article FOURTH amended December 23, 1986.
<FN3> Article SEVENTH (6) and Article EIGHTH amended December 23, 1986.
EXHIBIT 3.2
Revised as of December 17, 1993
BY-LAWS
of
CACI International Inc
(A Delaware Corporation)
ARTICLE I. OFFICES
Section 1. PRINCIPAL OFFICE
The principal office for the transaction of business of the
Corporation is hereby fixed and located at 1100 North Glebe Road,
County of Arlington, Commonwealth of Virginia. The Board of
Directors is hereby granted full power and authority to change said
principal office from one location to another in said County.
Section 2. OTHER OFFICES
Branch of subordinate offices may at any time be established by the
Board of Directors at any place or places where the Corporation is
qualified to do business.
ARTICLE II. MEETING OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS
All annual and other meetings of shareholders shall be held either
at the principal office of the Corporation or at any other place
which may be designated either by the Board of Directors pursuant
to authority hereafter granted to said Board, or by written consent
of all shareholders entitled to vote thereat, given either before
or after the meeting and filed with the Secretary of the Corporation.
Section 2. ANNUAL MEETING
The annual meetings of the shareholders shall be held on the third
Friday of October of each year, at 9:00 o'clock a.m. or at such
other date and time, not inconsistent with Delaware law, as may be
approved by the Board of Directors; provided, however, should said
day fall upon a legal holiday, then such annual meeting of
shareholders shall be held at the same time and place on the next
day thereafter which is not a legal holiday.
Written notice of each annual meeting shall be given to each
shareholder entitled to vote thereat, either personally or by mail
or other means of written communication, charges prepaid, addressed
to such shareholder at his or her address appearing on the books of
the Corporation or given by him or her to the Corporation for the
purpose of notice. If a shareholder gives no address, notice shall
be deemed to have been given him or her if sent by mail or other
means of written communication addressed to the place where the
principal office of the Corporation is situated, or if published at
least once in some newspaper of general circulation in the county
in which said office is located. All such notices shall be sent to
such shareholder entitled thereto, not less than twenty (20) days
nor more than sixty (60) days before such annual meeting, and shall
specify the place, day, and hour of such meeting, and shall also
state the general nature of the business or proposal to be
considered or acted upon at such meeting before action may be taken
at such meeting on:
(a) A proposal to sell, lease, convey, exchange, transfer, or
otherwise dispose of all or substantially all of the property or
assets of the Corporation, except under Section 272 of the Delaware
General Corporation Law, and except for a transfer to a
wholly-owned subsidiary;
(b) A proposal to merge or consolidate with another corporation,
domestic or foreign;
(c) A proposal to reduce the stated capital of the Corporation;
(d) A proposal to amend the Articles of Incorporation;
(e) A proposal to wind up and dissolve the Corporation; and
(f) A proposal to adopt a plan of distribution of shares,
securities, or any consideration other than money in the process of
winding up.
Advance Notice of Stockholder Proposed Business at Annual Meeting:
At an Annual Meeting of the Shareholders, only such business
shall be conducted as shall have been properly brought before the
meeting:
(a) As specified in the notice of the meeting (or any
supplement thereto);
(b) By, or at the direction of, the Board of Directors; or
(c) Otherwise properly brought before the meeting by a
stockholder.
In addition to any other applicable requirements, for business to
be properly brought before an Annual Meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice
must be delivered to or mailed and received at the offices of the
Secretary of the Corporation, not less than sixty (60) days prior
to the first anniversary of the date of the last Annual Meeting of
stockholders of the Corporation. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder
purposes to bring before the Annual Meeting (i) a brief description
of the business desired to be brought before the Annual Meeting and
reasons for conducting such business at the Annual Meeting; (ii)
the name and record address of the stockholder proposing such
business; (iii) the class and number of shares of the Corporation
which are beneficially owned by the stockholder; and (iv) any
material interest of the stockholder in such business.
Notwithstanding anything in the By-laws to the contrary, no
business shall be conducted at the Annual Meeting except in
accordance with the procedures set forth in this section, provided,
however, that nothing in this section shall be deemed to preclude
discussion by any stockholder of any business properly brought
before the Annual Meeting in accordance with said procedure.
The Chairman of the Annual Meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the provisions of
this section, and if he should so determine, he shall so declare to
the meeting that any such business not properly brought before the
meeting shall not be transacted.
Section 3. SPECIAL MEETINGS
Special Meetings of the shareholders, for any propose or purposes
whatsoever, may be called any time by the Chairman of the Board,
the President, or by the Board of Directors. Except in special
cases where other express provision is made by statute, notice of
such special meetings shall be given in the same manner as for
annual meetings of shareholders.
Notices of any special meeting shall specify, in addition to the
place, day and hour of such meeting, the general nature of the
business to be transacted.
Section 4. ADJOURNED MEETINGS AND NOTICE THEREOF
Any shareholders' meeting, annual or special, whether or not a
quorum is present, may be adjourned from time to time by vote of a
majority of the shares, the holders of which are either present in
person or by proxy, but in the absence of a quorum, no other
business may be transacted at such meeting.
When any shareholders' meeting, either annual or special, is
adjourned for thirty (30) days or more, notice of the adjourned
meeting shall be given as in the case of an original meeting. In
all other instances of adjournment, it shall not be necessary to
give any notice of an adjournment or of the business to be
transacted ad an adjourned meeting, other than by announcement at
the meeting at which such adjournment is taken.
Section 5. ENTRY OF NOTICE
Whenever any shareholder entitled to vote has been absent from any
meeting or shareholders, whether annual or special, an entry in the
minutes to the effect that notice has been duly given shall be
sufficient evidence that due notice of such meeting was given to
such shareholder, as required by the law and the By-laws of the
Corporation.
Section 6. VOTING
At all meetings of shareholders, every shareholder entitled to vote
shall have the right to vote in person or by proxy the number of
shares standing in his or her name on the stock records of the
Corporation. Such vote may be given viva voce or by ballot;
provided, however, that all elections for directors must be by
ballot upon demand made by a shareholder at any election and before
the voting begins.
Section 7. QUORUM.
The presence in person or by proxy of the holders of a majority of
the shares entitled to vote at any meeting shall constitute a
quorum for the transaction of business. The shareholders present at
a duly called or held meeting at which a quorum is present may
continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum. When
a quorum is present at any meeting, a majority in interest of the
stock represented thereat shall decide any question brought before
such meeting, unless the question is one upon which by express
provision of law, the Articles of Incorporation, or these By-laws,
a larger or different vote is required, in which case such express
provision shall govern and control the decision of such question.
Section 8. CONSENT OF ABSENTEES
The proceedings and transactions of any meeting of shareholders,
either annual or special, however called and noticed, shall be as
valid as though had at a meeting duly held after regular call and
notice, if a quorum be present either in person or by proxy, and
if, either before or after the meeting, each of the shareholders
entitled to vote, not present in person or by proxy, sign a written
waiver of notice, a consent to the holding of such meeting, or an
approval of the minutes thereof. All such waivers, consents, or
approvals shall be filed with the corporate records or made apart
of the minutes of the meeting.
Section 9. ACTION WITHOUT MEETING
Any action, which under the provisions of Section 228 of the
Delaware General Corporation Law may be taken at a meeting of the
shareholders, may be taken without a meeting if authorized by a
writing signed by the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to
authorize or take such action at any meeting at which all shares
entitled to vote thereon were present and voted, and filed with the
Secretary of the Corporation.
Section 10. PROXIES
Every person entitled to vote or execute consents shall have the
right to do so either in person or by an agent or agents authorized
by a written proxy executed by such person or his or her duly
authorized agent and filed with the Secretary of the Corporation;
provided, that no such proxy shall be valid after the expiration of
eleven (11) months from the date of its execution, unless the
shareholder executing it specifies therein the length of time for
which such proxy is to continue in force, which in no case shall
exceed seven (7) years from the date of its execution.
ARTICLE III. DIRECTORS
Section 1. POWERS
Subject to limitations of the Articles of Incorporation, of the
By-laws, and particularly Article II, Section 6 of these By-laws,
and Section 141 of the Delaware General Corporation Law as to
action to be authorized or approved by the shareholders, and
subject to the duties of directors as prescribed by the By-laws,
all corporate power shall be exercised by or under the authority
of, and the business and affairs of the Corporation shall be
controlled by, the Board of Directors. Without prejudice to such
general powers, but subject to the same limitations, it is hereby
expressly declared that the directors shall have the following
powers, to-wit:
First: To select and remove all other officers, agent, and
employees of the Corporation, prescribe such powers and duties for
them as may not be inconsistent with law, the Articles of
Incorporation or by By-laws, fix their compensation, and require
from them security for faithful service.
Second: To conduct, manage, and control the affairs and business
of the Corporation, and to make such rules and regulations
therefore not inconsistent with law, the Articles of Incorporation
or the By-laws, as they may deem best.
Third: To change the principal office for the transaction of the
business of the Corporation from one location to another within the
same county as provided in Article I, Section 1 hereof; to fix and
locate from time to time, one or more branch or subsidiary offices
of the Corporation within or without the State of Delaware as
provided in Article I, Section 2 hereof; to designate any place
within or without the State of Delaware for the holding of any
shareholders' meetings; and to adopt, make, and use a corporate
seal, and to prescribe the form of certificates of stock, and to
alter the form of such seal and of such stock certificates from
time to time, as in their judgment they may deem best; provided,
such seal and such certificates shall at all times comply with the
provisions of the law.
Fourth: To authorize the issuance of stock of the Corporation
from time to time, upon such terms as may be lawful, in
consideration of money paid, labor done, or services actually
rendered, debts or securities canceled, or tangible or intangible
property actually received, or in case of shares issued as a
dividend, against amounts transferred from surplus to stated
capital.
Fifth: To borrow money and incur indebtedness for the purposes of
the Corporation and to cause to be executed and delivered
therefore, in the corporate name, promissory notes, bonds,
debentures, deeds of trust, mortgages, pledges, hypothecations, or
other evidence of debt and securities therefore.
Sixth: To appoint an executive committee and other committees,
and to delegate to the executive committee any of the powers and
authority of the Board in the management of the business and
affairs of the Corporation, except the power to declare dividends
and to adopt, amend, or repeal By-laws. The executive committee
shall be composed of two or more directors.
Seventh: To impose such restriction(s) on the transfer of the
stock of the Corporation, specifically including by way of
illustration only, and not of limitation, e.g., the requirement
that such stock not be transferable on the books of the Corporation
except with a simultaneous transfer of the stock of any other
corporation(s), as is or may be permitted by law, and to remove any
such restriction(s) thereon.
Section 2. NUMBER AND QUALIFICATIONS OF DIRECTORS
The authorized number of directors of the Corporation shall be
a number between five (5) and nine (9) inclusive, as the Board of
Directors from time to time by vote of a supermajority (a majority
plus one) may set, until changed by amendment of the Articles of
Incorporation or by a by-law amending this Section 2, Article III
of these By-laws duly adopted by the vote or written assents of the
shareholders entitled to exercise fifty-one percent (51%) of the
voting power of the Corporation.
Section 3. ELECTION AND TERM OF OFFICE
The directors shall be elected at each annual meeting of the
shareholders, but if any such annual meeting is not held, or the
directors are not elected thereat, the directors may be elected at
any special meeting of the shareholders held for that purpose. All
directors shall hold office at the pleasure of the shareholders or
until their respective successors are elected. The shareholders may
at any time, either at a regular or special meeting, remove any
director and elect his or her successor.
NOMINATIONS OF DIRECTORS
Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors. Nominations
of candidates for election as directors of the Corporation at any
meeting of shareholders may be made (a) by, or at the direction of,
a majority of the Board of Directors, or (b) by any shareholder of
that class of stock entitled to vote for the election of directors
of that class of stock. Only persons nominated in accordance with
the procedures set forth in this section shall be eligible for
election as directors. Such nomination, other than those made by,
or at the direction of the board, shall be made pursuant to timely
notice in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice shall be delivered to or mailed and
received at the office of the Secretary of the Corporation not less
than sixty (60) days prior to the first anniversary of the date of
the last meeting of stockholders of the Corporation called for the
election of directors. Such stockholder's notice to the Secretary
shall set forth (a) as to each person whom the stockholder proposes
to nominate for election or reelection as a director: (i) the name,
age, business address, and residence address of the person; (ii)
the principal occupation of the employment of the person; (iii) the
class and number of shares of capital stock of the Corporation
which are beneficially owned by the person; and (iv) any other information
related to the person that is required to be disclosed in solicitations for
proxies for elections of directors pursuant to Rule 14a under the Securities
Exchange Act of 1934, as amended; and (b) as to the stockholder giving the
notice: (i) the name and record address of the stockholder, and (ii) the
class and number of shares of capital stock of the Corporation which are
beneficially owned by the stockholder. The Corporation may require any
proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee to serve as director of the Corporation. No person shall be
eligible for election as a director of the Corporation unless
nominated in accordance with the procedures set forth herein.
The Chairman of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting that the defective
nomination shall be disregarded.
Section 4. VACANCIES
Vacancies in the Board of Directors may be filled by the remaining
directors, though less than a quorum, or by a sole remaining
director, and each director so elected shall hold office until his
or her successor is elected at an annual or special meeting of the
shareholders.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation, or removal of any
director, or if the authorized number of directors be increased, or
if the shareholders fail at any annual or special meeting of the
shareholders at which any director or directors are elected, to
elect the full authorized number of directors to be voted for at
that meeting.
The shareholders may elect a director of directors at any time to
fill any vacancy or vacancies of a director tendered to take effect
at a future time; the Board or the shareholders shall have the
power to elect a successor to take office when the resignation is
to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his or
her term of office.
Section 5. PLACE OF MEETING
Regular meetings of the Board of Directors shall be held at any
place within or without the State of Delaware which has been
designated from time to time by resolution of the Board or by
written consent of all members of the Board. In the absence of such
designation, regular meetings shall be held at the principal office
of the Corporation. Special meetings of the Board may be held
either at a place so designated or at the principal office.
Section 6. ORGANIZATION MEETING
Immediately following each annual meeting of shareholders, the
Board of Directors shall hold a regular meeting for the purpose of
organization, election of officers, and the transaction of other
business. Notice of such meetings is hereby dispensed with.
Section 7. OTHER REGULAR MEETINGS
Other regular meetings of the Board of Directors shall be held on
the third Friday of January, April, and July of each year at 9:00
o'clock a.m. thereof; provided, however, that should said day fall
upon a legal holiday, then said meeting shall be held at the same
time and place on the next day thereafter which is not a legal
holiday. Notice of regular meetings of the Board of Directors is
required and shall be given in the same manner as notice of special
meetings of the Board of Directors.
Section 8. SPECIAL MEETINGS
Special meetings of the board of Directors for any purpose or
purposes may be called at any time by the President, by the
Executive Committee, or by any three (3) members of the Board.
Written notice of the time and place of special meetings shall be
delivered personally to the directors or sent to each director by
mail or other form or written communication, charges prepaid,
addressed to him or her at his or her address as it is shown upon
the records of the Corporation, or if it is not shown on such
records or is not readily ascertainable, at the place in which the
meetings of the directors are regularly held. In case such notice
is mailed or telegraphed, it shall be deposited in the U.S. Mail or
delivered to the telegraph company in the place in which the
principal office of the Corporation is located at least one hundred
twenty (120) hours prior to the time of holding of the meeting. In
case such notice is delivered personally as above provided, it
shall be so delivered at least forty eight (48) hours prior to the
time of the holding of the meeting. Such mailing, telegraphing, or
delivery as above provided, shall be due, timely, legal and
personal notice to such director.
NOTICE FOR A PARTICULAR SPECIFIED ACTION
Notwithstanding the above requirements for regular or special
meetings, the Chairman of the Board, the Chief Executive Officer,
or any two directors may require at least thirty (30) calendar days
notice of any action, by writing delivered to the Secretary of the
Corporation, before or during any regular or special meeting, and
if such notice is given, no vote or written consent may be taken
upon such action until the passage of such time (at another special
meeting or by written consent). Provided, however, if eighty
percent (80%) of the directors agree to waive such notice, the
meeting or vote of consent on such action shall proceed without the
requirement for extended notice.
Section 9. NOTICE OF ADJOURNMENT
Notice of the time and place of holding an adjourned meeting need
not be given to absent directors if the time and place be fixed at
the meeting adjourned.
Section 10. ENTRY OF NOTICE
Whenever any director has been absent from any special meeting of
the Board of Directors, any entry in the minutes as to the effect
that notice has been duly given shall be sufficient evidence that
due notice of such special meeting was given to such director, as
required by law and the By-laws of the Corporation.
Section 11. WAIVER OF NOTICE
The transactions of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though
had at a meeting duly held after regular call and notice, if a
quorum be present, and if either before or after the meeting, each
of the directors not present, signs a written waiver of notice or
a consent to holding such meeting or an approval of the minutes
thereof. All such waivers, consents, or approvals shall be filed
with the corporate records or made a part of the minutes of the
meeting.
Section 12. QUORUM
A majority of the authorized number of directors shall be necessary
to constitute a quorum for the transaction of business, except to
adjourn as hereinafter provided. With the exception of Section 4 of
this Article, an action of the directors shall be regarded as the
act of the Board of Directors only if a majority of the entire
authorized number of directors shall vote affirmatively on such
action.
Section 13. ADJOURNMENT
A quorum of the directors may adjourn any directors' meeting to
meet again at a stated time, place, and hour; provided, however,
that in the absence of a quorum, the directors present at any
directors' meeting, either regular or special, may adjourn from
time to time, until the time fixed for the next regular meeting of
the Board.
Section 14. ACTION WITHOUT MEETING
Any action required or permitted to be taken by the Board of
Directors under any provision of law or these By-laws may be taken
without a meeting if all members shall individually or collectively
consent in writing to such action. Such written consent or consents
shall be filed with the minutes of the proceedings of the Board.
Such action by written consent shall have the same force and effect
as a unanimous vote of such directors, any certificate or other
document filed under any provisions of the Delaware General
Corporation Law which related to action so taken shall state that
the action was taken by unanimous written consent of the Board of
Directors without a meeting and that the By-laws authorize the
directors to so act, and such statement shall be prima facie
evidence of such authority.
Section 15. FEES AND COMPENSATION
Directors shall not receive any stated salary for their services as
directors, but, by resolution of the Board of Directors, a fixed
fee, with or without expenses of attending, may be allowed for
attendance at each meeting. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in
any other capacity as an officer, agent, employee, or otherwise,
and receiving compensation therefore.
ARTICLE IV. OFFICERS
Section 1. OFFICERS
The officers of the Corporation shall be:
1. Chairman of the Board
2. President
3. Vice President
4. Secretary
5. Treasurer
The Corporation may also have, at the discretion of the Board of
Directors, one or more additional vice presidents, one or more
assistant secretaries, one or more assistant treasurers, and such
other officers as may be appointed in accordance with the
provisions of Section 3 of this Article. Officers other than the
President and Chairman of the Board of Directors need not be
directors. One person may hold two or more offices, except those of
President and Secretary.
Section 2. ELECTIONS
The officers of the Corporation, except such officers as may be
appointed in accordance with the provisions of Sections 3 or 5 of
this Article, shall be chosen annually by the Board of Directors,
and each shall hold his or her office at the pleasure of the Board
of Directors, who may, either at a regular or special meeting,
remove any such officers and appoint his or her successor.
Section 3. SUBORDINATE OFFICERS, ETC
The Board of Directors may appoint such other officers as the
business of the Corporation may require, each of whom shall hold
office for such period, have such authority, and perform such
duties as are provided in the By-laws or as the Board of Directors
may from time to time determine.
Section 4. REMOVAL AND RESIGNATION
Any officer may be removed, either with or without cause, by a
majority of the directors at the time in office, at a regular or
special meeting of the Board, or, except in the case of an officer
chosen by the Board of Directors, by any officer upon whom such
power of removal may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
Board of Directors or to the President, or to the Secretary of the
Corporation. Any such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein;
and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 5. VACANCIES
A vacancy in any office because of death, resignation, removal,
disqualification, or any other cause shall be filled in the manner
prescribed in the By-laws for regular appointments to such office.
Section 6. CHAIRMAN OF THE BOARD
The Chairman of the Board, if there shall be such an officer,
shall, if present, preside at all meetings of the Board of
Directors, and exercise and perform such other powers and duties as
may be from time to time assigned to him or her by the Board of
Directors as prescribed by the By-laws.
Section 7. PRESIDENT
Subject to such supervisory powers, if any, as may be given by the
Board of Directors to the Chairman of the Board, if there be such
an officer, the President shall be the Chief Executive Officer of
the Corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction, and control of the
business and affairs of the Corporation. He shall preside at all
meetings of the shareholders, and in the absence of the Chairman of
the Board, or if there be none, at all meetings of the Board of
Directors. He shall be ex-officio a member of all the standing
committees, including the Executive Committee, if any, and shall
have the general powers and duties of management usually vested in
the office of president of a Corporation, and shall have such other
powers and duties as may be prescribed by the Board of Directors or
by the By-laws.
Section 8. VICE PRESIDENT
In the absence or disability of the President, the Chairman of the
Board or in the event of his absence or disability, the Vice
Presidents in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the
Board of Directors, shall perform all the duties of the President,
and when so acting shall have all the powers of, and be subject to
all restrictions upon, the President. Absence and disability are
defined as follows: absence is physical absence from the
Corporation's principal place of business and unreachable by
telephone for a period of forty-eight (48) hours. Disability is the
inability of the President to perform his duties on an ongoing
basis.
The Senior Vice President and each other Vice President shall have
such other powers and perform such duties as are authorized by the
laws of Delaware and as are delegated to them respectively from
time to time by the board of Directors or the By-laws.
Section 9. SECRETARY
The Secretary shall keep, or cause to be kept, a book of minutes at
the principal office or such other place as the Board of Directors
may order, of all meetings of directors and shareholders, with the
time and place of holding, whether regular or special, and if
special, how authorized, the notice thereof given, the names of
those directors and shareholders present, the names of those
present at the directors' meeting, the number of shares present or
represented at shareholders' meetings, and the proceedings thereof.
The Secretary shall keep or cause to be kept, at the principal
office or at the office of the Corporation's transfer agent, a
share register or a duplicate share register showing the names of
the shareholders and their addresses; the number and classes of
shares held by each; the number and the date of certificates issued
for the same; and the number and date of cancellation of every
certificate surrendered for cancellation.
The Secretary shall give or cause to be given, notice of all
meetings of shareholders and the Board of Directors, as required by
the By-laws or by law to be given, and he or she shall keep the
seal of the Corporation in safe custody, and shall have such other
powers and perform such other duties as may be prescribed by the
Board of Directors or the By-laws.
Section 10. TREASURER
The Treasurer shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and
business transactions of the Corporation, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses,
capital surplus, and surplus shares. Any surplus, including earned
surplus, paid-in surplus, and surplus arising from a reduction of
stated capital, shall be classified according to source and shown
in a separate account. The books of account shall at all times be
open for inspection by any director.
The Treasurer shall deposit all monies and other valuables in the
name and to the credit of the Corporation with such depositories as
may be designated by the Board of Directors. He or she shall
disburse the funds of the Corporation as may be ordered by the
Board of Directors and shall render to the President and directors,
when they request it, an account of all of his or her transactions
as Treasurer and of the financial condition of the Corporation, and
shall have such other powers and perform such other duties as may
be prescribed by the Board of Directors or the By-laws.
ARTICLE V. MISCELLANEOUS
Section 1. RECORD DATE AND CLOSING STOCK BOOKS
A. Fixed Date
The Board of Directors may fix a time, in the future, not less than
twenty (20) nor more than sixty (60) days preceding the date of any
meeting of shareholders, and not more than sixty (60) days
preceding the date fixed for the payment of any dividend or
distribution, or for the allotment of rights, or when any change,
conversion, or exchange of shares shall go into effect, as a record
date for the determination of the shareholders entitled to notice
of and to vote at any such meeting, or entitled to receive any such
dividend or distribution, or any such allotment of rights, or to
exercise the rights in respect to any such change, conversion, or
exchange of shares, and in such case only shareholders of record on
the date so fixed shall be entitled to notice of and to vote at
such meeting, or to receive such rights, as the case may be,
notwithstanding any transfer of any shares on the books of the
Corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the Corporation against transfer
of shares during the whole, or any part of any such period.
B. No Fixed Date
As an alternative to an action taken under Subsection A of this
Section 1 of Article V, if no record date has been or is fixed for
the purpose of determining shareholders entitled to receive payment
of any dividend, the record date for such purpose shall be at the
close of business of the date on which the Board of Directors
adopts the resolution relating thereto.
Section 2. INSPECTION OF CORPORATE RECORDS
The share register or duplicate share register, the books of
account, and minutes of proceedings of the shareholders and
directors shall be open to inspection upon the written demand of
any shareholder or the holder of a voting trust certificate, at any
reasonable time, and for a purpose reasonably related to his or her
interests as a shareholder, and shall be exhibited at any time when
required by the demand of ten percent (10%) of the shares
represented at any shareholders' meeting. Such inspection may be
made in person or by an agent or attorney, and shall include the
right to make extracts. Demand of inspection other than at a
shareholders' meeting shall be made in writing upon the President,
Secretary, or Assistant Secretary of the Corporation.
Section 3. CHECKS, DRAFTS, ETC.
All checks, drafts, or other orders for payment of money, notes, or
other evidence of indebtedness issued in the name of or payable to
the Corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be
determined by resolution of the Board of Directors.
Section 4. CONTRACTS, ETC.: HOW EXECUTED
The Board of Directors, except as the By-laws or Articles of
Incorporation otherwise provide, may authorize any officer or
officers, agent or agents, to enter into any contract or execute
any instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances;
and unless so authorized by the Board of Directors, no officer,
agent, or employee shall have any power or authority to bind the
Corporation by any contract or agreement or to pledge its credit to
render it liable for any purpose or to any amount.
Section 5. ANNUAL REPORTS
The Board of Directors shall cause an annual report or statement to
be sent to the shareholders of this Corporation not later than one
hundred and twenty (120) days after the close of the fiscal or
calendar year.
Section 6. CERTIFICATES OF STOCK
A certificate or certificates for shares of the capital stock of
the Corporation shall be issued to each shareholder when any such
shares are fully paid up. All such certificates shall be signed by
the President or a Vice President and the Secretary or an Assistant
Secretary. Such certificates may be paired with, deemed to
represent, and subjected to restrictions on transfer without
simultaneous transfer of, certificates for: (a) shares of stock of
any other corporation(s), (b) beneficial interests in such shares,
(c) interests in voting trust(s), or (d) other kinds of interests
in any other kind of entity.
Certificates for shares may be issued prior to full payment
thereof, under such restrictions and for such purposes as the Board
of Directors or the By-laws may provide; provided, however, that
any such certificate so issued prior to full payment shall state
the amount remaining unpaid and the terms of payment thereof.
Section 7. REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The President or any Vice President and the Secretary or Assistant
Secretary of this Corporation are authorized to vote, represent,
and exercise on behalf of this Corporation all rights incident to
any and all shares of any other corporation or corporations
standing in the name of this Corporation. The authority herein
granted to said officers to vote or represent on behalf of this
Corporation any and all shares held by this Corporation or
corporations, may be exercised either by such officers in person or
by any person authorized to do so by proxy or power of attorney.
Section 8. INSPECTION OF BY-LAWS
The Corporation shall keep in its principal office for the
transaction of business the original or a copy of the By-laws as
amended or otherwise altered to date, certified by the Secretary,
which shall be open to inspection by the shareholders at all
reasonable times during business hours.
Section 9. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Every person who was or is a party or is threatened to be made a
party to or is involved in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, by reason of the
fact that he or a person of whom he is the legal representative is
or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director or officer
of another corporation, shall be indemnified and held harmless to
the fullest extent legally permissible under the General
Corporation Law of the state of Delaware from time to time against
all expense, liability, and loss (including attorneys' fees,
judgments, fines, and, if approved by the Board of Directors,
amounts paid or to be paid in settlement) reasonably incurred or
suffered by him in connection therewith.
If authorized by the Board of Directors, expenses incurred in
connection with the defense of any civil or criminal action, suit,
or proceeding may be paid by the Corporation in advance of the
disposition of the action, suit, or proceeding, upon receipt of an
undertaking by or on behalf of the director or officer to repay
such amounts if it shall be ultimately determined that he is not
entitled to be indemnified by the Corporation.
The foregoing right of indemnification shall be in addition to, and
not exclusive of, all other rights to which such director or
officer may be entitled. Payments pursuant to the Corporation's
indemnification of any person hereunder shall be reduced by any
amounts such person may collect as indemnification under any policy
of insurance purchased and maintained on his behalf by this or any
other Corporation.
ARTICLE VI. AMENDMENTS
Section 1. POWER OF SHAREHOLDERS
New By-laws may be adopted or these By-laws may be amended or
repealed by the vote of shareholders entitled to exercise fifty-one
percent (51%) of the voting power of the Corporation or by the
written assent of such shareholders.
Section 2. POWERS OF DIRECTORS
Subject to the right of shareholders as provided in Section 1 of
this Article VI to adopt, amend, or repeal By-laws, By-laws other
than a By-law or amendment thereof changing the authorized number
of directors may be adopted, amended, or repealed by the Board of
Directors.
ARTICLE VII. SEAL
The Corporation shall have a common seal, and shall have inscribed
thereon the name of the Corporation, the year of its incorporation,
and the word Delaware.
EXHIBIT 10.5
Stock Purchase Agreement
Dated as of September 1, 1995
among
CACI International Inc,
CACI, Inc.,
Conrad Hipkins
and
Automated Sciences Group, Inc.
Stock Purchase Agreement (the "Agreement"), dated as of September 1, 1995, by
and among CACI International Inc, a Delaware corporation ("CACI"), CACI,
Inc., a Delaware corporation and a wholly-owned subsidiary of CACI ("CASub"),
Conrad Hipkins ("Seller"), a resident of Washington, the District of
Columbia, and Automated Sciences Group, Inc., a Delaware corporation ("ASG"),
all of the capital stock of which is owned by Seller.
W I T N E S S E T H
WHEREAS CACI has a strong commitment to the government information technology
industry and ASG provides information technology, engineering and
environmental services to the United States Departments of Defense and
Energy;
WHEREAS Seller wishes to sell to CASub and CASub wishes to purchase from
Seller all of the outstanding capital stock of ASG;
NOW, THEREFORE, CACI, CASub, Seller and ASG hereby agree as follows:
Article 1
PURCHASE OF COMMON STOCK
1.1 Purchase and Sale. Upon and subject to the terms and conditions
hereof, and on the basis of the representations, warranties, covenants and
agreements contained herein, at the "Closing" (as defined in Section 1.8.1),
Seller shall sell, transfer, assign and deliver to CASub, and CASub shall
purchase, acquire and accept from Seller, all right, title and interest in
and to 449,565 shares of the Common Stock, par value $0.10 per share (the
"Common Stock") of ASG and 23,700 shares of the Preferred Stock, par value
$100.00 per share (the "Preferred Stock")(together, the "Shares"), free and
clear of all covenants, conditions, restrictions, voting arrangements, liens,
charges, encumbrances, options, claims and rights whatsoever.
1.2 Purchase Price. CASub shall pay to Seller a total purchase price of
Four Million Three Hundred Forty Thousand Dollars ($4,340,000) (the "Purchase
Price") for the Shares, subject to adjustment in accordance with Section 1.3.
The Purchase Price shall be payable as follows:
1.2.1 Two Million Three Hundred Thousand Dollars ($2,300,000) shall
be payable to Seller at the Closing by certified check, wire transfer or
other form of immediately available funds; and
1.2.2 Two Million Forty Thousand Dollars ($2,040,000) shall be
payable in three equal installments of Six Hundred Eighty Thousand Dollars
($680,000), payable to Seller on each of the first, second and third
anniversaries of the Closing (each, an "Installment Payment"); provided,
however, that the third Installment Payment shall be subject to adjustment in
accordance with Section 1.3.
1.3 Holdback.
1.3.1 CASub shall be entitled to withhold from the third Installment
Payment due Seller on the third anniversary of the Closing a portion of the
Purchase Price, up to a maximum of Five Hundred Thousand Dollars ($500,000)
(the "Holdback"), based on the collection of accounts receivable in the
amount of Eight Million Two Hundred Twenty-Seven Thousand Nine Hundred
Sixty-Two Dollars ($8,227,962) reflected on the March 31, 1995 audited
balance sheet of ASG (the "Receivables"). The Receivables are individually
identified by amount and account debtor on Exhibit 1.3.1. The holdback
period shall expire on the third anniversary of the Closing (the "Holdback
Period"). If, at the end of the Holdback Period, any of the Receivables have
not been collected by ASG, CASub shall reduce the amount of the third
Installment Payment by the amount of such uncollected Receivables, up to a
maximum reduction of Five Hundred Thousand Dollars ($500,000). CACI, CASub
or ASG shall pay to Seller any Receivables collected after the expiration of
the Holdback Period within thirty (30) days of receipt.
1.3.2 Exhibit 1.3.2 identifies by amount and account debtor the
accounts receivable existing as of March 31, 1995 that are not included in
the Receivables (the "Windfall Receivables"). If ASG collects any Windfall
Receivables during the Holdback Period, CASub shall reduce the amount of the
uncollected Receivables by the amount of such Windfall Receivables. If the
amount of the uncollected Receivables is reduced to zero or if the Holdback
Period has expired, CACI, CASub or ASG shall pay to Seller any Receivables or
Windfall Receivables received thereafter within thirty (30) days of receipt.
1.4 Non-Competition Agreement. In connection with the execution, delivery
and performance of this Agreement and the transactions contemplated hereby,
Seller agrees to execute and deliver at or prior to the Closing a
Non-Competition Agreement in form and substance satisfactory to CACI and
CASub, to the effect set forth in Exhibit 1.4 (the "Non-Competition
Agreement"). In consideration of the execution and delivery of the
Non-Competition Agreement, CASub shall pay to Seller the sum of Two Hundred
Thousand Dollars ($200,000) at the Closing and One Hundred Thousand Dollars
($100,000) on each of the first four (4) anniversaries of the Closing.
1.5 Escrow of Earnest Money Deposit. CACI acknowledges that, pursuant to
the escrow agreement attached as Exhibit 1.5 hereto, it has deposited the sum
of One Hundred Thousand Dollars ($100,000) (the "Earnest Money Deposit") into
money market account no. 03-97-2061 of Independence Federal Savings Bank,
7711 Georgia Avenue, N.W., Washington, the District of Columbia, on behalf of
Kilcullen, Wilson & Kilcullen (the "Escrow Agent"), to be paid to Seller in
accordance with Section 7.2.
1.6 No Setoff. Except for the Holdback provided for in Section 1.3, in the
event of any dispute arising under this Agreement or any other document
executed in connection herewith, CACI and CASub shall not setoff against or
withhold from Seller any Installment Payment or any portion thereof.
1.7 Failure to Pay. If CASub fails to pay any Installment Payment within
thirty (30) days of the date on which such Installment Payment is payable,
CASub shall:
1.7.1 pay to Seller (i) liquidated damages equal to fifty percent
(50%) of such Installment Payment (e.g., Three Hundred Forty Thousand Dollars
($340,000)) and (ii) reasonable attorney's fees incurred by Seller solely in
connection with the collection of such Installment Payment and liquidated
damages; provided, however, that CASub shall have no obligation to pay any
attorney's fees incurred by Seller in connection with any issue other than
the collection of an Installment Payment and related liquidated damages; and
1.7.2 deposit any remaining Installment Payments, together with funds
sufficient to pay any liquidated damages that may thereafter become payable
to Seller pursuant to Section 1.7.1, into an escrow account, which shall be
governed by an escrow agreement substantially in the form of Exhibit 1.7.
<PAGE>
1.8 Closing.
1.8.1 The closing of the purchase and sale of the Shares (the
"Closing") shall be held at the offices of CACI, 1100 North Glebe Road,
Arlington, VA 22201, or at such other location as the parties hereto may
mutually agree upon in writing, at 10:00 A.M., local time, on September 1,
1995 or on such other date and at such other time as the parties hereto may
mutually agree upon in writing (the "Closing Date"). All transactions
contemplated by this Agreement shall be deemed to have become effective as of
12:01 A.M. on the Closing Date.
1.8.2 At the Closing, Seller and ASG shall deliver to CACI and CASub:
1.8.2.1 one or more certificates evidencing the Shares,
registered in the name of CASub or duly endorsed in blank or with stock
powers or other appropriate instruments of transfer, duly executed by Seller,
with signatures guaranteed, sufficient to convey to CASub good title to the
Shares, free and clear of all covenants, conditions, restrictions, voting
arrangements, liens, charges, encumbrances, options, claims and rights
whatsoever, with all applicable stock transfer and other Taxes paid;
1.8.2.2 the Non-Competition Agreement, duly executed by
Seller; and
1.8.2.3 the other instruments, agreements, certificates and
documents referred to in Section 6.2.
1.8.3 At the Closing, CACI and/or CASub shall deliver:
1.8.3.1 to Seller pursuant to Section 1.2, Two Million Three
Hundred Thousand Dollars ($2,300,000) by certified check, wire transfer or
other form of immediately available funds;
1.8.3.2 to Seller pursuant to Section 1.4, Two Hundred
Thousand Dollars ($200,000) by certified check, wire transfer or other form
of immediately available funds; and
1.8.3.3 to Seller and ASG, the other instruments, agreements,
certificates and documents referred to in Section 6.3.
Article 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to CACI and CASub as follows:
2.1 Ownership of the Shares. Seller is the sole record and beneficial
owner of and has and will have at the Closing good and marketable title to
the Shares, free and clear of any and all covenants, conditions,
restrictions, voting arrangements, liens, charges, encumbrances, options,
claims and rights whatsoever. There are no agreements restricting the
transfer of, or affecting the rights of Seller with respect to, the Shares.
2.2 Authority for Agreement. Seller has the full right, power and capacity
to execute, deliver and perform this Agreement and the other transactions
contemplated herein, to carry out his obligations hereunder and to transfer,
convey and sell the Shares to CASub at the Closing. Upon transfer of the
Shares to CASub, CASub will acquire good and marketable title to the Shares,
free and clear of any and all covenants, conditions, restrictions, voting
arrangements, liens, charges, encumbrances, options, claims and rights
whatsoever. Assuming the due authorization, execution and delivery hereof
and thereof by each other party hereto and thereto, this Agreement and all
other agreements and obligations entered into and undertaken in connection
with the transactions contemplated herein to which Seller is a party
constitute, when executed and delivered by Seller, the valid and legally
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws
affecting the rights of creditors generally.
2.3 No Default or Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
by Seller do not and will not, with or without the giving of notice or the
lapse of time, or both, conflict with, or result in any violation or breach
of or constitute a default under, or require the consent of any other party
to, or result in any right to accelerate or the creation of any lien, charge
or encumbrance on the Shares or any of the assets or properties of ASG
pursuant to, or right of termination under, any provision of any note,
mortgage, indenture, lease, agreement or other instrument, permit,
concession, grant, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation to which Seller or ASG is a party or by which
Seller or ASG or any of his or its assets or properties may be bound or which
is applicable to Seller or ASG or any of his or its assets or properties.
Other than in connection with or in compliance with the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and
applicable state securities laws, no authorization, consent, approval,
license, order, or permit of, or declaration of, or filing with or notice to,
any governmental body or authority or any other person or entity is necessary
for the execution, delivery and performance of this Agreement by Seller or
the consummation by Seller of the transactions contemplated hereby.
2.4 No Brokers or Finders. No broker or finder has acted for Seller in
connection with this Agreement or the transactions contemplated hereby, and
no broker or finder is entitled to any brokerage or finder's fee or other
commissions in respect of such transactions based upon agreements,
arrangements or understandings made by or on behalf of Seller.
2.5 No Pending Actions. There is no Action pending or threatened to which
Seller is a party or of which Seller is aware which questions or challenges
the validity of this Agreement or any action taken or to be taken by Seller
pursuant to this Agreement or in connection with the transactions
contemplated hereby.
2.6 No Misrepresentations. No representation or warranty by Seller in this
Agreement, nor any statement, certificate, list, exhibit or schedule
furnished or to be furnished by or on behalf of Seller pursuant to this
Agreement nor any document or certificate delivered to CACI or CASub pursuant
to this Agreement, when taken together with the foregoing, contains or shall
contain any untrue statement of material fact or omits or shall omit to state
a material fact necessary to make the statements not misleading.
Article 3
REPRESENTATIONS AND WARRANTIES OF SELLER AND ASG
Whenever any representation, warranty, covenant or agreement of Seller is
qualified or limited as to "Knowledge," the term "Knowledge" shall be limited
to the actual knowledge of (a) the Seller and (b) the executive officer or
officers of ASG whose management responsibilities include the matters or
operations referred to by such representation, warranty, covenant or
agreement. Seller and ASG jointly and severally represent and warrant to
CACI and CASub as follows:
3.1 Corporate Status of ASG. ASG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. ASG
is duly qualified to do business as a foreign corporation and is in good
standing in all jurisdictions in which the character of the properties owned,
leased or operated by ASG or the nature of the business transacted by ASG
makes such qualification necessary, except where failure to be so qualified
would not have a material adverse effect on the business, operations, assets,
financial condition, results of operations, properties or prospects of ASG.
3.2 Subsidiary of ASG. The corporation listed on Exhibit 3.2 (the
"Subsidiary"), except as set forth in that Exhibit, is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full corporate power to own, lease and
operate its properties and to conduct its business as currently owned,
leased, operated and conducted. The Subsidiary is duly qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the properties owned, leased or
operated by the Subsidiary or the nature of the business transacted by the
Subsidiary makes such qualification necessary, except where failure to be so
qualified would not have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties or
prospects of the Subsidiary. ASG has made available to CACI and CASub true,
complete and correct copies of the certificate of incorporation, by-laws and
other organizational documents of the Subsidiary, as in effect on the date
hereof. All of the shares of capital stock of the Subsidiary are duly and
validly issued, fully paid and nonassessable and are held of record and
beneficially by ASG, free and clear of any and all covenants, conditions,
restrictions, voting arrangements, liens, charges, encum- brances, options,
claims and rights whatsoever. Other than 20,522 shares of Common Stock of US
Lan Systems Corporation of Virginia, ASG does not own, hold of record or
beneficially, or have the right to acquire, either directly or indirectly,
any shares of any class of securities (including debt securities) of or any
other proprietary interest in any Person other than the Subsidiaries. There
are no agreements relating to or restricting the issuance, sale or transfer
of shares of capital stock of the Subsidiary, or affecting the rights of ASG
with respect thereto. There are no preemptive rights on the part of any
Person and there are not, and as of the Closing there will not be,
outstanding any options, warrants, agreements, commitments, conversion or
other rights that obligate the Subsidiary to issue or sell any shares of its
capital stock or other security. The subsidiary has no obligation to acquire
any class of securities (including debt securities) of any Person.
3.3 Authority for Agreement. ASG has the full corporate power to own,
lease and operate its properties and to conduct its business as currently
owned, leased, operated and conducted, to execute, deliver, and perform this
Agreement, to consummate the other transactions contemplated herein and to
carry out its obligations hereunder. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by ASG's Board of Directors. No
other corporate proceedings on the part of ASG, including, without
limitation, stockholder approval, are necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
3.4 No Default or Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
by ASG do not and will not (a) conflict with or result in a material
violation of any provision of the Certificate of Incorporation or By-Laws or
other organizational documents of ASG, or (b) with or without the giving of
notice or the lapse of time, or both, conflict with, or result in any
material violation or breach of or constitute a material default under, or
require the consent of any other party to, or result in any right to
accelerate or the creation of any material lien, charge or encumbrance on any
of the assets or properties of ASG pursuant to, or right of termination
under, any provision of any note, mortgage, indenture, lease, agreement or
other instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation to which ASG is a
party or by which ASG or any of its assets or properties may be bound or
which is applicable to ASG or any of its assets or properties. Other than in
connection with or in compliance with the provisions of the Securities Act,
the Exchange Act, the HSR Act and applicable state securities laws, no
authorization, consent, approval, license, order, or permit of, or
declaration of, or filing with or notice to, any governmental body or
authority or any other person or entity is necessary for the execution,
delivery and performance of this Agreement by ASG or the consummation by ASG
of the transactions contemplated hereby.
3.5 Corporate Documents. ASG has heretofore made available to CACI and
CASub a true, complete and correct copy of ASG's Certificate of Incorporation
and By-Laws, each as amended to date. Such Certificate of Incorporation and
By-Laws are in full force and effect. ASG is not in violation of any
provision of its Certificate of Incorporation or By-Laws, except for such
violations that would not, individually or in the aggregate, have a material
adverse effect on the business, operations, assets, financial condition,
results of operations, properties or prospects of ASG. The minute books of
ASG (including the stock records), a copy of which has heretofore been
provided to CACI and CASub, are true, complete and correct and are the only
minute books of ASG.
3.6 Books and Records. The books of account, ledgers, order books, records
and documents of ASG accurately and completely reflect all material
information relating to the business of ASG, the location and condition of
its assets, and the nature of all transactions giving rise to the obligations
or accounts receivable of ASG.
3.7 Capitalization of ASG. ASG's authorized capital stock consists of
650,000 shares of common stock, par value $0.10 per share, and 23,700 shares
of preferred stock, par value $100.00 per share, of which only the Shares are
issued and outstanding. All of the Shares are held, and as of the Closing
Date will be held, of record and beneficially by Seller. All of the Shares
are, and as of the Closing Date will be, duly and validly issued, fully paid
and nonassessable. A total of 29,835 shares of Common Stock of ASG are held
in treasury. There are no dividends which have been authorized, declared or
set aside but not paid or which are in arrears with respect to any shares of
capital stock of ASG. There are no agreements relating to or restricting the
issuance, sale or transfer of shares of capital stock of ASG, or affecting
the rights of Seller with respect thereto. There are no preemptive rights on
the part of any Person and there are not, and as of the Closing there will
not be, outstanding any options, warrants, agreements, commitments,
conversion or other rights that obligate ASG to issue or sell any shares of
its capital stock or other security.
3.8 Financial Statements. ASG has previously delivered to CACI and CASub
the audited balance sheets of ASG as of March 31, 1993, 1994 and 1995 (the
"Audited Balance Sheets") and the related statements of income, changes in
stockholders' equity, and cash flows of ASG for the fiscal years ended March
31, 1993, 1994 and 1995 (collectively, the "Audited Financial Statements").
The Audited Financial Statements have been prepared in accordance with
generally accepted accounting principles applied consistently throughout the
periods involved (except as disclosed in the footnotes thereto) and have been
certified by Rubino and McGeehin, ASG's independent auditors. The Audited
Financial Statements present fairly the financial position, results of
operations and cash flows of ASG at the dates and for the periods indicated.
Attached hereto as Exhibit 3.8 is the unaudited balance sheet of ASG as of
June 30, 1995 (the "Unaudited Balance Sheet") and the related statements of
income, changes in stockholders' equity, and cash flows of ASG for the three
month period then ended (collectively, the "Unaudited Financial Statements").
The Unaudited Financial Statements have been prepared in accordance with
generally accepted accounting principles, applied consistently with those
employed in the Audited Financial Statements, and present fairly the
financial position and results of operations of ASG as of the date and for
the period indicated, subject to the addition of notes and normal,
non-material year-end adjustments consistent with past practice. Except to
the extent set forth on the Unaudited Balance Sheet, ASG does not have any
material liabilities or obligations of any nature, whether accrued, absolute,
contingent or otherwise, whether due or to become due and whether the amount
thereof is readily ascertainable or not, other than (i) liabilities and
obligations described in the footnotes to the 1995 Audited Financial
Statements, (ii) liabilities and obligations incurred in the ordinary course
of business since the date of the Unaudited Balance Sheet, none of which
individually or in the aggregate has had or could reasonably be expected to
have a material adverse effect on the business, operations, assets, financial
condition, results of operations, properties or prospects of ASG, and (iii)
liabilities and obligations described in the Exhibits hereto.
