Acquisition and Merger Agreement - CACI International Inc. and IMS Technologies Inc.
Acquisition and Merger Agreement
Dated as of December 21, 1995
among
CACI International Inc,
CACI, Inc.,
CACI Acquisition Corporation
and
IMS Technologies, Inc.
Table of Contents
-----------------
ARTICLE 1
THE MERGER
1.1 Merger Terms
1.2 Merger Consideration
1.3 Consulting Agreements
1.4 Closing
1.5 Approval by IMS Shareholders
1.6 Actions Subsequent to the Closing
1.7 Divestiture of Excluded Assets
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF IMS
AND THE PRINCIPAL SHAREHOLDERS
2.1 Corporate Status of IMS
2.2 Subsidiaries of IMS
2.3 Authority for Agreement
2.4 No Default or Violation
2.5 Corporate Documents
2.6 Books and Records
2.7 Capitalization of IMS
2.8 Financial Statements
2.9 Absence of Material Adverse Changes
2.10 Title to Assets; Condition
2.11 Intellectual Property
2.12 Inventories
2.13 Material Contracts
2.14 Agreements, Contracts and Commitments
2.15 Banking Facilities, Powers of Attorney, etc.
2.16 Customers and Orders
2.17 Compliance with Applicable Law
2.18 Litigation
2.19 Insurance
2.20 Tax Matters
2.21 Employee Benefit Plans; Compliance with ERISA
2.22 Employment-Related Matters
2.23 Environmental
2.24 Absence of Certain Payments
2.25 Interests of Officers
2.26 No Brokers or Finders
2.27 No Pending Actions
2.28 No Misrepresentations
2.29 No Implied Representations
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CACI, CASUB, AND ACQUISITION
3.1 Corporate Status of CACI, CASub, and Acquisition
3.2 Authority for Agreement
3.3 No Default or Violation
3.4 Responsible Prospective Contractor
3.5 No Brokers or Finders
3.6 No Pending Actions
3.7 No Misrepresentations
ARTICLE 4
COVENANTS
4.1 Conduct of Business
4.2 Payment of Taxes
4.3 Filings and Submissions
4.4 Release of Information
4.5 Confidentiality
4.6 Further Assurances
4.6.1 Generally
4.6.2 Novation of the Material Contracts
4.7 Defense of Claims and Litigation
4.8 Indemnification
4.8.1 Indemnification of CACI, CASub and IMS
4.8.2 Indemnification of the Principal Shareholders
4.8.3 Third Party Claims
4.8.4 Minimum Liability
4.8.5 Limitation of the Principal Shareholders' Liability
4.9 Indemnification of IMS Directors and Officers
4.10 Annuity
ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions to Obligations of Each Party
5.2 Conditions to Obligations of CACI, CASub, and Acquisition
5.3 Conditions to Obligations of IMS and the Principal Shareholders
ARTICLE 6
TERMINATION
6.1 Methods of Termination
6.2 Payments on Termination
6.3 Effect of Termination
ARTICLE 7
DEFINITIONS AND MISCELLANEOUS
7.1 Definitions of Certain Terms
7.2 Brokerage
7.3 Amendments and Supplements
7.4 Extensions and Waivers
7.5 Survival of Representations and Warranties
7.6 Expenses
7.7 Letter of Intent
7.8 Governing Law
7.9 Alternative Dispute Resolution
7.10 Notice
7.11 Entire Agreement, Assignability, etc.
7.12 Cumulative Rights and Remedies
7.13 Severability
7.14 Counterparts
<PAGE>
Acquisition and Merger Agreement
Acquisition and Merger Agreement (the "Agreement"), dated as of December
21, 1995, by and among CACI International Inc, a Delaware corporation
("CACI"), CACI, Inc., a Delaware corporation and a wholly-owned subsidiary of
CACI ("CASub"), CACI Acquisition Corporation, a Delaware corporation and a
wholly- owned subsidiary of CASub ("Acquisition"), IMS Technologies, Inc., a
Delaware corporation ("IMS," which term shall include the subsidiaries of IMS
unless the context otherwise requires), and John Yeh, Joseph Yeh, James Yeh,
and Jeffry Yeh (collectively, the "Principal Shareholders").
