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, 1998
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
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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 .
---- ----
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of August 31, 1998, was approximately $134,912,203.
Indicate the number of shares outstanding of each of the Registrant's classes
of Common Stock, as of August 31, 1998: CACI International Inc Common Stock,
$.10 par value, 10,862,995 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 1998 Annual
Meeting of Stockholders is incorporated by reference into Part III, Items 10,
11, 12, and 13 of this Form 10-K.
PAGE
<PAGE>
BUSINESS INFORMATION
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Unless the context indicates otherwise, the terms "the Company" and "CACI" as
used in Parts I and II, include both CACI International Inc and its
wholly-owned subsidiaries. The term "the Registrant", as used in Parts I and
II, refers to CACI International Inc only.
PART I
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ITEM 1. BUSINESS
Background
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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 U.S. and Europe.
Overview
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CACI founded its business in 1962 in simulation technology, and has
strategically diversified within the information technology ("IT") industry.
With 1998 revenues of $326 million, CACI serves clients in major segments of
government and commercial markets primarily throughout North America and
Western Europe, delivering client solutions for systems integration, year 2000
conversion, information assurance and security, reengineering, logistics and
engineering support, electronic commerce, intelligent document management
("IDM"), product data management ("PDM"), software development and reuse,
telecommunications, simulation and planning, and market analysis. Many of the
Company's client relationships have existed for five years or more.
The Company's service and value have enabled it not only to sustain high rates
of repeat business and long-term client relationships, but also 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 through centralized business development and industry
alliances. CACI has structured its new business development organization to
respond to the globally competitive marketplace. The Company employs
full-time marketing, sales, communications, and proposal development
specialists who support Company marketing and sales activities.
The Company's primary markets -- both domestic and international -- are
agencies of national governments, major corporations, state and local
governments, and other business organizations. The market for CACI's
information systems and advanced technology services is created by the complex
systems and information environment in which clients operate and the
continuous demand to stay current with emerging technology while increasing
performance, whether as a result of governmentally mandated programs or
commercial initiatives.
The Company offers marketing systems software and database products, targeted
to clients who need systems and analysis for retail sales of consumer
products, direct marketing campaigns, franchise or branch site location
projects, and similar requirements.
In its simulation technology business, the Company offers simulation
languages, software products, and services that enable clients to visualize
the impact of proposed changes or new technologies before implementation.
CACI's simulation offerings include solutions for military training and
war-gaming exercises, air traffic control, manufacturing, wide area
communications networks (i.e., "WAN"s) including satellites, land lines and
metro area networks (i.e., "MAN"s), local area computer networks (i.e.,
"LAN"s), the study of business processes, and the design of distributed
computer systems architectures for the integration of synthetic environments.
CACI provides electronic commerce ("EC") solutions to the federal government
for automated procurement. Its complete suite of EC products is available on
a GSA schedule and provides a flexible but fully-featured configuration to
enable easy management of purchases and contracts.
The Company has generated commercial business from solutions built on CACI's
thirty-year history of logistics and engineering support for the Department of
Defense ("DoD"). CACI's proprietary PDM product, C-GATE (TM), 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 preceding C-GATE trademark contains a hyphen to represent
the bullet point which is an integral component of the mark and which cannot
be printed due to electronic transmission limitations.]
The Company's IDM solutions provide a range of enabling technologies -
imaging, document management, workflow, and groupware - that facilitate the
management of large document collections and allow organizations to achieve
higher operational efficiencies and mission effectiveness. CACI provides IDM
and related litigation support services to the Department of Justice ("DoJ"),
the U.S. Navy, the U.S. Army, and commercial legal clients.
CACI's RENovate (SM) methodology combines technology tasks and methodologies
to plan, integrate, and manage technology change -- without losing existing
investments in technology.
In response to the year 2000 challenge, CACI offers a wide range of solutions,
including the Company's conversion methodology, Restore 2000 (SM), that has
been independently validated by the Information Technology Association of
America ("ITAA"), based upon a Software Engineering Institute Level
3-certified process reengineering approach.
CACI's systems integration solutions, applied throughout the federal and
commercial arenas, improve organizational performance by enhancing system
infrastructure through such activities as migrating legacy systems to more
powerful or new environments such as the Internet, automating procurement,
assuring security and accessibility of vital information, and reusing legacy
software and data.
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's information
systems, marketing systems and simulation technology lines of business in the
U.K. and Western Europe.
At June 30, 1998, CACI employed approximately 3,700 people. This total
includes 400 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 over 60 other
locations throughout the U.S., Western Europe and Canada.
General Description of CACI Systems, Technologies and Products
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Representative systems applications include:
. Ammunition management information systems
. Automated procurement
. Business support systems
. Computer aided logistics/data information systems
. Configuration management
. Electronic commerce
. Electronic data interchange
. Engineering support
. Executive decision support systems
. Imaging services
. Information assurance/security
. Information management systems
. Intelligent document management systems and services
. Legal systems and litigation support services
. Manufacturing planning systems
. Marketing and customer database management systems
. Military trainers/synthetic environment integration and services
. Network security
. Process reengineering
. Product data and supply chain management
. Retail market modeling
. Simulation and modeling languages, products and services
. Site location planning and analysis systems
. Software development and reuse
. Systems reengineering
. Systems integration
. State motor vehicle registration and related management information
systems
. Telecommunications network services and support
. Training
. Weapon systems/equipment configuration management systems
. World Wide Web integration
. Year 2000 date reconfiguration services
CACI products are installed in numerous locations worldwide, and many are
designed to run on a variety of commercially available computers.
Representative CACI software and marketing systems include:
. Performance Prediction Technology:
. SIMFACTORY (R) II.5 General Factory Simulator. A software product for
factory planners to study alternative plant and equipment
configurations.
. COMNET III (TM) Network Simulation Software. An object-oriented high-
fidelity wide area network, local area network and metro area network
telecommunications simulator for capacity planning and failure analysis.
. COMNET Baseliner (TM) Telecommunications Simulation Software. An
automatic network traffic and topology-gathering tool.
. COMNET Predictor (TM) Network Planning Software. An analytical capacity
planning tool for the day-to-day network manager that predicts the
impact of changes to very large telecommunications networks before
implementation.
. Enterprise Profiler (TM) Telecommunications Simulation Software. A tool
for analyzing application traffic.
. 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. A
prototyping tool for business process reengineering that enables
managers to model a current business process, then explore alternative
approaches before implementation.
. MODSIM III (TM) Simulation Programming Language. A graphical computer
programming and simulation environment that generates C++ code.
. Marketing Data and Information Products:
. InSite-USA (TM) and InSite (TM) for Windows 95 (U.S. and U.K. versions)
Marketing and Demographics Information Systems. PC-based geographic
information systems combining software, data and mapping capabilities to
enable planners to study markets to help determine the location of
retail outlets, branch networks, sales territories, potential customers,
and competitors. (Windows is a registered trademark of Microsoft
Corporation.)
[The preceding InSite-USA trademark contains a hyphen to represent
the bullet point which is an integral component of the mark and which
cannot be printed due to electronic transmission limitations.]
. ACORN (SM) (A Classification of Residential Neighborhoods) Demographic
Information System. A system that analyzes 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 customers 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 services for any
geographic area, such as county, zip code, TV broadcast area,
congressional district, or retail trade area.
. UpFront (TM) Graphical Interface Software. A graphical user interface
that enables software to be used in an object-oriented manner.
. Electronic Commerce Products:
. SACONS (R) Automated Contracting System. A commercial off-the-shelf
system that provides clients an automated, cost effective way to
complete procurement activities and improve productivity.
. SACONS (R)-EDI Module. An automated, electronic commerce add-on module
to the SACONS system that creates and receives data transmissions using
standard protocols.
. SACONS (R)-Gateway 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) Automated Bid/Contracting System. A World Wide Web-based
value-added network ("VAN") that allows identification and competition
for U.S. Government business via electronic data interchange over the
Internet.
. Imaging and Document Management Products:
. ADIIS (TM) Document Imaging Software System. A flexible document
conversion and management system that includes advanced imaging, optical
character recognition, indexing, document retrieval and workprocess
management.
U.S. Government Agencies
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CACI offers 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 may combine a wide range of CACI's skills in
information systems, systems engineering, telecommunications, logistics
sciences, weapons systems, simulation, and automated document management
systems. CACI also contracts with other national governments.
State and Local Governments
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CACI is a 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 alarm billing
systems and housing registration systems. The Company also offers its software
and systems integration services to this market segment.
Major Corporations
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CACI's commercial market base consists primarily of large corporations
(nominally characterized as the "Fortune 1000"). This market is a primary
target of the Company's proprietary software and database products in its
marketing systems and simulation technology lines of business. The market for
CACI's proprietary simulation products is worldwide.
Other Services
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CACI also provides information about its products and services, investor
relations, and career opportunities on its World Wide Web home page at
http://www.caci.com.
CACI Employment and Benefits
- ----------------------------
CACI's business success is highly correlated with the Company's ability to
recruit, train, promote, 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 highly skilled
professionals in virtually all of its high technology areas.
For these reasons, the Company has endeavored to develop and maintain
competitive salary structures, incentive compensation programs, fringe
benefits, opportunities for growth, and 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 highly skilled
personnel, the Company and its subsidiaries provide substantial benefits to
their employees. These benefits vary among the Company's subsidiaries, but
generally include paid vacations and holidays, medical, dental, disability and
life insurance, incentive bonuses, tuition reimbursement for job-related
education and training, technical training, and other benefits under
retirement and stock purchase plans.
The Company recruits people from various populations, including experienced
professionals, university graduates, trade and technical school graduates,
seasoned technicians, and entry-level employees. The Company's employee
profile includes a high-percentage of college graduates, many with masters and
doctoral degrees. The Company seeks professionals with academically certified
credentials in computer-based information sciences, systems engineering,
modeling and simulation, telecommunications, network systems, management
systems, market research, economics, environmental sciences, military
sciences, law, and other scientific and research-oriented disciplines.
The Company has structured its promotion and advancement policies to meet the
current market environment. Individuals advance in relation to their
demonstrated abilities to perform, their leadership skills, or their
managerial achievements.
CACI's advancement criteria incorporate specific requirements to demonstrate a
"client-service orientation" and to work synergistically within the Company.
This philosophy is consistent with CACI's current market, and is a catalyst
for individuals to support Company objectives.
The Company has published policies that set high standards for the conduct of
its business. 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.
Marketplace, Description and Significant Activities
- ---------------------------------------------------
CACI operates in an industry which includes many highly competitive firms. At
the same time, CACI is one of the larger public corporations in its segment of
the IT services industry. Although the Company is a premier supplier of
proprietary computer-based simulation technology products worldwide, and is a
major supplier of proprietary marketing systems products in both the U.S. and
the U.K., CACI is not primarily a software product developer-distributor (See
discussion following on Patents, Trademarks, Trade Secrets and Licenses).
Competition for new contracts centers on past performance, responsiveness to
proposal requests, price, and many other factors. Competition for software
products and services focuses on reputation, applicability to client needs and
market demand, and quality of product support and maintenance services, among
other elements.
The Company has established the capability to combine comprehensive knowledge
of client challenges with significant expertise in the design, development and
implementation of advanced IT solutions. This capability provides CACI with
important opportunities to support large equipment manufacturers with the
systems integration and software services required to compete for
multi-million dollar contracts from the U.S. Government.
CACI has developed strategic business relationships with companies such as
Microsoft Corporation, Sun Microsystems, Infonet Services Corporation,
Intergraph, PKS, Viasoft, Inc., NCR Corporation, Digital Equipment
Corporation, Computer Associates, and Lotus Development Corporation. These
businesses have perspectives and objectives compatible with those of the
Company, and offer products and services that complement CACI's. The Company
intends to continue development of these relationships wherever they support
CACI's growth objectives.
Marketing and new business development for the Company's services and products
is conducted by all the officers and managers of the Company, including the
Chief Executive Officer, executive officers, vice presidents, and division and
department managers. CACI's proprietary software and data products are sold
primarily by full-time salespeople. 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. The Company also has established agreements for the sale
of certain third party products in specified domestic and international
markets.
CACI competes with a substantial number of firms, some of which are larger in
size and have greater financial resources than CACI. The Company obtains much
of its business on the basis of proposals submitted in response to requests
from potential and current customers, who may also request proposals from
other firms. Additionally, the Company faces 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 effected
by limited duration or perpetual licenses. The Company generally prices its
products in catalog fashion and via the Internet. Often, product prices are
determined by the target computer on which the product will run, by the number
of users or by frequency of usage.
For CACI's information systems and professional services contracts, the
Company submits bids for work and products to be delivered. Commercial bids
are frequently negotiated as to terms and conditions for schedule,
specifications, delivery, and payment. CACI's contracts and subcontracts
include 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.
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 1998, the ten top revenue-producing contracts accounted for
42% of CACI's revenues, or $138 million. One contract for automated litigation
support to the Civil Division of DoJ, accounted for 13% of total 1998 Company
revenues.
In 1998, 77% of CACI's revenues came from U.S. Government contracts, the
remaining 23% coming from commercial and state and local contracts, as well as
proprietary products sales. Of the total, 49% of the Company's revenues came
from DoD contracts, 18% from contracts with DoJ, and 10 % from other civilian
agency government clients.
The Company is working to diversify its business portfolio. The Company
nonetheless, will aggressively seek additional work from DoD. In 1998, the
DoD revenues grew by 14%, or $20 million, primarily as a result of the
November 1, 1997 acquisition of the business of Government Systems, Inc.
("GSI") and the October 1, 1996 acquisition of the business of Sunset
Resources, Inc. ("SRI").
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 litigation support work from the U.S. Government and offers
significant economies to the Government through its specialization in this
field. In addition, the Company recently expanded its services to include
automated debt collection support services to DoJ.
During the past fiscal year, the Company examined a number of acquisition
opportunities. On November 1, 1997, the Company acquired the business and net
assets of Government Systems, Inc., a provider of international communications
and network-related services to the U.S. Government and other organizations,
for $28 million. As a result of this acquisition, the Company significantly
expanded its telecommunications capabilities and contract base with DoD and
the Federal Aviation Administration ("FAA").
On November 6, 1997, CACI Limited, the Registrant's wholly-owned subsidiary in
the United Kingdom, acquired the outstanding stock of AnaData Limited
("AnaData"), a provider of database marketing software products in the U.K.
for $1.9 million. The acquired AnaData products are used across a range of
database marketing applications, from relationship marketing through advanced
name and address processing. The AnaData business was merged into CACI's
already sizeable database marketing business in the U.K. The acquisition
gives CACI ownership of an enhanced range of software products which it will
continue to sell to companies for their own in-house use as well as for
support of CACI's clients.
Seasonal Nature of Business
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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. Variations in the Company's business
also may occur at the expiration of major contracts until such contracts are
renewed or new contracts obtained.
Research and Development
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During fiscal years 1998, 1997 and 1996, the Company spent $1,123,000,
$1,307,000 and $833,000 respectively for research and development on current
and future products.
Environmental Protection Requirements
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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
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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.
CACI claims copyright, trademark and proprietary rights in each of its
proprietary computer software and data products and documentation. The
Company presently owns approximately 40 registered U.S. trademarks and service
marks. All of the Company's registered U.S. trademarks and service marks may
be renewed indefinitely. CACI also 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 (SM), ADIIS (TM), C-GATE (TM)#, CACI Coder/Plus (TM), COMNET II.5
(R), COMNET III (TM), COMNET Baseliner (TM), COMNET Predictor (TM), Enterprise
Profiler (TM), FAR-TRIEVE (R), InSite-USA (TM)#, L-NET (R)#, Legal Workbench
(TM), Market*Master (TM), MODSIM II (R), MODSIM III (TM), NETOBJECT (TM),
NETWORK II.5 (R), QuickBid (R), RENovate (SM), Restore 2000 (SM), SACONS (R),
SACONS-FEDERAL (R), SIMANIMATION (R), SIMBASE (TM), SIMFACTORY (R) II.5,
SIMFLOW (R), SIMGRAPHICS (R), SIMLAB (R), SIMOBJECT (R), SIMPROCESS (R) III,
SIMSCENARIO (R), SIMSCRIPT II.5 (R), SIMSNIPS (R), SIMSTRUCTOR (R), SimTrainer
(R), SIMVIDEO (TM), SITELINE (R), SITE-POTENTIAL (R)#, Site Reporter (TM),
Sourcebook-America (TM)#, SUPERSITE (R), UpFront (TM), and ZIP-DEMOGRAPHICS
(R)#.
[# 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 to due electronic transmission limitations.]
In addition, subsidiaries of the Registrant claim foreign copyright,
trademark, and proprietary rights in computer software products and databases
including, but not limited to: ACORN (R) (and the related Arts*ACORN (R),
Change*ACORN (R), Custom*ACORN (R), Financial*ACORN (R), Holiday*ACORN (R),
Household*ACORN (R), Investor*ACORN (R), Property*ACORN (R), Scottish*ACORN
(R)), ACORN Lifestyles (R), ALEX (R), CACI MARKET MASTER (R), CACI National
Mortgage Database (R), CACI Savings Market Database (R), Charity Focus (TM),
FINPIN (R), GEOMATCH (R), GEOREAD (R), GEOTRIEVE (R), InSite (TM),
Lifestyle*Plus (TM)(and the related Auto*Plus (TM), Fuel*Plus (TM),
HouseAge*Plus (TM), and MailOrder*Plus (TM)), Listline (TM), MONICA (R),
PayCheck (TM), PIN (R), PINPOINT (R), PINPOINT ADDRESS CODE (R), ScoreBoards
(TM), SITE (R), and UpFront (R).
Some of the Registrant's 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.
Backlog
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The Company's backlog as of June 30, 1998 was $1.05 billion, of which $185
million was funded for orders believed to be firm. Total backlog as of June
30, 1997 was $1.03 billion, of which $113 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, 1999.
Business Segments, Foreign Operations, and Major Customer
- ---------------------------------------------------------
The business segment, foreign operations and major customer information is
provided in the Company's Consolidated Financial Statements contained in this
Report. In particular, see Note 10, Segment Information, to 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
-------------------------------------------------------------------
1998 $84,612 $171,137 $70,361 $326,110
1997 67,627 122,987 82,370 272,984
1996 56,813 109,429 78,373 244,615
ITEM 2. PROPERTIES
As of June 30, 1998, CACI leased office space at 60 locations containing an
aggregate of approximately 767,000 square feet located in 24 states and the
District of Columbia. In five countries outside the U.S., CACI leased seven
offices containing about 26,500 square feet. CACI's leases expire primarily
within the next five 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, 1998, CACI International Inc maintained its corporate
headquarters in approximately 155,000 square feet of space at 1100 North Glebe
Road, Arlington, Virginia. See Note 8, Commitments and Contingencies, to the
Notes to Consolidated Financial Statements, for additional information
regarding the Company's lease commitments.
ITEM 3. LEGAL PROCEEDINGS
CACI, INC.-FEDERAL v. Arizona Department of Transportation
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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, 1998 for the
most recently filed information concerning the lawsuit filed on June 25, 1996,
by CACI, INC.-FEDERAL ("CACI"), the Registrant's wholly-owned subsidiary, in
Superior Court for Maricopa County, Arizona, against the Arizona Department of
Transportation ("ADOT"). This suit seeks the following: (i) a declaratory
judgment 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 connectio
n with the dispute; (iv) $2,938,990 plus interest in breach of contract
damages; (v) the return of CACI's property seized by ADOT in connection with
the termination of the contract; and (vi) lawyers' fees. ADOT has
counterclaimed, seeking in excess of $100 million in damages allegedly caused
by CACI's breach of contract.
Since the filing of Registrant's report indicated above, the parties engaged
in settlement discussions in July 1998, with no resolution to date.
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, 1998, through the
solicitation of proxies or otherwise.
PART II
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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, 1996 to June 30, 1998, the ranges of high and low sales prices of
the common shares of the Registrant quoted on the Nasdaq National Market
System for each quarter during this period are as follows:
1998 1997
Quarter High Low High Low
------- ------------------ ------------------
1st $20 $13 7/8 $18 5/8 $12
2nd $20 5/8 $16 $22 $16
3rd $22 1/4 $18 1/2 $23 5/8 $16 1/8
4th $22 1/4 $17 1/8 $19 5/8 $13 5/8
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 expansio
n of its business. The Registrant does not intend to pay any cash dividends
at this time.
At August 31, 1998, the number of record stockholders of the Registrant's
Common Stock was approximately 881.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data set forth below is derived from the audited
financial statements of the Company for the years ended June 30, 1998, 1997,
1996, 1995 and 1994. This information should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the financial statements of the Company and the notes thereto
included as Item 8 in this Form 10-K.