3.9 Absence of Material Adverse Changes. Since March 31, 1995, ASG has
conducted its business only in the ordinary course and consistent with prior
practice and there has not occurred or arisen, whether or not in the ordinary
course of business, any material adverse change in the business, operations,
assets, financial condition, results of operations, properties or prospects
of ASG. Specifically, except (i) as described in Exhibit 3.9 and (ii) as
described in that certain letter dated the Closing Date from Seller to CACI
and CASub, since March 31, 1995, ASG has not:
3.9.1 issued, sold, purchased, redeemed or granted any options,
warrants, conversion or other rights to purchase or otherwise acquire any
shares of its capital stock or any other security;
3.9.2 authorized, declared, set aside or paid any dividend or made
any other distribution with respect to any share of its capital stock or
other security;
3.9.3 incurred, discharged, satisfied or paid any obligation or
liability, accrued, absolute, contingent or otherwise, whether due or to
become due, material to ASG other than current liabilities and current
portion of long-term debt shown on the 1995 Audited Balance Sheet and current
liabilities incurred since the date of the 1995 Audited Balance Sheet in the
ordinary course of business and consistent with prior practice;
3.9.4 suffered any damage or destruction in the nature of a casualty
loss or other loss that would be treated as an extraordinary item pursuant to
Opinion No. 30 of the Accounting Principles Board, whether covered by
insurance or not, that might reasonably be expected to have a material
adverse effect on the business, operations, assets, financial condition,
results of operations, properties or prospects of ASG;
3.9.5 granted any increase in the compensation payable or to become
payable by ASG to its directors, officers, managers, consultants or agents or
any increase in benefits under any bonus, insurance, pension or other benefit
plan made for or with any of such persons, other than increases that are
provided to broad categories of employees and do not discriminate in favor of
the aforementioned persons;
3.9.6 encountered any labor union organizing activity material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of ASG, had any employee strike, work-stoppage,
slow-down or lockout, or any substantial threat of any imminent strike,
work-stoppage, slow-down or lock-out or had any adverse change in its
relations with its employees, agents, customers or suppliers or any
governmental or regulatory authorities, that, in any of the foregoing cases,
has had or could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the business, operations, assets,
financial condition, results of operations, properties or prospects of ASG;
3.9.7 transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any United States or
foreign intellectual property, or modified any existing rights with respect
thereto, other than in the ordinary course of business and consistent with
prior practice;
3.9.8 cancelled or compromised any debts or waived or permitted to
lapse any claims or rights of substantial value, or sold, leased, transferred
or otherwise disposed of any of its properties or assets (real, personal or
mixed, tangible or intangible), except in the ordinary course of business and
consistent with prior practice;
3.9.9 made any material capital expenditure or commitment for any
addition to property, plant or equipment not in the ordinary course of
business and consistent with prior practice or in any event in excess of an
aggregate of Five Thousand Dollars ($5,000);
3.9.10 made any change in any method of accounting or accounting
practice;
3.9.11 paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any
officer, director, "affiliate," officer of an "affiliate," director of an
"affiliate," "associate" of an officer, "associate" of a director, or
"associate" of an "affiliate" (as such terms are defined in the rules and
regulations of the Securities and Exchange Commission), who exercised senior
managerial responsibility with respect to ASG, except for normal business
advances to employees consistent with prior practice;
3.9.12 granted any options to officers, employees, directors, or any
affiliated parties;
3.9.13 agreed, whether in writing or otherwise, to take any action
described in this Section 3.9; or
3.9.14 taken, failed to take or suffered to exist any action that, if
taken, not taken, or suffered to exist after the date hereof, would
constitute a breach of any of the covenants set forth in Section 5.
3.10 Title to Assets; Condition.
3.10.1 ASG has good title to, or a valid leasehold interest in, all of
its properties and assets. Except as described on Exhibit 3.10.1, none of
its properties or assets is subject to any mortgage, pledge, lien, security
interest, lease or other encumbrance. All of ASG's properties and assets are
in working condition.
3.10.2 Exhibit 3.10.2 contains a true, correct and complete list and
description of all real property, including all facilities and structures
located thereon, owned by ASG. ASG has good record and marketable title to
all of such real property and none of such properties is subject to any
mortgage, pledge, lien, security interest, lease, charge, encumbrance,
objection or joint ownership, except (i) liens, encumbrances and leases
incurred or made in the ordinary course of business that do not materially
impair the usefulness of such properties and assets in the conduct of its
business, (ii) liens for Taxes, assessments or governmental charges or levies
if the same shall not at the time be delinquent or thereafter can be paid
without penalty, or are being contested in good faith and by appropriate
proceedings, (iii) such imperfections of title, zoning or planning
restrictions, easements and encumbrances, if any, as do not materially
detract from the value as presently used, or materially interfere with the
present or contemplated use, of such property; and (iv) as described on
Exhibit 3.10.2.
3.10.3 Exhibit 3.10.3 sets forth a true, correct and complete list as
of the date hereof of all leases, and all amendments, modifications and
supplemental agreements thereto, of real property to which ASG is a party
(the "Leases"). True, correct and complete copies of the Leases have been
delivered by ASG to CACI and CASub. The Leases grant leasehold estates free
and clear of all mortgages, liens, claims, charges, security interests,
encumbrances and other restrictions and limitations whatsoever granted by or
caused by the actions of ASG, and ASG enjoys a right of quiet possession as
against any lien or other encumbrance on the properties subject to the Leases
(collectively, the "Leased Properties"). The Leases are in full force and
effect, are binding and enforceable against each of the parties thereto in
accordance with their respective terms. No party to any Lease has sent
written notice to the other claiming that such party is in default
thereunder, which remains uncured. There has not occurred any event that
would constitute a breach of or default in the performance of any material
covenant, agreement or condition contained in any Lease, nor has there
occurred any event that with the passage of time or the giving of notice or
both would constitute such a breach or material default. ASG is not
obligated to pay any leasing or brokerage commission relating to any Lease
and will not have any enforceable obligation to pay any leasing or brokerage
commission upon the renewal of any Lease. No material construction,
alteration or other leasehold improvement work with respect to any of the
Leases remains to be paid for or to be performed by ASG.
3.10.4 ASG is not in violation in any material respect of any law,
regulation or ordinance (including, without limitation, laws, regulations or
ordinances relating to building, zoning, environmental, city planning, land
use or similar matters) relating to the Leased Properties. There are no
proceedings materially affecting the present or future use of the Leased
Properties for the purposes for which they are used or the purposes for which
they are intended to be used. All buildings, structures and fixtures used by
ASG are in good operating condition and repair, normal wear and tear
excepted, and are insured with coverages that are usual and customary for
similar properties and similar businesses.
3.11 Intellectual Property. ASG owns, or is licensed or otherwise has the
full right to use, the Intellectual Property listed on Exhibit 3.11(a).
Exhibit 3.11(a) lists all Intellectual Property owned, licensed or used by
ASG, together with the owner or licensor thereof. Exhibit 3.11(b) lists all
third party licenses related to the Intellectual Property listed on Exhibit
3.11(a). All Intellectual Property that is identified on Exhibit 3.11(a) as
owned by ASG is, together with the goodwill of the business associated with
any Intellectual Property, owned by ASG free and clear of any and all
agreements, judgments, orders, decrees, stipulations, liens, claims, tax
liens, charges, security interests, encumbrances and licenses or sublicenses
that would prevent the use of the Intellectual Property by ASG, CACI or
CASub. The business and operations of ASG do not infringe upon or violate
any intellectual property owned by any third party. ASG has not received,
within the past three (3) years, notice of any claim that ASG has infringed
or violated any intellectual property of any third party, or that any
Intellectual Property identified on Exhibit 3.11(a) is invalid or violates or
infringes upon the rights of any third party. ASG has not sent or otherwise
communicated to another person, within the past three (3) years, any notice,
charge, claim or other assertion of, nor does there exist, any present,
impending or threatened infringement or violation by any third party of any
Intellectual Property listed on Exhibit 3.11(a) or any acts of unfair
competition by any third party relating to such Intellectual Property. ASG
maintains reasonable security measures to prevent disclosure or transfer to
unauthorized persons of any trade secrets and confidential information that
are proprietary to ASG.
3.12 Inventories. ASG has no inventory material to its business,
operations, financial condition, results of operations or prospects.
3.13 Material Contracts. ASG has delivered to CACI and CASub or made
available to CACI and CASub a true, correct and complete copy of each
material contract to which ASG is a party and all amendments thereto (the
"Material Contracts"), all of which are listed on Exhibit 3.13. All Material
Contracts are in full force and effect. ASG has not received any notice of
default, nor is it in default, nor does any condition exist which with or
without notice or the lapse of time, or both, will render ASG in default,
under any of the Material Contracts. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby do not and will not, with or without the giving of notice or the lapse
of time, or both, conflict with, or result in any violation or breach of or
constitute a default under, or require the consent of any other party to, or
result in any right to accelerate or the creation of any lien, charge or
encumbrance on any of the assets or properties of ASG pursuant to, or right
of termination under, any provision of any Material Contract. The other
parties to the Material Contracts are in compliance with all material terms
and conditions of the Material Contracts, and no party to a Material Contract
has notified ASG of its intention to terminate or materially change the
nature of its transaction or relationship with ASG under any such Material
Contract.
3.14 Agreements, Contracts and Commitments. Except as set forth in Exhibit
3.14, to the Knowledge of Seller, ASG is not a party to:
3.14.1 any agreement relating to the issuance, transfer or sale of any
shares of the capital stock or other securities of ASG;
3.14.2 any bonus, deferred compensation, pension, severance,
profit-sharing, stock option, employee stock purchase or retirement plan,
contract or arrangement or other employee benefit plan or arrangement;
3.14.3 any employment agreement that contains any severance pay
liabilities or obligations;
3.14.4 any agreement for personal services, consultant services or
employment;
3.14.5 any agreement of guarantee or indemnification of third parties
in an amount that could exceed Five Thousand Dollars ($5,000);
3.14.6 any agreement or commitment containing a covenant limiting or
purporting to limit the freedom of ASG to compete with any person in any
geographic area or to engage in any line of business;
3.14.7 any lease (other than equipment leases under which ASG is
lessor) to which ASG is a party as lessor or lessee that is material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of ASG;
3.14.8 any joint venture agreement or profit-sharing agreement (other
than with employees);
3.14.9 except for trade indebtedness incurred in the ordinary course
of business, any loan or credit agreements providing for the extension of
credit to ASG or any instrument evidencing or related in any way to
indebtedness incurred in the acquisition of companies or other entities or
indebtedness for borrowed money by way of direct loan, sale of debt
securities, purchase money obligation, conditional sale, guarantee, or
otherwise, that is material to the business, operations, assets, financial
condition, results of operations, properties or prospects of ASG;
3.14.10 any license agreement, either as licensor or licensee, or
distributor, dealer, franchise, manufacturer's representative, sales agency
or other similar agreement or commitment;
3.14.11 any contract or agreement, for the future sale by ASG of
materials, products, services or supplies, that is material to the business,
operations, assets, financial condition, results of operations, properties or
prospects of ASG;
3.14.12 any contract or agreement for the future purchase by ASG of any
materials, equipment, services, or supplies, that either provides for
payments in excess of Two Thousand Five Hundred Dollars ($2,500) and cannot
be terminated by it without penalty upon less than ninety (90) days' notice
or was not made in the ordinary course of business and consistent with prior
practice;
3.14.13 any agreement that provides for the sale of goods or services
that will result in a loss as a result of costs already incurred or expected
to be incurred to complete the agreement;
3.14.14 any agreement or arrangement for the assignment, sale or other
transfer by ASG of any agreement or lease (or right to payment thereunder) by
which it leases materials, products or other property to a third party;
3.14.15 any contract or agreement that provides any discount;
3.14.16 any agreement or commitment for the acquisition, construction
or sale of fixed assets owned or to be owned by ASG;
3.14.17 any contract or agreement not described above involving the
payment or receipt by ASG of more than Five Hundred Dollars ($500)
individually or Five Thousand Dollars ($5,000) in the aggregate other than
contracts or agreements in the ordinary course of business for the purchase
of inventory, supplies or services or for the sale of current requirements
and consistent with prior practice, or for the sale or lease of finished
goods or services in the ordinary course of business and consistent with
prior practice; or
3.14.18 any contract or agreement not described above that was not made
in the ordinary course of business and consistent with prior practice and
that is material to the business, operations, assets, financial condition,
results of operations, properties or prospects of ASG.
All agreements, contracts, plans, leases, instruments, arrangements, licenses
and commitments listed in Exhibit 3.14 pursuant to this Section 3.14 are
valid and in full force and effect and neither ASG nor any other party
thereto has breached any provision of, or defaulted under the terms of, nor
are there any facts or circumstances that would reasonably indicate that ASG
will or may be in such breach or default under, any such agreement, contract,
plan, lease, instrument, arrangement, license or commitment, which breach or
default has or could reasonably be expected to have a material adverse effect
on the business, operations, assets, financial condition, results of
operations, properties or prospects of ASG. Exhibit 3.14 correctly
identifies each contract the provisions of which would be materially and
adversely affected by this Agreement and each contract under which the rights
of any party would be altered as a result of the sale, merger, consolidation
or other change of control of ASG.
3.15 Banking Facilities, Powers of Attorney, etc. Exhibit 3.15 attached
hereto sets forth a true, correct and complete list of (i) each bank, savings
and loan or similar financial institution with which ASG has an account or
safety deposit box or other arrangement, and any numbers of the accounts or
safety deposit boxes maintained by ASG thereat, (ii) the names of all persons
authorized to draw on each such account or to have access to any such safety
deposit box facility, and (iii) any outstanding powers of attorney executed
on behalf of ASG in respect of ASG or its assets, liabilities or businesses.
ASG has no general or special powers of attorney outstanding (whether as
grantor or grantee thereof), nor any obligation or liability (whether actual,
accrued, accruing, contingent or otherwise) as guarantor, surety, co-signer,
endorser, co-maker, indemnitor or otherwise in respect of the obligation of
any Person, except as endorser or maker of checks or letters of credit,
respectively, endorsed or made in the ordinary course of business and
consistent with prior practice.
3.16 Customers and Orders. During the period from March 31, 1995 through
the Closing Date, ASG has not accepted, and will not accept, orders from any
of the other contracting parties to the Material Contracts on any terms other
than pursuant to one or more of the Material Contracts.
3.17 Compliance with Applicable Law. ASG has all requisite material
licenses, permits and certificates from all foreign, federal, state and local
authorities necessary for the conduct of its business as presently conducted,
and to lease and operate the Leased Properties. ASG has conducted its
business in material compliance with all applicable laws, statutes,
ordinances, regulations, rules, judgments, decrees, orders, permits,
licenses, concessions, grants or other authorizations of any court or of any
governmental entity or authority.
3.18 Litigation. Except as described in Exhibit 3.18, there is no Action of
any kind, pending or threatened, at law or in equity, by or before any court,
arbitrator, governmental entity or authority, that involves, affects or
relates to ASG that either singly or in the aggregate may have any material
adverse effect on the business, operations, assets, financial condition,
results of operations, prospects or properties of ASG. Neither ASG nor any
of its directors, officers, employees or properties is subject to any order,
writ, injunction, decree or judgment of any court, arbitrator or governmental
entity or authority, that involves, affects or relates to ASG that either
singly or in the aggregate may have any material adverse effect on the
business, operations, assets, financial condition, results of operations,
prospects or properties of ASG.
3.19 Insurance. To the Knowledge of Seller, Exhibit 3.19 attached hereto
sets forth a true, correct and complete list of all fire, theft, casualty,
general liability, workers' compensation, business interruption,
environmental impairment, product liability, automobile and other insurance
policies maintained by ASG and all life insurance policies maintained on the
lives of any of its directors, officers or employees (collectively, the
"Insurance Policies"). All premiums due on the Insurance Policies or
renewals thereof have been paid in full. To the Knowledge of Seller, the
amounts and coverages of the Insurance Policies are those customarily carried
by companies engaged in similar businesses and owning similar properties in
the same general areas in which ASG operates and are adequate and customary
for the type and scope of ASG's assets, properties and business. To the
Knowledge of Seller, the Insurance Policies are sufficient for compliance
with all Material Contracts to which ASG is a party or by which ASG is bound
and all applicable laws and regulations of any governmental entity. ASG's
workers' compensation insurance materially complies with all applicable
statutory and regulatory requirements relating thereto. To the Knowledge of
Seller, ASG has not received any written notices of any pending termination
with respect to any of such policies. To the Knowledge of Seller, Exhibit
3.19 includes a true and complete listing of all claims made under ASG's
Insurance Policies in excess of Five Thousand Dollars ($5,000), and the
dispositions thereof, for the period from March 31, 1992 to the date hereof.
3.20 Tax Matters.
3.20.1 ASG has duly filed, within the times and in the manner
prescribed by law, all Tax Returns that it was required to file. All such
Tax Returns were correct and complete in all material respects. All Taxes
owed by ASG (whether or not shown on any Tax Return) have been paid when due.
ASG is not currently the beneficiary of any extension of time within which to
file any Tax Return. No claim or inquiry with respect to any material amount
of Taxes has ever been made by an authority in a jurisdiction where ASG did
not file Tax Returns but where it is or may be subject to any Tax by that
jurisdiction for any period ending on or before the Closing Date. There are
no liens or other security interests on any of the properties or assets of
ASG that arose in connection with any failure (or alleged failure) to pay any
Tax.
3.20.2 All Taxes of ASG attributable to Tax periods or portions
thereof ending on or prior to the Closing Date that have not yet been paid
have in the aggregate been adequately reflected as a liability on the books
of ASG in accordance with generally accepted accounting principles
consistently applied.
3.20.3 ASG has withheld and paid all Taxes required to have been
withheld and paid in connection with payments to foreign persons, sales and
use Tax obligations with respect to any and all states, and amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
person.
3.20.4 Exhibit 3.20 hereto lists all federal and state income Tax
Returns filed with respect to ASG for Tax periods ended on or after December
31, 1991, indicates those Tax Returns that have been audited, and indicates
those Tax Returns that currently are the subject of audit. Exhibit 3.20 also
sets forth all deficiencies of Tax that have been asserted for all periods up
to and including the date hereof.
3.20.5 There are no outstanding agreements or waivers extending the
statute of limitations applicable to any Tax Return of ASG for any period.
3.20.6 ASG has delivered to CACI and CASub true, correct and complete
copies of all United States federal income Tax Returns, examination reports,
and statements of deficiencies assessed against, proposed in writing to be
assessed against, or agreed to by any of the Company and its Subsidiaries for
all Tax periods ending on or after December 31, 1991.
3.20.7 ASG has not filed a consent under Section 341(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), concerning
collapsible corporations. ASG has not made any payments, is not obligated to
make any payments, and is not a party to any agreement that could obligate it
to make any payments that will be an "excess parachute payment" under Code
Section 280G. ASG has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii), nor has ASG
been a passive foreign investment company as defined in Code Sections
1291-1297. ASG has disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Code Section 6662. ASG is not a party to any
Tax allocation or sharing agreement. ASG has no liability for any Taxes of
any person (other than its own) under Treas. Reg. Section 1.1502- 6 (or any
similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
3.20.8 ASG has not made any elections under the Code, including,
without limitation, elections under Code Section 1362 (relating to taxation
as an S Corporation) or elections under Code Section 338 (relating to the
treatment of certain stock purchases as asset acquisitions).
3.21 Employee Benefit Plans; Compliance with ERISA. Exhibit 3.21 contains a
true, correct and complete list of all pension, profit sharing, retirement,
deferred compensation, welfare, insurance, disability, bonus, vacation pay,
severance pay and other similar plans, programs or agreements, and every
material personnel policy, whether reduced to writing or not, relating to any
persons employed by ASG and maintained by ASG or by any other member
(hereinafter, "Affiliate") of a controlled group of corporations, group of
trades or businesses under common control or affiliated service group which
includes ASG (as defined for purposes of Section 414(b), (c) and (m) of the
Code) (collectively, the "ASG Plans"). Neither ASG nor any Affiliate has
ever been obligated to contribute to any "multi-employer plan," as defined in
Section 3(37) of ERISA. Neither ASG nor any Affiliate has incurred any
"withdrawal liability" calculated under Section 4211 of ERISA and there has
been no event or circumstance which would cause them to incur any such
liability. Except as indicated in Exhibit 3.21, neither ASG nor any
Affiliate has ever maintained an ASG Plan providing health or life insurance
benefits to former employees (other than as required by Part 6 of Subtitle B
of Title I of ERISA). Except as indicated in Exhibit 3.21, no ASG Plan which
was subject to ERISA has been terminated; no proceedings to terminate any
such ASG Plan have been instituted within the meaning of Subtitle C of Title
IV of ERISA; and no reportable event within the meaning of Section 4043 of
said Subtitle C has occurred with respect to any such ASG Plan, and no
liability to the Pension Benefit Guaranty Corporation has been incurred.
With respect to all the ASG Plans, ASG and every Affiliate are in material
compliance with all requirements prescribed by all statutes, regulations,
orders or rules currently in effect, and have in all material respects
performed all obligations required to be performed by them. Neither ASG nor
any Affiliate, nor any of its or their directors, officers, employees or
agents, nor any trustee or administrator of any trust created under the ASG
Plans, has engaged in or been a party to any "prohibited transaction" as
defined in Section 4975 of the Code and Section 406 of ERISA which could
subject ASG or CACI or their Subsidiaries, affiliates, directors or employees
or the ASG Plans or the trusts relating thereto or any party dealing with any
of the ASG Plans or trusts to any Tax or penalty on "prohibited transactions"
imposed by Section 4975 of the Code. Neither the ASG Plans nor the trusts
created thereunder have incurred any "accumulated funding deficiency," as
such term is defined in Section 412 of the Code and regulations issued
thereunder, whether or not waived.
Each ASG Plan intended to qualify under Section 401(a) of the Code has been
determined by the Internal Revenue Service to so qualify, and the trusts
created thereunder have been determined to be exempt from Tax under Section
501(a) of the Code; copies of all determination letters have been delivered
to CACI and CASub; and nothing has occurred since the date of such
determination letters which might cause the loss of such qualification or
exemption. With respect to each ASG Plan that is a "defined benefit plan" as
defined in Section 3(35) of ERISA, the present value of the actuarial accrued
liability, determined on a plan termination basis, does not exceed the fair
market value of the assets held under such ASG Plan, and there is no unpaid
contribution for any ASG Plan year ended prior to the Closing as required
under Section 412 of the Code. With respect to each ASG Plan which is a
qualified profit sharing or stock bonus plan, all employer contributions
accrued for plan years ending prior to the Closing under the ASG Plan terms
and applicable law have been made.
There is no Action threatened or pending or that can reasonably be expected
to be asserted with respect to any of the ASG Plans or any prior plan
maintained by ASG, and there are no outstanding written requests, other than
routine requests for information concerning such ASG Plans, by participants,
beneficiaries or any government agency.
3.22 Employment-Related Matters. To the Knowledge of Seller, ASG is in
compliance in all material respects with all applicable laws respecting
employment, consulting, employment practices, wages, hours, and terms and
conditions of employment. To the Knowledge of Seller, ASG is not a party to
any collective bargaining agreement or other contract or agreement with any
labor organization or other representative of any employees of ASG. There is
no labor strike, dispute, slowdown, work stoppage, lockout or other labor
controversy in effect or, to the Knowledge of Seller, pending or threatened
against or otherwise affecting ASG. ASG has not experienced any labor
controversy within the past three years. To the Knowledge of Seller, no
labor representation question exists or has been raised respecting any of
ASG's employees. ASG has not closed any plant or facility, or effectuated
any layoffs of employees or implemented any early retirement, separation or
window program at any time from or after March 31, 1992 nor has ASG planned
or announced any action or program for the future with respect to which ASG
has or may have any material liability. To the Knowledge of Seller, ASG is
in compliance in all material respects with its obligations pursuant to the
Worker Adjustment and Retraining Notification Act of 1988, and all other
notification and bargaining obligations arising under any collective
bargaining agreement or statute relating to employment; provided, however,
that nothing in this Section 3.22 shall be construed as any representation or
warranty relating to the Code or ERISA.
3.23 Environmental.
3.23.1 To the Knowledge of Seller, ASG is in compliance in all
material respects with all applicable Environmental Laws. ASG has not
received any communication (written or oral), whether from a governmental
authority, employee, or any other person that alleges that ASG is not in
compliance with such laws. To the Knowledge of Seller, all material Permits
and other governmental authorizations currently held by ASG pursuant to the
Environmental Laws are in full force and effect and no other material Permits
are required by ASG.
3.23.2 To the Knowledge of Seller, there is no Environmental Claim
pending or threatened against or involving ASG or against any person or
entity whose liability for any Environmental Claim ASG has or may have
retained or assumed either contractually or by operation of law.
3.23.3 To the Knowledge of Seller, there are no past or present
actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, threatened release, emission,
discharge or disposal of any Material of Environmental Concern, that could
form the basis of any Environmental Claim against ASG or against any person
or entity whose liability for any Environmental Claim ASG may have retained
or assumed either contractually or by operation of law.
3.23.4 Without in any way limiting the generality of the foregoing, to
the Knowledge of Seller, (a) no polychlorinated biphenyls are or have been
used or stored at any of the Leased Properties, and (b) no friable asbestos
or asbestos-containing material is present at any of the Leased Properties.
3.24 Absence of Certain Payments. Neither ASG nor any director, officer,
agent, employee or other person associated with or acting on behalf of ASG
has used any funds of ASG for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity, or made any direct or
indirect unlawful payments to government officials or employees from
corporate funds, or established or maintained any unlawful or unrecorded
funds, or violated any provisions of the Foreign Corrupt Practices Act of
1977 or any rules or regulations promulgated thereunder, in any circumstance
that would adversely affect the operations of ASG after the Closing.
3.25 Interests of Officers. None of the officers or directors of ASG has
any interest in any property, real or personal, tangible or intangible,
including Intellectual Property used in the conduct of the business of ASG,
except for rights under existing employee benefit plans.
3.26 No Brokers or Finders. No broker or finder has acted for ASG in
connection with this Agreement or the transactions contemplated hereby, and
no broker or finder is entitled to any brokerage or finder's fee or other
commissions in respect of such transactions based upon agreements,
arrangements or understandings made by or on behalf of ASG.
3.27 No Pending Actions. There is no Action pending or threatened to which
ASG is a party or of which ASG is aware which questions or challenges the
validity of this Agreement or any action taken or to be taken by ASG pursuant
to this Agreement or in connection with the transactions contemplated hereby.
3.28 No Misrepresentations. No representation or warranty by ASG in this
Agreement, nor any statement, certificate, list, exhibit or schedule
furnished or to be furnished by or on behalf of ASG pursuant to this
Agreement nor any document or certificate delivered to CACI or CASub pursuant
to this Agreement, when taken together with the foregoing, contains or shall
contain any untrue statement of material fact or omits or shall omit to state
a material fact necessary to make the statements not misleading.
Article 4
REPRESENTATIONS AND WARRANTIES OF CACI AND CASUB
CACI and CASub represent and warrant to ASG as follows:
4.1 Corporate Status of CACI and CASub. CACI and CASub are corporations
duly organized, validly existing and in good standing under the laws of
Delaware. CACI and CASub are duly qualified to do business as foreign
corporations and are in good standing in all jurisdictions in which the
character of the properties owned, leased or operated by each or the nature
of the business transacted by each makes such qualification necessary, except
where failure to be so qualified would not have a materially adverse effect
on the business, operations, assets, financial condition, results of
operations, properties or prospects of CACI and its Subsidiaries considered
as a whole.
4.2 Authority for Agreement. CACI and CASub have the full corporate power
to execute, deliver, and perform this Agreement, to consummate the
transactions contemplated hereby and to carry out their obligations
hereunder. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of both CACI and CASub. No
other corporate proceedings on the part of CACI or CASub including, without
limitation, stockholder approval, are necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
4.3 No Default or Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
do not and will not (a) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-Laws or other
organizational documents of CACI or CASub, or (b) with or without the giving
of notice or the lapse of time, or both, conflict with, or result in any
violation or breach of or constitute a default under, or require the consent
of any other party to, or result in any right to accelerate or the creation
of any lien, charge or encumbrance pursuant to, or right of termination
under, any provision of any note, mortgage, indenture, lease, agreement or
other instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation to which CACI or
CASub is a party or by which either of them or any of their assets or
properties may be bound or which is applicable to either of them or any of
their assets or their properties. Other than in connection with or in
compliance with the provisions of the Securities Act, the Exchange Act, the
HSR Act and applicable state securities laws, no authorization, consent,
approval, license, order, or permit of, or declaration of, or filing with or
notice to, any governmental body or authority or any other person or entity
is necessary for the execution, delivery and performance of this Agreement by
CACI and CASub or the consummation by CACI and CASub of the transactions
contemplated hereby.
4.4 Responsible Prospective Contractor. Each of CACI and CASub is a
"responsible prospective contractor," as defined in 48 C.F.R. Part 9, Section
9.101 and Section 9.104, and other applicable sections of the Federal
Acquisition Regulation.
4.5 No Brokers or Finders. Except as described on Exhibit 4.5, no broker
or finder has acted for CACI or CASub in connection with this Agreement or
the transactions contemplated hereby, and no broker or finder is entitled to
any brokerage or finder's fee or other commissions in respect of such
transactions based upon agreements, arrangements or understandings made by or
on behalf of CACI or CASub.
4.6 No Pending Actions. There is no Action pending or threatened to which
CACI or CASub is a party or of which CACI or CASub is aware which questions
or challenges the validity of this Agreement or any action taken or to be
taken by CACI or CASub pursuant to this Agreement or in connection with the
transactions contemplated hereby.
4.7 No Misrepresentations. No representation or warranty by CACI or CASub
in this Agreement, nor any statement, certificate, list, exhibit or schedule
furnished or to be furnished by or on behalf of CACI or CASub pursuant to
this Agreement nor any document or certificate delivered to Seller or ASG
pursuant to this Agreement, when taken together with the foregoing, contains
or shall contain any untrue statement of material fact or omits or shall omit
to state a material fact necessary to make the statements not misleading.
Article 5
COVENANTS
It is further agreed as follows:
5.1 Divestiture of Excluded Assets. It is understood that the assets,
agreements and contracts listed on Exhibit 5.1 (the "Excluded Assets") are
not required for the conduct of the business of ASG by CACI or CASub and are
not intended to be included in the business being acquired by CACI and CASub.
Accordingly, prior to the Closing, ASG shall have (i) sold, distributed to
Seller or otherwise disposed of the assets listed on Exhibit 5.1 and (ii)
terminated or assigned to Seller the agreements and contracts listed on
Exhibit 5.1.
5.2 Filings and Submissions. The parties hereto shall cooperate with each
other and promptly prepare and make all filings and notices required under
the Securities Act, the Exchange Act, the HSR Act, any other federal or state
securities laws and any other applicable laws and regulations relating to the
sale of the Shares or the other transactions contemplated hereby. The
parties hereto agree to cooperate and promptly respond to any inquiries or
investigations initiated by the Federal Trade Commission, the Department of
Justice or any other governmental entity or authority in connection with such
filings and notices.
5.3 Release of Information. Except as required by law, no party to this
Agreement shall announce or disclose to any non-party (other than the
directors, officers, employees, attorneys, accountants, advisors or other
representatives or agents who have a "need to know" in order to consummate
this Agreement and the transactions contemplated hereby) the terms or
provisions of the Letter of Intent or this Agreement without the prior
consent of the other parties hereto (which consent shall not be unreasonably
withheld). Each party shall consult with the other parties before issuing
any press release or other public announcement referring to this Agreement,
the Letter of Intent or the terms and conditions of the transactions
contemplated hereby or thereby.
5.4 Confidentiality. Except as required by law, each party and its
representatives will hold in strict confidence all documents and information
concerning the other party furnished in connection with the transactions
contemplated by this Agreement (except to the extent that such information
can be shown to have been (a) in the public domain through no action by the
party in violation of this Section 5.4, (b) in the party's possession at the
time of disclosure and not acquired by the party directly or indirectly from
the other party on a confidential basis or (c) disclosed by the other party
to others on an unrestricted, non-confidential basis) and will not, without
the consent of the other party, (i) release or disclose any such documents or
information to any other person or (ii) use or permit others to use such
documents or information except in connection with this Agreement and the
transactions contemplated hereby. In the event of the termination of this
Agreement, each party shall return to the other parties all documents, work
papers and other material so obtained by it, or on its behalf, and all
copies, digests, abstracts or other materials relating thereto, whether so
obtained before or after the execution hereof, and will comply with the terms
of theconfidentiality provisions set forth herein.
5.5 Review of Contracts. At least thirty (30) days prior to the
commencement of the final closeout process of any contract of ASG awarded
before April 1, 1995, CACI, CASub or ASG shall give notice to Seller of the
commencement of such process. Upon reasonable notice to CACI and CASub,
Seller or Seller's representative shall have the right to review such
process.
5.6 Further Assurances.
5.6.1 Generally. Subject to terms and conditions herein provided and
to the fiduciary duties of the Board of Directors and officers of any party,
each of the parties agrees to use his or its best reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
perfect the transfer and delivery to CASub of all right, title and interest
in and to the Shares and to consummate and make effective this Agreement and
the other transactions contemplated hereby. In case at any time any further
action, including, without limitation, the obtaining of waivers and consents
under any agreements, material contracts or leases and the execution and
delivery of any licenses or sublicenses for any software, is necessary,
proper or advisable to carry out the purposes of this Agreement, the proper
officers and directors of each corporate party to this Agreement are hereby
directed and authorized to use their reasonable best efforts to effectuate
all required action.
5.6.2 Novation of the Material Contracts. Each party agrees to use
its best reasonable efforts to effect the novation of each Material Contract
that may require novation under its terms or under applicable laws or
regulations, and further agrees to provide all documentation necessary to
effect each such novation, including, without limitation, all instruments,
certifications, requests, legal opinions, audited financial statements, and
other documents required by Part 42 of the Federal Acquisition Regulation to
effect a novation of any contract with the Government. In particular and
without limiting the generality of the foregoing, Seller and ASG shall
continue to communicate with responsible officers of the Government and/or
any Prime Contractor from time to time as may be appropriate and permissible,
to request speedy action on any and all requests for consent to novation.
5.7 Defense of Claims and Litigation. At all times from and after the
Closing, Seller shall consult, confer and cooperate in good faith on a
reasonable basis with CACI, CASub and ASG (including, without limitation, the
making available of witnesses and cooperation in discovery proceedings) in
the conduct or defense of any Action related to the business of ASG before
the Closing Date, or any matter which, directly or indirectly, arises
therefrom, whether known at the Closing or arising thereafter, against CACI,
CASub ASG or any of their affiliates by any third party. To the extent the
indemnification provisions of this Agreement or of any other document
delivered in connection with the transactions contemplated hereby apply to
any such conduct or defense, they shall control as to the payment of costs
and expenses.
5.8 Indemnification.
5.8.1 Indemnification of CACI, CASub and ASG. Subject to the
limitations set forth in Sections 5.8.3 and 5.8.4, Seller shall indemnify and
hold harmless CACI, CASub and ASG and their respective successors by merger
or other operation of law (the "Successors"), directors, officers and assigns
from and against all losses, liabilities, claims, damages, costs or expenses
(including, without limitation, reasonable expenses of investigation and
reasonable attorneys' fees and disbursements) suffered, incurred or paid:
5.8.1.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of Seller and
ASG in this Agreement or in any other instrument or document delivered to
CACI or CASub pursuant to this Agreement had been (with respect to
representations and warranties) true and had been (with respect to covenants
and agreements) fully performed and fulfilled;
5.8.1.2 as a result of any Action arising out of or relating
to the conduct of the business of ASG or Seller before the Closing; and
5.8.1.3 as a result of any Action arising out of or relating
to the failure of Seller to pay, promptly and when due, any Tax, fee or other
charge which shall become due or shall have accrued on account of the sale of
the Shares, or any other Tax, fee or charge Seller is obligated to pay
hereunder on account of the sale of the Shares or the other transactions
contemplated hereby.
Notwithstanding anything herein to the contrary, if Seller shall be required
to indemnify CACI, CASub, ASG or any of their Subsidiaries or respective
directors, officers, Successors or permitted assigns with respect to the same
item of damage and amount, the satisfaction of such indemnity to one of them
shall discharge Seller's obligations to the others to the extent of the
amount paid.
5.8.2 Indemnification of Seller. Subject to the limitations set
forth in Sections 5.8.3 and 5.8.4, CACI, CASub and ASG shall indemnify and
hold harmless Seller and his heirs, Successors and assigns from and against
all losses, liabilities, claims, damages, costs or expenses (including,
without limitation, reasonable expenses of investigation and reasonable
attorney's fees and disbursements) suffered, incurred or paid:
5.8.2.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of CACI and
CASub in this Agreement or in any other instrument or document delivered to
Seller pursuant to this Agreement had been (with respect to representations
and warranties) true and had been (with respect to covenants and agreements)
fully performed and fulfilled; and
5.8.2.2 as a result of any Action arising out of or relating
to the conduct of the business of ASG after the Closing.
Notwithstanding anything herein to the contrary, if CACI, CASub or ASG shall
be required to indemnify Seller or any of his heirs, Successors or assigns
with respect to the same item of damage and amount, the satisfaction of such
indemnity to one of them shall discharge the obligations of CACI, CASub and
ASG to the others to the extent of the amount paid.
5.8.3 Third Party Claims. The obligations and liabilities of a party
for which indemnification is sought (an "Indemnifying Party") by a person or
entity seeking indemnification (an "Indemnified Party") under this Section
5.8 with respect to claims resulting from the assertion of liability by third
parties shall be subject to the following conditions:
5.8.3.1 The Indemnified Party shall give written notice to the
Indemnifying Party of the nature of the assertion of liability by a third
party and the amount thereof promptly after the Indemnified Party learns of
such assertion. The foregoing notwithstanding, failure of an Indemnified
Party to comply with its obligations under this Section 5.8.3.1 shall affect
its right to indemnity only to the extent such failure shall have a material
adverse effect on the Indemnifying Party's ability to defend.
5.8.3.2 If any Action is brought by a third party against an
Indemnified Party, the Action shall be defended by the Indemnifying Party and
such defense shall include all appeals or reviews which counsel for the
Indemnifying Party shall deem appropriate. Until the Indemnifying Party
shall have assumed the defense of any such Action, or if the Indemnified
Party shall have reasonably concluded that there are likely to be defenses
available to the Indemnified Party that are different from or in addition to
those available to the Indemnifying Party (in which case the Indemnifying
Party shall not be entitled to assume the defense of such Action), all legal
or other expenses reasonably incurred by the Indemnified Party shall be borne
by the Indemnifying Party.
5.8.3.3 In any Action initiated by a third party and defended
by the Indemnifying Party, subject to the confidentiality provisions of this
Agreement, (a) the Indemnified Party shall have the right to be represented
by advisory counsel and accountants, at its own expense, (b) the Indemnifying
Party shall keep the Indemnified Party fully informed as to the status of
such Action at all stages thereof, whether or not the Indemnified Party is
represented by its own counsel, (c) the Indemnified Party shall make
available to the Indemnifying Party, and its attorneys and accountants, all
books and records of the Indemnified Party relating to such Action and (d)
the parties shall render to each other such assistance as may be reasonably
required for the proper and adequate defense of such Action.
5.8.3.4 In any Action initiated by a third party and defended
by the Indemnifying Party, the Indemnifying Party shall not make any
settlement of any claim without the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld or delayed. Without
limiting the generality of the foregoing, it shall not be deemed unreasonable
to withhold consent to a settlement involving injunctive or other equitable
relief against the Indemnified Party or its assets, employees or business.
5.8.4 Minimum Liability. Seller shall not be liable under Section
5.8.1, and CACI, CASub and ASG shall not be liable under Section 5.8.2,
unless and until the aggregate amount of liability under such Section shall
exceed $25,000, in which case the Indemnifying Party shall make
indemnification thereunder for the aggregate amount of such liability,
including, without limitation, such $25,000.
5.8.5 Limitation of Seller's Liability. The Seller's obligation to
indemnify pursuant to Section 5.8.1 (i) shall not in any event exceed in the
aggregate an amount equal to the Purchase Price and (ii) shall be the
exclusive remedy for any breach of this Agreement by the Seller.
5.9 Indemnification of ASG Directors and Officers. Until at least the
third anniversary of the Closing, consistent with the standard practices of
the CACI Group of Companies, all expenses (including, without limitation,
reasonable expenses of investigation and reasonable attorney's fees and
disbursements) incurred by individuals who are directors or officers of ASG
at the time of the Closing in defending any civil, criminal, administrative
or investigative action, suit or proceeding initiated by reason of the fact
that such individuals were directors or officers of ASG shall be advanced by
ASG or its successor or assign in advance of the final disposition of such
action, suit or proceeding, and any such director or officer indemnified
shall repay any and all expenses so advanced if it is ultimately determined
that such director and/or officer was not entitled to be indemnified by ASG
or its successor or assign under the ASG By-laws in effect at the time of the
Closing.
Article 6
CONDITIONS PRECEDENT
6.1 Conditions to Obligations of Each Party. The obligations of CACI
CASub, Seller and ASG to effect the sale of the Shares and to consummate the
other transactions contemplated hereby shall be subject to the fulfillment at
or prior to the Closing of the following conditions and CACI, CASub, Seller
and ASG shall exert their best efforts to cause each such condition to be so
fulfilled:
6.1.1 No injunction or restraining or other order issued by a court
of competent jurisdiction that prohibits or materially restricts the
consummation of the sale of the Shares or any other material transaction
contemplated by this Agreement shall be in effect (each party agreeing to use
its best efforts to have any such injunction or other order lifted), and no
Action shall have been commenced or threatened seeking any injunction or
restraining or other
order that seeks to prohibit, restrain, invalidate or set aside consummation
of the sale of the Shares or any other material transaction contemplated
hereby.
6.1.2 There shall not have been any action taken, and no statute,
rule or regulation shall have been enacted, by any state or federal
government agency since the date of this Agreement that would prohibit or
materially restrict the sale of the Shares or any other material transaction
contemplated hereby.
6.1.3 All filings with and notifications to, and all approvals and
authorizations of, third parties (including, without limitation, governmental
entities and authorities) required for the consummation of the sale of the
Shares and the other material transactions contemplated hereby shall have
been made or obtained and all such approvals and authorizations obtained
shall be effective and shall not have been suspended, revoked or stayed by
action of any governmental entity or authority.
6.1.4 Any waiting period (and any extension thereof) applicable to
the sale of the Shares under the HSR Act shall have expired or been
terminated.
6.2 Conditions to Obligations of CACI and CASub to Purchase the Shares. The
obligation of CACI and CASub to purchase the Shares and to consummate the
other transactions contemplated hereby shall be subject to the fulfillment at
or prior to the Closing of the following additional conditions and Seller and
ASG shall exert their best efforts to cause each such condition to be so
fulfilled:
6.2.1 Since the date of the Letter of Intent there shall not have
been any material adverse change of any nature in the business, operations,
assets, financial condition, results of operations, properties or prospects
of ASG; and ASG shall have delivered to CACI and CASub a certificate to that
effect, dated the Closing Date and signed by the President of ASG.
6.2.2 Seller and ASG shall have received, each in form and substance
satisfactory to CACI and CASub, all covenants, approvals, authorizations,
licenses, orders, waivers, Permits and other consents under any contract,
Material Contract, plan, lease, instrument, arrangement, license, commitment
or other agreement of Seller and ASG that are required (i) to consummate the
sale of the Shares, (ii) to permit CACI and CASub to continue to conduct
their businesses and the business of ASG as they are currently conducted or
(iii) in connection with the transactions contemplated hereby; and all
filings, registrations, covenants, approvals, orders, consents and
authorizations by or with, and notifications to, all governmental authorities
or regulators, domestic or foreign, or other Persons by Seller or ASG
required to consummate the transactions contemplated by this Agreement shall
have been made or received, and shall be in full force and effect.
6.2.3 CACI and CASub shall have obtained all covenants, consents,
approvals, authorizations, licenses, orders, waivers and other Permits and
all transfers of Permits which CACI, CASub and their counsel reasonably deem
necessary (i) to consummate the sale of the Shares, (ii) to permit CACI and
CASub to continue to conduct their businesses and the business of ASG as they
are currently conducted and (iii) in connection with the transactions
contemplated hereby.
6.2.4 The execution of this Agreement and performance of the
transactions contemplated hereby by appropriate officers of ASG shall have
been authorized by the Board of Directors of ASG in accordance with
applicable corporate law.
6.2.5 No information obtained by CACI or CASub concerning ASG during
CACI's and CASub's "due diligence" investigation of ASG shall have, in the
sole judgment of CACI and CASub, adversely affected the value of this
Agreement or the transactions contemplated hereby.
6.2.6 Seller shall have executed and delivered the Non-Competition
Agreement.
6.2.7 ASG shall have (i) sold, distributed to Seller or otherwise
disposed of the assets listed on Exhibit 5.1 and (ii) terminated or assigned
to Seller the agreements and contracts listed on Exhibit 5.1.
6.2.8 Seller shall have performed in all material respects all of his
covenants set forth herein that are required to be performed at or prior to
the Closing; the representations and warranties of Seller and ASG contained
in this Agreement shall be true and correct in all material respects as of
the date hereof and as of the Closing Date as if made at the Closing, except
for representations and warranties made expressly as of a specified date
(which representations and warranties shall be true and correct in all
material respects as of such date); and Seller shall have delivered to CACI
and CASub a certificate to that effect, dated the Closing Date and signed by
Seller.
6.2.9 ASG shall have performed in all material respects all of its
covenants set forth herein that are required to be performed at or prior to
the Closing; the representations and warranties of ASG contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and as of the Closing Date as if made at the Closing, except for
representations and warranties made expressly as of a specified date (which
representations and warranties shall be true and correct in all material
respects as of such date); and ASG shall have delivered to CACI and CASub a
certificate to that effect, dated the Closing Date and signed by Arthur
Holmes, as Chief Operating Officer of ASG.
6.2.10 CACI and CASub shall have received from ASG and from such other
essential parties such affidavits and certificates as CACI and CASub shall
deem necessary to relieve CACI and CASub of any obligation to deduct and
withhold any portion of the Purchase Price pursuant to Code Section 1445.
6.2.11 CACI and CASub shall have received an opinion or opinions of
counsel to Seller and ASG in form and substance satisfactory to counsel to
CACI and CASub, dated the Closing Date, to the effect set forth in Exhibit
6.2.13.
6.2.12 CACI and CASub shall have received from ASG all other documents
consistent with the purposes of this Agreement, in form and substance
satisfactory to CACI and CASub and their counsel, as CACI and CASub shall
have reasonably requested (other than additional opinions of counsel).
6.3 Conditions to Obligations of Seller to Sell the Shares. The obligation
of Seller to sell the Shares and to consummate the other transactions
contemplated hereby shall be subject to the fulfillment at or prior to the
Closing of the following additional conditions and CACI and CASub shall exert
their best efforts to cause each such condition to be so fulfilled:
6.3.1 CACI and CASub shall have performed in all material respects
all of their covenants set forth herein that are required to be performed at
or prior to the Closing; the representations and warranties of CACI and CASub
contained in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date as if made at the
Closing, except for representations and warranties made expressly as of a
specified date (which representations and warranties shall be true and
correct in all material respects as of such date); and CACI and CASub shall
have delivered to Seller a certificate to that effect, dated the Closing Date
and signed by the President or a Vice President of each of CACI and CASub.
6.3.2 Seller shall have received an opinion of counsel to CACI and
CASub in form and substance satisfactory to counsel to Seller, dated the
Closing Date, to the effect set forth in Exhibit 6.3.2.
6.3.3 Seller shall have received an acknowledgement from Broker that
any and all obligations of CACI and CASub to Broker arising as a result of
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby have been fully satisfied.
6.3.4 Seller shall have received from CACI and CASub all such other
documents consistent with the purposes of this Agreement, in form and
substance satisfactory to Seller and his counsel, as Seller shall have
reasonably requested (other than additional opinions of counsel).
<PAGE>
Article 7
TERMINATION
7.1 Methods of Termination. This Agreement may be terminated, by written
notice promptly given to the other parties hereto, at any time prior to the
Closing:
7.1.1 By mutual written consent of the parties hereto.
7.1.2 By either CACI and CASub or Seller by notice to the other, if:
7.1.2.1 any injunction or restraining or other order issued by
a court of competent jurisdiction that prohibits or materially restricts the
consummation of the sale of the Shares or any other material transaction
contemplated by this Agreement shall be in effect, or any Action shall have
been commenced or threatened seeking any injunction or restraining or other
order that seeks to prohibit, restrain, invalidate or set aside consummation
of the sale of the Shares or any other material transaction contemplated by
this Agreement;
7.1.2.2 any action shall have been taken, or any statute, rule
or regulation shall have been enacted, by any state or federal government
agency since the date of this Agreement that would prohibit or materially
restrict the sale of the Shares or any other material transaction
contemplated by this Agreement; or
7.1.2.3 any filings with or notifications to, or any approvals
or authorizations of, third parties (including, without limitation,
governmental entities and authorities) required for the consummation of the
sale of the Shares shall not have been made or obtained or any such approvals
or authorizations obtained shall not be effective or shall have been
suspended, revoked or stayed by action of any governmental entity or
authority.
7.1.3 By CACI and CASub by notice to Seller and ASG:
7.1.3.1 if the Closing shall not have occurred on or before
October 21, 1995, unless the absence of the occurrence shall be solely due to
the failure of CACI or CASub (or their Subsidiaries or affiliates) to perform
in all material respects each of their respective material obligations under
this Agreement required to be performed by it at or prior to the Closing;
7.1.3.2 in the event of a material breach by Seller or ASG of
any representation, warranty, covenant or agreement contained herein which
has not been cured or is not curable by the earlier of the Closing or the
tenth day after written notice of that breach was given to Seller and ASG; or
7.1.3.3 if the Board of Directors of ASG shall have withdrawn
or modified in any material respect its approval of this Agreement or the
transactions contemplated hereby.
7.1.4 By Seller and ASG by notice to CACI and CASub:
7.1.4.1 if the Closing shall not have occurred on or before
October 21, 1995, unless the absence of the occurrence shall be solely due to
the failure of Seller or ASG (or the affiliates of either) to perform in all
material respects each of their respective material obligations under this
Agreement required to be performed by it at or prior to the Closing;
7.1.4.2 in the event of a material breach by CACI or CASub of
any representation, warranty, covenant or agreement contained herein which
has not been cured or is not curable by the earlier of the Closing or the
tenth day after written notice of that breach was given to CACI and CASub; or
7.1.4.3 if the Board of Directors of either CACI or CASub
shall have withdrawn or modified in any material respect its approval of this
Agreement or the transactions contemplated hereby.
