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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 12, 1997
--------------------------------
BTG, INC.
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(Exact name of registrant as specified in its charter)
Virginia 000-25094 54-1194161
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
3877 Fairfax Ridge Road, Fairfax, Virginia 22030
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 383-8000
Not applicable
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(Former name or former address, if changed since last report)
Exhibit Index on Page: 4
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Total Number of Pages:
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Item 2. Acquisition or Disposition of Assets.
On June 12, 1997, BTG, Inc. (the "Company") acquired all of the
outstanding capital stock of Nations, Inc. ("Nations") from John Pla and George
J. Holly III for a total purchase price of $10 million in cash pursuant to a
Stock Purchase Agreement dated May 22, 1997 (a copy of which is attached as
Exhibit 2 hereto). Nations provides software and systems engineering services
from its headquarters in Tinton Falls, New Jersey and other locations, and its
largest clients include the U.S. Army and the U.S. Marine Corps. The Company
intends for Nations to continue to provide such services.
The Company financed its acquisition of Nations with funds
available under the $85.0 million secured revolving credit facility provided to
the Company by NationsBank, N.A., Fleet Capital Corporation and Signet Bank,
N.A.
There is no material relationship between Mr. Pla or Mr. Holly
and the Company or any of its affiliates, any director or officer of the
Company or any of their associates. The purchase price under the Stock Purchase
Agreement was determined as a result of arms-length negotiations between
the Company and the sellers.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Business Acquired.
It is not practicable to provide the required financial
statements for Nations at this time. The statements will be filed as soon as
they are prepared and not later than August 22, 1997.
(b) Pro Forma Financial Information.
It is not practicable to provide the required pro forma
financial statements for the Company at this time. The statements will be
filed as soon as they are prepared and not later than August 22, 1997.
(c) Exhibits.
2 Stock Purchase Agreement by and among BTG, Inc., Nations,
Inc., John Pla and George J. Holly III, dated as of May 22,
1997
99 Press Release dated June 16, 1997
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SIGNATURES
Pursuant to the requirements 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.
BTG, INC.
Date: June 27, 1997 By:/s/ Edward H. Bersoff
-----------------------------------------------
Edward H. Bersoff
Chairman of the Board, Chief Executive Officer
and President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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2 Stock Purchase Agreement by and among BTG, Inc., Nations, Inc.,
John Pla and George J. Holly III, dated as of May 22, 1997
99 Press Release dated June 16, 1997
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EXHIBIT 2
STOCK PURCHASE AGREEMENT
BY AND AMONG
BTG, INC.,
A VIRGINIA CORPORATION,
NATIONS, INC.,
A NEW JERSEY CORPORATION,
JOHN A. PLA
AND
GEORGE J. HOLLY III
MAY 22, 1997
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. SALE AND PURCHASE OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.01 Sale and Purchase of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.02 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.03 Life Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.04 Satisfaction of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. ADDITIONAL UNDERTAKINGS AND COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.01 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.02 Access; Investigations by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.03 Operation of Business of the Company . . . . . . . . . . . . . . . . . . . . . . . . 5
3.04 No Inconsistent Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.05 News Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.06 Reserves for Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.07 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.08 Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.09 Access to Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDER . . . . . . . . . . . . . 9
4.01 Organization and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.02 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.03 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . 9
4.04 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.05 Directors, Officers and Employees . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.06 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.07 No Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.08 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.10 Conduct of Business; Absence of Material Adverse Change . . . . . . . . . . . . . . 13
4.11 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.12 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.15 Debt Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.16 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.17 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.18 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.19 Litigation; Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.20 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.21 Pension and Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.22 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.23 Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
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4.24 Restrictions and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.25 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.26 Absence of Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.27 Copies of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.28 Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.29 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER . . . . . . . . . . . . . . . . . . . . . 26
5.01 Title to Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.02 Authority and Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.03 Absence of Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.04 Restrictions and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.05 Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.06 Transfer of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5A. REPRESENTATIONS AND WARRANTIES OF HOLLY . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5A.01 Title to Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5A.02 Authority and Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5A.03 Absence of Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5A.04 Restrictions and Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5A.05 Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5A.06 Transfer of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.01 Organization and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.03 Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.04 No Registration Under the Securities Act . . . . . . . . . . . . . . . . . . . . . . 29
6.05 Acquisition for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.06 Evaluation of Merits and Risks of Investment . . . . . . . . . . . . . . . . . . . . 30
6.07 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDER . . . . . . . . . . . 30
7.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.02 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.03 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.04 Buyer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.05 Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.06 HSR Act Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.07 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.08 Documents at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.09 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.10 Consulting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.11 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . 32
8.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
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8.02 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.03 Absence of Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.04 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.05 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.06 Stockholder's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.07 HSR Act Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.08 Documents at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.09 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.10 Resignation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.11 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.12 Consulting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.13 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.14 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.15 Issuance of Additional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.01 Closing of Sale and Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.02 Deliveries by the Stockholder and Holly . . . . . . . . . . . . . . . . . . . . . . 35
9.03 Deliveries by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.04 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES . . . . . . . . . . . . . . . . . . 38
10.01 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.02 Agreement of Stockholder and Holly to Indemnify . . . . . . . . . . . . . . . . . . 38
10.03 Agreement of Buyer to Indemnify . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.04 Conditions of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.05 No Recourse Against the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.06 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.07 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.01 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.02 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.01 Additional Actions and Documents . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.02 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.03 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.04 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.05 Entire Agreement; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.06 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.07 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.08 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.12 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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12.13 Limitation on Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.14 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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EXHIBITS
EXHIBIT A - Definitions
EXHIBIT B - Form of Employment Agreement
EXHIBIT C - Form of Consulting Agreement
EXHIBIT D - Form of Noncompetition Agreement
EXHIBIT E - Form of Legal Opinion of Shanley & Fisher, P.C.
EXHIBIT F - Form of Legal Opinion of Hogan & Hartson L.L.P.
EXHIBIT G - Press Release
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Purchase Agreement") is
entered into as of May 22, 1997, among BTG, INC., a Virginia corporation
("Buyer"), NATIONS, INC., a New Jersey Corporation (the "Company"), JOHN A.
PLA, the sole stockholder of the Company as of the date hereof (the
"Stockholder"), and GEORGE J. HOLLY III, the Chief Operating Officer of the
Company ("Holly").
WHEREAS, as of the date of this Purchase Agreement, the
Stockholder owns One Thousand Two Hundred Seventy-Six (1,276) shares of capital
stock of the Company (which constitutes all of the issued and outstanding
shares of capital stock of the Company as of the date of this Purchase
Agreement) (the "Current Shares");
WHEREAS, immediately prior to Closing (as hereinafter defined)
on the Closing Date (as hereinafter defined), the Company will issue to Holly
Three Hundred Nineteen (319) shares of capital stock of the Company (the
"Additional Shares"), all subject to the terms and conditions of this Purchase
Agreement; and
WHEREAS, the Stockholder and Holly desire to sell and Buyer
desires to purchase all of the issued and outstanding shares of capital stock
of the Company at the price and upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows:
1. DEFINITIONS
For all purposes of this Purchase Agreement, certain capitalized terms
specified in Exhibit A shall have the meanings in this Purchase Agreement as
are ascribed to them in Exhibit A, except as otherwise expressly provided in
this Purchase Agreement.
2. SALE AND PURCHASE OF STOCK
2.01 SALE AND PURCHASE OF STOCK
On the basis of the representations, warranties and
agreements contained herein, and subject to the terms and conditions hereof,
(a) the Stockholder agrees to sell to Buyer, and Buyer agrees to purchase from
the
<PAGE> 8
Stockholder, the Current Shares for the purchase price specified in Section
2.02, and (b) Holly agrees to sell to Buyer, and Buyer agrees to purchase from
Holly, the Additional Shares (which, together with the Current Shares shall
constitute all of the issued and outstanding shares of capital stock of the
Company as of the Closing Date) for the purchase price specified in Section
2.02.
2.02 PURCHASE PRICE
The purchase price for all of the issued and outstanding
shares of capital stock of the Company, including the Additional Shares, shall
be Ten Million Dollars ($10,000,000) (the "Purchase Price"), of which (a) Eight
Million Dollars ($8,000,000), less the outstanding amount of Stockholder Loans
as of the Closing Date, shall be payable to the Stockholder in respect of the
Current Shares on the Closing Date by wire transfer of immediately available
funds in accordance with written instructions of the Stockholder provided to
Buyer at least one (1) business day prior to the Closing Date, and (b) Two
Million Dollars ($2,000,000) shall be payable to Holly in respect of the
Additional Shares on the Closing Date by wire transfer of immediately available
funds in accordance with written instructions of Holly provided to Buyer at
least one (1) business day prior to the Closing Date.
2.03 LIFE INSURANCE POLICIES
At Closing, the Company will assign to the Stockholder, and
the Stockholder will assume from the Company, the life insurance policies
maintained by the Company on the life of the Stockholder, as more fully
described in Section 4.21 of the Disclosure Schedule.
2.04 SATISFACTION OF INDEBTEDNESS
At Closing, Buyer shall, subject to the terms and conditions
of this Purchase Agreement, pay the amounts outstanding under the Huntington
Bank Promissory Notes as stated in and in accordance with the payoff letter
delivered pursuant to Section 9.03(n) hereof.
3. ADDITIONAL UNDERTAKINGS AND COVENANTS
3.01 CONSENTS AND APPROVALS
(a) Subject to Section 3.01(d) hereof, Buyer, the
Company and the Stockholder shall use their respective best efforts to take all
measures reasonably necessary or advisable to secure such consents,
authorizations and approvals of governmental authorities and of private persons
or entities with respect to the
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transactions contemplated by this Purchase Agreement, and the performance of
all other obligations of such parties hereunder, as may be required by any
applicable Laws or by any Agreement to which Buyer, the Company or the
Stockholder is a party or by which Buyer, the Company or the Stockholder is
bound.
(b) Subject to Section 3.01(d) hereof, Buyer, the
Company and the Stockholder shall (i) cooperate in the filing of all forms,
notifications, reports and information, if any, required pursuant to applicable
statutes, rules, regulations or orders of any governmental authority in
connection with the transactions contemplated by this Purchase Agreement and
(ii) use their respective good faith efforts to cause any applicable waiting
periods thereunder to expire and any objections to the transactions
contemplated hereby to be withdrawn before the Closing.
(c) In addition to the obligations set forth in Section
3.01(b), as promptly as practicable after the execution and delivery of this
Purchase Agreement, the Stockholder and Buyer shall file with the United States
Federal Trade Commission and the Department of Justice a Pre-Merger
Notification and Report required to be filed pursuant to the HSR Act. The
Company, the Stockholder and Buyer shall diligently take (or fully cooperate in
the taking of) all actions, and provide any additional information, required or
reasonably requested in order to comply with the requirements of the HSR Act.
Buyer shall be responsible for paying the HSR Act filing fee in connection with
such filing.
(d) Notwithstanding anything to the contrary contained
in this Purchase Agreement, prior to the Closing none of the parties hereto
shall, without the prior written consent of Buyer, seek to novate any of the
Company's Government Contracts. The parties hereto acknowledge and agree that,
unless otherwise agreed in writing by Buyer and the Company, no novations under
the Company's Government Contracts shall be conditions precedent to the
obligations of any party hereto to consummate the transactions hereunder. The
parties hereto further acknowledge and agree that the Company is required under
the terms of certain of the Government Contracts to which it is a party to
notify the applicable governmental authorities that the Company has entered
into this Purchase Agreement. The parties hereto shall cooperate with each
other in providing such notices and each such notice shall be in a form
mutually acceptable to the Company and Buyer. In addition, promptly following
the execution and delivery of this Purchase Agreement, the Company and the
Stockholder shall provide all required notifications to the applicable
governmental agencies under the 8(a) Contracts of the entering into of this
Purchase Agreement, and request that the contracting parties and administrative
contracting officers under the 8(a) Contracts obtain from the Small Business
Administration (the "SBA") waivers to permit the 8(a) Contracts to continue to
be performed from and after the Closing Date. Such notifications and requests
to obtain waivers shall be subject to the approval of Buyer, which approval
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shall not be unreasonably withheld. From and after the Closing Date,
the Stockholder and Holly shall take such actions and execute such documents as
Buyer may reasonably request in connection with any novations, notifications or
waivers that Buyer may elect to pursue under the Company's Government
Contracts.
3.02 ACCESS; INVESTIGATIONS BY BUYER
(a) At all times through the Closing Date, the Company
shall, upon reasonable prior notice and during normal business hours, provide
to representatives of Buyer access to the offices, books, Agreements, records
(including, without limitation, tax returns and correspondence with
accountants), officers, directors and employees of the Company (provided such
access shall not cause any unreasonable disruption in the conduct of the
Company's business), and will furnish representatives of Buyer such financial
and operating data and other information with respect to the business and
Assets of the Company as Buyer may reasonably request, including, without
limitation, Agreements with clients, customers, vendors, lessors, licensors and
suppliers of the Company. Buyer agrees at all times through the Closing Date
to (i) keep confidential all such information that is identified by the Company
as being of a confidential nature, (ii) not use such confidential information
on its own behalf, except in connection with the transactions contemplated
hereby, or on behalf of any other person, firm or entity, and (iii) not
disclose such confidential information to any third party (other than to
Buyer's counsel, accountants and other consultants in connection with the
transactions contemplated hereby) without the Company's advance written
authorization; provided, however, that Buyer shall have no such obligations
with respect to confidential information that (A) was lawfully obtained by it
not subject to restrictions of confidentiality; (B) is a matter of public
knowledge; or (C) has been or is hereafter publicly disclosed other than by or
through Buyer. In the event this Purchase Agreement is terminated, Buyer will
return to the Company or destroy, as the Company may direct, all documents,
workpapers and other materials furnished to Buyer relating to the transactions
contemplated hereunder, whether obtained before or after the execution of this
Purchase Agreement. Nothing in this Section 3.02(a) shall limit Buyer's
obligations under the Confidentiality Agreement.