(dollars in thousands, except per share)
Income Statement Data
---------------------
Year ended June 30, 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------
Revenues $326,110 $272,984 $244,615 $232,964 $183,700
Costs and expenses
Direct costs 177,584 147,084 133,184 126,442 97,584
Indirect costs and
selling expenses 119,320 101,157 89,160 87,688 71,126
Depreciation and
amortization 8,892 6,852 5,510 4,981 4,341
------- ------- ------- ------- -------
Total operating expenses 305,796 255,093 227,854 219,111 173,051
Income from operations 20,314 17,891 16,761 13,853 10,649
Interest expense 1,837 1,105 605 478 420
Shareholder lawsuit
& merger costs - - - - 494
------- ------- ------- ------- -------
Income before income taxes 18,477 16,786 16,156 13,375 9,735
Income taxes 6,762 6,714 6,305 5,219 3,699
------- ------- ------- ------- -------
Net income $ 11,715 $ 10,072 $ 9,851 $ 8,156 $ 6,036
======= ======= ======= ======= =======
Basic earnings per
share <FN1> $ 1.09 $ 0.96 $ 0.97 $ 0.81 $ 0.60
======= ======= ======= ======= =======
Diluted earnings
per share <FN1> $ 1.05 $ 0.92 $ 0.92 $ 0.77 $ 0.57
======= ======= ======= ======= =======
Balance Sheet Data
------------------
June 30, 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------
Total assets $163,060 $118,860 $103,308 $ 74,642 $ 70,999
Long-term obligations 31,231 10,568 2,414 2,340 2,492
Working capital 54,878 42,014 28,675 26,517 22,009
Stockholders' equity 84,327 70,774 55,338 44,485 37,738
<FN1> Computed on the basis described in Note 1, Earnings Per Share, of the
Notes to Consolidated Financial Statements. As a result, prior period per
share amounts have been restated.
ITEM 7. MANAGEMENT'S DISCUSSION AND 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 which ends on
June 30.
The table below sets forth, for the periods indicated, the customer mix in
revenues with related percentages of total revenues.
<TABLE>
<CAPTION>
(dollars in thousands) 1998
1997 1996
---------------- ---------------
- ----------------
<S> <C> <C> <C> <C>
<C> <C>
Department of Defense $160,982 49.4% $141,172 51.7%
$130,432 53.3%
Federal Civilian Agencies 89,768 27.5 69,615 25.5
59,178 24.2
Commercial 65,878 20.2 55,132 20.2
47,479 19.4
State & Local Government 9,482 2.9 7,065 2.6
7,526 3.1
------- ----- ------- -----
- ------- -----
Total $326,110 100.0% $272,984 100.0%
$244,615 100.0%
======= ===== ======= =====
======= =====
</TABLE>
REVENUES: Total revenues in 1998 increased by $53.1 million, or 19%, from
$273.0 million to $326.1 million. This increase was primarily due to recent
acquisitions coupled with continued internal revenue growth of 14% generated
from Federal civilian agencies, increased revenues from year 2000 software
renovation services, and higher commercial sales from the Company's Marketing
Systems Group in the U.K. The increase in total revenues of $28.4 million, or
12%, to $273.0 million in 1997 from $244.6 million in 1996 was primarily due
to acquisitions along with internal growth in services provided to Federal
civilian agencies, and in the demand for commercial products and services.
All of the acquisitions have been accounted for using the purchase method of
accounting and the results of their operations have been included in the
Company's revenues since the date of acquisition. The following reflects the
year-to-year effect of revenues contributed from acquired companies.
Acquisitions made during the last two years accounted for $29.0 million of the
1998 revenue growth. On November 1, 1997, the Company acquired the business
and net assets of Government Systems, Inc. ("GSI"), which contributed
approximately $22.3 million of incremental revenues in 1998. In addition, in
November 1997, CACI Limited in London, England, acquired all of the share
capital of AnaData, which contributed $1.5 million of incremental revenues in
1998. Acquisitions made during 1997 generated incremental revenues of $5.2
million during 1998. For 1997, revenues contributed from acquisitions were
$21.6 million, which accounted for 76% of the 1997 revenue growth.
Revenues from the DoD increased 14.0%, or $19.8 million, in 1998 as compared
to 1997, primarily due to the acquisitions discussed above, which accounted
for approximately $15.3 million of the total increase. The increase in 1997
DoD revenue as compared to 1996 was primarily attributable to the acquisitions
of Sunset Resources, Inc. ("SRI") in 1997 and of Automated Sciences Group,
Inc. ("ASG") in 1996, which contributed combined incremental revenues of
$13.1 million.
Federal Civilian Agencies revenues are primarily derived from DoJ litigation
support efforts. The litigation support services provided to DoJ have grown
substantially over many years. However, these services are dependent on the
level of DoJ litigation that the Company is supporting at any period of time
and have significant year-to-year fluctuations. Revenues from DoJ were $58.4
million, $53.2 million and $47.4 million in 1998, 1997 and 1996, respectively.
In 1998, revenues from Federal Civilian Agencies other than DoJ were enhanced
by $10.1 million from the acquisition of GSI, which resulted primarily from
services and equipment provided to the Federal Aviation Administration, and by
$4.9 million of internal growth, primarily in the Company's year 2000 software
renovation services.
In 1997, the majority of the growth in revenues from Federal Civilian Agencies
was due to the acquisitions of ASG and IMS Technologies, Inc. ("IMS"), which
combined provided civilian agency revenues of $7.1 million.
Commercial revenues are derived primarily from the Company's Marketing Systems
Group in the U.K., and to a lesser degree from the Simulation Systems Group
and commercial litigation support. For the years 1998 and 1997, commercial
revenues increased by 19%, or $10.7 million, and 16%, or $7.7 million,
respectively. These increases were primarily the result of growth in the
Marketing Systems Group's sales of territory optimization and marketing
analysis software products and services and systems integration services.
Total revenues were $40.9 million, $33.0 million and $28.8 million in 1998,
1997 and 1996, respectively. The nature of the Company's proprietary software
products business is inherently less predictable than the Company's
longer-term contract work with the Federal Government and may fluctuate from
year to year.
As a percentage, revenues from state and local governments have increased
slightly to 2.9% of revenues from 2.6% of revenues a year ago. The $2.4
million increase in revenues to $9.5 million in 1998 versus $7.1 million in
1997 was largely due to year 2000 business. The $0.4 million revenue decline
in 1997 was principally due to reduced demand from various state motor vehicle
departments.
The Company's total funded and unfunded backlog at June 30, 1998 increased to
$1.05 billion compared to $1.03 billion a year ago.
RESULTS OF OPERATIONS. The following table sets forth the relative
percentages that certain items of expense and earnings bear to revenues.
1998 1997 1996
------------------------------
Revenues 100.0% 100.0% 100.0%
Costs and expenses
Direct costs 54.5 53.9 54.4
Indirect & selling expenses 36.6 37.1 36.5
Depreciation & amortization 2.7 2.4 2.3
----- ----- -----
Total operating expenses 93.8 93.4 93.2
Income from operations 6.2 6.6 6.8
Interest expense 0.6 0.5 0.2
----- ----- -----
Income before income taxes 5.6 6.1 6.6
Income taxes 2.1 2.4 2.6
----- ----- -----
Net income 3.5% 3.7% 4.0%
===== ===== =====
There are a number of factors which affect the Company's operating income and
operating margins, or operating income as a percentage of revenues. Operating
income over the three years has been primarily determined through changes in
the levels of revenues. The Company reported a 13.5% increase in operating
income in 1998 as compared to 1997. The primary reason for the increase was
the 19.5% growth in revenues during the year, partially offset by a 0.3%
decline in operating margins.
In 1997, income from operations was 6.6% of revenues as compared to 6.8% of
revenues in 1996. The higher margin in 1996 was primarily due to $0.9 million
in favorable settlements of contract claims. Similar to 1996, the Company
recovered $1.5 million in 1997 on several old contract claims and prior year
indirect rate settlements. In addition, a $0.3 million pretax gain was
recognized on the sale of a non-strategic software product line. However, the
gains recognized in 1997 were, in the aggregate, offset by $1.7 million of
losses from productivity problems experienced in fixed unit price document
management work in the litigation support business.
In 1998, there were no significant unusual or infrequently recurring items,
such as those discussed in 1996 and 1997, that impacted operating margins.
During the last three years, as a percentage of revenues, total direct costs
were 54.5%, 53.9% and 54.4%. Direct costs include direct labor and other
direct costs such as equipment purchases, subcontract costs and travel
expenses, which are generally passed through to the customer. The largest
component of direct costs, direct labor, was $103.6 million, $92.3 million and
$86.3 million in 1998, 1997 and 1996, respectively. Other direct costs were
$74.0 million, $54.8 million and $46.9 million in 1998, 1997 and 1996,
respectively, and have grown at a more rapid pace over the three-year period
as the Company has a higher number of prime contracts with an increased level
of other direct costs, the most notable increase coming from contracts
obtained through the acquisitions of GSI and SRI.
Indirect costs and selling expenses include fringe benefits, marketing and bid
& proposal costs, indirect labor, and other discretionary costs. As a
percentage of revenues, indirect costs were 36.6%, 37.1% and 36.5% for 1998,
1997 and 1996 respectively. Most of these expenses are highly variable and
have grown in proportion with the growth in revenues.
The increase in depreciation and amortization of $2.0 million to $8.9 million
in 1998 was partially due to the acquisitions discussed above which resulted
in additional goodwill amortization of $0.8 million. In 1997, $0.3 million of
incremental goodwill amortization from acquisitions contributed to the overall
increase of $1.3 million of depreciation and amortization expense. The
remainder of the increases for 1998 and 1997 was due to capital expenditures
of $6.4 million and $6.5 million, respectively, which consisted primarily of
computer and network equipment.
Interest expense increased in 1998 and 1997 by $0.7 million and $0.5 million,
respectively. The higher costs were the result of increases in average
borrowings during these periods to $27.5 million and $15.6 million,
respectively, from the 1996 average of $8.6 million. The increased borrowings
were primarily the result of the acquisitions previously discussed.
The effective income tax rates in 1998, 1997 and 1996 were 36.6%, 40.0% and
39.0%, respectively. The decrease in the effective tax rate in 1998 was
primarily the result of a lower effective state income tax rate. The increase
in the 1997 rate was due to higher non-deductible goodwill amortization
expense associated with acquisitions.
Effects of Inflation
- --------------------
Approximately 22% of the Company's business is conducted under
cost-reimbursable contracts which automatically adjust revenues to cover
increased costs from inflation. Over 52% 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 generally are not adversely affected by
inflation.
PAGE
<PAGE>
Liquidity and Capital Resources
- -------------------------------
Historically, the Company's positive cash flow from operations and available
credit facilities has provided adequate liquidity and working capital to fully
fund the Company's operational needs and support acquisition activities.
Working capital was $54.9 million and $42.0 million as of June 30, 1998 and
1997, respectively. The increase in working capital in 1998 is primarily
related to the GSI acquisition. Operating activities provided cash of $19.9
million and $15.0 million for 1998 and 1997, respectively. The increase in
cash provided by operating activities was primarily due to growth in earnings
before depreciation and amortization. Increased working capital requirements
to support the higher level of revenues were partially offset by the receipt
of $3.1 million in income tax refunds.
The Company used $42.6 million in investing activities in 1998 versus $17.8
million for the same period last year. The acquisitions of GSI and AnaData
accounted for $35.4 million of the total cash invested in 1998. In 1997, the
acquisitions of SRI, Sales Performance Analysis Limited ("SPA"), and the
Simulation Engineering Division of Statistica, Inc. ("Statistica") accounted
for a combined purchase price of $9.6 million, which was financed through bank
borrowings. Purchases of office and computer-related equipment of $6.4
million and $6.5 million in 1998 and 1997, respectively, accounted for a
significant portion of the remaining cash used in investing activities.
During 1998, the Company financed its investing activities from operating cash
flows and from a net increase in borrowings of $21.0 million under its line of
credit. For the year ended June 30, 1997, financing activities provided cash
of $3.2 million as a result of $4.4 million in proceeds and derived income tax
benefits from the exercise of stock options offset by a $1.2 million reduction
in borrowings under the line of credit.
In anticipation of continuing its strategy of acquisitions and in order to
secure lower interest rates, on June 19, 1998 the Company executed a new
five-year unsecured revolving line of credit. The agreement permits
borrowings of up to $125 million with annual sublimits on amounts borrowed for
acquisitions. (See also Note 4 to the Notes to Consolidated Financial
Statements.) The Company also maintains a 500,000 pound sterling unsecured
line of credit in London, England, which expires in November 1998. At June
30, 1998, the Company had approximately $96 million available for borrowings
under its lines of credit.
On July 30, 1998, the Company executed a definitive purchase agreement to
acquire 100% of the outstanding common shares of QuesTech, Inc. ("QuesTech")
for $18.375 per share in cash, subsequently reduced to $18.13 per share. The
total value of the acquisition, including the assumption of debt, will be
approximately $42 million. The acquisition will be financed with bank
borrowings and is expected to be completed in late October or November 1998.
On August 13, 1998, the Company purchased the assets of Information Decision
Systems ("IDS") for $2.6 million in cash, which was financed with available
bank borrowings.
While the Company did not purchase any of its shares in 1997 or 1998, it has
repurchased its shares in the 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.
The Company believes that the combination of internally generated funds,
available bank borrowings and cash on hand will provide the required liquidity
and capital resources for the foreseeable future.
Year 2000
- ---------
The following discussion addresses the Company's response to the year 2000
issue, caused by the fact that many computer systems have not been designed to
process dates for the year 2000 and beyond.
The Company has undertaken a multi-faceted compliance program to address its
readiness to handle the date issue in connection with both IT and non-IT
systems (such as those using embedded chip technology) in the following areas:
CACI-developed software products and systems, infrastructure hardware and
software applications, business applications, office equipment, leasehold
facilities, and critical business partners. The Company believes that
continued awareness and communication are critical to the successful execution
of this program. We are currently addressing each one of these elements listed
above.
Through the use of questionnaires, compliance testing, and continued
discussions, we have presently determined the readiness of a substantial
portion of the CACI software products currently offered. We are working to a
plan which is aimed toward achieving compliance by March 1999. As most of the
products offered by CACI do not focus on or utilize transactional data, it is
our present belief that our efforts will be successful in developing a
complete suite of compliant products. Regarding the custom systems previously
developed by CACI for its customers, the Company is working to evaluate the
contractual commitments that would obligate CACI to remediate non-compliant
systems, as well as CACI's potential legal exposure concerning systems for
which CACI has no continuing express warranty or maintenance obligations.
Based on the present state of our knowledge and of the law as it applies to
this aspect of the year 2000 issue, we are unable at this time to determine
the full extent of exposure or to estimate the probable cost and timing of any
required remediation.
Over the past few years, the Company has made a concerted effort to update its
computer desktops and laptops and its internal communications network
equipment and software. With current technology in place, the Company
believes that most of these systems are already compliant. The Company has
taken the additional step of requesting that its 160 suppliers of such systems
and components provide information as to year 2000 compliance of their
products. To date, approximately 60% have been found to be compliant or
require only minor changes. The Company is proceeding in accordance with a
plan that is scheduled to achieve material compliance of these systems by June
1999.
At this point, the Company has identified the following systems as our key
business applications: finance & project management, payroll, human resources,
and contracts. Our human resources information and contracts database systems
are largely compliant with only minor issues remaining. We are currently in
the process of upgrading our payroll system to a fully compliant
MS-Windows(R)-based version supplied by an outside vendor, and we expect this
upgrade to resolve this issue. In January 1998, we began our implementation
of new finance and project management systems, which are supplied by Deltek, a
leading supplier of such systems to the government contracting industry.
These systems are represented as being compliant and our plan is to have them
implemented by June 1999.
We have and will continue to determine and assess our critical business
partners as a part of our compliance program. Presently, such significant
business partners include, but are not limited to, our suppliers, the utility
companies, our bank lending group, an outside vendor used to process payroll,
insurance and benefit providers, and property management firms. CACI's
operations are dependent to varying degrees on the readiness of these and
other partners. CACI has issued questionnaires to most of the currently
identified business partners. To date, the number of responses received is
insufficient for us to evaluate the readiness of such parties. The Company is
continuing to aggressively pursue responses in order to complete our
evaluations and develop any appropriate contingency plans, as necessary.
The Company is heavily dependent upon the effectiveness of its customers'
systems, principally in the U.S. Government, for the administration of
contracts and payment of the Company's invoices. The Company plans to make
formal inquiries of the efforts of its larger U.S. Government customers to
determine the status and encourage correction of any problems in their
systems. The primary concern is that there will be delays in contract
payments to the Company, which would require a temporary increase in working
capital. The Company has substantial borrowing capacity available under its
current line of credit, which extends to June 2003, but will further evaluate
the potential cash flow impact of the problem and determine if additional
steps are necessary to insure that adequate contingency financing is
available.
The financial impact of preparing the Company to be compliant is not fully
determinable at this time. Presently, the most significant costs are related
to our implementation of our new business systems in finance and project
management, which are discussed above. Costs for this project, including
software, hardware, consulting fees and labor are estimated at $2 million, of
which approximately 50% has been spent to date. These costs are being
capitalized and will be depreciated when the system is operational. In
addition, we anticipate incurring approximately $200 thousand in incremental,
internal labor costs that relate specifically to management of the year 2000
compliance program. The Company has devoted one full-time individual, an
oversight committee of 15 individuals and approximately 40 LAN administrators
at various offsite locations to communicate and implement all aspects of the
year 2000 compliance program. The Company has found that many of the upgrades
or patches necessary to fix the software are being provided at no cost by
major vendors. In addition, a majority of the CACI software product upgrades
are currently planned using existing technical staff without a significant
effect on other new product development.
In summary, the Company has established a year 2000 compliance program plan
and is working it as described above. We have not yet proceeded far enough
through performance of that plan to make a more complete assessment of the
Company's state of readiness, costs to address year 2000 issues, or risks to
the Company. Moreover, because the Company's year 2000 compliance program
plan appears, on the basis of our present knowledge, to adequately address the
matter, we have not yet developed specific contingency plans. Investors
should be aware of the fact that the process of addressing the year 2000 issue
is necessarily incremental. The Company will continue to report on the status
of its year 2000 compliance program. Investors are cautioned, however, that
the Company's assessment of its readiness, of the costs of performing the
program and the risks attended thereto, and of the need for any contingency
plans may change materially in the future as we gain more complete knowledge
and proceed further through plan performance.
Forward Looking Statements
- --------------------------
This filing may contain "forward-looking" statements, as that term is defined
in the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, statements concerning expectations of the
Company's future performance in terms of revenue and earnings. The Company
cautions investors that there can be no assurance that actual results will not
differ materially from those projected or suggested in such forward-looking
statements. Factors which could cause a material difference in results
include, but are not limited to, the following: regional and national economic
conditions; changes in interest rates; changes in government spending policies
and/or decisions concerning specific programs; individual business decisions
of customers and clients; developments in technology; competitive factors and
pricing pressures; the year 2000 issue; our ability to achieve the objectives
of our business plans; and changes in government laws or regulations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of CACI International Inc and
subsidiaries are provided in Section II of the Report.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Company had no disagreements with its independent accountants on
accounting principles, practices or financial statement disclosure during the
two years prior to the date of the most recent financial statements included
in this Report.
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
<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.
A. Report of Independent Accountants
B. Consolidated Statements of Operations for the years ended June
30, 1998, 1997 and 1996
C. Consolidated Balance Sheets as of June 30, 1998 and 1997
D. Consolidated Statements of Shareholders' Equity for the years
ended June 30, 1998, 1997 and 1996
E. Consolidated Statements of Cash Flows for the years ended June
30, 1998, 1997 and 1996
F. Notes to Consolidated Financial Statements
2. Supplementary Financial Data.
Schedule II - Valuation and Qualifying Accounts for the years ended
June 30, 1998, 1997 and 1996
(b) Reports on Form 8-K
. The Registrant filed a Current Report on 8-K on November 14, 1997,
in which the Registrant reported that it had acquired the business
and most of the assets of Government Systems, Inc.
. The Registrant filed a Current Report on 8-K/A on January 14, 1998,
in which the Registrant amended Items 7(a) (1) and (b)(2) of the
Current Report on Form 8-K filed on November 14, 1997.
. The Registrant filed a Current Report on Form 8-K on May 27, 1998,
in which the Registrant reported that it had signed a Letter of
Intent to acquire all of the issued and outstanding stock of
QuesTech, Inc.