Each notice of breach under Section 7.1.3.2 or 7.1.4.2 and each notice of
termination under this Section 7.1 shall set forth the facts believed to
constitute the basis therefor, all with reasonable specificity in light of
the facts then known.
7.2 Payments on Termination. If this Agreement shall be terminated
pursuant to Section 7.1.3.3, ASG shall pay to CACI the sum of One Hundred
Thousand Dollars ($100,000). If this Agreement shall be terminated pursuant
to Section 7.1.3.1 because of the nonoccurrence of any condition other than
those set forth in Sections 6.2.1, 6.2.2, 6.2.3, 6.2.4 or 6.2.5, CACI shall
cause the Escrow Agent to pay to Seller the Earnest Money Deposit.
7.3 Effect of Termination. In the event of termination under Section 7.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of CACI, CASub, Seller or ASG, except that the provisions of this
Article 7, Article 8 (other than the provisions of Section 8.5) and Sections
5.3 and 5.4 shall survive the termination and continue in effect, provided
that the foregoing shall not relieve any party for liability for damages
incurred as a result of any willful breach of this Agreement or as a result
of actual fraud. No party's refusal to waive fulfillment of any condition
precedent to its obligations under this Agreement shall constitute a breach
of its duty under this Agreement.
Article 8
DEFINITIONS AND MISCELLANEOUS
8.1 Definitions of Certain Terms. As used herein, the following terms
shall have the following meanings:
Action: any suit, claim, action, litigation, arbitration, dispute,
investigation, inquiry, review, or proceeding.
Affiliate: as defined in Section 3.21 hereof.
Agreement: as defined in the Preamble hereof.
ASG: as defined in the Preamble hereof.
ASG Plans: as defined in Section 3.21 hereof.
Audited Balance Sheets: as defined in Section 3.8 hereof.
Audited Financial Statements: as defined in Section 3.8 hereof.
Broker: Mr. William P. Pickett, an individual residing in the Commonwealth
of Virginia.
CACI: as defined in the Preamble hereof.
CASub: as defined in the Preamble hereof.
Closing: as defined in Section 1.8.1 hereof.
Closing Date: as defined in Section 1.8.1 hereof.
Code: as defined in Section 3.20.7 hereof.
Earnest Money Deposit: as defined in Section 1.5 hereof.
Environmental Claim: any written notice by any governmental agency alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties)
arising out of, based on or resulting from (a) the presence, or release into
the environment, of any Material of Environmental Concern at any location,
whether or not owned by Seller or ASG or (b) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law.
Environmental Contamination: (a) an occurrence occurring or a condition
existing at or before the Closing if such occurrence or condition was in
violation of any Environmental Law or Permit existing at or before the
Closing and if ASG, CACI or CASub is specifically required to take remedial
action with respect thereto by a governmental agency or a negotiated
agreement, decree or clean-up plan with a governmental agency, regardless of
when such occurrence or condition is discovered or when such remedial action
is required, (b) any use, disposal or discharge of Materials of Environmental
Concern before the Closing resulting in liability to a third party,
regardless of when such use, disposal or discharge is discovered or (c) an
occurrence occurring or condition existing at or before the Closing if ASG,
CACI or CASub investigates or takes remedial action with respect thereto.
Environmental Laws: mean all Federal, state and local laws, rules and
regulations relating to pollution or protection of the environment, or
occupational or human health and safety, including, without limitation, laws,
rules and regulations relating to handling, processing, storage, recycling,
emission, discharge, disposal, treatment, transportation, release or
threatened release of any Material of Environmental Concern or other waste or
material into ambient air, surface water, ground water or land, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. 1801 et seq.), the Federal Water Pollution
Control Act (38 U.S.C. 1251 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the Occupational
Safety and Health Act (29 U.S.C. 651 et seq.), the Emergency Planning and
Community Right to Know Act (42 U.S.C. 11001 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 135 et seq.), and the
Food, Drug and Cosmetic Act (15 U.S.C. 2000 et seq.), in each case as these
laws have been amended or supplemented.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
Escrow Agent: as defined in Section 1.5 hereof.
Exchange Act: as defined in Section 2.3 hereof.
Excluded Assets: as defined in Section 5.1 hereof.
Government: the Federal Government of the United States of America.
Holdback: as defined in Section 1.3.1 hereof.
Holdback Period: as defined in Section 1.3.1 hereof.
HSR Act: as defined in Section 2.3 hereof.
Indemnified Party: as defined in Section 5.8.3 hereof.
Indemnifying Party: as defined in Section 5.8.3 hereof.
Installment Payment: as defined in Section 1.2.2 hereof.
Insurance Policies: as defined in Section 3.19 hereof.
Intellectual Property: patents, trademarks, service marks, trade names, mask
works, software, programs, development tools, methodologies, specifications,
processes, know-how, blueprints, drawings, designs, patterns, copyrights,
formulae, inventions, technology, trade secrets, proprietary information,
confidential information and other information and documents, and the
registrations and applications therefor and the goodwill related thereto.
Knowledge: as defined in Article 3 hereof.
Leased Properties: as defined in Section 3.10.4 hereof.
Leases: as defined in Section 3.10.3 hereof.
Letter of Intent: the letter agreement dated July 11, 1995 by and among
CACI, Seller and ASG.
Material Contracts: as defined in Section 3.13 hereof.
Materials of Environmental Concern: those substances or constituents which
are regulated by, or form the basis of liability under, any Environmental
Law.
Permit: all certificates, consents, permits, licenses, authorizations and
approvals required under or relating to any Environmental Law.
Person: any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or any other entity.
Prime Contractor: with respect to any Material Contract, the contracting
party, other than the Government, to whom ASG may be liable for performance
as a subcontractor.
Purchase Price: as defined in Section 1.2 hereof.
Receivables: as defined in Section 1.3 hereof.
Securities Act: as defined in Section 2.3 hereof.
Seller: as defined in the Preamble hereof.
Shares: as defined in Section 1.1 hereof.
Subsidiary: any corporation, association, or other business entity a majority
(by number of votes) of the shares of capital stock (or other voting
interests) of which is owned by ASG, CACI or their respective Subsidiaries.
Successors: as defined in Section 5.8.1 hereof.
Tax: any federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax or other fiscal
charges of any kind whatsoever, including without limitation any interest,
penalty, or addition thereto, whether disputed or not.
Tax Return: any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without
limitation any schedule or attachment thereto, and any amendment thereof.
Unaudited Balance Sheet: as defined in Section 3.8 hereof.
Unaudited Financial Statements: as defined in Section 3.8 hereof.
Windfall Receivables: as defined in Section 1.3.2 hereof.
8.2 Brokerage. Each party shall be solely responsible for payment of any
fee or charge of any broker, finder, financial advisor or intermediary
engaged, employed, or consulted by that party in connection with negotiations
or discussions incident to the execution of this Agreement or any of the
transactions contemplated hereby.
8.3 Amendments and Supplements. This Agreement may be amended or
supplemented by a written instrument signed by CACI, CASub, Seller and ASG
and approved by their respective Boards of Directors.
8.4 Extensions and Waivers. The parties hereto may (a) extend the time for
the performance of any of the obligations or other acts of the parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the covenants or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
such party. No party's refusal to waive fulfillment of any condition
precedent to its obligations under this Agreement shall constitute a breach
of its duty under this Agreement. No party's failure to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or remedy
by such party preclude any other or further exercise thereof or the exercise
of any other right or remedy. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate as a waiver of any
subsequent breach.
8.5 Survival of Representations and Warranties. Notwithstanding any
investigation conducted before or after the Closing and notwithstanding any
knowledge or notice of any fact or circumstance which a party may have as the
result of such investi- gation or otherwise, each party and its Successors
and assigns shall be entitled to rely upon the representations, warranties
and covenants of the others in this Agreement. Each of the representations,
warranties and covenants contained in this Agreement, made in any document
delivered hereunder or otherwise made in connection with the Closing
hereunder shall survive the Closing until the third anniversary of the
Closing.
8.6 Expenses. Each party shall pay its own expenses, including the fees of
attorneys, accountants, investment bankers, valuation experts and others, in
connection with the transactions contemplated hereby, whether or not they are
completed, except that in the event of a conflict between this Section 8.6
and Section 5.8, the latter Section shall control. Seller shall be
responsible for, and shall indemnify and hold harmless CACI, CASub and ASG
against, payment of any and all Taxes arising out of the sale of the Shares
or the other transactions contemplated hereby.
8.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without regard for
its principles of conflicts of laws.
8.8 Alternative Dispute Resolution. In the event that any dispute arises
under any provision of this Agreement, the parties agree to make reasonable
efforts to resolve the dispute by negotiation, mediation, or alternative
dispute resolution before any resort to legal remedies; provided, however,
that no party shall be bound by the determination of any mediation or
alternative dispute resolution proceeding without that party's prior written
consent to the proceeding.
8.9 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand sent via a reputable
nationwide courier service or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice) and shall be
deemed given on the date on which so hand-delivered or on the third business
dayfollowing the date on which so mailed or sent:
To CACI:
CACI International Inc
1100 North Glebe Road
Arlington, VA 22201
Attn: Dr. J. P. London, Chairman
With copies to:
Jeffrey P. Elefante, Esq.
Senior Vice President and General Counsel
CACI International Inc
1100 North Glebe Road
Arlington, VA 22201
and
David W. Walker, Esq.
Foley, Hoag & Eliot
One Post Office Square
Boston, MA 02109
To Seller:
Mr. Conrad Hipkins
1425 Leegate Road, N.W.
Washington, DC 20012
With a copy to:
Mark R. Eaton, Esq.
Michaels, Wishner & Bonner
1140 Connecticut Avenue, N.W.
Suite 900
Washington, DC 20036
To ASG:
Automated Sciences Group, Inc.
1010 Wayne Avenue
Silver Springs, MD 20910
Attention: Mr. Arthur Holmes, Jr.
With copies to Mark R. Eaton, Esq., at the address set forth above and to:
Keith J. Harrison, Esq.
King, Pagano & Harrison
1730 Pennsylvania Avenue, N.W.
Washington, DC 20006
8.10 Entire Agreement, Assignability, etc. This Agreement and the Exhibits
and documents delivered at the Closing pursuant to Section 6: (a) constitute
the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof, including, without limitation, the Letter of
Intent, (b) are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder, except as otherwise expressly
provided herein, and (c) shall not be assignable by operation of law or
otherwise. The representations and warranties of the parties shall not be
enlarged or restricted by any statement in any document referred to herein.
This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective legal representatives, Successors and
permitted assigns, and shall inure to the benefit of the Indemnified Parties
and their respective legal representatives, Successors and permitted assigns.
All Exhibits mentioned in this Agreement shall be attached to this Agreement,
and shall form an integral part hereof. All capitalized terms defined in
this Agreement which are used in any Exhibit shall, unless the context
otherwise requires, have the same meaning therein as given herein. The
failure or omission by Seller and ASG, or either of them, to disclose
information required by a particular Exhibit to this Agreement shall not
constitute a breach of this Agreement if the same information is disclosed on
another Exhibit to this Agreement.
8.11 Cumulative Rights and Remedies. Each party acknowledges that money
damages alone will not adequately compensate another party for breach of a
party's obligations under this Agreement and, therefore, agrees that in the
event of the breach or threatened breach of any such obligation, in addition
to all other remedies available, at law, in equity or otherwise, each party
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms of this Agreement. All rights and remedies
under this Agreement are cumulative and are in addition to and not exclusive
of any other rights and remedies provided hereunder, under any other document
delivered as part of a transaction contemplated hereby or otherwise by
agreement or law, at equity or otherwise. Without limiting the generality of
the foregoing, the parties expressly recognize that specific performance is
not any party's sole remedy hereunder.
8.12 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, each of which shall remain in full force and
effect.
8.13 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same
Agreement.
In Witness Whereof, the parties have duly executed this Agreement as of the
date first above written.
CACI International Inc
[SEAL]
By: /s/
------------------------------
President
CACI, Inc.
[SEAL]
By: /s/
------------------------------
President
Seller:
/s/
---------------------------------
Conrad Hipkins
Automated Sciences Group, Inc.
[SEAL]
By: /s/
------------------------------
President
<PAGE>
Index of Exhibits
Exhibit 1.3.1
Exhibit 1.3.2
Exhibit 1.4
Exhibit 1.5
Exhibit 1.7
Exhibit 3.2
Exhibit 3.8
Exhibit 3.9
Exhibit 3.10.1
Exhibit 3.10.2
Exhibit 3.10.3
Exhibit 3.11(a)
Exhibit 3.11(b)
Exhibit 3.13
Exhibit 3.14
Exhibit 3.15
Exhibit 3.18
Exhibit 3.19
Exhibit 3.20
Exhibit 3.21
Exhibit 4.5
Exhibit 5.1
Exhibit 6.2.13
Exhibit 6.3.2
EXHIBIT 10.6
Acquisition and Merger Agreement
Dated as of December 21, 1995
among
CACI International Inc,
CACI, Inc.,
CACI Acquisition Corporation
and
IMS Technologies, Inc.
Table of Contents
-----------------
ARTICLE 1
THE MERGER
1.1 Merger Terms
1.2 Merger Consideration
1.3 Consulting Agreements
1.4 Closing
1.5 Approval by IMS Shareholders
1.6 Actions Subsequent to the Closing
1.7 Divestiture of Excluded Assets
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF IMS
AND THE PRINCIPAL SHAREHOLDERS
2.1 Corporate Status of IMS
2.2 Subsidiaries of IMS
2.3 Authority for Agreement
2.4 No Default or Violation
2.5 Corporate Documents
2.6 Books and Records
2.7 Capitalization of IMS
2.8 Financial Statements
2.9 Absence of Material Adverse Changes
2.10 Title to Assets; Condition
2.11 Intellectual Property
2.12 Inventories
2.13 Material Contracts
2.14 Agreements, Contracts and Commitments
2.15 Banking Facilities, Powers of Attorney, etc.
2.16 Customers and Orders
2.17 Compliance with Applicable Law
2.18 Litigation
2.19 Insurance
2.20 Tax Matters
2.21 Employee Benefit Plans; Compliance with ERISA
2.22 Employment-Related Matters
2.23 Environmental
2.24 Absence of Certain Payments
2.25 Interests of Officers
2.26 No Brokers or Finders
2.27 No Pending Actions
2.28 No Misrepresentations
2.29 No Implied Representations
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CACI, CASUB, AND ACQUISITION
3.1 Corporate Status of CACI, CASub, and Acquisition
3.2 Authority for Agreement
3.3 No Default or Violation
3.4 Responsible Prospective Contractor
3.5 No Brokers or Finders
3.6 No Pending Actions
3.7 No Misrepresentations
ARTICLE 4
COVENANTS
4.1 Conduct of Business
4.2 Payment of Taxes
4.3 Filings and Submissions
4.4 Release of Information
4.5 Confidentiality
4.6 Further Assurances
4.6.1 Generally
4.6.2 Novation of the Material Contracts
4.7 Defense of Claims and Litigation
4.8 Indemnification
4.8.1 Indemnification of CACI, CASub and IMS
4.8.2 Indemnification of the Principal Shareholders
4.8.3 Third Party Claims
4.8.4 Minimum Liability
4.8.5 Limitation of the Principal Shareholders' Liability
4.9 Indemnification of IMS Directors and Officers
4.10 Annuity
ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions to Obligations of Each Party
5.2 Conditions to Obligations of CACI, CASub, and Acquisition
5.3 Conditions to Obligations of IMS and the Principal Shareholders
ARTICLE 6
TERMINATION
6.1 Methods of Termination
6.2 Payments on Termination
6.3 Effect of Termination
ARTICLE 7
DEFINITIONS AND MISCELLANEOUS
7.1 Definitions of Certain Terms
7.2 Brokerage
7.3 Amendments and Supplements
7.4 Extensions and Waivers
7.5 Survival of Representations and Warranties
7.6 Expenses
7.7 Letter of Intent
7.8 Governing Law
7.9 Alternative Dispute Resolution
7.10 Notice
7.11 Entire Agreement, Assignability, etc.
7.12 Cumulative Rights and Remedies
7.13 Severability
7.14 Counterparts
<PAGE>
Acquisition and Merger Agreement
Acquisition and Merger Agreement (the "Agreement"), dated as of December
21, 1995, by and among CACI International Inc, a Delaware corporation
("CACI"), CACI, Inc., a Delaware corporation and a wholly-owned subsidiary of
CACI ("CASub"), CACI Acquisition Corporation, a Delaware corporation and a
wholly- owned subsidiary of CASub ("Acquisition"), IMS Technologies, Inc., a
Delaware corporation ("IMS," which term shall include the subsidiaries of IMS
unless the context otherwise requires), and John Yeh, Joseph Yeh, James Yeh,
and Jeffry Yeh (collectively, the "Principal Shareholders").
W I T N E S S E T H
WHEREAS, CACI has a strong commitment to the government information
technology industry and IMS provides information technology and engineering
and support services to the United States Government and other similar
customers; and
WHEREAS, CACI and IMS wish to combine their businesses in a merger
transaction, after which IMS will be operated as a wholly-owned subsidiary of
CASub;
NOW, THEREFORE, CACI, CASub, Acquisition, IMS, and the Principal
Shareholders hereby agree as follows:
Article 1
THE MERGER
1.1 Merger Terms. Upon and subject to the terms and conditions hereof,
and on the basis of the representations, warranties, covenants and agreements
contained herein, at the "Effective Time" (as defined in Section 7.1),
Acquisition shall be merged with and into IMS (the Surviving Corporation")
pursuant to the terms of the Merger Agreement attached hereto as Exhibit A
(the "Merger").
1.2 Merger Consideration. Upon the effectiveness of the Merger, the
shares of Common Stock of Acquisition outstanding immediately before the
Effective Time shall be converted into shares of Common Stock (par value
$0.01 per share) of IMS, and the shares of Common Stock of IMS outstanding
immediately before the Effective Time shall be converted into the right to
receive payment on a pro rata basis of an aggregate of Six Million Five
Hundred Thousand Dollars ($6,500,000), less the amount of any expenses of the
Merger properly chargeable to IMS or to any Principal Shareholder pursuant to
this Agreement and paid by CACI, CASub, or Acquisition at or before the
Closing (the "Merger Consideration").
1.3 Consulting Agreements. In connection with the execution, delivery
and performance of this Agreement and the transactions contemplated hereby,
each of the Principal Shareholders agrees to execute and to deliver at or
prior to the Closing a Consulting Agreement in form and substance
satisfactory to CACI, to the effect set forth in Exhibit 1.3.1 (the
"Consulting Agreement"). In consideration of the execution and delivery of
the Consulting Agreements, CACI and CASub shall pay or shall cause the
Surviving Corporation to pay to each of the Principal Shareholders the sum
set forth in Exhibit 1.3.2, in accordance with the schedule set forth in that
Exhibit.
1.4 Closing.
1.4.1 The closing of the Merger (the "Closing") shall be held at the
offices of CACI, 1100 North Glebe Road, Arlington, VA 22201, or at such other
location as the parties hereto may mutually agree upon in writing, at 2:00
P.M., local time, on December 21, 1995 or on such other date and at such
other time as the parties hereto may mutually agree upon in writing (the
"Closing Date").
1.4.2 At the Closing, IMS shall deliver to CACI and CASub:
1.4.2.1 the Consulting Agreements, duly executed by the
Principal Shareholders; and
1.4.2.2 the other instruments, agreements, certificates and
documents referred to in Section 5.2.
1.4.3 At or before the Effective Time, CACI and/or CASub shall
deliver:
1.4.3.1 to IMS or a disbursing agent acceptable to IMS, for
distribution to the shareholders of IMS, the Merger Consideration;
1.4.3.2 to each of the Principal Shareholders, the initial
payment provided in the respective Consulting Agreement with that Shareholder
(collectively, the "Initial Consulting Fees"); and
1.4.3.3 to IMS and the Principal Shareholders, the other
instruments, agreements, certificates and documents referred to in Section
5.3.
1.4.4 At the Closing, Acquisition and IMS shall execute and deliver
the Merger Agreement attached hereto as Exhibit A.
1.5 Approval by IMS Shareholders. On or before the Closing Date, IMS
will call a special meeting of its stockholders to be held on or before the
Closing Date to submit this Agreement, the Merger Agreement, and related
matters for the consideration and approval of the shareholders of IMS, which
approval will be recommended by IMS's Board of Directors. The meeting will
be called, held and conducted, and any proxies will be solicited, in
compliance with applicable law. At the meeting, each of the Principal
Shareholders will vote all shares of capital stock of IMS that he has the
power to vote in favor of approval.
1.6 Actions Subsequent to the Closing.
1.6.1 On or before December 28, 1995, IMS and the Principal
Shareholders shall cause the Merger Agreement to be delivered to CT
Corporation (or such other agent as CACI and IMS may mutually agree upon in
writing) (the "Agent") with instructions for the Agent to file the Merger
Agreement with the Secretary of State of the State of Delaware on December
28, 1995 at 4:00 P.M. Eastern standard time unless the Agent shall have
received, on or before December 28, 1995 at 3:00 P.M. Eastern standard time,
from CACI, CASub, Acquisition or IMS, or their attorneys, instructions not to
file the Merger Agreement with such Secretary of State.
1.6.2 On or before December 28, 1995 at 3:00 P.M., CACI, CASub and
Acquisition shall cause the Merger Consideration and the Initial Consulting
Fees to be wired to the client trust account of Michaels, Wishner & Bonner
(NationsBank Account No. 02308282) such funds to be held and disbursed in
accordance with the terms of the Escrow Agreement dated December 21, 1995
among the parties hereto and Michaels, Wishner & Bonner.
1.7 Divestiture of Excluded Assets. It is understood that the assets,
agreements and contracts listed on Exhibit 1.7 (the "Excluded Assets") are
not required for the conduct of the business of IMS by CACI or CASub and are
not intended to be included in the business being acquired by CACI and CASub.
Accordingly, prior to the Effective Time, IMS shall have (i) sold,
distributed to its shareholders or otherwise disposed of the assets listed on
Exhibit 1.7 and (ii) terminated or assigned to the Principal Shareholders the
agreements and contracts listed on Exhibit 1.7. Notwithstanding any other
provision of this Agreement, the disposition of the Excluded Assets in
accordance with this Section 1.7 shall not constitute a breach of any
representation, warranty, covenant or agreement of IMS or the Principal
Shareholders.
Article 2
REPRESENTATIONS AND WARRANTIES OF IMS
AND THE PRINCIPAL SHAREHOLDERS
Whenever any representation, warranty, covenant or agreement of IMS and the
Principal Shareholders is qualified or limited as to "Sellers' Knowledge,"
the term "Sellers' Knowledge" shall be limited to the actual knowledge of (a)
the Principal Shareholders and (b) the executive officer or officers of IMS
and its Subsidiaries (as defined below) whose management responsibilities
include the matters or operations referred to by such representation,
warranty, covenant or agreement. IMS and the Principal Shareholders jointly
and severally represent and warrant to CACI and CASub as follows:
2.1 Corporate Status of IMS. IMS is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. IMS is duly qualified to do business as a foreign corporation and
is in good standing in all jurisdictions in which the character of the
properties owned, leased or operated by IMS or the nature of the business
transacted by IMS makes such qualification necessary, except where failure to
be so qualified would not have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS.
2.2 Subsidiaries of IMS. Each of the corporations listed on Exhibit 3.2
(the "Subsidiaries"), except as set forth in that Exhibit, is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full corporate power to own, lease and
operate its properties and to conduct its business as currently owned,
leased, operated and conducted. Each of the Subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the properties owned, leased or
operated by such Subsidiary or the nature of the business transacted by such
Subsidiary makes such qualification necessary, except where failure to be so
qualified would not have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties or
prospects of such Subsidiary. IMS has made available to CACI and CASub true,
complete and correct copies of the certificate of incorporation, by-laws and
other organizational documents of each of the Subsidiaries, each as in effect
on the date hereof. All of the shares of capital stock of each Subsidiary
are duly and validly issued, fully paid and nonassessable and are held of
record and beneficially by IMS, free and clear of any and all covenants,
conditions, restrictions, voting arrangements, liens, charges, encumbrances,
options, claims and rights whatsoever. There are no agreements relating to
or restricting the issuance, sale or transfer of shares of capital stock of
any Subsidiary, or affecting the rights of IMS with respect thereto. There
are no preemptive rights on the part of any Person and there are not, and as
of the Closing there will not be, outstanding any options, warrants,
agreements, commitments, conversion or other rights that obligate any
Subsidiary to issue or sell any shares of its capital stock or other
security. No Subsidiary has any obligation to acquire any class of
securities (including debt securities) of any Person.
2.3 Authority for Agreement. IMS has the full corporate power to own,
lease and operate its properties and to conduct its business as currently
owned, leased, operated and conducted, to execute, deliver, and perform this
Agreement, to consummate the other transactions contemplated herein and to
carry out its obligations hereunder. The execution, delivery and performance
of this Agree ment and the consummation of the transactions contemplated
hereby have been duly and validly authorized by IMS's Board of Directors and
stockholders.
2.4 No Default or Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
by IMS do not and will not (a) conflict with or result in a material
violation of any provision of the Certificate of Incorporation or By-Laws or
other organizational documents of IMS, or (b) with or without the giving of
notice or the lapse of time, or both, conflict with, or result in any
material violation or breach of or constitute a material default under, or
require the consent of any other party to, or result in any right to
accelerate or the creation of any material lien, charge or encumbrance on any
of the assets or properties of IMS pursuant to, or right of termination
under, any provision of any note, mortgage, indenture, lease, agreement or
other instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation to which IMS is a
party or by which IMS or any of its assets or properties may be bound or
which is applicable to IMS or any of its assets or properties. Other than in
connection with or in compliance with the provisions of the Securities Act,
the Exchange Act, the Hart-Scott-Rodino Antitrust Improvements Act (the "HSR
Act") and applicable state securities laws, no authorization, consent,
approval, license, order, or permit of, or declaration of, or filing with or
notice to, any governmental body or authority or any other person or entity
is necessary for the execution, delivery and performance of this Agreement by
IMS or the consummation by IMS of the transactions contemplated hereby.
2.5 Corporate Documents. IMS has heretofore made available to CACI and
CASub a true, complete and correct copy of IMS's Certificate of Incorporation
and By-Laws, each as amended to date. Such Certificate of Incorporation and
By-Laws are in full force and effect. IMS is not in violation of any
provision of its Certificate of Incorporation or By-Laws, except for such
violations that would not, individually or in the aggregate, have a material
adverse effect on the business, operations, assets, financial condition,
results of operations, properties or prospects of IMS. The minute books of
IMS (including the stock records), a copy of which has heretofore been
provided to CACI and CASub, are true, complete and correct and are the only
minute books of IMS.
2.6 Books and Records. The books of account, ledgers, order books,
records and documents of IMS accurately and completely reflect all material
information relating to the business of IMS, the location and condition of
its assets, and the nature of all transactions giving rise to the obligations
or accounts receivable of IMS.
2.7 Capitalization of IMS. IMS's authorized capital stock consists of
400,000 shares of Class A common stock, par value $0.01 per share, 125,000
shares of Class B common stock, par value $0.01 per share, and 25,000 shares
of undesignated preferred stock, par value $1.00 per share. There are 75,833
shares of Class B common stock (the "Shares") issued and outstanding and no
shares of Class A common stock or preferred stock issued and outstanding. An
aggregate of 40,847.75 of the Shares are held, and as of the Effective Time
will be held, of record and beneficially by the Principal Shareholders. All
of the Shares are, and as of the Effective Time will be, duly and validly
issued, fully paid and nonassessable. There are no dividends which have been
authorized, declared or set aside but not paid or which are in arrears with
respect to any shares of capital stock of IMS. There are no agreements
relating to or restricting the issuance, sale or transfer of shares of
capital stock of IMS. There are no preemptive rights on the part of any
Person and there are not, and as of the Closing there will not be,
outstanding any options, warrants, agreements, commitments, conversion or
other rights that obligate IMS to issue or sell any shares of its capital
stock or other security.
2.8 Financial Statements. IMS has previously delivered to CACI and CASub
the audited balance sheets of IMS as of September 30, 1993, 1994 and 1995
(the "Audited Balance Sheets") and the related statements of income, changes
in stockholders' equity, and cash flows of IMS for the fiscal years ended
September 30, 1993, 1994 and 1995 (collectively, together with the Audited
Balance Sheets, the "Audited Financial Statements"). The Audited Financial
Statements have been prepared in accordance with generally accepted
accounting principles applied consistently throughout the periods involved
(except as disclosed in the footnotes thereto) and have been certified by
Ernst & Young, LLP, IMS's independent auditors. The Audited Financial
Statements present fairly the financial position, results of operations and
cash flows of IMS at the dates and for the periods indicated. Attached
hereto as Exhibit 2.8 is the unaudited balance sheet of IMS as of December 2,
1995 (the "Unaudited Balance Sheet") and the related statements of income,
changes in stockholders' equity, and cash flows of IMS for the two month
period then ended (collectively, the "Unaudited Financial Statements"). The
Unaudited Financial Statements have been prepared in accordance with
generally accepted accounting principles, applied consistently with those
employed in the Audited Financial Statements, and present fairly the
financial position and results of operations of IMS as of the date and for
the period indicated, subject to the addition of notes and normal,
non-material year-end adjustments consistent with past practice. Except to
the extent set forth on the Unaudited Balance Sheet, IMS does not have any
material liabilities or obligations of any nature, whether accrued, absolute,
contingent or otherwise, whether due or to become due and whether the amount
thereof is readily ascertainable or not, other than (i) liabilities and
obligations described in the footnotes to the 1995 Audited Financial
Statements, (ii) liabilities and obligations incurred in the ordinary course
of business since the date of the Unaudited Balance Sheet, none of which
individually or in the aggregate has had or could reasonably be expected to
have a material adverse effect on the business, operations, assets, financial
condition, results of operations, properties or prospects of IMS, and (iii)
liabilities and obligations described in the Exhibits hereto.
2.9 Absence of Material Adverse Changes. Since September 30, 1995, IMS
has conducted its business only in the ordinary course and consistent with
prior practice and there has not occurred or arisen, whether or not in the
ordinary course of business, any adverse Material Change in the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS. Specifically, except as described in Exhibit 2.9, IMS has
not:
2.9.1 issued, sold, purchased, redeemed or granted any options,
warrants, conversion or other rights to purchase or otherwise acquire any
shares of its capital stock or any other security;
2.9.2 authorized, declared, set aside or paid any dividend or made
any other distribution with respect to any share of its capital stock or
other security;
2.9.3 incurred, discharged, satisfied or paid any obligation or
liability, accrued, absolute, contingent or otherwise, whether due or to
become due, material to IMS other than current liabilities and current
portion of long-term debt shown on the 1995 Audited Balance Sheet and current
liabilities incurred since the date of the 1995 Audited Balance Sheet in the
ordinary course of business and consistent with prior practice;
2.9.4 suffered any damage or destruction in the nature of a casualty
loss or other loss that would be treated as an extraordinary item pursuant to
Opinion No. 30 of the Accounting Principles Board, whether covered by
insurance or not, that might reasonably be expected to have a material
adverse effect on the business, operations, assets, financial condition,
results of operations, properties or prospects of IMS;
2.9.5 granted any increase in the compensation payable or to become
payable by IMS to its directors, officers, managers, consultants or agents or
any increase in benefits under any bonus, insurance, pension or other benefit
plan made for or with any of such persons, other than increases that are
provided to broad categories of employees and do not discriminate in favor of
the aforementioned persons;
2.9.6 encountered any labor union organizing activity material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of IMS, had any employee strike, work-stoppage,
slow-down or lockout, or any substantial threat of any imminent strike,
work-stoppage, slow-down or lock-out or had any adverse change in its
relations with its employees, agents, customers or suppliers or any
governmental or regulatory authorities, that, in any of the foregoing cases,
has had or could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the business, operations, assets,
financial condition, results of operations, properties or prospects of IMS;
2.9.7 transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any United States or
foreign intellectual property, or modified any existing rights with respect
thereto, other than in the ordinary course of business and consistent with
prior practice;
2.9.8 cancelled or compromised any debts or waived or permitted to
lapse any claims or rights of substantial value, or sold, leased, transferred
or otherwise disposed of any of its properties or assets (real, personal or
mixed, tangible or intangible), except in the ordinary course of business and
consistent with prior practice;
2.9.9 made any material capital expenditure or commitment for any
addition to property, plant or equipment not in the ordinary course of
business and consistent with prior practice or in any event in excess of an
aggregate of Five Thousand Dollars ($5,000);
2.9.10 made any change in any method of accounting or accounting
practice;
2.9.11 paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any
officer, director, "affiliate," officer of an "affiliate," director of an
"affiliate," "associate" of an officer, "associate" of a director, or
"associate" of an "affiliate" (as such terms are defined in the rules and
regulations of the Securities and Exchange Commission), who exercised senior
managerial responsibility with respect to IMS, except for normal business
advances to employees consistent with prior practice;
2.9.12 granted any options to officers, employees, directors, or any
affiliated parties;
2.9.13 agreed, whether in writing or otherwise, to take any action
described in this Section 2.9; or
2.9.14 taken, failed to take or suffered to exist any action that, if
taken, not taken, or suffered to exist after the date hereof, would
constitute a breach of any of the covenants set forth in Section 4.
2.10 Title to Assets; Condition.
2.10.1 IMS has good title to, or a valid leasehold interest in, all of
its properties and assets. Except as described on Exhibit 2.10.1, none of
its properties or assets is subject to any mortgage, pledge, lien, security
interest, lease or other encumbrance. All of IMS's properties and assets are
in working condition.
2.10.2 Exhibit 2.10.3 sets forth a true, correct and complete list as
of the date hereof of all leases, and all amendments, modifications and
supplemental agreements thereto, of real property to which IMS is a party
(the "Leases"). True, correct and complete copies of the Leases have been
delivered by IMS to CACI and CASub. The Leases grant leasehold estates free
and clear of all mortgages, liens, claims, charges, security interests,
encumbrances and other restrictions and limitations whatsoever granted by or
caused by the actions of IMS, and IMS enjoys a right of quiet possession as
against any lien or other encumbrance on the properties subject to the Leases
(collectively, the "Leased Properties"). The Leases are in full force and
effect, are binding and enforceable against each of the parties thereto in
accordance with their respective terms. No party to any Lease has sent
written notice to the other claiming that such party is in default
thereunder, which remains uncured. To Sellers' Knowledge, there has not
occurred any event that would constitute a breach of or default in the
performance of any material covenant, agreement or condition contained in any
Lease, nor has there occurred any event that with the passage of time or the
giving of notice or both would constitute such a breach or material default.
IMS is not obligated to pay any leasing or brokerage commission relating to
any Lease and will not have any enforceable obligation to pay any leasing or
brokerage commission upon the renewal of any Lease. No material
construction, alteration or other leasehold improvement work with respect to
any of the Leases remains to be paid for or to be performed by IMS.
2.10.3 IMS is not in violation in any material respect of any law,
regulation or ordinance (including, without limitation, laws, regulations or
ordinances relating to building, zoning, environmental, city planning, land
use or similar matters) relating to the Leased Properties. There are to
Sellers' Knowledge no proceedings materially affecting the present or future
use of the Leased Properties for the purposes for which they are used or the
purposes for which they are intended to be used. All buildings, structures
and fixtures used by IMS are in good operating condition and repair, normal
wear and tear excepted, and are insured with coverages that are usual and
customary for similar properties and similar businesses.
2.11 Intellectual Property. IMS owns, or is licensed or otherwise has
the full right to use, the Intellectual Property listed on Exhibit 2.11(a).
Exhibit 2.11(a) lists all Intellectual Property owned, licensed or used by
IMS, together with the owner or licensor thereof. Exhibit 2.11(b) lists all
third party licenses related to the Intellectual Property listed on Exhibit
2.11(a). All Intellectual Property that is identified on Exhibit 2.11(a) as
owned by IMS is, together with the goodwill of the business associated with
any Intellectual Property, owned by IMS free and clear of any and all
agreements, judgments, orders, decrees, stipulations, liens, claims, tax
liens, charges, security interests, encumbrances and licenses or sublicenses
that would prevent the use of the Intellectual Property by IMS, CACI or
CASub. The business and operations of IMS do not infringe upon or violate
any intellectual property owned by any third party. IMS has not received,
within the past three (3) years, notice of any claim that IMS has infringed
or violated any intellectual property of any third party, or that any
Intellectual Property identified on Exhibit 2.11(a) is invalid or violates or
infringes upon the rights of any third party. IMS has not sent or otherwise
communicated to another person, within the past three (3) years, any notice,
charge, claim or other assertion of, nor does there exist, any present,
impending or to Sellers' Knowledge threatened infringement or violation by
any third party of any Intellectual Property listed on Exhibit 2.11(a) or any
acts of unfair competition by any third party relating to such Intellectual
Property. IMS maintains reasonable security measures to prevent disclosure
or transfer to unauthorized persons of any trade secrets and confidential
information that are proprietary to IMS.
2.12 Inventories. IMS has no inventory material to its business,
operations, financial condition, results of operations or prospects.
2.13 Material Contracts. IMS has delivered to CACI and CASub or made
available to CACI and CASub a true, correct and complete copy of each
material contract to which IMS is a party and all amendments thereto (the
"Material Contracts"), all of which are listed on Exhibit 2.13. All Material
Contracts are in full force and effect. IMS has not received any notice of
default, nor is it in default, nor does any condition exist which with or
without notice or the lapse of time, or both, will render IMS in default,
under any of the Material Contracts. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby do not and will not, with or without the giving of notice or the lapse
of time, or both, conflict with, or result in any violation or breach of or
constitute a default under, or require the consent of any other party to, or
result in any right to accelerate or the creation of any lien, charge or
encumbrance on any of the assets or properties of IMS pursuant to, or right
of termination under, any provision of any Material Contract. To Sellers'
Knowledge, the other parties to the Material Contracts are in compliance with
all material terms and conditions of the Material Contracts. No party to a
Material Contract has notified IMS of its intention to terminate or
materially change the nature of its transaction or relationship with IMS
under any such Material Contract.
2.14 Agreements, Contracts and Commitments. Except as set forth in
Exhibit 2.14, IMS is not a party to:
2.14.1 any agreement relating to the issuance, transfer or sale of any
shares of the capital stock or other securities of IMS;
2.14.2 any bonus, deferred compensation, pension, severance,
profit-sharing, stock option, employee stock purchase or retirement plan,
contract or arrangement or other employee benefit plan or arrangement;
2.14.3 any employment agreement that contains any severance pay
liabilities or obligations;
2.14.4 any agreement for personal services, consultant services or
employment;
2.14.5 any agreement of guarantee or indemnification of third parties
in an amount that could exceed Five Thousand Dollars ($5,000);
2.14.6 any agreement or commitment containing a covenant limiting or
purporting to limit the freedom of IMS to compete with any person in any
geographic area or to engage in any line of business;
2.14.7 any lease (other than equipment leases under which IMS is
lessor) to which IMS is a party as lessor or lessee that is material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of IMS;
2.14.8 any joint venture agreement or profit-sharing agreement (other
than with employees);
2.14.9 except for trade indebtedness incurred in the ordinary course
of business, any loan or credit agreements providing for the extension of
credit to IMS or any instrument evidencing or related in any way to
indebtedness incurred in the acquisition of companies or other entities or
indebtedness for borrowed money by way of direct loan, sale of debt
securities, purchase money obligation, conditional sale, guarantee, or
otherwise, that is material to the business, operations, assets, financial
condition, results of operations, properties or prospects of IMS;
2.14.10 any license agreement, either as licensor or licensee, or
distributor, dealer, franchise, manufacturer's representative, sales agency
or other similar agreement or commitment;
2.14.11 any contract or agreement, for the future sale by IMS of
materials, products, services or supplies, that is material to the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS;
2.14.12 any contract or agreement for the future purchase by IMS of any
materials, equipment, services, or supplies, that either provides for
payments in excess of Two Thousand Five Hundred Dollars ($2,500) and cannot
be terminated by it without penalty upon less than ninety (90) days' notice
or was not made in the ordinary course of business and consistent with prior
practice;
2.14.13 any agreement that provides for the sale of goods or services
that will result in a loss as a result of costs already incurred or expected
to be incurred to complete the agreement;
2.14.14 any agreement or arrangement for the assignment, sale or other
transfer by IMS of any agreement or lease (or right to payment thereunder) by
which it leases materials, products or other property to a third party;
2.14.15 any contract or agreement that provides any discount;
2.14.16 any agreement or commitment for the acquisition, construction
or sale of fixed assets owned or to be owned by IMS;
2.14.17 any contract or agreement not described above involving the
payment or receipt by IMS of more than Five Hundred Dollars ($500)
individually or Five Thousand Dollars ($5,000) in the aggregate other than
contracts or agreements in the ordinary course of business for the purchase
of inventory, supplies or services or for the sale of current requirements
and consistent with prior practice, or for the sale or lease of finished
goods or services in the ordinary course of business and consistent with
prior practice; or
2.14.18 any contract or agreement not described above that was not made
in the ordinary course of business and consistent with prior practice and
that is material to the business, operations, assets, financial condition,
results of operations, properties or prospects of IMS.
All agreements, contracts, plans, leases, instruments, arrangements, licenses
and commitments listed in Exhibit 2.14 pursuant to this Section 2.14 are
valid and in full force and effect and neither IMS nor, to Sellers'
Knowledge, any other party thereto has breached any provision of, or
defaulted under the terms of, nor are there any facts or circumstances that
would reasonably indicate that IMS will or may be in such breach or default
under, any such agreement, contract, plan, lease, instrument, arrangement,
license or commitment, which breach or default has or could reasonably be
expected to have a material adverse effect on the business, operations,
assets, financial condition, results of operations, properties or prospects
of IMS. Exhibit 2.14 correctly identifies each contract the provisions of
which would be materially and adversely affected by this Agreement and each
contract under which the rights of any party would be altered as a result of
the sale, merger, consolidation or other change of control of IMS.
2.15 Banking Facilities, Powers of Attorney, etc. Exhibit 2.15 attached
hereto sets forth a true, correct and complete list of (i) each bank, savings
and loan or similar financial institution with which IMS has an account or
safety deposit box or other arrangement, and any numbers of the accounts or
safety deposit boxes maintained by IMS thereat, (ii) the names of all persons
authorized to draw on each such account or to have access to any such safety
deposit box facility, and (iii) any outstanding powers of attorney executed
on behalf of IMS in respect of IMS or its assets, liabilities or businesses.
IMS has no general or special powers of attorney outstanding (whether as
grantor or grantee thereof), nor any obligation or liability (whether actual,
accrued, accruing, contingent or otherwise) as guarantor, surety, co-signer,
endorser, co-maker, indemnitor or otherwise in respect of the obligation of
any Person, except as endorser or maker of checks or letters of credit,
respectively, endorsed or made in the ordinary course of business and
consistent with prior practice.
2.16 Customers and Orders. During the period from December 2, 1995
through the Effective Time, IMS has not accepted, and will not accept, orders
from any of the other contracting parties to the Material Contracts on any
terms other than pursuant to one or more of the Material Contracts.
2.17 Compliance with Applicable Law. IMS has all requisite material
licenses, permits and certificates from all foreign, federal, state and local
authorities necessary for the conduct of its business as presently conducted,
and to lease and operate the Leased Properties. IMS has conducted its
business in material compliance with all applicable laws, statutes,
ordinances, regula tions, rules, judgments, decrees, orders, permits,
licenses, concessions, grants or other authorizations of any court or of any
governmental entity or authority.
2.18 Litigation. Except as described in Exhibit 2.18, there is no Action
of any kind, pending or, to Sellers' Knowledge, threatened, at law or in
equity, by or before any court, arbitrator, governmental entity or authority,
that involves, affects or relates to IMS that either singly or in the
aggregate may have any material adverse effect on the business, operations,
assets, financial condition, results of operations, prospects or properties
of IMS. Neither IMS nor any of its Principal Shareholders or properties is
subject to any order, writ, injunction, decree or judgment of any court,
arbitrator or governmental entity or authority, that involves, affects or
relates to IMS that either singly or in the aggregate may have any material
adverse effect on the business, operations, assets, financial condition,
results of operations, prospects or properties of IMS.
2.19 Insurance. Exhibit 2.19 attached hereto sets forth a true, correct
and complete list of all fire, theft, casualty, general liability, workers'
compensation, business interruption, environmental impairment, product
liability, automobile and other insurance policies maintained by IMS and all
life insurance policies maintained on the lives of any of its directors,
officers or employees (collectively, the "Insurance Policies"). All premiums
due on the Insurance Policies or renewals thereof have been paid in full. To
Sellers' Knowledge, the amounts and coverages of the Insurance Policies are
those customarily carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which IMS operates and
are adequate and customary for the type and scope of IMS's assets, properties
and business. The Insurance Policies are sufficient for compliance with all
Material Contracts to which IMS is a party or by which IMS is bound and all
applicable laws and regulations of any governmental entity. IMS's workers'
compensation insurance materially complies with all applicable statutory and
regulatory requirements relating thereto. IMS has not received any written
notices of any pending termination with respect to any of such policies.
Exhibit 2.19 includes a true and complete listing of all claims made under
IMS's Insurance Policies in excess of Five Thousand Dollars ($5,000), and the
dispositions thereof, for the period from September 30, 1992 to the date
hereof.
2.20 Tax Matters.
2.20.1 Except as disclosed in Exhibit 2.20.1, IMS has duly filed,
within the times and in the manner prescribed by law, all Tax Returns that it
was required to file. To Sellers' Knowledge, all such Tax Returns were
correct and complete in all material respects. All Taxes owed by IMS
(whether or not shown on any Tax Return) have been paid when due. IMS is not
currently the beneficiary of any extension of time within which to file any
Tax Return. No claim or inquiry with respect to any material amount of Taxes
has ever been made by an authority in a jurisdiction where IMS did not file
Tax Returns but where it is or may be subject to any Tax by that jurisdiction
for any period ending on or before the Closing Date. There are no liens or
other security interests on any of the properties or assets of IMS that arose
in connection with any failure (or alleged failure) to pay any Tax.
2.20.2 All Taxes of IMS attributable to Tax periods or portions
thereof ending on or prior to the Closing Date that have not yet been paid
have in the aggregate been adequately reflected as a liability on the books
of IMS in accordance with generally accepted accounting principles
consistently applied.
2.20.3 IMS has withheld and paid all Taxes required to have been
withheld and paid in connection with payments to foreign persons, sales and
use Tax obligations with respect to any and all states, and amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
person.
2.20.4 Exhibit 2.20 hereto lists all federal and state income Tax
Returns filed with respect to IMS for Tax periods ended on or after December
31, 1991, indicates those Tax Returns that have been audited, and indicates
those Tax Returns that currently are the subject of audit. Exhibit 2.20 also
sets forth all deficiencies of Tax that have been asserted for all periods up
to and including the date hereof.
2.20.5 There are no outstanding agreements or waivers extending the
statute of limitations applicable to any Tax Return of IMS for any period.
2.20.6 IMS has delivered to CACI and CASub true, correct and complete
copies of all United States federal income Tax Returns, examination reports,
and statements of deficiencies assessed against, proposed in writing to be
assessed against, or agreed to by any of the Company and its Subsidiaries for
all Tax periods ending on or after December 31, 1991.
2.20.7 IMS has not filed a consent under Section 341(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), concerning
collapsible corporations. IMS has not made any payments, is not obligated to
make any payments, and is not a party to any agreement that could obligate it
to make any payments that will be an "excess parachute payment" under Code
Section 280G. IMS has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii), nor has IMS
been a passive foreign investment company as defined in Code Sections
1291-1297. IMS has disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Code Section 6662. IMS is not a party to
any Tax allocation or sharing agreement. IMS has no liability for any Taxes
of any person (other than its own) under Treas. Reg. Section 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
2.20.8 IMS has not made any elections under the Code, including,
without limitation, elections under Code Section 1362 (relating to taxation
as an S Corporation) or elections under Code Section 338 (relating to the
treatment of certain stock purchases as asset acquisitions).
2.21 Employee Benefit Plans; Compliance with ERISA. Exhibit 2.21
contains a true, correct and complete list of all pension, profit sharing,
retirement, deferred compensation, welfare, insurance, disability, bonus,
vacation pay, severance pay and other similar plans, programs or agreements,
and every material personnel policy, whether reduced to writing or not,
relating to any persons employed by IMS and maintained by IMS or by any other
member (hereinafter, "Affiliate") of a controlled group of corporations,
group of trades or businesses under common control or affiliated service
group which includes IMS (as defined for purposes of Section 414(b), (c) and
(m) of the Code) (collectively, the "IMS Plans"). Neither IMS nor any
Affiliate has ever been obligated to contribute to any "multi-employer plan,"
as defined in Section 3(37) of ERISA. Neither IMS nor any Affiliate has
incurred any "withdrawal liability" calculated under Section 4211 of ERISA
and there has been no event or circumstance which would cause them to incur
any such liability. Except as indicated in Exhibit 2.21, neither IMS nor any
Affiliate has ever maintained an IMS Plan providing health or life insurance
benefits to former employees (other than as required by Part 6 of Subtitle B
of Title I of ERISA). Except as indicated in Exhibit 2.21, no IMS Plan which
was subject to ERISA has been terminated; no proceedings to terminate any
such IMS Plan have been instituted within the meaning of Subtitle C of Title
IV of ERISA; and no reportable event within the meaning of Section 4043 of
said Subtitle C has occurred with respect to any such IMS Plan, and no
liability to the Pension Benefit Guaranty Corporation has been incurred.