(b) The Company, the Stockholder and Holly hereby
acknowledge that each of them has obtained and may continue to obtain knowledge
of and access to confidential and valuable business information relating to
Buyer not generally known by or available to the general public, including,
without limitation, information to which the Stockholder obtains access
pursuant to Section 3.09 hereof. The Company, the Stockholder and Holly each
agree at all times through the Closing Date and for a period of five (5) years
thereafter, to (i) keep confidential all such information that is identified by
Buyer as being of a confidential nature, (ii) not use such confidential
information on its own behalf, except in connection
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with the transactions contemplated hereby, or on behalf of any other person,
firm or entity, and (iii) not disclose such confidential information to any
third party (other than to the Company's counsel, accountants and other
consultants in connection with the transactions contemplated hereby) without
Buyer's advance written authorization; provided, however, that the Company, the
Stockholder and Holly shall have no such obligations with respect to
confidential information that (A) was lawfully obtained by it not subject to
restrictions of confidentiality; (B) is a matter of public knowledge; or (C)
has been or is hereafter publicly disclosed other than by or through the
Company. In the event this Purchase Agreement is terminated, the Company, the
Stockholder and Holly will return to Buyer or destroy, as Buyer may direct, all
documents, workpapers and other materials furnished to such parties relating to
the transactions contemplated hereunder, whether obtained before or after the
execution of this Purchase Agreement. Nothing contained in this Section
3.02(b) shall limit the obligations of the Company, the Stockholder or Holly
under the Confidentiality Agreement.
3.03 OPERATION OF BUSINESS OF THE COMPANY
(a) At all times through the Closing Date, the Company
shall use its best efforts to (i) preserve its business organization and its
present relationships with customers, suppliers, consultants, employees and any
other persons having business relations with the Company in the Ordinary Course
of Business; and (ii) maintain all of its Assets in customary repair and
condition (normal wear and tear excepted) in the Ordinary Course of Business.
(b) Except as set forth in the Disclosure Schedule, at
all times through the Closing Date, the Company shall conduct its business
substantially in the manner heretofore conducted and only in the Ordinary
Course of Business and shall not, without the prior written consent of Buyer:
(i) except for the issuance of the Additional Shares to Holly at or prior to
the Closing, issue any capital stock, bonds or other corporate securities or
debt instruments, grant any options, warrants or other rights calling for the
issuance thereof, or borrow any funds; (ii) declare, set aside or pay any
dividends or distributions of any Assets; (iii) directly or indirectly redeem,
purchase or otherwise acquire any of its capital stock, any securities
convertible into capital stock, or any other securities; (iv) effect a split,
reclassification or other change in or of any of its capital stock; (v) amend
its certificate of incorporation or bylaws; (vi) grant any increase in the
compensation payable, or to become payable, by the Company to any of its
directors, officers, employees or consultants, or make any accrual or
arrangement for or payment of bonuses or special compensation of any kind to
any director, officer or employee; (vii) directly or indirectly guarantee or
agree to guarantee the obligations of others; (viii) enter into or make or
permit any amendment to the terms or conditions of any of the loans evidenced
by the Huntington Bank Promissory Notes (including,
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without limitation, the Witkowski Huntington Bank Promissory Note), or enter
into or make or permit any amendment or termination of any other Agreement
which the Company or the Stockholder reasonably believes is likely to have a
Material Adverse Effect; (ix) mortgage, pledge or subject to any Encumbrance
any of its Assets; (x) cancel any indebtedness owing to the Company or any
claims which the Company may possess (other than the resolution of claims under
any Agreement in the Ordinary Course of Business which would not have a
Material Adverse Effect), or waive any rights of substantial value; (xi) sell,
assign or transfer any Intellectual Property; (xii) sell, exchange, transfer or
otherwise dispose of any interest in any Asset (other than in the Ordinary
Course of Business); (xiii) violate any Laws which have or could reasonably be
expected to have a Material Adverse Effect; (xiv) commit any act or omit to do
any act, or engage in any activity or transaction or incur any obligation (by
conduct or otherwise), which the Company or the Stockholder reasonably expects
to have a Material Adverse Effect; or (xv) make any loan or advance to any
stockholder, officer or director of the Company or to any other person. Prior
to the Closing Date, the Company and the Stockholder on behalf of the Company
(i) will not do or agree to do any of the things listed in clauses (b) through
(s) of Section 4.10 and (ii) will maintain all insurance, which shall meet the
requirements of Section 4.13.
(c) The Company shall notify Buyer promptly of any
material adverse change in the business, operations, prospects, condition
(financial or otherwise), Assets or liabilities of the Company, including,
without limitation, information (including, without limitation, copies of all
Documents relating thereto) concerning all claims instituted, threatened or
asserted against or affecting the Company or its business or Assets at law or
in equity, before or by any court or governmental authority.
(d) The Company shall keep proper books of record and
account in which true and complete entries will be made of all transactions in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods, and shall supply to Buyer such Documents
(financial or otherwise) with respect thereto as Buyer shall reasonably
request.
(e) The Company shall inform and discuss with Buyer on a
regular and ongoing basis the management of the business and Assets of the
Company, including, without limitation, (i) any significant new Agreements or
transactions proposed to be entered into, (ii) persons proposed to be employed
or terminated by the Company outside of the Ordinary Course of Business, and
(iii) any other significant developments relating to the business or Assets of
the Company; provided, however, that Buyer shall have no express or implied
power, authority or responsibility with respect to the Company or its business,
Assets or Agreements. Without limiting the foregoing, the Company shall not
enter into any agreement, understanding, commitment or other arrangement
(whether written or oral) with
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any Affiliate or any officer, director, employee or agent thereof after the
date hereof without the prior written consent of Buyer.
(f) Prior to Closing, the Company shall comply with all
applicable requirements of ISRA and shall receive evidence of the
non-applicability of ISRA to the transactions contemplated hereunder from the
New Jersey Department of Environmental Protection ("NJDEP"), with respect to
the Real Property located in New Jersey. The Company shall be responsible for
making all notifications required by ISRA, if any, and shall provide to Buyer
copies of all such notifications, if any.
3.04 NO INCONSISTENT NEGOTIATIONS
Neither the Company nor the Stockholder shall, nor shall any
of them authorize or knowingly permit any director, officer, employee or other
agent of the Company, directly or indirectly, to (i) take any action to
solicit, initiate or encourage the submission of a Proposal; (ii) participate
in any negotiations regarding, or furnish to any other person, entity or group
any nonpublic information with respect to, a Proposal, or (iii) otherwise
cooperate in any way with, or assist or participate in, facilitate, or
encourage, any effort or attempt by any other person, entity or group to make a
Proposal to the Stockholder, Holly or the Company.
In addition, the Company and the Stockholder shall use
reasonable efforts to cause any financial advisor engaged by the Company or the
Stockholder for any purpose within the past twelve (12) months to refrain from
taking any of the actions referred to in clause (i) or (ii) of the immediately
preceding sentence. The Company and the Stockholder shall immediately cease
any existing discussions or negotiations with any parties (other than Buyer)
conducted heretofore with respect to any of the foregoing. The Company or the
Stockholder shall notify Buyer promptly if any Proposal, or any inquiry or
contact with any person with respect thereto, is made and shall, in any such
notice to Buyer, indicate in reasonable detail the identity of the offeror and
the terms and conditions of the Proposal, including the proposed financing for
such Proposal if contained therein. The Company and the Stockholder shall
respond to any such Proposal only to the extent consistent with their
obligations under this Purchase Agreement.
3.05 NEWS RELEASES
The Company and the Stockholder hereby authorize Buyer to
issue the press release attached hereto as Exhibit G promptly following the
execution and delivery of this Purchase Agreement. Except to the extent
required by applicable Law, neither Buyer nor the Company or the Stockholder
shall issue or approve any other news release or other public announcement
concerning the transactions
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contemplated by this Purchase Agreement without the prior approval of Buyer, on
the one hand, and the Company and the Stockholder, on the other hand.
3.06 RESERVES FOR TAXES
The Company will pay, or will, to the extent required by
generally accepted accounting principles, establish in the financial and
accounting books and records of the Company, adequate reserves for the payment
of all Taxes payable for or with respect to the period up to and including the
Closing Date (without regard to whether or not such Taxes are disputed or are
due and payable on or before the Closing Date).
3.07 EMPLOYEES
The Company shall use its reasonable efforts to encourage the
current employees of the Company to continue their employment with the Company
following the Closing Date; provided, however, that the Company shall not be
deemed to guarantee the continued employment of any of its employees.
3.08 SUBSEQUENT EVENTS
The Company and the Stockholder shall notify Buyer promptly
in writing of the occurrence of any event, or the failure of any event to
occur, prior to the Closing that results in a material omission from, or
material breach of, any of the covenants, representations or warranties made by
or on behalf of the Company or the Stockholder in this Purchase Agreement or
the Disclosure Schedule. Prior to the Closing, the Company and the Stockholder
promptly will supplement or amend the Disclosure Schedule delivered pursuant
hereto with respect to any material matter hereafter arising which, if
existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in such Disclosure Schedule or which is
necessary to correct any information in such Disclosure Schedule which has been
rendered materially inaccurate thereby.
3.09 ACCESS TO RECORDS
For a period five (5) years after the Closing Date, the Buyer
shall, upon reasonable prior notice and during normal business hours, provide
to the Stockholder access to the financial and accounting books and records of
the Company for periods prior to the Closing Date and which are in the
Company's possession as of Closing, solely for purposes of assisting the
Stockholder in connection with any tax audit or other governmental
investigation of the Stockholder relating to the business of the Company for
the period prior to Closing or for purposes of defending or investigating any
Losses for which indemnification is
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sought by Buyer pursuant to Section 10.02 hereof; provided, however, such
access shall not cause any unreasonable disruption in the conduct of Buyer's
business. Buyer shall not dispose of such books and records during the five
(5) year period after the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDER
The Company and the Stockholder jointly and severally
represent and warrant (which representation and warranty shall be deemed to
include the disclosure with respect thereto so specified in the Disclosure
Schedule) to Buyer as follows:
4.01 ORGANIZATION AND STANDING
The Company is a corporation duly organized and validly
existing under the laws of New Jersey, and has the corporate power and
authority to own, operate and lease its Assets, to carry on its business as
currently conducted, to execute and deliver this Purchase Agreement and to
carry out the transactions contemplated hereby. The Company is duly qualified
to conduct business as a foreign corporation and is in good standing in the
states, countries and territories listed on the Disclosure Schedule. The
Company is not qualified to conduct business in any other jurisdiction. There
is no state, country or territory wherein the absence of licensing or
qualification as a foreign corporation would have a Material Adverse Effect.
4.02 SUBSIDIARIES
The Company has no Subsidiaries and, except as set forth in
the Disclosure Schedule or the Audited Financial Statements, no equity
investment or other interest in, nor has the Company made advances or loans to,
any corporation, association, partnership, joint venture or other entity.
4.03 ARTICLES OF INCORPORATION AND BYLAWS
The Company has furnished to Buyer a true and complete copy
of the certificate of incorporation of the Company, as currently in effect,
certified as of a recent date by the Secretary of State of New Jersey, and a
true and complete copy of the bylaws of the Company, as currently in effect,
certified by the Company's corporate secretary. Such certified copies are
attached as exhibits to, and part of, the Disclosure Schedule.
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4.04 CAPITALIZATION
(a) The authorized capital stock of the Company consists
of Two Thousand Five Hundred (2,500) shares of capital stock, without par
value, of which One Thousand Two Hundred Seventy-Six (1,276) shares are duly
authorized and validly issued and outstanding, fully paid and non-assessable
and not subject to preemptive rights. All of the issued and outstanding shares
of capital stock of the Company are beneficially and of record owned by the
Stockholder, free and clear of all Encumbrances, except such restrictions on
the transfer of such shares as may be applicable under federal and state
securities laws. The Current Shares and Additional Shares will constitute all
of the issued and outstanding shares of capital stock of the Company as of the
Closing Date.
(b) No shares of capital stock of the Company have been
reserved for any purpose, except for issuance of the Additional Shares to
Holly. Except as set forth in the Disclosure Schedule, there are no
outstanding securities convertible into or exchangeable for capital stock of
the Company and no outstanding options, rights (preemptive or otherwise), or
warrants to purchase or to subscribe for any shares of such stock or other
securities of the Company. Except as set forth in the Disclosure Schedule,
there are no outstanding Agreements affecting or relating to the voting,
issuance, purchase, redemption, repurchase or transfer of the Company's capital
stock or any other securities of the Company.
(c) The Additional Shares to be issued to Holly at
Closing, when issued, will be duly authorized and validly issued, fully paid
and non-assessable and not subject to any preemptive rights.
4.05 DIRECTORS, OFFICERS AND EMPLOYEES
The Disclosure Schedule lists all current directors, officers
and employees of the Company, showing each such person's name, position, and
annual remuneration, bonuses (except bonuses which have not been determined for
the current fiscal year) and fringe benefits for the current fiscal year and
the most recently completed fiscal year.
4.06 FINANCIAL STATEMENTS
The Company has prepared and furnished to Buyer (a) the
audited balance sheet of the Company as of the Current Balance Sheet Date, and
the audited statements of income, stockholder's equity and cash flows for the
twelve (12) month period ended as of the Current Balance Sheet Date (such
audited financial statements, including the notes thereto, collectively, the
"Audited Financial Statements"), together with the accompanying report thereon
of
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Coopers & Lybrand L.L.P. dated April 10, 1997; and (b) the unaudited balance
sheet of the Company as of March 31, 1997, and the unaudited statement of
income for the three (3) month period then ended (such unaudited statements,
collectively, the "Unaudited Financial Statements"; together with the Audited
Financial Statements, the "Financial Statements"). All of the Financial
Statements, including, without limitation, the notes thereto: (i) have been
prepared from the books and records of the Company, (ii) present fairly the
financial position of the Company as of the respective dates and the results of
operations and cash flows for the respective periods indicated, and (iii) have
been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior accounting periods (subject to normal
audit adjustments in the case of unaudited statements). The Disclosure
Schedule sets forth all changes in accounting methods (for financial accounting
purposes) at any time made, agreed to, requested or required with respect to
the Company for any of the periods covered by the Financial Statements.
4.07 NO LIABILITIES
Except as reflected in the Financial Statements (or disclosed
in the associated footnotes to the Audited Financial Statements) or as
described in the Disclosure Schedule, there exist no liabilities (whether
contingent or absolute, matured or unmatured, known or unknown) of the Company.