W I T N E S S E T H
WHEREAS, CACI has a strong commitment to the government information
technology industry and IMS provides information technology and engineering
and support services to the United States Government and other similar
customers; and
WHEREAS, CACI and IMS wish to combine their businesses in a merger
transaction, after which IMS will be operated as a wholly-owned subsidiary of
CASub;
NOW, THEREFORE, CACI, CASub, Acquisition, IMS, and the Principal
Shareholders hereby agree as follows:
Article 1
THE MERGER
1.1 Merger Terms. Upon and subject to the terms and conditions hereof,
and on the basis of the representations, warranties, covenants and agreements
contained herein, at the "Effective Time" (as defined in Section 7.1),
Acquisition shall be merged with and into IMS (the Surviving Corporation")
pursuant to the terms of the Merger Agreement attached hereto as Exhibit A
(the "Merger").
1.2 Merger Consideration. Upon the effectiveness of the Merger, the
shares of Common Stock of Acquisition outstanding immediately before the
Effective Time shall be converted into shares of Common Stock (par value
$0.01 per share) of IMS, and the shares of Common Stock of IMS outstanding
immediately before the Effective Time shall be converted into the right to
receive payment on a pro rata basis of an aggregate of Six Million Five
Hundred Thousand Dollars ($6,500,000), less the amount of any expenses of the
Merger properly chargeable to IMS or to any Principal Shareholder pursuant to
this Agreement and paid by CACI, CASub, or Acquisition at or before the
Closing (the "Merger Consideration").
1.3 Consulting Agreements. In connection with the execution, delivery
and performance of this Agreement and the transactions contemplated hereby,
each of the Principal Shareholders agrees to execute and to deliver at or
prior to the Closing a Consulting Agreement in form and substance
satisfactory to CACI, to the effect set forth in Exhibit 1.3.1 (the
"Consulting Agreement"). In consideration of the execution and delivery of
the Consulting Agreements, CACI and CASub shall pay or shall cause the
Surviving Corporation to pay to each of the Principal Shareholders the sum
set forth in Exhibit 1.3.2, in accordance with the schedule set forth in that
Exhibit.
1.4 Closing.
1.4.1 The closing of the Merger (the "Closing") shall be held at the
offices of CACI, 1100 North Glebe Road, Arlington, VA 22201, or at such other
location as the parties hereto may mutually agree upon in writing, at 2:00
P.M., local time, on December 21, 1995 or on such other date and at such
other time as the parties hereto may mutually agree upon in writing (the
"Closing Date").
1.4.2 At the Closing, IMS shall deliver to CACI and CASub:
1.4.2.1 the Consulting Agreements, duly executed by the
Principal Shareholders; and
1.4.2.2 the other instruments, agreements, certificates and
documents referred to in Section 5.2.
1.4.3 At or before the Effective Time, CACI and/or CASub shall
deliver:
1.4.3.1 to IMS or a disbursing agent acceptable to IMS, for
distribution to the shareholders of IMS, the Merger Consideration;
1.4.3.2 to each of the Principal Shareholders, the initial
payment provided in the respective Consulting Agreement with that Shareholder
(collectively, the "Initial Consulting Fees"); and
1.4.3.3 to IMS and the Principal Shareholders, the other
instruments, agreements, certificates and documents referred to in Section
5.3.
1.4.4 At the Closing, Acquisition and IMS shall execute and deliver
the Merger Agreement attached hereto as Exhibit A.
1.5 Approval by IMS Shareholders. On or before the Closing Date, IMS
will call a special meeting of its stockholders to be held on or before the
Closing Date to submit this Agreement, the Merger Agreement, and related
matters for the consideration and approval of the shareholders of IMS, which
approval will be recommended by IMS's Board of Directors. The meeting will
be called, held and conducted, and any proxies will be solicited, in
compliance with applicable law. At the meeting, each of the Principal
Shareholders will vote all shares of capital stock of IMS that he has the
power to vote in favor of approval.
1.6 Actions Subsequent to the Closing.
1.6.1 On or before December 28, 1995, IMS and the Principal
Shareholders shall cause the Merger Agreement to be delivered to CT
Corporation (or such other agent as CACI and IMS may mutually agree upon in
writing) (the "Agent") with instructions for the Agent to file the Merger
Agreement with the Secretary of State of the State of Delaware on December
28, 1995 at 4:00 P.M. Eastern standard time unless the Agent shall have
received, on or before December 28, 1995 at 3:00 P.M. Eastern standard time,
from CACI, CASub, Acquisition or IMS, or their attorneys, instructions not to
file the Merger Agreement with such Secretary of State.