With respect to all the IMS Plans, IMS and every Affiliate are in material
compliance with all requirements prescribed by all statutes, regulations,
orders or rules currently in effect, and have in all material respects
performed all obligations required to be performed by them. Neither IMS nor
any Affiliate, nor to Sellers' Knowledge any of its or their directors,
officers, employees or agents, nor any trustee or administrator of any trust
created under the IMS Plans, has engaged in or been a party to any
"prohibited transaction" as defined in Section 4975 of the Code and Section
406 of ERISA which could subject IMS or CACI or their Subsidiaries,
affiliates, directors or employees or the IMS Plans or the trusts relating
thereto or any party dealing with any of the IMS Plans or trusts to any Tax
or penalty on "prohibited transactions" imposed by Section 4975 of the Code.
Neither the IMS Plans nor the trusts created thereunder have incurred any
"accumulated funding deficiency," as such term is defined in Section 412 of
the Code and regulations issued thereunder, whether or not waived.
Each IMS Plan intended to qualify under Section 401(a) of the Code has been
determined by the Internal Revenue Service to so qualify, and the trusts
created thereunder have been determined to be exempt from Tax under Section
501(a) of the Code; copies of all determination letters have been delivered
to CACI and CASub; and to Sellers' Knowledge nothing has occurred since the
date of such determination letters which might cause the loss of such
qualification or exemption. With respect to each IMS Plan that is a "defined
benefit plan" as defined in Section 3(35) of ERISA, the present value of the
actuarial accrued liability, determined on a plan termination basis, does not
exceed the fair market value of the assets held under such IMS Plan, and
there is no unpaid contribution for any IMS Plan year ended prior to the
Closing as required under Section 412 of the Code. With respect to each IMS
Plan which is a qualified profit sharing or stock bonus plan, all employer
contributions accrued for plan years ending prior to the Closing under the
IMS Plan terms and applicable law have been made.
To Sellers' Knowledge, there is no Action threatened or pending or that can
reasonably be expected to be asserted with respect to any of the IMS Plans or
any prior plan maintained by IMS, and there are no outstanding written
requests, other than routine requests for information concerning such IMS
Plans, by participants, beneficiaries or any government agency.
2.22 Employment-Related Matters. To Sellers' Knowledge, IMS is in
compliance in all material respects with all applicable laws respecting
employment, consulting, employment practices, wages, hours, and terms and
conditions of employment. IMS is not a party to any collective bargaining
agreement or other contract or agreement with any labor organization or other
representative of any employees of IMS. There is no labor strike, dispute,
slowdown, work stoppage, lockout or other labor controversy in effect or
pending or to Sellers' Knowledge threatened against or otherwise affecting
IMS. IMS has not experienced any labor controversy within the past three
years. No labor representation question exists or to Sellers' Knowledge has
been raised respecting any of IMS's employees. IMS has not closed any plant
or facility, or effectuated any layoffs of employees or implemented any early
retirement, separation or window program at any time from or after October 1,
1992 nor has IMS planned or announced any action or program for the future
with respect to which IMS has or may have any material liability. IMS is in
compliance in all material respects with its obligations pursuant to the
Worker Adjustment and Retraining Notification Act of 1988, and all other
notification and bargaining obligations arising under any collective
bargaining agreement or statute relating to employment; provided, however,
that nothing in this Section 2.22 shall be construed as any representation or
warranty relating to the Code or ERISA.
2.23 Environmental.
2.23.1 To Sellers' Knowledge, IMS is in compliance in all material
respects with all applicable Environmental Laws. IMS has not received any
communication (written or oral), whether from a governmental authority,
employee, or any other person that alleges that IMS is not in compliance with
such laws. To Sellers' Knowledge, all material Permits and other
governmental authorizations currently held by IMS pursuant to the
Environmental Laws are in full force and effect and no other material Permits
are required by IMS.
2.23.2 To Sellers' Knowledge, there is no Environmental Claim pending
or threatened against or involving IMS or against any person or entity whose
liability for any Environmental Claim IMS has or may have retained or assumed
either contractually or by operation of law.
2.23.3 To Sellers' Knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, threatened release, emission, discharge or
disposal of any Material of Environmental Concern, that could form the basis
of any Environmental Claim against IMS or against any person or entity whose
liability for any Environmental Claim IMS may have retained or assumed either
contractually or by operation of law.
2.23.4 Without in any way limiting the generality of the foregoing, to
Sellers' Knowledge, (a) no polychlorinated biphenyls are or have been used or
stored at any of the Leased Properties, and (b) no friable asbestos or
asbestos-containing material is present at any of the Leased Properties.
2.24 Absence of Certain Payments. Neither IMS nor any director, officer,
agent, employee or other person associated with or acting on behalf of IMS
has used any funds of IMS for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity, or made any direct or
indirect unlawful payments to government officials or employees from
corporate funds, or established or maintained any unlawful or unrecorded
funds, or violated any provisions of the Foreign Corrupt Practices Act of
1977 or any rules or regulations promulgated thereunder.
2.25 Interests of Officers. Except as described in Exhibit 2.25, none of
the officers or directors of IMS has any interest in any property, real or
personal, tangible or intangible, including Intellectual Property used in the
conduct of the business of IMS, except for rights under existing employee
benefit plans.
2.26 No Brokers or Finders. Except as described in Exhibit 2.26, no
broker or finder has acted for IMS in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder is entitled to any
brokerage or finder's fee or other commissions in respect of such
transactions based upon agreements, arrangements or understandings made by or
on behalf of IMS.
2.27 No Pending Actions. There is no Action pending or threatened to
which IMS is a party or of which IMS is aware which questions or challenges
the validity of this Agreement or any action taken or to be taken by IMS
pursuant to this Agreement or in connection with the transactions
contemplated hereby.
2.28 No Misrepresentations. No representation or warranty by IMS in this
Agreement, nor any statement, certificate, list, exhibit or schedule
furnished or to be furnished by or on behalf of IMS pursuant to this
Agreement nor any document or certificate delivered to CACI or CASub pursuant
to this Agreement, when taken together with the foregoing, contains or shall
contain any untrue statement of material fact or omits or shall omit to state
a material fact necessary to make the statements not misleading.
2.29 No Implied Representations. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, IMS IS BEING MERGED ON AN "AS IS, WHERE IS" BASIS, WITH ALL
FAULTS, AND EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF IMS AND THE
PRINCIPAL SHAREHOLDERS EXPRESSLY CONTAINED HEREIN, IMS DISCLAIMS ALL
WARRANTIES, EXPRESSED, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.
Article 3
REPRESENTATIONS AND WARRANTIES OF CACI, CASUB, AND ACQUISITION
CACI, CASub, and Acquisition represent and warrant to IMS as follows:
3.1 Corporate Status of CACI, CASub, and Acquisition. CACI, CASub, and
Acquisition are corporations duly organized, validly existing and in good
standing under the laws of Delaware. CACI, CASub, and Acquisition are duly
qualified to do business as foreign corporations and are in good standing in
all jurisdictions in which the character of the properties owned, leased or
operated by each or the nature of the business transacted by each makes such
qualification necessary, except where failure to be so qualified would not
have a materially adverse effect on the business, operations, assets,
financial condition, results of operations, properties or prospects of CACI
and its Subsidiaries considered as a whole.
3.2 Authority for Agreement. CACI, CASub, and Acquisition have the full
corporate power to execute, deliver, and perform this Agreement, to
consummate the transactions contemplated hereby and to carry out their
obligations hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of CACI, CASub,
and Acquisition and by CASub in its capacity as sole shareholder of
Acquisition. No other corporate proceedings on the part of CACI or CASub
including, without limitation, stockholder approval, are necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
3.3 No Default or Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
do not and will not (a) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-Laws or other
organizational documents of CACI, CASub, or Acquisition, or (b) with or
without the giving of notice or the lapse of time, or both, conflict with, or
result in any violation or breach of or constitute a default under, or
require the consent of any other party to, or result in any right to
accelerate or the creation of any lien, charge or encumbrance pursuant to, or
right of termination under, any provision of any note, mortgage, indenture,
lease, agreement or other instrument, permit, concession, grant, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
to which CACI, CASub, or Acquisition is a party or by which either of them or
any of their assets or properties may be bound or which is applicable to
either of them or any of their assets or their properties. Other than in
connection with or in compliance with the provisions of the Securities Act,
the Exchange Act, the HSR Act and applicable state securities laws, no
authorization, consent, approval, license, order, or permit of, or
declaration of, or filing with or notice to, any governmental body or
authority or any other person or entity is necessary for the execution,
delivery and performance of this Agreement by CACI and CASub or the
consummation by CACI and CASub of the transactions contemplated hereby.
3.4 Responsible Prospective Contractor. Each of CACI and CASub is a
"responsible prospective contractor," as defined in 48 C.F.R. Part 9, Section
9.101 and Section 9.104, and other applicable sections of the Federal
Acquisition Regulation.
3.5 No Brokers or Finders. Except as described on Exhibit 3.5, no broker
or finder has acted for CACI, CASub, or Acquisition in connection with this
Agreement or the transactions contemplated hereby, and no broker or finder is
entitled to any brokerage or finder's fee or other commissions in respect of
such transactions based upon agreements, arrangements or understandings made
by or on behalf of CACI, CASub, or Acquisition.
3.6 No Pending Actions. There is no Action pending or threatened to
which CACI, CASub, or Acquisition is a party or of which CACI, CASub, or
Acquisition is aware which questions or challenges the validity of this
Agreement or any action taken or to be taken by CACI, CASub, or Acquisition
pursuant to this Agreement or in connection with the transactions
contemplated hereby.
3.7 No Misrepresentations. No representation or warranty by CACI, CASub,
or Acquisition in this Agreement, nor any statement, certificate, list,
exhibit or schedule furnished or to be furnished by or on behalf of CACI,
CASub, or Acquisition pursuant to this Agreement nor any document or
certificate delivered to IMS pursuant to this Agreement, when taken together
with the foregoing, contains or shall contain any untrue statement of
material fact or omits or shall omit to state a material fact necessary to
make the statements not misleading.
Article 4
COVENANTS
It is further agreed as follows:
4.1 Conduct of Business. Between the date of this Agreement and the
Effective Time, except as contemplated by this Agreement or as otherwise
consented to by CACI and CASub in writing, IMS shall keep and observe the
following covenants:
4.1.1 IMS shall conduct its operations and pay its accounts payable
according to its ordinary and usual course of business consistent with prior
practice and shall use its best efforts to preserve intact its business
organization, facilities, good will, assets, prospects, and licenses, permits
and certificates from federal, state and local authorities, retain its
present officers, and to maintain satisfactory relationships with businesses,
suppliers, distributors, customers and others having business relationships
with it, and further:
4.1.1.1 shall maintain in full force and effect all contracts
of insurance and indemnity specified in any Exhibit;
4.1.1.2 shall repair and maintain all of its tangible
properties and assets in accordance with its usual and ordinary repair and
maintenance
standards;
4.1.1.3 shall promptly satisfy in all material respects all
its obligations under the Material Contracts and with respect to other
current liabilities;
4.1.1.4 shall confer on a regular and frequent basis with
representatives of CACI and CASub to report material operational matters and
the general status of ongoing operations; and
4.1.1.5 shall notify CACI and CASub of any material emergency
or other material change in its business, operations, assets, financial
condition, results of operations, properties or prospects and of any
governmen tal complaints, investigations, inquiries or hearings (or
communications indicating that the same may be contemplated).
4.1.2 IMS shall not, without the prior written consent of CACI and
CASub:
4.1.2.1 amend its Certificate of Incorporation or By-Laws;
4.1.2.2 issue, sell, purchase, redeem or grant any options,
warrants, conversion or other rights to purchase or otherwise acquire any
shares of its capital stock or other security;
4.1.2.3 authorize, declare, set aside or pay any dividend or
make any other distribution with respect to any share of its capital stock
or other security;
4.1.2.4 borrow or agree to borrow any funds or incur, or
assume or become subject to, whether directly or by way of guaranty or
otherwise, any obligation or liability (absolute or contingent), except
obligations incurred in the ordinary course of business and consistent with
prior practice;
4.1.2.5 pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with prior practice of obligations reflected on or reserved
against in the Unaudited Balance Sheet or incurred since date thereof in the
ordinary course of business and consistent with prior practice or in
connection with this transaction;
4.1.2.6 grant or make any general increase (including any
increase pursuant to any bonus, pension, insurance, profit-sharing or other
plan or commitment) in the compensation of officers, managers, employees,
agents, consultants or other personnel or any increase in the compensation or
benefits payable or to become payable to any officer, manager, employee,
agent, consultant or other personnel;
4.1.2.7 except as required by this Agreement or by applicable
law, amend or adopt in any material respect, any agreement or plan (including
severance arrangements) for the benefit of the employees of IMS;
4.1.2.8 make any capital expenditure or commitment for
addition to IMS's assets, property, plant or equipment not in the ordinary
course of business and consistent with prior practice or in any event in
excess of an aggregate of Five Thousand Dollars ($5,000);
4.1.2.9 sell, transfer, dispose, mortgage, pledge, or
otherwise encumber or agree to sell, transfer, dispose, mortgage, pledge or
otherwise encumber any of its properties or assets, incur any Prepaid
Expenses or enter into any Material Contracts, except in the ordinary course
of business and consistent with prior practice;
4.1.2.10 amend, modify or cancel any Material Contract, other
than amendments, modifications and cancellations that individually and in the
aggregate will not have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties,
or prospects of IMS, CACI or CASub;
4.1.2.11 enter into an agreement, contract, or commitment that,
if entered into prior to the date hereof, would be required to be listed on a
Exhibit delivered to CACI or CASub pursuant to the terms of this Agreement;
4.1.2.12 amend, terminate or change in any material respect
any lease, contract, undertaking or other commitment listed in any Exhibit or
do any act or omit to do any act, or permit an act or omission to act, that
will cause a breach of any such lease, contract, undertaking or other
commitment;
4.1.2.13 transfer or grant any rights under, or enter into any
settlement regarding the breach or infringement of, any United States or
foreign Intellectual Property or modify any existing rights with respect
thereto other than in the ordinary course of business and consistent with
prior practice;
4.1.2.14 cancel or compromise any debts, or waive, release,
transfer or permit to lapse any claims or rights of substantial value, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
(real, personal or mixed, tangible or intangible), except in the ordinary
course of business and consistent with prior practice;
4.1.2.15 make any change in any method of accounting or
accounting practice;
4.1.2.16 enter any transaction which, in CACI's or CASub's
reasonable judgment, may have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS, whether or not such transaction is in the ordinary course
of business and consistent with prior practice; or
4.1.2.17 agree in writing or otherwise to take any of the
foregoing actions or any action that would make any representation or
warranty in this Agreement materially untrue or incorrect.
4.1.3 IMS will promptly advise CACI and CASub in writing of the
commencement or threat of any Action against Seller or IMS, whether covered
by insurance or not, (a) when the amount claimed exceeds One Thousand Dollars
($1,000) in any one case or Ten Thousand Dollars ($10,000) in the aggregate,
or (b) when such Action or the threat thereof relates in any way to this
Agreement or to any of the transactions contemplated hereby.
4.2 Payment of Taxes. IMS shall pay, promptly and when due, whether at
the original time fixed therefor or pursuant to any extension of time to pay,
any and all Taxes, fees and other charges which shall become due or shall
have accrued on account of the operation and conduct of the business of IMS
on or before the Closing Date; provided, however, that IMS shall not be
required to pay any such Tax, fee or charge if they are contesting the
validity thereof through proper proceedings, in good faith and with
reasonable diligence, provided that in any event IMS shall promptly pay any
such Tax, fee or charge if a failure to pay would have a material adverse
effect on the business, operations, assets, financial condition, results of
operations, properties or prospects of IMS, CACI or CASub or result in any
lien on any of the properties or assets of IMS, CACI or CASub.
4.3 Filings and Submissions. The parties hereto shall cooperate with
each other and promptly prepare and make all filings and notices required
under the Securities Act, the Exchange Act, the HSR Act, any other federal or
state securities laws and any other applicable laws and regulations relating
to the sale of the Shares or the other transactions contemplated hereby. The
parties hereto agree to cooperate and promptly respond to any inquiries or
investigations initiated by the Federal Trade Commission, the Department of
Justice or any other governmental entity or authority in connection with such
filings and notices.
4.4 Release of Information. Except as required by law, no party to this
Agreement shall announce or disclose to any non-party (other than the
directors, officers, employees, attorneys, accountants, advisors or other
representatives or agents who have a "need to know" in order to consummate
this Agreement and the transactions contemplated hereby) the terms or
provisions of the Letter of Intent or this Agreement without the prior
consent of the other parties hereto (which consent shall not be unreasonably
withheld). Each party shall consult with the other parties before issuing
any press release or other public announcement referring to this Agreement,
the Letter of Intent or the terms and conditions of the transactions
contemplated hereby or thereby.
4.5 Confidentiality. Except as required by law, each party and its
representatives will hold in strict confidence all documents and information
concerning the other party furnished in connection with the transactions
contemplated by this Agreement (except to the extent that such information
can be shown to have been (a) in the public domain through no action by the
party in violation of this Section 4.5, (b) in the party's possession at the
time of disclosure and not acquired by the party directly or indirectly from
the other party on a confidential basis or (c) disclosed by the other party
to others on an unrestricted, non-confidential basis) and will not, without
the consent of the other party, (i) release or disclose any such documents or
information to any other person or (ii) use or permit others to use such
documents or informa tion except in connection with this Agreement and the
transactions contemplated hereby. In the event of the termination of this
Agreement, each party shall return to the other parties all documents, work
papers and other material so obtained by it, or on its behalf, and all
copies, digests, abstracts or other materials relating thereto, whether so
obtained before or after the execution hereof, and will comply with the terms
of the confidentiality provisions set forth herein.
4.6 Further Assurances.
4.6.1 Generally. Subject to terms and conditions herein provided
and to the fiduciary duties of the Board of Directors and officers of any
party, each of the parties agrees to use his or its best reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective this Agreement and the other transactions
contemplated hereby. In case at any time any further action, including,
without limitation, the obtaining of waivers and consents under any
agreements, material contracts or leases and the execution and delivery of
any licenses or sublicenses for any software, is necessary, proper or
advisable to carry out the purposes of this Agreement, the proper officers
and directors of each corporate party to this Agreement are hereby directed
and authorized to use their reasonable best efforts to effectuate all
required action.
4.6.2 Novation of the Material Contracts. Each party agrees to use
its best reasonable efforts to effect the novation of each Material Contract
that may require novation under its terms or under applicable laws or
regulations, and further agrees to provide all documentation necessary to
effect each such novation, including, without limitation, all instruments,
certifications, requests, legal opinions, audited financial statements, and
other documents required by Part 42 of the Federal Acquisition Regulation to
effect a novation of any contract with the Government. In particular and
without limiting the generality of the foregoing, IMS shall continue to
communicate with responsible officers of the Government and/or any Prime
Contractor from time to time as may be appropriate and permissible, to
request speedy action on any and all requests for consent to novation.
4.7 Defense of Claims and Litigation. At all times from and after the
Closing, the Principal Shareholders shall consult, confer and cooperate in
good faith on a reasonable basis with CACI, CASub and IMS (including, without
limitation, the making available of witnesses and cooperation in discovery
proceedings) in the conduct or defense of any Action related to the business
of IMS before the Effective Time, or any matter which, directly or
indirectly, arises therefrom, whether known at the Closing or arising
thereafter, against CACI, CASub IMS or any of their affiliates by any third
party. To the extent the indemnification provisions of this Agreement or of
any other document delivered in connection with the transactions contemplated
hereby apply to any such conduct or defense, they shall control as to the
payment of costs and expenses.
4.8 Indemnification.
4.8.1 Indemnification of CACI, CASub and IMS. Subject to the
limitations set forth in Sections 4.8.3 and 4.8.4, the Principal Shareholders
shall indemnify and hold harmless CACI, CASub and IMS and their respective
successors by merger or other operation of law (the "Successors"), directors,
officers and assigns from and against all losses, liabilities, claims,
damages, costs or expenses (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and disbursements)
suffered, incurred or paid:
4.8.1.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of the
Principal Shareholders and IMS in this Agreement or in any other instrument
or document delivered to CACI, CASub, or Acquisition pursuant to this
Agreement had been (with respect to representations and warranties) true and
had been (with respect to covenants and agreements) fully performed and
fulfilled;
4.8.1.2 as a result of any Action arising out of or relating
to the conduct of the business of IMS before the Closing; and
4.8.1.3 as a result of any Action arising out of or relating
to the failure of the Principal Shareholders to pay, promptly and when due,
any Tax, fee or other charge which shall become due or shall have accrued on
account of the conversion of the Shares owned by any of the Principal
Shareholders, or any other Tax, fee or charge that any of the Principal
Shareholders is obligated to pay hereunder on account of the Merger or the
other transactions contemplated hereby.
Notwithstanding anything herein to the contrary, if the Principal
Shareholders shall be required to indemnify CACI, CASub, IMS or any of their
Subsidiaries or respective directors, officers, Successors or permitted
assigns with respect to the same item of damage and amount, the satisfaction
of such indemnity to one of such indemnitees shall discharge the Principal
Shareholders' obligations to the others to the extent of the amount paid.
4.8.2 Indemnification of the Principal Shareholders. Subject to the
limitations set forth in Sections 4.8.3 and 4.8.4, CACI, CASub and IMS shall
indemnify and hold harmless the Principal Shareholders and their heirs,
Successors and assigns from and against all losses, liabilities, claims,
damages, costs or expenses (including, without limitation, reasonable
expenses of investigation and reasonable attorney's fees and disbursements)
suffered, incurred or paid:
4.8.2.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of CACI and
CASub in this Agreement or in any other instrument or document delivered to
the Principal Shareholders pursuant to this Agreement had been (with respect
to representations and warranties) true and had been (with respect to
covenants and agreements) fully performed and fulfilled; and
4.8.2.2 as a result of any Action arising out of or relating
to the conduct of the business of IMS after the Closing.
Notwithstanding anything herein to the contrary, if CACI, CASub or
IMS shall be required to indemnify the Principal Shareholders or any of their
respective heirs, Successors or assigns with respect to the same item of
damage and amount, the satisfaction of such indemnity to one of such
indemnitees shall discharge the obligations of CACI, CASub and IMS to the
others to the extent of the amount paid.
4.8.3 Third Party Claims. The obligations and liabilities of a
party for which indemnification is sought (an "Indemnifying Party") by a
person or entity seeking indemnification (an "Indemnified Party") under this
Section 4.8 with respect to claims resulting from the assertion of liability
by third parties shall be subject to the following conditions:
4.8.3.1 The Indemnified Party shall give written notice to the
Indemnifying Party of the nature of the assertion of liability by a third
party and the amount thereof promptly after the Indemnified Party learns of
such assertion. The foregoing notwithstanding, failure of an Indemnified
Party to comply with its obligations under this Section 4.8.3.1 shall affect
its right to indemnity only to the extent such failure shall have a material
adverse effect on the Indemnifying Party's ability to defend.
4.8.3.2 If any Action is brought by a third party against an
Indemnified Party, the Action shall be defended by the Indemnifying Party and
such defense shall include all appeals or reviews which counsel for the
Indemnifying Party shall deem appropriate. Until the Indemnifying Party
shall have assumed the defense of any such Action, or if the Indemnified
Party shall have reasonably concluded that there are likely to be defenses
available to the Indemnified Party that are different from or in addition to
those available to the Indemnifying Party (in which case the Indemnifying
Party shall not be entitled to assume the defense of such Action), all legal
or other expenses reasonably incurred by the Indemnified Party shall be borne
by the Indemnifying Party.
4.8.3.3 In any Action initiated by a third party and defended
by the Indemnifying Party, subject to the confidentiality provisions of this
Agreement, (a) the Indemnified Party shall have the right to be represented
by advisory counsel and accountants, at its own expense, (b) the Indemnifying
Party shall keep the Indemnified Party fully informed as to the status of
such Action at all stages thereof, whether or not the Indemnified Party is
represented by its own counsel, (c) the Indemnified Party shall make
available to the Indemnifying Party, and its attorneys and accountants, all
books and records of the Indemnified Party relating to such Action and (d)
the parties shall render to each other such assistance as may be reasonably
required for the proper and adequate defense of such Action.
4.8.3.4 In any Action initiated by a third party and defended
by the Indemnifying Party, the Indemnifying Party shall not make any
settlement of any claim without the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld or delayed. Without
limiting the generality of the foregoing, it shall not be deemed unreasonable
to withhold consent to a settlement involving injunctive or other equitable
relief against the Indemnified Party or its assets, employees or business.
4.8.4 Minimum Liability. The Principal Shareholders shall not be
liable under Section 4.8.1, and CACI, CASub and IMS shall not be liable under
Section 4.8.2, unless and until the aggregate amount of liability under such
Section shall exceed $25,000, in which case the Indemnifying Party shall make
indemnification thereunder for the aggregate amount of such liability,
including, without limitation, such $25,000.
4.8.5 Limitation of the Principal Shareholders' Liability. The
obligation of any Principal Shareholder to indemnify pursuant to Section
4.8.1 (i) shall not in any event exceed in the aggregate an amount equal to
the aggregate amount paid or to be paid to that Principal Shareholder on
account of his share of the Merger Consideration and pursuant to the
Consulting Agreement to which he is a party, and (ii) shall be the exclusive
remedy for any breach of this Agreement by that Principal Shareholder.
4.9 Indemnification of IMS Directors and Officers. CACI and CASUb agree
that, until the third anniversary of the Closing, they will cause IMS to
maintain indemnification provisions in its Certificate of Incorporation or
By-Laws or both at least as favorable as those in effect at the date of this
Agreement for the benefit of those persons who are officers and directors of
IMS immediately before the Closing.
4.10 Annuity. CACI and CASub shall purchase one or more annuity
contracts sufficient to fund the obligations of IMS to pay deferred
compensation to the Principal Stockholders and to Mr. Howell Mei (together,
the "Beneficiaries") under the IMS Deferred Compensation Plan, as amended by
an Amendment dated December 21, 1995, and CACI and CASub shall consult with
the Beneficiaries concerning their preferences with respect to the timing and
amounts of payment under such Deferred Compensation Plan; provided, however,
that in no event shall CACI and CASub be required to expend more than Seven
Hundred Thousand Dollars ($700,000) (including, without limitation,
reasonable expenses and reasonable attorneys' fees and disbursements) to
satisfy its obligations under this Section 4.10.
Article 5
CONDITIONS PRECEDENT
5.1 Conditions to Obligations of Each Party. The obligations of CACI,
CASub, Acquisition, the Principal Shareholders and IMS to effect the Merger
and to consummate the other transactions contemplated hereby shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions and CACI, CASub, Acquisition, the Principal Shareholders and IMS
shall exert their best efforts to cause each such condition to be so
fulfilled:
5.1.1 No injunction or restraining or other order issued by a court
of competent jurisdiction that prohibits or materially restricts the
consummation of the Merger or any other material transaction contemplated by
this Agreement shall be in effect (each party agreeing to use its best
efforts to have any such injunction or other order lifted), and no Action
shall have been commenced or threatened seeking any injunction or restraining
or other order that seeks to prohibit, restrain, invalidate or set aside
consummation of the Merger or any other material transaction contemplated
hereby.
5.1.2 There shall not have been any action taken, and no statute,
rule or regulation shall have been enacted, by any state or federal
government agency since the date of this Agreement that would prohibit or
materially restrict the Merger or any other material transaction contemplated
hereby.
5.1.3 All filings with and notifications to, and all approvals and
authorizations of, third parties (including, without limitation, governmental
entities and authorities) required for the consummation of the Merger and the
other material transactions contemplated hereby shall have been made or
obtained and all such approvals and authorizations obtained shall be
effective and shall not have been suspended, revoked or stayed by action of
any governmental entity or authority.
5.1.4. Any waiting period (and any extension thereof) applicable to
the sale of the Shares under the HSR Act shall have expired or been
terminated.
5.2 Conditions to Obligations of CACI, CASub, and Acquisition. The
obligations of CACI, CASub, and Acquisition to consummate the Merger and the
other transactions contemplated hereby shall be subject to the fulfillment at
or prior to the Effective Time of the following additional conditions and the
Principal Shareholders and IMS shall exert their best efforts to cause each
such condition to be so fulfilled:
5.2.1 Since the date of the Letter of Intent there shall not have
been any adverse Material Change of any nature in the business, operations,
assets, financial condition, results of operations, properties or prospects
of IMS; and IMS shall have delivered to CACI and CASub a certificate to that
effect, dated the Closing Date and signed by the President of IMS.
5.2.2 IMS shall have received, each in form and substance
satisfactory to CACI and CASub, all approvals, authorizations, licenses,
orders, waivers, Permits and other consents under any contract, Material
Contract, plan, lease, instrument, arrangement, license, commitment or other
agreement of IMS that are required (i) to consummate the Merger, (ii) to
permit CACI and CASub to continue to conduct their businesses and the
business of IMS as they are currently conducted or (iii) in connection with
the transactions contemplated hereby; and all filings, registrations,
covenants, approvals, orders, consents and authorizations by or with, and
notifications to, all governmental authorities or regulators, domestic or
foreign, or other Persons by IMS required to consummate the transactions
contemplated by this Agreement shall have been made or received, and shall be
in full force and effect.
5.2.3 CACI, CASub, and Acquisition shall have obtained all covenants,
consents, approvals, authorizations, licenses, orders, waivers and other
Permits and all transfers of Permits that they and their counsel reasonably
deem necessary (i) to consummate the Merger, (ii) to permit CACI and CASub to
continue to conduct their businesses and the business of IMS as they are
currently conducted and (iii) in connection with the transactions
contemplated hereby.
5.2.4 The execution of this Agreement and performance of the
transactions contemplated hereby by appropriate officers of IMS shall have
been authorized by the shareholders and the Board of Directors of IMS in
accordance with applicable corporate law.
5.2.5 Dissenting shareholders' appraisal rights under Delaware law
shall not have been claimed by the holders of more than five per cent (5%) of
the outstanding Common Stock of IMS.
5.2.6 No information obtained by CACI, CASub, or Acquisition
concerning IMS during CACI's and CASub's "due diligence" investigation of IMS
shall have, in the sole judgment of CACI and CASub, adversely affected the
value of this Agreement or the transactions contemplated hereby.
5.2.7 The Principal Shareholders shall have executed and delivered
the Consulting Agreements.
5.2.8 IMS shall have performed in all material respects all of its
covenants set forth herein that are required to be performed at or prior to
the Effective Time; the representations and warranties of IMS contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and as of the Effective Time as if made at the Effective Time,
except for representations and warranties made expressly as of a specified
date (which representations and warranties shall be true and correct in all
material respects as of such date); and IMS shall have delivered to CACI and
CASub a certificate to that effect, dated the Closing Date and signed by one
or more executive officers of IMS.
5.2.9 The lease arrangements for the premises occupied by IMS at 2
Research Place, Rockville, Maryland, shall have been amended to provide
substantially as set forth in paragraph 5.D. of the Letter of Intent.
5.2.10 CACI and CASub shall have received from IMS and from such other
essential parties such affidavits and certificates as CACI and CASub shall
deem necessary to relieve CACI and CASub of any obligation to deduct and
withhold any portion of the Purchase Price pursuant to Code Section 1445.
5.2.11 CACI and CASub shall have received an opinion or opinions of
counsel to IMS in form and substance satisfactory to counsel to CACI and
CASub, dated the Closing Date, to the effect set forth in Exhibit 5.2.11.
5.2.12 CACI and CASub shall have received from IMS all other documents
consistent with the purposes of this Agreement, in form and substance
satisfactory to CACI and CASub and their counsel, as CACI and CASub shall
have reasonably requested (including but not limited to evidence of payment
of any broker's or finder's fee or other expense of the transaction for which
IMS is responsible under this Agreement).
5.2.13 CACI and CASub shall have received on or before the Closing
Date from the Principal Stockholders a guaranty of the payment in full of the
receivables due to IMS in the amount of NT$30,494,000 in connection with the
PFG-II-PHASE-III project with Institute for Information Industry of the
Republic of China of Taiwan in form and substance satisfactory to counsel for
CACI and CASub.
5.3 Conditions to Obligations of IMS and the Principal Shareholders. The
obligation of IMS and the Principal Shareholders to consummate the Merger and
the other transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Effective Time of the following additional
conditions, and CACI, CASub, and Acquisition shall exert their best efforts
to cause each such condition to be so fulfilled:
5.3.1 The shareholders of IMS shall have approved the Merger pursuant
to applicable Delaware law and the Certificate of Incorporation and By- Laws
of IMS.
5.3.2 CACI, CASub, and Acquisition shall have performed in all
material respects all of their covenants set forth herein that are required
to be performed at or prior to the Effective Time; the representations and
warranties of CACI, CASub, and Acquisition contained in this Agreement shall
be true and correct in all material respects as of the date hereof and as of
the Effective Time as if made at the Effective Time, except for
representations and warranties made expressly as of a specified date (which
representations and warranties shall be true and correct in all material
respects as of such date); and CACI and CASub shall have delivered to IMS a
certificate to that effect, dated the Closing Date and signed by the
President or a Vice President of each of CACI and CASub.
5.3.3 IMS shall have received an opinion of counsel to CACI and CASub
in form and substance satisfactory to counsel to IMS, dated the Closing Date,
to the effect set forth in Exhibit 5.3.3.
5.3.4 IMS shall have received from CACI, CASub, and Acquisition all
such other documents consistent with the purposes of this Agreement, in form
and substance satisfactory to IMS and his counsel, as IMS shall have
reasonably requested (including but not limited to evidence of payment of any
broker's or finder's fee or other expense of the transaction for which CACI,
CASub, or Acquisition is responsible under this Agreement).
Article 6
TERMINATION
6.1 Methods of Termination. This Agreement may be terminated, by written
notice promptly given to the other parties hereto, at any time prior to the
Effective Time:
6.1.1 By mutual written consent of the parties hereto.
6.1.2 By either CACI and CASub or IMS by notice to the other, if:
6.1.2.1 any injunction or restraining or other order issued by
a court of competent jurisdiction that prohibits or materially restricts the
consummation of the sale of the Shares or any other material transaction
contemplated by this Agreement shall be in effect, or any Action shall have
been commenced or threatened seeking any injunction or restraining or other
order that seeks to prohibit, restrain, invalidate or set aside consummation
of the sale of the Shares or any other material transaction contemplated by
this Agreement;
6.1.2.2 any action shall have been taken, or any statute, rule
or regulation shall have been enacted, by any state or federal government
agency since the date of this Agreement that would prohibit or materially
restrict the sale of the Shares or any other material transaction
contemplated by this Agreement; or
6.1.2.3 any filings with or notifications to, or any approvals
or authorizations of, third parties (including, without limitation,
governmental entities and authorities) required for the consummation of the
sale of the Shares shall not have been made or obtained or any such approvals
or authorizations obtained shall not be effective or shall have been
suspended, revoked or stayed by action of any governmental entity or
authority.
6.1.3 By CACI and CASub by notice to IMS:
6.1.3.1 if the Merger shall not have occurred on or before
January 15, 1996, unless the absence of the occurrence shall be solely due to
the failure of CACI, CASub, or Acquisition (or their Subsidiaries or
affiliates) to perform in all material respects each of their respective
material obligations under this Agreement required to be performed by it at
or prior to the Effective Time;
6.1.3.2 in the event of a material breach by the Principal
Shareholders or IMS of any representation, warranty, covenant or agreement
contained herein which has not been cured or is not curable by the earlier of
the Effective Time or the tenth day after written notice of that breach was
given to the Principal Shareholders and IMS; or
6.1.3.3 if the Board of Directors of IMS shall have withdrawn
or modified in any material respect its approval of this Agreement or the
transactions contemplated hereby.
6.1.4 By IMS by notice to CACI and CASub:
6.1.4.1 if the Merger shall not have occurred on or before
January 15, 1996, unless the absence of the occurrence shall be solely due to
the failure of the Principal Shareholders or IMS (or the affiliates of
either) to perform in all material respects each of their respective material
obligations under this Agreement required to be performed by it at or prior
to the Effective Time;
6.1.4.2 in the event of a material breach by CACI, CASub, or
Acquisition of any representation, warranty, covenant or agreement contained
herein which has not been cured or is not curable by the earlier of the
Effective Time or the tenth day after written notice of that breach was given
to CACI and CASub; or
6.1.4.3 if the Board of Directors of either CACI, CASub, or
Acquisition shall have withdrawn or modified in any material respect its
approval of this Agreement or the transactions contemplated hereby.
Each notice of breach under Section 6.1.3.2 or 6.1.4.2 and each
notice of termination under this Section 6.1 shall set forth the facts
believed to constitute the basis therefor, all with reasonable specificity in
light of the facts then known.
6.2 Payments on Termination. If this Agreement shall be terminated, any
payments or reimbursements of fees, costs, or expenses of any party shall be
governed by the provisions of paragraphs 8 and 9 of the Letter of Intent.
6.3 Effect of Termination. In the event of termination under Section
6.1, this Agreement shall forthwith become void and there shall be no
liability on the part of CACI, CASub, the Principal Shareholders or IMS,
except that the provisions of this Article 6, Article 7 (other than the
provisions of Section 7.5) and Sections 4.4 and 4.5 shall survive the
termination and continue in effect, provided that the foregoing shall not
relieve any party for liability for damages incurred as a result of any
willful breach of this Agreement or as a result of actual fraud. No party's
refusal to waive fulfillment of any condition precedent to its obligations
under this Agreement shall constitute a breach of its duty under this
Agreement.
Article 7
DEFINITIONS AND MISCELLANEOUS
7.1 Definitions of Certain Terms. As used herein, the following terms
shall have the following meanings:
Acquisition: as defined in the Preamble hereof.
Action: any suit, claim, action, litigation, arbitration, dispute,
investigation, inquiry, review, or proceeding.
Affiliate: as defined in Section 2.21 hereof.
Agent: as defined in Section 1.6.1 hereof.
Agreement: as defined in the Preamble hereof.
Audited Balance Sheets: as defined in Section 2.8 hereof.
Audited Financial Statements: as defined in Section 2.8 hereof.
CACI: as defined in the Preamble hereof.
CASub: as defined in the Preamble hereof.
Closing: as defined in Section 1.4.1 hereof.
Closing Date: as defined in Section 1.4.1 hereof.
Code: as defined in Section 2.20.7 hereof.
Effective Time: January 1, 1996 at 12:01 A.M. Eastern standard time.
Environmental Claim: any written notice by any governmental agency
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries, fines
or penalties) arising out of, based on or resulting from (a) the presence, or
release into the environment, of any Material of Environmental Concern at any
location, whether or not owned by IMS or (b) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law.
Environmental Contamination: (a) an occurrence occurring or a condition
existing at or before the Closing if such occurrence or condition was in
violation of any Environmental Law or Permit existing at or before the
Closing and if IMS, CACI, CASub, or Acquisition is specifically required to
take remedial action with respect thereto by a governmental agency or a
negotiated agreement, decree or clean-up plan with a governmental agency,
regardless of when such occurrence or condition is discovered or when such
remedial action is required, (b) any use, disposal or discharge of Materials
of Environmental Concern before the Closing resulting in liability to a third
party, regardless of when such use, disposal or discharge is discovered or
(c) an occurrence occurring or condition existing at or before the Closing if
IMS, CACI, CASub, or Acquisition investigates or takes remedial action with
respect thereto.
Environmental Laws: mean all Federal, state and local laws, rules and
regulations relating to pollution or protection of the environment, or
occupational or human health and safety, including, without limitation, laws,
rules and regulations relating to handling, processing, storage, recycling,
emission, discharge, disposal, treatment, transportation, release or
threatened release of any Material of Environmental Concern or other waste or
material into ambient air, surface water, ground water or land, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. 1801 et seq.), the Federal Water Pollution
Control Act (38 U.S.C. 1251 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the Occupational
Safety and Health Act (29 U.S.C. 651 et seq.), the Emergency Planning and
Community Right to Know Act (42 U.S.C. 11001 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 135 et seq.), and the
Food, Drug and Cosmetic Act (15 U.S.C. 2000 et seq.), in each case as these
laws have been amended or supplemented.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Government: the Federal Government of the United States of America.
HSR Act: as defined in Section 2.4 hereof.
IMS: as defined in the Preamble hereof.
IMS Plans: as defined in Section 2.21 hereof.
Indemnified Party: as defined in Section 4.8.3 hereof.
Indemnifying Party: as defined in Section 4.8.3 hereof.
Initial Consulting Fees: as defined in Section 1.4.3.2 hereof.
Insurance Policies: as defined in Section 2.19 hereof.
Intellectual Property: patents, trademarks, service marks, trade names,
mask works, software, programs, development tools, methodologies,
specifications, processes, know-how, blueprints, drawings, designs, patterns,
copyrights, formulae, inventions, technology, trade secrets, proprietary
information, confidential information and other information and documents,
and the registrations and applications therefor and the goodwill related
thereto.
Knowledge: as defined in Article 2 hereof.
Leased Properties: as defined in Section 2.10.4 hereof.
Leases: as defined in Section 2.10.3 hereof.
Letter of Intent: the letter agreement dated October 25, 1995 by and
between CACI and IMS.
Material Change: as to IMS, a circumstance or circumstances that may
reasonably be expected to cause a net change in the book value of IMS of at
least Two Hundred Thirty Thousand Dollars ($230,000) compared with the book
value at August 25, 1995, exclusive of any change in the book value of
"land", "investment in foreign subsidiary", or "deferred compensation plan"
as carried on the books of IMS at that date.
Material Contracts: as defined in Section 2.13 hereof.
Materials of Environmental Concern: those substances or constituents
which are regulated by, or form the basis of liability under, any
Environmental Law.
Merger Consideration: as defined in Section 1.2 hereof.
Permit: all certificates, consents, permits, licenses, authorizations
and approvals required under or relating to any Environmental Law.
Person: any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or any other entity.
Prime Contractor: with respect to any Material Contract, the
contracting party, other than the Government, to whom IMS may be liable for
performance as a subcontractor.
Principal Shareholders: as defined in the Preamble hereof.
Securities Act: the Securities Act of 1933, as amended.
Shares: as defined in Section 1.1 hereof.
Subsidiary: any corporation, association, or other business entity a
majority (by number of votes) of the shares of capital stock (or other voting
interests) of which is owned by IMS, CACI or their respective Subsidiaries.
Successors: as defined in Section 4.8.1 hereof.
Tax: any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax or other fiscal
charges of any kind whatsoever, including without limitation any interest,
penalty, or addition thereto, whether disputed or not.
Tax Return: any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without
limitation any schedule or attachment thereto, and any amendment thereof.
Unaudited Balance Sheet: as defined in Section 2.8 hereof.
Unaudited Financial Statements: as defined in Section 2.8 hereof.
7.2 Brokerage. Each party shall be solely responsible for payment of any
fee or charge of any broker, finder, financial advisor or intermediary
engaged, employed, or consulted by that party in connection with negotiations
or discussions incident to the execution of this Agreement or any of the
transactions contemplated hereby.
7.3 Amendments and Supplements. This Agreement may be amended or
supplemented by a written instrument signed by CACI, CASub, the Principal
Shareholders and IMS and approved by their respective Boards of Directors.
7.4 Extensions and Waivers. The parties hereto may (a) extend the time
for the performance of any of the obligations or other acts of the parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the covenants or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
such party. No party's refusal to waive fulfillment of any condition
precedent to its obligations under this Agreement shall constitute a breach
of its duty under this Agreement. No party's failure to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or remedy
by such party preclude any other or further exercise thereof or the exercise
of any other right or remedy. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate as a waiver of any
subsequent breach.
7.5 Survival of Representations and Warranties. Notwithstanding any
investigation conducted before or after the Closing and notwithstanding any
knowledge or notice of any fact or circumstance which a party may have as the
result of such investigation or otherwise, each party and its Successors and
assigns shall be entitled to rely upon the representations, warranties and
covenants of the others in this Agreement. Each of the representations,
warranties and covenants contained in this Agreement, made in any document
delivered hereunder or otherwise made in connection with the Closing
hereunder shall survive the Closing until the third anniversary of the
Closing.
7.6 Expenses. Each party shall pay its own expenses, including the fees
of attorneys, accountants, investment bankers, valuation experts and others,
in connection with the transactions contemplated hereby, whether or not they
are completed, except that in the event of a conflict between this Section
7.6 and Section 4.8, the latter Section shall control. The Principal
Shareholders shall be responsible for payment of any and all Taxes arising
out of the conversion of the Shares or the other transactions contemplated
hereby.
7.7 Letter of Intent. The provisions of paragraphs 5.D, 6, 7, 8, 9, and
10 of the Letter of Intent are adopted and continued in effect as if
incorporated in this Agreement. Except as stated in the preceding sentence,
this Agreement supersedes the Letter of Intent and the letter dated October
24, 1995 from IMS to Dr. J.P. London as Chairman of the Board and Chief
Executive Officer of CACI; and this Agreement, together with the Exhibits and
related documents contemplated by this Agreement, constitutes the sole
Agreement among the parties with respect to the subject matter hereof.
7.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without regard for
its principles of conflicts of laws.
7.9 Alternative Dispute Resolution. In the event that any dispute arises
under any provision of this Agreement, the parties agree to make reasonable
efforts to resolve the dispute by negotiation, mediation, or alternative
dispute resolution before any resort to legal remedies; provided, however,
that no party shall be bound by the determination of any mediation or
alternative dispute resolution proceeding without that party's prior written
consent to the proceeding.
7.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand sent via a reputable
nationwide courier service or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice) and shall be
deemed given on the date on which so hand-delivered or on the third business
day following the date on which so mailed or sent:
To CACI:
CACI International Inc
1100 North Glebe Road
Arlington, VA 22201
Attn: Dr. J. P. London, Chairman
With copies to:
Jeffrey P. Elefante, Esq.
Senior Vice President and General Counsel
CACI International Inc
1100 North Glebe Road
Arlington, VA 22201
and
David W. Walker, Esq.
Foley, Hoag & Eliot
One Post Office Square
Boston, MA 02109
To IMS and the Principal Shareholders:
IMS Technologies, Inc.
2 Research Place
Rockville, MD 20850
Attention: Mr. John Yeh
With a copy to:
Mark R. Eaton, Esq.
Michaels, Wishner & Bonner
1140 Connecticut Avenue, N.W.
Suite 900
Washington, DC 20036
7.11 Entire Agreement, Assignability, etc. This Agreement and the
Exhibits and documents delivered at the Closing pursuant to Section 5: (a)
constitute the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof, including, without limitation, the Letter of
Intent, (b) are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder, except as otherwise expressly
provided herein, and (c) shall not be assignable by operation of law or
otherwise. The representations and warranties of the parties shall not be
enlarged or restricted by any statement in any document referred to herein.
This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective legal representatives, Successors and
permitted assigns, and shall inure to the benefit of the Indemnified Parties
and their respective legal representatives, Successors and permitted assigns.
All Exhibits mentioned in this Agreement shall be attached to this Agreement,
and shall form an integral part hereof. All capitalized terms defined in
this Agreement which are used in any Exhibit shall, unless the context
otherwise requires, have the same meaning therein as given herein. The
failure or omission by the Principal Shareholders and IMS, or either of them,
to disclose information required by a particular Exhibit to this Agreement
shall not constitute a breach of this Agreement if the same information is
disclosed on another Exhibit to this Agreement.
7.12 Cumulative Rights and Remedies. Each party acknowledges that money
damages alone will not adequately compensate another party for breach of a
party's obligations under this Agreement and, therefore, agrees that in the
event of the breach or threatened breach of any such obligation, in addition
to all other remedies available, at law, in equity or otherwise, each party
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms of this Agreement. All rights and remedies
under this Agreement are cumulative and are in addition to and not exclusive
of any other rights and remedies provided hereunder, under any other document
delivered as part of a transaction contemplated hereby or otherwise by
agreement or law, at equity or otherwise. Without limiting the generality of
the foregoing, the parties expressly recognize that specific performance is
not any party's sole remedy hereunder.
7.13 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of the
other provisions of this Agreement, each of which shall remain in full force
and effect.
7.14 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same
Agreement.
In Witness Whereof, the parties have duly executed this Agreement as of the
date first above written.
CACI International Inc
[SEAL]
/s/
--------------------------------------
By:
President
CACI, Inc.
[SEAL]
/s/
--------------------------------------
By:
President
IMS Technologies, Inc.