Except as described in the Disclosure Schedule or the Unaudited Financial
Statements, since the Current Balance Sheet Date, the Company has not incurred
any liabilities (whether contingent or absolute, matured or unmatured, known or
unknown) other than in the Ordinary Course of Business.
4.08 ACCOUNTS RECEIVABLE
Except as set forth in the Disclosure Schedule, the accounts
receivable of the Company shown on the balance sheets included in the Financial
Statements, or thereafter acquired by the Company, have arisen only from bona
fide transactions in the Ordinary Course of Business. Neither the Company nor
the Stockholder has any knowledge of any facts or circumstances generally
(other than general economic conditions) which would result in any material
increase in the uncollectability of such accounts receivable in excess of the
reserves therefor set forth in the Financial Statements.
4.09 TAXES
(a) Except as set forth in the Disclosure Schedule, the
Company has (or, in the case of returns becoming due after the date hereof and
on or before the Closing Date, will have prior to the Closing Date) duly filed
all the Company Tax
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Returns required to be filed by the Company on or before the Closing Date with
respect to all applicable Taxes, and no penalties or other charges are or will
become due with respect to any of the Company Tax Returns as the result of the
late filing thereof. All of the Company Tax Returns are (or, in the case of
returns becoming due after the date hereof and on or before the Closing Date,
will be) true and complete in all material respects. Except as set forth in
the Disclosure Schedule, the Company: (i) has paid all Taxes due or claimed to
be due by any Taxing authority in connection with any of the Company Tax
Returns; or (ii) has established (or, in the case of amounts becoming due after
the date hereof, prior to the Closing Date will have paid or established) in
the Financial Statements adequate reserves (in conformity with generally
accepted accounting principles consistently applied) for the payment of such
Taxes. The amounts set up as reserves for Taxes on the Financial Statements
are sufficient for the payment of all unpaid Taxes, whether or not such Taxes
are disputed or are yet due and payable, for or with respect to the period, and
for which the Company may be liable in its own right or as a transferee of the
Assets of, or successor to, any corporation, person, association, partnership,
joint venture or other entity.
(b) Except as set forth in the Disclosure Schedule, the
Company does not have, nor will the Company have on the Closing Date, either in
its own right or as a transferee, any liability for Taxes payable for or with
respect to any periods prior to and including the Closing Date in excess of the
amounts actually paid prior to the Closing Date or reserved for in the
Financial Statements.
(c) There is no action, suit, proceeding, audit,
investigation or claim pending or, to the knowledge of the Company or the
Stockholder, threatened in respect of any Taxes for which the Company is or may
become liable, nor has any deficiency or claim for any such Taxes been
proposed, asserted or, to the knowledge of the Company or the Stockholder,
threatened. Except as set forth in the Disclosure Schedule, the Company has
not consented to any waivers or extensions of any statute of limitations with
respect to any taxable year of the Company. Except as set forth in the
Disclosure Schedule, there is no Agreement, waiver or consent providing for an
extension of time with respect to the assessment or collection of any Taxes
against the Company, and no power of attorney granted by the Company with
respect to any tax matters is currently in force.
(d) The Company has furnished to Buyer true and complete
copies of all the Company Tax Returns for the past five (5) years and all
written communications relating to any such Company Tax Returns or to any
deficiency or claim proposed and/or asserted, irrespective of the outcome of
such matter, but only to the extent such items relate to tax years (i) which
are subject to an audit, investigation, examination or other proceeding, or
(ii) with respect to which the statute of limitations has not expired.
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(e) The Disclosure Schedule sets forth (i) all federal
tax elections that currently are in effect with respect to the Company, and
(ii) all elections for purposes of foreign, state or local Taxes and all
consents or Agreements for purposes of federal, foreign, state or local Taxes
in each case that reasonably could be expected to have a material effect on the
Company or any of its Assets or operations after the Closing. The Disclosure
Schedule sets forth all changes in accounting methods for Tax purposes at any
time made, agreed to, requested or required with respect to the Company within
the past five (5) years.
(f) The Company (i) is not and within the past five (5)
years has not been a partner in a partnership or an owner of an interest in an
entity treated as a partnership for federal income tax purposes; (ii) has not
executed or filed with the Internal Revenue Service any consent to have the
provisions of Section 341(f) of the Code apply to it; (iii) is not subject to
Section 999 of the Code; (iv) is not a passive foreign investment company as
defined in Section 1296(a) of the Code; and (v) is not a party to an Agreement
relating to the sharing, allocation or payment of, or indemnity for, Taxes.
4.10 CONDUCT OF BUSINESS; ABSENCE OF MATERIAL ADVERSE CHANGE
Other than as set forth in the Disclosure Schedule, since the
Current Balance Sheet Date, there has been no material adverse change, and no
change except in the Ordinary Course of Business, in the business, operations,
condition (financial or otherwise), Assets or liabilities of the Company.
Except as set forth in the Disclosure Schedule, since the Current Balance Sheet
Date, the Company has conducted its business substantially in the manner
heretofore conducted and only in the Ordinary Course of Business, and the
Company has not (a) incurred a significant loss of, or significant injury to,
any Assets of the Company as the result of any fire, explosion, flood,
windstorm, earthquake, labor trouble, riot, accident, act of God or public
enemy or armed forces, or other casualty; (b) issued any capital stock, bonds
or other corporate securities or debt instruments, granted any options,
warrants or other rights calling for the issuance thereof, or borrowed any
funds; (c) incurred, or become subject to, any obligation or liability
(absolute or contingent, matured or unmatured, known or unknown), except
current liabilities incurred in the Ordinary Course of Business; (d) discharged
or satisfied any Encumbrance or paid any obligation or liability (absolute or
contingent, matured or unmatured, known or unknown) other than current
liabilities shown in the balance sheets included in the Financial Statements,
and current liabilities incurred since the Current Balance Sheet Date in the
Ordinary Course of Business; (e) declared or made payment of, or set aside for
payment, any dividends or distributions of any Assets, or purchased, redeemed
or otherwise acquired any of its capital stock, any securities convertible into
capital stock, or any other securities; (f) mortgaged, pledged or subjected to
any Encumbrance any of its Assets; (g) sold, exchanged,
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transferred or otherwise disposed of any of its Assets, or canceled any debts
or claims, except in each case in the Ordinary Course of Business; (h) written
down the value of any Assets or written off as uncollectible any notes or
accounts receivable, except write-downs and write-offs in the Ordinary Course
of Business, none of which had or would have a Material Adverse Effect; (i)
entered into any transactions other than in the Ordinary Course of Business;
(j) increased the rate of compensation payable, or to become payable, by it to
any of its directors, officers, employees or consultants; (k) made or permitted
any amendment or termination of any Agreement to which it is a party which
would have a Material Adverse Effect; (l) through negotiation or otherwise made
any commitment or incurred any liability to any labor organization; (m) made
any accrual or arrangement for or payment of bonuses or special compensation of
any kind to any director, officer or employee; (n) directly or indirectly paid
any severance or termination pay to any officer or employee in excess of two
(2) months' salary; (o) made capital expenditures, or entered into commitments
therefor, aggregating more than Twenty-Five Thousand Dollars ($25,000); (p)
made any change in any method of accounting or accounting practice; (q) entered
into any transaction of the type described in Section 4.23; (r) made any
charitable contributions or pledges; or (s) made an Agreement to do any of the
foregoing.
4.11 REAL PROPERTY
The Disclosure Schedule lists and sets forth a description of
all the Real Property. Such Real Property constitutes all Real Property which
the Company and the Stockholder reasonably believe is necessary for the Company
to conduct its business as presently conducted and is suitable and adequate for
the uses for which it is currently devoted. The Company does not hold any fee
simple interest in any Real Property.
4.12 ASSETS
Except as set forth in the Disclosure Schedule or the Audited
Financial Statements, the Company has good, valid and marketable title to all
of its Assets, including, without limitation, all Assets reflected in the
balance sheets included in the Financial Statements and all Assets purchased by
the Company since the Current Balance Sheet Date (except for Assets reflected
in such balance sheets or acquired since the Current Balance Sheet Date which
have been sold or otherwise disposed of in the Ordinary Course of Business),
free and clear of all Encumbrances. All personal property of the Company
material to the conduct of its business is in good operating condition and
repair (reasonable wear and tear excepted) and is reasonably believed by the
Company to be suitable and adequate for the uses for which it is intended or is
being used.
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4.13 INSURANCE
The Disclosure Schedule lists all policies of title, Asset,
fire, hazard, casualty, liability, life, worker's compensation and other forms
of insurance of any kind owned or held by the Company. All such policies:
(a) are with insurance companies reasonably believed by the Company to be
financially sound and reputable; (b) are in full force and effect; (c) are
sufficient for compliance in all material respects by the Company with all
requirements of Law and of all Agreements to which the Company is a party; (d)
to the knowledge of the Company and the Stockholder, are valid and outstanding
policies enforceable against the insurer; (e) to the knowledge of the Company
and the Stockholder, insure against risks of the kind customarily insured
against and in amounts customarily carried by companies similarly situated and
by companies engaged in similar businesses and owning similar properties and
provide adequate insurance coverage for the business and Assets of the Company
and (f) provide that they will remain in full force and effect through the
respective dates set forth in the Disclosure Schedule.
4.14 INTELLECTUAL PROPERTY
The Disclosure Schedule lists all Intellectual Property and
applications therefor owned or licensed by or registered in the name of the
Company. Except as otherwise specifically stated in the Disclosure Schedule,
the Company owns all of the Intellectual Property listed in the Disclosure
Schedule purported to be owned by the Company, pays no royalty to anyone with
respect to any Intellectual Property and, to the knowledge of the Company and
the Stockholder, has the right to bring action for the infringement of such
Intellectual Property purported to be owned by the Company. The Company owns
or possesses adequate rights to use all Intellectual Property necessary to the
conduct of the present business of the Company. Neither the Company nor the
Stockholder has any knowledge, and has not received any notice to the effect,
that any product the Company sells or that any service the Company renders, or
that the marketing or use by the Company or another of any such product or
service, may or is claimed to infringe any Intellectual Property or legally
protectable right of another.
4.15 DEBT INSTRUMENTS
The Disclosure Schedule or the Audited Financial Statements
disclose all mortgages, indentures, notes, guarantees and other Agreements for
or relating to borrowed money (including, without limitation, conditional sales
agreements and capital leases) to which the Company is a party or which have
been assumed by the Company or to which any Assets of the Company are subject.
The Company has performed all the material obligations required to be performed
by it to date and is not in default in any material respect under any of the
foregoing, and, to the
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Company's and the Stockholder's knowledge, there has not occurred any event
which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a default. As of the
Closing Date, the Huntington Bank Promissory Notes will be prepayable in full,
without premium or penalty, in accordance with their terms.
4.16 LEASES
The Disclosure Schedule lists all leases and other
Agreements under which the Company is lessee or lessor of any Asset, or holds,
manages or operates any Asset owned by any third party, or under which any
Asset owned by the Company is held, operated or managed by a third party. Each
such lease and other Agreement is in full force and effect and constitutes a
legal, valid and binding obligation of, and is legally enforceable against, the
Company and, to knowledge of the Company and the Stockholder, the other parties
thereto. All governmental approvals required under applicable Laws to have
been obtained by the Company with respect to such leases and other Agreements,
if any, have been obtained, all filings or registrations required under
applicable Laws to have been made by the Company therefor, if any, have been
made, and, to the knowledge of the Company and the Stockholder, there have been
no threatened cancellations thereof and are no outstanding material disputes
thereunder. The Company has in all material respects performed all obligations
thereunder required to be performed by the Company to date. The Company is not
and, to the knowledge of the Company and the Stockholder, no other party is in
default in any material respect under any of the foregoing, and, except as set
forth in the Disclosure Schedule, there has not, to the knowledge of the
Company or the Stockholder, occurred any event which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute such a default. All of the Assets subject to such leases are in
good operating condition and repair, normal wear and tear excepted.
4.17 OTHER AGREEMENTS
(a) The Disclosure Schedule lists all Agreements to
which the Company is a party or by which the Company is bound at the date
hereof. Each such Agreement is in full force and effect and constitutes a
legal, valid and binding obligation of, and is legally enforceable against, the
Company and, to the knowledge of the Company and the Stockholder, the other
parties thereto. All governmental approvals required under applicable Laws to
have been obtained by the Company with respect to such Agreements, if any, have
been obtained, all filings or registrations required under applicable Laws to
have been made by the Company therefor, if any, have been made, and, to the
knowledge of the Company and the Stockholder, there have been no threatened
cancellations thereof and there are no outstanding material disputes thereunder
known to the Company or the
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<PAGE> 23
Stockholder. The Company has in all material respects performed all the
obligations thereunder required to be performed by the Company to date. The
Company is not and, to the knowledge of the Company and the Stockholder, no
other party is in default in any material respect under any of the Agreements
described in the Disclosure Schedule, and there has not, to the knowledge of
the Company or the Stockholder, occurred any event which (whether with or
without notice, lapse of time or the happening or occurrence of any other
event) would constitute such a default.
(b) Except as specified in the Disclosure Schedule, the
Company is not a party to any oral or written (i) Agreement for the employment
of any officer, employee, consultant or independent contractor; (ii) license
agreement or distributor, dealer, manufacturer's representative, sales agency,
advertising, property management or brokerage agreement; (iii) Agreement with
any labor organization or other collective bargaining unit; (iv) Agreement for
the future purchase of materials, supplies, services, merchandise or equipment
involving payments of more than Twenty-Five Thousand Dollars ($25,000) over its
remaining term (including, without limitation, periods covered by any option to
renew by either party); (v) Agreement for the purchase, sale or lease of any
real estate; (vi) profit-sharing, bonus, incentive compensation, deferred
compensation, stock option, severance pay, stock purchase, employee benefit,
insurance, hospitalization, pension, retirement or other similar plan or
Agreement; (vii) Agreement for the purchase, sale or lease of any of its Assets
other than in the Ordinary Course of Business or the grant of any preferential
rights to purchase any of its Assets or rights; (viii) except for the
Government Contracts, Agreement which contains any provisions requiring the
Company to indemnify any other party thereto; (ix) joint venture agreement or
other Agreement involving the sharing of profits; (x) outstanding loan to any
person or entity or receivable due from the Stockholder or any Affiliate of the
Company; (xi) Agreement (including, without limitation, Agreements not to
compete and exclusivity Agreements) that imposes any restriction on any
business operations of the Company which, either individually or in the
aggregate, would have a Material Adverse Effect; or (xii) Government Contract.