1.6.2 On or before December 28, 1995 at 3:00 P.M., CACI, CASub and
Acquisition shall cause the Merger Consideration and the Initial Consulting
Fees to be wired to the client trust account of Michaels, Wishner & Bonner
(NationsBank Account No. 02308282) such funds to be held and disbursed in
accordance with the terms of the Escrow Agreement dated December 21, 1995
among the parties hereto and Michaels, Wishner & Bonner.
1.7 Divestiture of Excluded Assets. It is understood that the assets,
agreements and contracts listed on Exhibit 1.7 (the "Excluded Assets") are
not required for the conduct of the business of IMS by CACI or CASub and are
not intended to be included in the business being acquired by CACI and CASub.
Accordingly, prior to the Effective Time, IMS shall have (i) sold,
distributed to its shareholders or otherwise disposed of the assets listed on
Exhibit 1.7 and (ii) terminated or assigned to the Principal Shareholders the
agreements and contracts listed on Exhibit 1.7. Notwithstanding any other
provision of this Agreement, the disposition of the Excluded Assets in
accordance with this Section 1.7 shall not constitute a breach of any
representation, warranty, covenant or agreement of IMS or the Principal
Shareholders.
Article 2
REPRESENTATIONS AND WARRANTIES OF IMS
AND THE PRINCIPAL SHAREHOLDERS
Whenever any representation, warranty, covenant or agreement of IMS and the
Principal Shareholders is qualified or limited as to "Sellers' Knowledge,"
the term "Sellers' Knowledge" shall be limited to the actual knowledge of (a)
the Principal Shareholders and (b) the executive officer or officers of IMS
and its Subsidiaries (as defined below) whose management responsibilities
include the matters or operations referred to by such representation,
warranty, covenant or agreement. IMS and the Principal Shareholders jointly
and severally represent and warrant to CACI and CASub as follows:
2.1 Corporate Status of IMS. IMS is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. IMS is duly qualified to do business as a foreign corporation and
is in good standing in all jurisdictions in which the character of the
properties owned, leased or operated by IMS or the nature of the business
transacted by IMS makes such qualification necessary, except where failure to
be so qualified would not have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS.
2.2 Subsidiaries of IMS. Each of the corporations listed on Exhibit 3.2
(the "Subsidiaries"), except as set forth in that Exhibit, is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full corporate power to own, lease and
operate its properties and to conduct its business as currently owned,
leased, operated and conducted. Each of the Subsidiaries is duly qualified
to do business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the properties owned, leased or
operated by such Subsidiary or the nature of the business transacted by such
Subsidiary makes such qualification necessary, except where failure to be so
qualified would not have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties or
prospects of such Subsidiary. IMS has made available to CACI and CASub true,
complete and correct copies of the certificate of incorporation, by-laws and
other organizational documents of each of the Subsidiaries, each as in effect
on the date hereof. All of the shares of capital stock of each Subsidiary
are duly and validly issued, fully paid and nonassessable and are held of
record and beneficially by IMS, free and clear of any and all covenants,
conditions, restrictions, voting arrangements, liens, charges, encumbrances,
options, claims and rights whatsoever. There are no agreements relating to
or restricting the issuance, sale or transfer of shares of capital stock of
any Subsidiary, or affecting the rights of IMS with respect thereto. There
are no preemptive rights on the part of any Person and there are not, and as
of the Closing there will not be, outstanding any options, warrants,
agreements, commitments, conversion or other rights that obligate any
Subsidiary to issue or sell any shares of its capital stock or other
security. No Subsidiary has any obligation to acquire any class of
securities (including debt securities) of any Person.
2.3 Authority for Agreement. IMS has the full corporate power to own,
lease and operate its properties and to conduct its business as currently
owned, leased, operated and conducted, to execute, deliver, and perform this
Agreement, to consummate the other transactions contemplated herein and to
carry out its obligations hereunder. The execution, delivery and performance
of this Agree ment and the consummation of the transactions contemplated
hereby have been duly and validly authorized by IMS's Board of Directors and
stockholders.