[SEAL]
/s/
--------------------------------------
By:
President
/s/
--------------------------------------
John Yeh
/s/
--------------------------------------
Joseph Yeh
/s/
--------------------------------------
James Yeh
/s/
---------------------------------------
Jeffry Yeh
<PAGE>
Index of Exhibits
Exhibit A
Exhibit 1.3.1
Exhibit 1.3.2
Exhibit 1.7
Exhibit 3.2
Exhibit 2.8
Exhibit 2.9
Exhibit 2.10.1
Exhibit 2.10.2
Exhibit 2.10.3
Exhibit 2.11(a)
Exhibit 2.11(b)
Exhibit 2.13
Exhibit 2.14
Exhibit 2.15
Exhibit 2.18
Exhibit 2.19
Exhibit 2.20
Exhibit 2.21
Exhibit 2.25
Exhibit 2.26
Exhibit 3.5
Exhibit 5.2.11
Exhibit 5.3.3
EXHIBIT 10.7
$50,000,000
REVOLVING CREDIT AGREEMENT
by and among
CACI International Inc
The Subsidiaries of CACI International Inc
Listed on The Signature Pages Hereof
and
The Banking Institutions From Time
To Time a Party Hereto
with
NationsBank, N.A.,
as Agent
Dated as of July 26, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I
---------
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Definitions
Section 1.2 Accounting Terms
Section 1.3 Time Period Computations
ARTICLE II
----------
GENERAL PROVISIONS
Section 2.1 The Revolving Loans
Section 2.2 Revolving Loan Borrowing Procedures
Section 2.3 Standby Letters of Credit
Section 2.4 Money Market Loan Subfacility
Section 2.5 Mandatory Reduction in Revolving Loan Commitment
ARTICLE III
-----------
INTEREST, FEES AND REPAYMENT
Section 3.1 Interest on the Revolving Loans
Section 3.2 Regulatory Changes
Section 3.3 Interest after Due Date
Section 3.4 Payment and Computations
Section 3.5 Payment at Maturity
Section 3.6 Prepayments; Certain Early Repayments
Section 3.7 Unused Portion Fee, Agent Fee and L/C Fee
Section 3.8 LIBOR Conversion
Section 3.9 Breakage, etc.
ARTICLE IV
----------
CONDITIONS PRECEDENT
Section 4.1 Conditions Precedent to Effective Date
Section 4.2 Further Conditions Precedent to Loans and Standby Letters
of Credit
ARTICLE V
---------
REPRESENTATIONS
Section 5.1 Existence, Power and Authority
Section 5.2 Authorization; Enforceable Obligations
Section 5.3 No Legal Bar
Section 5.4 Consents
Section 5.5 Litigation
Section 5.6 No Default
Section 5.7 Financial Condition
Section 5.8 Use of Proceeds
Section 5.9 Borrower Not an Investment Company
Section 5.10 Taxes
Section 5.11 Environmental Matters
Section 5.12 Subsidiaries
ARTICLE VI
----------
COVENANTS
Section 6.1 Affirmative Covenants
Section 6.2 Negative Covenants
ARTICLE VII
-----------
EVENTS OF DEFAULT
Section 7.1 Events of Default
ARTICLE VIII
------------
THE AGENT
Section 8.1 Appointment of Agent
Section 8.2 Nature of Duties; Non-Reliance on Agent and other Banks
Section 8.3 Rights, Exculpation, Etc.
Section 8.4 Reliance; Notice of Default
Section 8.5 Indemnification
Section 8.6 The Agent Individually
Section 8.7 Successor Agent; Resignation of Agent
Section 8.8 Certain Matters Requiring the Consent of all Banks
Section 8.9 Defaulting Banks Vote Not Counted
ARTICLE IX
----------
MISCELLANEOUS
Section 9.1 Amendments and Waivers; Cumulative Remedies
Section 9.2 Survival of Representations and Warranties
Section 9.3 Supervening Illegality
Section 9.4 No Reduction in Payments
Section 9.5 Stamp Taxes
Section 9.6 Notices
Section 9.7 Governing Law
Section 9.8 Successors and Assigns; Participations; Assignments
Section 9.9 Affirmative Rate of Interest Permitted by Law
Section 9.10 Costs and Expenses; Indemnification
Section 9.11 Set-Off; Suspension of Paym Performance
Section 9.12 Judicial Proceedings; Waiver of Jury Trial
Section 9.13 Limitation of Liability
Section 9.14 Further Acts and Assurances
Section 9.15 No Fiduciary Relationship
Section 9.16 Severability
Section 9.17 Counterparts
Section 9.18 Headings, Bold Type and Table of Contents
<PAGE>
SCHEDULES
---------
Schedule I Bank Commitments
Schedule 5.5 Litigation
Schedule 5.6 Defaults
Schedule 5.12 Foreign Subsidiaries
EXHIBITS
--------
Exhibit A Form of Revolving Note
Exhibit B Form of Money Market Note
Exhibit C Form of Pledge Agreement
Exhibit D Form of Backlog Report
<PAGE>
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of July 26, 1996 (this
"Agreement"), is by and among (i) CACI INTERNATIONAL INC, a Delaware
corporation (the "Representative Borrower"), (ii) THE SUBSIDIARIES OF THE
REPRESENTATIVE BORROWER LISTED ON THE SIGNATURE PAGES HEREOF (each such
subsidiary and the Representative Borrower, together with their respective
permitted successors and assigns, a "Borrower" and, collectively, the
"Borrowers"), (iii) THE BANKING INSTITUTIONS FROM TIME TO TIME A PARTY TO
THIS AGREEMENT (each, a "Bank" and, collectively, the "Banks") and (iv)
NATIONSBANK, N.A., a national banking association and in its separate
capacity as agent for the Banks hereunder (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers have requested the Banks to make available to the
Borrowers a revolving line of credit, in an aggregate principal amount not in
excess of $50,000,000, to enable them to finance stock or asset acquisitions,
the re-purchase of capital stock of the Representative Borrower and the
Borrowers' general corporate purposes and working capital requirements, in
each case subject to the limitations provided herein; and
WHEREAS, the Banks are willing to extend such revolving line of credit to the
Borrowers, and the Agent is willing to act as "Agent", upon the terms and
subject to the conditions and provisions set forth herein; and
WHEREAS, as a condition precedent to the making of any Loan or the issuance
of any Standby Letter of Credit as contemplated herein, the Pledgors shall
have executed and delivered to the Agent, for the benefit of the Banks, the
Pledge Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Borrowers, the Banks and the Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms shall have the
meanings indicated (such meanings to be, when appropriate, equally applicable
to both the singular and plural forms of the terms defined):
"Accumulated Funding Deficiency" has the meaning ascribed to that term in
ERISA Section 302.
"Acquisition Consideration" has the meaning specified in Section 6.2(e)(i) of
this Agreement.
"Administrative Fee" has the meaning specified in Section 3.7(b) of this
Agreement.
"Affected Advance" has the meaning specified in Section 3.8(e) of this
Agreement.
"Affiliate" means, with respect to a Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, or is controlled
by, or is under common control with, such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" or "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to
vote 10% or more of the securities having voting power for the election of
directors of such Person or otherwise to direct or cause the direction of the
management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise.
"Agent" has the meaning specified in the preamble of this Agreement and shall
include any successor Agent appointed pursuant to Section 8.7 hereof.
"Agent Lending Office" or "Lending Office of the Agent" means the Agent's
offices at NationsBank, N.A., 8300 Greensboro Drive, Fifth Floor, McLean,
Virginia 22102, or such other office in the United States of America of
Agent as it may from time to time designate to the Representative Borrower or
the Banks by written notice.
"Agreement" shall have the meaning specified in the preamble hereof.
"Applicable L/C Margin" means, for any period, in the event the Senior Funded
Debt to EBITDA ratio calculated pursuant to Section 6.1(e) hereof is (a) less
than or equal to 1.00 to 1.00, then 0.80%, (b) greater than 1.00 to 1.00 but
less than or equal to 1.50 to 1.00, then 0.90%, and (c) greater than 1.50 to
1.00, then 1.00%.
"Applicable LIBOR Rate" means, for any period, in the event the Senior Funded
Debt to EBITDA ratio calculated pursuant to Section 6.1(e) hereof is (a) less
than or equal to 1.00 to 1.00, LIBOR plus 0.80%, (b) greater than 1.00 to
1.00 but less than or equal to 1.50 to 1.00, LIBOR plus 0.90%, and (c)
greater than 1.50 to 1.00, LIBOR plus 1.00%.
"Applicable Money Market Rate" means, for any period, in the event the Senior
Funded Debt to EBITDA ratio calculated pursuant to Section 6.1(e) hereof is
(a) less than or equal to 1.00 to 1.00, the Federal Funds Rate plus 1.10%,
(b) greater than 1.00 to 1.00 but less than or equal to 1.50 to 1.00, the
Federal Funds Rate plus 1.20%, and (c) greater than 1.50 to 1.00, the Federal
Funds Rate plus 1.30% (it being understood and agreed that any change in the
Applicable Money Market Rate due to a change in the Senior Funded Debt to
EBITDA ratio shall take effect on the first day of the month after the
quarterly financial statements required to be delivered pursuant to Section
6.1(b) shall have been delivered).
"Applicable Prime Rate" means, for any period, in the event the Senior Funded
Debt to EBITDA ratio calculated pursuant to Section 6.1(e) hereof is (a) less
than or equal to 1.00 to 1.00, the Bank Prime Rate plus 0.00%, (b) greater
than 1.00 to 1.00 but less than or equal to 1.50 to 1.00, the Bank Prime Rate
plus 0.00%, and (c) greater than 1.50 to 1.00, the Bank Prime Rate plus
0.00%.
"Authorized Officer" means any of the Chief Executive Officer, Chief
Financial Officer or Treasurer of any Person which is a corporation,
partnership, or other business organization.
"Bank" or "Banks" have the meanings specified in the preamble of this
Agreement.
"Bank Availability" shall mean, as of any date of determination and with
respect to each Bank, the amount determined by deducting (x) the amount of
such Bank's Pro Rata Share of the Total Outstanding Amount from (y) the
amount of such Bank's Pro Rata Share of the Revolving Loan Commitment.
"Bank Prime Rate" means, for any period, a fluctuating interest rate per
annum equal to the rate of interest publicly announced by the Agent as its
prime rate in effect from time to time (which rate may not be the lowest rate
of interest charged by the Agent to commercial borrowers).
"Bankruptcy Code" shall mean Title 11 of the United States Code or any
similar or successor federal law for the relief of debtors, as the same may
be amended from time to time.
"Benefit Plan" means any employee benefit plan (including a Multiemployer
Benefit Plan), the funding requirements of which (under ERISA Section 302 or
Section 412 of the Code) are, or at any time within six years immediately
preceding the time in question were, in whole or in part, the responsibility
of any Borrower or an ERISA Affiliate.
"Borrower" has the meaning specified in the preamble of this Agreement.
"Borrowing Notice" has the meaning specified in Section 2.2(a) of this
Agreement.
"Business Day" means any day on which commercial banks are open for business
(and not required or authorized by law to close) in Fairfax County, Virginia,
and Charlotte, North Carolina.
"CACI Limited" shall mean CACI Limited, a United Kingdom corporation and,
except as otherwise permitted by the proviso contained in Section 6.1(q)
hereof, an indirect, wholly-owned subsidiary of the Representative Borrower.
"CACI N.V." shall mean CACI N.V., a corporation organized under the laws of
The Netherlands and, except as otherwise permitted by the proviso contained
in Section 6.1(q) hereof, an indirect, wholly-owned subsidiary of the
Representative Borrower.
"Capital Expenditures" shall mean all expenditures classified as capital
expenditures in accordance with GAAP.
"Capital Lease" of any Person shall mean any lease of any property (whether
real, personal or mixed) by such Person (as lessee or guarantor or other
surety) which would, in accordance with GAAP, be required to be classified
and accounted for as a capital lease on a balance sheet of such Person.
"Cash Equivalents" shall mean securities or other instruments of the type
described in (A) clauses (i) and (ii) of the definition of Permitted
Investment provided such obligations have a maturity of not more than twelve
(12) months from the date purchased, (B) clause (iii) of the definition of
Permitted Investment provided such instruments have a maturity of not more
than 270 days from the date purchased, and (C) clause (v) of the definition
of Permitted Investment provided such commercial paper has a maturity of not
greater than six (6) months from the date purchased.
"Change in Control" means one or more of the following events:
(a) if any Person (including a person as defined in Section 3(a)(9), Section
13(d) or Section 14(d) of the Exchange Act) is or becomes the owner or
beneficial owner, directly or indirectly, of securities of the Representative
Borrower representing fifty percent (50%) or more of the combined voting
power of the Representative Borrower's then outstanding securities (the term
"beneficial owner" as used herein shall include but not be limited to any
person with the attributes or interests described in Rule 13d-3 (as now in
effect or as amended) promulgated under the Exchange Act); or
(b) (i) the shareholders of the Representative Borrower approve one or more
mergers, consolidations or combinations of the Representative Borrower with
any other corporations or entities which, if consummated prior to the
Maturity Date, would result in (A) the voting securities of the
Representative Borrower outstanding the day following the Effective Date
(together with any voting securities issued by the Representative Borrower
permitted under Section 6.2(c) herein) representing less than 50% of the
combined voting power of the voting securities of the Representative Borrower
or such surviving entity immediately after consummation of any such merger,
consolidation or combination, or (B) after giving effect to such merger,
consolidation or combination, a change in the person holding the Office of
Chief Executive Officer, President, Chief Operating Officer or Chief
Financial Officer of the Representative Borrower relative to the person
holding such respective office immediately prior to giving effect to such
merger, consolidation or combination, or (ii) the shareholders of the
Representative Borrower approve a plan of liquidation of the Representative
Borrower or an agreement for the sale, disposition or transfer by the
Representative Borrower of all or substantially all the assets of the
Representative Borrower and its Consolidated Subsidiaries.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" shall mean, with respect to each Bank's commitment to make
Revolving Loans and to issue (or participate in the issuance of) Standby
Letters of Credit, the aggregate Dollar amount set forth on Schedule I hereto
opposite such Bank's name under the heading "Commitment" or assigned to it in
accordance with Section 9.8(c), as such amount may be reduced or otherwise
adjusted from time to time in accordance with the provisions of this
Agreement.
"Consolidated Cash Flow" means, as computed at any time and from time to
time, the sum of the Borrowers' and their respective Subsidiaries' earnings
before depreciation, amortization, lease and rental expenses, and interest
expense less Capital Expenditures, as determined in accordance with GAAP.
"Consolidated Fixed Charges" means, as computed at any time and from time to
time, the sum of the Borrowers' and their respective Subsidiaries' interest
expense, lease and rental expenses, dividends paid, declared or accumulated
on any class of capital stock and payments of principal due (during the
period as to which such computation relates) under any Indebtedness, as
determined in accordance with GAAP.
"Consolidated Net Income" shall mean, for any period, the consolidated net
income of the Borrowers and their respective Subsidiaries for any period, as
determined in accordance with GAAP.
"Consolidated Net Worth" means, as computed at any time and from time to
time, the excess of Consolidated Total Assets over Consolidated Total
Liabilities.
"Consolidated Tangible Net Worth" means, as computed at any time and from
time to time, (i) Consolidated Net Worth less (ii) all of the Borrowers' and
their respective Subsidiaries', taken as a whole, intangible assets
(including, without limitation, good will, organization expenses, research
and development expenses (including software development expenses), patents,
trademarks, trade names, copyrights, franchises, purchased contract costs,
all as determined in accordance with GAAP).
"Consolidated Total Assets" means all assets of the Borrowers and their
respective Subsidiaries, computed at any time and from time to time on a
consolidated basis, which would be classified, in accordance with GAAP, as
total assets of a corporation conducting a business the same as, or similar
in nature to, the business conducted by the Borrowers and their respective
Subsidiaries.
"Consolidated Total Liabilities" means all liabilities of the Borrowers and
their respective Subsidiaries, computed at any time and from time to time on
a consolidated basis, which would be classified, in accordance with GAAP, as
total liabilities of a corporation conducting a business the same as, or
similar in nature to, the business conducted by the Borrowers' and their
respective Subsidiaries.
"Consolidated Subsidiary" means with respect to any Person, at any time, any
Subsidiary or other Person the accounts of which would be consolidated with
those of such first Person in its consolidated financial statements as of
such time.
"Credit Agreement Related Claim" means any claim (whether civil, criminal or
administrative and whether sounding in tort, contract or otherwise) in any
way arising out of, related to, or connected with, this Agreement or any
other Loan Document or the relationships established hereunder or thereunder.
"Default Rate" means the rate of interest applicable under Section 3.3 of
this Agreement from time to time.
"Dollars", "U.S.$" and the sign "$" mean such coin or currency of the United
States of America as at the time shall constitute legal tender for the
payment of public and private debts.
"Domestic Subsidiary" shall mean any Subsidiary that is created under the
laws of any State of the United States of America or the District of
Columbia.
"Drawing" has the meaning specified in Section 2.3(e) of this Agreement.
"EBITDA" means, as at the end of any Fiscal Quarter, all of the Borrowers'
and their respective Subsidiaries' earnings before interest, taxes,
depreciation and amortization for such fiscal quarter and the immediately
preceding three fiscal quarters, as determined in accordance with GAAP. For
the avoidance of doubt, EBITDA shall be computed based on a rolling four
quarter basis.
"Effective Date" has the meaning specified in Section 4.1 of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person, including a Subsidiary or other
Affiliate, that is a member of any group of organizations within the meaning
of Code Sections 414(b), (c), (m) or (o) of which any Borrower is a member.
"Event of Default" has the meaning specified in Section 7.1 of this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any
successor Federal statute.
"Facility Amount" shall mean $50,000,000.00.
"Federal Funds Rate" means, for any day, the rate per annum (rounded upward
to the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (x) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day and (y) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to the Money Market Bank on such
day on such transactions as determined by the Money Market Bank.
"Fee Payment Date" means (x) in the case of the Unused Portion Fee, the first
Business Day following the end of any Fiscal Quarter (or part thereof), and
(y) in the case of the Agent Fee, the first Business Day following each
annual anniversary of the Effective Date.
"Fiscal Quarter" means the quarter, during any Fiscal Year, ending March 31,
June 30, September 30 and December 31.
"Fiscal Year" has the meaning specified in Section 6.1(a) of this Agreement.
"Fixed Charge Coverage Ratio" means the ratio of Consolidated Cash Flow to
Consolidated Fixed Charges.
"Foreign Subsidiary" shall mean any Subsidiary that is not created or
organized under the laws of any State of the United States of America or the
District of Columbia.
"Form 8-K" means Form 8-K of the Exchange Act.
"Form 10-K" means Form 10-K of the Exchange Act.
"Form 10-Q" means Form 10-Q of the Exchange Act.
"Funding Date" shall mean the date on which any loan shall be made by a Bank
to the Borrowers hereunder.
"GAAP" has the meaning specified in Section 1.2 of this Agreement.
"Governmental Body" means (i) the United States of America or any State
thereof or any department, agency, commission, board, bureau or
instrumentality of the United States of America or any State thereof, and
(ii) any quasi-governmental body, agency or authority (including any central
bank) exercising regulatory authority over the Bank pursuant to applicable
law in respect of the transactions contemplated by this Agreement.
"Indebtedness" means all (i) indebtedness, obligations and liabilities now
existing or hereafter arising for money borrowed by any Borrower or any
Subsidiary thereof, whether or not evidenced by a note, indenture or other
agreement (including, without limitation, the Revolving Notes and the Money
Market Note), (ii) reimbursement or indemnification obligations in respect of
any letter of credit issued for the account of any Borrower or any Subsidiary
thereof, (iii) reimbursement or indemnification obligations in respect of any
guarantee issued on behalf of any Borrower or any Subsidiary thereof, (iv)
obligations of any Borrower or any Subsidiary thereof as lessee under any
Capital Lease, (v) all amounts owing by any Borrower or any Subsidiary
thereof under purchase money mortgages or other purchase money liens or
conditional sales or other title retention agreements and (vi) all
indebtedness secured by purchase money mortgages, liens, security interests,
conditional sales or other title retention agreements upon property owned by
any Borrower or any Subsidiary thereof (whether or not such Borrower or
Subsidiary has assumed or become liable for the payment of such
indebtedness).
"Indemnified Person" has the meaning specified in Section 9.10(b) of this
Agreement.
"Initial Fiscal Quarter" has the meaning specified in Section 6.1(e).
"Interest Payment Date" means (x) in the case of Revolving Loans bearing
interest at the Applicable Prime Rate, the last Business Day of the calendar
month (or part thereof) in which interest accrues on such Revolving Loans,
(y) in the case of LIBOR Loans, the earlier of (A) the last Business Day of
the Fiscal Quarter in which interest accrues on such LIBOR Loans and (B) the
expiration of LIBOR Period in respect of such LIBOR Loans and (z) in the case
of any Money Market Loans, on the last Business Day of the Money Market
Period in respect of such Money Market Loans.
"Interest Period" means any 30-day period in respect of which interest
accrues on the Revolving Loans.
"Issuing Bank" shall mean, initially, the Agent and, thereafter, such other
Bank as from time to time shall agree to act as the issuer of the Standby
Letters of Credit by notice to the Banks, the Agent and the Representative
Borrower.
"L/C Fee" has the meaning specified in Section 2.3(b) of this Agreement.
"L/C Fee Payment Date" means the first Business Day of the calendar month
following each Fiscal Quarter.
"LIBOR" means, with respect to any LIBOR Period, (x) the per annum interest
rate (rounded upward to the nearest 1/100th of 1%) determined on the basis of
the offered rates for Dollar deposits for a term comparable to such LIBOR
Period and in an amount substantially equal to the outstanding amount of the
Revolving Loans in respect of which such determination is made which appear
on the Telerate Screen Page 3750 as of 11:00 a.m. (London time) on the day
that is two LIBOR Business Days prior to the first day of such LIBOR Period,
divided by (y) a number equal to 1.00 minus the LIBOR Reserve Rate.
"LIBOR Business Day" means any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or
such other Euro-dollar interbank market as may be selected by the Bank in its
sole discretion.
"LIBOR Conversion" has the meaning specified in Section 3.8 of this
Agreement.
"LIBOR Conversion Notice" has the meaning specified in Section 3.8 of this
Agreement.
"LIBOR Loans" means the Revolving Loans which bear interest at the Applicable
LIBOR Rate.
"LIBOR Period" means the 30-day, 60-day, 90-day or 180-day interest period
selected by the Representative Borrower pursuant to any LIBOR Conversion
Notice.
"LIBOR Reserve Rate" means, for any day with respect to a LIBOR Loan, the
maximum rate (expressed as a decimal) at which a Bank would be required to
maintain reserves under Regulation D of the Board of Governors of the Federal
Reserve System, as amended from time to time (or any successor or similar
regulations relating to such reserve requirements), against "LIBOR
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The LIBOR Reserve Rate shall be adjusted automatically on and
as of the effective date of any change in the LIBOR Reserve Rate.
"Lien" of any Person shall mean any mortgage, deed of trust, lien, pledge,
adverse interest in property, charge, security interest or other encumbrance
in or on, or any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other title
retention agreement or Capital Lease with respect to, any property or asset
owned or held by such Person, or the signing or filing of any security
agreement with respect to any of the foregoing authorizing any other party as
the secured party thereunder to file any financing statement.
"Loan" shall mean any Revolving Loan (whether bearing interest at the
Applicable Prime Rate or Applicable LIBOR Rate) or Money Market Loan, and
"Loans" shall mean, collectively, all Revolving Loans (whether bearing
interest at the Applicable Prime Rate or Applicable LIBOR Rate) and Money
Market Loans.
"Loan Documents" means this Agreement, the Revolving Notes, the Money Market
Note and the Pledge Agreement.
"Mandatory Borrowing" shall have the meaning specified in Section 2.4(e)
hereof.
"Maturity Date" means July 1, 1999.
"Money Market Borrowing Notice" shall have the meaning specified in Section
2.4(c) hereof.
"Money Market Loan" shall have the meaning specified in Section 2.4(a)
hereof.
"Money Market Note" means the promissory note jointly and severally issued by
the Borrowers to NationsBank, N.A. pursuant to this Agreement in respect of
the Money Market Loans, substantially in the form (appropriately completed)
of Exhibit B to this Agreement, and any other promissory note issued in
exchange or substitution therefor.
"Money Market Period" shall have the meaning specified in Section 2.4(c)
hereof.
"Money Market Subfacility" shall have the meaning specified in Section 2.4(a)
hereof.
"Multiemployer Plan" means any "multiemployer plan" as defined in ERISA
Section 4001(a)(3) to which any Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the
preceding three plan years made or accrued an obligation to make
contributions.
"Note" means each of the Revolving Notes and the Money Market Note.
"Obligations" shall mean all now existing or hereafter arising indebtedness,
obligations, liabilities and covenants of the Borrowers to the Banks and the
Agent, their respective Affiliates or permitted successors and assigns or any
other Indemnified Person, in each case arising under or evidenced by this
Agreement or any other Loan Document, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due.
"Optional Prepayment" means the optional prepayment of Revolving Loans
pursuant to Section 3.6(b) hereof or the optional prepayment of Money Market
Loans pursuant to Section 2.4(f) hereof, as the context shall require.
"Permitted Investment" means each of (i) direct obligations of the United
States of America, and agencies thereof; (ii) obligations fully guaranteed by
the United States of America; (iii) certificates of deposit issued by, or
bankers' acceptance of, or time deposits with, any bank, trust company or
national banking association incorporated or doing business under the laws of
the United States of America or one of the states thereof having combined
capital and surplus and retained earnings of at least $100,000,000; (iv)
bearer note deposits with, or certificates of deposit issued by, or
promissory notes of, any subsidiary incorporated under the laws of Canada (or
any province thereof) of any bank, trust company or national banking
association described in clause (iii) or (vi); (v) commercial paper of
companies having a rating assigned to such commercial paper by Standard &
Poor's Corporation or Moody's Investors Service, Inc. (or, if neither such
organization shall rate such commercial paper at any time, by any nationally
recognized rating organization in the United States of America) equal to
either of the two highest ratings assigned by such organization; (vi) U.S.
dollar-denominated time deposits with any Canadian bank having a combined
capital and surplus and retained earnings of at least $100,000,000, having a
rating of A, its equivalent or better by Moody's Investors Service, Inc. or
Standard & Poor's Corporation (or, if neither such organization shall rate
such institution at any time, by any nationally recognized rating
organization in the United States of America); (vii) Canadian Treasury Bills
fully hedged to U.S. dollars; (viii) bonds or other debt instruments of any
company, if such bonds or other debt instruments, at the time of their
purchase, are rated in either of the two highest rating categories by
Standard & Poor's Corporation or Moody's Investors Service, Inc. (or, if
neither such organization shall rate such obligations at such time, by any
nationally recognized rating organization in the United States of America);
(ix) if such investment is to be made by any Borrower or any Subsidiary
thereof not organized or created under the laws of any State of the United
States of America or the District of Columbia or any territory of the United
States of America, each of (A) direct obligations of the countries of France,
The Federal Republic of Germany, the United Kingdom, The Netherlands or
Switzerland (each, an "E.C. State") and agencies thereof, (B) obligations
fully guaranteed by any E.C.State; (C) certificates of deposit issued by, or
bankers' acceptance of, or time deposits with, any bank, trust company or
national banking association incorporated or doing business under the laws of
any E.C. State having combined capital and surplus retained earnings of the
local currency counter value of at least $100,000,000; (D) commercial paper
of companies having a rating assigned to such commercial paper by Standard &
Poor's Corporation or Moody's Investors Service, Inc. (or, if neither such
organization shall rate such commercial paper at any time, by any nationally
recognized rating organization in the relevant E.C. State) equal to either of
the two highest ratings assigned by such organization; (E) bonds or other
debt instruments of any company, if such bonds or other debt instruments, at
the time of their purchase, are rated in either of the two highest rating
categories by Standard & Poor's Corporation or Moody's Investors Service,
Inc., (or, if neither such organization shall rate such obligations at such
time, by any nationally recognized rating organization in the relevant E.C.
State); or (x) any investment provided the aggregate amount of all such
investments shall not exceed $1,000,000.00.
"Person" means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency
thereof.
"Pledge Agreement" shall have the meaning specified in Section 4.1(i)(C)
hereof.
"Pledgor" shall mean each of the Representative Borrower and CACI N.V.
"Potential Change In Control" means one or more of the following events:
(a) the Representative Borrower enters into an agreement, the consummation
of which would result in the occurrence of a Change In Control; or
(b) the Board of Directors of the Representative Borrower adopts a
resolution, the effect of which would result in the occurrence of a Change in
Control.
"Potential Event of Default" means an event, condition or circumstance which,
with the giving of notice or the lapse of time or both, would constitute an
Event of Default.
"Prepayment Date" has the meaning specified in the first sentence of Section
9.3 of this Agreement.
"Prohibited Transaction" shall have the meaning ascribed to such term in
ERISA.
"Pro Rata Share" shall mean, as of any date of determination and with respect
to any Bank, a fraction (expressed as a percentage), the numerator of which
shall be the amount of such Bank's Commitment and the denominator of which
shall be the aggregate amount of Commitments of all Banks, as such
Commitments may be reduced or otherwise adjusted from time to time in
accordance with the provisions of this Agreement; provided, however, that if
all of the Commitments are terminated or reduced to zero hereunder, the Pro
Rata Share shall mean, as of any date of determination and with respect to
any Bank, a fraction (expressed as a percentage), the numerator of which
shall be the sum of the aggregate amount of such Bank's Revolving Loans then
outstanding plus the aggregate amount of such Bank's participation in any
outstanding Standby Letter of Credit and the denominator of which shall be
the sum of the aggregate amount of all Revolving Loans then outstanding plus
all Standby Letters of Credit then outstanding.
"Regulatory Change" means any applicable law, interpretation, directive,
request or guideline (whether or not having the force of law), or any change
therein or in the administration or enforcement thereof, that becomes
effective or is implemented or first required or expected to be complied with
after the date hereof, whether the same is (i) the result of an enactment by
a government or any agency or political subdivision thereof, a determination
of a court or regulatory authority, or otherwise or (ii) enacted, adopted,
issued or proposed before or after the date hereof, including any such that
imposes, increases or modifies any tax, reserve requirement, insurance
charge, special deposit requirement, assessment or capital adequacy require-
ment, but excluding any such that imposes, increases or modifies any income
or franchise tax imposed upon any Bank by any jurisdiction (or any political
subdivision thereof) in which any Bank or any office is located.
"Reportable Event" means any event or condition described in ERISA Section
4043(b), other than an event or condition with respect to which the 30-day
notice requirement has been waived.
"Representative Borrower" has the meaning specified in the preamble of this
Agreement.
"Representative Borrower Account" means the bank account of the
Representative Borrower maintained with the Agent for general purposes and
assigned the account number designated by the Agent in writing to the
Representative Borrower.
"Required Banks" shall mean, except as otherwise provided in Section 8.9(i)
hereof, as of any date of determination, such Banks whose Pro Rata Shares of
the Revolving Loan Commitment, in the aggregate, are greater than fifty
percent (50%); provided, however, that for so long as only two financial
institutions constitute Banks hereunder (it being understood that, solely for
the purposes of determining the number of financial institutions constituting
Banks under this proviso, each financial institution, together with its
Affiliates, shall constitute a single Bank), Required Banks shall mean,
except as otherwise provided in Section 8.9(i) hereof, as of any date of
determination, such Banks whose Pro Rata Shares of the Revolving Loan
Commitment, in the aggregate, constitute one hundred percent (100%).
"Revolving Loan" has the meaning specified in Section 2.1 of this Agreement.
"Revolving Loan Commitment" shall mean the commitment of the Banks to make
Revolving Loans and issue (or participate in the issuance of) Standby Letters
of Credit in an aggregate amount of up to the Facility Amount, as such amount
may be reduced or otherwise adjusted from time to time in accordance with the
provisions of this Agreement.
"Revolving Note" means any promissory note jointly and severally issued to a
Bank by the Borrowers pursuant to this Agreement, substantially in the form
(appropriately completed) of Exhibit A to this Agreement, and any other
promissory note issued in exchange or substitution thereof, and "Revolving
Notes" means, collectively, all such promissory notes so issued.
"SEC" means the Securities and Exchange Commission or any similar Federal
agency.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor Federal Statute.
"Senior Funded Debt" means, as of any date of determination, the sum of (i)
all Indebtedness less (ii) all Subordinated Debt.
"Stamp Taxes" has the meaning specified in Section 9.5 of this Agreement.
"Standby Letter of Credit" has the meaning specified in Section 2.3 of this
Agreement.
"Subordinated Debt" means, with respect to any Borrower or any Subsidiary
thereof, any Indebtedness which is subordinate in right of payment to the
indebtedness owed to the Banks hereunder pursuant to one or more
subordination agreements in form and substance satisfactory to the Banks in
their sole discretion.
"Subsidiary" shall mean any corporation, limited liability company,
partnership, trust or other entity a majority of the capital stock (or
equivalent ownership or controlling interest) of which at the time out-
standing, having ordinary voting power for the election of directors (or
equivalent controlling interest or person), is owned by any Borrower directly
or indirectly.
"Target" has the meaning specified in Section 6.2(e) of this Agreement.
"Termination Event" means, with respect to any Benefit Plan, (i) any
Reportable Event with respect to such Benefit Plan, (ii) the termination of
such Benefit Plan, or the filing of a notice of intent to terminate such
Benefit Plan, or the treatment of any amendment to such Benefit Plan as a
termination under ERISA Section 4041(c), (iii) the institution of proceedings
to terminate such Benefit Plan under ERISA Section 4042 or (iv) the
appointment of a trustee to administer such Benefit Plan under ERISA Section
4042.
"Total Outstanding Amount" has the meaning specified in Section 2.1(a) of
this Agreement.
"U.K. Debt" has the meaning specified in Section 4.1(iii) of this Agreement.
"Unused Portion Fee" has the meaning specified in Section 3.7(a) of this
Agreement.
Section 1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles ("GAAP") consistently applied in the United States.
Section 1.3 TIME PERIOD COMPUTATIONS. In the computation of a period of
time specified in this Agreement from a specified date to a subsequent date,
the word "from" means "from and including" and the words "to" and "until"
mean "to but excluding".
ARTICLE II
GENERAL PROVISIONS OF REVOLVING CREDIT FACILITY
Section 2.1 THE REVOLVING LOANS.
(a) REVOLVING LOAN BORROWINGS. Subject to the terms and conditions of this
Agreement, each Bank severally and not jointly agrees to make revolving loans
(each individually, a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrowers, at any time and from time to time on and after the
Effective Date until one Business Day prior to the Maturity Date in an amount
which shall not exceed such Bank's Pro Rata Share of the Revolving Loan
Commitment; provided, however, that (i) the sum of the aggregate outstanding
amount of all Revolving Loans plus the aggregate outstanding amount of all
Money Market Loans plus the aggregate outstanding amount of all Standby
Letters of Credit (such sum, the "Total Outstanding Amount") shall at no time
exceed the Facility Amount and (ii) the aggregate outstanding amount of all
Revolving Loans made by each individual Bank pursuant to this Section 2.1
plus the aggregate outstanding amount of all Standby Letters of Credit made
by the Issuing Bank and deemed made by each other Bank pursuant to Section
2.3 hereof shall at no time exceed such Bank's Pro Rata Share of the
Revolving Loan Commitment. Within the limits and subject to the terms and
conditions set forth in this Agreement, the Borrowers may borrow pursuant to
this Section 2.1 and Section 2.2 hereof, may prepay pursuant to Section
3.6(b), and reborrow under this Section 2.1 hereof.
(b) THE REVOLVING NOTES; MATURITY. The Revolving Loans made by each Bank
pursuant hereto shall be evidenced by a separate Revolving Note. Each
Revolving Note shall be issued on or before the Effective Date and shall bear
interest for the period from the initial Funding Date thereof until paid in
full on the unpaid principal amount thereof at the rate specified in Section
3.1 of this Agreement. Each Bank is hereby authorized to record in the
books and records of such Bank (without making any notation in such Bank's
Revolving Note or any schedule thereto) the amount and Funding Date of each
Revolving Loan made by such Bank, and the amount and date of each payment or
prepayment of any Revolving Loan. No failure to so record nor any error in
so recording shall affect the obligations of the Borrowers to repay the
actual outstanding principal amount of the Revolving Loans, with interest
thereon, as provided in this Agreement. The aggregate principal amount of
the Revolving Loans shall be payable on the Maturity Date.
Section 2.2 REVOLVING LOAN BORROWING PROCEDURES.
(a) NOTICE OF REVOLVING BORROWING. Whenever the Borrowers desire to borrow
Revolving Loans under Section 2.1 hereof, the Representative Borrower shall
deliver to the Agent irrevocable written notice (each such notice, a
"Borrowing Notice"), no later than 10:00 A.M. (Eastern time) on the Funding
Date (or, in the case of a LIBOR Conversion as permitted by Section 3.8
hereof, at least three (3) LIBOR Business Days prior to the applicable LIBOR
Period, as more fully described in Section 3.8(a) hereof), specifying (i)
that the Borrowers wish to effect Revolving Loans, (ii) the amount of the
Revolving Loans thereby requested (which shall not be less than $100,000 and
shall be in multiples of $1,000), (iii) the requested Funding Date of such
Revolving Loans, which date shall be a Business Day, and (iv) whether the
requested Revolving Loans will bear interest at the Applicable Prime Rate or
Applicable LIBOR Rate. Each Borrowing Notice shall be accompanied by the
officer's certificate contemplated by Section 4.2(vi) hereof. In lieu of
delivering the above-described Borrowing Notice, and only with the consent of
the Agent in its sole discretion at such time, the Representative Borrower
may give the Agent telephonic notice of any such proposed borrowing by the
time required under this Section 2.2(a); provided that, in the event the
Agent so consents, such notice shall be confirmed in writing by delivery to
the Agent promptly (but in no event later than 12:00 noon (Eastern time) on
the Funding Date of the requested Revolving Loans) of a Borrowing Notice (it
being understood that any such telephonic notice shall be irrevocable).
Notwithstanding anything contained herein to the contrary, if on any Interest
Payment Date the credit balance in the Representative Borrower Account is
insufficient to permit the debit contemplated by the second sentence of
Section 3.4(a) of this Agreement, the Agent, without any notice or other
authorization being required, shall (and is hereby irrevocably instructed by
the Representative Borrower to) effect Revolving Loans in an amount
sufficient to permit such debit to be implemented or, if the amount of such
debit is greater than the aggregate Bank Availability, in the amount of such
unused portion.
(b) MAKING OF REVOLVING LOANS. Promptly after receipt of a Borrowing Notice
under clause (a) of this Section 2.2 (or telephonic notice if the Agent so
consents thereto), the Agent shall notify each Bank by telecopy or telex or
other customary form of teletransmission of the requested borrowing. Each
Bank shall make the amount of its Revolving Loan available to the Agent in
Dollars and in immediately available funds, not later than 3:00 P.M (Eastern
time) on the Funding Date specified in the Borrowing Notice. After the
Agent's receipt of the proceeds of such Revolving Loans from the Banks, the
Agent shall (unless it shall have learned that any of the conditions
precedent set forth in Section 4.2 hereof have not been satisfied) make the
proceeds of such Revolving Loans available to the Borrowers on such Funding
Date and shall disburse such funds in Dollars to the Borrowers in immediately
available funds by crediting the Representative Borrower Account.
(c) FAILURE TO FUND BY BANK. Unless the Agent shall have been notified by
any Bank prior to 12:00 P.M. (Eastern time) on any Funding Date in respect of
Revolving Loans requested under a Borrowing Notice that such Bank does not
intend to make available to the Agent such Bank's Revolving Loan on such
Funding Date, the Agent may assume that such Bank has made such amount
available to the Agent on such Funding Date and the Agent in its sole
discretion may, but shall not be obligated to, make available to the
Representative Borrower a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to the Agent by such Bank
on or prior to 3:00 P.M. (Eastern time) on a Funding Date, such Bank agrees
to pay and the Representative Borrower (on behalf of the Borrowers) agrees to
repay to the Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made
available to the Borrowers until the date such amount is paid or repaid to
the Agent, at (i) in the case of such Bank, the Federal Funds Rate, and (ii)
in the case of the Borrowers, the Applicable Prime Rate. If such Bank shall
pay to the Agent such corresponding amount, such amount so paid shall
constitute such Bank's Revolving Loan, and if both such Bank and the
Representative Borrower shall have paid and repaid, respectively, such
corresponding amount, the Agent shall promptly pay over to the Representative
Borrower such corresponding amount in same day funds, but the Borrowers shall
remain obligated for all interest thereon. Nothing contained in this Section
2.2(b) shall be deemed to relieve any Bank of its obligation hereunder to
make its Revolving Loan on any Funding Date.
Section 2.3 STANDBY LETTERS OF CREDIT.
(a) GENERALLY. Subject to and in accordance with the terms and conditions
set forth herein, the Representative Borrower may request the Issuing Bank,
from time to time during the period commencing on the Effective Date and
ending 10 Business Days prior to the Maturity Date, to issue, and subject to
the terms hereof the Issuing Bank shall issue, for the account of the
Borrowers but on behalf of any Borrower, one or more standby letters of
credit (each, a "Standby Letter of Credit") pursuant to the Issuing Bank's
customary letter of credit application. The aggregate outstanding amount at
any time and from time to time of all Standby Letters of Credit shall not
exceed $10,000,000. The Issuing Bank shall have no obligation to issue any
Standby Letter of Credit if, after giving effect to the issuance thereof, the
Total Outstanding Amount shall then exceed the Facility Amount (it being
understood that the Issuing Bank shall, upon request of the Representative
Borrower, issue a Standby Letter of Credit in an amount that would, after
giving effect to the issuance thereof, not cause the Facility Amount to be
exceeded).
(b) STANDBY LETTER OF CREDIT FEE; MATURITY. The Representative Borrower
shall, among other things, pay to the Issuing Bank on each L/C Fee Payment
Date, in arrears, a fee (the "L/C Fee") per annum (calculated on the basis of
a 360 day year and the actual number of days elapsed), computed by
multiplying the Applicable L/C Margin for the Fiscal Quarter immediately
preceding the applicable L/C Fee Payment Date by the daily average of the
aggregate of all Standby Letters of Credit outstanding during such Fiscal
Quarter. All Standby Letters of Credit issued by the Issuing Bank as
contemplated by this Section 2.3 shall expire no later than the Maturity
Date. Notwithstanding that the Issuing Bank shall have no obligation to
issue any Standby Letter of Credit the expiration date of which shall extend
beyond the Maturity Date, if the expiration date of any Standby Letter of
Credit shall in fact extend beyond the Maturity Date, then on the last
Business Day immediately preceding the Maturity Date, there shall be deemed
to have been made Revolving Loans in the outstanding amount of all Standby
Letters of Credit the expiration date of which shall occur after the Maturity
Date, the proceeds of which the Issuing Bank shall deposit in a collateral
account at the Issuing Bank or an Affiliate thereof in order to collateralize
such Standby Letters of Credit, which collateral account shall bear interest
for the account of the Representative Borrower based upon investment of the
funds as agreed between the Issuing Bank and the Representative Borrower.
(c) STANDBY LETTER OF CREDIT REQUEST PROCEDURE. Whenever a Borrower desires
that a Standby Letter of Credit be issued on its behalf, the Representative
Borrower shall give the Issuing Bank (with copies to be sent to the Agent and
each other Bank) at least five (5) Business Days' prior written notice
therefor. The execution and delivery of each request for a Standby Letter of
Credit shall be deemed to be a representation and warranty by the
Representative Borrower that such Standby Letter of Credit may be issued in
accordance with, and will not violate the requirements of, this Section 2.3.
Unless the Issuing Bank has received notice from the Agent or any Bank before
it issues the respective Standby Letter of Credit that one or more of the
conditions specified in Section 4.2 are not then satisfied, or that the
issuance of such Standby Letter of Credit would violate this Section 2.3,
then the Issuing Bank may issue the requested Standby Letter of Credit for
the account of the Borrowers in accordance with the terms of this Agreement
and, with respect to any matters not specifically covered by this Agreement,
in accordance with the Issuing Bank's usual and customary practices as in
effect from time to time.
(d) LETTER OF CREDIT PARTICIPATIONS.
(i) Immediately upon the issuance by the Issuing Bank of any Standby
Letter of Credit, the Issuing Bank shall be deemed to have sold and
transferred to each Bank (other than the Issuing Bank), and each such Bank
shall be deemed irrevocably and unconditionally to have purchased and
received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation, in proportion to such Bank's Pro Rata Share, in
such Standby Letter of Credit, each drawing made thereunder and the
obligations of the Borrowers under this Agreement with respect thereto, and
any collateral therefor. Upon any change in a Bank's Pro Rata Share of the
Revolving Loan Commitment, it is hereby agreed that with respect to all
outstanding Standby Letters of Credit, there shall be an automatic adjustment
to the participations pursuant to this Section 2.3(d) to reflect the new Pro
Rata Share of the Revolving Loan Commitment of the assigning and assignee
Banks.
(ii) In determining whether to pay under any Standby Letter of Credit,
the Issuing Bank shall have no obligation relative to the Banks other than to
confirm that any documents required to be delivered under such Standby Letter
of Credit appear to have been delivered and that they appear to comply on
their face with the requirements of such Standby Letter of Credit. Any
action taken or omitted to be taken by the Issuing Bank under or in
connection with any Standby Letter of Credit, if taken or omitted in the
absence of gross negligence or wilful misconduct, shall not create for the
Issuing Bank any resulting liability to any Bank.
(iii) Upon the request of any Bank, the Issuing Bank shall furnish to
such Bank copies of any Standby Letter of Credit to which the Issuing Bank is
party and such other documentation relating to such Standby Letter of Credit
as may reasonably be requested by such Bank.
(iv) As between the Borrowers on the one hand and the Issuing Bank and
the Banks on the other hand, the Borrowers assume all risks of the acts and
omissions of, or misuse of the Standby Letters of Credit by the respective
beneficiaries of such Standby Letters of Credit. Without limiting the
generality of the foregoing, neither the Issuing Bank nor any other Bank
shall be responsible (except in the case of its gross negligence or willful
misconduct) for the following:
(A) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any documents submitted by any party in connection with the
application for and issuance of or any drawing under such Standby Letters of
Credit, even if it should in fact prove to be in any respects invalid,
insufficient, inaccurate, fraudulent or forged;
(B) the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any such Standby Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of any such Standby Letter of
Credit to comply fully with conditions required in order to draw upon such
Standby Letter of Credit, other than material conditions or instructions that
expressly appear in such Standby Letter of Credit;
(D) errors, omissions, interruptions or delays in the
transmission or delivery of any messages by mail, cable, telegraph,
telecopier, telex or otherwise, whether or not they are encoded;
(E) errors in interpretation of technical terms;
(F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Standby Letter of
Credit or the proceeds thereof;
(G) the misapplication by the beneficiary of any such Standby
Letter of Credit of the proceeds of any drawing of any such Standby Letter of
Credit; and
(H) any consequences arising from causes beyond the control of
the Issuing Bank, including without limitation any acts of governments.
(v) The obligations of the Banks to make payments to the Agent for
the account of the Issuing Bank with respect to Standby Letters of Credit
shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any of
the following circumstances:
(A) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other right
which any Borrower may have at any time against a beneficiary named in a
Standby Letter of Credit, any transferee of any Standby Letter of Credit (or
any Person for whom any such transferee may be acting), the Agent, the
Issuing Bank, any Bank, or any other Person, whether in connection with this
Agreement, any Standby Letter of Credit, the transactions contemplated herein
or any unrelated transactions;
(C) any draft, certificate or any other document presented under
the Standby Letter of Credit shall prove to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein shall prove to be untrue
or inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(E) the occurrence of any Event of Default or Potential Event of
Default; or
(F) the termination of this Agreement or any Commitment.
(e) Standby Letter of Credit Drawings Constitute Revolving Loans. The
Issuing Bank shall promptly notify the Agent, and the Agent shall promptly
notify each Bank, in each case by telecopy or telex or other customary form
of teletransmission, of any drawing under any Standby Letter of Credit (each
drawing, a "Drawing"). Each Drawing shall immediately be deemed to be and
for all purposes of this Agreement shall constitute a Revolving Loan
hereunder in the amount of such drawing. Each Bank shall promptly and
unconditionally pay to the Agent for the account of the Issuing Bank an
amount equal to such Bank's Pro Rata Share of such Drawing in same day funds.
Such payment shall be made to the Agent at the Agent Lending Office. If the
Agent delivers such notice to such Bank prior to 2:00 P.M. (Eastern time) on
any Business Day, such Bank shall make its required payment on the same
Business Day. If and to the extent such Bank shall not have made available
to the Agent for the account of the Issuing Bank such Bank's Pro Rata Share
of such Drawing, such Bank agrees to pay to the Agent for the account of the
Issuing Bank, promptly upon demand, such amount, together with interest
thereon, for each day from such date until the date such amount is paid to
the Agent for the Account of the Issuing Bank at the Federal Funds Rate plus
100 basis points. The failure of any Bank to make available to the Agent for
the Account of the Issuing Bank its Pro Rata Share of any Drawing shall not
relieve any other Bank of its obligation hereunder to make available to the
Agent for the Account of the Issuing Bank its Pro Rata Share of any Drawing
on the date so required; provided, however, that no Bank shall be responsible
for the failure of any other Bank to make available to the Agent for the
account of the Issuing Bank such other Bank's Pro Rata Share of such Drawing.