(c) Except as set forth in Disclosure Schedule, the
Company has never been debarred or suspended from contracting (as a prime
contractor or subcontractor at any tier) for or bidding on any Government
Contract or, at any time during the past ten (10) years, had a Government
Contract canceled or terminated, in whole or in part, by reason of a default or
alleged default on the part of the Company. The Company is not currently
debarred or suspended from (nor has it received written notice that it is under
investigation with respect to a possible debarment or suspension from) bidding
on or entering into any Government Contract. Except as set forth in the
Disclosure Schedule, with respect to any Government Contract in effect as of
the date of this Agreement, the Company
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has not received written notice (i) that any such Government Contract may be or
will be terminated for convenience or by reason of a default or alleged default
by the Company, (ii) that funding for any such Government Contract or
governmental program involving the Company will be eliminated or substantially
reduced or suspended, (iii) requiring or resulting in loss of use or
substantial impairment or interference of use by the Company of any facilities
owned by a governmental authority, or (iv) that any relevant budget authority
or contract authority has been exceeded with respect to any such Government
Contract to which the Company is a party. The Company does not anticipate
incurring any cost overrun with respect to any Government Contract to which it
is a party that is reasonably likely to have a Material Adverse Effect.
(d) Final audits of all of the Government Contracts of
the Company with the United States of America and its departments, commissions,
agencies and instrumentalities have been completed by the Defense Contract
Audit Agency for all fiscal years of the Company through and including its
fiscal year ended December 31, 1992. No issue has been raised in any such
audit or in any pending audit covering subsequent years that could reasonably
be expected to result in (i) the suspension or debarment of the Company from
bidding on or entering into any Government Contract, (ii) the termination for
default of any Government Contract to which the Company is a party or under
which the Company is providing goods or services, or (iii) except as reserved
for in the Audited Financial Statements, any assertion or claim of material
liability against the Company for an equitable adjustment, price reduction,
liquidated damages or monetary penalty, or damages under the terms of such
Government Contract or based on a default or alleged default by the Company or
other malfeasance or alleged malfeasance by the Company arising out of or
relating to the performance or failure to perform by the Company thereunder.
(e) The Disclosure Schedule specifically identifies any
and all Government Contracts as to which final payment has not yet been made
that were awarded to the Company in reliance on its status as a small business
or small disadvantaged business (Section 8(a)) contractor (collectively, the
"8(a) Contracts"). At the time of award of each such 8(a) Contract, the
Company satisfied the applicable criteria as to its disadvantaged business
and/or small size status.
4.18 BOOKS AND RECORDS
Except as set forth in the Disclosure Schedule, the books of
account, stock records, minute books and other records of the Company are true
and complete in all material respects, and the matters contained therein are
appropriately and accurately reflected in the Financial Statements to the
extent
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required to be reflected therein under generally accepted accounting principles
consistently applied.
4.19 LITIGATION; DISPUTES
(a) Except as set forth in the Disclosure Schedule,
there are no actions, suits, claims, arbitrations, proceedings or
investigations pending, or, to the knowledge of the Company and the
Stockholder, threatened against, affecting or involving the Company or its
business or Assets, or the transactions contemplated by this Purchase
Agreement, at Law or in equity or admiralty, or before or by any court,
arbitrator or governmental authority, domestic or foreign. The Company is not
operating under, subject to or in default with respect to any order, award,
writ, injunction, decree or judgment of any court, arbitrator or governmental
authority.
(b) Except as set forth in the Disclosure Schedule, the
Company is not currently involved in and, to the knowledge of the Company and
the Stockholder, there are no threatened disputes with any of its current or
former employees, agents, brokers, distributors, vendors, customers, business
consultants, franchisees, franchisors, representatives or independent
contractors which, if adversely determined, would have a Material Adverse
Effect.
4.20 LABOR RELATIONS
There are no strikes, work stoppages, grievance proceedings,
union organization efforts or other material controversies pending, or, to the
Company's and the Stockholder's knowledge, threatened between the Company and
(i) any current or former employees of the Company or (ii) any union or other
collective bargaining unit representing such employees. The Company has
complied with and is in compliance in all material respects with all Laws
relating to employment or the workplace, including, without limitation,
provisions relating to wages, hours, collective bargaining, safety and health,
work authorization, equal employment opportunity, immigration, withholding,
unemployment compensation, worker's compensation, employee privacy and right to
know. There are no collective bargaining agreements or employment agreements
between the Company and any of its employees not terminable at will. Except as
set forth in the Disclosure Schedule, the consummation of the transactions
contemplated hereby will not cause Buyer or the Company to incur or suffer any
liability relating to, or obligation to pay, severance, termination or other
payments to any person or entity.
4.21 PENSION AND BENEFIT PLANS
(a) Except as set forth in the Disclosure Schedule, the
Company (i) does not maintain and has not during the past five (5) years
maintained any
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Plan or Other Arrangement, (ii) is not and has not during the past five (5)
years been a party to any Plan or Other Arrangement and (iii) has no
obligations under any Plan or Other Arrangement.
(b) The Company has furnished to Buyer true and complete
copies of each of the following Documents: (i) the Documents setting forth the
terms of each Plan; (ii) all related trust agreements or annuity agreements
(and any other funding Document) for each Plan; (iii) for the three most recent
plan years, all annual reports (Form 5500 series) on each Plan that have been
filed with any governmental agency; (iv) the current summary plan description
and subsequent summaries of material modifications for each Title I Plan; (v)
all DOL opinions on any Plan and all correspondence relating to the request for
and receipt of each opinion; (vi) all Internal Revenue Service rulings,
opinions or technical advice relating to any Plan and all correspondence
relating to the request for and receipt of each ruling, opinion or technical
advice; and (vii) all Agreements with service providers or fiduciaries for
providing services on behalf of any Plan. For each Other Arrangement, the
Company has furnished to Buyer true and complete copies of each policy,
Agreement or other Document setting forth or explaining the terms of the Other
Arrangement, all related trust agreements or other funding Documents
(including, without limitation, insurance contracts, certificates of deposit,
money market accounts, etc.), other submissions with any governmental agency
within the last five (5) years, and all Agreements with service providers or
fiduciaries for providing services on behalf of any material Other Arrangement.
(c) No Plan is a Multiemployer Plan, an ESOP, a Defined
Benefit Plan or a funded Welfare Plan.
(d) The Company has made all contributions and other
payments required by and required to have been paid under the terms of each
Plan and Other Arrangement and have taken no action (including, without
limitation, actions required by Law) relating to any Plan or Other Arrangement
that will increase any obligation of Buyer or the Company under any Plan or
Other Arrangement other than increases in employee compensation in the Ordinary
Course of Business.
(e) The Disclosure Schedule sets forth a list of all
Qualified Plans. All Qualified Plans and any related trust agreements or
annuity agreements (or any other funding Document) comply and have complied
with ERISA, the Code (including, without limitation, the requirements for Tax
qualification described in Section 401 thereof), and all other Laws. The
trusts established under such Qualified Plans are exempt from federal income
taxes under Section 501(a) of the Code. The Company has received determination
letters issued by the Internal Revenue Service with respect to each Qualified
Plan, and the Company has furnished to Buyer true and complete copies of all
such determination letters and all correspondence relating to the applications
therefor. All statements made by or
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on behalf of the Company to the Internal Revenue Service in connection with
applications for determinations with respect to each Qualified Plan were true
and complete when made and continue to be true and complete. Nothing has
occurred since the date of the most recent applicable determination letter that
would adversely affect the tax-qualified status of any Qualified Plan.
(f) The Company has complied in all material respects
with all applicable provisions of the Code, ERISA, the National Labor Relations
Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Securities Act, the Exchange
Act, and all other Laws pertaining to the Plans, Other Arrangements and other
employee or employment related benefits, and all premiums and assessments
relating to all Plans or Other Arrangements. The Company has no liability for
any delinquent contributions within the meaning of Section 515 of ERISA
(including, without limitation, related attorneys' fees, costs, liquidated
damages and interest) or for any arrearages of wages. The Company has no
pending unfair labor practice charges, contract grievances under any collective
bargaining agreement, other administrative charges, claims, grievances or
lawsuits before any court, governmental agency, regulatory body, or arbiter
arising under any Law governing any Plan, and, to the knowledge of the Company
and the Stockholder, there exist no facts that could give rise to such a claim.
(g) The Disclosure Schedule describes all transactions
in which the Company or any of the Plans has engaged in violation of Section
406(a) or 406(b) of ERISA for which no exemption exists under Section 408 of
ERISA and all "prohibited transactions" (as such term is defined in Section
4975(c)(1) of the Code), for which no exemption exists under Section 4975(c)(2)
or 4975(d) of the Code. The Company has furnished to Buyer true and complete
copies of each request for a prohibited transaction exemption and each
exemption obtained in response to such request. All such requests were true
and complete when made and continue to be true and complete.
(h) The Disclosure Schedule identifies any Plan that has
terminated since 1990. The Company has furnished to Buyer true and complete
copies of all government filings, employee communications, board minutes and
all other Documents relating to each Plan termination.
(i) No Plan or Other Arrangement, individually or
collectively, provides for any payment by the Company to any employee or
independent contractor that is not deductible under Section 162(a)(1) or 404 of
the Code or that is an "excess parachute payment" pursuant to Section 280G of
the Code.
(j) The Company has not filed, and has had no obligation
to file, any Form 5330 (Return of Excise Taxes Related to Employee Benefit
Plans) on any
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Plan. The Company has no liability for Taxes required to be reported on Form
5330.
(k) No Plan promises or provides post-retirement
medical, life insurance or other benefits due now or in the future to current,
former or retired employees of the Company.
(l) All Welfare Plans and the related trusts that are
subject to Section 4980B(f) of the Code and Sections 601 through 607 of ERISA
comply with and have been administered in compliance with the health care
continuation-coverage requirements for tax-favored status under Section
4980B(f) of the Code (formerly Section 162(k) of the Code), Sections 601
through 607 of ERISA, and all proposed or final Treasury regulations under
Section 162 of the Code explaining those requirements.
(m) The Company has (i) filed or caused to be filed all
returns and reports on the Plans that they are required to file and (ii) paid
or made adequate provision for all fees, interest, penalties, assessments or
deficiencies that have become due pursuant to those returns or reports or
pursuant to any assessment or adjustment that has been made relating to those
returns or reports. All other fees, interest, penalties and assessments that
are payable by or for the Company have been timely reported, fully paid and
discharged. There are no unpaid fees, penalties, interest or assessments due
from the Company or from any other person that are or could become a lien on
any Asset of the Company or could otherwise adversely affect the business or
Assets of the Company. The Company has collected or withheld all amounts that
are required to be collected or withheld by them to discharge their
obligations, and all of those amounts have been paid to the appropriate
governmental agencies or set aside in appropriate accounts for future payment
when due.
4.22 ENVIRONMENTAL
(a) The Company has complied and is in compliance with,
and the Company's use of the Real Property and all improvements thereon are in
compliance with, all Environmental Laws, except for any noncompliance which has
not had, and would not reasonably be expected to have, a Material Adverse
Effect.
(b) There are no pending or, to the Company's or the
Stockholder's knowledge, threatened actions, suits, claims, legal proceedings
or other proceedings based on, and neither the Company nor the Stockholder has
directly or indirectly received any notice of any complaint, order, directive,
citation, notice of responsibility, notice of potential responsibility, or
information request from any governmental authority or any other person or
entity or knows any fact(s) which the
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Company or the Stockholder reasonably believes form(s) the basis for any such
actions or notices arising out of or attributable to: (i) the current or past
presence, Release or threatened Release at or from any part of the Real
Property related to the Company's operations; (ii) the off-site disposal or
treatment of Hazardous Materials originating on or from the Real Property with
respect to the business or Assets of the Company; (iii) any facility
operations, procedures or designs of the Company which do not conform to
requirements of the Environmental Laws; or (iv) any violation of Environmental
Laws at any part of the Real Property or arising from the Company's activities
(or the activities of the Company's predecessors in title) involving Hazardous
Materials.
(c) The Company has been duly issued, and currently has
and will maintain through the Closing Date, all permits, licenses, certificates
and approvals required to be obtained by the Company under any Environmental
Law. A true and complete list of such permits, licenses, certificates and
approvals, all of which are valid and in full force and effect, is set out in
the Disclosure Schedule. Except in accordance with such permits, licenses,
certificates and approvals, there has been no release of material regulated by
such permits, licenses, certificates or approvals.
(d) To the knowledge of the Company and the Stockholder,
the Real Property contains no underground improvements, including but not
limited to treatment or storage tanks, or underground piping associated with
such tanks, used currently or in the past for the management of Hazardous
Materials. No portion of the Real Property is being or, to the knowledge of
the Company and the Stockholder, has been, used as a dump or landfill, or
consists of or contains filled in lands or wetlands.
(e) The Company has furnished to Buyer accurate and
complete copies of any environmental reports, assessments or other records, if
any, relating to the environmental condition of the Real Property of which the
Company or the Stockholder is in possession.
(f) The Company will promptly furnish to Buyer written
notice of any Release or of any actions or notices described in Section
4.22(b).
(g) To the knowledge of the Company and the Stockholder,
neither PCBs nor asbestos-containing materials are present on or in the Real
Property.
4.23 TRANSACTIONS WITH RELATED PARTIES
Except as set forth in the Disclosure Schedule, neither any
present or former officer, director, stockholder or person known by the Company
or the Stockholder to be an Affiliate of the Company, nor any person known by
the
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Company or the Stockholder to be an Affiliate of any such person, is currently
a party to any transaction or Agreement with the Company, including, without
limitation, any Agreement providing for the employment of, furnishing of
services by, rental of Assets from or to, or otherwise requiring payments to,
any such officer, director, stockholder or Affiliate.