(c) 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 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.
10.2 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.
10.3 The Stock Purchase Agreement dated September 1, 1995, between
the Registrant, CACI, Inc., Automated Sciences Group, Inc.,
and Conrad Hipkins, is incorporated by reference from
Exhibit 10.5 of the Registrant's Annual Report of Form 10-K
filed with
the Securities and Exchange Commission for the fiscal year
ended June 30, 1996.
10.4 The Acquisition and Merger Agreement dated December 21, 1995,
between the Registrant, IMS Technologies, Inc., and certain
other parties, is incorporated by reference from Exhibit 10.6
of the Registrant's Annual Report of Form 10-K filed with the
Securities and Exchange Commission for the fiscal year ended
June 30, 1996.
10.5 The Revolving Credit Agreement dated July 26, 1996, between
the Registrant, NationsBank, N.A., and certain other parties,
is incorporated by reference from Exhibit 10.7 of the
Registrant's Annual Report of Form 10-K filed with the
Securities and Exchange Commission for the fiscal year ended
June 30, 1996.
10.6 The 1996 Stock Incentive Plan of the Registrant is
incorporated by reference to the Registration Statement on
Form S-8 filed with the Commission on January 24, 1997.
10.7 The Acquisition Agreement dated November 1, 1997, between the
Registrant, CACI, Inc., and Government Systems, Inc., is
incorporated by reference from the Current Report on Form 8-K
filed with the Securities and Exchange Commission on November
14, 1997.
10.8 The Revolving Credit Agreement date June 19, 1998, between
Registrant, NationsBank N.A., and certain other parties.
(11) Computation of Earnings per Common and Common Equivalent Share.
(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
(also does business as "CACI Marketing Systems", "Information
Decision Systems", "Demographic on Call" and "CACI IDS")
CACI, INC.-COMMERCIAL, a Delaware Corporation
CACI Products Company, a Delaware Corporation
CACI Products Company California, a California Corporation
American Legal Services Corp., a Delaware Corporation
(also does business as "CACI Advanced Legal Systems" and "CACI
Legal Systems")
CACI Field Services, Inc., a Delaware Corporation
CACI N.V., a Netherlands Corporation
CACI Limited, a United Kingdom Corporation
Automated Sciences Group, Inc., a Delaware Corporation
IMS Services, Incorporated, a Maryland Corporation
Integrated Microcomputer Systems, Inc., a Maryland Corporation
(27) Financial Data Schedule
PAGE
<PAGE>
SECTION II
REPORT OF INDEPENDENT ACCOUNTANTS
AND
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1998, 1997 AND 1996
PAGE
<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, 1998 and 1997,
and the related consolidated statements of operations, shareholders' equity,
and cash flows for each of the three years in the period ended June 30, 1998.
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, 1998 and 1997,
and the results of its operations and its cash flows for each of the three
years in the period ended June 30, 1998, in conformity with generally accepted
accounting principles.
/s/
[Deloitte & Touche LLP]
Washington, D.C.
August 11, 1998
PAGE
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
Year ended June 30, 1998 1997 1996
- ----------------------------------------------------------------------
Revenues $326,110 $272,984 $244,615
Costs and expenses
Direct costs 177,584 147,084 133,184
Indirect costs & selling expenses 119,320 101,157 89,160
Depreciation & amortization 8,892 6,852 5,510
------- ------- -------
Total operating expenses 305,796 255,093 227,854
Income from operations 20,314 17,891 16,761
Interest expense 1,837 1,105 605
------- ------- -------
Income before income taxes 18,477 16,786 16,156
Income taxes 6,762 6,714 6,305
------- ------- -------
Net income $ 11,715 $ 10,072 $ 9,851
======= ======= =======
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE:
Basic earnings per share $ 1.09 $ 0.96 $ 0.97
======= ======= =======
Diluted earnings per share $ 1.05 $ 0.92 $ 0.92
======= ======= =======
Average shares outstanding 10,779 10,504 10,140
====== ====== ======
Average shares & equivalent
shares outstanding 11,153 11,005 10,716
====== ====== ======
See Notes to Consolidated Financial Statements.
PAGE
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, 1998 1997
- ------------------------------------------------------------------------
ASSETS
Current assets
Cash and equivalents $ 2,081 $ 2,015
Accounts receivable
Billed 83,995 59,294
Unbilled 9,350 11,549
------- -------
Total accounts receivable 93,345 70,843
Income taxes receivable - 2,984
Deferred income taxes 209 114
Deferred contract costs 2,383 -
Prepaid expenses and other 4,362 3,576
------- -------
Total current assets 102,380 79,532
Property and equipment, net 11,351 11,605
Accounts receivable, long-term 6,075 7,015
Goodwill 37,474 15,459
Other assets 4,884 4,486
Deferred contract costs, long-term 480 -
Deferred income taxes 416 763
------- -------
Total assets $163,060 $118,860
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 24,257 $ 19,854
Accrued compensation and benefits 17,010 12,527
Income taxes payable 4,390 -
Deferred income taxes 1,845 5,137
------- -------
Total current liabilities 47,502 37,518
Note payable, long-term 29,800 8,800)
Deferred rent expenses 1,289 1,627
Deferred income taxes 142 141
Shareholders' equity
Common stock
$.10 par value, 40,000,000 shares
authorized, 14,371,000 and 14,215,000
shares issued 1,437 1,422
Capital in excess of par 12,344 10,595
Retained earnings 84,415 72,700
Cumulative currency translation adjustments (207) (281)
Treasury stock, at cost (3,526,000 shares) (13,662) (13,662)
------- -------
Total shareholders' equity 84,327 70,774
------- -------
Total liabilities and shareholders' equity $163,060 $118,860
======= =======
See Notes to Consolidated Financial Statements.
PAGE
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Year ended June 30, 1998 1997 1996
- ---------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 11,715 $ 10,072 $ 9,851
Reconciliation of net income
to net cash provided by
operating activities
Depreciation and amortization 8,892 6,852 5,510
(Gain) loss on sale of property
and equipment (166) (657) 11
Provision (benefit) for
deferred income taxes (2,898) 2,531 811
Changes in operating assets
and liabilities
Accounts receivable (12,014) (275) (5,636)
Prepaid expenses and other assets 273 363 177
Accounts payable and
accrued expenses 1,481 (873) 1,558
Accrued compensation and benefits 4,192 (990) (1,667)
Deferred rent expenses (755) (638) (462)
Income taxes payable (receivable) 7,374 (1,357) (3,571)
Deferred contract costs 1,764 - -
------- ------- -------
Net cash provided by
operating activities 19,858 15,028 6,582
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment (6,428) (6,544) (4,198)
Proceeds from sale of business,
property and equipment 1,207 373 62
Purchase of businesses (36,513) (10,351) (13,372)
Capitalized software costs and other (837) (1,292) (463)
------- ------- -------
Net cash used in investing activities (42,571) (17,814) (17,971)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds under line of credit 175,950 116,471 109,173
Payments under line of credit (154,950) (117,658) (99,186)
Proceeds from stock options 1,764 4,402 1,205
------- ------- -------
Net cash provided by financing activities 22,764 3,215 11,192
Effect of exchange rates on cash
and equivalents 15 (192) (21)
------- ------- -------
Net increase (decrease) in
cash and equivalents 66 237 (218)
Cash and equivalents, beginning of year 2,015 1,778 1,996
------- ------- -------
Cash and equivalents, end of year $ 2,081 $ 2,015 $ 1,778
======= ======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid during the year for
income taxes, net of refunds $ 1,483 $ 2,826 $ 7,240
======= ======= =======
Cash paid during the year for interest $ 1,909 $ 1,035 $ 609
======= ======= =======
See Notes to Consolidated Financial Statements.
PAGE
<PAGE>
CACI INTERNATIONAL INC
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(amounts in thousands)
<TABLE>
<CAPTION>
Cumulative
Common stock
Capital currency Treasury stock Total
------------------ in excess Retained
translation --------------- shareholders'
Shares Amount of par earnings
adjustments Shares Amount equity
- --------------------------------------------------------------------------------
- -----------
<S> <C> <C> <C>
<C> <C> <C> <C> <C>
BALANCE, July 1, 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
Net income - - -
10,072 - - - 10,072
Currency translation adjustments - - -
- - 962 - - 962
Exercise of stock options
(including $2,720 income
tax benefit) 460 46 4,356
- - - - - 4,402
------ ----- ------
- ------ ----- ----- ------ ------
BALANCE, June 30, 1997 14,215 1,422 10,595
72,700 (281) 3,526 (13,662) 70,774
Net income - - -
11,715 - - - 11,715
Currency translation adjustments - - -
- - 74 - - 74
Exercise of stock options
(including $834 income
tax benefit) 156 15 1,749
- - - - - 1,764
------ ----- ------
- ------ ------ ----- ------ ------
BALANCE, June 30, 1998 14,371 $1,437 $12,344
$84,415 $ (207) 3,526 $(13,662) $84,327
====== ===== ======
====== ===== ===== ====== ======
</TABLE>
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 leader in computer-based information technology
systems, custom software, integration and operations, communication and
network services, imaging and document management, simulation, and proprietary
database and software products. The Company provides worldwide services in
support of U.S. national defense and civilian agencies, state and local
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
- -------------------
Revenues on cost-plus-fee contracts are recognized to the extent of costs
incurred plus a proportionate amount of the fee earned. Revenues on
fixed-price contracts are recognized on the percentage-of-completion method
based on costs incurred in relation to total estimated costs. Revenues on
time-and-material contracts are recognized to the extent of billable rates
times hours delivered plus material expenses incurred. Revenues from software
license sales are recognized upon delivery when there is no significant
obligation to perform after the sale, but are recognized under the
percentage-of-completion method when there is significant obligation for
production, modification or customization after the sale. Revenues from
maintenance support services on these products are 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 U.S. Government contracts (approximately 77% of total revenues
in 1998) are subject to subsequent government audit of direct and indirect
costs. The majority of such incurred cost audits have been completed through
June 30, 1996. Management does not anticipate any material adjustment to the
consolidated financial statements in subsequent periods for audits not yet
completed.
Property and Equipment
- ----------------------
Property and equipment is recorded at cost. Depreciation of equipment has
been provided over the estimated useful life of the respective assets of three
to ten years, using 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.
(dollars in thousands) June 30, 1998 1997
- -----------------------------------------------------------------
Equipment and furniture $ 33,949 $ 30,553
Leasehold improvements 2,412 2,198
------- -------
Property and equipment, at cost 36,361 32,751
Less accumulated depreciation
and amortization (25,010) (21,146)
------- -------
Total property and equipment, net $ 11,351 $ 11,605
======= =======
Deferred Contract Costs
- -----------------------
Deferred contract costs include the cost of equipment acquired by the Company
to provide communications services under contract. The costs are charged to
expense as the associated service revenues are billed to the customer. As of
June 30, 1998, approximately $2.4 million is classified as a current asset,
which represents the amount to be recovered within the next twelve months.
Capitalized Software Costs
- --------------------------
Costs incurred internally in creating a computer software product are charged
to expense when incurred as research and development until technological
feasibility has been established for the product. Technological feasibility
is established upon completion of a detailed program design or, in its
absence, completion of a working model. Thereafter, all software development
costs are capitalized and subsequently reported at the lower of unamortized
cost or estimated net realizable value. Capitalized costs are amortized based
on current and future revenues for each product with annual minimum
amortization equal to the straight-line amortization over the remaining
estimated economic life of the product, which ranges from three to five years.
Goodwill
- --------
The excess of cost over fair market value of net assets acquired is being
amortized using the straight-line method, generally over 15 to 20 years.
Accumulated amortization was $4,972,000 and $2,952,000 at June 30, 1998, and
June 30, 1997, respectively.
PAGE
<PAGE>
Income Taxes
- ------------
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes, and operating loss and
tax credit carryforwards.
U.S. income taxes have not been provided on $20,157,000 in undistributed
earnings of foreign subsidiaries that have been permanently reinvested outside
the United States. If such earnings were distributed to the United States,
certain foreign tax credits would be available to reduce the associated tax
liability.
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
- ------------------
In March 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share," which simplifies the standards for computing earnings per share
previously found in Accounting Principles Board Opinion No. 15 and makes them
comparable to international earnings per share standards. The Statement is
effective for financial statements issued for periods ending after December
15, 1997. As a result, the Company's reported earnings per share for 1997 and
1996 have been restated.
SFAS No. 128 requires dual presentation of basic and diluted earnings per
share on the face of the income statement. Basic earnings per share excludes
dilution and is computed by dividing income available to common shareholders
by the weighted average number of common shares outstanding for the period.
Diluted earnings per share reflects potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock. Diluted earnings per share includes the
incremental effect of stock options calculated using the treasury stock
method.
Statement of Cash Flows
- -----------------------
For purposes of the Statement of Cash Flows, short-term investments with an
original maturity of three months or less are considered cash equivalents.
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.
Recent Accounting Pronouncements
- --------------------------------
Effective for fiscal 1997, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation," and, as permitted by this standard, will continue
to apply the recognition and measurement principles of Accounting Principles
Board Opinion No. 25 to its stock options. 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. (See Note 6).
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income,"
and SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." As specified by these Statements, the Company will apply these
Statements beginning in fiscal 1999 and reclassify its financial statements
for earlier periods for comparative purposes.
SFAS No. 130 requires that all items that are required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. As a result, the Company will report the effects of
foreign currency translation gains or losses as a component of comprehensive
income.
SFAS No. 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information
about operating segments in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about products and
services, geographic areas, and major customers. This Statement supersedes
SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise," but
retains the requirement to report information about major customers. It
amends SFAS No. 94, "Consolidation of All Majority-Owned Subsidiaries," to
remove the special disclosure requirements for previously unconsolidated
subsidiaries. At this point, the Company has not fully determined the impact
of the adoption of SFAS No. 131.
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, 1998, 1997
and 1996, included on the Consolidated Balance Sheets as other assets, were
as follows:
(dollars in thousands) 1998 1997 1996
- ---------------------------------------------------------------
Annual activity
Balance, beginning-of-year $2,029 $1,229 $1,068
Capitalized during year 694 1,399 422
Amortized during year (860) (599) (261)
----- ----- -----
Balance, end-of year $1,863 $2,029 $1,229
===== ===== =====
NOTE 3. ACCOUNTS RECEIVABLE
Total accounts receivable are net of allowance for doubtful accounts of
$3,637,000 and $2,988,000 at June 30, 1998 and 1997, respectively. Accounts
receivable are classified as follows:
(dollars in thousands) 1998 1997
- -------------------------------------------------------------------
Billed receivables
Billed receivables $76,458 $52,159
Billable receivables at end of period 7,537 7,135
------ ------
Total billed receivables 83,995 59,294
Unbilled receivables
Unbilled pending receipt of contractual
documents authorizing billing 9,195 11,374
Unbilled retainages and fee withholds
expected to be billed within the
next 12 months 155 175
------ ------
9,350 11,549
Unbilled retainages and fee withholds
expected to be billed beyond the
next 12 months 6,075 7,015
------ ------
Total unbilled receivables 15,425 18,564
------ ------
Total accounts receivable $99,420 $77,858
====== ======
NOTE 4. NOTE PAYABLE
On July 26, 1996, the Company entered into an unsecured credit agreement,
which permitted borrowings of up to $50 million with sublimits on amounts
borrowed for acquisitions, dividends paid, and repurchases of Company stock.
Interest was calculated based on the Prime Rate, London Interbank Offered Rate
("LIBOR"), or Federal Funds Rate, dependent upon borrowing options and
financial covenant thresholds. In October 1997, the Company increased its
borrowing capacity to $70 million and extended the term to July 1, 2000, with
all other significant terms remaining the same. On June 19, 1998, the
Company replaced this existing facility with a new five-year unsecured credit
agreement, which permits borrowings of up to $125 million with a sublimit of
$55 million of borrowings in the first year for acquisitions and a sublimit
of $40 million per year in subsequent years. The new agreement permits
similar borrowing options and interest rates as those offered by the prior
agreement. The current LIBOR option is at the applicable period rate plus
0.50%. In addition, the Company pays a fee on the unused portion of the
facility. The interest rate and unused portion fee are determined quarterly
based on debt leverage ratio thresholds. The agreement contains customary
financial covenants and ratios related to debt leverage, fixed charges
coverage and net worth. Under these agreements, the Company had outstanding
borrowings of $29,800,000 and $8,800,000 at June 30, 1998 and 1997,
respectively. The applicable interest rate was 6.2% and 6.7% at June 30, 1998
and 1997, respectively.
NOTE 5. INCOME TAXES
The provision (benefit) for income taxes for the years ended June 30, consists
of:
(dollars in thousands) 1998 1997 1996
- -------------------------------------------------------------------
Current
Federal $7,986 $2,911 $3,668
State and local 649 675 802
Foreign 1,025 597 1,024
----- ----- -----
Total current 9,660 4,183 5,494
Deferred
Federal (2,261) 2,050 693
State and local (731) 454 152
Foreign 94 27 (34)
----- ----- -----
Total deferred (2,898) 2,531 811
----- ----- -----
Total $6,762 $6,714 $6,305
===== ===== =====
A reconciliation of the income tax provision (benefit) and the amount computed
by applying the statutory U.S. income tax rate of 35% for the year ended June
30, 1998 and 34% for the years ended June 30, 1997 and 1996 is as follows:
(dollars in thousands) 1998 1997 1996
- -------------------------------------------------------------------
Amount at statutory U.S. rate $6,467 $5,707 $5,493
State taxes, net of U.S. income
tax benefit 96 745 630
Taxes on foreign earnings at
different effective rates (65) 29 (25)
Other expenses not deductible
for tax purposes 29 74 130
Non-deductible goodwill 235 209 147
Foreign and research & development
tax credits - (50) (70)
----- ----- -----
Total $6,762 $6,714 $6,305
===== ===== =====
Effective tax rate 36.6% 40.0% 39.0%
===== ===== =====
PAGE
<PAGE>
The tax effects of temporary differences that give rise to significant
deferred tax assets and deferred tax liabilities at June 30, 1998 and 1997,
are as follows:
(dollars in thousands) 1998 1997
- -----------------------------------------------------------------
Deferred tax assets
Accrued vacation and other expenses $4,111 $ 3,973
Deferred rent 602 968
Foreign transactions 67 114
Pension 307 280
Depreciation 141 -
Other 143 270
----- ------
Total deferred tax assets 5,371 5,605
----- ------
Deferred tax liabilities
Unbilled revenues (5,361) (8,651)
Depreciation - (205)
Capitalized software (486) (562)
Goodwill (326) -
Other (560) (588)
----- ------
Total deferred tax liabilities (6,733) (10,006)
----- ------
Net deferred tax liability $(1,362) $(4,401)
===== ======
NOTE 6. STOCK INCENTIVE PLAN
Until September 24, 1996, the Company had an Employee Stock Incentive Plan
(the "1986 Plan") which provided that key employees could 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. At the
Company's 1996 Annual Meeting on November 14, 1996, the shareholders approved
a new Stock Incentive Plan (the "1996 Plan"). The 1996 Plan permits award of
incentive and non-qualified stock options, stock appreciation rights and stock
grants to officers and employees of the Company, and limits total awards and
stock grants to 1,500,000 shares over the life of the Plan. Options for
480,000 shares have been granted under the 1996 Plan through June 30, 1998
and, with certain exceptions, are exercisable for a period of ten years from
the date of grant.
The period during which each option is exercisable is determined when granted,
but in no event could options granted under the 1986 Plan be exercisable after
December 31, 2000. Pursuant to the terms of the 1986 Plan, no grants of
options or other securities could be made after September 24, 1996.