Section 2.4 MONEY MARKET LOAN SUBFACILITY.
(a) MONEY MARKET SUBFACILITY. Subject to the terms and conditions hereof,
NationsBank, N.A., in its individual capacity (as such, the "Money Market
Bank"), shall, in its sole and absolute discretion from and after the
Effective Date until one Business Day prior to the Maturity Date, make
certain revolving credit loans (each, a "Money Market Loan" and,
collectively, the "Money Market Loans") to the Borrowers; provided, however,
that (i) the aggregate principal amount of all Money Market Loans shall at no
time exceed $6,000,000.00 (such amount, the "Money Market Subfacility"), and
(ii) the sum of the aggregate amount of all Revolving Loans (whether bearing
interest at the Applicable Prime Rate or Applicable LIBOR Rate) plus the
aggregate amount of all Money Market Loans plus the aggregate amount of all
Standby Letters of Credit shall at no time exceed the Facility Amount.
(b) THE MONEY MARKET NOTE; MATURITY. The Money Market Loans made by the
Money Market Bank pursuant hereto shall be evidenced by a separate Money
Market Note. The Money Market Note shall be issued on or before the
Effective Date and shall bear interest for the period from the date of the
initial funding of any Money Market Loan until paid in full on the unpaid
principal amount thereof. The Money Market Bank is hereby authorized to
record in its books and records (without making any notation on the Money
Market Note or any schedule thereto) the amount and date of funding of each
Money Market Loan made by it, and the amount and date of each payment or
prepayment of any Money Market Loan. No failure to so record nor any error
in so recording shall affect the obligations of the Borrowers to repay the
actual outstanding principal amount of the Money Market Loans, with interest
thereon, as provided in this Agreement. The aggregate principal amount of
the Money Market Loans shall be payable on the Maturity Date.
(c) MONEY MARKET LOAN BORROWING PROCEDURE. Whenever the Borrowers desire
to borrow Money Market Loans under this Section 2.4, the Representative
Borrower shall, on behalf of the Borrowers, deliver to the Money Market Bank
irrevocable written notice (each such notice, a "Money Market Borrowing
Notice"), and the Money Market Bank may, in its sole and absolute discretion
and upon such other arrangements as shall be specifically agreed to by the
Money Market Bank and the Representative Borrower, make a Money Market Loan
to the Borrowers on the date (which shall be a Business Day), at the time and
in the amount so agreed; provided, however, that (i) the principal amount of
any Money Market Loan made hereunder shall not be less than $1,000,000.00
(and shall be in multiples of $1,000.00) and (ii) an individual Money Market
Loan shall be offered by the Money Market Bank for a period of not less than
1 but not more than 29 days (any such period, a "Money Market Period").
(d) INTEREST ON MONEY MARKET LOANS. Subject to the provisions of clause
(e) of this Section 2.4, in the event that the Money Market Bank shall make
any Money Market Loan pursuant to Section 2.4 hereof, the aggregate principal
amount of Money Market Loans outstanding from time to time shall bear
interest at a rate per annum equal to the Applicable Money Market Rate for
the applicable Money Market Period.
(e) REPAYMENT OF MONEY MARKET LOANS. Each Money Market Loan made by the
Money Market Bank hereunder shall be due and payable upon the expiration of
the Money Market Period relating to such Money Market Loan. The Money Market
Bank may, at any time and in its sole and absolute discretion, by written
notice to the Representative Borrower and the Agent (which shall promptly
deliver a copy thereof to the other Banks), demand repayment of its Money
Market Loans then outstanding by way of a Revolving Loan borrowing (a
"Mandatory Borrowing"), in which case the Representative Borrower, on behalf
of the Borrowers, shall be deemed to have requested a Revolving Loan
borrowing in the amount of the then outstanding Money Market Loans which
shall bear interest at the Applicable Prime Rate; provided, however, that, in
the following circumstances, any such demand shall also be deemed to have
been given one Business Day prior to each of (i) the Maturity Date, (ii) the
occurrence of any Event of Default described in clause (g), (h) or (i) of
Section 7.1 hereof, (iii) upon acceleration of the Obligations hereunder,
whether on account of an Event of Default described in clause (g), (h) or (i)
of Section 7.1 or any other Event of Default, and (iv) the exercise of
remedies in accordance with the provisions of Section 7.1 hereof. Each Bank
hereby irrevocably agrees to make such Revolving Loans promptly upon any such
request or deemed request on account of Mandatory Borrowing, in the amount
(but in proportion to each Bank's Pro Rata Share) and in the manner specified
in the preceding sentence and on the same such date notwithstanding that (A)
the amount of the Mandatory Borrowing may not comply with the minimum amount
for borrowings of Revolving Loans otherwise required hereunder, (B) whether
any conditions specified in Section 4.2 are then satisfied, (C) whether a
Default or an Event of Default then exists, (D) failure of any such request
or deemed request for Revolving Loans to be made by the time otherwise
required in Section 2.2 hereof, (E) the date of such Mandatory Borrowing, or
(F) any reduction in the Revolving Loan Commitment or termination of the
Commitments relating thereto immediately prior to such Mandatory Borrowing or
contemporaneous therewith. In the event that any Mandatory Borrowing cannot
for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding in
bankruptcy with respect to any Borrower), then each Bank hereby agrees that
it shall forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrowers on or after such date and prior to such purchase) from the Money
Market Bank such participations in the then outstanding Money Market Loans as
shall be necessary to cause each such Bank to share in such Money Market
Loans ratably based upon its respective Pro Rata Share of the Revolving Loan
Commitment (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 7.1),
provided that (1) all interest payable on the Money Market Loans shall be for
the account of the Money Market Bank until the date as of which the
respective participation of each other Bank is purchased, and (2) at the time
any purchase of participations pursuant to this sentence is actually made,
the purchasing Bank shall be required to pay to the Money Market Bank
interest on the principal amount of such participation purchased for each day
from and including the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such participation, at
the rate equal to, if paid within 2 Business Days of the date of the
Mandatory Borrowing, the Federal Funds Rate, and thereafter at a rate equal
to the Applicable Prime Rate.
(f) OPTIONAL PREPAYMENT OF MONEY MARKET LOANS. Subject to the provisions
of this clause (f) and Section 3.9 hereof, the Representative Borrower may,
at its sole option and on behalf of the Borrowers, prepay the principal
amount of the Money Market Loans in whole or in part (in an amount of $10,000
or more and in multiples of $1,000) at any time and from time to time,
without premium or penalty. In respect of each Optional Prepayment of a
Money Market Loan proposed to be made by the Representative Borrower, the
right of the Representative Borrower to make such Optional Prepayment is
subject to the Agent's receipt from the Representative Borrower, no later
than 12:00 P.M. on the Business Day specified therein as the date on which
such Optional Prepayment is to be made, of a written notice (which shall be
irrevocable) specifying (i) that the Representative Borrower desires to
prepay such Money Market Loan, (ii) the principal amount of such Optional
Prepayment, and (iii) the date (which shall be a Business Day) on which such
Optional Prepayment will be made. Any Optional Prepayment of a Money Market
Loan made by the Representative Borrower as permitted hereunder shall be paid
to the Agent for the account of the Money Market Bank no later than 12:00
P.M. (Eastern Time) on the applicable prepayment date.
Section 2.5 MANDATORY REDUCTION IN REVOLVING LOAN COMMITMENT. From time
to time during the term of this Agreement, to the extent that the sum of (i)
the product of five (5) times EBITDA of CACI Limited (it being understood
that, for the purposes of this Section 2.5, the words "Borrowers' and their
respective Subsidiaries'" appearing in the definition of EBITDA shall be
deemed deleted and the words "CACI Limited" shall be deemed substituted
therefor) minus (ii) the aggregate sum of all Indebtedness of CACI Limited
(it being understood that, for the purposes of this Section 2.5, each
reference to the words "Borrower or any Subsidiary thereof" or "Borrower or
Subsidiary" in the definition of Indebtedness shall be deemed deleted and the
words "CACI Limited" shall be deemed substituted therefor) minus (iii) the
aggregate sum of all income taxes payable by CACI Limited (net of the
aggregate sum of all income taxes receivable of CACI Limited) shall be less
than $12,000,000.00 (in Dollars), then the Facility Amount shall, without
notice to the Borrowers, automatically be reduced on a dollar for dollar
basis by the amount of such deficit, and the Revolving Loan Commitment and
each Bank's Commitment hereunder shall also be reduced in proportion to each
Bank's Pro Rata Share; provided, however, that the Facility Amount, as so
reduced, and the Revolving Loan Commitment and each Bank's Commitment, also
as so reduced, shall be increased (and, in the case of each Bank's
Commitment, such increase shall be in proportion to each Bank's Pro Rata
Share) from time to time upon and to the extent of any reduction in such
deficit (it being understood that the Facility Amount shall at no time exceed
$50,000,000.00). Upon the occurrence of a deficit as calculated by this
Section 2.5, the Representative Borrower shall make such prepayments of the
Loans and/or Standby Letters of Credit as shall then be required pursuant to
Section 3.6(a)(ii) hereof.
ARTICLE III
INTEREST, FEES AND REPAYMENT
Section 3.1 INTEREST ON THE REVOLVING LOANS.
(a) APPLICABLE PRIME RATE. The initial Revolving Loan and, except as
provided pursuant to clause (b) of this Section 3.1, the aggregate principal
amount of the Revolving Loans outstanding from time to time shall bear
interest at a rate per annum equal to the Applicable Prime Rate until the
entire principal amount of the Revolving Loans shall have been repaid. Any
change in the rate of interest on the Revolving Loans resulting from a change
in the Bank Prime Rate shall be effective as of the opening of business on
the day on which such change in the Bank Prime Rate is effective.
(b) LIBOR RATE. In the event the Representative Borrower shall effect a
LIBOR Conversion in accordance with the provisions of Section 3.8 of this
Agreement, the aggregate principal amount of the Revolving Loans that are the
subject of such LIBOR Conversion shall bear interest at a rate per annum
equal to the Applicable LIBOR Rate.
Section 3.2 REGULATORY CHANGES. If, after the date of this Agreement,
any Regulatory Change
(i) shall subject any Bank to any tax, duty or other charge with respect to
its obligation to make or maintain any Loan or its Commitment, or shall
change the basis of taxation of payments to such Bank of the principal of or
interest on the Loans or in respect of any other amounts due under this
Agreement in respect of its obligation to make any Loan or maintain its
Commitment (except for changes in the rate of tax on the overall net income
of such Bank); or
(ii) shall impose, modify or deem applicable any reserve, assessment,
special deposit, capital adequacy, capital maintenance or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, such Bank or shall impose on such Bank any other condition affecting (x)
the obligation of the Bank to make or maintain the Loans or its Commitment,
or (y) the Revolving Notes or the Money Market Note; and the result of any of
the foregoing is to increase the cost to such Bank of making or maintaining
any Loan or maintaining its Commitment or to reduce the amount of any sum
received or receivable by such Bank under, or the rate of return attributable
to, this Agreement or under the Revolving Notes or the Money Market Note,
such Bank shall, within 30 days after the effective date of such Regulatory
Change, provide written notice to the Representative Borrower of such
Regulatory Change (it being agreed by the parties hereto that if such notice
is given after 30 days' of the effective date of such Regulatory Change, the
Borrowers shall be liable to the Banks for the additional amounts payable
pursuant to this Section 3.2 only to the extent such additional amounts
accrue from and after the date of the giving of such notice), together with a
certificate describing in reasonable detail such increase or reduction, as
the case may be, then, within 30 days after delivery of such notice by such
Bank to the Representative Borrower if such Regulatory Change shall impose
costs in excess of those costs, or reduce the amount of any such sum or rate
of return below the amount or rate, applicable on the date of this Agreement,
the Representative Borrower, on behalf of the Borrowers, shall pay to such
Bank for the account of such Bank such additional amount or amounts as will
compensate such Bank for such increase or reduction. A certificate of such
Bank setting forth the basis for the amount of said increase or reduction, as
the case may be, shall be conclusive in the absence of manifest error.
Section 3.3 INTEREST AFTER DUE DATE. In the event the Borrowers shall
fail to make any payment of the principal amount of or interest on any of the
Revolving Loans or Money Market Loans, or of the Unused Portion Fee, the
Administrative Fee or the L/C Fee, in each case when due (whether by demand,
acceleration or otherwise), the Representative Borrower, on behalf of the
Borrowers, shall pay to the Agent for the account of the Banks interest on
such unpaid amount, payable from time to time on demand, from the date such
amount shall have become due to the date of payment thereof, accruing on a
daily basis, at a per annum rate (the "Default Rate") equal to the sum of (x)
the greater of the Applicable Prime Rate or Applicable LIBOR Rate determined
on and, in the case of any continuing default, from time to time after the
date of such default plus (y) two percent (2%).
Section 3.4 PAYMENT AND COMPUTATIONS.
(a) PAYMENTS. All payments required or permitted to be made to the Agent,
to the Agent for the account of the Banks, or to any Bank under this
Agreement or under any Note shall be made in Dollars (i) if to the Agent, at
the Lending Office of the Agent in immediately available funds and (ii) if to
any Bank, to it in immediately available funds at an account specified by
such Bank in writing to the Representative Borrower. The Representative
Borrower, on behalf of the Borrowers, hereby irrevocably instructs and
authorizes the Agent to effect each payment of interest on the Loans due on
each Interest Payment Date, and of each payment of the Unused Portion Fee and
the Administrative Fee due on the applicable Fee Payment Date by debiting the
Representative Borrower Account on such Interest Payment Date or Fee Payment
Date, as the case may be, with the aggregate amount thereof, in each case,
after giving effect to the crediting to the Representative Borrower Account
of the proceeds of the Revolving Loan, if any, made on such Interest Payment
Date or Fee Payment Date, as the case may be, in accordance with Section
2.1(b) of this Agreement. The Agent shall provide to the Representative
Borrower an invoice showing the amount of such debit and the manner in which
it was calculated.
(b) COMPUTATIONS. Interest on the unpaid portion of the Revolving Loans,
the Money Market Loans, the Unused Portion Fee and the Administrative Fee
shall each be calculated for the actual number of days (including the first
day but excluding the last day) elapsed and shall be computed on the basis of
a year of 360 days.
(c) INTEREST AND FEE PAYMENT DATES. The Unused Portion Fee and interest on
the Loans shall be payable in arrears (i) in the case of the Revolving Loans
and Money Market Loans, on each Interest Payment Date and (ii) in the case of
the Unused Portion Fee, on each Fee Payment Date. The Administrative Fee, if
any, shall be payable in advance on each Fee Payment Date. The L/C Fee shall
be payable in arrears as provided in Section 2.3(b) hereof.
(d) APPLICATION OF PAYMENTS; APPORTIONMENT.
(i) Apportionment of Payments and Prepayments. Unless a Bank shall
be in default of its obligations to advance any Revolving Loan or reimburse
the Agent as provided herein, all payments and prepayments of principal and
interest in respect of outstanding Revolving Loans and all payments of fees
and all other payments in respect of any other Obligations (other than with
respect to Money Market Loans) shall be allocated among such of the Banks as
are entitled thereto in proportion to their respective Pro Rata Share. All
payments and prepayments of principal and interest and other amounts in
respect of the Money Market Loans shall be allocated only to the Money Market
Bank.
(ii) Upon the occurrence and during the continuance of an Event of
Default, the Agent shall, unless otherwise specified by the Required Banks as
provided in the last paragraph of this clause (ii), apply all payments
(including the proceeds of any collateral obtained upon the exercise by the
Agent of any remedy specified in the Pledge Agreement) in respect of any
Obligations:
(A) first, and except as otherwise provided in Section 4(b)(ii)
of the Pledge Agreement, to pay interest on and then principal of any portion
of the Loans which the Agent may have advanced on behalf of any Bank for
which the Agent has not then been reimbursed by such Bank or the Borrowers;
(B) second, to pay Obligations in respect of any fees, expense
reimbursement or indemnities due to the Agent;
(C) third, to pay Obligations in respect of any fees, expense
reimbursement, indemnities, increased costs or breakage then due to the
Banks, pro rata;
(D) fourth, to the ratable payment of overdue interest or late
charges, if any, then due the Banks;
(E) fifth, to the ratable payment of interest due in respect of
the Revolving Loans and Money Market Loans;
(F) sixth, to the ratable payment or prepayment of principal due
in respect of the Revolving Loans and Money Market Loans;
(G) seventh, to the ratable payment of all other Obligations;
provided, however, that no Bank which shall be in default of its obligations
to fund Revolving Loans or reimburse the Agent as provided herein shall be
entitled to its ratable share of payments in respect of any Obligations prior
to the payment to all non-defaulting Banks of all amounts due such Banks as
provided herein.
The order of priority set forth in this Section 3.4(d)(ii) is set forth
solely to determine the rights and priorities of the Agent and the Banks as
among themselves. The order of priority set forth in clauses (C) through (G)
of this Section 3.4(d)(ii) may at any time and from time to time be changed
by the Required Banks without necessity of notice to or consent of or
approval by the Borrowers, or any other Person. The order of priority set
forth in clauses (A) and (B) of this Section 3.4(d)(ii) may be changed only
with the prior written consent of the Agent.
Section 3.5 PAYMENT AT MATURITY. Any outstanding principal amount of the
Revolving Notes or the Money Market Note theretofore not repaid, together
with any accrued and unpaid Unused Portion Fee, Administrative Fee or L/C
Fee, any accrued and unpaid interest thereon, together with any other amounts
due and payable in accordance with the provisions hereof (including pursuant
to Section 9.10 hereof) shall be due and payable in full on the Maturity
Date, and this Agreement shall not terminate until all Obligations shall have
been paid in full.
Section 3.6 PREPAYMENTS; CERTAIN EARLY REPAYMENTS.
(a) MANDATORY PREPAYMENT OF LOANS AND STANDBY LETTERS OF CREDIT.
(i) Upon the termination of this Agreement pursuant to the first
sentence of Section 9.3 of this Agreement, the Representative Borrower, on
behalf of the Borrowers, shall on the Prepayment Date (x) prepay the Loans in
full together with interest accrued on the aggregate principal amount of the
Loans to the Prepayment Date, and (y) pay to the Agent, for the account of
the Banks all other amounts payable pursuant to Sections 3.9 and 9.3 of this
Agreement.
(ii) If at any time the Total Outstanding Amount shall be greater than
the Facility Amount (as adjusted pursuant to Section 2.5 hereof), the
Representative Borrower shall, on behalf of the Borrowers and without notice
from the Bank, prepay that portion of the Loans and/or the Standby Letters of
Credit, as the case may be, in an amount equal to such excess.
(b) OPTIONAL PREPAYMENTS OF REVOLVING LOANS. Subject to the terms and
conditions of clause (c) below and Section 3.9 hereof, the Representative
Borrower may, at its sole option and on behalf of the Borrowers, prepay the
principal amount of the Revolving Loans (whether bearing interest at the
Applicable Prime Rate or Applicable LIBOR Rate) in whole or in part (in an
amount of $10,000 or more and in multiples of $1,000) at any time and from
time to time, without premium or penalty.
(c) OPTIONAL PREPAYMENT PROCEDURE. In respect of each Optional Prepayment
of Revolving Loans (whether bearing interest at the Applicable Prime Rate or
Applicable LIBOR Rate) proposed to be made by the Representative Borrower,
the right of the Representative Borrower to make such Optional Prepayment is
subject to the Agent's receipt from the Representative Borrower, no later
than 12:00 P.M. on the Business Day specified therein as the date on which
such Optional Prepayment is to be made (unless such Optional Prepayment shall
relate to LIBOR Loans, in which case such notice shall be given no later than
12:00 P.M., London time), of a written notice (which shall be irrevocable)
specifying (i) that the Representative Borrower desires to prepay the
Revolving Loans, (ii) the principal amount of such Optional Prepayment, and
(iii) the date (which shall be a Business Day or, if such Optional Prepayment
relates to a LIBOR Loan, a LIBOR Business Day) on which such Optional
Prepayment will be made. Any Optional Prepayment of Revolving Loans made by
the Representative Borrower as permitted hereunder shall be paid to the Agent
for the account of the Banks no later than 12:00 P.M. (Eastern Time) on the
applicable prepayment date (except that any prepayment of a LIBOR Loan shall
be paid no later than 10:00 A.M. (Eastern Time) on the applicable prepayment
date).
Section 3.7 UNUSED PORTION FEE, AGENT FEE AND L/C FEE.
(a) UNUSED PORTION FEE. For each Fiscal Quarter (or part thereof) during
the period from the Effective Date until the Maturity Date, the
Representative Borrower, on behalf of the Borrowers, shall pay to the Agent
for the account of the Banks pro rata based upon each Bank's Pro Rata Share
of the Revolving Loan Commitment, an unused portion fee (the "Unused Portion
Fee") determined by subtracting the sum of the aggregate outstanding amount
of all Revolving Loans and Standby Letters of Credit (computed on the basis
of the daily average for such Fiscal Quarter) from the Facility Amount. The
Unused Portion Fee shall be computed at a rate per annum equal to, in the
event the Senior Funded Debt to EBITDA ratio calculated pursuant to Section
6.1(e) hereof is (i) less than or equal to 1.00 to 1.00, then 0.09%, (ii)
greater than 1.00 but less than or equal to 1.50 to 1.00, then 0.17%, and
(iii) greater than 1.50 to 1.00, then 0.25%. The Unused Portion Fee shall be
due and payable in arrears on the Fee Payment Date to which such Unused
Portion Fee relates and on the Maturity Date, and shall be calculated on the
basis of a 360 day year and the actual days elapsed.
(b) ADMINISTRATIVE FEE. The Representative Borrower, on behalf of the
Borrowers, shall pay to the Agent, as compensation for the services of the
Agent hereunder, a fee (the "Administrative Fee") equal to $5,000.00 per
annum for each Bank (other than the Agent) a party hereto either on the date
hereof or by way of assignment (but not participation) pursuant to Section
9.8(c) hereof; provided, however, that no Administrative Fee shall be due and
payable by the Representative Borrower with respect to any Bank if such Bank
shall, after the execution hereof by the initial Banks, become a party hereto
pursuant to the assignment provisions contained in Section 9.8(c) hereof
without the consent of the Representative Borrower. The Administrative Fee
payable by the Representative Borrower, on behalf of the Borrowers, as
contemplated by this clause (b) shall be due on the applicable Fee Payment
Date (and the Borrowers shall not be entitled to any credit if any Bank as to
which such fee shall have been paid ceases to be a Bank hereunder for the
entire year in respect of which such fee shall have been due and payable).
(c) L/C FEE. The Borrowers shall pay the L/C Fee in accordance with the
provisions of Section 2.3(b) hereof.
Section 3.8 LIBOR CONVERSION.
(a) CONVERSION. So long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, the Representative Borrower,
on behalf of the Borrowers, shall have the right to convert all or part of
the outstanding Revolving Loans bearing interest at the then Applicable Prime
Rate to loans bearing interest at the then Applicable LIBOR Rate (such
conversion, a "LIBOR Conversion"); provided, however, that the LIBOR Period
to which such LIBOR Conversion shall relate will not extend beyond the
Maturity Date. In order to effect a LIBOR Conversion, the Representative
Borrower, on behalf of the Borrowers, shall give the Agent irrevocable
written notice (such notice, a "LIBOR Conversion Notice") at least three
LIBOR Business Days prior to the first day of the LIBOR Period to which such
LIBOR Conversion shall apply, stating that (i) the Representative Borrower
wishes to effect a LIBOR Conversion, (ii) the aggregate principal amount of
outstanding Revolving Loans which the Representative Borrower wishes to bear
interest at the Applicable LIBOR Rate (it being understood and agreed that no
LIBOR Conversion shall be permitted in an amount less than $2,000,000.00),
(iii) the applicable LIBOR Period being elected by the Representative
Borrower (it being understood that no change in LIBOR with respect to any
LIBOR Loans may be effected during any applicable LIBOR Period) and (iv) the
Business Day on which the LIBOR Period is to be effective.
(b) NOTICE OF LIBOR RATE TO REPRESENTATIVE BORROWER. In the event the
Representative Borrower has requested a LIBOR Conversion, the Agent shall
give written notice to the Representative Borrower and the Banks of the LIBOR
rate as promptly as reasonably possible after such rate is determined. The
Agent's determination of the LIBOR rate shall be conclusive in the absence of
manifest error.
(c) SUCCESSIVE NOTICE OF LIBOR CONVERSION. Subject to the provisions of
clause (a) of this Section 3.8, the Representative Borrower may, on behalf of
the Borrowers, by executing a LIBOR Conversion Notice at least three LIBOR
Business Days prior to the first day of the LIBOR Period to which such LIBOR
Conversion Notice shall apply, execute successive LIBOR Conversions with
respect to any Revolving Loan then outstanding and bearing interest at the
Applicable Prime Rate together with any then outstanding LIBOR Loans the
LIBOR Period in respect of which is scheduled to expire on or before the
start of the LIBOR Period specified in such LIBOR Conversion Notice. If,
with respect to any LIBOR Loans, the Agent shall not have received a LIBOR
Conversion Notice for the next immediately succeeding LIBOR Period which
complies with the provisions of clause (a) of this Section 3.8, such LIBOR
Loans shall, immediately upon the expiration of the then current LIBOR Period
and without any notice to any Borrower, bear interest at the Applicable Prime
Rate in accordance with the provisions of Section 3.1(a) of this Agreement.
(d) MARKET DISRUPTION, ETC. In the event that the Agent (i) shall have
determined (which determination shall be conclusive and binding upon the
Borrowers) that by reason of circumstances affecting the London interbank
market either adequate or reasonable means do not exist for ascertaining the
LIBOR rate elected by the Representative Borrower pursuant to the terms
hereof or (ii) the Agent shall have determined (which determination shall be
conclusive and binding on the Borrowers) that the applicable LIBOR rate will
not adequately and fairly reflect the cost to the Agent of maintaining or
funding loans bearing interest based on such LIBOR rate, with respect to any
portion of the Revolving Loans that the Representative Borrower has requested
be made as a LIBOR Loan (each, an "Affected Advance"), the Agent shall
promptly notify the Representative Borrower (by telephone or otherwise, to be
promptly confirmed in writing), with a copy to the Banks, of such
determination. If the Agent shall give such notice, (x) any Affected
Advances shall be made as advances which shall bear interest at the
Applicable Prime Rate, and (y) any outstanding LIBOR Loan shall, from and
after the last day of the then current LIBOR Period applicable thereto, bear
interest at the Applicable Prime Rate. Until any notice under clauses (i) or
(ii) of this Section 3.8(d) has been withdrawn by the Agent, no amounts
outstanding or to be advanced hereunder shall bear interest based upon LIBOR.
Section 3.9 BREAKAGE, ETC.. In the event of the prepayment of any LIBOR
Loan or Money Market Loan (whether by way of acceleration or otherwise or due
to an Optional Prepayment of any LIBOR Loan pursuant to Section 3.6(b) hereof
or of any Money Market Loan pursuant to Section 2.4(f)), the Representative
Borrower, on behalf of the Borrowers, shall pay to each Bank whose LIBOR Loan
or Money Market Loan has been so prepaid any loss or expense which such Bank
may incur or sustain directly as a result of such prepayment, including
without limitation, an amount equal to (i) an amount of interest which would
have accrued on the amount so prepaid for the period beginning on the date of
such prepayment and ending on the last day of the applicable LIBOR Period, in
the case of LIBOR Loans, or the applicable Money Market Period, in the case
of Money Market Loans (such period, the "Breakage Period"), in each case at
the Applicable LIBOR Rate or Applicable Money Market Rate, as the case may
be, minus (ii) the amount of interest (as reasonably determined by each
affected Bank) which would have accrued to such Bank on such amount by
placing such amount on deposit for the Breakage Period with (A) in the case
of LIBOR Loans, leading banks in the London interbank market, and (B) in the
case of Money Market Loans, members of the Federal Reserve System.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 CONDITIONS PRECEDENT TO EFFECTIVE DATE. The Revolving Loan
Commitment of the Banks hereunder shall become effective at a closing at the
offices of Crowell & Moring, 1001 Pennsylvania Avenue, N.W., Washington, D.C.
20004 only on the day (the "Effective Date") on which all of the following
conditions precedent shall have been fulfilled to the satisfaction of the
Banks; provided, however, that in the event the Effective Date shall have not
occurred on or prior to August 28, 1996, the Banks shall have no further
obligations hereunder:
(i) the Agent, on behalf of the Banks, shall have received from the
Representative Borrower the following instruments, agreements, certificates
and payments, as the case may be, on or prior to the Effective Date:
(A) One Revolving Note, dated the Effective Date, for each Bank,
payable to the order thereof in the amount of such Bank's Pro Rata Share of
the Revolving Loan Commitment and duly executed by each Borrower;
(B) The Money Market Note, dated the Effective Date, payable to the
order of NationsBank, N.A. in the amount of $6,000,000.00 and duly executed
by each Borrower;
(C) the Agent shall have received from the Pledgors a Pledge
Agreement, substantially in the form of Exhibit C hereto (the "Pledge
Agreement"), together with certificates representing all shares of capital
stock pledged thereunder and undated stock powers duly executed in blank;
(D) The results of a search, upon the records maintained with the
appropriate Secretary of State and county recorder offices of all
jurisdictions deemed advisable by the Banks, regarding Uniform Commercial
Code financing statements, if any, on file with such offices and naming any
Borrower or any Subsidiary thereof as debtor, which results shall be
satisfactory to the Banks;
(E) An opinion or opinions of counsel to the Borrowers, in form and
substance satisfactory to the Banks;
(F) A certified copy of the resolutions of the Board of Directors of
each Borrower and the Pledgors authorizing the execution and delivery of this
Agreement and the other Loan Documents to which they are a party;
(G) A copy of the charter documents and by-laws of each Borrower and
any Subsidiary thereof, together with all amendments thereto, certified by
the Secretary of such Borrower as being true, complete and correct and in
effect as of the Effective Date;
(H) An incumbency certificate of the Secretary, an Assistant
Secretary or an Assistant Treasurer of each Borrower and CACI N.V. certifying
the names and true signatures of each officer of such Borrower and CACI N.V.
authorized to execute the Loan Documents to which each is a party and, in the
case of the Representative Borrower, of each Authorized Officer authorized to
execute the Loan Documents;
(I) By wire transfer of immediately available funds, the
Administrative Fee with respect to each Bank as to which the Agent shall be
entitled to a fee in accordance with Section 3.7(b) hereof;
(J) A certificate of an Authorized Officer of the Representative
Borrower, dated the Effective Date, certifying that the matters contained in
clauses (iii), (iv) and (v) of Section 4.2 hereof are true and correct; and
(K) A certificate of an Authorized Officer of the Representative
Borrower, dated the Effective Date, certifying, in form and substance
satisfactory to the Banks, the Borrowers' compliance with Section 6.1(m)
hereof, having attached to such certificate a summary in reasonable detail of
the Representative Borrower's and its Subsidiaries' insurance coverage. Upon
request of the Banks, the Representative Borrower shall deliver an insurance
report of an independent insurance broker as to due compliance with Section
6.1(m) hereof.
(ii) the Representative Borrower shall have disclosed to the Banks promptly
from time to time any material developments or changes in the Borrowers' and
their respective Subsidiaries', taken as a whole, financial condition,
assets, liabilities or prospects, including without limitation amendments to
their charter documents or the Representative Borrower's Form 10-K or 10-Q
and the exhibits thereto, and any material amendments, changes or
terminations of any material contracts or the award of or loss of any
material bid or proposal. Any such material developments, changes or
amendments shall not have affected adversely the assumptions contained in the
credit analysis of the Borrowers performed by the Banks prior to the
execution of this Agreement;
(iii) the Representative Borrower shall have delivered to the Banks a true,
correct and complete copy of the loan documents relating to that certain
unsecured loan facility made to CACI Limited by the financing institution or
institutions named therein in the aggregate amount of up to 500,000 Pound
Sterling (the "U.K. Debt"), certified as of the Effective Date by an
Authorized Officer of CACI Limited as such and that each such loan document
remains in full force and effect and that no default or event that, with the
lapse of time or the giving of notice or both, would constitute an event of
default exists thereunder;
(iv) the Representative Borrower shall have delivered to the Banks (A) the
Representative Borrower's Form 10-K for the Fiscal Year ending June 30, 1995
and Form 10-Q for the Fiscal Quarter ending March 31, 1996, and (B) such
other unaudited consolidated financial statements of the Representative
Borrower and its Consolidated Subsidiaries as any Bank shall reasonably
request, together with, in each case, an officer's certificate, dated the
Effective Date, from each of the Representative Borrower's Chief Financial
Officer and Treasurer, stating that, to their personal knowledge after having
performed such due diligence as would customarily be performed by a corporate
officer in their position but no additional due diligence, the Representative
Borrower's Form 10-K and Form 10-Q and unaudited consolidated financial
statements, if any, attached thereto as of the Effective Date do not contain
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;
(v) all legal matters incident to this Agreement shall be satisfactory to
counsel for the Banks, and the Representative Borrower, on behalf of the
Borrowers, shall have reimbursed the Banks for their fees and expenses and
the fees and expenses of the Banks' counsel in connection with the
preparation or review, as the case may be, of the Loan Documents and all
matters incident thereto (it being understood that such statement may not
reflect the final statement of fees and expenses incurred by the Banks'
counsel in connection with such preparation or review);
(vi) all Schedules delivered hereunder by any Borrower shall be in form and
substance satisfactory to the Banks; and
(vii) the Banks shall have received such other documents, instruments,
certificates, opinions, agreements and information as the Banks or their
counsel shall reasonably request in their discretion in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, current consolidated and consolidating financial
statements of the Borrowers and their respective Subsidiaries, a report
describing the aggregate amount and current age status of accounts receivable
of any Borrower, and a report describing the current status of goods or
services on backlog with any Borrower or Subsidiary thereof).
Section 4.2 FURTHER CONDITIONS PRECEDENT TO LOANS AND STANDBY LETTERS OF
CREDIT. The obligation of the Agent, on behalf of the Banks, to make any
Revolving Loan, and the obligation of the Money Market Bank to make any Money
Market Loan, and the obligation of the Issuing Bank to issue any Standby
Letter of Credit shall be subject to the fulfillment to the satisfaction of
the Banks, in the case of Revolving Loans and Standby Letters of Credit, and
the Money Market Bank, in the case of Money Market Loans, of the further
conditions precedent that, on the Funding Date for such Revolving Loan or
Money Market Loan or the issuance date for such Standby Letter of Credit, as
the case may be:
(i) the Agent shall have received a Borrowing Notice (except as otherwise
provided in the last sentence of Section 2.2(a) of this Agreement) in
accordance with Section 2.2(a) or the Money Market Bank shall have received a
Money Market Borrowing Notice in accordance with Section 2.4(c) or the
Issuing Bank shall have received a request for a Standby Letter of Credit in
accordance with Section 2.3(c), as the case may be, in each case executed by
an Authorized Officer of the Representative Borrower (or other officer of
the Representative Borrower designated by such Authorized Officer as having
authority to execute such notice);
(ii) the prospect of payment of all obligations and liabilities outstanding
or to become outstanding under this Agreement is not impaired due to acts or
events materially bearing upon the financial condition of the Borrowers and
their respective Consolidated Subsidiaries (taken as a whole), as determined
by the Required Banks (or, in the case of Money Market Loans, the Money
Market Bank) in their sole discretion;
(iii) since the date of the most recent financial statements or projections
provided to the Banks, there shall have been no material adverse change in
the Borrowers' or their respective Consolidated Subsidiaries' (taken as a
whole) financial condition or in the Borrowers' or their respective
Consolidated Subsidiaries' (taken as a whole) assets or prospects, in each
case as determined by the Required Banks (or, in the case of Money Market
Loans, the Money Market Bank) in their sole discretion;
(iv) the representations and warranties of the Borrowers and the Pledgors
contained in Article V of this Agreement and in the Pledge Agreement are true
and correct as of such Funding Date (or, in the case of Standby Letters of
Credit, the date of issuance thereof) as though made on and as of such
Funding Date (or, in the case of Standby Letters of Credit, the date of
issuance thereof) (and, if any such representation and warranty shall not be
true and correct, the Representative Borrower shall describe in writing to
the Agent the nature of such misrepresentation and warranty);
(v) No event has occurred and is continuing, or would result from such
Revolving Loan or Money Market Loan after giving effect to the application of
the proceeds therefrom or from the issuance of such Standby Letter of Credit
if the beneficiary thereof were to fully draw upon such Standby Letter of
Credit on the date of issuance, which constitutes an Event of Default or
would constitute a Potential Event of Default; and
(vi) the Agent shall have received a certificate, addressed to the Banks
(or, in the case of a Money Market Loan, the Money Market Bank), of an
Authorized Officer of the Representative Borrower, dated the date of the
Borrowing Notice, certifying that the matters contained in clauses (iii),
(iv) and (v) of this Section 4.2 are true and correct.
ARTICLE V
REPRESENTATIONS
In order to induce the Banks and the Agent to enter into this Agreement and
make the Loans contemplated by the terms hereof, the Representative Borrower
represents and warrants with respect to itself and each other Borrower and
CACI N.V. and any Subsidiary of any thereof, as the context shall require, as
of the date hereof and as of the Effective Date that:
Section 5.1 EXISTENCE, POWER AND AUTHORITY. Each Borrower and each
Subsidiary thereof is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, with
full corporate power and authority to carry on its business as currently con-
ducted and to own or hold under lease its property; each Borrower and each
Subsidiary thereof is duly qualified to do business as a foreign corporation
in good standing in each other jurisdiction in which the conduct of its
business or the maintenance of its property requires it to be so qualified
and where the failure to be so qualified would have a material adverse effect
on the financial condition, business or operation of such Borrower or
Subsidiary; and, each Borrower and CACI N.V. has full corporate power and
authority to execute and deliver the Loan Documents to which they are a party
and to carry out the transactions contemplated thereby.
Section 5.2 AUTHORIZATION; ENFORCEABLE OBLIGATIONS. As of the Effective
Date and thereafter, each Loan Document to which the Borrowers and CACI N.V.
are a party has been duly authorized, executed and delivered by each Borrower
and CACI N.V. and constitutes legal, valid and binding obligations of such
Borrower and CACI N.V. enforceable against such Borrower and CACI N.V. in
accordance with their respective terms (except as such enforceability may be
limited by general principles of the law of equity or by any applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws and laws
affecting creditors' rights generally).
Section 5.3 NO LEGAL BAR. The execution, delivery and performance by
each Borrower and CACI N.V. of the Loan Documents to which they are a party
(i) do not violate the certificate of incorporation, by-laws or any preferred
stock provision of such Borrower or CACI N.V., (ii) do not violate or
conflict with any law, governmental rule or regulation or any judgment, writ,
order, injunction, award or decree of any court, arbitrator, administrative
agency or other governmental authority applicable to such Borrower or CACI
N.V. or any indenture, mortgage, contract, agreement or other undertaking or
instrument to which such Borrower or CACI N.V. is a party or by which their
respective property may be bound and/or (iii) do not and will not result in
the creation or imposition of any lien, mortgage, security interest or other
encumbrance on any of its property pursuant to the provisions of any such
indenture, mortgage, contract, agreement or other undertaking or instrument.
Section 5.4 CONSENTS. The execution, delivery and performance by each
Borrower and CACI N.V. of the Loan Documents to which they are a party do not
require any consent, which has not been obtained, of any other Person
(including, without limitation, stockholders of such Borrower or CACI N.V.)
or any consent, license, permit, authorization or other approval of, any
giving of notice to, exemption by, any registration, declaration or filing
with, or any taking of any other action in respect of, any court, arbitrator,
administrative agency or other governmental authority.
Section 5.5 LITIGATION. Except as set forth on Schedule 5.5 hereto,
there is no action, suit, investigation or proceeding by or before any court,
arbitrator, administrative agency or other governmental authority pending or,
to the knowledge of each Borrower or CACI N.V., threatened (i) which involves
any of the transactions contemplated by this Agreement or (ii) against or
affecting such Borrower or CACI N.V. or any Subsidiary of any thereof which
could in the reasonable judgment of the Representative Borrower materially
adversely affect the financial condition, business or operation of such
Borrower or CACI N.V. or any Subsidiary of any thereof.
Section 5.6 NO DEFAULT. Except as set forth on Schedule 5.6 hereto in
writing, neither any Borrower or CACI N.V. nor any Subsidiary of any thereof
is in default under any material order, writ, injunction, award or decree of
any court, arbitrator, administrative agency or other governmental authority
binding upon it or its property, or any material indenture, mortgage,
contract, agreement or other undertaking or instrument to which it is a party
or by which its property may be bound, and nothing has occurred which would
materially adversely affect the ability of any of them to carry on their
respective business or perform their respective obligations under any such
material order, writ, injunction, award or decree or any such material
indenture, mortgage, contract, agreement or other undertaking or instrument.
Section 5.7 FINANCIAL CONDITION. The financial statements of the
Borrowers (including the Representative Borrowers' Form 10-K and Form 10-Q)
and their Subsidiaries, copies of which have been furnished to the Banks,
were prepared in accordance with GAAP and are complete and correct and fairly
and accurately present the financial condition of the Borrowers and their
Subsidiaries (taken as a whole) as of their dates and the results of their
operations for the periods then end. There has been no material adverse
change in the financial condition of the Representative Borrower and the
other Borrowers (taken as a whole) or the results of their operations since
the date of such financial statements.
Section 5.8 USE OF PROCEEDS. None of the proceeds of the Revolving Loans
or the Money Market Loans shall be used to purchase or carry, or reduce or
retire or refinance any credit incurred to purchase or carry, any margin
stock (within the meaning of Regulations G, U and X of the Board of Governors
of the Federal Reserve system) or to extend credit to others for the
purchasing or carrying of any margin stock. No Borrower is engaged in the
business of extending credit for the purpose of purchasing or carrying any
margin stock.
Section 5.9 BORROWER NOT AN INVESTMENT COMPANY. No Borrower is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
Section 5.10 TAXES. The Borrowers and their Subsidiaries have filed or
caused to be filed all tax returns which are required to be filed by them and
have paid or caused to be paid all taxes which have been shown to be due and
payable by such returns or (except to the extent being contested in good
faith and for the payment of which adequate reserves have been provided) tax
assessments received by any Borrower or any Subsidiary thereof to the extent
that such taxes have become due and payable.
Section 5.11 ENVIRONMENTAL MATTERS. The Borrowers and their Subsidiaries
conduct their respective operations in compliance with all applicable laws
and regulations concerning the discharge of substances into the environment
and other environmental control matters, except to the extent that non-
compliance would not have a material adverse effect on the business, results
of operations or condition (financial or otherwise) of the Borrowers (taken
as a whole). No Borrower or any Subsidiary thereof has any liability,
contingent or otherwise, under any law, ordinance or regulation relating to
the storage, transport, disposal or release of "oil", "petroleum products",
"hazardous substance", "hazardous waste", "hazardous material", "hazardous
chemical substance", "refuse" or any other term of similar import (as such
terms are defined in any such law, ordinance or regulation), except to the
extent that any such liability would not have a material adverse effect on
the business, results of operations or condition (financial or otherwise) of
the Borrowers (taken as a whole).
Section 5.12 SUBSIDIARIES. There are no Affiliates or Subsidiaries
(consolidated or otherwise, direct or indirect) of the Representative
Borrower other than (i) the other Borrowers, (ii) the Foreign Subsidiaries
set forth on Schedule 5.12 hereof and (iii) in the case of Affiliates,
certain other Persons disclosed in writing to the Banks prior to the date
hereof. The Representative Borrower is the holder (either directly or
indirectly) of all of the outstanding shares of capital stock of each
Borrower (other than the Representative Borrower) and, except as otherwise
provided in the proviso contained in Section 6.1(q) hereof, of each Foreign
Subsidiary. All Foreign Subsidiaries other than CACI Limited, CACI Virgin
Islands, Inc., a corporation organized under the laws of the United States
Virgin Islands, and CACI Nederland B.V., a corporation organized under the
laws of The Netherlands, are non-operating companies. Except for CACI N.V.
and CACI Limited, no Foreign Subsidiary is material to the financial
condition or assets of the Borrowers and their Consolidated Subsidiaries,
taken as a whole.
ARTICLE VI
COVENANTS
Section 6.1 AFFIRMATIVE COVENANTS. The Representative Borrower covenants
and agrees for itself, each other Borrower, CACI N.V. and any Subsidiary of
any thereof, as the context shall require, that, so long as this Agreement
shall remain in effect or any Obligation shall remain unpaid:
(a) AUDITED ANNUAL FINANCIALS. The Representative Borrower shall deliver
to the Agent and each Bank, as soon as available but within 90 days of the
end of each fiscal year of the Representative Borrower ending June 30 (each
such year, a "Fiscal Year"), a full and complete set of the annual audited
consolidated financial statements (including statements of financial
condition, income, cash flows and changes in shareholders' equity), together
with all notes thereto, of the Representative Borrower and its Consolidated
Subsidiaries prepared in accordance with GAAP and certified by an independent
accounting firm of national recognition reasonably acceptable to the Required
Banks (which certificate shall be accompanied by an unqualified opinion of
such accounting firm of such statements).
(b) QUARTERLY FINANCIAL STATEMENTS. The Representative Borrower shall
deliver to the Agent and each Bank, as soon as available but within 45 days
following the end of each of the Representative Borrower's Fiscal Quarters,
internally prepared consolidated and consolidating financial statements of
the Representative Borrower and its Consolidated Subsidiaries (including a
balance sheet, income statement and statement of cash flows), together with
(i) a report detailing the aggregate amount and current age status of
accounts receivable of the Representative Borrower and any of its
Consolidated Subsidiaries, (ii) a report, substantially in the form of
Exhibit D hereof, describing the current status of goods or services on
backlog with the Representative Borrower or any such Consolidated Subsidiary
and (iii) a worksheet, in reasonable detail, of the calculation described in
Section 2.5 hereof, in each case as of the end of such Fiscal Quarter. The
financial statements and reports required to be delivered under this clause
(b) shall be accompanied by a certificate of an Authorized Officer of the
Representative Borrower, to the effect that the information contained therein
is true and accurate as of the date of such certificate.
(c) EXCHANGE ACT AND SECURITIES ACT FILINGS. The Representative Borrower
shall deliver to each Bank and the Agent, within 5 days following the filing
with the SEC, copies of all filings by it or any of its Subsidiaries under
the Exchange Act (including reports on Forms 10-Q, 10-K and 8-K) and
registration statements filed with the SEC under either the Securities Act
or the Exchange Act. The Representative Borrower shall deliver to each Bank
and the Agent copies of all of the Representative Borrower's Annual Reports
and Proxy Statements and, at the request of such Bank, any other shareholder
communication.
(d) TAX FORMS. From time to time, each Borrower that is not created or
organized under the laws of any State of the United States of America or the
District of Columbia shall cooperate with each Bank and shall execute and
deliver to such Bank in a timely manner such forms (including Internal
Revenue Service Forms) and certificates as such Bank shall reasonably
request, in each case for the purpose of confirming that such Bank is
capable, under the provisions of any applicable tax treaty concluded with the
United States of America or any other applicable law, of receiving payments
of interest hereunder without deduction or withholding of any tax. In the
event that any such tax shall be required to be withheld or deducted, the
Representative Borrower shall pay to such Bank an amount that would fully
indemnify such Bank for such withheld or deducted amount.
(e) SENIOR FUNDED DEBT TO EBITDA RATIO. The Borrowers and their respective
Subsidiaries, taken as a whole, shall maintain, for (and at all times during)
each Fiscal Quarter beginning with the Fiscal Quarter ending June 30, 1996
(the "Initial Fiscal Quarter"), a ratio of Senior Funded Debt to EBITDA of
not greater than 2.50 to 1.00.
(f) CONSOLIDATED TANGIBLE NET WORTH. The Borrowers and their respective
Subsidiaries, taken as a whole, shall maintain, for (and at all times during)
each Fiscal Quarter beginning with the Initial Fiscal Quarter, a Consolidated
Tangible Net Worth of not less than (i) $25,000,000.00 plus (ii) fifty
percent (50%) of Consolidated Net Income (computed on a cumulative basis for
each Fiscal Quarter during the term of this Agreement, from the Initial
Fiscal Quarter to the date of determination without deducting any net losses
during any Fiscal Quarter in which there was a net loss) plus (iii) the net
proceeds from the issuance of any capital stock of the Representative
Borrower as determined on a cumulative basis.
(g) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The Borrowers and their
respective Subsidiaries, taken as a whole, shall at all times maintain, for
(and at all times during) each Fiscal Quarter beginning with the Initial
Fiscal Quarter, a ratio of Consolidated Cash Flow to Consolidated Fixed
Charges of not less than 1.65 to 1.00. The ratio contemplated by this clause
(g) shall be computed on a rolling four quarter basis and shall include the
Fiscal Quarter for which such ratio shall be determined plus the immediately
preceding three Fiscal Quarters.