4.24 RESTRICTIONS AND CONSENTS
Except as set forth in the Disclosure Schedule and except for
the requirements of the HSR Act, there are no Agreements, Laws or other
restrictions to which the Company is party or subject that would prevent or
restrict the execution, delivery or performance of this Purchase Agreement by
the Company or result in any penalty, forfeiture, Agreement termination, or
restriction on business operations of the Company as a result of the execution,
delivery or performance of this Purchase Agreement by the Company. The
Disclosure Schedule lists all such Agreements and Laws that require the consent
or acquiescence of any person or entity not party to this Purchase Agreement
with respect to any aspect of the execution, delivery or performance of this
Purchase Agreement by the Company.
4.25 AUTHORIZATION
Except as set forth in the Disclosure Schedule, the
execution, delivery and performance by the Company of this Purchase Agreement
and all other Documents executed by the Company in connection with the
transactions contemplated hereby, the fulfillment of and compliance with the
respective terms and provisions hereof, and the consummation by the Company of
the transactions contemplated hereby, have been duly authorized by all
necessary corporate action (which authorization has not been modified or
rescinded and is in full force and effect), and do not and will not: (a)
conflict with, or violate any provision of, any Law having applicability to the
Company, or any provision of the certificate of incorporation or bylaws of the
Company; (b) conflict with, or result in any breach of, or constitute a default
under any Agreement to which the Company is a party or by which it or any of
its Assets may be bound; or (c) result in or require the creation or imposition
of or result in the acceleration of any indebtedness, or of any Encumbrance of
any nature upon, or with respect to, the Company or any of the Assets now owned
or hereafter acquired by the Company.
4.26 ABSENCE OF VIOLATION
The Company is not in violation of or default under, nor has
it breached, any term or provision of its certificate of incorporation or
bylaws or any Agreement to which the Company is a party or by which the Company
or any Asset thereof is bound or affected, except for any violations, breaches
or defaults under
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Agreements which do not, individually or in the aggregate with any other such
violations, breaches and defaults, have a Material Adverse Effect. The Company
has complied and is in compliance with all Laws, the failure to comply with
which could have a Material Adverse Effect. Neither the Company nor any of its
officers or directors, any employees or, to the knowledge of the Company and
the Stockholder, any of the Company's agents (or the stockholders,
distributors, representatives or other persons acting on the express authority
of the Company) has paid, given or received or has offered or promised to pay,
give or receive, any bribe or other unlawful, questionable or unusual payment
of money or other thing of value, any extraordinary discount, or any other
unlawful or unusual inducement, to or from any person, business association or
governmental official or entity in the United States or elsewhere in connection
with or in furtherance of the business of the Company (including, without
limitation, any offer, payment or promise to pay money or other thing of value
(i) to any foreign official or political party (or official thereof) for the
purposes of influencing any act, decision or omission in order to assist the
Company in obtaining business for or with, or directing business to, any
person, or (ii) to any person, while knowing that all or a portion of such
money or other thing of value will be offered, given or promised to any such
official or party for such purposes). The business of the Company is not in
any manner dependent upon the making or receipt of such payments, discounts or
other inducements.
4.27 COPIES OF DOCUMENTS
True and complete copies of all Documents listed in the
Disclosure Schedule have been furnished to Buyer prior to the execution of this
Purchase Agreement.
4.28 BINDING OBLIGATION
This Purchase Agreement constitutes, and each Document to be
executed by the Company pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall constitute, a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights generally and by the application of general
principles of equity.
4.29 DISCLOSURE
No representation or warranty by the Company or the
Stockholder in this Purchase Agreement, and no Document expressly referred to
in this Purchase Agreement as being furnished or to be furnished by the Company
or the Stockholder to Buyer pursuant to this Purchase Agreement, or in
connection herewith or with
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<PAGE> 32
the transactions contemplated hereby, contains or will contain any material
untrue or misleading statement or omits or will omit any material fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which made, not misleading.
5. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
In addition to the representations and warranties made by the
Stockholder in Section 4 hereof, the Stockholder hereby represents and warrants
to Buyer as follows:
5.01 TITLE TO CAPITAL STOCK
The Stockholder is, and, except for the Additional Shares to
be issued to Holly at Closing, on the Closing Date will be, the sole legal,
beneficial and record owner of all of the issued and outstanding shares of
capital stock of the Company, with good, valid and marketable title thereto,
free and clear of all Encumbrances, except such restrictions on the transfer of
such shares as may be applicable under federal and state securities laws, with
full right and lawful authority to sell and transfer the shares to Buyer
pursuant to this Purchase Agreement.
5.02 AUTHORITY AND CAPACITY
The Stockholder has full legal right, capacity, power and
authority to execute and deliver this Purchase Agreement and all other
Documents executed or to be executed by the Stockholder pursuant hereto, and to
consummate the transactions contemplated hereby and thereby.
5.03 ABSENCE OF VIOLATION
The execution, delivery and performance by the Stockholder of
this Purchase Agreement and all other Documents contemplated hereby to which
the Stockholder is a party, the fulfillment of and the compliance with the
respective terms and provisions hereof and thereof, and the consummation of the
transactions contemplated hereby and thereby, do not and will not (a) conflict
with, or violate any provision of, any Laws having applicability to the
Stockholder; or (b) conflict with, or result in any breach of, or constitute a
default under, any Agreement to which the Stockholder is a party.
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<PAGE> 33
5.04 RESTRICTIONS AND CONSENTS
Except for the requirements of the HSR Act, there are no
Agreements, Laws or other restrictions of any kind to which the Stockholder is
party or subject that would prevent or restrict the execution, delivery or
performance of this Purchase Agreement by the Stockholder.
5.05 BINDING OBLIGATION
This Purchase Agreement constitutes, and each Document to be
executed by the Stockholder pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall constitute, a valid and binding
obligation of the Stockholder, enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
5.06 TRANSFER OF TITLE
Upon payment at Closing for the shares of capital stock to be
purchased from the Stockholder pursuant to the terms of this Purchase
Agreement, Buyer will acquire good, valid and marketable title thereto, free
and clear of all Encumbrances, except such restrictions on the transfer of such
shares as may be applicable under federal and state securities laws.
5A. REPRESENTATIONS AND WARRANTIES OF HOLLY
Holly hereby represents and warrants to Buyer as follows:
5A.01 TITLE TO CAPITAL STOCK
On the Closing Date, Holly will be the sole legal, beneficial
and record owner of the Additional Shares, with good, valid and marketable
title thereto, free and clear of all Encumbrances, except such restrictions on
the transfer of such shares as may be applicable under federal and state
securities laws, with full right and lawful authority to sell and transfer the
Additional Shares to Buyer pursuant to this Purchase Agreement.
5A.02 AUTHORITY AND CAPACITY
Holly has full legal right, capacity, power and authority to
execute and deliver this Purchase Agreement and all other Documents executed or
to be
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<PAGE> 34
executed by Holly pursuant hereto, and to consummate the transactions
contemplated hereby and thereby.
5A.03 ABSENCE OF VIOLATION
The execution, delivery and performance by Holly of this
Purchase Agreement and all other Documents contemplated hereby to which Holly
is a party, the fulfillment of and the compliance with the respective terms and
provisions hereof and thereof, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (a) conflict with, or
violate any provision of, any Laws having applicability to Holly; or (b)
conflict with, or result in any breach of, or constitute a default under, any
Agreement to which Holly is a party.
5A.04 RESTRICTIONS AND CONSENTS
There are no Agreements, Laws or other restrictions of any kind to
which Holly is party or subject that would prevent or restrict the execution,
delivery or performance of this Purchase Agreement by Holly.
5A.05 BINDING OBLIGATION
This Purchase Agreement constitutes, and each Document to be executed
by Holly pursuant hereto, when executed and delivered in accordance with the
provisions hereof, shall constitute, a valid and binding obligation of Holly,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws of general applicability relating to or affecting creditors' rights
generally and by the application of general principles of equity.
5A.06 TRANSFER OF TITLE
Upon payment for the Additional Shares at Closing, Buyer will acquire
good, valid and marketable title to the Additional Shares, free and clear of
all Encumbrances, except such restrictions on the transfer of such shares as
may be applicable under federal and state securities laws.
6. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company and the
Stockholder as follows:
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6.01 ORGANIZATION AND STANDING
Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Virginia and has the
corporate power and authority to carry on its business as currently conducted,
to enter into this Purchase Agreement and to carry out the transactions
contemplated hereby.
6.02 AUTHORIZATION
The execution, delivery and performance by Buyer of this
Purchase Agreement and all other Documents executed or to be executed by Buyer
in connection with the transactions contemplated hereby, the fulfillment of and
the compliance with the respective terms and provisions hereof and thereof, and
the consummation by Buyer of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action (which
authorization has not been modified or rescinded and is in full force and
effect), and do not and will not: (a) conflict with, or violate any provision
of, any Law having applicability to Buyer or any provision of the certificate
of incorporation or bylaws of Buyer; (b) conflict with, or result in any breach
of, or constitute a default under, any Agreement to which Buyer is a party or
by which Buyer is bound; or (c) result in or require the creation or imposition
of or result in the acceleration of any indebtedness, or of any Encumbrance of
any nature upon, or with respect to, Buyer or any of the Assets now owned or
hereafter acquired by Buyer. No other corporate action is necessary for Buyer
to enter into this Purchase Agreement and all other Documents contemplated
hereby and to consummate the transactions contemplated hereby and thereby.
6.03 BINDING OBLIGATION
This Purchase Agreement constitutes, and each Document to be
executed by Buyer pursuant hereto, when executed and delivered in accordance
with the provisions hereof, shall constitute, a valid and binding obligation of
Buyer, enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws of general applicability relating to or affecting creditors'
rights generally and by the application of general principles of equity.
6.04 NO REGISTRATION UNDER THE SECURITIES ACT
Buyer understands that the capital stock to be purchased by
it under this Purchase Agreement has not been registered under the Securities
Act or any state securities laws, in reliance upon exemptions contained in the
Securities Act and such state securities laws or interpretations thereof, and
cannot be offered for sale, sold or otherwise transferred unless such capital
stock being acquired
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hereunder subsequently is so registered or qualifies for exemption from
registration under the Securities Act and such state securities laws.
6.05 ACQUISITION FOR INVESTMENT
The capital stock is being acquired under this Purchase
Agreement by Buyer in good faith solely for its own account, for investment and
not with a view toward resale or other distribution within the meaning of the
Securities Act. Such capital stock will not be offered for sale, sold or
otherwise transferred by Buyer without either registration or exemption from
registration under the Securities Act and applicable state securities laws.
6.06 EVALUATION OF MERITS AND RISKS OF INVESTMENT
Buyer has such knowledge and experience in financial and
business matters that Buyer is capable of evaluating the merits and risks of
Buyer's investment in such capital stock being acquired hereunder. Buyer
understands and is able to bear any economic risks associated with such
investment (including, without limitation, the necessity of holding such
capital stock for an indefinite period of time, inasmuch as such capital stock
has not been registered under the Securities Act or any state securities laws).
6.07 DISCLOSURE
No representation or warranty by Buyer in this Purchase
Agreement contains any material untrue or misleading statement or omits any
material fact necessary to make the statements contained herein in light of the
circumstances under which made, not misleading.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDER
The obligations of the Company and the Stockholder under this
Purchase Agreement are subject to the fulfillment, at or prior to the Closing,
of each of the following conditions, and failure to satisfy any such condition
shall excuse and discharge all obligations of the Company and the Stockholder
to carry out the provisions of this Purchase Agreement, unless such failure is
agreed to in writing by the Company and the Stockholder:
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7.01 REPRESENTATIONS AND WARRANTIES
The representations and warranties made by Buyer in this
Purchase Agreement or in any Document furnished by Buyer pursuant to this
Purchase Agreement shall be true and correct in all material respects when made
and on and as of the Closing Date as though such representations and warranties
were made on and as of the Closing Date (provided that any representation or
warranty contained herein that is qualified by a materiality standard shall not
be further qualified hereby).
7.02 PERFORMANCE
Buyer shall have performed and complied in all material
respects with all Agreements and conditions required by this Purchase Agreement
to be performed or complied with by Buyer prior to the Closing Date.
7.03 LEGAL PROCEEDINGS
No action or proceeding by or before any governmental
authority shall have been instituted or threatened (and not subsequently
dismissed, settled or otherwise terminated) which is reasonably expected to
restrain, prohibit or invalidate the transactions contemplated by this Purchase
Agreement, other than an action or proceeding instituted or threatened by the
Company or the Stockholder.
7.04 BUYER'S CERTIFICATE
Buyer shall have delivered to the Company and the Stockholder
a certificate, dated as of the Closing Date and executed by a senior officer of
Buyer, certifying to the fulfillment of the conditions set forth in Sections
7.01 through 7.03.
7.05 RELEASES
The Stockholder shall have been released from the guarantees
described at Items 2 and 3 of Section 7.04 of the Disclosure Schedule, or (a)
the Stockholder shall have received commitments reasonably satisfactory to the
Stockholder from the beneficiaries under such guarantees to release the
Stockholder therefrom promptly after the Closing upon satisfaction of
conditions that are reasonably acceptable to the Stockholder, or (b) Buyer
shall have agreed to indemnify the Stockholder under any such guarantee which
is not so released for claims made by the beneficiary thereunder for matters
related to the time period from and after the Closing Date.
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7.06 HSR ACT FILING
All applicable waiting periods with any extensions thereof
under the HSR Act shall have expired or been terminated.
7.07 LEGAL OPINION
The Company and the Stockholder shall have received an
opinion from Hogan & Hartson L.L.P., counsel to Buyer, in the form attached
hereto as Exhibit F.
7.08 DOCUMENTS AT CLOSING
All Documents required to be furnished by Buyer to the
Company and/or the Stockholder prior to or at the Closing shall have been so
furnished.
7.09 EMPLOYMENT AGREEMENTS
Buyer shall have executed and delivered an employment
agreement in substantially the form of Exhibit B hereto for each of the
individuals listed in Exhibit B hereto.
7.10 CONSULTING AGREEMENT
Buyer shall have executed and delivered to the Stockholder a
consulting agreement substantially in the form of Exhibit C hereto.