The stock option exercise prices were at fair market value on the date of
grant. Accordingly, no compensation cost has been recognized for incentive
stock option grants. Had compensation cost for the Company's stock-based
compensation plans been determined based on the fair value at grant dates for
awards under those plans consistent with the method of accounting under SFAS
No. 123, the Company's net income and earnings per share would have been
reduced to the pro forma amounts indicated below:
(dollars in thousands,
except per share) 1998 1997 1996
- ----------------------------------------------------------------
Net income
As reported $11,715 $10,072 $ 9,851
Pro forma 10,991 9,681 9,683
Diluted earnings per share
As reported $ 1.05 $ 0.92 $ 0.92
Pro forma 0.99 0.88 0.90
The fair value of each option is estimated on the date of grant using the
Black-Sholes option-pricing model with the following additional assumptions:
Year ended June 30, 1998 1997 1996
- ---------------------------------------------------------------
Dividend yield 0% 0% 0%
Volatility rate 26.6% 47.0% 40.0%
Discount rate 5.7% 6.2% 6.6%
Expected term (years) 5 3 3
Stock option activity and price information regarding the Plans follows:
Weighted
Average
of Exercise
(shares in thousands) shares Exercise Price Price
- -------------------------------------------------------------------------
Shares under option, July 1, 1995 1,414 $ 1.87 - $10.88 $ 3.63
Granted 198 10.00 - 14.44 12.10
Exercised (187) 1.87 - 5.94 3.15
Forfeited (46) 3.50 - 13.44 8.42
-----
Shares under option, June 30, 1996 1,379 1.87 - 14.44 4.75
Granted 188 11.06 - 19.31 16.74
Exercised (460) 1.87 - 13.44 3.60
Forfeited (46) 1.87 - 14.63 10.34
-----
Shares under option, June 30, 1997 1,061 1.87 - 19.31 7.18
Granted 366 15.00 - 20.28 19.19
Exercised (156) 1.87 - 14.63 5.98
Forfeited (88) 2.59 - 19.31 14.76
-----
Shares under option, June 30, 1998 1,183 1.87 - 20.28 10.14
=====
<TABLE>
<CAPTION>
Weighted Weighted
Number
Average Average
of
Exercise Remaining
(shares in thousands) shares Exercise Price
Price Contractual Life
- --------------------------------------------------------------------------------
- --------------------
<S> <C> <C> <C>
<C> <C>
Shares under option, June 30, 1998 409 $ 1.87 - $ 2.81 $
1.99 2.5
123 2.87 - 3.50
3.15 2.5
26 5.94 - 8.56
6.75 2.5
224 10.00 - 15.00
13.00 2.5
401 15.50 - 20.28
19.24 8.4
-----
1,183
=====
Options exercisable, June 30, 1998 409 1.87 - 2.81 1.99
123 2.87 - 3.50 3.15
26 5.94 - 8.56 6.75
84 10.88 - 15.50 12.65
4 17.44 - 19.31 18.46
-----
646
=====
</TABLE>
Exercise prices are based on the market price of the Company's common stock at
the date the options are granted.
NOTE 7. PENSION PLAN
Through June 30, 1997, the Company had a defined contribution pension plan
(the "CACI Pension Plan") covering approximately 85% of its employees. The
Company contributed to a trust an amount equal to 2.5% of a qualified
employee's total fiscal year cash compensation, up to $35,000 per year, and an
amount equal to 5% of cash compensation in excess of $35,000 per year, subject
to maximum contribution limitations.
Effective July 1, 1997, the Company merged its pension plan and voluntary
401(k) Plan into a single plan, the CACI $MART Plan. Current Company
employees who participated in the prior CACI Pension Plan became fully vested
in their prior Company contributions on June 30, 1997, and their balances were
transferred to the new CACI $MART Plan.
Effective July 1, 1997, employees became immediately eligible to join the CACI
$MART Plan, a defined contribution plan. Employees can contribute up to 15%
(subject to certain statutory limitations) of their total compensation. The
Company matches contributions equal to 50% of the amount of the employee's
contribution, up to 6% of the employee's total fiscal year cash compensation.
In addition, the Company may also make discretionary profit sharing
contributions to the plan. Employer contributions vest to the employees
according to a vesting schedule entitling full vesting after five years of
employment. The CACI $MART PLAN is qualified under the Internal Revenue Code,
as determined by the Internal Revenue Service.
The Company maintains a non-qualified, unfunded plan, the CACI, Inc. Group
Retirement Plan (the "Retirement Plan"), which is available to certain
executives participating in the CACI $MART PLAN whose annual compensation
exceeds the statutory limit of the qualified plan. The Company contributes 5%
of such excess eligible compensation to the Plan. Each participant is fully
vested immediately in his account balance.
The total consolidated expense for pension and Company contribution to the
401(k) plan and the Retirement Plan for the years ended June 30, 1998, 1997
and 1996 was $3,847,000, $3,117,000 and $2,745,000, respectively. The Company
funds the costs of the qualified plans as they accrue.
NOTE 8. 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
five years.
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, 1998:
Year ended Operating Leases
June 30, (dollars in thousands)
----------------------------------
1999 $11,977
2000 8,944
2001 7,401
2002 4,593
2003 524
Later years 27
------
Total minimum lease payments $33,466
======
Operating leases reflect the minimum lease payments net of a minimal amount of
sub-lease income. Rent expense incurred from operating leases for the years
ended June 30, 1998, 1997 and 1996 amounted to $10,780,000, $9,778,000 and
$8,938,000 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 operations and liquidity.
NOTE 9. BUSINESS ACQUISITIONS
All of the acquisitions made by the Company have been accounted for using the
purchase method of accounting, and the results of their operations have been
included in the Company's statements of operations since the dates of
acquisition. The purchase price for each acquisition was allocated to the
acquired assets and liabilities using the respective fair value at the date of
acquisition. The excess, if any, has been recorded as goodwill and is being
amortized on a straight-line basis over 15 to 20 years. All of the
acquisitions have been primarily financed through borrowings under the
Company's existing line of credit.
1998 Acquisitions
- -----------------
On November 1, 1997, the Company acquired the business and net assets of
Government Systems, Inc. ("GSI"), a subsidiary of Infonet Services
Corporation, a multinational communications network provider, for $28 million
in cash plus an additional $5.5 million to pay off existing debt of GSI. GSI
delivers international communications and network-related services to meet the
networking needs of the U.S. Government and other organizations. These
services include full implementation of dedicated private networks, integrated
public and private networks, network installation, maintenance, and management
and operations. Its major customers include the DoD, the Federal Aviation
Administration, and Globalstar Limited Partnership. GSI's annual revenues,
prior to acquisition, approximated $36 million. Approximately $23.5 million
of the purchase consideration has been allocated to goodwill, based upon the
excess of the purchase price over the estimated fair value of net assets
acquired, and will be amortized over 20 years. The preliminary purchase price
allocation may change during the year of acquisition as additional information
concerning the net asset valuation is obtained. GSI contributed revenues of
$22.3 million for the period from November 1, 1997 to June 30, 1998.
Also in November 1997, CACI Limited in London, England, acquired all of the
share capital of AnaData Limited ("AnaData"). The total consideration paid
was $1.9 million in cash, which was financed from CACI Limited's working
capital. AnaData develops and markets software products for managing
marketing databases, and historically generated annual revenues of
approximately $2.5 million. Based upon estimated fair values, $1 million of
the purchase consideration has been allocated to software intellectual
property rights which will be amortized over five years, and $0.4 million has
been allocated to goodwill which will be amortized over 10 years. Since its
acquisition, the operations of AnaData have generated $1.5 million in revenue
through June 30, 1998.
1997 Acquisitions
- -----------------
On October 1, 1996, the Company acquired the business and most of the assets
of Sunset Resources, Inc. ("SRI") for $6.2 million. SRI is an engineering and
information technology firm that has focused on logistics and engineering
support services to the Air Force and is an expert in electronic commerce.
The excess of the purchase price over the fair value of the net assets
acquired was $4.6 million.
On January 3, 1997, the Company acquired the business of Sales Performance
Analysis Limited ("SPA"), including the intellectual property rights to
certain software products, for $2.6 million. SPA develops and markets a
unique range of specialized software products and services that enable
companies to make more effective use of their field forces through the optimal
configuration of sales and services territories. SPA's annual revenues prior
to acquisition were $2.0 million. The excess of the purchase price over the
fair value of the net assets acquired is $0.7 million. In addition, $1.7
million was allocated to software which will be amortized over five years.
On May 14, 1997, the Company purchased the Simulation Engineering Division of
Statistica, Inc., which specializes in computer modeling and simulation. The
purchase price of $0.8 million was based on the value of the tangible assets
acquired. Consequently, there was no goodwill recorded with this purchase.
1996 Acquisitions
- -----------------
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
environmental science services to DoD and the Department of Energy. $500,000
of the purchase price has been held back against the collection of certain
receivables.
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.
The goodwill, the amount that the purchase prices exceeded the fair values of
the net assets acquired, was $2.8 million for ASG and $3.1 million for IMS.
Pro Forma Information (unaudited)
- ---------------------------------
The following unaudited pro forma combined condensed statements of operations
set forth the consolidated results of operations of the Company for the years
ended June 30, 1998, 1997 and 1996, as if the above mentioned acquisitions had
occurred at the beginning of both the year of acquisition and the year prior
to the acquisition. This unaudited pro forma information does not purport to
be indicative of the actual financial position or the results that would
actually have occurred if the combinations had been in effect for the years
ended June 30:
(dollars in thousands,
except per share amounts) 1998 1997 1996
- -------------------------------------------------------------------
Revenues $338,013 $316,300 $265,234
Net income 11,440 9,389 9,335
Diluted earnings per share 1.03 0.85 0.87
Subsequent Events
- -----------------
On July 30, 1998, the Company executed a definitive purchase agreement to
acquire 100% of the outstanding common shares of QuesTech, Inc. ("QuesTech")
for $18.375 per share in cash, which was subsequently reduced to $18.13 per
share. QuesTech is an information technology company that specializes in the
development and application of information technology for government and
industry. The company provides a broad spectrum of scientific, engineering,
and management services in electronics, software engineering, systems
engineering, and many other advanced information technology fields. The total
value of the acquisition, including the assumption of debt, is expected to be
approximately $42 million. The transaction is expected to be completed in
late October or November 1998.
On August 13, 1998, the Company purchased the assets of Information Decision
Systems ("IDS") for $2.6 million in cash and, therefore, the transaction will
be recorded under purchase accounting standards. It is estimated that the
excess of the purchase price over the fair value of net assets acquired will
approximate $2.4 million. IDS provides Internet access to demographic site
information and is expected to enhance the current market share of the
Company's Marketing Systems Group in the industry. The acquisition was
financed with available bank borrowings.
NOTE 10. SEGMENT INFORMATION
Revenues from contracts with the U.S. Government for 1998, 1997 and 1996
amounted to approximately $251,000,000 (77% of revenues), $211,000,000 (77% of
revenues) and $190,000,000 (78% of revenues), respectively.
(dollars in thousands) 1998 1997 1996
- -----------------------------------------------------------------
Revenues
United States $285,756 $239,645 $215,311
Foreign 40,354 33,339 29,304
------- ------- -------
Combined $326,110 $272,984 $244,615
======= ======= =======
Income before income taxes
United States $ 14,740 $ 14,853 $ 13,518
Foreign 3,737 1,933 2,638
------- ------- -------
Combined $ 18,477 $ 16,786 $ 16,156
======= ======= =======
Net income
United States $ 9,212 $ 8,837 $ 8,215
Foreign 2,503 1,235 1,636
------- ------- -------
Combined $ 11,715 $ 10,072 $ 9,851
======= ======= =======
Identifiable assets
United States $134,431 $ 97,847 $ 86,762
Foreign 28,629 21,013 16,546
------- ------- -------
Combined $163,060 $118,860 $103,308
======= ======= =======
NOTE 11. COMMON STOCK DATA (UNAUDITED)
The Company's stock trades on the Nasdaq National Market System. The ranges of
high and low sales prices for each quarter during fiscal years 1998 and 1997
are as follows:
1998 1997
Quarter High Low High Low
---------------------------------------------------
First $20 $13 7/8 $18 5/8 $12
Second 20 5/8 16 22 16
Third 22 1/4 18 1/2 23 5/8 16 1/8
Fourth 22 1/4 17 1/8 19 5/8 13 5/8
NOTE 12. 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.
The 1997 fourth quarter net income included a $0.6 million loss resulting from
certain productivity problems experienced in a fixed unit price document
management contract in the litigation support business. This loss included a
$0.3 million net income provision to cover anticipated losses in 1998, before
productivity improvements were fully effected to return the activity to a
profitable condition.
(dollars in thousands,
except per share) First Second Third Fourth
- -----------------------------------------------------------------------
Year ended June 30, 1998
Revenues $70,669 $79,145 $85,239 $91,057
Costs and expenses 66,746 74,514 80,520 85,853
Income taxes 1,491 1,759 1,613 1,899
Net income 2,432 2,872 3,106 3,305
Diluted earnings per share 0.22 0.26 0.28 0.29
Year ended June 30, 1997
Revenues $62,734 $68,821 $70,907 $70,522
Costs and expenses 58,200 64,039 66,016 67,943
Income taxes 1,836 1,936 1,912 1,030
Net income 2,698 2,846 2,979 1,549
Diluted earnings per share 0.25 0.26 0.27 0.14
PAGE
<PAGE>
SCHEDULE II
CACI INTERNATIONAL INC AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR YEARS ENDED JUNE 30, 1998, 1997 AND 1996
(dollars in thousands)
<TABLE>
<CAPTION>
Other
Balance
at Changes Balance
Beginning
Additions Add at End
Description of Period at Cost
Deductions (Deduct) of Period
- ----------- ---------- ---------
- ---------- -------- ---------
1998
- ----
<S> <C> <C>
<C> <C> <C>
Reserves deducted from assets
to which they apply:
Allowances for doubtful accounts $2,988 $ 820
$(381) $210 $3,637
===== =====
==== === =====
1997
- ----
Reserves deducted from assets
to which they apply:
Allowances for doubtful accounts $2,245 $1,006
$(590) $327 $2,988
===== =====
==== === =====
1996
- ----
Reserves deducted from assets
to which they apply:
Allowances for doubtful accounts $1,415 $ 382
$(103) $551 $2,245
===== =====
==== === =====
</TABLE>
PAGE
<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 22nd day of
September, 1998.
CACI International Inc
By: /s/
--------------------------------
J. P. London
Chairman of the Board,
Chief Executive Officer
and Director
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/ September 22, 1998
- --------------------- Chairman of the Board, ------------------
J. P. London Chief Executive Officer
and Director
(Principal Executive Officer)
/s/ September 22, 1998
- --------------------- Executive Vice President, -------------------
James P. Allen Chief Financial Officer
and Treasurer
(Principal Financial and
Accounting Officer)
/s/ September 16, 1998
- --------------------- Director -------------------
Richard L. Leatherwood
/s/ September 15, 1998
- --------------------- Director -------------------
Larry L. Pfirman
/s/ September 15, 1998
- --------------------- Director -------------------
Warren R. Phillips
/s/ September 14, 1998
- --------------------- Director -------------------
Charles P. Revoile
/s/ September 16, 1998
- --------------------- Director -------------------
William B. Snyder
/s/ September 15, 1998
- --------------------- Director -------------------
Richard P. Sullivan
/s/ September 19, 1998
- --------------------- Director -------------------
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 March 19, 1998
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 one hundred fifty (150)
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 Chairman of the Board,
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 11
CACI INTERNATIONAL INC AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Year ended June 30, 1998 1997 1996
- -------------------------------------------------------------------------
Net income $11,715 $10,072 $ 9,851
====== ====== ======
Average shares outstanding during
the period 10,779 10,504 10,140
Dilutive effect of stock options after
application of treasury stock method 374 501 576
------ ------ ------
Average number of shares and equivalent
shares outstanding during the period 11,153 11,005 10,716
====== ====== ======
Basic earnings per share $ 1.09 $ 0.96 $ 0.97
====== ====== ======
Diluted earnings per share $ 1.05 $ 0.92 $ 0.92
====== ====== ======
Exhibit 21
SIGNIFICANT SUBSIDIARIES
------------------------
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
(also does business as "CACI Marketing Systems","Information Decision
Systems", "Demographic on Call" and "CACI IDS")
CACI, INC.-COMMERCIAL, a Delaware Corporation
CACI Products Company, a Delaware Corporation
CACI Products Company California, a California Corporation
American Legal Services Corp., a Delaware Corporation
(also does business as "CACI Advanced Legal Systems" and "CACI Legal
Systems")
CACI Field Services, Inc., a Delaware Corporation
CACI N.V., a Netherlands Corporation
CACI Limited, a United Kingdom Corporation
Automated Sciences Group, Inc., a Delaware Corporation
IMS Services, Incorporated, a Maryland Corporation
Integrated Microcomputer Systems, Inc., a Maryland Corporation
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-K FOR FY1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,081,000
<SECURITIES> 0
<RECEIVABLES> 103,057,000
<ALLOWANCES> (3,637,000)
<INVENTORY> 0
<CURRENT-ASSETS> 102,380,000
<PP&E> 36,361,000
<DEPRECIATION> (25,010,000)
<TOTAL-ASSETS> 163,060,000
<CURRENT-LIABILITIES> 47,502,000
<BONDS> 29,800,000
0
0
<COMMON> 1,437,000
<OTHER-SE> 82,890,000
<TOTAL-LIABILITY-AND-EQUITY> 163,060,000
<SALES> 0
<TOTAL-REVENUES> 326,110,000
<CGS> 0
<TOTAL-COSTS> 177,584,000
<OTHER-EXPENSES> 126,871,000
<LOSS-PROVISION> 1,341,000
<INTEREST-EXPENSE> 1,837,000
<INCOME-PRETAX> 18,477,000
<INCOME-TAX> 6,762,000
<INCOME-CONTINUING> 11,715,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,715,000
<EPS-PRIMARY> $1.09<F1>
<EPS-DILUTED> $1.05<F1>
<FN>
<F1>Earnings per share data has been presented on the financial statements in
accordance with the nomenclature in SFAS #128:
earnings per share - basic $1.09
earnings per share - diluted $1.05
</FN>
</TABLE>
Exhibit 10.8
$125,000,000
REVOLVING CREDIT AGREEMENT
between
CACI International Inc,
as Borrower
and
The Lenders From Time
To Time a Party Hereto,
as Lenders
with
NationsBank, N.A.,
as Agent
Dated as of June 19, 1998
<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 OF REVOLVING CREDIT FACILITY
Section 2.1 The Revolving Loans
Section 2.2 Revolving Loan Borrowing Procedures
Section 2.3 Standby Letters of Credit
Section 2.4 Swing Line Loan Subfacility
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, Administrative Fee, L/C Fee
and Fronting 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
Section 5.13 Year 2000 Compliance
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 Lenders
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 Lenders
Section 8.9 Defaulting Lenders 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 Payment and Performance
Section 9.12 Judicial Proceedings; Waiver of Jury Trial
Section 9.13 Integration
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
Schedule I Lender Commitments
Schedule 5.5 Litigation
Schedule 5.6 Defaults
Schedule 5.12 Foreign Subsidiaries
Exhibit A Notarial Deed
Exhibit B Pledge Agreement
Exhibit C Form of Revolving Note
Exhibit D Subsidiary Guarantee
Exhibit E Form of Swing Line Note
Exhibit F Form of Backlog Report
<PAGE> REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of June 19, 1998 as amended,
modified, or otherwise supplemented from time to time (this "Agreement"), is
between (i) CACI INTERNATIONAL INC, a Delaware corporation (the "Borrower"),
(ii) THE LENDERS FROM TIME TO TIME A PARTY TO THIS AGREEMENT (each, a"Lender"
and, collectively, the "Lenders") and (iii) NATIONSBANK, N.A., a national
banking association and in its separate capacity as agent for the Lenders
hereunder (in such capacity, the "Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested the Lenders to make available to the
Borrower a revolving line of credit for loans and letters of credit up to an
aggregate of $125,000,000 for the purpose of financing stock or asset
acquisitions and the general working capital requirements of the Borrower and
its subsidiaries (the "Permitted Uses"), in each case upon the terms and
conditions set forth herein;
WHEREAS, as collateral security for the obligations of the Borrower under
this Agreement, and to induce the Lenders and the Agent to enter into this
Agreement, (i) the Borrower and the Agent are, contemporaneously with the
execution and delivery hereof, entering into the Notarial Deed, pursuant to
which the Borrower has pledged to the Agent a first priority security interest
in the CACI Limited Shares and (ii) CACI N.V. and the Agent are,
contemporaneously with the execution and delivery hereof, entering into, the
Pledge Agreement, pursuant to which CACI N.V. has pledged to the Agent the
CACI Limited Shares;
WHEREAS, to induce the Lenders and the Agent to enter into this
Agreement, the Agent, on behalf of itself and the Lenders, and the Guarantors
are entering into the Subsidiary Guarantee;
WHEREAS, the Lenders are willing to make the loans and issue the letters
of credit to the Borrower, and the Agent is willing to act as "Agent", upon
the terms and subject to the conditions and provisions set forth herein; and
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the Borrower, the Lenders 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):
"ABR" means, for any day, the greater of (x) the Bank Prime Rate as in
effect on such day and (y) the Federal Funds Rate as in effect on such day
plus one-half of 1%.
"ABR Period" means any 30-day period in respect of which interest accrues
on the Revolving Loans bearing interest at the ABR.
"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.