(h) QUICK ASSETS TO SENIOR FUNDED DEBT. The Borrowers and their respective
Subsidiaries, taken as a whole, shall maintain, for (and at all times during)
each Fiscal Quarter beginning with the Initial Fiscal Quarter a ratio of (i)
the sum of all cash and Cash Equivalents of the Borrowers and their
respective Subsidiaries plus the sum of the net current accounts receivable
of all Borrowers and their respective Subsidiaries to (ii) Senior Funded Debt
of not less than 1.50 to 1.00.
(i) PAYMENT OF DEBTS AND TAXES. Each Borrower and any Subsidiary thereof
shall pay all debts, liabilities, taxes, assessments and other governmental
charges when due in the ordinary course; provided, however, that no such
debt, liability, tax, assessment or other governmental charge need be paid if
such is being contested in good faith by appropriate legal proceedings
promptly initiated and diligently conducted and if such reserves or other
appropriate provision, if any, as shall be required by GAAP shall have been
made therefor.
(j) CONDUCT OF BUSINESS. Each Borrower and its Subsidiaries shall continue
to engage in business of the same general type as now conducted by such
Borrower or Subsidiary. Each Borrower and its Subsidiaries will conduct and
manage their respective business and affairs in the ordinary course, and
shall take all steps necessary and reasonable for the purpose of preserving
the value of their respective business and assets.
(k) PRESERVATION OF CORPORATE EXISTENCE. Each Borrower and any Subsidiary
thereof shall at all times preserve and keep in full force and effect their
respective corporate existence and their respective rights, privileges,
licenses and franchises which are necessary in the normal conduct of their
business; provided, however, that without the consent of the Required Banks,
the Representative Borrower may cause any non-operating Subsidiary not a
party to any Loan Document or CACI Nederland B.V. to cease its corporate
existence so long as the assets of such entity are distributed to its parent
company prior to such cessation.
(l) BOOKS AND RECORDS. Each Borrower and any Subsidiary thereof shall at
all times keep and maintain complete and accurate books, accounts and records
of its operations and affairs in accordance with customary and sound business
practices, and shall permit each Bank and the Agent and their respective
officers, employees, agents and representatives to, from time to time upon
reasonable notice, have access to its place of business, examine such books,
accounts and records and make copies thereof and discuss the affairs and
finances of such Borrower or such Subsidiary with any of their respective
officers or directors.
(m) INSURANCE. Each Borrower and any Subsidiary thereof shall maintain in
full force and effect policies of insurance with responsible and reputable
insurance companies or associations in such amounts as are within an
acceptable range for and covering such risks as are usually and customarily
insured against by companies engaged in similar businesses and owning similar
properties in the same general area in which such Borrower or Subsidiary is
engaged.
(n) COMPLIANCE WITH LAWS. Each Borrower and any Subsidiary thereof shall
comply with all applicable laws, rules, regulations and orders of any
governmental or regulatory body or authority, a breach of which could have a
material adverse effect on the financial condition or business of the
Representative Borrower and its Consolidated Subsidiaries (taken as a whole).
(o) COMPLIANCE WITH LOAN DOCUMENTS. Each Borrower and CACI N.V. shall
comply with the terms and agreements contained in each Loan Document to which
they are a party.
(p) BANKING RELATIONSHIP WITH THE AGENT. The Representative Borrower shall
maintain with the Agent the Representative Borrower Account.
(q) PARENT OWNERSHIP OF CONSOLIDATED SUBSIDIARIES. The Representative
Borrower will, at all times, either directly or indirectly own all of the
shares of each class of capital stock of each other Borrower and any
Subsidiary thereof; provided, however, that, in the case of any Foreign
Subsidiary, not more than three percent (3%) of such shares may be owned by
Persons other than any Borrower or Subsidiary thereof. So long as any
Obligation remains outstanding, the Representative Borrower shall continue to
consolidate the accounts of each its Foreign and Domestic Subsidiaries on the
consolidated financial statements of the Representative Borrower.
(r) NOTICE OF DEFAULT. The Representative Borrower shall, promptly after
becoming aware thereof, deliver to each Bank and the Agent notice of any
Event of Default and Potential Event of Default.
(s) NOTICE OF ENVIRONMENTAL CLAIMS. The Representative Borrower shall
deliver to each Bank and the Agent a copy of any notice or other
communication (i) alleging any violation by any Borrower or any Subsidiary
thereof of any laws or regulations concerning the discharge of substances
into the environment and other environmental control matters or (ii) under
which any Borrower or Subsidiary shall admit to any such violation. Each
copy of any such notice shall be delivered to the Banks and the Agent
promptly following the receipt or issuance thereof by such Borrower or
Subsidiary.
(t) PAYMENTS PARI PASSU. Under applicable laws in force from time to time,
the claims and rights of the Banks and the Agent against the Borrowers under
the Loan Documents will not be subordinate to, and will rank at least pari
passu with, the claims and rights of each other unsecured creditor of the
Borrowers and their Subsidiaries.
Section 6.2 NEGATIVE COVENANTS. The Representative Borrower covenants
and agrees for itself, each other Borrower, CACI N.V. and any Subsidiary of
any thereof that, so long as this Agreement shall remain in effect or any
Obligation shall remain unpaid:
(a) LIENS. The Borrowers and all Subsidiaries thereof, taken as a whole,
shall not, directly or indirectly, create, incur, assume, grant, pledge or
permit to exist any Lien on the property or assets of the Borrowers and
Subsidiaries, taken as a whole, whether now owned or hereafter acquired, or
any income or profits therefrom, other than:
(i) any Lien (other than a Lien arising out of a purchase money
security interest) which, together with all such other similar Liens, are no
greater than $250,000;
(ii) any Lien which shall constitute a purchase money security
interest which, together with all such other similar Liens, are no greater
than $5,000,000; and
(iii) the Lien granted by the Pledgors under the Pledge Agreement.
(b) INDEBTEDNESS. No Borrower or any Subsidiary thereof shall, directly or
indirectly, create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, other than:
(i) the Indebtedness incurred hereunder and evidenced by the
Revolving Notes and the Money Market Note;
(ii) the Indebtedness incurred by CACI Limited under the loan
documents evidencing the U.K. Debt;
(iii) the Indebtedness evidenced by the Standby Letters of Credit, if
any, issued by the Bank in accordance with Section 2.3 hereof;
(iv) Indebtedness of the type described in clauses (i) and (ii) of
Section 6.2(a) which does not exceed (in each case in the aggregate and as to
the Borrowers and their Subsidiaries, taken as a whole) the respective
amounts set forth in such clauses (i) and (ii) of Section 6.2(a);
(v) (A) any guarantee, suretyship agreement, other similar
arrangement effecting the assumption of a debt or obligation of any other
Borrower or Subsidiary thereof, or the endorsement of any promissory note or
other instrument of obligation of any other Borrower or Subsidiary thereof,
in each case which is entered into in the ordinary course of any Borrower's
or Subsidiary's business and is necessary and beneficial in connection with
the operation thereof, or (B) any guarantee, suretyship agreement, other
similar arrangement effecting the assumption of a debt or obligation of any
Person (other than any Borrower or Subsidiary thereof), or the endorsement of
any promissory note or other instrument of obligation of any Person (other
than any Borrower or Subsidiary thereof), in each case which is entered into
in the ordinary course of any Borrower's or its Subsidiaries' business, is
necessary and beneficial in connection with the operation thereof and the
aggregate amount of all such guarantees, suretyship agreements, or other
similar arrangements shall not exceed in the aggregate $1,000,000.00; and
(vi) trade debt, operating leases, accounts payable and other similar
indebtedness incurred in the ordinary course of any Borrower's or its
Subsidiaries' business.
(c) CAPITAL STOCK. Without the prior written consent of the Required
Banks, no Borrower or any Subsidiary thereof shall, directly or indirectly,
repurchase, redeem or retire any of their capital stock, create new classes
of capital stock, declare or pay any cash dividends on their capital stock,
except that the Representative Borrower may:
(i) repurchase from time to time the capital stock of the
Representative Borrower provided such repurchases do not, throughout the term
of this Agreement, exceed in the aggregate $10,000,000.00 and, provided
further, that after giving effect to any such repurchase, the Borrowers shall
be in compliance with all provisions of this Agreement (including, without
limitation, all financial ratios contained in Section 6.1 hereof based on the
financial statements most recently provided by the Representative Borrower to
the Banks);
(ii) declare and pay dividends or make other distributions on its
capital stock if the Borrowers would be in compliance with all provisions of
this Agreement, including without limitation the financial ratios contained
in Section 6.1 hereof after giving effect to the payment or distribution
thereof; and
(iii) issue securities authorized under stock incentive plans described
in the Representative Borrower's Form 10-K or Proxy Statement.
(d) LOAN. No Borrower (or any Subsidiary thereof) shall, directly or
indirectly, make any loans or advances to any corporate officers or
directors, or any employees, or any insiders or affiliates (as defined in the
Exchange Act) or to any Subsidiary of any thereof not a party hereto, other
than:
(i) travel, relocation and other salary advances made in the ordinary
course of any Borrower's or its Subsidiaries' business;
(ii) loan to any Subsidiary of any Borrower not a party hereto
proceeds of the Revolving Loans or Money Market Loans for the purpose of
financing the acquisition of any Target as contemplated by, and in accordance
with the limitations contained in, Section 6.1(e) hereof (provided such
Subsidiary shall agree to be bound by the Loan Documents in accordance with
Section 6.2(h) hereof); and
(iii) loans to any officer of the Representative Borrower for the
purpose of enabling such officer to purchase securities of the type described
in Section 6.2(c)(iii) hereof; provided that the aggregate amount of all
loans made pursuant to this clause and outstanding from time to time shall
not exceed $500,000.00.
(e) NO MERGER OR ACQUISITION. Without the prior written consent of the
Required Banks, no Borrower or any Subsidiary thereof shall acquire, whether
by stock or asset purchase, merger, consolidation or other business
combination, any corporation, partnership, joint venture or other business
organization (any such entity, the "Target"); provided, however, that the
Representative Borrower or any direct or indirect Consolidated Subsidiary
thereof may acquire, either by way of stock or asset acquisition, merger,
consolidation or otherwise, one or more Targets if:
(i) during the period beginning on the Effective Date and ending on
the first anniversary thereof, the aggregate consideration (whether such
consideration shall consist of stock, cash, the assumption of debt, or
otherwise, and whether or not paid at closing or deferred) (any such
consideration, "Acquisition Consideration") paid for all Targets acquired
during such period shall not exceed $30,000,000.00;
(ii) during the period beginning on the Effective Date and ending on
the second anniversary thereof, the aggregate Acquisition Consideration paid
for all Targets acquired during such period shall not exceed $40,000,000.00;
(iii) during the period beginning on the Effective Date and ending on
the third anniversary thereof, the aggregate Acquisition Consideration paid
for all Targets acquired during such period shall not exceed $50,000,000.00;
(iv) the Borrowers and their respective Subsidiaries shall, after
giving effect to the acquisition of any such Target as provided above, be in
compliance with all of the terms of this Agreement including the financial
covenants described in Sections 6.1(e), Section 6.1(f) and 6.1(g) hereof as
determined on a pro-forma basis, provided further that:
(A) in the case of calculating the pro-forma Senior Funded Debt
to EBITDA ratio pursuant to Section 6.1(e) hereof, (1) Senior Funded Debt
shall be determined after giving effect to the acquisition of the Target, and
(2) EBITDA shall be determined on the basis of the lesser of (x) EBITDA for
the 12 months immediately preceding the month of such acquisition with out
taking into account such acquisition and (y) pro-forma EBITDA for the 12
months immediately preceding the month of such acquisition after taking into
account such acquisition;
(B) in the case of calculating pro-forma compliance with the
Fixed Charge Coverage Ratio pursuant to Section 6.1(g) hereof, Consolidated
Cash Flow shall be determined on the basis of the lesser of (1) Consolidated
Cash Flow for the 12 months immediately preceding the month of such
acquisition without taking into account such acquisition (in which case
Consolidated Fixed Charges shall be determined on the basis of the 12 months
immediately preceding the month of such acquisition without taking into
account such acquisition) and (2) pro-forma Consolidated Cash Flow for the 12
months immediately preceding the month of such acquisition after taking into
account such acquisition (in which case Consolidated Fixed Charges shall be
determined on the basis of the pro-forma Consolidated Fixed Charges for the
12 months immediately preceding the month of such acquisition after taking
into account such acquisition); and
(C) in addition to complying with the pro-forma Fixed Charge
Coverage Ratio as provided in clause (B) above, the Fixed Charge Coverage
Ratio pursuant to Section 6.1(g) hereof shall, on a pro forma basis after
giving effect to such acquisition, be equal to or greater than 1.20 to 1.00,
where for the purposes of such computation Consolidated Cash Flow shall be
determined on the basis of the lesser of (1) Consolidated Cash Flow for the
12 months immediately preceding the month of such acquisition without taking
into account such acquisition (in which case Consolidated Fixed Charges shall
be determined on the basis of the 12 months immediately preceding the month
of such acquisition without taking into account such acquisition plus 20% of
all indebtedness of whatever nature to be incurred or assumed in connection
with such acquisition), and (2) pro-forma Consolidated Cash Flow for the 12
months immediately preceding the month of such acquisition after taking into
account such acquisition (in which case Consolidated Fixed Charges shall be
determined on the basis of the pro-forma Consolidated Fixed Charges for the
12 months immediately preceding the month of such acquisition after taking
into account such acquisition plus 20% of all indebtedness of whatever nature
to be incurred or assumed in connection with such acquisition);
(v) such acquisition, merger, consolidation (or otherwise) is not
hostile or pursued by way of tender offer, proxy contest or other contested
manner (unless the Required Banks shall have waived in writing compliance
with this clause (v)); and
(vi) three (3) Business Days prior to consummation thereof, the
Representative Borrower shall have delivered to the Agent (which shall
promptly deliver a copy to the Banks) a certificate, executed by an
Authorized Officer of the Representative Borrower, demonstrating in
sufficient detail compliance with the financial covenants contained in this
Section 6.2(e) and, further, certifying that, after giving effect to the
consummation of such acquisition, merger, consolidation (or otherwise), the
representations and warranties of the Borrowers contained herein will be true
and correct and that the Borrowers, as of the date of such consummation, will
be in compliance with all other terms and conditions contained herein.
(f) MODIFICATIONS OF U.K. DEBT. CACI Limited shall not amend or modify in
any respect any of the agreements or instruments delivered in connection with
the U.K. Debt, the effect of which would, as a result thereof, contravene any
of the provisions contained herein, increase the aggregate amount of the loan
facility thereunder (which, as of the date hereof, is 500,000 Pounds
Sterling) or otherwise adversely effect the ability of the Borrowers to make
any payments of the principal of, or interest on, any Loan or of any Unused
Portion Fee or Administrative Fee or L/C Fee or of any other amounts payable
hereunder, in each case in accordance with the provisions hereof.
(g) FISCAL YEAR. The Representative Borrower and the other Borrowers shall
not, without the prior written consent of the Required Banks, make any
material change in accounting policies or reporting practices, including a
change in their Fiscal Year.
(h) ADVANCES TO SUBSIDIARIES AND AFFILIATES. No Borrower shall, without
the prior written consent of the Required Banks, make any advances (either
directly or indirectly), whether such advances are made from the proceeds of
the Revolving Loans, any Money Market Loan or Standby Letters of Credit or
otherwise, to any of their respective Subsidiaries or Affiliates not a party
hereto unless any such Subsidiary or Affiliate shall have entered into an
agreement and/or instrument (in form and substance acceptable to the Required
Banks) pursuant to which such Subsidiary or Affiliate shall have agreed to be
bound by all of the terms, conditions, covenants and agreements contained
herein and in the other Loan Documents, and such Subsidiary or Affiliate
shall have delivered such documents, certificates and opinions as any Bank
may reasonably request to implement such agreement.
(i) CREATION OF SUBSIDIARIES. No Borrower or any Subsidiary thereof shall
create or cause to be formed any Subsidiary without the consent of the
Required Banks unless such Subsidiary is a Consolidated Subsidiary of any
Borrower and agrees to be bound by the terms and conditions of this Agreement
pursuant to an agreement of the type and to the extent described in clause
(h) above.
(j) DISPOSITION OF ASSETS. No Borrower or Subsidiary thereof shall,
without the prior written consent of the Required Banks, sell, transfer or
otherwise dispose of (including by way of a sale and leaseback transaction)
any its assets (whether real or personal) other than in the ordinary and
usual course of its business.
(k) PERMITTED INVESTMENTS. No Borrower or Subsidiary thereof shall,
without the prior written consent of the Required Banks, make any investment
in any security (whether consisting of debt or equity or a partnership,
limited liability company or other interest) or like instrument except for
Permitted Investments (it being understood and agreed that this clause (k)
shall not prohibit the investment in any Target to the extent permitted by
the provisions of Section 6.2(e) hereof).
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1. EVENTS OF DEFAULT. If one or more of the following events or
conditions (each, an "Event of Default") shall occur and be continuing, that
is to say:
(a) the Borrowers shall default in the payment of principal of any
Revolving Note or the Money Market Note when due; or
(b) the Borrowers shall default in the payment of interest on any Loan, or
of the Unused Portion Fee, the Administrative Fee, any L/C Fee or of any
other fee, expense or other amount payable hereunder after the same becomes
due and payable for more than three (3) Business Days after notice thereof
has been given by the Agent to the Representative Borrower (which notice may
be telephonic); or
(c) any Borrower shall default in any payment of principal of or interest
on, or fees and expenses relating to any other obligation for borrowed money
(including without limitation the obligations arising under the U.K. Debt)
beyond any period of grace provided with respect thereto or in the
performance of any other agreement, term or condition contained in any
instrument or agreement evidencing, securing, guaranteeing or otherwise
relating to any such obligation and shall not have cured such default within
any period of grace provided by such agreement and such obligation, either
individually or in the aggregate, is for an amount in excess of $250,000 of
the Indebtedness of the Borrowers; or
(d) any written representation or warranty made by any Borrower or Pledgor
in or pursuant to this Agreement or any other Loan Document or in any other
documents, certificates, financial statements or reports furnished by any
Borrower or Pledgor or any Subsidiary of any thereof in connection with the
transactions contemplated hereby shall prove to have been false or misleading
in any material respect as of the time made or furnished; or
(e) (i) any Borrower shall default in the performance or observance of any
covenant, condition or agreement contained in clause (c), (d), (h), (j), (k),
(l), (m), (s) or (t) of Section 6.1 and such default shall remained
unremedied for more than ten (10) Business Days, or (ii) any Borrower shall
default in the performance or observance of any other covenant, condition or
agreement contained in Section 6.1 or any covenant, condition or agreement
contained in Section 6.2; or
(f) any Borrower shall default in the performance or observance of any
other covenant, condition or provision hereof or in any other Loan Document
or any Pledgor shall default in the performance or observance of any
covenant, condition or provision in the Pledge Agreement, and such default
shall not be remedied within thirty (30) days after written notice thereof is
received by the Representative Borrower (or, in the case of a default under
the Pledge Agreement, the applicable Pledgor) from any Bank or the Agent; or
(g) a proceeding (other than a proceeding commenced by any Borrower or any
Subsidiary thereof, as the case may be) shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of such Borrower or Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Borrower or
Subsidiary or for any substantial part of its total assets, or for the
winding-up or liquidation of its affairs and such proceedings shall remain
undismissed or unstayed and in effect for a period of thirty (30) consecutive
days or such court shall enter a decree or order granting the relief sought
in such proceeding; or
(h) any Borrower or any Subsidiary thereof, as the case may be, shall
commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, shall consent to the entry of
an order for relief in an involuntary case under any such law, or shall
consent to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of
such Borrower or Subsidiary or for any substantial part of its total assets,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action in furtherance of any of the foregoing; or
(i) a judgment or order shall be entered against any Borrower or any
Subsidiary thereof, by any court, and (i) in the case of a judgment or order
for the payment of money, either (A) such judgment or order shall continue
undischarged and unstayed for a period of fifteen (15) days in which the
aggregate amount of all such judgments and orders exceeds $100,000 or (B)
enforcement proceedings shall have been commenced upon such judgment or order
and (ii) in the case of any judgment or order for other than the payment of
money, such judgment or order could, in the reasonable judgment of any Bank,
together with all other such judgments or orders, have a materially adverse
effect on the Borrowers and their respective Subsidiaries taken as a whole;
or
(j) subject to the proviso contained in Section 6.1(p) hereof, the
Representative Borrower shall cease to own (either directly or indirectly)
100% of the outstanding capital stock of the Borrowers and their respective
Subsidiaries; or
(k) the occurrence of a material adverse change in the financial condition,
properties or assets of the Representative Borrower and its Consolidated
Subsidiaries, taken as a whole; or
(l) (i) any Termination Event shall occur with respect to any Benefit Plan
(it being understood and agreed that the termination of the Representative
Borrower's defined contribution plan in connection with the Representative
Borrower's reorganization of its Benefit Plans shall not constitute an Event
of Default hereunder provided such plan is fully funded at the time of
termination), (ii) any Accumulated Funding Deficiency, whether or not waived,
shall exist with respect to any Benefit Plan, (iii) any Person shall engage
in any Prohibited Transaction involving any Benefit Plan, (iv) any Borrower
or any ERISA Affiliate shall be in "default" (as defined in ERISA Section
4219(c)(5)) with respect to payments owing to a Multiemployer Benefit Plan as
a result of such Borrower's or any ERISA Affiliate's complete or partial
withdrawal (as described in ERISA Section 4203 or 4205) from such
Multiemployer Benefit Plan, (v) any Borrower or any ERISA Affiliate shall
fail to pay when due an amount that is payable by it to the Pension Benefit
Guaranty Corporation or to a Benefit Plan under Title IV of ERISA, or (vi) a
proceeding shall be instituted by a fiduciary of any Benefit Plan against any
Borrower or any ERISA Affiliate to enforce ERISA Section 515 and such
proceeding shall not have been dismissed within 30 days thereafter, except
that no event or condition referred to in clauses (i) through (vi) shall
constitute an Event of Default if it, together with all other such events or
conditions at the time existing, has not had, and in the reasonable
determination of the Required Banks will not have, a materially adverse
effect on the Borrowers and their respective Subsidiaries, taken as whole; or
(m) if (i) any Borrower or any Subsidiary thereof shall be suspended or
debarred from contracting with the United States Government and such
suspension or debarment shall not have been lifted within fifteen (15) days
after the imposition thereof, or (ii) the United States Government shall have
terminated any contract to which any Borrower or any Consolidated Subsidiary
thereof is a party and such termination would have a material adverse effect
upon the financial condition or prospects of the Representative Borrower and
its Consolidated Subsidiaries, taken as a whole;
(n) the occurrence of a Change in Control or a Potential Change in Control;
then, and upon any such event, the Agent, with the consent of the Required
Banks, may (1) upon notice to the Representative Borrower, on behalf of the
Borrowers, declare the entire outstanding principal amount, if any, of the
Revolving Notes, the Money Market Note, any and all accrued and unpaid
interest thereon, any and all accrued and unpaid Unused Portion Fee,
Administrative Fee and L/C Fees, and any and all other amounts payable by the
Borrowers to the Banks or the Agent under this Agreement or the Revolving
Notes or the Money Market Note to be forthwith due and payable, whereupon the
entire outstanding principal amount, if any, of the Revolving Notes and the
Money Market Note, together with any and all accrued and unpaid interest
thereon, any and all accrued and unpaid Unused Portion Fee, Administrative
Fee and fees in respect of Standby Letters of Credit, and any and all other
such amounts and such reimbursement shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrowers; provided, however,
that in the event of the entry of an order for relief with respect to any
Borrower or its Subsidiary under the Bankruptcy Code, any principal amount of
the Revolving Notes and the Money Market Note then outstanding, together with
any and all accrued and unpaid interest thereon, any and all accrued and
unpaid Unused Portion Fee, Administrative Fee and any fee in respect of any
Standby Letter of Credit, and any and all such other amounts shall thereupon
automatically become and be due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by
the Borrowers; (2) terminate or reduce the Revolving Loan Commitment; (3)
exercise any rights and remedies available to it under any Loan Document
(including without limitation the Pledge Agreement) or under applicable laws,
including without limitation any rights and remedies of a secured party under
the Uniform Commercial Code in effect in the Commonwealth of Virginia and
under any other applicable laws.
ARTICLE VIII
THE AGENT
Section 8.1 APPOINTMENT OF AGENT.
(a) APPOINTMENT GENERALLY. Each of the Banks hereby designates and
appoints NationsBank, N.A. as the Agent of such Bank under this Agreement and
the other Loan Documents, and each of the Banks hereby irrevocably authorizes
the Agent to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers as are set
forth herein and therein, together with such other powers as are incidental
thereto. The Agent agrees to act as such on the express conditions contained
in this Article VIII.
(b) AGENT ACTS FOR BANKS. The provisions of this Article VIII are solely
for the benefit of the Agent and the Banks and the Borrowers shall have no
right (including as third party beneficiary) to rely on or enforce any of the
provisions hereof. In performing its functions and other duties under this
Agreement and the other Loan Documents, the Agent shall act solely as agent
for the Banks and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for the
Borrowers or any of their Affiliates.
Section 8.2 NATURE OF DUTIES; NON-RELIANCE ON AGENT AND OTHER BANKS.
(a) The Agent shall not have any duties or responsibilities except those
expressly set forth in this Agreement or in the other Loan Documents. The
duties of the Agent shall be mechanical and administrative in nature. The
Agent shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Bank and is not a trustee for the
Banks. Nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be construed to impose upon the
Agent any obligations in respect of this Agreement or any of the other Loan
Documents except as expressly set forth herein and therein. If the Agent
seeks the consent or approval of the Banks to the taking or refraining from
taking of any action hereunder, the Agent shall send notice thereof to each
Bank. The Agent shall promptly notify each Bank at any time the Required
Banks or all of the Banks, as the case may be, have instructed the Agent to
act or refrain from acting pursuant hereto. The Agent may execute any of its
duties hereunder or under any other Loan Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
(b) Each Bank expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Agent or
any Affiliate thereof hereinafter taken, including any review of the affairs
of any Borrower or any Subsidiary thereof, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrowers and their Subsidiaries and made its own
decision to make its Loans and issue or participate in the issuance of
Standby Letters of Credit hereunder and enter into this Agreement and the
other Loan Documents to which it is a party. Each Bank covenants that it
will, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement or any other Loan
Document to which it is a party, and to make such investigations as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the
Borrowers and their Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrowers and their Subsidiaries which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
Section 8.3 RIGHTS, EXCULPATION, ETC. Neither the Agent nor any of its
Affiliates nor any of their respective officers, directors, employees,
agents, attorneys or consultants shall be liable to any Bank for any action
taken or omitted by it or such Person hereunder or under any of the other
Loan Documents, or in connection herewith or therewith, except that (i) the
Agent shall be obligated on the terms set forth herein for performance of its
express obligations hereunder, and (ii) neither the Agent nor any such other
Person shall have any liability hereunder or under any other Loan Document
except to the extent arising out of its own gross negligence or willful
misconduct (as determined by the final judgment of a court of competent
jurisdiction). The Agent shall not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to the terms of
this Agreement and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Bank to whom
payment was due, but not made, shall be to recover from other Banks any
payment in excess of the amount to which they are determined to have been
entitled. The Agent shall not be responsible to any Bank for any recitals,
statements, representations or warranties made by any Borrower or Subsidiary
thereof in this Agreement or in any other Loan Document or in any other
document, certificate report or financial statement delivered by any Borrower
or any Subsidiary thereof in connection herewith or therewith or for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the other Loan
Documents, or any of the transactions contemplated thereby, or for the
financial condition of the Borrowers or any of their respective Subsidiaries.
The Agent shall not be required to make any inquiry concerning conditions of
this Agreement or any of the Loan Documents or the financial condition of the
Borrowers or any of their respective Subsidiaries or the existence or
possible existence of any Potential Event of Default or Event of Default.
The Agent may at any time request instructions from the Banks with respect to
any actions or approvals which by the terms of this Agreement or of any of
the other Loan Documents the Agent is permitted or required to take or to
grant, and if such instructions are promptly requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not incur any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Required
Banks or, to the extent specifically provided herein, all the Banks or unless
it shall first be indemnified by the Banks against any and all liability and
expense which may be incurred by it by reason of refraining to take any
action or withholding any approval. Without limiting the foregoing, no Bank
shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of the Required
Banks or, to the extent specifically provided herein, all the Banks, and such
instructions shall be binding upon all Banks (including their successors and
assigns).
Section 8.4 RELIANCE; NOTICE OF DEFAULT.
(a) The Agent shall be entitled to rely upon any written notice, statement,
certificate, order, letter, cablegram, telegram, telecopy, telex or teletype
message, statement or other document or any telephone message believed by it
in good faith to be genuine and correct and to have been signed or made by
the proper Person, and with respect to all matters pertaining to this
Agreement or any of the other Loan Documents and its duties hereunder or
thereunder, upon advice of legal counsel (including counsel for the Borrowers
or the Pledgors), independent public accountants and other experts selected
by it with reasonable care. The Agent may deem and treat each Bank as the
owner of its interests hereunder for all purposes unless and until the Agent
shall have received a duly executed instrument of assignment as contemplated
by Section 9.8(c) hereof and the other conditions to assignment, to the
extent applicable, shall have been satisfied.
(b) The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default or Potential Event of Default unless the
Agent has received notice from a Bank or the Representative Borrower
referring to this Agreement, describing such Event of Default of Potential
Event of Default and stating that such notice is a "notice of Event of
Default" of "notice of Potential Event of Default", as the case may be. The
Agent shall take such action with respect to such Event of Default or
Potential Event of Default as shall be reasonably directed by the Required
Banks.
Section 8.5 INDEMNIFICATION. To the extent that the Agent is not
reimbursed and indemnified by the Borrowers or the Borrowers fail upon demand
by the Agent to perform their obligations to reimburse or indemnify the
Agent, the Banks will severally reimburse and indemnify the Agent for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
the Agent in any way relating to or arising out of this Agreement or any of
the other Loan Documents or any action taken or omitted by the Agent under
this Agreement or any of the other Loan Documents, in proportion to each
Bank's Pro Rata Share; provided, that no Bank shall be liable for (i) any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
the Agent's gross negligence or willful misconduct (as determined by the
final judgment of a court of competent jurisdiction) or (ii) the legal fees
and expenses incurred by the Agent in connection with the execution and
delivery of this Agreement and the other Loan Documents (to the extent not
reimbursed by the Borrowers). The obligations of the Banks under this
Section 8.5 shall survive the payment in full of the Revolving Loans and the
Money Market Loans and the termination of this Agreement.
Section 8.6 THE AGENT INDIVIDUALLY. With respect to its Pro Rata Share
hereunder and the Revolving Loans, Money Markets Loans, if any, and Standby
Letters of Credit made by it, the Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Bank. The
term "Banks" or "Required Banks" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity as a Bank. The Agent and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with the Borrowers as if it were not acting as Agent pursuant
hereto.
Section 8.7 SUCCESSOR AGENT; RESIGNATION OF AGENT.
(a) The Agent may resign from the performance of its functions and duties
hereunder at any time by giving at least twenty (20) days' prior written
notice to the Banks and the Representative Borrower. In the event that the
Agent gives notice of its desire to resign from the performance of its
functions and duties as Agent, any such resignation shall take effect only
upon the acceptance by a successor Agent of appointment pursuant to clauses
(b) and (c) below.
(b) The Required Banks shall jointly appoint a successor Agent, which shall
be a Bank hereunder.
(c) If a successor Agent shall not have been so appointed within said
twenty (20) day period, the retiring Agent shall then appoint a successor
Agent who shall serve as Agent until such time, if any, as the Banks appoint
a successor Agent as provided above, it being understood and agreed that any
successor Agent so appointed by the retiring Agent pursuant to this clause
(c) need not be, notwithstanding the provisions of clause (b) above, a Bank
hereunder so long as such successor Agent is a commercial bank organized
under the laws of the United States of America or of any State thereof or of
the District of Columbia and has a combined capital and surplus of at least
$400,000,000.00.
(d) Upon the appointment of a successor Agent, the term "Agent" shall, for
all purposes of this Agreement and the other Loan Documents, thereafter
include such successor Agent, the retiring Agent shall be discharged from its
duties and obligations as Agent, as appropriate, under this Agreement and the
other Loan Documents and the successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, except that the retiring Agent shall reserve all rights as to
obligations accrued or due to it, in its capacity as such, at the time of
such succession and all rights (whenever arising) under Section 9.10 hereof.
Section 8.8 CERTAIN MATTERS REQUIRING THE CONSENT OF ALL BANKS. Subject to
the provisions of Section 8.9(ii) hereof, the consent of all the Banks shall
be required for taking any of the following required or permitted actions
hereunder:
(i) any decrease or increase in any interest rate or margin applicable to
any Loan or in any fee payable hereunder;
(ii) any change in the Maturity Date;
(iii) any increase in the Facility Amount (except for such increases
following a reduction in the Facility Amount as contemplated by Section 2.5
hereof); and
(iv) any postponement of the date of payment of any principal, interest or
fees (other than the Administrative Fee, which may be postponed or waived at
the sole discretion of the Agent) due hereunder.
For the avoidance of doubt, all other actions, consents, waivers and
amendments permitted or required hereunder by the Banks shall be by the
Required Banks (unless such action, consent, waiver or amendment shall relate
only to an individual Bank, in which case such action may be taken by such
Bank individually).
Section 8.9 DEFAULTING BANKS VOTE NOT COUNTED. Whenever the "Required
Banks" or "all the Banks" shall be required or permitted to take any action
pursuant to the provisions of any Loan Document, for so long as a Bank shall
be in default of its obligation to advance its Pro Rata Share of any Loan or
advance any other funds to the Agent or any other Bank as required hereunder:
(i) until the earlier of the cure of such default and the termination of
the Revolving Loan Commitment, the term Required Banks for purposes of this
Agreement shall mean Banks (excluding all Banks whose default shall have not
been cured) whose Pro Rata Shares represent more than fifty percent (50%) of
the aggregate Pro Rata Shares of such Banks; and
(ii) until the earlier of the cure of such default and the termination of
the Revolving Loan Commitment, the term "all the Banks" for purposes of this
Agreement shall mean Banks (excluding all Banks whose default shall have not
been cured) whose Pro Rata Shares represent one hundred percent (100%) of the
aggregate Pro Rata Shares of such Banks.
ARTICLE IX
MISCELLANEOUS
Section 9.1 AMENDMENTS AND WAIVERS; CUMULATIVE REMEDIES. No delay or
failure of any Bank or the Agent or the holder of any the Revolving Notes or
the Money Market Note in exercising any right, power or privilege hereunder
or under any other Loan Document shall affect such right, power or privilege;
nor shall any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, power or privilege preclude
any further exercise thereof or of any other right, power or privilege. The
rights and remedies of any Bank or the Agent or any other holder of the
Revolving Notes or the Money Market Note are cumulative and not exclusive of
any rights or remedies which any of them would otherwise have. Neither this
Agreement or any other Loan Document, nor any term, condition,
representation, warranty, covenant or agreement hereof or thereof, may be
changed, waived, discharged or terminated orally but only by an instrument in
writing executed by the party against whom such change, waiver, discharge or
termination is sought. Any waiver, permit, consent or approval of any kind
or character (whether involving a breach, default, provision, condition or
term hereof or otherwise) on the part of any Bank or the Agent or any other
holder of any Note, or of the Borrowers under this Agreement, or under any
other Loan Document shall be effective only in the specific instance and for
the purpose for which given and only to the extent set forth specifically in
writing. No notice or demand given hereunder shall entitle the recipient
thereof to any other or further notice or demand in similar or other
circumstances.
Section 9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties, covenants and agreements of the Borrowers and
the Pledgors contained herein or made in writing in connection herewith shall
survive the execution and delivery of this Agreement and the Pledge
Agreement, the making of Loans hereunder and the issuance of the Notes.
Section 9.3 SUPERVENING ILLEGALITY. If, after the Effective Date, as the
result of (i) the adoption of any law, rule or regulation by any Governmental
Body, (ii) any change in the existing laws, rules and regulations of any
Governmental Body, (iii) the issuance of any order or decree by any Govern-
mental Body, (iv) any change in the interpretation or administration of any
applicable law, rule, regulation, order or decree by any Governmental Body
(including any central bank or similar agency) charged with the
interpretations or administration thereof, or (v) compliance by any Bank with
any request or directive (whether or not having the force of law) of any
Governmental Body, it shall be unlawful or impossible for any Bank to
maintain the Revolving Loans or the Money Market Loans, such Bank shall so
notify the Representative Borrower and the Agent and such Bank, by giving the
Representative Borrower at least one hundred twenty (120) Business Days'
prior written notice, may require the Borrowers to prepay the aggregate
principal amount of, and all accrued and unpaid Unused Portion Fee and all
other fees and all accrued and unpaid interest on, the Revolving Loans and
the Money Market Loans, as the case may be (together with any other amounts
that may become payable hereunder as a result thereof, including all amounts
pursuant to Section 9.10 of this Agreement), on a Business Day (the
"Prepayment Date") specified in such notice. If after the date of this
Agreement and prior to the initial Funding Date it shall become unlawful for
any Bank to make any Revolving Loans or Money Market Loans hereunder or to
maintain its Commitment, this Agreement shall terminate forthwith with
respect to such Bank and neither such Bank nor the Borrowers shall have any
further rights or obligations under this Agreement, provided, however, that
the Borrowers, in the event of any termination pursuant to this second
sentence of Section 9.3, shall pay to such Bank the amount of all accrued and
unpaid fees, if any, together with all amounts then due pursuant to Section
9.10 hereof. If it shall become unlawful for any such Bank to make any
Revolving Loans or Money Market Loans as provided in this Section 9.3, the
Revolving Loan Commitment shall automatically be deemed to be decreased in
the amount of such Bank's Pro Rata Share, and the Commitment of each such
other Bank shall be adjusted accordingly.
Section 9.4 NO REDUCTION IN PAYMENTS. All payments due to the Banks
hereunder, and all other terms, conditions, covenants and agreements to be
observed and performed by the Borrowers hereunder, shall be made, observed or
performed by the Borrowers without any reduction or deduction whatsoever,
including any reduction or deduction for any set-off, recoupment,
counterclaim (whether sounding in tort, contract or otherwise) or tax.
Section 9.5 STAMP TAXES. The Representative Borrower, on behalf of the
Borrowers and the Pledgors, agrees to pay, and to save each Bank harmless
from all liability for, any State or Federal stamp, transfer, documentary or
similar taxes, assessments or charges (herein "Stamp Taxes"), and any
penalties or interest with respect thereto, which may be assessed, levied,
collected or imposed by or upon such Bank, or otherwise become payable by
such Bank, in connection with the execution and delivery of this Agreement or
the Pledge Agreement or the Revolving Notes or the Money Market Note.
Section 9.6 NOTICES. Any notice, statement, request or demand required or
permitted hereunder to be in writing may be given by telecopy, telex, cable
or other customary means of electronic communication or by registered or
certified mail (return receipt requested) or express courier, postage
prepaid. All notices, statements, requests and demands given to or made upon
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given or made, in the case of telephonic notice (to the
extent expressly permitted hereunder) when made, or in the case of any other
type of notice, when actually received, if:
to the Representative Borrower or to any other Borrower (in which case such
communication shall be addressed care of the Representative Borrower), to it
at:
CACI International Inc
1100 North Glebe Road
Arlington, Virginia 22021
Attention: James P. Allen
Telephone: (703) 841-7946
Telecopy: (703) 522-6895
if to the Agent, to it at:
NationsBank, N.A.
8300 Greensboro Drive
Fifth Floor
Arlington, Virginia 22102
Attention: James W. Gaittens
Telephone: (703) 761-8022
Telecopy: (703) 761-8059
and if to any Bank, to it at its
address specified opposite its name
on the signature pages hereto.
or such other address for notice as any party hereto may designate for itself
in a notice to the other party, except in cases where it is expressly
provided herein that such notice, statement, request or demand shall not be
effective until received by the party to whom it is addressed. Notice to the
Representative Borrower in accordance with the provisions hereof shall, for
all purposes of this Agreement and the other Loan Documents, constitute and
be deemed to be notice to each Borrower.
Section 9.7 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE DEEMED TO BE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF
VIRGINIA AND, FOR ALL PURPOSES, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA WITHOUT REGARD TO
THE CONFLICTS OF LAWS PRINCIPLES.
Section 9.8 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective permitted successors
and assigns of the parties hereto, provided that no Borrower may assign or
transfer any of its interest hereunder without the prior written consent of
the Banks and the Agent.
(b) Any Bank may sell participation in all or any part of the Revolving
Loans made by it or its Commitment or any other interest herein or in its
Revolving Note or in any other document delivered or instrument delivered in
connection herewith to another bank or other entity. In the case of such
participation by a Bank, (i) the participant shall not have any rights under
this Agreement or the applicable Revolving Note or any other document or
instrument delivered in connection herewith (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating
thereto), (ii) all amounts payable by the Borrowers shall be determined as if
such Bank had not sold such participation and (iii) the Borrowers shall
continue to deal directly with such Bank with respect to the transactions
contemplated hereby.
(c) ASSIGNMENTS. Each Bank may assign any of its rights or interests under
the Loan Documents to one or more financial institutions, provided that:
(i) each such assignment shall be in an amount not less than
$10,000,000.00 (or such lesser amount if, after giving effect to such
assignment and all other assignments by such Bank occurring substantially
simultaneously therewith, such assigning Bank shall hold no Commitment or any
Revolving Loan;
(ii) each such assignment by a Bank of its Commitment or Revolving
Loans shall be made in such manner so that the same portion of such Bank's
Commitment, Revolving Loans, Revolving Note and obligations in respect of any
Standby Letter of Credit is assigned to the respective assignee Bank; and
(iii) if such assignment is made at the request of the Representative
Borrower with the consent of the Banks and the Agent, the Borrowers shall pay
to the Agent the Administrative Fee with respect to such assignee Bank as
provided pursuant to Section 3.7 hereof;
(iv) if such assignment is not being made at the request of the
Borrowers, (A) the assignee Bank shall pay to the Agent an annual fee to
cover its administrative costs in the amount of $5,000.00, and (B) the
assigning Bank shall pay to the Agent a one-time fee in the amount of
$2,000.00; and
(v) the Agent shall have consented to such Assignment, which consent
shall not be unreasonably withheld or delayed.
Upon execution and delivery by the assignee to the Borrowers and the Agent of
an instrument in writing pursuant to which such assignee agrees to be a
"Bank" hereunder (if not already a Bank) having the Commitment and Revolving
Loans specified in such assignment, and upon the consent of the Agent as
provided above, the assignee shall have, to the extent of such assignment,
the rights, benefits and obligations of a Bank hereunder holding the
Commitment, Revolving Loans (or portions thereof) and Standby Letters of
Credit or deemed participations therein, as applicable, assigned to it
pursuant to such assignment (in addition to the Commitment, Revolving Loans
(or portions thereof) and Standby Letters of Credit or deemed participations
therein, as applicable, theretofore held by such assignee), and the assigning
Bank shall, to the extent of such assignment, be relieved from its Commitment
(or portion thereof) so assigned.
Section 9.9 AFFIRMATIVE RATE OF INTEREST PERMITTED BY LAW. Nothing in this
Agreement or in any Note shall require the Borrowers to pay interest to the
Agent for the account of the Banks at a rate exceeding the maximum rate
permitted by applicable law to be charged or received by the Banks, it being
understood that this Section 9.9 is not intended to make the criminal laws of
any jurisdiction applicable in circumstances in which they would not
otherwise apply. If the rate of interest specified herein, in any Revolving
Note or in the Money Market Note would otherwise exceed the maximum rate so
permitted to be charged or received with respect to any amounts outstanding
hereunder or under such Revolving Note or the Money Market Note, the rate of
interest required to be paid to the Agent for the account of the Banks shall
be automatically reduced to such maximum rate.
Section 9.10 COSTS AND EXPENSES; INDEMNIFICATION.
(a) Without regard to whether the Effective Date shall have come into
existence or whether any Revolving Loan or Money Market Loan or Standby
Letter of Credit shall have been made or issued hereunder, the Representative
Borrower, on behalf of the Borrowers and the Pledgors, shall pay to each Bank
and the Agent, as the case may be, and reimburse each Bank and the Agent for,
as the case may be, and save each Bank and the Agent, as the case may be,
harmless against and indemnify each Bank and the Agent, as the case may be,
against losses from:
(i) in the case of the Agent, (x) all out-of-pocket cost and expenses
of the Agent in connection with the preparation, execution, delivery, waiver,
modification and amendment of this Agreement and any other Loan Document (to
the extent applicable) and any other document or instrument delivered in
connection with the transactions contemplated hereby, including, without
limitation, the reasonable fees and expenses of counsel for the Agent with
respect thereto, and (y) all out-of-pocket costs and expenses, if any
(including without limitation, reasonable counsel fees and expenses), of such
Agent in such capacity in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement and any other
Loan Document and any other document or instrument delivered in connection
with the transactions contemplated hereby, including, for the avoidance of
doubt and without limitation, reasonable counsel fees and expenses in
connection with the enforcement of rights under this clause (i); and
(ii) in the case of any Bank, all out-of-pocket costs and expenses, if
any (including without limitation, reasonable counsel fees and expenses), of
such Bank in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement and any other Loan Document
and any other document or instrument delivered in connection with the
transactions contemplated hereby, including, for the avoidance of doubt and
without limitation, reasonable counsel fees and expenses in connection with
the enforcement of rights under this clause (ii).
(b) The Representative Borrower, on behalf of the Borrowers and the
Pledgors, shall indemnify and hold harmless each Bank, the Agent and their
respective affiliates, officers, directors, employees, agents and advisors
(each, an "Indemnified Person") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable
fees and disbursements of counsel) which may be incurred by or asserted or
awarded against any Indemnified Person in each case arising out of or in
connection with or by reason of, or in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with this Agreement, the Pledge Agreement, the
Revolving Notes, the Money Market Note and any other document or instrument
delivered in connection with the transactions contemplated hereby, whether or
not an Indemnified Person is a party hereto or thereto and whether or not the
Effective Date shall have come into existence or any Revolving Loan or Money
Market Loan or Standby Letter of Credit has been made or issued under this
Agreement; provided, however, that, and except as specifically limited by the
next succeeding proviso, the Borrowers shall have no obligation to indemnify
or hold harmless any Indemnified Person for liability or expenses to the
extent arising out of such Indemnified Person's gross negligence or willful
misconduct; and provided, further, and that the Borrowers shall have no
obligation to indemnify or hold harmless any Indemnified Person for liability
or expenses arising out of any investigation, litigation or proceeding
instituted by any Borrower against an Indemnified Person if such liability or
expenses are attributable to the negligence of such Indemnified Person in the
performance of such Indemnified Person's obligations under any Loan Document
as finally determined by a court of competent jurisdiction or as mutually
agreed upon by such Indemnified Person and the Borrowers (it being understood
and agreed that nothing contained in this proviso shall have the effect of
limiting or otherwise prejudicing any Indemnified Person's right to
indemnification hereunder for liability or expenses arising out of any
investigation, litigation or proceeding instituted by any Borrower against an
Indemnified Person in connection with any action or inaction taken by such
Indemnified Person under, pursuant to or in connection with Section 2.3
hereof unless such liability or expenses are attributable to such Indemnified
Person's gross negligence or willful misconduct.
(c) All amounts payable by the Borrowers under this Section 9.10 shall be
immediately due upon written request by a Bank or Agent, as the case may be,
for the payment thereof. The obligations of the Borrowers under this Section
9.10 shall survive the payment of the Revolving Notes and the Money Market
Note.
Section 9.11 SET-OFF; SUSPENSION OF PAYMENT AND PERFORMANCE. Each Bank and
the Agent is hereby authorized by the Borrowers, at any time and from time to
time, without notice (a) during any Event of Default, to set off against, and
to appropriate and apply to the payment of, the liabilities of the Borrowers
then due under this Agreement and any other Loan Document any and all
liabilities owing by any Bank or the Agent or any of their Affiliates to any
Borrower (whether payable in Dollars or any other currency, whether matured
or unmatured and, in the case of liabilities that are deposits (including,
without limitation, any funds from time to time on deposit in the
Representative Borrower Account or other account maintained with any Bank or
the Agent Bank, whether general or special, time or demand and however
evidenced and whether maintained at a branch or office located within or
without the United States), and (b) during any Event of Default, to suspend
the payment and performance of such liabilities owing by such Person or its
Affiliates and, in the case of liabilities that are deposits, to return as
unpaid for insufficient funds any and all checks and other items drawn
against such deposits.
Section 9.12 JUDICIAL PROCEEDINGS; WAIVER OF JURY TRIAL. Any judicial
proceeding brought against any Borrower with respect to any Credit Agreement
Related Claim may be brought in any court of competent jurisdiction in the
Commonwealth of Virginia, and, by execution and delivery of this Agreement,
each Borrower (a) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any judgment rendered thereby in connection with any
Credit Agreement Related Claim and (b) irrevocably waives any objection it
may now or hereafter have as to the venue of any such proceeding brought in
such a court or that such a court is an inconvenient forum. Each Borrower
hereby waives personal service of process and consents that service of
process upon it may be made by certified or registered mail, return receipt
requested, at its address specified or determined in accordance with the
provisions of Section 9.6 of this Agreement, and service so made shall be
deemed completed on the earlier of (x) the receipt thereof and (y) the fifth
(5th) Business Day after such service is deposited in the mail. Nothing
herein shall affect the right of any Bank, the Agent or any other Indemnified
Person to serve process in any other manner permitted by law or shall limit
the right of any Bank, the Agent or any other Indemnified Person to bring
proceedings against any Borrower in the courts of any other jurisdiction. Any
judicial proceeding by any Borrower against any Bank or the Agent involving
any Credit Agreement Related Claim shall be brought only in a court located
in the Commonwealth of Virginia. EACH BORROWER AND THE BANK AND THE AGENT
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE
PARTIES INVOLVING ANY CREDIT AGREEMENT RELATED CLAIM.