7.11 CONSENTS
The consents, authorizations and approvals described at Items
3 and 4 of Section 4.24 of the Disclosure Schedule shall have been obtained and
shall be in full force and effect on the Closing Date, unless Buyer shall have
waived in writing the requirement of any such consent, authorization or approval
and the failure to obtain such consent, authorization or approval prior to
Closing would not reasonably be expected to have material adverse economic
consequences on the Stockholder or Holly.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Purchase Agreement are subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions, and failure to satisfy any such condition shall excuse and
discharge all obligations of Buyer to
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carry out the provisions of this Agreement, unless such failure is agreed to in
writing by Buyer:
8.01 REPRESENTATIONS AND WARRANTIES
The representations and warranties made (jointly or
individually) by the Company, the Stockholder and Holly in this Purchase
Agreement and the statements contained in the Disclosure Schedule and Exhibits
attached hereto or in any Document furnished by the Company or the Stockholder
pursuant to this Purchase Agreement shall be true and correct in all material
respects when made, and on and as of the Closing Date as though such
representations and warranties were made on and as of the Closing Date
(provided that any representation or warranty contained herein that is
qualified by a materiality standard shall not be further qualified hereby).
8.02 PERFORMANCE
The Company, the Stockholder and Holly shall have performed
and complied in all material respects with all Agreements and conditions
required by this Purchase Agreement to be performed or complied with prior to
the Closing Date. None of the Huntington Bank Promissory Notes or the loans
evidenced thereby shall have been amended or otherwise modified in any respect.
8.03 ABSENCE OF ADVERSE CHANGES
There shall have been no material adverse changes since the
Current Balance Sheet Date in the business, operations, condition (financial or
otherwise), Assets or liabilities of the Company; provided, however, that the
failure to obtain the waivers from the SBA, as described in Section 3.01(d)
hereof, shall not constitute an adverse change for purposes of this Section
8.03.
8.04 LEGAL PROCEEDINGS
No action or proceeding by or before any governmental
authority shall have been instituted or threatened (and not subsequently
settled, dismissed or otherwise terminated) which is reasonably expected to
restrain, prohibit or invalidate the transactions contemplated by this Purchase
Agreement other than an action or proceeding instituted or threatened by Buyer.
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8.05 OFFICER'S CERTIFICATE
The Company shall have delivered to Buyer a certificate,
dated as of the Closing Date and executed by the Company's President, in his
capacity as such, certifying to the fulfillment of the conditions specified in
Sections 8.01 through 8.04.
8.06 STOCKHOLDER'S CERTIFICATE
The Stockholder shall have delivered to Buyer a certificate,
dated as of the Closing Date and executed by the Stockholder, certifying to the
fulfillment of the conditions specified in Sections 8.01 through 8.04.
8.07 HSR ACT FILING
All applicable waiting periods with any extensions thereof
under the HSR Act shall have expired or been terminated.
8.08 DOCUMENTS AT CLOSING
All Documents required to be furnished by the Company and/or
the Stockholder to Buyer prior to or at the Closing shall have been so
furnished.
8.09 CONSENTS
The consents, authorizations and approvals described at Items
3 and 4 of Section 4.24 of the Disclosure Schedule shall have been duly
obtained and shall be in full force and effect on the Closing Date, and the
notifications under the Government Contracts and requests to obtain the SBA
waivers under the 8(a) Contracts shall have been submitted in accordance with
Section 3.01(d) hereof.
8.10 RESIGNATION OF DIRECTORS
Buyer shall have received the written resignations of all of
the members of the Board of Directors of the Company (effective as of the
Closing Date).
8.11 EMPLOYMENT AGREEMENTS
Holly and Margaret Vicharello shall each have executed and
delivered to Buyer an employment agreement substantially in the form of Exhibit
B hereto.
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8.12 CONSULTING AGREEMENT
The Stockholder shall have executed and delivered to Buyer a
consulting agreement substantially in the form of Exhibit C hereto.
8.13 NONCOMPETITION AGREEMENT
The Stockholder shall have executed and delivered to Buyer a
noncompetition agreement substantially in the form of Exhibit D hereto.
8.14 LEGAL OPINION
Buyer shall have received an opinion from Shanley & Fisher,
P.C., counsel to the Company and the Stockholder, in the form attached hereto as
Exhibit E.
8.15 ISSUANCE OF ADDITIONAL SHARES
The Additional Shares shall have been issued to Holly by the
Company in accordance with the terms and conditions of this Purchase Agreement.
9. CLOSING
9.01 CLOSING OF SALE AND PURCHASE
Subject to the terms and conditions of this Purchase
Agreement, the Closing shall take place on the Closing Date at the offices of
Hogan & Hartson L.L.P., 8300 Greensboro Drive, Suite 1100, McLean, Virginia
22102, or at such other place acceptable to Buyer, the Company and the
Stockholder.
9.02 DELIVERIES BY THE STOCKHOLDER AND HOLLY
At the Closing, the Stockholder and Holly shall deliver to
Buyer certificates representing the shares of capital stock being sold to Buyer
pursuant to Section 2.01, duly endorsed in blank or with duly executed stock
powers attached. The Stockholder also shall deliver to Buyer the following:
(a) the certificate required by Section 8.06;
(b) an assignment and assumption agreement in a form
reasonably acceptable to Buyer with respect to the assignment by the Company to
the Stockholder of the life insurance policies described in Section 2.03
hereof and all
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rights of the Company under such policies, and the Stockholder's assumption of
liabilities under such policies; and
(c) such other Documents as Buyer may reasonably request.
9.03 DELIVERIES BY THE COMPANY
At the Closing, the Company shall deliver to Buyer the
following:
(a) a copy of the resolutions adopted by the Board of
Directors of the Company authorizing the transactions contemplated by this
Purchase Agreement certified by the Secretary or other duly authorized officer
of the Company;
(b) the written resignations of all of the current
members of the Board of Directors of the Company (effective as of the Closing
Date);
(c) the certificate required by Section 8.05;
(d) certificates of incumbency and specimen signatures
of the signatory officers of the Company;
(e) a long-form certificate of standing of the Company
issued by the state of New Jersey, and a good standing certificate from each
state in which the Company is qualified to do business, each such certificate
to be dated as of a date not more than seven (7) days prior to the Closing
Date;
(f) the certificate of incorporation, bylaws, minute
books and stock books of the Company and all other books and records reasonably
requested by Buyer;
(g) employment agreements in the form of Exhibit B
hereto duly executed by the individuals listed in Exhibit B hereto; provided,
however, that notwithstanding Section 8.08 hereof, it shall not be a condition
precedent to Buyer's obligations to close that any individuals (other than
Holly and Margaret Vicharello) shall have executed such employment agreements;
(h) the Consulting Agreement described in Section 8.12
duly executed by the Stockholder;
(i) the Noncompetition Agreement described in Section
8.13 duly executed by the Stockholder;
(j) the legal opinion described in Section 8.14;
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(k) the assignment and assumption agreement described in
Section 9.02(b) duly executed by the Company;
(l) the letter of non-applicability from NJDEP
described in Section 3.03(f) hereof;
(m) a statement of all outstanding Stockholder Loans as
of the Closing Date, certified by the Chief Financial Officer of the Company as
being complete and accurate;
(n) a payoff letter executed by the Huntington Bank of
West Virginia, in a form reasonably acceptable to Buyer, which specifies
separately the amount of all outstanding indebtedness of the Company, the
Stockholder and John Witkowski to such bank as of the Closing Date, and
includes an obligation of such bank to (i) execute all release documents
necessary to terminate and release the Encumbrances securing the loans
evidenced by the Huntington Bank Promissory Notes, and (ii) promptly return to
the Company the original Huntington Bank Promissory Notes marked paid or
satisfied in full; and
(o) such other Documents as Buyer may reasonably request.
9.04 DELIVERIES BY BUYER
At the Closing, Buyer shall deliver the following:
(a) the amount of the Purchase Price set forth in
Section 2.02(a);
(b) a certified copy of the resolutions adopted by the
Board of Directors of Buyer authorizing the transactions contemplated by this
Purchase Agreement;
(c) the certificate required by Section 7.04;
(d) the Employment Agreements described in Section 8.11
duly executed by Buyer;
(e) the Consulting Agreement described in Section 8.12
duly executed by Buyer;
(f) the Noncompetition Agreement described in Section
8.13 duly executed by Buyer;
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(g) the legal opinion described in Section 7.07, and
(h) such other Documents as the Company or the
Stockholder may reasonably request.
10. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES
10.01 SURVIVAL OF REPRESENTATIONS
All representations, warranties, covenants, indemnities and
other Agreements made by any party to this Purchase Agreement herein or
pursuant hereto, or made pursuant to any Disclosure Schedule, shall be deemed
made on and as of the Closing Date as though such representations, warranties,
covenants, indemnities and other Agreements were made on and as of such date,
and all such representations, warranties, covenants, indemnities and other
Agreements shall survive the Closing and any investigation, audit or inspection
at any time made by or on behalf of any party hereto, as follows: (a) unless
otherwise specified hereinbelow, representations and warranties shall survive
for a period of eighteen (18) months after the Closing Date; (b)
representations and warranties with respect to Taxes shall survive until the
expiration of the applicable statute of limitations; (c) representations,
warranties and covenants for matters relating to title to the capital stock of
the Company shall continue in full force and effect in perpetuity; (d)
representations, warranties and covenants for matters relating to title to the
Company's Assets shall continue in full force and effect for a period of five
(5) years after the Closing Date; and (e) the covenants and agreements in this
Article 10 and the covenants and agreements which by their terms survive
Closing shall continue in full force and effect until fully discharged.
Notwithstanding anything herein to the contrary, any representation, warranty,
covenant or Agreement which is the subject of a claim which is asserted in
writing prior to the expiration of the applicable period set forth above shall
survive with respect to such claim or dispute until the final resolution
thereof.
10.02 AGREEMENT OF STOCKHOLDER AND HOLLY TO INDEMNIFY
Subject to the conditions and provisions of this Article 10,
the Stockholder and Holly hereby agree to indemnify, defend and hold harmless
the Buyer Indemnified Persons from and against and in respect of all Losses
resulting from, imposed upon or incurred by the Buyer Indemnified Persons,
directly or indirectly, by reason of or resulting from (a) any
misrepresentation or breach of any representation or warranty, or noncompliance
with any conditions or other Agreements, given or made by Holly, the
Stockholder or the Company in this
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Purchase Agreement or in the Disclosure Schedules or Exhibits attached hereto
or in any Document furnished by or on behalf of any such party pursuant to this
Purchase Agreement; provided, however, that the failure to obtain the waivers
from the SBA, as described in Section 3.01(d) hereof, shall not constitute a
breach or noncompliance by Holly, the Stockholder or the Company for purposes
of this Section 10.02(a); (b) any arrangements between the Company and/or the
Stockholder and any broker, finder, agent or similar advisor in connection with
the transactions contemplated by the Purchase Agreement, and any claim for fees
or other amounts arising out of any such arrangement or alleged arrangement;
and (c) any claims made under any Agreements or arrangements between the
Stockholder and/or the Company and any former officer, director or stockholder
of the Company that were entered into prior to the Closing Date; provided,
however, that, except for Losses arising out of a willful or intentional breach
of representations, warranties or covenants by the Company, or the Stockholder
or Holly, and Losses arising out of any breach of representations or warranties
for matters relating to title to the capital stock of the Company, none of
which shall be subject to the following limitations, neither the Stockholder
nor Holly shall have any liability under Section 10.02(a) except to the extent
that the aggregate amount of claims for Losses asserted under such Section
exceeds One Hundred Thousand Dollars ($100,000); provided, further, however, in
no event shall the aggregate amount of liability of the Stockholder and Holly
for Losses asserted under Section 10.02(a) (except for Losses arising out of a
willful or intentional breach of representations, warranties or covenants by
the Company, or the Stockholder or Holly, and Losses arising out of any breach
of representations or warranties for matters relating to title to the capital
stock of the Company), exceed Five Million Dollars ($5,000,000). It shall be a
condition to the right of any Buyer Indemnified Person to indemnification
pursuant to this Section that such Buyer Indemnified Person shall assert a
claim for such indemnification within the applicable survival periods set forth
in Section 10.01 hereof.
10.03 AGREEMENT OF BUYER TO INDEMNIFY
Subject to the conditions and provisions of this Article 10, Buyer
hereby agrees to indemnify, defend and hold harmless the Stockholder and Holly
from and against and in respect of all Losses resulting from, imposed upon or
incurred by the Stockholder or Holly, directly or indirectly, by reason of or
resulting from any misrepresentation or breach of any representation or
warranty, or noncompliance with any conditions or other Agreements, given or
made by Buyer in this Purchase Agreement or in the Exhibits or in any Document
furnished by or on behalf of the Buyer pursuant to this Purchase Agreement;
provided, however, that, except for Losses arising out of a willful or
intentional breach of representations, warranties or covenants by Buyer, none
of which shall be subject to the following limitations, Buyer shall have no
liability under this Section 10.03 until the aggregate amount of
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claims for Losses asserted under such Section exceeds One Hundred Thousand
Dollars ($100,000); provided, further, however, in no event shall the aggregate
amount of liability of Buyer for Losses asserted under this Section 10.03
(except for Losses arising out of a willful or intentional breach of
representations, warranties or covenants by Buyer), exceed Five Million Dollars
($5,000,000). It shall be a condition to the rights of the Stockholder and
Holly to indemnification pursuant to this Section that such parties shall
assert a claim for such indemnification within the applicable survival periods
set forth in Section 10.01 hereof.
10.04 CONDITIONS OF INDEMNIFICATION
The obligations and liabilities of the Company, the
Stockholder and Buyer hereunder with respect to their respective indemnities
pursuant to this Article 10, resulting from any Third Party Claim shall be
subject to the following terms and conditions:
(a) The party seeking indemnification (the "Indemnified
Party") must give the other party (the "Indemnifying Party"), notice of any
Third Party Claim which is asserted against, resulting to, imposed upon or
incurred by the Indemnified Party and which may give rise to liability of the
Indemnifying Party pursuant to this Article 10, stating (to the extent known or
reasonably anticipated) the nature and basis of such Third Party Claim and the
amount thereof; provided that the failure to give such notice shall not affect
the rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual material damage by reason of such
failure.