"Administrative Fee Letter" shall have the meaning specified in Section
3.7(b) hereof, and shall include any amendment, modification or supplement
thereof.
"Affected Advance" has the meaning specified in Section 3.8(d) 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., Corporate Credit Services, care of Angela Berry,
NC1-001-15-04, 100 North Tryon Street, Charlotte, North Carolina 28255-0001,
or such other office in the United States of America of Agent as it may from
time to time designate to the Borrower or the Lenders 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 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 0.375%, (b) greater than 1.00 to 1.00 but
less than or equal to 1.50 to 1.00, then 0.50%, (c) greater than 1.50 to 1.00
but less than 2.00 to 1.00, then 0.625%, (d) greater than 2.00 to 1.00 but
less than 2.50 to 1.00, then 0.75%, and (e) greater than 2.50 to 1.00, then
1.0%.
"Applicable LIBOR Rate" means, for any period, in the event the 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 0.375%, (b) greater than 1.00 to
1.00 but less than or equal to 1.50 to 1.00, LIBOR plus 0.50%, (c) greater
than 1.50 to 1.00 but less than 2.00 to 1.00, LIBOR plus 0.625%, (d) greater
than 2.00 to 1.00 but less than 2.50 to 1.00, LIBOR plus 0.75%, and (e)
greater than 2.50 to 1.00, LIBOR plus 1.0%.
"Applicable Swing Line Rate" means, for any period, in the event the
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 (based on a LIBOR Period of 30
days) plus 0.55%, (b) greater than 1.00 to 1.00 but less than or equal to 1.50
to 1.00, LIBOR (based on a LIBOR Period of 30 days) plus 0.65%, (c) greater
than 1.50 to 1.00 but less than or equal to 2.00 to 1.00, LIBOR (based on a
LIBOR Period of 30 days) plus 0.75%, (d) greater than 2.00 to 1.00 but less
than or equal to 2.50 to 1.00, LIBOR (based on a LIBOR Period of 30 days) plus
0.85%, and (e) greater than 2.50 to 1.00, LIBOR (based on a LIBOR Period of 30
days) plus 1.05%.
"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 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 the Borrower or an ERISA Affiliate.
"Borrower" has the meaning specified in the preamble of this Agreement.
"Borrower Account" means the bank account of the Borrower maintained with
the Agent for general purposes and assigned the account number designated by
the Agent in writing to the Borrower.
"Borrowing Notice" has the meaning specified in Section 2.2(a) of this
Agreement.
"Breakage Period" has the meaning specified in Section 3.9 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 Borrower.
"CACI Limited Shares" means the issued and outstanding shares of capital
stock of CACI Limited pledged by CACI N.V. to the Agent under the Pledge
Agreement.
"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
Borrower.
"CACI N.V. Shares" means the issued and outstanding shares of capital
stock of CACI N.V. pledged by the Borrower to the Agent under the Notarial
Deed.
"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.
"Cash Flow" shall mean, for any period of determination, the sum of a
Person's earnings before interest, taxes, depreciation, amortization, lease
and rental expenses less Capital Expenditures, as determined in accordance
with GAAP.
"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
Borrower representing fifty percent (50%) or more of the combined voting power
of the 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 Borrower approve one or more
mergers, consolidations or combinations of the Borrower with any other
corporations or entities which, if consummated prior to the Maturity Date,
would result in (A) the voting securities of the Borrower outstanding the day
following the Effective Date (together with any voting securities issued by
the Borrower permitted under Section 6.2(c) herein) representing less than 50%
of the combined voting power of the voting securities of the 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 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 Borrower approve a plan of
liquidation of the Borrower or an agreement for the sale, disposition or
transfer by the Borrower of all or substantially all the assets of the
Borrower and its Consolidated Subsidiaries.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor Federal statute.
"Commitment" shall mean, with respect to each Lender'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 Lender'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 Borrower's and its Subsidiaries' earnings before
interest, taxes, depreciation, amortization, lease and rental expenses 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 Borrower's and its Subsidiaries' cash interest paid,
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 Borrower and its 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 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.
"Consolidated Total Assets" means all assets of the Borrower and its
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 Borrower and its Subsidiaries.
"Consolidated Total Liabilities" means all liabilities of the Borrower
and its 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 Borrower and its
Subsidiaries.
"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
Borrower's and its 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 from time to time.
"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 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 $125,000,000.00.
"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 Agent on such day on such
transactions as determined by the Agent Lender.
"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 Administrative Fee and the Fronting 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.
"Fronting Fee" shall have the meaning specified in Section 2.3(b) hereof.
"Funded Debt" means, as of any date of determination, the sum of all
Indebtedness.
"Funding Date" shall mean the date on which any loan shall be made by a
Lender to the Borrower 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 Lender pursuant to applicable law in
respect of the transactions contemplated by this Agreement.
"Guarantors" means those Subsidiaries who have executed the Subsidiary
Guarantee on the Effective Date, or who may thereafter become a party to the
Subsidiary Guarantee in accordance with the provisions hereof.
"Indebtedness" means all (i) indebtedness, obligations and liabilities
now existing or hereafter arising for money borrowed by the Borrower or any
Subsidiary thereof, whether or not evidenced by a note, indenture or other
agreement (including, without limitation, the Revolving Notes, the Swing Line
Note and the Subsidiary Guarantee), (ii) reimbursement or indemnification
obligations in respect of any letter of credit issued for the account of the
Borrower or any Subsidiary thereof, (iii) reimbursement or indemnification
obligations in respect of any guarantee issued by or on behalf of the Borrower
or any Subsidiary thereof, (iv) obligations of the Borrower or any Subsidiary
thereof as lessee under any Capital Lease, (v) all amounts owing by the
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 the Borrower or any Subsidiary thereof (whether or not the 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 ABR, 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 expiration of the LIBOR Period in respect of such LIBOR
Loans, and (z) in the case of any Swing Line Loans, on the last Business Day
of the Swing Line Period in respect of such Swing Line Loans.
"Interest Period" means any 30-day period in respect of which interest
accrues on the Revolving Loans bearing interest at the ABR.
"Issuing Lender" shall mean, initially, the Agent and, thereafter, such
other Lender as from time to time shall agree to act as the issuer of the
Standby Letters of Credit by notice to the Lenders, the Agent and the
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.
"Lender" or "Lenders" have the meanings specified in the preamble of this
Agreement.
"Lender Availability" shall mean, as of any date of determination and
with respect to each Lender, the amount determined by deducting (x) the amount
of such Lender's Pro Rata Share of the Total Outstanding Amount from (y) the
amount of such Lender's Pro Rata Share of the Revolving Loan Commitment.
"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 Lender 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 one month, two month, three month or six month
interest period selected by the 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 Lender 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 "Eurocurrency
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 ABR
or Applicable LIBOR Rate) or Swing Line Loan, and "Loans" shall mean,
collectively, all Revolving Loans (whether bearing interest at the ABR or
Applicable LIBOR Rate) and Swing Line Loans.
"Loan Documents" means this Agreement, the Revolving Notes, the Swing
Line Note, the Subsidiary Guarantee, the Notarial Deed, the Pledge Agreement
and the Administrative Fee Letter.
"Mandatory Borrowing" shall have the meaning specified in Section 2.4(e)
hereof.
"Maturity Date" means June 19, 2003.
"Multiemployer Plan" means any "multiemployer plan" as defined in ERISA
Section 4001(a)(3) to which the 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.
"NationsBanc Montgomery Securities LLC" means that certain affiliate of
Agent which is a party to the Administrative Fee Letter.
"Notarial Deed" means that certain notarial deed of pledge of shares,
dated on or about the date of the initial Loan made hereunder, by and among
the Borrower, the Agent and CACI N.V., and notarized by a civil law notary
officiating in Amsterdam, pursuant to which the Borrower pledged to the Agent,
on behalf of the Lenders, the CACI N.V. Shares, substantially in the form of
Exhibit A hereto, as the same may be amended, modified or otherwise
supplemented from time to time.
"Note" means each of the Revolving Notes and the Swing Line Note.
"Obligations" shall mean all now existing or hereafter arising
indebtedness, obligations, liabilities and covenants of the Borrower to the
Lenders or 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 Swing Line
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) of A-1 or P-1, respectively;
(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 AAA or Aaa, respectively, 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 the 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 having a rating of A, its equivalent or higher by Standard &
Poor's Corporation or Moody's Investors Service, Inc. (or, if neither such
organization shall rate such institution at any time, by any nationally
recognized rating organization in the relevant E.C. State); (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
A-1 or P-1, respectively; (E) bonds or other debt instruments of any company,
if such bonds or other debt instruments, at the time of their purchase, are
rated A-1 or P-1, respectively, 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 $4,000,000.00.
"Permitted Uses" shall have the meaning specified in the first Whereas
clause hereof.
"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" means that certain Pledge Agreement, dated as of June
19, 1998, between the Agent and CACI N.V., substantially in the form of
Exhibit B hereto, as the same may be amended, modified or supplemented from
time to time.
"Pledgor" shall mean each of the Borrower and CACI N.V.
"Potential Change In Control" means one or more of the following events:
(a) the 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 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 Lender, a fraction (expressed as a percentage), the numerator
of which shall be the amount of such Lender's Commitment and the denominator
of which shall be the aggregate amount of Commitments of all Lenders, 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
Lender, a fraction (expressed as a percentage), the numerator of which shall
be the sum of the aggregate amount of such Lender's Revolving Loans then
outstanding plus the aggregate amount of such Lender'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 requirement, but excluding
any such that imposes, increases or modifies any income or franchise tax
imposed upon any Lender by any jurisdiction (or any political subdivision
thereof) in which any Lender 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.
"Required Lenders" shall mean, except as otherwise provided in Section
8.9(i) hereof, as of any date of determination, such Lenders whose Pro Rata
Shares of the Revolving Loan Commitment, in the aggregate, are greater than
sixty-six and two-thirds percent (66 2/3%); provided, however, that for so
long as only two financial institutions constitute Lenders hereunder (it being
understood that, solely for the purposes of determining the number of
financial institutions constituting Lenders under this proviso, each financial
institution, together with its Affiliates, shall constitute a single Lender),
Required Lenders shall mean, except as otherwise provided in Section 8.9(i)
hereof, as of any date of determination, such Lenders 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 Lenders 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 issued to a Lender by the
Borrower pursuant to this Agreement, substantially in the form (appropriately
completed) of Exhibit C to this Agreement, as the same may be amended,
modified or supplemented from time to time, 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.
"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.
"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
outstanding, having ordinary voting power for the election of directors (or
equivalent controlling interest or person), is owned by Borrower directly or
indirectly, and "Subsidiaries" means, collectively, all such entities.
"Subsidiary Guarantee" means the Subsidiary Guarantee, dated as of June
19, 1998, substantially in the form of Exhibit D hereto, between the
Guarantors and the Agent, as the same may be amended, modified or supplemented
from time to time.
"Swing Line Lender" shall have the meaning specified in Section 2.4(a)
hereof.
"Swing Line Borrowing Notice" shall have the meaning specified in Section
2.4(c) hereof.
"Swing Line Loan" shall have the meaning specified in Section 2.4(a)
hereof.
"Swing Line Note" means the promissory note issued by the Borrower to
NationsBank, N.A. pursuant to this Agreement in respect of the Swing Line
Loans, substantially in the form (appropriately completed) of Exhibit E to
this Agreement, as the same may be amended, modified or supplemented from time
to time, and any other promissory note issued in exchange or substitution
therefor.
"Swing Line Period" shall have the meaning specified in Section 2.4(c)
hereof.
"Swing Line Subfacility" shall have the meaning specified in Section
2.4(a) hereof.
"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.
"Year 2000 Compliant" has the meaning specified in Section 5.13 of this
Agreement.
"Year 2000 Problem" has the meaning specified in Section 5.13 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 Lender severally and not jointly agrees to make revolving
loans (each individually, a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrower, 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 Lender'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
Swing Line 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 Lender pursuant to this Section 2.1
plus the aggregate outstanding amount of all Standby Letters of Credit made by
the Issuing Lender and deemed made by each other Lender pursuant to Section
2.3 hereof shall at no time exceed such Lender'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 Borrower 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
Lender 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 Lender is hereby authorized to record in the
books and records of such Lender (without making any notation in such Lender's
Revolving Note or any schedule thereto) the amount and Funding Date of each
Revolving Loan made by such Lender, 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 Borrower 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, unless sooner accelerated
pursuant to the terms of this Agreement.
Section 2.2 REVOLVING LOAN BORROWING PROCEDURES.
(a) NOTICE OF REVOLVING BORROWING. Whenever the Borrower desires to
borrow Revolving Loans under Section 2.1 hereof, the 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 on a Revolving
Loan bearing interest at the ABR (it being understood that the Borrower may
request Revolving Loans to bear interest initially at the Applicable LIBOR
Rate provided the Borrower complies with all of the provisions of Section
3.8(a) (with such modifications thereof as shall be necessary to reflect that
an initial loan, rather than the conversion of an outstanding loan, is being
requested, including the delivery to the Agent of a Borrowing Notice no later
than 10:00 a.m. at least three (3) LIBOR Business Days prior to the first day
of the LIBOR Period as to which such initial loan relates) and, to the extent
applicable but without duplication, this Section 2.2(a)) specifying (i) that
the Borrower wishes to effect Revolving Loans, (ii) the amount of the
Revolving Loans thereby requested (which shall not be less than $500,000 and
shall be in multiples of $100,000), (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 ABR 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 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 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 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 Lender 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 Lender by telecopy or telex
or other customary form of teletransmission of the requested borrowing. Each
Lender 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 Lenders, 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 Borrower on such Funding Date and shall
disburse such funds in Dollars to the Borrower in immediately available funds
by crediting the Borrower Account.
(c) FAILURE TO FUND BY LENDER. Unless the Agent shall have been
notified by any Lender prior to 12:00 P.M. (Eastern time) on any Funding Date
in respect of Revolving Loans requested under a Borrowing Notice that such
Lender does not intend to make available to the Agent such Lender's Revolving
Loan on such Funding Date, the Agent may assume that such Lender 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 Borrower
a corresponding amount on such Funding Date. If such corresponding amount is
not in fact made available to the Agent by such Lender on or prior to 3:00
P.M. (Eastern time) on a Funding Date, such Lender agrees to pay and the
Borrower 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 Borrower until the date such amount is paid or repaid
to the Agent, at (i) in the case of such Lender, the Federal Funds Rate, and
(ii) in the case of the Borrower, the ABR. If such Lender shall pay to the
Agent such corresponding amount, such amount so paid shall constitute such
Lender's Revolving Loan, and if both such Lender and the Borrower shall have
paid and repaid, respectively, such corresponding amount, the Agent shall
promptly pay over to the Borrower such corresponding amount in same day funds,
but the Borrower shall remain obligated for all interest thereon. Nothing
contained in this Section 2.2(b) shall be deemed to relieve any Lender 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 Borrower may request the Issuing Lender, 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 Lender shall issue, for the account of the Borrower and on
behalf of itself or any Subsidiary, one or more standby letters of credit
(each, a "Standby Letter of Credit") pursuant to the Issuing Lender'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 $15,000,000. The Issuing Lender 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 Lender shall, upon request of the 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 FEES; MATURITY. The Borrower shall, among
other things, pay to the Issuing Lender for the benefit of the Lenders, pro
rata, on each L/C Fee Payment Date, in arrears, a fee (the AL/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. Any change in the Applicable L/C Margin resulting from a
change in the ratio of Funded Debt to EBITDA calculated pursuant to Section
6.1(e) hereof shall be effective five (5) Business Days after receipt of
Borrower's financial statements reflecting such ratio; provided, however, that
if such financial statements are not delivered when due, then the highest
Applicable L/C Margin shall apply. In addition to the L/C Fee, the Borrower
shall pay to the Issuing Lender, for its own account, an annual fronting fee
(the "Fronting Fee"). The Fronting Fee shall be payable not later than the
Fee Payment Date and shall be equal to 0.125% per annum (calculated on the
basis of a 360 days year and the actual number of days elapsed) of the daily
average of the aggregate of all Standby Letters of Credit outstanding during
the period as to which such Fronting Fee shall have accrued.
All Standby Letters of Credit issued by the Issuing Lender as
contemplated by this Section 2.3 shall expire no later than the Maturity
Date. Notwithstanding that the Issuing Lender 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 Lender shall deposit in a collateral
account at the Issuing Lender or an Affiliate thereof in order to
collateralize such Standby Letters of Credit, which collateral account shall
bear interest for the account of the Borrower based upon investment of the
funds as agreed between the Issuing Lender and the Borrower.
(c) STANDBY LETTER OF CREDIT REQUEST PROCEDURE. Whenever the Borrower
desires that a Standby Letter of Credit be issued on its behalf, the Borrower
shall give the Issuing Lender (with copies to be sent to the Agent and each
other Lender) 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 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 Lender has
received notice from the Agent or any Lender 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 Lender may
issue the requested Standby Letter of Credit for the account of the Borrower
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 Lender'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 Lender of any
Standby Letter of Credit, the Issuing Lender shall be deemed to have sold and
transferred to each Lender (other than the Issuing Lender), and each such
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from the Issuing Lender, without recourse or warranty, an undivided
interest and participation, in proportion to such Lender's Pro Rata Share, in
such Standby Letter of Credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
collateral therefor. Upon any change in a Lender'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
Lenders.
(ii) In determining whether to pay under any Standby Letter of
Credit, the Issuing Lender shall have no obligation relative to the Lenders
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 Lender under or in
connection with any Standby Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for the
Issuing Lender any resulting liability to any Lender.
(iii) Upon the request of any Lender, the Issuing Lender shall
furnish to such Lender copies of any Standby Letter of Credit to which the
Issuing Lender is party and such other documentation relating to such Standby
Letter of Credit as may reasonably be requested by such Lender.
(iv) As between the Borrower on the one hand and the Issuing
Lender and the Lenders on the other hand, the Borrower assumes 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 Lender nor any other
Lender 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; or
(H) any consequences arising from causes beyond the control
of the Issuing Lender, including without limitation any acts of governments.
(v) The obligations of the Lenders to make payments to the Agent
for the account of the Issuing Lender 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 the 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
Lender, any Lender, 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 Lender shall promptly notify the Agent, and the Agent shall promptly
notify each Lender, 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 Lender shall promptly and unconditionally
pay to the Agent for the account of the Issuing Lender an amount equal to such
Lender'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 Lender prior to 2:00 P.M. (Eastern time) on any Business Day,
such Lender shall make its required payment on the same Business Day. If and
to the extent such Lender shall not have made available to the Agent for the
account of the Issuing Lender such Lender's Pro Rata Share of such Drawing,
such Lender agrees to pay to the Agent for the account of the Issuing Lender,
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 Lender at the Federal Funds Rate plus 100 basis
points. The failure of any Lender to make available to the Agent for the
Account of the Issuing Lender its Pro Rata Share of any Drawing shall not
relieve any other Lender of its obligation hereunder to make available to the
Agent for the Account of the Issuing Lender its Pro Rata Share of any Drawing
on the date so required; provided, however, that no Lender shall be
responsible for the failure of any other Lender to make available to the Agent
for the account of the Issuing Lender such other Lender's Pro Rata Share of
such Drawing.
Section 2.4 SWING LINE LOAN SUBFACILITY.
(a) SWING LINE SUBFACILITY. Subject to the terms and conditions
hereof, NationsBank, N.A., in its individual capacity (as such, the ASwing
Line Lender"), 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 "Swing Line Loan" and, collectively, the
"Swing Line Loans") to the Borrower; provided, however, that (i) the aggregate
principal amount of all Swing Line Loans shall at no time exceed
$10,000,000.00 (such amount, the "Swing Line Subfacility"), and (ii) the sum
of the aggregate amount of all Revolving Loans (whether bearing interest at
the ABR or Applicable LIBOR Rate) plus the aggregate amount of all Swing Line
Loans plus the aggregate amount of all Standby Letters of Credit shall at no
time exceed the Facility Amount.
(b) THE SWING LINE NOTE; MATURITY. The Swing Line Loans made by the
Swing Line Lender pursuant hereto shall be evidenced by a separate Swing Line
Note. The Swing Line 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
Swing Line Loan until paid in full on the unpaid principal amount thereof.
The Swing Line Lender is hereby authorized to record in its books and records
(without making any notation on the Swing Line Note or any schedule thereto)
the amount and date of funding of each Swing Line Loan made by it, and the
amount and date of each payment or prepayment of any Swing Line Loan. No
failure to so record nor any error in so recording shall affect the
obligations of the Borrower to repay the actual outstanding principal amount
of the Swing Line Loans, with interest thereon, as provided in this
Agreement. The aggregate principal amount of the Swing Line Loans shall be
payable on the Maturity Date.