2.4 No Default or Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
by IMS do not and will not (a) conflict with or result in a material
violation of any provision of the Certificate of Incorporation or By-Laws or
other organizational documents of IMS, or (b) with or without the giving of
notice or the lapse of time, or both, conflict with, or result in any
material violation or breach of or constitute a material default under, or
require the consent of any other party to, or result in any right to
accelerate or the creation of any material lien, charge or encumbrance on any
of the assets or properties of IMS pursuant to, or right of termination
under, any provision of any note, mortgage, indenture, lease, agreement or
other instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation to which IMS is a
party or by which IMS or any of its assets or properties may be bound or
which is applicable to IMS or any of its assets or properties. Other than in
connection with or in compliance with the provisions of the Securities Act,
the Exchange Act, the Hart-Scott-Rodino Antitrust Improvements Act (the "HSR
Act") and applicable state securities laws, no authorization, consent,
approval, license, order, or permit of, or declaration of, or filing with or
notice to, any governmental body or authority or any other person or entity
is necessary for the execution, delivery and performance of this Agreement by
IMS or the consummation by IMS of the transactions contemplated hereby.
2.5 Corporate Documents. IMS has heretofore made available to CACI and
CASub a true, complete and correct copy of IMS's Certificate of Incorporation
and By-Laws, each as amended to date. Such Certificate of Incorporation and
By-Laws are in full force and effect. IMS is not in violation of any
provision of its Certificate of Incorporation or By-Laws, except for such
violations that would not, individually or in the aggregate, have a material
adverse effect on the business, operations, assets, financial condition,
results of operations, properties or prospects of IMS. The minute books of
IMS (including the stock records), a copy of which has heretofore been
provided to CACI and CASub, are true, complete and correct and are the only
minute books of IMS.
2.6 Books and Records. The books of account, ledgers, order books,
records and documents of IMS accurately and completely reflect all material
information relating to the business of IMS, the location and condition of
its assets, and the nature of all transactions giving rise to the obligations
or accounts receivable of IMS.
2.7 Capitalization of IMS. IMS's authorized capital stock consists of
400,000 shares of Class A common stock, par value $0.01 per share, 125,000
shares of Class B common stock, par value $0.01 per share, and 25,000 shares
of undesignated preferred stock, par value $1.00 per share. There are 75,833
shares of Class B common stock (the "Shares") issued and outstanding and no
shares of Class A common stock or preferred stock issued and outstanding. An
aggregate of 40,847.75 of the Shares are held, and as of the Effective Time
will be held, of record and beneficially by the Principal Shareholders. All
of the Shares are, and as of the Effective Time will be, duly and validly
issued, fully paid and nonassessable. There are no dividends which have been
authorized, declared or set aside but not paid or which are in arrears with
respect to any shares of capital stock of IMS. There are no agreements
relating to or restricting the issuance, sale or transfer of shares of
capital stock of IMS. There are no preemptive rights on the part of any
Person and there are not, and as of the Closing there will not be,
outstanding any options, warrants, agreements, commitments, conversion or
other rights that obligate IMS to issue or sell any shares of its capital
stock or other security.
2.8 Financial Statements. IMS has previously delivered to CACI and CASub
the audited balance sheets of IMS as of September 30, 1993, 1994 and 1995
(the "Audited Balance Sheets") and the related statements of income, changes
in stockholders' equity, and cash flows of IMS for the fiscal years ended
September 30, 1993, 1994 and 1995 (collectively, together with the Audited
Balance Sheets, the "Audited Financial Statements"). The Audited Financial
Statements have been prepared in accordance with generally accepted
accounting principles applied consistently throughout the periods involved
(except as disclosed in the footnotes thereto) and have been certified by
Ernst & Young, LLP, IMS's independent auditors. The Audited Financial
Statements present fairly the financial position, results of operations and
cash flows of IMS at the dates and for the periods indicated. Attached
hereto as Exhibit 2.8 is the unaudited balance sheet of IMS as of December 2,
1995 (the "Unaudited Balance Sheet") and the related statements of income,
changes in stockholders' equity, and cash flows of IMS for the two month
period then ended (collectively, the "Unaudited Financial Statements"). The
Unaudited Financial Statements have been prepared in accordance with
generally accepted accounting principles, applied consistently with those
employed in the Audited Financial Statements, and present fairly the
financial position and results of operations of IMS as of the date and for
the period indicated, subject to the addition of notes and normal,
non-material year-end adjustments consistent with past practice. Except to
the extent set forth on the Unaudited Balance Sheet, IMS does not have any
material liabilities or obligations of any nature, whether accrued, absolute,
contingent or otherwise, whether due or to become due and whether the amount
thereof is readily ascertainable or not, other than (i) liabilities and
obligations described in the footnotes to the 1995 Audited Financial
Statements, (ii) liabilities and obligations incurred in the ordinary course
of business since the date of the Unaudited Balance Sheet, none of which
individually or in the aggregate has had or could reasonably be expected to
have a material adverse effect on the business, operations, assets, financial
condition, results of operations, properties or prospects of IMS, and (iii)
liabilities and obligations described in the Exhibits hereto.