(b) Subject to Section 10.04(c) below, the Indemnifying
Party shall have the right to undertake, by counsel or other representatives of
its own choosing, the defense of such Third Party Claim at the Indemnifying
Party's risk and expense.
(c) In the event that (i) the Indemnifying Party shall
elect not to undertake such defense, (ii) within a reasonable time after notice
from the Indemnified Party of any such Third Party Claim, the Indemnifying
Party shall fail to undertake to defend such Third Party Claim, (iii) there is
a reasonable probability that such Third Party Claim may materially and
adversely affect the Indemnified Party other than as a result of money damages
or other money payments, or (iv) there is a reasonable probability that the
amount of Losses asserted under such Third Party Claim may exceed the
Indemnifying Party's obligations under this Article 10, then the Indemnified
Party (upon further written notice to the Indemnifying Party) shall have the
right to undertake the defense, compromise or settlement of such Third Party
Claim, by counsel or other representatives of its own choosing, on behalf of
and for the account and risk of the
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Indemnifying Party; provided, however, that if the Indemnified Party undertakes
defense of such Third Party Claim under clause (iv) above, the Indemnified
Party shall not, without the Indemnifying Party's written consent (which
consent shall not be unreasonably withheld), settle such Third Party Claim if
the Indemnifying Party will be responsible for any amounts under such
settlement. In the event that the Indemnified Party undertakes the defense of
a Third Party Claim under this Section 10.04(c), the Indemnifying Party shall
pay to the Indemnified Party, in addition to the other sums required to be paid
hereunder, the reasonable costs and expenses incurred by the Indemnified Party
in connection with such defense, compromise or settlement as and when such
costs and expenses are so incurred.
(d) Anything in this Section 10.04 to the contrary
notwithstanding, (i) the Indemnifying Party shall not, without the Indemnified
Party's written consent, settle or compromise such Third Party Claim or consent
to entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party of
a release from all liability in respect of such Third Party Claim in form and
substance satisfactory to the Indemnified Party; (ii) in the event that the
Indemnifying Party undertakes defense of such Third Party Claim, the
Indemnified Party, by counsel or other representative of its own choosing and
at its sole cost and expense, shall have the right to participate in the
defense, compromise or settlement thereof and each party and its counsel and
other representatives shall cooperate with the other party and its counsel and
representatives in connection therewith; and (iii) in the event that the
Indemnifying Party undertakes defense of such Third Party Claim, the
Indemnifying Party shall have an obligation to keep the Indemnified Party
informed of the status of the defense of such Third Party Claim and furnish the
Indemnified Party with all documents, instruments and information that the
Indemnified party shall reasonably request in connection therewith.
10.05 NO RECOURSE AGAINST THE COMPANY
The Stockholder and Holly each hereby irrevocably waives any
and all right to recourse against the Company with respect to any
misrepresentation or breach of any representation, warranty or indemnity, or
noncompliance with any conditions or covenants, given or made by the
Stockholder, Holly or the Company in this Purchase Agreement. Neither the
Stockholder nor Holly shall be entitled to contribution from, subrogation to or
recovery against the Company with respect to any liability of the Stockholder
or Holly that may arise under or pursuant to this Purchase Agreement or the
transactions contemplated hereby.
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10.06 SPECIFIC PERFORMANCE
In addition to any other remedies which Buyer may have at law
or in equity, the Company, the Stockholder and Holly hereby acknowledge that
the Company and its capital stock are unique, and that the harm to Buyer
resulting from breaches by the Company, the Stockholder or Holly of their
respective obligations cannot be adequately compensated by damages.
Accordingly, the Company, the Stockholder and Holly agree that Buyer shall have
the right to have all obligations, undertakings, Agreements, covenants and
other provisions of this Purchase Agreement specifically performed by the
Company, the Stockholder and Holly, as the case may be, and that Buyer shall
have the right to obtain an order or decree of such specific performance in any
of the courts of the United States of America or of any state or other
political subdivision thereof.
10.07 REMEDIES CUMULATIVE
The remedies provided herein shall be cumulative and shall
not preclude the assertion by the Company, the Stockholder or Buyer of any
other rights or the seeking of any other remedies against the other, or their
respective successors or assigns.
11. TERMINATION
11.01 TERMINATION
This Purchase Agreement may be terminated at any time before
the Closing Date under any one or more of the following circumstances:
(a) by the mutual written consent of all of the parties
hereto;
(b) by Buyer, the Company or the Stockholder, by written
notice of termination delivered to the other parties if the Closing shall not
have occurred prior to July 31, 1997; provided, however, that the right to
terminate this Purchase Agreement under this Section 11.01(b) shall not be
available to any party whose breach of representations, warranties, covenants
or agreements contained in this Purchase Agreement has been the cause of, or
resulted in, the failure of the Closing to occur by such date;
(c) by Buyer if the Company, the Stockholder or Holly
shall have breached, or failed to comply with, in any material respect any of
their respective obligations under this Purchase Agreement or any
representation or warranty made by such party shall have been incorrect in any
material respect when made or shall
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have since ceased to be true and correct in any material respect, and such
breach, failure or misrepresentation is not cured within thirty (30) days after
notice thereof;
(d) by the Company or the Stockholder if Buyer shall
have breached, or failed to comply with, in any material respect any of its
obligations under this Purchase Agreement or any representation or warranty
made by Buyer shall have been incorrect in any material respect when made or
shall have since ceased to be true and correct in any material respect, and
such breach, failure or misrepresentation is not cured within thirty (30) days
after notice thereof; and
(e) by Buyer, the Company or the Stockholder if any
decree, permanent injunction, judgment, order or other action by any court of
competent jurisdiction or any governmental or regulatory authority preventing
or prohibiting consummation of the transactions under this Purchase Agreement
shall have become final and non-appealable.
11.02 EFFECT OF TERMINATION
In the event this Purchase Agreement is terminated as
provided in this Article 11, this Purchase Agreement shall forthwith become
wholly void and of no effect, and the parties shall be released from all future
obligations hereunder; provided, however, that the obligations of the parties
as to confidentiality provided in Section 3.02 and the provisions of Section
12.03 relating to the payment of expenses, shall not be extinguished but shall
survive such termination, and nothing herein shall relieve any party for any
breach of this Agreement. The parties hereto shall have any and all remedies
to enforce such obligations provided at law or in equity (including, without
limitation, specific performance).
12. MISCELLANEOUS
12.01 ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to
be taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further Documents, and will obtain such
consents, as may be necessary or as may be reasonably requested in order to
fully effectuate the purposes, terms and conditions of this Purchase Agreement.
12.02 BROKERS
(a) The Company and the Stockholder jointly and
severally represent and warrant to Buyer that, except as set forth in the
Disclosure Schedule,
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neither such party has (i) engaged any broker, finder or agent in connection
with the transactions contemplated by this Purchase Agreement or (ii) incurred
(or will incur) any unpaid liability to any broker, finder or agent for any
brokerage fees, finders' fees or commissions, with respect to the transactions
contemplated by this Purchase Agreement.
(b) Buyer represents and warrants to the Company and the
Stockholder that Buyer has not (i) engaged any broker, finder or agent in
connection with the transactions contemplated by this Purchase Agreement or
(ii) incurred (and will not incur) any unpaid liability to any broker, finder
or agent for any brokerage fees, finders' fees or commissions, with respect to
the transactions contemplated by this Purchase Agreement.
(c) Each party agrees to indemnify, defend and hold
harmless each of the other parties from and against any and all claims asserted
against such parties for any fees or commissions other than those set forth in
this Section by any persons purporting to act or to have acted for or on behalf
of the indemnifying party.
12.03 EXPENSES
Subject to the provisions of Article 10 and except for the
HSR Act filing fee described in Section 3.01(c), each party hereto shall pay
its own expenses incident to this Purchase Agreement and the transactions
contemplated hereunder, including all legal and accounting fees and
disbursements.
12.04 ASSIGNMENT
Buyer shall have the right to assign its rights and
obligations under this Purchase Agreement (except for its obligations under
Section 10.03), in whole or in part, to an entity in which Buyer owns all of
the issued and outstanding stock (to the extent permitted by law). Except as
described in the immediately preceding sentence, no party shall assign its
rights and obligations under this Purchase Agreement, in whole or in part,
whether by operation of law or otherwise, without the prior written consent of
the other parties hereto, and any such assignment contrary to the terms hereof
shall be null and void and of no force and effect. In no event shall the
assignment by any party of its respective rights or obligations under this
Purchase Agreement, whether before or after the Closing, release such party
from its respective liabilities and obligations hereunder.
12.05 ENTIRE AGREEMENT; AMENDMENT
This Purchase Agreement, including the Disclosure Schedule,
the Exhibits and other Documents referred to herein or furnished pursuant
hereto,
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constitute the entire Agreement among the parties hereto with respect to the
transactions contemplated herein, and supersede all prior oral or written
Agreements, commitments or understandings with respect to the matters provided
for herein. No amendment, modification or discharge of this Purchase Agreement
shall be valid or binding unless set forth in writing and duly executed and
delivered by the party against whom enforcement of the amendment, modification,
or discharge is sought.
12.06 WAIVER
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Purchase Agreement or under
any other Documents furnished in connection with or pursuant to this Purchase
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial
exercise of any such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
12.07 CONSENT TO JURISDICTION
(a) This Purchase Agreement and the duties and
obligations of the parties hereunder and under each of the Documents referred
to herein shall be enforceable against any party in the courts of the United
States of America and of the Commonwealth of Virginia. For such purpose, each
party hereto hereby irrevocably submits to the non-exclusive jurisdiction of
such courts, and agrees that all claims in respect of this Purchase Agreement
and such other Documents may be heard and determined in any of such courts.
(b) Each party hereto hereby irrevocably agrees that a
final judgment of any of the courts specified above in any action or proceeding
relating to this Purchase Agreement or to any of the other Documents referred
to herein or therein shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
12.08 SEVERABILITY
If any part of any provision of this Purchase Agreement or
any other Agreement or document given pursuant to or in connection with this
Purchase Agreement shall be invalid or unenforceable in any respect, such part
shall be ineffective to the extent of such invalidity or unenforceability only,
without in any
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way affecting the remaining parts of such provision or the remaining provisions
of this Purchase Agreement.
12.09 GOVERNING LAW
This Purchase Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the Commonwealth of Virginia
(excluding the choice of law rules thereof).
12.10 NOTICES
All notices, demands, requests, or other communications which
may be or are required to be given, served, or sent by any party to any other
party pursuant to this Purchase Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or transmitted by
telegram, telecopy or telex, addressed as follows:
<TABLE>
<S> <C>
(i) If to Buyer:
BTG, Inc.
3877 Fairfax Ridge Road
Fairfax, Virginia 22030
Attention: Deborah Fox, Esq.
Telecopy No.: (703) 383-4025
with a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
Attention: David B.H. Martin, Esq.
Telecopy No.: (202) 637-5910
(ii) If to the Company:
Nations, Inc.
788 Shrewsbury Avenue
Tinton Falls, New Jersey 07724-3080
Attention: President
Telecopy No.: (908) 741-6622
</TABLE>
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<PAGE> 53
<TABLE>
<S> <C>
with a copy (which shall not constitute notice) to:
Shanley & Fisher, P.C.
131 Madison Avenue
Morristown, New Jersey 07962-1979
Attention: Stewart E. Lavey, Esq.
Telecopy No.: (201) 285-1625
(iii) If to the Stockholder or Holly:
c/o Nations, Inc.
788 Shrewsbury Avenue
Tinton Falls, New Jersey 07724-3080
Telecopy No.: (908) 741-6622
with a copy (which shall not constitute notice) to:
Shanley & Fisher, P.C.
131 Madison Avenue
Morristown, New Jersey 07962-1979
Attention: Stewart E. Lavey, Esq.
Telecopy No.:(201) 285-1625
</TABLE>
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request, or communication which shall be hand
delivered, sent, mailed, telecopied or telexed in the manner described above,
or which shall be delivered to a telegraph company, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at
such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or (with respect to a telecopy or telex) the answerback being
deemed conclusive, but not exclusive, evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
12.11 HEADINGS
Article and Section headings contained in this Purchase
Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Purchase Agreement for any purpose, and shall not in any
way define or affect the meaning, construction or scope of any of the
provisions hereof.
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<PAGE> 54
12.12 EXECUTION IN COUNTERPARTS
To facilitate execution, this Purchase Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signatures of, or on behalf of, each party, or that the signatures of
all persons required to bind any party, appear on each counterpart; but it
shall be sufficient that the signature of, or on behalf of, each party, or that
the signatures of the persons required to bind any party, appear on one or more
of the counterparts. All counterparts shall collectively constitute a single
Agreement. It shall not be necessary in making proof of this Purchase
Agreement to produce or account for more than a number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
12.13 LIMITATION ON BENEFITS
The covenants, undertakings and agreements set forth in this
Purchase Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns, except that the
agreements set forth in Article 10 also shall be for the benefit of, and
enforceable by, Buyer Indemnified Persons, Company Indemnified Persons and
their respective successors, heirs, executors, administrators, legal
representatives or permitted assigns.
12.14 BINDING EFFECT
Subject to any provisions hereof restricting assignment,
this Purchase Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and assigns.
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<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have duly executed
this Stock Purchase Agreement, or have caused this Stock Purchase Agreement to
be duly executed on their behalf, as of the day and year first above written.
BUYER:
-----
BTG, INC.
By: /s/ EDWARD H. BERSOFF
------------------------
Name: Edward H. Bersoff
Title: President and Chief
Executive Officer
COMPANY:
-------
NATIONS, INC.
By: /s/ JOHN A. PLA
------------------
Name: John A. Pla
Title: President and Chief
Executive Officer
STOCKHOLDER:
-----------
/s/ JOHN A. PLA
------------------
JOHN A. PLA
/S/ GEORGE J. HOLLY III
-------------------------
GEORGE J. HOLLY III
<PAGE> 56
EXHIBIT A TO THE
STOCK PURCHASE AGREEMENT
DEFINITIONS
"8(a) Contracts" has the meaning set forth in Section 4.17(e)
of the Purchase Agreement.