(c) SWING LINE LOAN BORROWING PROCEDURE. Whenever the Borrower desires
to borrow Swing Line Loans under this Section 2.4, the Borrower shall deliver
to the Swing Line Lender irrevocable written notice (each such notice, a
"Swing Line Borrowing Notice"), and the Swing Line Lender may, in its sole and
absolute discretion and upon such other arrangements as shall be specifically
agreed to by the Swing Line Lender and the Borrower, make a Swing Line Loan to
the Borrower 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
Swing Line Loan made hereunder shall not be less than $1,000.00 (and shall be
in multiples of $1,000.00) and (ii) an individual Swing Line Loan shall be
offered by the Swing Line Lender for a period of not less than 1 but not more
than 29 days (any such period, a "Swing Line Period"). In addition, and as an
alternative when requested by the Borrower, the Swing Line Lender shall
provide autoborrow services in respect of the Swing Line Loans pursuant to the
Swing Line Lender's standard terms and conditions for such services as set
forth in a mutually acceptable agreement or other arrangement between the
Swing Line Lender and the Borrower.
(d) INTEREST ON SWING LINE LOANS. Subject to the provisions of clause
(e) of this Section 2.4, in the event that the Swing Line Lender shall make
any Swing Line Loan pursuant to Section 2.4 hereof, the aggregate principal
amount of Swing Line Loans outstanding from time to time shall bear interest
at a rate per annum equal to the Applicable Swing Line Rate for the applicable
Swing Line Period (or such other interest rate agreed to in writing by the
Swing Line Lender and the Borrower). Any change in the Applicable Swing Line
Rate resulting from a change in the ratio of Funded Debt to EBITDA calculated
pursuant to Section 6.1(e) hereof shall be effective five (5) Business Days
after timely receipt of Borrower's financial statements reflecting such ratio;
provided, however, that if such financial statements are not delivered when
due, then the highest Applicable Swing Line Rate shall apply.
(e) REPAYMENT OF SWING LINE LOANS. Each Swing Line Loan made by the
Swing Line Lender hereunder shall be due and payable upon the expiration of
the Swing Line Period relating to such Swing Line Loan. The Swing Line Lender
may, at any time and in its sole and absolute discretion, by written notice to
the Borrower and the Agent (which shall promptly deliver a copy thereof to the
other Lenders), demand repayment of its Swing Line Loans then outstanding by
way of a Revolving Loan borrowing (a "Mandatory Borrowing"), in which case the
Borrower, shall be deemed to have requested a Revolving Loan borrowing in the
amount of the then outstanding Swing Line Loans which shall bear interest at
the ABR; 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 Lender hereby irrevocably agrees to
make such Revolving Loans promptly upon any such request or deemed request on
account of a Mandatory Borrowing, in the amount (but in proportion to each
Lender'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 contemporaneously 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 the Borrower), then
each Lender 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 Borrower on or after such date and prior to such
purchase) from the Swing Line Lender such participations in the then
outstanding Swing Line Loans as shall be necessary to cause each such Lender
to share in such Swing Line 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 Swing Line
Loans shall be for the account of the Swing Line Lender until the date as of
which the respective participation of each other Lender is purchased, and (2)
at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay to the Swing
Line Lender 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 ABR.
(f) OPTIONAL PREPAYMENT OF SWING LINE LOANS. Subject to the provisions
of this clause (f) and Section 3.9 hereof, the Borrower may, at its sole
option, prepay the principal amount of the Swing Line 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 Swing Line Loan proposed to be made by the Borrower, the right
of the Borrower to make such Optional Prepayment is subject to the Agent's
receipt from the 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
Borrower desires to prepay such Swing Line 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
Swing Line Loan, which has not been converted to a Revolving Loan, made by the
Borrower as permitted hereunder shall be paid to the Agent for the account of
the Swing Line Lender no later than 12:00 P.M. (Eastern Time) on the
applicable prepayment date.
<PAGE> ARTICLE III
INTEREST, FEES AND REPAYMENT
Section 3.1 INTEREST ON THE REVOLVING LOANS
(a) ABR. 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 ABR 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 ABR shall be effective as of
the opening of business on the day on which such change is effective.
(b) LIBOR RATE. In the event the Borrower shall effect a LIBOR
Conversion in accordance with the provisions of Section 3.8 of this Agreement
or obtain a Revolving Loan that shall bear interest initially at the
Applicable LIBOR Rate as provided in Section 2.2(a) hereof, the aggregate
principal amount of the Revolving Loans that are the subject of such LIBOR Conve
rsion or Borrowing Notice, as the case may be, shall bear interest at a rate
per annum equal to the Applicable LIBOR Rate. Any change in the Applicable
LIBOR Rate resulting from a change in the ratio of Funded Debt to EBITDA
calculated pursuant to Section 6.1(e) hereof shall be effective five (5)
Business Days after receipt of Borrower's financial statements reflecting such
ratio; provided, however, that if such financial statements are not delivered
when due, then the highest Applicable LIBOR Rate shall apply.
Section 3.2 REGULATORY CHANGES. If, after the date of this Agreement,
any Regulatory Change
(i) shall subject any Lender 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 Lender 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 Lender); 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 Lender or shall impose on such Lender any other condition
affecting (x) the obligation of the Lender to make or maintain the Loans or
its Commitment, or (y) the Revolving Notes or the Swing Line Note;
and the result of any of the foregoing is to increase the cost to such Lender
of making or maintaining any Loan or maintaining its Commitment or to reduce
the amount of any sum received or receivable by such Lender under, or the rate
of return attributable to, this Agreement or under the Revolving Notes or the
Swing Line Note, such Lender shall, within 30 days after the effective date of
such Regulatory Change, provide written notice to the 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
Borrower shall be liable to the Lenders 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 Lender
to the 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 Borrower, shall
pay to such Lender for the account of such Lender such additional amount or
amounts as will compensate such Lender for such increase or reduction. A
certificate of such Lender 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 Borrower fails to
make any payment of the principal amount of or interest on any of the
Revolving Loans or Swing Line Loans, or of the Unused Portion Fee, the
Administrative Fee, the L/C Fee or the Fronting Fee, in each case when due
(whether by demand, acceleration or otherwise), the Borrower, shall pay to the
Agent for the account of the Lenders 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 ABR and
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 Lenders, or to any Lender 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 Lender, to it in immediately available funds at an account specified by
such Lender in writing to the Borrower. The Borrower 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 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 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 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 Swing Line 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 Swing Line 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 and the Fronting 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 Lender
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 (other than the Administrative Fee and Fronting Fee) and all
other payments in respect of any other Obligations (other than with respect to
Swing Line Loans) shall be allocated among (and paid over promptly after
receipt thereof to) such of the Lenders 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 Swing Line Loans that have
not been converted to Revolving Loans and of the Administrative Fee and
Fronting Fee shall be allocated only to the Swing Line Lender.
(ii) Upon the occurrence and during the continuance of an Event of
Default, the Agent shall, unless otherwise specified by the Required Lenders
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 or in the Notarial Deed)
in respect of any Obligations:
(A) first, and except as otherwise provided in Section
4(b)(ii) of the Pledge Agreement and in the Notarial Deed, to pay interest on
and then principal of any portion of the Loans which the Agent may have
advanced on behalf of any Lender for which the Agent has not then been
reimbursed by such Lender 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 Lenders, pro rata;
(D) fourth, to the ratable payment of overdue interest or
late charges, if any, then due the Lenders;
(E) fifth, to the ratable payment of interest due in
respect of the Revolving Loans and Swing Line Loans;
(F) sixth, to the ratable payment or prepayment of
principal due in respect of the Revolving Loans and Swing Line Loans; and
(G) seventh, to the ratable payment of all other
Obligations;
provided, however, that no Lender 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 Lenders of all amounts due such Lenders
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
Lenders 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 Lenders without necessity of notice to or consent
of or approval by the Borrower, 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 Swing Line Note theretofore not repaid, together with
any accrued and unpaid Unused Portion Fee, Administrative Fee, L/C Fee or
Fronting 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 (unless sooner accelerated pursuant to the terms hereof), 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 Borrower 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 Lenders 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, the Borrower shall, without notice from the Lender,
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 Borrower may, at
its sole option prepay the principal amount of the Revolving Loans (whether
bearing interest at the ABR or Applicable LIBOR Rate) in whole or in part (in
an amount of $500,000 or more and in multiples of $100,000) 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 ABR or
Applicable LIBOR Rate) proposed to be made by the Borrower, the right of the
Borrower to make such Optional Prepayment is subject to the Agent's receipt
from the Borrower, no later than 10:00 A.M. (Eastern Time) 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 10:00 A.M. (Eastern time) at least
three (3) Business Days prior to the date of prepayment, of a written notice
(which shall be irrevocable) specifying (i) that the 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 Borrower as permitted hereunder shall be paid to the Agent
for the account of the Lenders 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, ADMINISTRATIVE FEE, L/C FEE AND
FRONTING FEE.
(a) UNUSED PORTION FEE. For each Fiscal Quarter (or part thereof)
during the period from the Effective Date until the Maturity Date, the
Borrower shall pay to the Agent for the account of the Lenders pro rata based
upon each Lender'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 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 0.125%, (ii) greater than 1.00 but less than or equal to 1.50 to 1.00,
then 0.15%, (iii) greater than 1.50 to 1.00, but less than or equal to 2.00 to
1.00, then 0.175%, (iv) greater than 2.00 to 1.00 but less than or equal to
2.50 to 1.00, then 0.20%, and (v) greater than 2.50 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 Borrower shall pay to the Agent, as
compensation for the services of the Agent hereunder, a fee (the
"Administrative Fee") in an amount separately agreed to by the Borrower,
NationsBanc Montgomery Securities LLC and the Agent in that certain letter
agreement dated the date hereof (the "Administrative Fee Letter"). The
Administrative Fee payable by the Borrower as contemplated by this clause (b)
shall be due on the applicable Fee Payment Date (and the Borrower shall not be
entitled to any credit if any Lender as to which such fee shall have been paid
ceases to be a Lender hereunder for the entire year in respect of which such
fee shall have been due and payable).
(c) L/C FEE. The Borrower shall pay the L/C Fee and the Fronting 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 Borrower shall have the
right to convert all or part of the outstanding Revolving Loans bearing
interest at the then ABR 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 Borrower
shall give the Agent irrevocable written notice (such notice, a "LIBOR
Conversion Notice") prior to 10:00 A.M. (Eastern time), 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 Borrower wishes to effect a LIBOR
Conversion, (ii) the aggregate principal amount of outstanding Revolving Loans
which the 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 $500,000.00 and shall be in multiples of $100,000.00), (iii)
the applicable LIBOR Period being elected by the 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 TO BORROWER. In the event the Borrower has
requested a LIBOR Conversion, the Agent shall give written notice to the
Borrower and the Lenders of LIBOR as promptly as reasonably possible after
such rate is determined. The Agent's determination of LIBOR 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 Borrower may, 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 ABR 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 the Borrower, bear interest at the ABR
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
Borrower) that by reason of circumstances affecting the London interbank
market either adequate or reasonable means do not exist for ascertaining LIBOR
elected by the Borrower pursuant to the terms hereof or (ii) the Agent shall
have determined (which determination shall be conclusive and binding on the
Borrower) that the applicable LIBOR 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
Borrower has requested be made as a LIBOR Loan (each, an "Affected Advance"),
the Agent shall promptly notify the Borrower (by telephone or otherwise, to be
promptly confirmed in writing), with a copy to the Lenders, 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 ABR, 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 ABR. 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
(whether by way of acceleration or otherwise or due to an Optional Prepayment
of any LIBOR Loan pursuant to Section 3.6(b) hereof), the Borrower shall pay
to each Lender whose LIBOR Loan has been so prepaid any loss or expense which
such Lender 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 (such period, the "Breakage Period"), at the Applicable LIBOR Rate
minus (ii) the amount of interest (as reasonably determined by each affected
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for the Breakage Period with leading banks in the London
interbank market. Without limitation of the foregoing provisions of this
Section 3.9, the Borrower agrees to pay to each Lender the losses or expenses
which any Lender may suffer or incur as a result of such prepayments of any
Loan.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 CONDITIONS PRECEDENT TO EFFECTIVE DATE. This Agreement, and the
Revolving Loan Commitment of the Lenders hereunder, shall become effective at
a closing at the offices of Crowell & Moring LLP 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 Lenders; provided, however, that in the event the
Effective Date shall have not occurred on or prior to June 30, 1998, the
Lenders shall have no further obligations hereunder:
(i) The Agent, on behalf of the Lenders, shall have received from the
Borrower the following instruments, agreements, certificates and payments, as
the case may be, on or prior to the Effective Date:
(A) A Revolving Note, dated the Effective Date, payable to the
order of each of Lender in the amount of such Lender's Pro Rata Share of the
Revolving Loan Commitment and duly executed by the Borrower;
(B) A Swing Line Note, dated the Effective Date, payable to the
order of NationsBank, N.A. in the amount of $10,000,000.00 and duly executed
by the Borrower;
(C) The Subsidiary Guarantee, executed in favor of the Agent by
each Domestic Subsidiary of the Borrower existing as of the Effective Date;
(D) The Pledge Agreement, executed by CACI N.V. in favor of the
Agent, together with stock certificates evidencing the CACI Limited Shares,
duly indorsed in blank for transfer or having attached thereto stock transfer
powers duly indorsed in blank;
(E) The Notarial Deed, executed by the Borrower in favor of the
Agent and acknowledged or executed by CACI N.V.;
(F) An opinion or opinions of counsel to the Borrower, Guarantors
and Pledgors, in form and substance satisfactory to the Lenders;
(G) A certified copy of the resolutions of the Board of Directors
of the Borrower, Guarantors and the Pledgors authorizing the execution and
delivery of this Agreement and/or the other Loan Documents to which they are a
party;
(H) A copy of the charter documents and by-laws of the Borrower
and any Subsidiary thereof, together with all amendments thereto, certified by
the Secretary of the Borrower or such Guarantor as being true, complete and
correct and in effect as of the Effective Date;
(I) An incumbency certificate of the Secretary, an Assistant
Secretary or an Assistant Treasurer of the Borrower, the Guarantors and CACI
N.V. certifying the names and true signatures of each officer of the Borrower,
the Guarantors and CACI N.V. authorized to execute the Loan Documents;
(J) By wire transfer of immediately available funds, the Borrower
shall have paid to the Agent, on behalf of the Lenders, as applicable, a fee
in the amount of (i) in the case of NationsBank, N.A., $25,000.00, (ii) in the
case of First Union Commercial Corporation, $18,750.00, (iii) in the case of
Mellon Bank, N.A., $16,875.00, and (iv) in the case of Crestar Bank
$16,875.00,
(K) A certificate of an Authorized Officer of the 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;
(L) A certificate of an Authorized Officer of the Borrower, dated
the Effective Date, certifying, in form and substance satisfactory to the
Lenders, the Borrower's compliance with Section 6.1(m) hereof, having attached
to such certificate a summary in reasonable detail of the Borrower's and its
Subsidiaries' insurance coverage. Upon request of the Lenders, the Borrower
shall deliver an insurance report of an independent insurance broker as to due
compliance with Section 6.1(m) hereof; and
(M) The results of a search, upon the records maintained with the
appropriate Secretary of State and county or city recorder offices of all
jurisdictions deemed advisable by the Lenders, regarding liens, if any, on
file with such offices and naming the Borrower or any Subsidiary as a debtor,
which results shall be satisfactory to the Lenders.
(ii) The Borrower shall have disclosed to the Lenders
promptly from time to time any material developments or changes in the
Borrower and its Subsidiaries', taken as a whole, business, assets, results of
operations, condition (financial or otherwise) or prospects, including without
limitation amendments to their charter documents or the 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 Borrower performed by the Lenders prior to the execution of this
Agreement or resulted in a material adverse change since March 31, 1998 in the
business, assets, results of operations, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole;
(iii) The Borrower shall have delivered to the Lenders a
true, correct and complete copy of all 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 the U.K. Debt loan
documents remain 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 Borrower shall have delivered to the Lenders (A)
the Borrower's Form 10-K for the Fiscal Years ending June 30, 1996 and 1997
and Form 10-Q for the Fiscal Quarters ending September 30, 1997, December 31,
1997 and March 31, 1998, and (B) such other unaudited consolidated financial
statements of the Borrower and its Consolidated Subsidiaries as any Lender
shall reasonably request, together with, in each case, an officer's
certificate, dated the Effective Date, from each of the 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
Borrower's Form 10-K and Form 10-Qs 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 Lenders, and the Borrower shall have
reimbursed the Lenders for their fees and expenses and the fees and expenses
of the Lenders' 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 Lenders' counsel in connection with such preparation
or review);
(vi) All Schedules delivered hereunder by the Borrower shall
be in form and substance satisfactory to the Lenders;
(vii) By wire transfer of immediately available funds, the
Agent shall have received the Administrative Fee due and payable to the Agent
on the Effective Date pursuant to the Administrative Fee Letter;
(viii) By wire transfer of immediately available funds,
NationsBanc Montgomery Securities LLC shall have received the fee due and
payable to it on the Effective Date in accordance with the Administrative Fee
Letter;
(ix) The Lenders shall have completed their due diligence
review of the Borrower and its Subsidiaries, including their business, assets,
results of operations, condition (financial or otherwise), prospects,
liabilities (both actual and contingent, including environmental liabilities),
management and affairs, and the results thereof shall have been satisfactory
to the Lenders in their sole discretion;
(x) The Lenders shall have received such other documents,
instruments, certificates, opinions, agreements and information as the Lenders
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 Borrower and its Subsidiaries, a report describing
the aggregate amount and current age status of accounts receivable of the
Borrower, a report describing the current status of goods or services on
backlog with the Borrower or any Subsidiary thereof and a report describing
the status of pending or threatened litigation).
Section 4.2 FURTHER CONDITIONS PRECEDENT TO LOANS AND STANDBY LETTERS OF
CREDIT. The obligation of the Agent, on behalf of the Lenders, to make any
Revolving Loan, and the obligation of the Swing Line Lender to make any Swing
Line Loan, and the obligation of the Issuing Lender to issue any Standby
Letter of Credit shall be subject to the fulfillment to the satisfaction of
the Lenders, in the case of Revolving Loans and Standby Letters of Credit, and
the Swing Line Lender, in the case of Swing Line Loans, of the further
conditions precedent that, on the Funding Date for such Revolving Loan or
Swing Line 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 Swing Line Lender shall have received
a Swing Line Borrowing Notice in accordance with Section 2.4(c) or the Issuing
Lender 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 Borrower (or other officer of the 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
Borrower and its Consolidated Subsidiaries (taken as a whole), as determined
by the Required Lenders (or, in the case of Swing Line Loans, the Swing Line
Lender) in their sole discretion;
(iii) Since the date of the most recent financial statements or
projections provided to the Lenders, there shall have been no material adverse
change in the Borrower's or its Consolidated Subsidiaries' (taken as a whole)
financial condition or in the Borrower's or its Consolidated Subsidiaries'
(taken as a whole) assets or prospects, in each case as determined by the
Required Lenders (or, in the case of Swing Line Loans, the Swing Line Lender)
in their sole discretion;
(iv) The representations and warranties of the Borrower, the Pledgors
and the Guarantors contained in Article V of this Agreement, in the Pledge
Agreement, the Notarial Deed and the Subsidiary Guarantee, as the case may be,
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 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 Swing Line 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
Lenders (or, in the case of a Swing Line Loan, the Swing Line Lender), of an
Authorized Officer of the 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 Lenders and the Agent to enter into this Agreement
and make the Loans contemplated by the terms hereof, the Borrower represents
and warrants with respect to itself and its Subsidiaries, as the context shall
require, as of the date hereof and as of the Effective Date that:
Section 5.1 EXISTENCE, POWER AND AUTHORITY. The 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 conducted and to own
or hold under lease its property; the 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 the Borrower or such Subsidiary;
and, the Borrower and its Subsidiaries have 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, the Loan Documents to which the Borrower and the Subsidiaries
are a party have been duly authorized, executed and delivered by the Borrower
and such Subsidiaries and constitute legal, valid and binding obligations of
the Borrower and such Subsidiaries, enforceable against the Borrower and such
Subsidiaries 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 the
Borrower and the Subsidiaries 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 the Borrower or such Subsidiaries (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 the Borrower or such
Subsidiaries or any indenture, mortgage, contract, agreement or other
undertaking or instrument to which the Borrower or such Subsidiaries 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 the
Borrower and the Subsidiaries of the Loan Documents to which they are a party
does not require any consent, which has not been obtained, of any other
Person (including, without limitation, stockholders of the Borrower or such
Subsidiaries) 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 the Borrower or the Subsidiaries, threatened (i) which
involves any of the transactions contemplated by this Agreement or (ii)
against or affecting the Borrower or any Subsidiary thereof which could in the
reasonable judgment of the Borrower materially adversely affect the financial
condition, business or operation of the Borrower, CACI N.V. or the Guarantors
or any Subsidiary thereof.