2.9 Absence of Material Adverse Changes. Since September 30, 1995, IMS
has conducted its business only in the ordinary course and consistent with
prior practice and there has not occurred or arisen, whether or not in the
ordinary course of business, any adverse Material Change in the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS. Specifically, except as described in Exhibit 2.9, IMS has
not:
2.9.1 issued, sold, purchased, redeemed or granted any options,
warrants, conversion or other rights to purchase or otherwise acquire any
shares of its capital stock or any other security;
2.9.2 authorized, declared, set aside or paid any dividend or made
any other distribution with respect to any share of its capital stock or
other security;
2.9.3 incurred, discharged, satisfied or paid any obligation or
liability, accrued, absolute, contingent or otherwise, whether due or to
become due, material to IMS other than current liabilities and current
portion of long-term debt shown on the 1995 Audited Balance Sheet and current
liabilities incurred since the date of the 1995 Audited Balance Sheet in the
ordinary course of business and consistent with prior practice;
2.9.4 suffered any damage or destruction in the nature of a casualty
loss or other loss that would be treated as an extraordinary item pursuant to
Opinion No. 30 of the Accounting Principles Board, whether covered by
insurance or not, that might reasonably be expected to have a material
adverse effect on the business, operations, assets, financial condition,
results of operations, properties or prospects of IMS;
2.9.5 granted any increase in the compensation payable or to become
payable by IMS to its directors, officers, managers, consultants or agents or
any increase in benefits under any bonus, insurance, pension or other benefit
plan made for or with any of such persons, other than increases that are
provided to broad categories of employees and do not discriminate in favor of
the aforementioned persons;
2.9.6 encountered any labor union organizing activity material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of IMS, had any employee strike, work-stoppage,
slow-down or lockout, or any substantial threat of any imminent strike,
work-stoppage, slow-down or lock-out or had any adverse change in its
relations with its employees, agents, customers or suppliers or any
governmental or regulatory authorities, that, in any of the foregoing cases,
has had or could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the business, operations, assets,
financial condition, results of operations, properties or prospects of IMS;
2.9.7 transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any United States or
foreign intellectual property, or modified any existing rights with respect
thereto, other than in the ordinary course of business and consistent with
prior practice;
2.9.8 cancelled or compromised any debts or waived or permitted to
lapse any claims or rights of substantial value, or sold, leased, transferred
or otherwise disposed of any of its properties or assets (real, personal or
mixed, tangible or intangible), except in the ordinary course of business and
consistent with prior practice;
2.9.9 made any material capital expenditure or commitment for any
addition to property, plant or equipment not in the ordinary course of
business and consistent with prior practice or in any event in excess of an
aggregate of Five Thousand Dollars ($5,000);
2.9.10 made any change in any method of accounting or accounting
practice;
2.9.11 paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any
officer, director, "affiliate," officer of an "affiliate," director of an
"affiliate," "associate" of an officer, "associate" of a director, or
"associate" of an "affiliate" (as such terms are defined in the rules and
regulations of the Securities and Exchange Commission), who exercised senior
managerial responsibility with respect to IMS, except for normal business
advances to employees consistent with prior practice;
2.9.12 granted any options to officers, employees, directors, or any
affiliated parties;
2.9.13 agreed, whether in writing or otherwise, to take any action
described in this Section 2.9; or
2.9.14 taken, failed to take or suffered to exist any action that, if
taken, not taken, or suffered to exist after the date hereof, would
constitute a breach of any of the covenants set forth in Section 4.
2.10 Title to Assets; Condition.
2.10.1 IMS has good title to, or a valid leasehold interest in, all of
its properties and assets. Except as described on Exhibit 2.10.1, none of
its properties or assets is subject to any mortgage, pledge, lien, security
interest, lease or other encumbrance. All of IMS's properties and assets are
in working condition.