"Additional Shares" has the meaning set forth in the recitals
to the Purchase Agreement.
"Affiliate" means: (a) with respect to an individual person,
any member of such person's immediate family, consisting of such person's
spouse or children; (b) with respect to an entity, any officer or director of
such entity; and (c) with respect to an individual person or entity, any person
or entity which directly or indirectly, through one or more intermediaries,
Controls, is Controlled by, or is under common Control with such person or
entity.
"Agreement" means any binding agreement between two or more
persons (or entities) with respect to their relative rights and/or obligations
or with respect to a thing done or to be done.
"Article" means an Article of this Purchase Agreement.
"Assets" means assets of every kind and everything that is or
may be available for the payment of liabilities (whether inchoate, tangible or
intangible), including, without limitation, real and personal property.
"Audited Financial Statements" has the meaning set forth in
Section 4.06(a) of the Purchase Agreement.
"Buyer" means BTG, Inc., a Virginia corporation.
"Buyer Indemnified Persons" means Buyer and its subsidiaries
and their respective officers and directors.
"Closing" means the closing of the sale and purchase of
shares of the Company's capital stock pursuant to this Purchase Agreement.
"Closing Date" means 10:00 a.m. local time on the later of
(i) five (5) business days after all applicable waiting periods with any
extensions thereof under the HSR Act shall have expired or been terminated, or
(ii) the satisfaction or, if permissible, waiver of the closing conditions set
forth in Articles 7 and 8, or such
<PAGE> 57
other time and such date as shall be mutually agreed upon by Buyer, the Company
and the Stockholder.
"Code" means the Internal Revenue Code of 1986, as amended,
and all regulations promulgated thereunder.
"Common Control Entity" means any trade or business under
common control (as such term is defined in Section 414(b) or 414(c) of the
Code) with the Company.
"Company" means Nations, Inc., a New Jersey corporation.
"Company Tax Returns" means all returns, reports,
declarations and information statements required to be filed by the Company
(without regard to extensions of time permitted by law or otherwise) with any
federal, state, local or foreign governmental authority or agency.
"Confidentiality Agreement" means that certain
Confidentiality Agreement dated October 28, 1996 between the Company and Buyer.
"Control" means possession, directly or indirectly, of power
to direct or cause the direction of management or policies (whether through
ownership of voting securities, by Agreement or otherwise).
"Current Balance Sheet Date" means December 31, 1996.
"Current Shares" has the meaning set forth in the recitals to
the Purchase Agreement.
"Defined Benefit Plan" means a Plan that is or was a "defined
benefit plan" as such term is defined in Section 3135 of ERISA.
"Disclosure Schedule" means the disclosure schedule
identified as the Disclosure Schedule to the Purchase Agreement.
"Documents" means any written or similar material (including,
without limitation, computer storage media) on which is recorded (by letters,
numbers or other marks) information, including, without limitation, legal
opinions, mortgages, indentures, notes, instruments, leases, Agreements,
insurance policies, reports, studies, financial statements (including, without
limitation, the notes thereto), other written financial information, schedules,
certificates, charts, maps, plans, letters, memoranda and all similar
materials.
"DOL" means the Department of Labor or its successors.
ExA -ii-
<PAGE> 58
"Encumbrance" means any mortgage, lien, pledge, encumbrance,
security interest, deed of trust, option, encroachment known to the Company or
the Stockholder, reservation, order, decree, judgment, restriction, charge,
Agreement, claim or equity of any kind.
"Environmental Laws" means any Laws (including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act), including any regulations promulgated pursuant to such Laws,
now or hereafter in effect relating to the generation, production,
installation, use, storage, treatment, transportation, release, threatened
release, or disposal of Hazardous Materials, noise control, or the protection
of human health or the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and all Laws promulgated pursuant thereto or in connection
therewith.
"ESOP" means any "employee stock ownership plan" as such term
is defined in Section 407(d)(6) of ERISA or Section 4975(c)(7) of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and all regulations promulgated thereunder.
"Exhibit" means an exhibit attached to the Purchase
Agreement.
"Financial Statements" has the meaning set forth in Section
4.06(b) of the Purchase Agreement.
"Government Contract" means any Agreement with or for (and
any subcontract at any tier under an Agreement with or for) any federal, state
or local governmental agency, department, commission, board, bureau, authority
or instrumentality.
"Hazardous Materials" means any wastes, substances, radiation
or materials (whether solids, liquids or gases) (i) which are defined as
"pollutants", "contaminants", "hazardous wastes", "hazardous substances",
"toxic substances", "radioactive materials", "solid wastes" or other similar
designations in, or otherwise subject to regulation under, any Environmental
Laws; (ii) without limitation, which contain polychlorinated biphenyls (PCBs),
asbestos and asbestos-containing materials, lead-based paints,
urea-formaldehyde foam insulation, and petroleum or petroleum products
(including, without limitation, crude oil or any fraction thereof) or (iii)
which are known to the Company or the Stockholder to pose a hazard to human
health, safety, natural resources, industrial hygiene, or the environment, or
an impediment to working conditions.
ExA -iii-
<PAGE> 59
"Holly" means George J. Holly III.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
"Huntington Bank Promissory Notes" means the following
promissory notes made to Huntington National Bank West Virginia ("Huntington
Bank"): (i) Revolving Line of Credit Master Note dated December 19, 1996, in
the original principal amount of Four Million Five Hundred Thousand Dollars
($4,500,000) by the Company, as Maker; (ii) Term Loan Promissory Note dated
December 19, 1996, in the original principal amount of Five Hundred Thousand
Dollars ($500,000) by the Company, as Maker; (iii) Promissory Note dated August
15, 1993, in the original principal amount of Two Hundred Thirty-One Thousand
Dollars ($231,000) by the Stockholder, as Maker; and (iv) Promissory Note dated
August 15, 1993, in the original principal amount of Three Hundred Ten Thousand
Dollars ($310,000) by John Witkowski, as Maker.
"Indemnified Party" has the meaning set forth in Section
10.04(a).
"Indemnifying Party" has the meaning set forth in Section
10.04(a).
"Individual Account Plan" means a Plan that is or was an
"individual account plan" as such term is defined in Section 3(34) of ERISA.
"Intellectual Property" means all franchises, patents, patent
qualifications, trademarks, service marks, trade names, trade styles, brands,
private labels, copyrights, know-how, computer software, industrial designs and
drawings and general intangibles of a like nature, trade secrets, licenses, and
rights and filings with respect to the foregoing, and all reissues, extensions
and renewals thereof.
"ISRA" means the New Jersey Industrial Site Recovery Act, as
amended, and all regulations promulgated thereto or in connection therewith.
"Laws" means all foreign, federal, state and local statutes,
laws, ordinances, regulations, rules, resolutions, orders, determinations,
writs, injunctions, awards (including, without limitation, awards of any
arbitrator), judgments and decrees applicable to the specified persons or
entities and to the businesses and Assets thereof (including, without
limitation, Laws relating to securities registration and regulation; the sale,
leasing, ownership or management of real property; employment practices, terms
and conditions, and wages and hours; building standards, land use and zoning;
safety, health and fire prevention; and environmental protection, including
Environmental Laws).
ExA -iv-
<PAGE> 60
"Losses" means all demands, losses, claims, actions or causes
of action, assessments, damages, liabilities, costs and expenses, including,
without limitation, interest, penalties and reasonable attorneys' fees and
disbursements.
"Material Adverse Effect" means a material adverse effect
upon the business, operations, Assets or condition (financial or otherwise) of
the Company taken as a whole.
"Minimum Funding Plan" means a Pension Plan that is subject
to Title I, Subtitle B, Part 3 of ERISA (concerning funding).
"Multiemployer Plan" means a "multiemployer plan" as such
term is defined in Section 3(37) of ERISA.
"Ordinary Course of Business" means ordinary course of the
Company's business consistent with past practices.
"Other Arrangement" means a benefit program or practice
providing for bonuses, incentive compensation, vacation pay, severance pay,
insurance, restricted stock, stock options, employee discounts, company cars,
tuition reimbursement or any other perquisite or benefit (including, without
limitation, any fringe benefit under Section 132 of the Code) to employees,
officers or independent contractors that is not a Plan.
"Pension Plan" means an "employee pension benefit plan" as
such term is defined in Section 3(2) of ERISA.
"Plan" means any plan, program or arrangement, whether or not
written, that is or was an "employee benefit plan" as such term is defined in
Section 3(3) of ERISA and (a) which was or is established or maintained by the
Company; (b) to which the Company contributed or was obligated to contribute or
to fund or provide benefits; or (c) which provides or promises benefits to any
person who performs or who has performed services for the Company and because
of those services is or has been (i) a participant therein or (ii) entitled to
benefits thereunder.
"Proposal" means any proposal, offer or indication of
interest from any person, entity or group relating to any acquisition or
purchase of all or (other than in the Ordinary Course of Business) any portion
of the Assets of, or any equity in, the Company or any business combination
with the Company, other than the transactions contemplated by the Purchase
Agreement.
ExA -v-
<PAGE> 61
"Purchase Agreement" means this Stock Purchase Agreement,
including the Disclosure Schedule and all Exhibits hereto.
"Purchase Price" has the meaning set forth in Section 2.02 of
the Purchase Agreement.
"Qualified Plan" means a Pension Plan that satisfies or is
intended to satisfy, the requirements for tax qualification described in
Section 401 of the Code.
"Real Property" means the portions of real property (and all
improvements thereon) leased or used by the Company.
"Release" means any emission, spill, seepage, leak, escape,
discharge, leaching, injection, pumping, pouring, emptying, dumping, disposal,
or release of Hazardous Materials from the Real Property into or upon the air,
soil, improvements, surface water, groundwater, the sewer, septic system, storm
drain, publicly owned treatment works, or waste treatment, storage or disposal
systems at, on, above, or under the Real Property.
"SBA" has the meaning set forth in Section 3.01(d) of the
Purchase Agreement.
"SEC" means the Securities and Exchange Commission.
"Section" means a Section (or a subsection) of the Purchase
Agreement.
"Securities Act" means the Securities Act of 1933, as
amended, and all regulations promulgated thereunder.
"Statutory Waiver Plan" means a Pension Plan that is not
subject to Title I, Subtitle B, Part 3 of ERISA (concerning funding).
"Stockholder" means Mr. John A. Pla.
"Stockholder Loans" means all outstanding loans and advances
made by the Company to the Stockholder, and all other indebtedness of the
Stockholder for amounts borrowed from the Company and advances made by the
Company on behalf of the Stockholder (including amounts outstanding as of the
Closing Date under the Huntington Bank Promissory Note made by the
Stockholder), including, without limitation, accrued interest thereon.
"Subsidiary" means any corporation, partnership, joint
venture or other legal entity of which the Company (either alone or through or
together with any other Subsidiary) (i) owns, directly or indirectly, fifty
percent (50%) or more of
ExA -vi-
<PAGE> 62
the stock, partnership interests or other equity interests the holders of which
are generally entitled to vote for the election of the board of directors or
other governing body of such corporation, partnership, joint venture or other
legal entity; or (ii) possesses, directly or indirectly, control over the
direction of management or policies of such corporation, partnership, joint
venture or other legal entity (whether through ownership of voting securities,
by agreement or otherwise).
"Taxes" means all federal, state, local and foreign taxes
(including, without limitation, income, profit, franchise, sales, use, real
property, personal property, ad valorem, excise, employment, social security
and wage withholding taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imports, duties, withholdings, or other similar charges
imposed by any governmental or quasi-governmental authorities, and any
interest, penalties or additions to tax imposed thereon or in connection
therewith.
"Third Party Claim" means any claim or other assertion of
liability by any third party.
"Title I Plan" means a Plan that is subject to Title I of
ERISA.
"Unaudited Financial Statements" has the meaning set forth in
Section 4.06(b) of the Purchase Agreement.
"Welfare Plan" means an "employee welfare benefit plan" as
such term is defined in Section 3(1) of ERISA.
ExA -vii-
<PAGE> 63
The remaining exhibits and schedules to the Stock Purchase Agreement are not
included with this Current Report on Form 8-K. The Company will provide those
exhibits and schedules upon the request of the Securities and Exchange
Commission.
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<PAGE> 1
EXHIBIT 99
<TABLE>
<S> <C> <C> <C>
[BTG LOGO] BTG Incorporated INVESTORS CONTACT: EDITORS CONTACT:
3877 Fairfax Ridge Road John Graham Theda Parrish
News Release Fairfax, VA 22030-7448 Vice President, Communications
703-383-8000 Corporate Affairs 703-383-8145
FAX: 703-383-8999 703-383-8147 703-573-8135 (Home)
[email protected] Fax: 703-383-4070 Fax: 703-383-4070
www.btg.com [email protected] [email protected]
</TABLE>
BTG COMPLETES NATIONS ACQUISITION
FAIRFAX, VIRGINIA, June 16, 1997 -- BTG, Inc. (BTGI: Nasdaq) announced that it
has completed the acquisition of Nations, Inc., a privately held software and
systems engineering company headquartered in Tinton Falls, New Jersey. BTG said
it purchased all of Nations' stock for $10 million in cash. BTG also refinanced
approximately $2 million of Nations' bank debt.
In its last fiscal year, which ended March 31, 1997, BTG reported revenue of
$400 million. Nations revenue for its fiscal year ended December 31, 1996, was
$45 million. With the addition of Nations' 386 employees, the combined BTG
organization has more than 1500 employees and facilities in 17 states, the
District of Columbia, Germany, Belgium, and the United Kingdom.
Nations' capabilities include life cycle software engineering, program
management services, systems engineering, and integrated logistics support
services, which complement BTG's broad range of information technology services
and products. BTG specializes in systems engineering, integration and network
systems, Internet/intranet/extranet access and services, community networks,
custom computer manufacturing, and the reselling of hardware, software and
services.
Nations' clients, which include the U.S. Army, the U.S. Marine Corps, the
Department of Justice, and other federal agencies, expands BTG's client base
which includes both defense and civilian agencies of the federal government,
state and local government agencies, and commercial clients.
Additional information on BTG is available on the Internet at www.btg.com/, by
e-mail at [email protected], or by calling 703-383-8000.
###
BTG-97-22