Section 5.6 NO DEFAULT. Except as set forth on Schedule 5.6 hereto in
writing, neither the Borrower nor any Subsidiary 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 Borrower
(including the Borrower's Form 10-K and Form 10-Q) and its Subsidiaries,
copies of which have been furnished to the Lenders, were prepared in
accordance with GAAP and are complete and correct and fairly and accurately
present the financial condition of the Borrower and its Subsidiaries (taken as
a whole) as of their dates and the results of their operations for the periods
then ended. There has been no material adverse change in the financial
condition of the Borrower and the Guarantors (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 any Loan have been or
will 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. Neither the Borrower nor any of its Subsidiaries 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. Neither the Borrower nor any
of its Subsidiaries 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. T he Borrower and its 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 the Borrower or any Subsidiary thereof to the extent
that such taxes have become due and payable.
Section 5.11 ENVIRONMENTAL MATTERS. The Borrower and its 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 Borrower and the
Guarantors (taken as a whole). Neither the Borrower nor 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 Borrower and the Guarantors (taken as a
whole).
Section 5.12 SUBSIDIARIES. There are no Affiliates or Subsidiaries
(consolidated or otherwise, direct or indirect) of the Borrower other than (i)
the Guarantors, (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 Lenders prior to the date hereof. The Borrower is the holder
(either directly or indirectly) of all of the outstanding shares of capital
stock of each Subsidiary 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 Borrower
and its Consolidated Subsidiaries, taken as a whole.
Section 5.13 YEAR 2000 COMPLIANCE. The Borrower has (i) initiated a review
and assessment of all areas within its and each of the Subsidiaries' business
and operations (including those affected by suppliers and vendors) that could
be adversely affected by the risk that computer applications used by the
Borrower or any of its Subsidiaries (or its suppliers and vendors) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999 (the "Year 2000
Problem"), (ii) developed a plan and timeline for addressing the Year 2000
Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. The Borrower reasonably believes that all
computer applications (including those of its suppliers and vendors) that are
material to its or any of its Subsidiaries' business and operations will on a
timely basis be able to perform properly date-sensitive functions for all
dates before and after January 1, 2000 (such compliance, "Year 2000
Compliant"), except to the extent that a failure to do so could not reasonably
be expected to have a material adverse effect on the Borrower and the
Guarantors, taken as a whole.
ARTICLE VI
COVENANTS
Section 6.1 AFFIRMATIVE COVENANTS. The Borrower covenants and agrees for
itself and its Subsidiaries (in which case the Borrower shall cause such
Subsidiaries to take or refrain from taking the actions described below) that,
so long as this Agreement shall remain in effect or any Obligation shall
remain unpaid:
(a) AUDITED ANNUAL FINANCIALS. The Borrower shall deliver to the
Agent and each Lender, as soon as available but within 90 days of the end of
each fiscal year of the 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
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 Lenders (which certificate shall be
accompanied by an unqualified opinion of such accounting firm of such
statements).
(b) QUARTERLY FINANCIAL STATEMENTS. The Borrower shall deliver to the
Agent and each Lender, as soon as available but within 48 days following the
end of each of the Borrower's Fiscal Quarters, internally prepared
consolidated and consolidating financial statements of the 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 Borrower and any
of its Consolidated Subsidiaries, and (ii) a report, substantially in the form
of Exhibit F hereof, describing the current status of goods or services on
backlog with the Borrower or any such Consolidated Subsidiary, 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 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 Borrower shall
deliver to each Lender 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 Borrower shall deliver to each Lender and the Agent copies of all of
the Borrower's Annual Reports and Proxy Statements and, at the request of such
Lender, any other shareholder communication.
(d) TAX FORMS. From time to time, the Borrower shall cause each of its
Foreign Subsidiaries to cooperate with each Lender and shall execute and
deliver to such Lender in a timely manner such forms (including Internal
Revenue Service Forms) and certificates as such Lender shall reasonably
request, in each case for the purpose of confirming that such Lender 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 Borrower
shall pay to such Lender an amount that would fully indemnify such Lender for
such withheld or deducted amount.
(e) FUNDED DEBT TO EBITDA RATIO. The Borrower and its Subsidiaries,
taken as a whole, shall maintain, for (and at all times during) each Fiscal
Quarter beginning with the Fiscal Quarter ending March 31, 1998 (the "Initial
Fiscal Quarter"), a ratio of Funded Debt to EBITDA of not greater than 3.00 to
1.00. The ratio contemplated by this clause (e) 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; provided, however, that to the extent that any Target acquired in
accordance with Section 6.2(e) hereof shall not constitute a Subsidiary for a
month falling within such rolling four quarters at the time of the
determination of this ratio, then EBITDA for the purposes of this ratio shall
include, for such rolling four quarter basis as it relates to such Target, (i)
the pro forma EBITDA of such Target for that portion of the rolling four
quarter period during which the Target was not a Subsidiary of the Borrower,
and (ii) the actual EBITDA of the Target for that portion of the rolling four
quarter period during which the Target constitutes a Subsidiary of the
Borrower. For the purposes of illustration of the proviso to the preceding
sentence, if a Target is acquired on March 31, 2000 and the ratio contemplated
by this clause (e) shall be determined for the period ending June 30, 2000,
then such Target's pro forma EBITDA as it existed prior to the acquisition for
the quarters ending September 30, 1999, December 31, 1999 and March 31, 2000,
together with such Target's actual EBITDA as a Subsidiary of the Borrower for
the quarter ending June 30, 2000, shall be taken into account for the purposes
of calculating this ratio.
(f) CONSOLIDATED NET WORTH. The Borrower and its Subsidiaries, taken
as a whole, shall maintain, for (and at all times during) each Fiscal Quarter
beginning with the Initial Fiscal Quarter, a Consolidated Net Worth of not
less than (i) $70,000,000.00 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 Borrower as determined on a cumulative basis.
(g) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The Borrower and its
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 2.00 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; provided, however, that to the extent that any Target
acquired in accordance with Section 6.2(e) hereof shall not constitute a
Subsidiary for a month falling within such rolling four quarters at the time
of the determination of this ratio, then Consolidated Cash Flow for the
purposes of this ratio shall include, for such rolling four quarter basis as
it relates to such Target, (i) the pro forma Cash Flow of such Target for that
portion of the rolling four quarter period during which the Target was not a
Subsidiary of the Borrower, and (ii) the actual Cash Flow of the Target for
that portion of the rolling four quarter period during which the Target
constitutes a Subsidiary of the Borrower. For the purposes of illustration of
the proviso to the preceding sentence, if a Target is acquired on March 31,
2000 and the ratio contemplated by this clause (g) shall be determined for the
period ending June 30, 2000, then such Target's pro forma Cash Flow as it
existed prior to the acquisition for the quarters ending September 30, 1999,
December 31, 1999 and March 31, 2000, together with such Target's actual Cash
Flow as a Subsidiary of the Borrower for the quarter ending June 30, 2000,
shall be taken into account for the purposes of calculating this ratio.
(h) PROCEEDS. The Borrower shall use the proceeds of the Loans and the
Standby Letters of Credit for the Permitted Uses and for no other purpose.
(i) PAYMENT OF DEBTS AND TAXES. The Borrower and its
Subsidiaries 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. The Borrower and its Subsidiaries shall
continue to engage in business of the same general type as now conducted by
the Borrower or Subsidiary. The 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. The Borrower and its
Subsidiaries 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 Lenders,
the 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; and provided, further, that any Domestic Subsidiary of the Borrower
may merge with and into any other Domestic Subsidiary of the Borrower, and any
Foreign Subsidiary of the Borrower may merge with and into any other Foreign
Subsidiary of the Borrower, so long as the surviving entity resulting from
such merger shall have succeeded to all rights, assets, liabilities,
obligations and properties of the disappearing entity.
(l) BOOKS AND RECORDS. The Borrower and its Subsidiaries 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 Lender 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 the Borrower or its Subsidiary with any of their
respective officers or directors.
(m) INSURANCE. The Borrower and its Subsidiaries 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 the Borrower or Subsidiary is
engaged.
(n) COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries
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 Borrower
and its Consolidated Subsidiaries (taken as a whole).
(o) COMPLIANCE WITH LOAN DOCUMENTS. The Borrower and its
Subsidiaries shall comply with the terms and agreements contained in each Loan
Document to which they are a party.
(p) LENDING RELATIONSHIP WITH THE AGENT. The Borrower shall
maintain with the Agent the Borrower Account.
(q) PARENT OWNERSHIP OF CONSOLIDATED SUBSIDIARIES. The Borrower
will, at all times, either directly or indirectly own all of the shares of
each class of capital stock of each 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 the Borrower or its
Subsidiaries. So long as any Obligation remains outstanding, the Borrower
shall continue to consolidate the accounts of each its Foreign and Domestic
Subsidiaries on the consolidated financial statements of the Borrower.
(r) NOTICE OF DEFAULT. The Borrower shall, promptly after
becoming aware thereof, deliver to each Lender and the Agent notice of any
Event of Default and Potential Event of Default, and such notice shall contain
an express reference to this Agreement and that such notice is a "notice of an
Event of Default" or "notice of Potential Event of Default," as the case may
be.
(s) NOTICE OF ENVIRONMENTAL CLAIMS. The Borrower shall deliver
to each Lender and the Agent a copy of any notice or other communication (i)
alleging any violation by the Borrower or its Subsidiaries of any laws or
regulations concerning the discharge of substances into the environment and
other environmental control matters or (ii) under which the Borrower or its
Subsidiaries shall admit to any such violation. Each copy of any such notice
shall be delivered to the Lenders and the Agent promptly following the receipt
or issuance thereof by the Borrower or such Subsidiary.
(t) PAYMENTS PARI PASSU. Under applicable laws in force from
time to time, the claims and rights of the Lenders and the Agent against the
Borrower and its Subsidiaries 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 Borrower and its Subsidiaries.
(u) YEAR 2000 COMPLIANCE. The Borrower will promptly notify the
Agent in the event the Borrower discovers or determines that any computer
application (including those of its suppliers and vendors) that is material to
its or any of its Subsidiaries' business and operations will not be Year 2000
Compliant on a timely basis, except to the extent that such failure could not
reasonably be expected to have a material adverse effect upon the Borrower and
the Guarantors, taken as a whole.
Section 6.2 NEGATIVE COVENANTS. The Borrower covenants and agrees for
itself and its Subsidiaries (in which case the Borrower shall cause such
Subsidiaries to take or refrain from taking the actions described below),
that, so long as this Agreement shall remain in effect or any Obligation shall
remain unpaid:
(a) LIENS. The Borrower and its Subsidiaries, 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 Borrower and its 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 CACI N.V. under the Pledge Agreement
and the Lien granted by the Borrower under the Notarial Deed.
(b) INDEBTEDNESS. Neither the Borrower nor its Subsidiaries 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 by the Borrower hereunder and
evidenced by the Revolving Notes and the Swing Line Note and the Indebtedness
of the Guarantors under the Subsidiary Guarantee;
(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 Lender 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 Borrower and its 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 Borrower or
any Subsidiary, or the endorsement of any promissory note or other instrument
of obligation of any other Subsidiary thereof, in each case which is entered
into in the ordinary course of the 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 the Borrower or
Subsidiary thereof), or the endorsement of any promissory note or other
instrument of obligation of any Person (other than the Borrower or Subsidiary
thereof), in each case which is entered into in the ordinary course of the
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 the Borrower's or its
Subsidiaries' business.
(c) CAPITAL STOCK. Without the prior written consent of the Required
Lenders, neither the Borrower nor 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 Borrower may:
(i) repurchase from time to time the capital stock of the
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 Borrower 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 Borrower to the Lenders);
(ii) declare and pay dividends or make other distributions on its
capital stock if the Borrower 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 Borrower's Form 10-K or Proxy Statement.
(d) LOAN. Neither the Borrower (nor 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 the Borrower not a party to the
Subsidiary Guarantee, other than:
(i) travel, relocation and other salary advances made in the
ordinary course of the Borrower's or its Subsidiaries' business;
(ii) loan the proceeds of the Revolving Loans or Swing Line Loans
to any Subsidiary of the Borrower that is not a party to the Subsidiary
Guarantee 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 have become a party to the
Subsidiary Guarantee in accordance with Section 6.2(h) hereof); and
(iii) loans to any officer of the 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 Lenders, neither the Borrower nor 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 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 involved in a line of business similar to the
line of business of the Borrower if:
(i) for any calendar year during the term of this Agreement, 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 calendar year shall not exceed
$60,000,000.00; provided, however, that if Borrower either directly or
indirectly shall so acquire QuesTech, Inc., a Virginia corporation, on or
before December 31, 1998, then, solely with respect to the calendar year
ending December 31, 1998, such aggregate consideration paid for all Targets
during such calendar year ending December 31, 1998 shall not exceed
$75,000,000.00;
(ii) for any calendar year during the term of this Agreement, the
cash component (which, for the purposes of this clause (ii), shall include all
cash and cash equivalents and the assumption of debt, whether or not paid at
closing or deferred) of Acquisition Consideration paid for all Targets
acquired during such calendar year shall not exceed $40,000,000.00; provided,
however, that if Borrower either directly or indirectly shall so acquire
QuesTech, Inc., a Virginia corporation, on or before December 31, 1998, then,
solely with respect to the calendar year ending December 31, 1998, such cash
component of Acquisition Consideration paid for all Targets acquired during
such calendar year ending December 31, 1998 shall not exceed $55,000,000.00;
(iii) such Target's earnings before interest, taxes, depreciation
and amortization shall, for the 12 month period immediately preceding the
acquisition of such Target, be greater than $0.00;
(iv) the Borrower and its 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), 6.1(f) and 6.1(g) hereof as determined on a pro-forma
basis;
(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 Lenders shall have waived in writing compliance
with this clause (v));
(vi) for any calendar year during the term of this Agreement
(including the calendar year beginning January 1, 1998), Targets that are not
organized under the laws of a state of the United States of America or the
District of Columbia may not be so acquired except to the extent that the
Aggregate Consideration paid for all such Targets during such calendar year
does not exceed $5,000,000.00;
(vii) such Target shall have become a party to the Subsidiary
Guarantee pursuant to an instrument in writing satisfactory to the Agent
(unless such Target shall, after giving effect to the acquisition thereof,
constitute a Foreign Subsidiary, in which case the entity acquiring the
capital stock or other equity interests of such Target shall pledge to the
Agent for the benefit of the Lenders, pursuant to a pledge agreement
satisfactory to the Agent, not more than 65% of the issued and outstanding
shares of capital stock or other equity interests of such Target); and
(viii) three (3) Business Days prior to consummation thereof, the
Borrower shall have delivered to the Agent (which shall promptly deliver a
copy to the Lenders) a certificate, executed by an Authorized Officer of the
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
Borrower contained herein will be true and correct and that the Borrower, 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 Fronting Fee or of any other
amounts payable hereunder, in each case in accordance with the provisions
hereof.
(g) FISCAL YEAR. The Borrower and its Subsidiaries shall not, without
the prior written consent of the Required Lenders, make any material change in
accounting policies or reporting practices, including a change in their Fiscal
Year.
(h) ADVANCES TO SUBSIDIARIES AND AFFILIATES. The Borrower shall not,
without the prior written consent of the Required Lenders, make any advances
(either directly or indirectly), whether such advances are made from the
proceeds of the Revolving Loans, any Swing Line Loan or Standby Letters of
Credit or otherwise, to any of its Subsidiaries or Affiliates not a party to
the Subsidiary Guarantee unless such Subsidiary or Affiliate shall have
entered into an agreement or instrument (in form and substance acceptable to
the Required Lenders) pursuant to which such Subsidiary or Affiliate shall
have agreed to be bound by all of the terms, conditions, covenants and
agreements contained in the Subsidiary Guarantee and such Subsidiary or
Affiliate shall have delivered such documents, certificates and opinions as
any Lender may reasonably request to implement such agreement or instrument.
(i) CREATION OF SUBSIDIARIES. Neither the Borrower nor any Subsidiary
thereof shall create or cause to be formed any Subsidiary without the consent
of the Required Lenders unless such Subsidiary is a Consolidated Subsidiary of
the Borrower and agrees to be bound by the terms and conditions of the
Subsidiary Guarantee pursuant to an agreement of the type and to the extent
described in clause (h) above; provided, however, that the Borrower or any of
its Domestic Subsidiaries may form a Domestic Subsidiary for the purpose of
implementing or giving effect to any acquisition permitted by Section 6.2(e)
without such newly formed Domestic Subsidiary being required to be a party to
the Subsidiary Guarantee so long as such newly formed Domestic Subsidiary
shall have received none of the proceeds of any Loan or shall have no material
assets.
(j) DISPOSITION OF ASSETS. Neither the Borrower nor any Subsidiary
thereof shall, without the prior written consent of the Required Lenders,
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. Neither the Borrower nor the Subsidiary
thereof shall, without the prior written consent of the Required Lenders, 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 Borrower defaults in the payment of principal of any Revolving
Note or the Swing Line Note when due, or any Guarantor defaults in observance
or performance of any agreement contained in Section 2 of the Subsidiary
Guarantee; or
(b) the Borrower defaults in the payment of interest on any Loan, or of
the Unused Portion Fee, the Administrative Fee, any L/C Fee, the Fronting 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 Borrower (which notice may be
telephonic); or
(c) the Borrower or any Subsidiary defaults 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 Borrower; or
(d) any written representation or warranty made by the Borrower, the
Guarantors or the Pledgors in or pursuant to this Agreement or any other Loan
Document or in any other documents, certificates, financial statements or
reports furnished by the Borrower, the Guarantors or the Pledgors 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) the 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) the 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) the 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 or in the Notarial Deed or any
Guarantor shall default in the performance or observance of any covenant,
condition or provision in the Subsidiary Guarantee (other than Section 2
thereof, as to which clause (a) of this Section 7.1 relates), as the case may
be, and such default shall not be remedied within thirty (30) days after
written notice thereof is received by the Borrower (or, in the case of a
default under the Pledge Agreement, the Subsidiary Guarantee or the Notarial
Deed, as the case may be, the applicable Pledgor or Guarantor) from any Lender
or the Agent; or
(g) a proceeding (other than a proceeding commenced by the 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 the Borrower or such 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 the Borrower or such 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) the 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 the Borrower
or such 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 the 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 Lender,
together with all other such judgments or orders, have a materially adverse
effect on the Borrower and its Subsidiaries taken as a whole; or
(j) subject to the proviso contained in Section 6.1(q) hereof, the
Borrower shall cease to own (either directly or indirectly) 100% of the
outstanding capital stock or other equity interests of its Subsidiaries; or
(k) the occurrence of a material adverse change in the financial
condition, properties or assets of the Borrower and its Consolidated
Subsidiaries, taken as a whole; or
(l) (i) any Termination Event shall occur with respect to any Benefit
Plan, (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) the 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
the 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) the 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 the 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 Lenders will not have, a
materially adverse effect on the Borrower and its Subsidiaries, taken as
whole; or
(m) if (i) the 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 the 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 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 Lenders, may (1) upon notice to the Borrower declare the entire
outstanding principal amount, if any, of the Revolving Notes, the Swing Line
Note, any and all accrued and unpaid interest thereon, the aggregate amount
outstanding under all Standby Letters of Credit, any and all accrued and
unpaid Unused Portion Fee, Administrative Fee, L/C Fees and the Fronting Fee,
and any and all other amounts payable by the Borrower to the Lenders or the
Agent under this Agreement or the Revolving Notes or the Swing Line Note to be
forthwith due and payable, whereupon the entire outstanding principal amount,
if any, of the Revolving Notes and the Swing Line Note, together with any and
all accrued and unpaid interest thereon, the aggregate amount outstanding
under all Standby Letters of Credit, any and all accrued and unpaid Unused
Portion Fee, Administrative Fee, the 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
Borrower; provided, however, that in the event of the entry of an order for
relief with respect to the Borrower or its Subsidiary under the Bankruptcy
Code, any principal amount of the Revolving Notes and the Swing Line Note then
outstanding, together with any and all accrued and unpaid interest thereon,
the aggregate amount outstanding under all Standby Letters of Credit, 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 Borrower; (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 Subsidiary Guarantee, the
Pledge Agreement and the Notarial Deed) 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
the Netherlands Civil Code and under any other applicable laws.