2.10.2 Exhibit 2.10.3 sets forth a true, correct and complete list as
of the date hereof of all leases, and all amendments, modifications and
supplemental agreements thereto, of real property to which IMS is a party
(the "Leases"). True, correct and complete copies of the Leases have been
delivered by IMS to CACI and CASub. The Leases grant leasehold estates free
and clear of all mortgages, liens, claims, charges, security interests,
encumbrances and other restrictions and limitations whatsoever granted by or
caused by the actions of IMS, and IMS enjoys a right of quiet possession as
against any lien or other encumbrance on the properties subject to the Leases
(collectively, the "Leased Properties"). The Leases are in full force and
effect, are binding and enforceable against each of the parties thereto in
accordance with their respective terms. No party to any Lease has sent
written notice to the other claiming that such party is in default
thereunder, which remains uncured. To Sellers' Knowledge, there has not
occurred any event that would constitute a breach of or default in the
performance of any material covenant, agreement or condition contained in any
Lease, nor has there occurred any event that with the passage of time or the
giving of notice or both would constitute such a breach or material default.
IMS is not obligated to pay any leasing or brokerage commission relating to
any Lease and will not have any enforceable obligation to pay any leasing or
brokerage commission upon the renewal of any Lease. No material
construction, alteration or other leasehold improvement work with respect to
any of the Leases remains to be paid for or to be performed by IMS.
2.10.3 IMS is not in violation in any material respect of any law,
regulation or ordinance (including, without limitation, laws, regulations or
ordinances relating to building, zoning, environmental, city planning, land
use or similar matters) relating to the Leased Properties. There are to
Sellers' Knowledge no proceedings materially affecting the present or future
use of the Leased Properties for the purposes for which they are used or the
purposes for which they are intended to be used. All buildings, structures
and fixtures used by IMS are in good operating condition and repair, normal
wear and tear excepted, and are insured with coverages that are usual and
customary for similar properties and similar businesses.
2.11 Intellectual Property. IMS owns, or is licensed or otherwise has
the full right to use, the Intellectual Property listed on Exhibit 2.11(a).
Exhibit 2.11(a) lists all Intellectual Property owned, licensed or used by
IMS, together with the owner or licensor thereof. Exhibit 2.11(b) lists all
third party licenses related to the Intellectual Property listed on Exhibit
2.11(a). All Intellectual Property that is identified on Exhibit 2.11(a) as
owned by IMS is, together with the goodwill of the business associated with
any Intellectual Property, owned by IMS free and clear of any and all
agreements, judgments, orders, decrees, stipulations, liens, claims, tax
liens, charges, security interests, encumbrances and licenses or sublicenses
that would prevent the use of the Intellectual Property by IMS, CACI or
CASub. The business and operations of IMS do not infringe upon or violate
any intellectual property owned by any third party. IMS has not received,
within the past three (3) years, notice of any claim that IMS has infringed
or violated any intellectual property of any third party, or that any
Intellectual Property identified on Exhibit 2.11(a) is invalid or violates or
infringes upon the rights of any third party. IMS has not sent or otherwise
communicated to another person, within the past three (3) years, any notice,
charge, claim or other assertion of, nor does there exist, any present,
impending or to Sellers' Knowledge threatened infringement or violation by
any third party of any Intellectual Property listed on Exhibit 2.11(a) or any
acts of unfair competition by any third party relating to such Intellectual
Property. IMS maintains reasonable security measures to prevent disclosure
or transfer to unauthorized persons of any trade secrets and confidential
information that are proprietary to IMS.
2.12 Inventories. IMS has no inventory material to its business,
operations, financial condition, results of operations or prospects.
2.13 Material Contracts. IMS has delivered to CACI and CASub or made
available to CACI and CASub a true, correct and complete copy of each
material contract to which IMS is a party and all amendments thereto (the
"Material Contracts"), all of which are listed on Exhibit 2.13. All Material
Contracts are in full force and effect. IMS has not received any notice of
default, nor is it in default, nor does any condition exist which with or
without notice or the lapse of time, or both, will render IMS in default,
under any of the Material Contracts. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby do not and will not, with or without the giving of notice or the lapse
of time, or both, conflict with, or result in any violation or breach of or
constitute a default under, or require the consent of any other party to, or
result in any right to accelerate or the creation of any lien, charge or
encumbrance on any of the assets or properties of IMS pursuant to, or right
of termination under, any provision of any Material Contract. To Sellers'
Knowledge, the other parties to the Material Contracts are in compliance with
all material terms and conditions of the Material Contracts. No party to a
Material Contract has notified IMS of its intention to terminate or
materially change the nature of its transaction or relationship with IMS
under any such Material Contract.