Section 9.13 LIMITATION OF LIABILITY. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, to the extent the
obligations or liabilities of any Borrower (other than the Representative
Borrower) shall have been determined by a court of competent jurisdiction to
be invalid or unenforceable for any reason (including, without limitation, on
account of any applicable state or federal law relating to fraudulent
conveyance or transfers), then the obligations or liabilities of such
Borrower hereunder or under any other Loan Document shall be limited to the
maximum amount that is permissible under any such applicable law, and such
Borrower expressly consents to remain liable for such obligations and
liabilities hereunder as so limited.
Section 9.14 FURTHER ACTS AND ASSURANCES. Each Borrower shall promptly and
duly execute and deliver to a Bank or the Agent, as the case may be, and to
such other persons as such Bank or the Agent shall designate, such further
instruments and shall take such further action as may be required by law or
as such Bank or the Agent may from time to time request in order more
effectively to carry out and accomplish the intent and purpose of this
Agreement and the other Loan Documents and to establish and protect the
rights and remedies created or intended to be created in favor of the Bank
hereunder or under any other Loan Document.
Section 9.15 NO FIDUCIARY RELATIONSHIP. No provision of this Agreement or
in any of the other Loan Documents, and no course of dealing between the any
Bank or the Agent and the Borrowers shall be deemed to create any fiduciary
duty by the Agent or any Bank to the Borrowers.
Section 9.16 SEVERABILITY. The provisions of this Agreement are severable,
and if any clause or provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such clause or
provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the
validity or enforceability of such clause or provision in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
Section 9.17 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each
complete set of which, when so executed and delivered by all parties, shall
be an original, but all such counterparts shall together constitute but one
and the same instrument.
Section 9.18 HEADINGS, BOLD TYPE AND TABLE OF CONTENTS. The section
headings, subsection headings, and bold type used herein and the Table of
Contents hereto have been inserted for convenience of reference only and do
not constitute matters to be considered in interpreting this Agreement.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
BORROWERS
CACI INTERNATIONAL INC
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
CACI PRODUCTS COMPANY
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
CACI, INC.
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
CACI, INC.-FEDERAL
By: /s/
--------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
CACI, INC.-COMMERCIAL
By: /s/
--------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
CACI FIELD SERVICES, INC.
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
AUTOMATED SCIENCES GROUP, INC.
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
QUICKSOURCE, INC.
By: /s/
--------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
CACI SYSTEMS INTEGRATION INC
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
AMERICAN LEGAL SYSTEMS CORP.
By: /s/
--------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
IMS TECHNOLOGIES, INC.
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
IMS SERVICES, INC.
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
INTEGRATED MICROCOMPUTER SYSTEMS, INC.
By: /s/
-------------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
AGENT
Address: NATIONSBANK, N.A.
By: /s/
-------------------------------------
Name: James W. Gaittens
Title: Vice President
8300 Greensboro Drive
Fifth Floor
McLean, Virginia 22102
Attention: Mr. James W. Gaittens
Telephone: (703) 761-8022
Telecopier: (703) 761-8059
BANKS
By: /s/
-------------------------------------
Name: James W. Gaittens
Title: Vice President
Address: NATIONSBANK, N.A.
8300 Greensboro Drive
Fifth Floor
McLean, Virginia 22102
Attention: Mr. James W. Gaittens
Telephone: (703) 761-8022
Telecopier: (703) 761-8059
By: /s/
-------------------------------------
Name: R. Mark Swaak
Title: Assistant Vice President
Address: SIGNET BANK
7799 Leesburg Pike
Falls Church, Virginia 22043
Attention: Mr. R. Mark Swaak
Telephone: (703) 714-5044
Telecopier: (703) 506-9551
EXHIBIT 11
CACI INTERNATIONAL INC AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
Year Ended June 30
(dollars in thousands) 1996 1995 1994
- ------------------------------------------------------------------------
Net income before
extraordinary item $ 9,851 $ 8,156 $ 6,336
Extraordinary item 0 0 (300)
------- ------- -------
Net Income $ 9,851 $ 8,156 $ 6,036
Average shares outstanding
during the period 10,140 10,020 10,098
Dilutive effect of stock
options after application
of treasury stock method 576 591 517
------- ------- -------
Average number of shares
and equivalent shares
outstanding during the period 10,716 10,611 10,615
------- ------- -------
Earnings per common and
common equivalent share
Before extraordinary item $ 0.92 $ 0.77 $ 0.60
Extraordinary item $ 0.00 $ 0.00 $ (0.03)
------- ------- -------
Net Income $ 0.92 $ 0.77 $ 0.57
======= ======= =======
EXHIBIT 13
FINANCIAL CONTENTS
Selected Financial Information
Management's Discussion and Analysis
Schedule II: Valuation and Qualifying Accounts
Independent Auditors' Consent to incorporation of the financial information
related to the Independent Auditors' Report by reference from the Annual
Report to Shareholders
Independent Auditors' Report on Consolidated Financial Statement Schedule
Report of Independent Auditors
Statements of Operations
Balance Sheets
Statements of Cash Flows
Statements of Shareholders' Equity
Notes to Financial Statements
Quarterly Results
<PAGE>
CACI INTERNATIONAL INC
FIVE YEAR SELECTED FINANCIAL INFORMATION
(amounts in thousands, except share data)
INCOME STATEMENT DATA
<TABLE>
<S> <C> <C> <C> <C> <C>
Year ended June 30, 1996 1995 1994 1993 1992
- ------------------- -------- -------- -------- -------- --------
Revenues $244,615 $232,964 $183,700 $145,148 $139,878
Costs and expenses
Direct costs 133,184 126,442 97,584 75,804 74,536
Indirect costs and selling expenses 89,160 87,688 71,126 57,797 55,289
Depreciation and amortization 5,510 4,981 4,341 3,367 2,556
-------- -------- -------- -------- --------
Operating expenses 227,854 219,111 173,051 136,968 132,381
-------- -------- -------- -------- --------
Income from operations 16,761 13,853 10,649 8,180 7,497
Interest expenses 605 478 420 471 359
Shareholder lawsuit and merger costs - - - 901 -
Excess facilities and
lease termination cost - - - 1,921 -
-------- -------- -------- -------- --------
Earnings before income taxes 16,156 13,375 10,229 4,887 7,138
Income taxes 6,305 5,219 3,893 1,907 2,928
-------- -------- -------- -------- --------
Income before extraordinary item 9,851 8,156 6,336 2,980 4,210
Extraordinary item-cost of
shareholder lawsuit settlement
(net of $194 tax benefit) - - (300) - -
-------- -------- -------- -------- --------
Net income $ 9,851 $ 8,156 $ 6,036 $ 2,980 $ 4,210
======== ======== ======== ======== ========
Earnings per share
Income before extraordinary item $ 0.92 $ 0.77 $ 0.60 $ 0.29 $ 0.40
Extraordinary item - - (0.03) - -
-------- -------- -------- -------- --------
Net Income $ 0.92 $ 0.77 $ 0.57 $ 0.29 $ 0.40
======== ======== ======== ======== ========
</TABLE>
BALANCE SHEET DATA
<TABLE>
<S> <C> <C> <C> <C> <C>
June 30, 1996 1995 1994 1993 1992
- ------------------ -------- -------- -------- -------- --------
Total assets $103,308 $ 74,642 $ 70,999 $ 58,417 $ 55,835
Long-term obligations 2,414 2,340 2,492 2,898 2,901
Working capital 28,675 26,517 22,009 21,937 24,055
Shareholders' equity 55,338 44,485 37,738 30,497 28,923
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION
& RESULTS OF OPERATIONS
The following discussion and analysis is provided to enhance the
understanding of, and should be read in conjunction with, the Financial
Statements and the related Notes. All years refer to the Company's fiscal
year end of June 30.
REVENUES
The table below sets forth, for the periods indicated, the customer mix in
revenues with related percentages of total revenues.
(dollars in thousands, except as percents)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1996 1995 1994
------------------ ------------------ -------------------
Department of Defense $130,432 53.3% $120,104 51.6% $ 94,569 51.5%
Federal Civilian Agencies 59,178 24.2 55,541 23.8 35,698 19.4
Commercial 47,479 19.4 48,286 20.7 46,859 25.5
State & Local Governments 7,526 3.1 9,033 3.9 6,574 3.6
-------- ------ -------- ------ -------- ------
Total $244,615 100.0% $232,964 100.0% $183,700 100.0%
======== ====== ======== ====== ======== ======
</TABLE>
Total revenues in 1996 increased by 5% from $233.0 million to $244.6 million,
primarily due to two acquisitions during the year. On September 1, 1995, the
Company acquired Automated Sciences Group, Inc. ("ASG") which added $12.0
million of revenues in the year. On January 1, 1996, IMS Technologies, Inc.
("IMS") was acquired and contributed $8.6 million to 1996 revenues. Lack of
internal growth was partially attributable to the extensive delays in
approval of federal government budgets during the past year which resulted in
delays in new federal procurements.
1995 revenues of $233.0 million grew 27% from the previous year, an increase
of $49.3 million. Most of the increase in 1995, $38.3 million, was from
internal growth. The remainder of the increase was the result of the full-
year effect of an acquisition on December 1, 1993, of the Government Services
business of SofTech, Inc.
The 1996 Department of Defense ("DoD") revenue increase of $10.3 million was
primarily attributable to the two acquisitions made during the year. This
revenue increase was partially offset by the give back to the prime
contractor of a U.S. Navy contract by the Company on April 1, 1995. This
subcontract generated approximately $6.2 million in revenue in 1995, but was
breakeven in terms of its profitability. The 1995 $25.5 million DoD revenue
increase was primarily attributable to $14.0 million of internally generated
revenues and the 1994 acquisition of the Government Services business of
SofTech, Inc. which added approximately $11.0 million.
Federal Civilian Agencies revenues are primarily derived from Department of
Justice ("DoJ") litigation support efforts. The litigation support business
with DoJ has grown substantially over many years. However, it is subject to
significant year-to-year fluctuations based on DoJ's case load. Revenues from
DoJ were $47.4 million, $49.2 million and $28.9 million in 1996, 1995 and
1994, respectively. 1996 revenues from Federal Civilian Agencies were
enhanced by $8.3 million derived from the acquisitions of ASG and IMS.
Commercial revenues are primarily derived from the Company's Marketing
Systems Group located in the U.K., and to a lesser degree from the Simulation
Systems Group and from commercial litigation support. In 1996, revenues
declined $0.8 million largely as a result of a delay in the Marketing Systems
Group's introductions of a Windows (R) 95 version of its InSite(TM) product
until mid-year causing revenues to decrease to $28.8 million from last year's
$30.2 million. Revenues from the Simulation Systems Group remained level at
$9.6 million. The $1.5 million revenue increase in 1995 over 1994 was
largely the result of a $3.4 million increase in Marketing Systems Group
revenue offset by a decline from commercial litigation support.
The $2.4 million increase in State & Local Governments revenue in 1995, as
compared with 1994, was principally due to the growth in systems development
contracts with various state motor vehicle departments. The $1.5 million
decline in 1996 revenue resulted primarily from an early termination from one
of these efforts.
The Company's total backlog at July 31, 1996, increased to $705 million, or
20%, from prior year's $588 million.
RESULTS OF OPERATIONS
In 1996, income from operations grew $2.9 million to $16.8 million, and as a
percent of revenues improved from 5.9% to 6.8% This margin improvement was
the result of increased revenue, management's control of discretionary costs,
$0.9 million in favorable settlements of contract claims, coupled with a
shift in contract mix from lower to higher margin business. In 1995, income
from operations grew $3.2 million to $13.9 million, principally as a result
of the 27% increase in revenues. The margins also rose from 5.8% to 5.9% in
1995 from a reduction in indirect costs as a percent of revenues.
The following table sets forth the relative percentages that certain items of
expense and earnings bear to revenues.
1996 1995 1994
----------------------------
Revenues 100.0% 100.0% 100.0%
Costs and expenses
Direct costs 54.4 54.3 53.1
Indirect costs & selling expenses 36.5 37.7 38.7
Depreciation & amortization 2.3 2.1 2.4
----------------------------
Total operating expenses 93.2 94.1 94.2
----------------------------
Income from operations 6.8 5.9 5.8
Interest expense 0.2 0.2 0.2
----------------------------
Earnings before income taxes 6.6 5.7 5.6
Income taxes 2.6 2.2 2.1
Extraordinary item 0.0 0.0 0.2
----------------------------
Net income 4.0% 3.5% 3.3%
============================
During the last three years, as a percentage of revenue, total direct costs
remained relatively stable at 54.4%, 54.3% and 53.1%. Direct costs include
direct labor and other direct costs (i.e., non-labor) which are generally
passed through to the customer without significant mark-up. Direct labor, the
principal driver of profit-bearing revenue, increased in 1996 as a percent of
total direct costs to 65.9% from 63.3% in 1995 and 64.5% in 1994. The higher
proportion of direct labor improved overall profit margins.
Indirect & selling expense includes fringe benefits, marketing and bid &
proposal costs, indirect labor, and other indirect discretionary costs.
Fringe benefits, representing the largest category of indirect expenses,
increased proportionally to direct labor in 1995 and in 1996. From 1994 to
1996, indirect costs, as a percentage of revenue, have been declining -- from
38.7% to 37.7% to 36.5%, respectively. The decline in expenses as a percent
of revenues in 1996 is due primarily to management's efforts to reduce
discretionary costs by $1.5 million to offset the negative effects on revenue
of delays that resulted from the 1996 Federal Government budget process. The
reduction in the percentage of indirect costs from 1994 to 1995 was
principally due to control of growth of management costs while revenues were
increasing sharply. Throughout this three-year period, the Company has
maintained a high level of marketing and bid & proposal activity.
Depreciation & amortization expense increased in 1996 by $0.5 million to $5.5
million. An increased level of fixed asset acquisitions, primarily purchases
of computing and network equipment, coupled with the addition of ASG and IMS
fixed assets, accounted for about half of the growth. The remainder of the
growth was the result of ASG and IMS goodwill amortization. The 1995
depreciation and amortization expense increase of $0.7 million to $5.0
million was primarily the result of purchases of computing and network
equipment, reduction in depreciation life of computer equipment, and the
addition of goodwill amortization of the Government Services business of
SofTech, Inc. See Note 10 to the Financial Statements.
Interest costs remained at 0.2% of revenues for period 1994, 1995 and 1996.
In 1996, interest costs increased by $127,000, primarily as a result of a
$1.7 million increase in average borrowings to $8.6 million from $6.9
million. The increased borrowings were incurred to support the acquisitions.
The 1995 increase in interest costs was primarily the result of an increase
in average interest rates from 5.0% to 7.0%, partially offset by a 14.0%
reduction in the average line of credit balance.
The effective income tax rates in 1996, 1995, and 1994 were 39%, 39%, and
38%, respectively. The lower effective tax rate in 1994 was primarily
associated with the level of earnings from the Company's U.K. subsidiary,
where the Company enjoys a lower tax rate as compared with U.S. income.
The 1994 extraordinary item reflects a provision made to cover the costs of
settling outstanding shareholder lawsuits. The provision equates to a $0.5
million pre-tax expense, and $0.3 million net of tax.
EFFECTS OF INFLATION
Approximately one-third of the Company's business is conducted under cost-
reimbursable contracts which automatically adjust revenues to cover increased
costs from inflation. About 40% of the business is under time and materials
contracts where labor rates are often fixed for several years. The Company
generally is able to price these contracts in a manner to accommodate rates
of inflation as experienced in recent years. The remaining portion of the
Company's business is fixed-price and is primarily for product sales or other
short-term efforts that would not be adversely affected by inflation.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of cash are from operating activities and
bank borrowings. The Company's primary requirement for working capital is to
carry billed and unbilled receivables, a majority of which are due under
prime contracts with the U.S. Government, or subcontracts thereunder.
During the past three years, the Company has consistently generated positive
cash flow from operations sufficient to meet its normal working capital
requirements and capital expenditures. In 1996, the Company drew on its bank
revolving line of credit to fund the previously mentioned acquisitions.
Month-end borrowings peaked in January at $15.2 million following the IMS
acquisition, but were reduced to $10.0 million by year-end from internally
generated cash flows. Also see Note 10 to the Financial Statements.
In anticipation of continuing its strategy of acquisitions, on July 26, 1996,
the company entered into a new three-year unsecured revolving line of credit.
The new agreement permits borrowings of up to $50 million, with a sublimit of
$30 million in the first year to be available for acquisitions of businesses.
See Note 4 to the Financial Statements.
While the company did not purchase any of its shares in 1996, it has
repurchased its shares in the open market in prior years. The Company has
never paid any cash dividends as its policy is to invest earnings in the
growth of the Company.
Accordingly, the Company believes that the combination of internally
generated funds, available bank credit and cash on hand will provide for the
required liquidity and capital resources for the foreseeable future.
<PAGE>
SCHEDULE II
CACI INTERNATIONAL INC AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR YEARS ENDED JUNE 30, 1996, 1995 AND 1994
(dollars in thousands)
<TABLE>
Balance
at Other Changes Balance
Beginning Additions Add at End of
Description of Period at Cost Deductions (Deduct) Period
- ----------- --------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
1996
- ----
Reserves deducted from
assets to which they
apply:
Allowances for
doubtful receivables $1,415 $382 $ (103) $551 $2,245
====== ==== ======= ==== ======
1995
- ----
Reserves deducted from
assets to which they
apply:
Allowances for
doubtful receivables $1,664 $493 $ (754) $ 12 $1,415
====== ==== ======= ==== ======
1994
- ----
Reserves deducted from
assets to which they
apply:
Allowances for
doubtful receivables $2,312 $294 $(1,105) $163 $1,664
====== ==== ======= ==== ======
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Annual Report of CACI
International Inc and subsidiaries on Form 10-K of our report dated August
12, 1996, appearing in the 1996 Annual Report to Shareholders of CACI
International Inc and subsidiaries for the year ended June 30, 1996.
/s/
Washington, D.C.
September 26, 1996
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
CACI International Inc
Arlington, Virginia
We have audited the consolidated financial statements of CACI International
Inc and subsidiaries (the Company) for the years ended June 30, 1996 and
1995, and for each of the three years in the period ended June 30, 1996, and
have issued our report thereon dated August 12, 1996; such consolidated
financial statements and report are included in the 1996 Annual Report to
Shareholders of CACI International Inc and subsidiaries and are incorporated
herein by reference. Our audits also included the consolidated financial
statement schedule of the Company, listed in the index at Item 14(a)2. This
consolidated financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such consolidated financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly in all material respects the information
set forth therein.
/s/
Washington, D.C.
August 12, 1996
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
CACI International Inc
Arlington, Virginia
We have audited the accompanying consolidated balance sheets of CACI
International Inc and subsidiaries (the Company) as of June 30, 1996 and
1995, and the related statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended June 30, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of June 30, 1996 and 1995,
and the results of its operations and its cash flows for each of the three
years in the period ended June 30, 1996 in conformity with generally accepted
accounting principles.
/s/
Washington, D.C.
August 12, 1996
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
<TABLE>
<S> <C> <C> <C>
Year ended June 30, 1996 1995 1994
- ------------------- -------- -------- --------
Revenues $244,615 $232,964 $183,700
Costs and expenses
Direct costs 133,184 126,442 97,584
Indirect costs and selling expenses 89,160 87,688 71,126
Depreciation and amortization 5,510 4,981 4,341
-------- -------- --------
Total operating expenses 227,854 219,111 173,051
-------- -------- --------
Income from operations 16,761 13,853 10,649
Interest expense 605 478 420
-------- -------- --------
Income before income taxes and
extraordinary item 16,156 13,375 10,229
Income taxes 6,305 5,219 3,893
-------- -------- --------
Income before extraordinary item 9,851 8,156 6,336
Extraordinary item: cost of
shareholder lawsuit settlement
(net of tax benefit) - - (300)
-------- -------- --------
Net income $ 9,851 $ 8,156 $ 6,036
======== ======== ========
Earnings per share:
Income before extraordinary item $ 0.92 $ 0.77 $ 0.60
Extraordinary item - - (0.03)
-------- -------- --------
Net income $ 0.92 $ 0.77 $ 0.57
======== ======== ========
Weighted average shares outstanding 10,716 10,611 10,615
</TABLE>
(See Notes to Consolidated Financial Statements)
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
ASSETS
------
June 30, 1996 1995
- ----------------------------------------------------------------------------
Current assets
Cash and equivalents $ 1,778 $ 1,996
Accounts receivable
Billed 59,330 42,188
Unbilled 7,770 6,134
---------------------------
Total accounts receivable 67,100 48,322
---------------------------
Income taxes receivable 1,627 -
Deferred income taxes 133 156
Prepaid expenses and other 3,593 3,860
---------------------------
Total current assets 74,231 54,334
Property and equipment
Equipment and furniture 24,007 20,644
Leasehold improvements 2,186 1,809
---------------------------
Property and equipment, at cost 26,193 22,453
Accumulated depreciation and amortization (17,138) (13,927)
---------------------------
Total property and equipment, net 9,055 8,526
---------------------------
Accounts receivable, long term 7,289 4,489
Goodwill 10,548 5,413
Other assets 1,813 1,182
Deferred income taxes 372 698
---------------------------
TOTAL ASSETS $103,308 $74,642
===========================
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED BALANCE SHEETS (continued)
(dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, 1996 1995
- ----------------------------------------------------------------------------
Current liabilities
Note payable $ 9,987 $ -
Accounts payable and accrued expenses 19,196 11,719
Accrued compensation and benefits 13,406 13,310
Deferred rent expense 724 561
Income taxes payable - 1,944
Deferred income taxes 2,243 283
---------------------------
Total current liabilities 45,556 27,817
---------------------------
Deferred rent expenses 2,274 2,197
Deferred income taxes 140 143
Shareholders' equity
Common stock -
$.10 par value, 40,000,000 shares authorized,
13,755,000 and 13,568,000 shares issued 1,376 1,357
Capital in excess of par 6,239 5,053
Retained earnings 62,628 52,777
Cumulative currency translation adjustments (1,243) (1,040)
Treasury stock, at cost
(3,526,000 shares and 3,526,000 shares) (13,662) (13,662)
---------------------------
Total shareholders' equity 55,338 44,485
---------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $103,308 $74,642
===========================
See Notes to Consolidated Financial Statements
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<TABLE>
<S> <C> <C> <C>
Year ended June 30, 1996 1995 1994
- ------------------- ------- ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 9,851 $ 8,156 $ 6,036
Reconciliation of net income to net cash
provided by operating activities
Depreciation and amortization 5,510 4,981 4,341
Loss(gain) on sale of property and equipment 11 (12) 54
Provision for deferred income taxes 811 (516) (816)
Changes in operating assets and liabilities
Accounts receivable (5,636) (1,534) (10,122)
Prepaid expenses and other assets 177 426 (593)
Accounts payable and accrued expenses 1,558 (4,811) 5,902
Accrued compensation and vacation (1,667) 2,664 3,637
Deferred rent expense (462) (49) (26)
Income taxes (receivable) payable (3,571) 64 715
------- ------- -------
Net cash provided by operating activities 6,582 9,369 9,128
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment (4,198) (4,172) (2,671)
Proceeds from sale of property and equipment 62 91 103
Purchase of businesses (13,372) - (4,508)
Other (463) 133 (411)
------- ------ -------
Net cash used in investing activities (17,971) (3,948) (7,487)
------- ------ -------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds under line-of-credit 109,173 79,684 86,982
Payments under line-of-credit (99,186) (82,429) (91,460)
Proceeds from stock options 1,205 470 1,161
Purchase of common stock for treasury - (2,154) (157)
-------- ------- -------
Net cash provided by (used in) financing activities 11,192 (4,429) (3,474)
-------- ------- -------
Effect of exchanges rates on cash and equivalents (21) 63 49
-------- ------- -------
Net (decrease) increase in cash and equivalents (218) 1,055 (1,784)
Cash and equivalents, beginning of period 1,996 941 2,725
-------- ------- -------
Cash and equivalents, end of period $ 1,778 $ 1,996 $ 941
======== ======= =======
Supplemental disclosures of cash flow information
Cash paid during the year for
Income taxes, net of refunds $ 7,240 $ 4,632 $ 1,784
======== ======= =======
Interest $ 609 $ 515 $ 410
======== ======= =======
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(amounts in thousands)
<TABLE>
Common Stock
Cumulative
Class A <FN> Class B Capital
currency Treasury Stock Total
--------------- --------------- in excess Retained
translation ----------------- Shareholder's
Shares Amount Shares Amount of par earnings
adjustments Shares Amount equity
------ ------ ------ ------ --------- --------
- ----------- ------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
BALANCE, July 1, 1993 13,130 $1,313 115 $12 $3,454 $38,585
$(1,516) 3,232 $(11,351) $30,497
Net income - - - - - 6,036
- - - 6,036
Currency translation adjustments - - - - - -
201 - - 201
Exercise of stock options
(including $494 income
tax benefit) 245 24 - - 1,137 -
- - - 1,161
Conversion of Class B shares 115 12 (115) (12)
Treasury shares purchased - - - - - -
- 19 (157) (157)
------ ------ ---- --- ------ -------
- ------- ----- -------- -------
BALANCE, June 30, 1994 13,490 1,349 - - 4,591 44,621
(1,315) 3,251 (11,508) 37,738
Net income - - - - - 8,156
- - - 8,156
Currency translation adjustments - - - - - -
275 - - 275
Exercise of stock options
(including $184
income tax benefit) 78 8 - - 462 -
- - - 470
Treasury shares purchased - - - - - -
- 275 (2,154) (2,154)
------ ------ ---- --- ------ -------
- ------- ----- -------- -------
BALANCE, June 30, 1995 13,568 1,357 - - 5,053 52,777
(1,040) 3,526 (13,662) 44,485
Net income - - - - - 9,851
- - - 9,851
Currency translation adjustments - - - - - -
(203) - - (203)
Exercise of stock options
(including $618
income tax benefit) 187 19 - - 1,186 -
- - - 1,205
------ ------ ---- --- ------ -------
- ------- ----- -------- -------
BALANCE, June 30, 1996 13,755 $1,376 - $ - $6,239 $62,628
$(1,243) 3,526 $(13,662) $55,338
====== ====== ==== === ====== =======
======= ===== ======== =======
</TABLE>
[FN] As of June 30, 1994, all Class A Common Stock was classified as
Common Stock.
See Notes to Consolidated Financial Statements
<PAGE>
CACI INTERNATIONAL INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITIES
The Company is an international information systems and high technology
services corporation. It is a world leader in computer-based information
technology systems, custom software, integration and operations, imaging and
document management, simulation, and proprietary database and software
products. The Company provides worldwide services in support of United
States national defense and civilian agencies, state governments, and
commercial enterprises.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the statements of CACI
International Inc and its wholly-owned subsidiaries (the "Company"). All
significant intercompany balances and transactions have been eliminated in
consolidation.
REVENUE RECOGNITION
Revenue on cost-plus-fee contracts is recognized to the extent of costs
incurred plus a proportionate amount of the fee earned. Revenue on
fixed-price contracts is recognized on the percentage of completion method
based on costs incurred in relation to total estimated costs. Revenue on
time and materials contracts is recognized to the extent of billable rates
times hours delivered plus materials expense incurred. Revenue from software
license sales is recognized upon delivery when there is no significant
obligation to perform after the sale, but is recognized under the percentage
of completion method when there is significant obligation for production,
modification or customization after the sale. Revenue from maintenance
support services on these products is nonrefundable and generally recognized
on a straight-line basis over the term of the service agreement. Provisions
for estimated losses on uncompleted contracts are recorded in the period such
losses are determined.
The Company's United States Government contracts (approximately 78% of total
revenue) are subject to subsequent government audit of direct and indirect
costs. All such incurred cost audits have been completed through June 30,
1994. Management does not anticipate any material adjustment to the
consolidated financial statements for subsequent periods.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. Depreciation of equipment has
been provided over the estimated useful lives of three to ten years of the
respective assets, using primarily the straight-line method. Leasehold
improvements are generally amortized using the straight-line method over the
respective remaining lease term or the useful life of the improvements,
whichever is shorter.
CAPITALIZED SOFTWARE COSTS
The Company capitalizes certain product-related software development costs
after technological feasibility and marketability have been demonstrated.
These costs are amortized on a product-by-product basis over their estimated
economic useful lives, which range from three to five years.
INCOME TAXES
Effective July 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes." Under SFAS 109,
deferred income taxes are recognized for the future tax consequences of
differences between tax bases of assets and liabilities and financial
reporting amounts, based upon enacted tax laws and statutory rates applicable
to the periods in which the differences are expected to affect taxable
income. Valuation allowances are established when necessary to reduce
deferred tax assets to amounts expected to be realized. Income tax expense is
the tax payable for the period and the change during the period in deferred
tax assets and liabilities. The adoption of SFAS 109 had no material impact
on operations.
U.S. income taxes have not been provided on $16,240,000 in undistributed
earnings of foreign subsidiaries that have been permanently reinvested
outside the United States.
CURRENCY TRANSLATION
The assets and liabilities of the Company's foreign subsidiaries whose
functional currency is other than the U.S. dollar are translated at the
exchange rates in effect on the reporting date, and income and expenses are
translated at the weighted average exchange rate during the period. The net
effect of such translation gains and losses is not included in determining
net income but is accumulated as a separate component of shareholders'
equity. Foreign currency transaction gains and losses are included in
determining net income.
EARNINGS PER SHARE
Earnings per share is computed by dividing net earnings by the weighted
average number of shares and equivalent shares outstanding during each of the
years ended June 30, 1996, 1995, and 1994 of 10,716,000, 10,611,000, and
10,615,000, respectively. The weighted averages include the number of shares
issuable upon exercise of stock options granted under the employee stock
incentive plan after the assumed repurchase of shares with the related
proceeds.
STATEMENT OF CASH FLOWS
Short-term investments with an original maturity of three months or less are
considered cash equivalents.
GOODWILL
The excess of cost over fair market value of net assets acquired is being
amortized, using the straight line method, generally over 15 years.
Accumulated amortization was $1,855,000 and $1,066,000 at June 30, 1996 and
June 30, 1995, respectively.
RECENT ACCOUNTING PRONOUNCEMENTS
During 1996, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of" (SFAS No. 121). This statement requires that such
assets be reviewed for impairment whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable and that such
assets be reported at the lower of carrying amount or fair value. The
Company will adopt SFAS No. 121 during fiscal 1997 and, based on current
circumstances, does not expect a material impact on its results of operations
or financial position.
Also during 1996, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" was issued, which is effective for
years beginning after December 15, 1995. This statement requires footnote
disclosure of the pro forma impact on net income and earnings per share of
the compensation cost that would have been recognized if the fair value of
all stock-based awards was recorded in the income statement. The disclosure
provisions of this statement will be adopted during fiscal 1997.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of the Company's accounts payable and accrued expenses
approximate their fair value. The line of credit has a floating interest rate
that varies with current indices, and as such, its recorded value
approximates fair value.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior years' financial
statements in order for them to conform to the current presentation.
NOTE 2. CAPITALIZED SOFTWARE DEVELOPMENT COSTS
The costs capitalized and amortized for the years ended June 30, 1996, 1995,
and 1994 were as follows:
(dollars in thousands) 1996 1995 1994
----------------------------
Annual activity
Balance, beginning of year $1,068 $ 865 $775
Capitalized during year 422 478 332
Amortized during year (261) (275) (242)
----------------------------
Balance, end of year $1,229 $1,068 $865
============================
Amounts included in:
Current assets $ 461 $ 263 $275
Other assets $ 768 $ 805 $590
<PAGE>
NOTE 3. ACCOUNTS RECEIVABLE
Total accounts receivable are net of allowance for doubtful accounts of
$2,245,000 and $1,415,000 at June 30, 1996 and June 30, 1995, respectively.
Accounts receivable are classified as follows:
(dollars in thousands) 1996 1995
- ---------------------------------------------------------------------
Billed and billable receivables
Billed receivables $53,836 $35,960
Billable receivables at end of period 5,494 6,228
---------------------
Total 59,330 42,188
---------------------
Unbilled receivables
Unbilled pending receipt of contractual
documents authorizing billing 7,598 5,799
Unbilled retainages and fee withholds
expected to be billed within the
next 12 months 172 335
---------------------
7,770 6,134
Unbilled retainages and fee
withholds expected to be billed
beyond the next 12 months 7,289 4,489
---------------------
Total unbilled receivables 15,059 10,623
---------------------
Total accounts receivable $74,389 $52,811
=====================
NOTE 4. NOTE PAYABLE
The Company had a $25 million revolving credit agreement scheduled to expire
on March 31, 1997. Under this agreement, the Company had outstanding
borrowings of $9,987,000 at June 30, 1996 and no borrowings at June 30, 1995.
Interest was charged on the outstanding borrowings at the lower of the bank's
daily prime commercial lending rate or the Federal Funds rate plus 0.90% at
June 30, 1996 and 1995. The applicable interest rate on the loan balance was
5.9% and 7.01% at June 30, 1996 and 1995, respectively. The credit agreement
required, among other provisions, the maintenance of certain levels of net
worth and working capital and placed certain restrictions on cash dividends
and additional debt.
On July 26, 1996, the Company entered into a new revolving bank credit
agreement which permits loans of up to $50 million, with sublimits of $30
million in the first year for acquisitions and $10 million for dividends and
repurchase of Company stock. The agreement permits various London Interbank
Offered Rate ("LIBOR"), Prime Rate, and Federal Funds based borrowing
options. The current LIBOR option is at the applicable LIBOR rate plus
0.80%. In addition, the Company pays a fee of 0.09% on the unused portion of
the facility. The interest rate and unused fee can increase based on
increases in the debt leverage ratio. The agreement contains customary
financial covenants and ratios related to tangible net worth, debt leverage
ratios, fixed charges coverage, and working capital.
NOTE 5. INCOME TAXES
The provision (benefit) for income taxes for year ended June 30, consists of:
(dollars in thousands) 1996 1995 1994
- -------------------------------------------------------------
Current:
Federal $3,668 $3,649 $1,894
State and local 802 798 696
Foreign 1,024 291 1,151
--------------------------------
Total current 5,494 4,738 3,741
Deferred:
Federal 693 207 97
State and local 152 46 21
Foreign (34) 228 34
--------------------------------
Total deferred 811 481 152
--------------------------------
Total $6,305 $5,219 $3,893
================================
A reconciliation of the income tax provision (benefit) and the amount
computed by applying the statutory U.S. income tax rate of 34% is as follows
for year ended June 30:
(dollars in thousands) 1996 1995 1994
- ---------------------------------------------------------------------
Amount at statutory U.S. rate $5,493 $4,548 $3,478
State taxes, net of U.S. income
tax benefit 630 557 473
Taxes on foreign earnings at
different effective rates (25) 102 15
Other expenses not deductible
for tax purposes 130 63 57
Nondeductable goodwill 147 64 -
Foreign and research &
development tax credits (70) (115) (130)
----------------------------
Total $6,305 $5,219 $3,893
============================
Effective tax rate 39.0% 39.0% 38.1%
============================
<PAGE>
The tax effects of temporary differences that give rise to significant
deferred tax assets and deferred tax liabilities at June 30, 1996 and 1995
are as follows:
(dollars in thousands) 1996 1995
- ----------------------------------------------------------------
Deferred tax assets:
Accrued vacation and other expenses $3,685 $3,276
Deferred rent 785 1,065
Foreign transactions 167 156
Pension 163 207
------------------
Total deferred tax assets 4,800 4,704
------------------
Deferred tax liabilities:
Unbilled revenue (5,679) (3,698)
Depreciation (540) (516)
Other (459) (62)
------------------
Total deferred tax liabilities (6,678) (4,276)
------------------
Net deferred tax (liability) asset $(1,878) $ 428
===================
The Company utilizes the accrual net of unbillable revenue method for tax
accounting purposes. Under this method, only revenue that is contractually
billable is used to compute taxable income while certain expenses are not
currently deductible.
NOTE 6. COMMON STOCK
At July 1, 1993, the Company's Common Stock consisted of Class A and Class B
Common Stock, each with a $.10 par value, and each with 40,000,000 shares
authorized. There were 13,130,000 Class A shares and 115,000 Class B shares
outstanding at July 1, 1993, of which 3,194,000 Class A shares and 39,000
Class B shares were carried in Treasury at their acquisition cost. In
October 1993, by the provisions of the Company's Charter, the Class B shares
automatically converted to Class A Common Stock on a one-for-one basis, after
which the Company had only one class of Common Stock.
NOTE 7. STOCK INCENTIVE PLAN
The Company has an employee stock incentive plan (the "Plan") which provides
that key employees may be awarded some or all of the following: non-
qualified stock options; incentive stock options within the meaning of the
Internal Revenue Code; and Common Stock. The stock option exercise prices
would generally be at fair market value on the date of grant. The period
during which each option is exercisable is determined when granted, but in no
event are they exercisable after December 31, 2000. Any debt securities
awarded under the Plan would be subordinate to existing and future secured
debt of the Company and would be offered to the employees for purchase at
their fair market value. At June 30, 1996, there were 1,804,000 shares
reserved for future grants under the Plan. Pursuant to the terms of the Plan,
no grants of options or other securities may be made after September 24,
1996.
On August 14, 1996, the Board of Directors approved a new Plan for
presentation to the shareholders for approval at the Company's 1996 Annual
Meeting. The new Plan would permit award of incentive and non-qualified
stock options, stock appreciation rights and stock grants to officers and
employees of the Company, and would limit total awards and stock grants to
1,500,000 shares over the life of the Plan.
Stock option activity and price information regarding the Plan follows:
Number Exercise
(shares in thousands) of shares Price
- -------------------------------------------------------------------
Shares under option, July 1, 1993 1,519 $1.87-$5.03
Granted 108 $5.87-$5.94
Exercised (244) $1.87-$4.75
Forfeited (2) $3.50
---------
Shares under option, June 30, 1994 1,381 $1.87-$5.94
Granted 133 $8.56-$10.88
Exercised (78) $1.87-$5.94
Forfeited (22) $1.87-$4.44
---------
Shares under option, June 30, 1995 1,414 $1.87-$10.88
Granted 198 $10.00-$14.44
Exercised (187) $1.87-$5.94
Forfeited (46) $3.50-$13.44
---------
Shares under option, June 30, 1996 1,379 $1.87-$14.44
=========
Options exercisable, June 30, 1996 961 $1.87-$14.44
=========
Exercise prices are based on the market price of the Company's Common Stock
at the date the options are granted.
NOTE 8. PENSION PLAN
The Company has a defined contribution pension plan covering approximately
85% of its employees. The company contributes to a trust an amount equal to
2.5% of qualified employee's total fiscal year cash compensation, up to
$35,000 per year, and an amount equal to 5% of cash compensation paid in
excess of $35,000 per year. The total consolidated pension expense for the
years ended June 30, 1996, 1995, and 1994 was $2,745,000, $2,565,000, and
$1,939,000 respectively. The Company funds current pension costs as they
accrue annually. The plan is qualified under the United States Internal
Revenue Code, as determined by the United States Internal Revenue Service.
NOTE 9. COMMITMENTS AND CONTINGENCIES
The Company conducts its operations from leased office facilities, all of
which are classified as operating leases and expire primarily over the next
six years.
<PAGE>
The following is a schedule of future minimum lease payments under
non-cancelable leases with a remaining term greater than one year as of June
30, 1996:
Year ending Operating
(dollars in thousands) June 30, leases
- ----------------------------------------------------
1997 $10,532
1998 8,919
1999 6,526
2000 4,578
2001 3,312
Later Years 1,826
-------
Total minimum lease payments $35,693
=======
Operating leases reflect the minimum lease payments net of a minimal amount
of sublease income. Expense incurred from operating leases for the years
ended June 30, 1996, 1995, and 1994 amounted to $8,938,000, $8,376,000, and
$7,202,000 respectively.
The Company is involved in various lawsuits, claims, and administrative
proceedings arising in the normal course of business. Management is of the
opinion that any liability or loss associated with such matters will not have
a material adverse effect on the Company's financial condition.
NOTE 10. ACQUISITIONS
AUTOMATED SCIENCES GROUP, INC.
Effective September 1, 1995, the Company purchased all of the outstanding
stock of Automated Sciences Group, Inc. ("ASG") for $4.9 million payable in
cash over four years. ASG provides information technology, engineering and
scientific environmental services to the U.S. Department of Defense ("DoD")
and the U.S. Department of Energy. The purchase price is subject to a
maximum $500,000 holdback contingent on the collection of certain
receivables.
IMS TECHNOLOGIES, INC.
Effective January 1, 1996, the Company purchased all of the outstanding stock
of IMS Technologies, Inc. ("IMS") for $6.5 million in cash payable at
closing, plus $1.5 million in cash payable to the four founders of IMS over
three years. IMS provides a wide range of computer systems development and
systems integration for a variety of applications. These services are
provided to DoD as well as Department of Justice, Department of Education,
Internal Revenue Service, and Drug Enforcement Agency.
Both acquisitions were accounted for as purchases and were financed through
bank borrowings. The preliminary estimates of goodwill, the amount that the
purchase prices exceeded the fair values of the net assets acquired, is $2.8
million for ASG and $3.1 million for IMS. The resulting goodwill is being
amortized on a straight-line basis over 15 years. The preliminary purchase
price allocations are subject to change during the year following the
acquisition as additional information concerning net asset valuation is
obtained. Therefore, the final allocations may differ from the preliminary
allocations. The Consolidated Statement of Operations includes the results
of operation of ASG from September 1, 1995 and IMS from January 1, 1996.
The following unaudited pro forma summary presents information as if the
acquisitions had occurred at the beginning of each fiscal year. The pro
forma information is provided for information purposes only. It is based on
historical information and does not purport to be indicative of what would
have occurred if the acquisition was put into effect at the beginning of year
1996, 1995, or 1994, nor is it necessarily indicative of future results of
operation of the combined enterprise.
PRO FORMA INFORMATION (UNAUDITED)
(dollars in thousands,
except share data) 1996 1995 1994
- ------------------------------------------------------------
Revenues $256,380 $274,605 $228,831
Net income 8,371 7,500 4,591
Earnings per share 0.79 0.71 0.47
SOFTECH, INC.
On December 1, 1993, the Company purchased certain contracts and assets
consisting of the Government Services business of SofTech, Inc. for an
initial purchase price of $4.2 million which has been allocated as $0.9
million for the fair value of fixed assets acquired and $3.3 million to
Goodwill.
The results of this acquisition have been included in the Company's operating
results beginning December 1, 1993. If the acquisition had occurred at the
beginning of fiscal 1994, revenues would have increased by approximately $10
million and $0.3 million in net income, which would have increased earnings
per share by $0.03. Given that this acquisition represents only a limited
number of contracts and assets of SofTech, Inc., it is impractical to
estimate the impact that this acquisition would have had on the Company's
1993 revenues and earnings.
NOTE 11. SUBSEQUENT ACQUISITION
The Company has entered into a letter of intent to acquire the business and
certain net assets of Sunset Resources, Inc. ("SRI"). SRI provides
engineering and information technology support services to the U.S. Air
Force, and is a specialist in electronic data interchange. SRI's current
annual revenues are approximately $12 million. The preliminary purchase price
is $5.3 million and is to be paid in cash at closing, estimated to be on or
near October 1, 1996. The agreement is subject to due diligence and approval
by both companies. The transaction will be financed through the Company's new
revolving line of credit.
NOTE 12. SEGMENT INFORMATION
Revenue from contracts with the United States government for 1996, 1995, and
1994 amounted to approximately $190,000,000 (78% of revenues), $176,000,000
(75% of revenues), and $130,000,000 (71% of revenues), respectively.
Information about operations in the United States and foreign countries
(primarily in Western Europe), after the elimination of intercompany
transactions, as of and for the years ended June 30 consists of:
(dollars in thousands) 1996 1995 1994[FN]
- ------------------------------------------------------------------------
Revenue
United States $215,311 $202,943 $156,775
Foreign 29,304 30,021 26,925
----------------------------------------
Combined $244,615 $232,964 $183,700
========================================
Income before income taxes
United States $ 13,518 $ 11,512 $ 7,400
Foreign 2,638 1,863 2,829
----------------------------------------
Combined $ 16,156 $ 13,375 $ 10,229
========================================
Net income
United States $ 8,215 $ 6,908 $ 4,427
Foreign 1,636 1,248 1,609
----------------------------------------
Combined $ 9,851 $ 8,156 $ 6,036
========================================
Identifiable assets
United States $ 86,762 $ 58,716 $ 56,568
Foreign 16,546 15,926 14,431
----------------------------------------
Combined $103,308 $ 74,642 $ 70,999
========================================
[FN] Pretax income in 1994 includes extraordinary loss of $494.
NOTE 13. COMMON STOCK DATA (UNAUDITED)
The Company's stock trades on The Nasdaq Stock Market. The range of high and
low sales prices for each quarter during this period are as follows:
1996 1995
Quarter High Low High Low
- ------------------------------------------------------------
First $13 7/8 $11 1/4 $11 1/8 $7 1/2
Second 13 1/2 11 1/4 12 9
Third 12 1/4 9 1/2 10 7/8 8 7/8
Fourth 15 3/4 12 1/4 12 7/8 8 3/4
<PAGE>
NOTE 14. QUARTERLY FINANCIAL DATA (UNAUDITED)
The quarterly financial data is unaudited, but in the opinion of management,
all adjustments necessary for a fair presentation of the selected data for
these interim periods have been included.
(dollars in thousands, except share data)
<TABLE>
<S> <C> <C> <C> <C>
First Second Third Fourth
-------- ------- ------- -------
Year ended June 30, 1996
Revenue $57,610 $59,332 $62,324 $65,349
Costs and expenses 53,989 55,457 58,080 60,933
Income taxes 1,397 1,528 1,657 1,723
Net income 2,224 2,347 2,587 2,693
Earnings per share $ 0.21 $ 0.22 $ 0.24 $ 0.25
Year ended June 30, 1995
Revenue $54,881 $57,394 $61,620 $59,069
Costs and expenses 51,745 54,168 58,124 55,552
Income taxes 1,223 1,238 1,382 1,376
Net income 1,913 1,988 2,114 2,141
Earnings per share $ 0.18 $ 0.19 $ 0.20 $ 0.20
Year ended June 30, 1994
Revenue $38,200 $43,966 $48,953 $52,581
Costs and expenses 35,975 41,586 46,178 49,732
Income taxes 867 924 1,089 1,013
Income before extraordinary item 1,358 1,456 1,686 1,836
Extraordinary item-cost of
shareholder lawsuit settlement
(net of tax benefit) (300) - - -
Net income 1,058 1,456 1,686 1,836
Earnings per share
Income before extraordinary item $ 0.13 $ 0.14 $ 0.16 $ 0.17
Extraordinary item (0.03) - - -
Net income 0.10 0.14 0.16 0.17
</TABLE>
EXHIBIT 21
The significant subsidiaries of the Registrant, as defined in Section 1-02(w)
of regulation S-X, are:
CACI, Inc., a Delaware Corporation
CACI, INC.-FEDERAL, a Delaware Corporation
CACI, INC.-COMMERCIAL, a Delaware Corporation
CACI Products Company, a Delaware Corporation
American Legal Services Corp., a Delaware Corporation
CACI Field Services, Inc., a Delaware Corporation
CACI N.V., a Netherlands Corporation
CACI Limited, a U.K. Corporation
Automated Sciences Group, Inc., a Delaware Corporation
IMS Technologies, Inc., a Delaware Corporation
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
EXHIBIT 13 TO FORM 10-K FOR FY1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,778,000
<SECURITIES> 0
<RECEIVABLES> 69,345,000
<ALLOWANCES> (2,245,000)
<INVENTORY> 0
<CURRENT-ASSETS> 74,231,000
<PP&E> 26,193,000
<DEPRECIATION> (17,138,000)
<TOTAL-ASSETS> 103,308,000
<CURRENT-LIABILITIES> 45,556,000
<BONDS> 0
0
0
<COMMON> 1,376,000
<OTHER-SE> 53,962,000
<TOTAL-LIABILITY-AND-EQUITY> 103,308,000
<SALES> 0
<TOTAL-REVENUES> 244,615,000
<CGS> 0
<TOTAL-COSTS> 133,184,000
<OTHER-EXPENSES> 94,286,000
<LOSS-PROVISION> 384,000
<INTEREST-EXPENSE> 605,000
<INCOME-PRETAX> 16,156,000
<INCOME-TAX> 6,305,000
<INCOME-CONTINUING> 9,851,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,851,000
<EPS-PRIMARY> 0.92
<EPS-DILUTED> 0.92
</TABLE>