ARTICLE VIII
THE AGENT
Section 8.1 APPOINTMENT OF AGENT.
(a) APPOINTMENT GENERALLY. Each of the Lenders hereby designates and
appoints NationsBank, N.A. as the Agent of such Lender under this Agreement
and the other Loan Documents, and each of the Lenders 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 LENDERS. The provisions of this Article VIII are
solely for the benefit of the Agent and the Lenders and the Borrower 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 Lenders 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 Borrower or any of their Affiliates.
Section 8.2 NATURE OF DUTIES; NON-RELIANCE ON AGENT AND OTHER LENDERS.
(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 Lender and is not a trustee for the
Lenders. 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 Lenders to the taking or refraining from
taking of any action hereunder, the Agent shall send notice thereof to each
Lender. The Agent shall promptly notify each Lender at any time the Required
Lenders or all of the Lenders, 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 Lender 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 the Borrower or any Subsidiary thereof, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, 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 Borrower and its
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
Lender covenants that it will, independently and without reliance upon the
Agent or any other Lender, 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 Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, operations, assets, property, financial and other conditions,
prospects or creditworthiness of the Borrower and its 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 Lender 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 Lender to whom
payment was due, but not made, shall be to recover from other Lenders any
payment in excess of the amount to which they are determined to have been
entitled. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties made by the 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 the 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 Borrower or any of its 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
Borrower or its 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 Lenders 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 Lenders or, to the extent
specifically provided herein, all the Lenders or unless it shall first be
indemnified by the Lenders 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 Lender 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 Lenders or, to the extent
specifically provided herein, all the Lenders, and such instructions shall be
binding upon all Lenders (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 Borrower,
the Guarantors or the Pledgors), independent public accountants and other
experts selected by it with reasonable care. The Agent may deem and treat
each Lender 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 Lender or the Borrower referring to this
Agreement, describing such Event of Default or 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 Lenders.
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
Lenders 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 Lender's
Pro Rata Share; provided, that no Lender 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
Borrower). The obligations of the Lenders under this Section 8.5 shall
survive the payment in full of the Revolving Loans and the Swing Line 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, Swing Line 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 Lender. The
term "Lenders" or "Required Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity as a Lender. 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 Borrower 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 Lenders and the 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 Lenders shall jointly appoint a successor Agent, which
shall be a Lender 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 Lenders 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 Lender
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 LENDERS. Subject to
the provisions of Section 8.9(ii) hereof, the consent of all the Lenders 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, or change in the method of
computing the 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;
(iv) the release of any collateral, including but not limited to the
CACI Limited Shares and the CACI N.V. Shares;
(v) any change in the definition of Required Lenders;
(vi) any assignment or delegation of Borrower's Obligations and rights
hereunder;
(vii) any change in the definition of Pro Rata Share;
(viii) any amendment, modification or waiver of this Section 8.8; and
(ix) 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 Lenders shall be by the
Required Lenders (unless such action, consent, waiver or amendment shall
relate only to an individual Lender, in which case such action may be taken by
such Lender individually).
Section 8.9 DEFAULTING LENDERS VOTE NOT COUNTED. Whenever the "Required
Lenders" or "all the Lenders" shall be required or permitted to take any
action pursuant to the provisions of any Loan Document, for so long as a
Lender 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 Lender as
required hereunder:
(i) until the earlier of the cure of such default and the termination
of the Revolving Loan Commitment, the term Required Lenders for purposes of
this Agreement shall mean Lenders (excluding all Lenders whose default shall
have not been cured) whose Pro Rata Shares represent more than sixty-six and
two-thirds percent (66 2/3%) of the aggregate Pro Rata Shares of such Lenders;
and
(ii) until the earlier of the cure of such default and the termination
of the Revolving Loan Commitment, the term "all the Lenders" for purposes of
this Agreement shall mean Lenders (excluding all Lenders whose default shall
have not been cured) whose Pro Rata Shares represent one hundred percent
(100%) of the aggregate Pro Rata Shares of such Lenders.
ARTICLE IX
MISCELLANEOUS
Section 9.1 AMENDMENTS AND WAIVERS; CUMULATIVE REMEDIES. No delay or
failure of any Lender or the Agent or the holder of any the Revolving Notes or
the Swing Line 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 Lender or the Agent or any other holder of the
Revolving Notes or the Swing Line 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 Lender or the Agent or any other holder of any
Note, or of the Borrower 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 Borrower, the
Guarantors and the Pledgors contained herein or made in writing in connection
herewith shall survive the execution and delivery of this Agreement, the
Subsidiary Guarantee, the Pledge Agreement and the Notarial Deed, 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
Governmental 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 Lender
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 Lender to
maintain the Revolving Loans or the Swing Line Loans, such Lender shall so
notify the Borrower and the Agent and such Lender, by giving the Borrower at
least one hundred twenty (120) Business Days' prior written notice, may
require the Borrower 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 Swing Line 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 Lender to make any Revolving Loans or
Swing Line Loans hereunder or to maintain its Commitment, this Agreement shall
terminate forthwith with respect to such Lender and neither such Lender nor
the Borrower shall have any further rights or obligations under this
Agreement, provided, however, that the Borrower, in the event of any
termination pursuant to this second sentence of Section 9.3, shall pay to such
Lender 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 Lender to make any Revolving Loans or Swing Line Loans as
provided in this Section 9.3, the Revolving Loan Commitment shall
automatically be deemed to be decreased in the amount of such Lender's Pro
Rata Share, and the Commitment of each such other Lender shall be adjusted
accordingly.
Section 9.4 NO REDUCTION IN PAYMENTS. All payments due to the Lenders
hereunder, and all other terms, conditions, covenants and agreements to be
observed and performed by the Borrower hereunder, shall be made, observed or
performed by the Borrower 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 Borrower, on behalf of the Guarantors and the
Pledgors, agrees to pay, and to save each Lender 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 Lender, or otherwise become payable by such Lender, in connection
with the execution and delivery of this Agreement or the other Loan
Documents.
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 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
Suite 550
McLean, VA 22102
Attention: James W. Gaittens
Telephone: (703) 761-8022
Telecopy:(703) 761-8059
and if to any Lender, 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.
Section 9.7 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN THE NOTARIAL DEED) 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 the Borrower may
not assign or transfer any of its interest hereunder without the prior written
consent of the Lenders and the Agent.
(b) PARTICIPATIONS. Any Lender 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 Lender, (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 Lender in respect of such participation to
be those set forth in the agreement executed by such Lender in favor of the
participant relating thereto), (ii) all amounts payable by the Borrower shall
be determined as if such Lender had not sold such participation and (iii) the
Borrower shall continue to deal directly with such Lender with respect to the
transactions contemplated hereby.
(c) ASSIGNMENTS. Each Lender 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 Lender occurring substantially
simultaneously therewith, such assigning Lender shall hold no Commitment or
any Revolving Loan);
(ii) each such assignment by a Lender of its Commitment or
Revolving Loans shall be made in such manner so that the same portion of such
Lender's Commitment, Revolving Loans, Revolving Note and obligations in
respect of any Standby Letter of Credit is assigned to the respective assignee
Lender;
(iii) the assigning Lender shall pay to the Agent a one-time fee in
the amount of $3,500.00; and
(iv) 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 Borrower and the Agent of
an instrument in writing pursuant to which such assignee agrees to be a
"Lender" hereunder (if not already a Lender) 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 Lender 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
Lender shall, to the extent of such assignment, be relieved from its
Commitment (or portion thereof) and other obligations hereunder so assigned.
Section 9.9 AFFIRMATIVE RATE OF INTEREST PERMITTED BY LAW. Nothing in this
Agreement or in any Note shall require the Borrower to pay interest to the
Agent for the account of the Lenders at a rate exceeding the maximum rate
permitted by applicable law to be charged or received by the Lenders, 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 Swing Line 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 Swing Line Note, the rate of interest required to
be paid to the Agent for the account of the Lenders 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 Swing Line Loan or Standby Letter
of Credit shall have been made or issued hereunder, the Borrower, on behalf of
the Guarantors and the Pledgors, shall pay to each Lender and the Agent, as
the case may be, and reimburse each Lender and the Agent for, as the case may
be, and save each Lender and the Agent, as the case may be, harmless from and
indemnify each Lender 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 Lender, all out-of-pocket costs and
expenses, if any (including without limitation, reasonable counsel fees and
expenses), of such Lender 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 Borrower, on behalf of itself, the Guarantors and the Pledgors,
shall indemnify and hold harmless each Lender, the Agent and their respective
affiliates, officers, directors, employees, agents and advisors (each, an
"Indemnified Person") from and against, and pay and reimburse each Indemnified
Person for, 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 Subsidiary Guarantee, the Pledge Agreement, the Notarial Deed,
the Revolving Notes, the Swing Line 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 Swing
Line 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 Borrower 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 Borrower 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 the 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 Borrower (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 the 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 Borrower under this Section 9.10 shall
be immediately due upon written request by a Lender or the Agent, as the case
may be, for the payment thereof. The obligations of the Borrower under this
Section 9.10 shall survive the payment of the Revolving Notes and the Swing
Line Note.
Section 9.11 SET-OFF; SUSPENSION OF PAYMENT AND PERFORMANCE. Each Lender and
the Agent is hereby authorized by the Borrower, 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 Borrower
then due under this Agreement and any other Loan Document any and all
liabilities owing by any Lender or the Agent or any of their Affiliates to the
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 Borrower
Account or other account maintained with any Lender or the Agent Lender,
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 the 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,
the 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. The 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 Lender, the Agent or any other Indemnified Person to serve
process in any other manner permitted by law or shall limit the right of any
Lender, the Agent or any other Indemnified Person to bring proceedings against
the Borrower in the courts of any other jurisdiction. Any judicial proceeding
by the Borrower against any Lender or the Agent involving any Credit Agreement
Related Claim shall be brought only in a court located in the Commonwealth of
Virginia. THE BORROWER AND THE LENDERS 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 INTEGRATION. This Agreement and the Other Loan Documents
constitute the entire agreement of the Agent, the Lenders, the Borrower and
the Guarantors with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Agent or any Lender relative to the subject matter hereof or thereof not
expressly set forth or referred to herein or in the other Loan Documents.
Section 9.14 FURTHER ACTS AND ASSURANCES. The Borrower shall, and shall
cause the Guarantors or CACI N.V. to, promptly and duly execute and deliver to
a Lender or the Agent, as the case may be, and to such other persons as such
Lender or the Agent shall designate, such further instruments and shall take
such further action as may be required by law or as such Lender 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 Lender hereunder or under any other
Loan Document.
Section 9.15 NO FIDUCIARY RELATIONSHIP. The Borrower acknowledges that no
provision of this Agreement or in any of the other Loan Documents, and no
course of dealing between any Lender or the Agent and the Borrower, the
Guarantors or CACI N.V. shall be deemed to create any fiduciary duty by the
Agent or any Lender to the Borrower, the Guarantors and CACI N.V.
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.
BORROWER
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CACI INTERNATIONAL INC
By: /s/
---------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
AGENT
-----
Address: NATIONSBANK, N.A.
8300 Greensboro Drive By: /s/
Fifth Floor ---------------------------------
McLean, Virginia 22102 Name: James W. Gaittens
Attention: Mr. James W. Gaittens Title: Senior Vice President
Telephone: (703) 761-8022
Telecopier: (703) 761-8059
LENDERS
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Address: NATIONSBANK, N.A.
8300 Greensboro Drive By: /s/
Fifth Floor ---------------------------------
McLean, Virginia 22102 Name: James W. Gaittens
Attention: Mr. James W. Gaittens Title: Senior Vice President
Telephone: (703) 761-8022
Telecopier: (703) 761-8059
Address: FIRST UNION COMMERCIAL
CORPORATION
1970 Chain Bridge Road By: /s/
McLean, Virginia 22102 ---------------------------------
Attention: Mr. Richard Schmersal Name: Richard M. Schmersal
Telephone: (703) 760-5318 Title: Vice President
Telecopier: (703) 760-6019
Address: MELLON BANK, N.A.
1901 Research Boulevard By: /s/
Rockville, Maryland 20850 ---------------------------------
Attention: Ms. Crissola Kennedy Name: J. Michael Troutman
Telephone: (301) 309-3427 Title: Vice President
Telecopier: (301) 309-3458
Address: CRESTAR BANK
8245 Boone Boulevard By: /s/
Vienna, VA 22182 ---------------------------------
Attention: Mr. Mark Swaak Name: R. Mark Swaak
Telephone: (703) 902-9123 Title: Vice President
Telecopier: (703) 902-9075
<PAGE>
Exhibit C to
Revolving Credit Agreement
FORM OF
REVOLVING NOTE
--------------
REVOLVING NOTE
U.S.$ Dated: June , 1998
--------------------- ---
FOR VALUE RECEIVED, the undersigned, CACI International Inc, a Delaware
corporation, (the "Borrower"), hereby promises to pay on June , 2003 (the
---
"Maturity Date") to the order of [NATIONSBANK, N.A.] [FIRST UNION COMMERCIAL
CORPORATION] [MELLON BANK, N.A.] [CRESTAR BANK] (the "Lender") the principal
amount of the lesser of (x) MILLION UNITED STATES DOLLARS
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($ ) and (y) the aggregate amount of Revolving Loans made by the
-----------
Lender to the Borrower pursuant to the Agreement (as hereinafter defined) and
remaining outstanding on such date. Capitalized terms used (but not defined)
in this Revolving Note shall have the meanings given to them in the Agreement
(as hereinafter defined).
The Borrower promises to pay interest from the initial Funding Date of
such Revolving Loans until the Maturity Date on the principal amount of this
Revolving Note from time to time outstanding at the rate, and in the manner,
prescribed in the Agreement. Any principal amount of, or any interest accrued
on, this Revolving Note which is not paid on the date due shall bear interest
from such due date until paid in full at the Default Rate. In no event shall
the rate of interest borne by this Revolving Note at any time exceed the
maximum rate of interest permitted at that time under applicable law.
Payments of the principal amount of and interest on this Revolving Note
shall be made in lawful money of the United States of America to the Lending
Office of the Agent on behalf of the Lender as provided in the Agreement.
This Revolving Note is one of the Revolving Notes referred to in the
Revolving Credit Agreement, dated as of June , 1998 (the "Agreement"),
---
between the Lender, the other financial institutions from time to time a party
thereto, the Borrower and the Agent. The Lender is entitled to the rights and
benefits of the Agreement and the other Loan Documents, and the Agent, for the
benefit of the Lender, is secured by certain collateral described in the
Pledge Agreement and the Notarial Deed and is entitled to the benefits of the
Subsidiary Guarantee. The Agreement, among other things, contains provisions
for optional and mandatory prepayments on account of the principal of this
Revolving Note by the Borrower and for acceleration of the maturity of this
Revolving Note upon the terms and conditions therein specified.
THIS REVOLVING NOTE IS BEING ISSUED IN 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.
CACI INTERNATIONAL INC
By: /s/
---------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
ARTICLE I
<PAGE> Exhibit E to
Revolving Credit Agreement
FORM OF
SWING LINE NOTE
---------------
SWING LINE NOTE
U.S.$10,000,000.00 Dated: June , 1998
---
FOR VALUE RECEIVED, the undersigned, CACI International Inc, a Delaware
corporation (the "Borrower"), hereby promises to pay on June , 2003 (the
---
"Maturity Date") to the order of NATIONSBANK, N.A. (the "Lender") the
principal amount of the lesser of (x) TEN MILLION UNITED STATES DOLLARS
($10,000,000.00) and (y) the aggregate amount of Swing Line Loans made by the
Lender to the Borrower pursuant to the Agreement (as hereinafter defined) and
remaining outstanding on such date. Capitalized terms used (but not defined)
in this Swing Line Note shall have the meanings given to them in the Agreement
(as hereinafter defined).
The Borrower promises to pay interest from the initial Funding Date of
such Swing Line Loans until the Maturity Date on the principal amount of this
Swing Line Note from time to time outstanding at the rate, and in the manner,
prescribed in the Agreement. Any principal amount of, or any interest accrued
on, this Swing Line Note which is not paid on the date due shall bear interest
from such due date until paid in full at the Default Rate. In no event shall
the rate of interest borne by this Swing Line Note at any time exceed the
maximum rate of interest permitted at that time under applicable law.
Payments of the principal amount of and interest on this Swing Line Note
shall be made in lawful money of the United States of America to the Lending
Office of the Agent on behalf of the Lenders as provided in the Agreement.
This Swing Line Note is the Swing Line Note referred to in the Revolving
Credit Agreement, dated as of June , 1998 (the "Agreement"), between the
---
Lender, the other financial institutions from time to time a party thereto,
the Borrower and the Agent. The Lender is entitled to the rights and benefits
of the Agreement and the other Loan Documents, and the Agent, for the benefit
of the Lender, is secured by certain collateral described in the Pledge
Agreement and the Notarial Deed and is entitled to the benefits of the
Subsidiary Guarantee. The Agreement, among other things, contains provisions
for optional and mandatory prepayments on account of the principal of this
Swing Line Note by the Borrower and for acceleration of the maturity of this
Swing Line Note upon the terms and conditions therein specified.
THIS SWING LINE NOTE IS BEING ISSUED IN 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.
CACI INTERNATIONAL INC
By: /s/
---------------------------------
Name: James P. Allen
Title: Executive Vice President,
Chief Financial Officer
and Treasurer
<PAGE> SCHEDULE I TO
THE REVOLVING CREDIT AGREEMENT
Name of Lender Commitment (in Dollars)
- -------------- -----------------------
NationsBank, N.A. $50,000,000.00
First Union Commercial Corporation $30,000,000.00
Mellon Bank, N.A. $22,500,000.00
Crestar Bank $22,500,000.00
<PAGE> Schedule 5.12
Foreign Subsidiaries
--------------------
1. CACI SYSTEMS AND TECHNOLOGY LTD, a corporation organized under the laws
of Ontario, Canada
2. CACI Virgin Islands, Inc., a corporation organized under the laws of the
United States Virgin Islands
3. CACI N.V., a corporation organized under the laws of The Netherlands
4. CACI Limited, a corporation organized under the laws of the United
Kingdom
5. CACI-Dublin Limited, a corporation organized under the laws of Ireland
6. CACI Nederland B.V., a corporation organized under the laws of The
Netherlands
<PAGE> Schedule 5.5
Litigation
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1. CACI, INC.-FEDERAL is engaged in litigation with the State of Arizona
Department of Transportation as more fully described in CACI International
Inc.'s Forms 10K and 10Q filed beginning with the fiscal period ended June 30,
1996 and continuing through the fiscal quarter ended March 31, 1998.
2. Various litigation instituted by Pentagen Technologies International,
Ltd. against CACI International Inc and certain of its subsidiaries as more
fully described in CACI International Inc's Forms 10K and 10Q filed beginning
with the fiscal year ended June 30, 1993 and continuing through the fiscal
year ended June 30, 1997.
3. On May 18, 1998, Computer Systems and Communications Corporation (CSCC)
transmitted a Demand Letter to CACI International Inc (CACI) seeking payment
of Fifteen Million Dollars ($15,000,000) in damages allegedly caused by CACI's
termination of efforts to acquire substantially all of the assets of CSCC.
<PAGE> Schedule 5.6
Defaults
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1. Contract No. TI-00115-01 between the State of Arizona Department of
Transportation (ADOT) and CACI, INC-FEDERAL (CACI). CACI notified ADOT in
November, 1995 that CACI considered ADOT to be in material breach of the
contract. ADOT, in turn, notified CACI that ADOT considered the contract
terminated for default. The dispute is now in litigation as described in
Schedule 5.5.
2. On May 18, 1998, Computer Systems and Communications Corporation (CSCC)
transmitted a demand letter to CACI International Inc (CACI) alleging that
CACI had materially breached an alleged contract under which CACI and CSCC
allegedly had agreed that CACI would purchase substantially all of the assets
of CSCC. Litigation has been threatened, but has not begun.
<PAGE>
SCHEDULES
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Schedule I Lender Commitments
Schedule 5.5 Litigation
Schedule 5.6 Defaults
Schedule 5.12 Foreign Subsidiaries
EXHIBITS
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Exhibit A Notarial Deed
Exhibit B Pledge Agreement
Exhibit C Form of Revolving Note
Exhibit D Subsidiary Guarantee
Exhibit E Form of Swing Line Note
Exhibit F Form of Backlog Report