2.14 Agreements, Contracts and Commitments. Except as set forth in
Exhibit 2.14, IMS is not a party to:
2.14.1 any agreement relating to the issuance, transfer or sale of any
shares of the capital stock or other securities of IMS;
2.14.2 any bonus, deferred compensation, pension, severance,
profit-sharing, stock option, employee stock purchase or retirement plan,
contract or arrangement or other employee benefit plan or arrangement;
2.14.3 any employment agreement that contains any severance pay
liabilities or obligations;
2.14.4 any agreement for personal services, consultant services or
employment;
2.14.5 any agreement of guarantee or indemnification of third parties
in an amount that could exceed Five Thousand Dollars ($5,000);
2.14.6 any agreement or commitment containing a covenant limiting or
purporting to limit the freedom of IMS to compete with any person in any
geographic area or to engage in any line of business;
2.14.7 any lease (other than equipment leases under which IMS is
lessor) to which IMS is a party as lessor or lessee that is material to the
business, operations, assets, financial condition, results of operations,
properties or prospects of IMS;
2.14.8 any joint venture agreement or profit-sharing agreement (other
than with employees);
2.14.9 except for trade indebtedness incurred in the ordinary course
of business, any loan or credit agreements providing for the extension of
credit to IMS or any instrument evidencing or related in any way to
indebtedness incurred in the acquisition of companies or other entities or
indebtedness for borrowed money by way of direct loan, sale of debt
securities, purchase money obligation, conditional sale, guarantee, or
otherwise, that is material to the business, operations, assets, financial
condition, results of operations, properties or prospects of IMS;
2.14.10 any license agreement, either as licensor or licensee, or
distributor, dealer, franchise, manufacturer's representative, sales agency
or other similar agreement or commitment;
2.14.11 any contract or agreement, for the future sale by IMS of
materials, products, services or supplies, that is material to the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS;
2.14.12 any contract or agreement for the future purchase by IMS of any
materials, equipment, services, or supplies, that either provides for
payments in excess of Two Thousand Five Hundred Dollars ($2,500) and cannot
be terminated by it without penalty upon less than ninety (90) days' notice
or was not made in the ordinary course of business and consistent with prior
practice;
2.14.13 any agreement that provides for the sale of goods or services
that will result in a loss as a result of costs already incurred or expected
to be incurred to complete the agreement;
2.14.14 any agreement or arrangement for the assignment, sale or other
transfer by IMS of any agreement or lease (or right to payment thereunder) by
which it leases materials, products or other property to a third party;
2.14.15 any contract or agreement that provides any discount;
2.14.16 any agreement or commitment for the acquisition, construction
or sale of fixed assets owned or to be owned by IMS;
2.14.17 any contract or agreement not described above involving the
payment or receipt by IMS of more than Five Hundred Dollars ($500)
individually or Five Thousand Dollars ($5,000) in the aggregate other than
contracts or agreements in the ordinary course of business for the purchase
of inventory, supplies or services or for the sale of current requirements
and consistent with prior practice, or for the sale or lease of finished
goods or services in the ordinary course of business and consistent with
prior practice; or
2.14.18 any contract or agreement not described above that was not made
in the ordinary course of business and consistent with prior practice and
that is material to the business, operations, assets, financial condition,
results of operations, properties or prospects of IMS.
All agreements, contracts, plans, leases, instruments, arrangements, licenses
and commitments listed in Exhibit 2.14 pursuant to this Section 2.14 are
valid and in full force and effect and neither IMS nor, to Sellers'
Knowledge, any other party thereto has breached any provision of, or
defaulted under the terms of, nor are there any facts or circumstances that
would reasonably indicate that IMS will or may be in such breach or default
under, any such agreement, contract, plan, lease, instrument, arrangement,
license or commitment, which breach or default has or could reasonably be
expected to have a material adverse effect on the business, operations,
assets, financial condition, results of operations, properties or prospects
of IMS. Exhibit 2.14 correctly identifies each contract the provisions of
which would be materially and adversely affected by this Agreement and each
contract under which the rights of any party would be altered as a result of
the sale, merger, consolidation or other change of control of IMS.
2.15 Banking Facilities, Powers of Attorney, etc. Exhibit 2.15 attached
hereto sets forth a true, correct and complete list of (i) each bank, savings
and loan or similar financial institution with which IMS has an account or
safety deposit box or other arrangement, and any numbers of the accounts or
safety deposit boxes maintained by IMS thereat, (ii) the names of all persons
authorized to draw on each such account or to have access to any such safety
deposit box facility, and (iii) any outstanding powers of attorney executed
on behalf of IMS in respect of IMS or its assets, liabilities or businesses.
IMS has no general or special powers of attorney outstanding (whether as
grantor or grantee thereof), nor any obligation or liability (whether actual,
accrued, accruing, contingent or otherwise) as guarantor, surety, co-signer,
endorser, co-maker, indemnitor or otherwise in respect of the obligation of
any Person, except as endorser or maker of checks or letters of credit,
respectively, endorsed or made in the ordinary course of business and
consistent with prior practice.
2.16 Customers and Orders. During the period from December 2, 1995
through the Effective Time, IMS has not accepted, and will not accept, orders
from any of the other contracting parties to the Material Contracts on any
terms other than pursuant to one or more of the Material Contracts.
2.17 Compliance with Applicable Law. IMS has all requisite material
licenses, permits and certificates from all foreign, federal, state and local
authorities necessary for the conduct of its business as presently conducted,
and to lease and operate the Leased Properties. IMS has conducted its
business in material compliance with all applicable laws, statutes,
ordinances, regula tions, rules, judgments, decrees, orders, permits,
licenses, concessions, grants or other authorizations of any court or of any
governmental entity or authority.
2.18 Litigation. Except as described in Exhibit 2.18, there is no Action
of any kind, pending or, to Sellers' Knowledge, threatened, at law or in
equity, by or before any court, arbitrator, governmental entity or authority,
that involves, affects or relates to IMS that either singly or in the
aggregate may have any material adverse effect on the business, operations,
assets, financial condition, results of operations, prospects or properties
of IMS. Neither IMS nor any of its Principal Shareholders or properties is
subject to any order, writ, injunction, decree or judgment of any court,
arbitrator or governmental entity or authority, that involves, affects or
relates to IMS that either singly or in the aggregate may have any material
adverse effect on the business, operations, assets, financial condition,
results of operations, prospects or properties of IMS.
2.19 Insurance. Exhibit 2.19 attached hereto sets forth a true, correct
and complete list of all fire, theft, casualty, general liability, workers'
compensation, business interruption, environmental impairment, product
liability, automobile and other insurance policies maintained by IMS and all
life insurance policies maintained on the lives of any of its directors,
officers or employees (collectively, the "Insurance Policies"). All premiums
due on the Insurance Policies or renewals thereof have been paid in full. To
Sellers' Knowledge, the amounts and coverages of the Insurance Policies are
those customarily carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which IMS operates and
are adequate and customary for the type and scope of IMS's assets, properties
and business. The Insurance Policies are sufficient for compliance with all
Material Contracts to which IMS is a party or by which IMS is bound and all
applicable laws and regulations of any governmental entity. IMS's workers'
compensation insurance materially complies with all applicable statutory and
regulatory requirements relating thereto. IMS has not received any written
notices of any pending termination with respect to any of such policies.
Exhibit 2.19 includes a true and complete listing of all claims made under
IMS's Insurance Policies in excess of Five Thousand Dollars ($5,000), and the
dispositions thereof, for the period from September 30, 1992 to the date
hereof.
2.20 Tax Matters.
2.20.1 Except as disclosed in Exhibit 2.20.1, IMS has duly filed,
within the times and in the manner prescribed by law, all Tax Returns that it
was required to file. To Sellers' Knowledge, all such Tax Returns were
correct and complete in all material respects. All Taxes owed by IMS
(whether or not shown on any Tax Return) have been paid when due. IMS is not
currently the beneficiary of any extension of time within which to file any
Tax Return. No claim or inquiry with respect to any material amount of Taxes
has ever been made by an authority in a jurisdiction where IMS did not file
Tax Returns but where it is or may be subject to any Tax by that jurisdiction
for any period ending on or before the Closing Date. There are no liens or
other security interests on any of the properties or assets of IMS that arose
in connection with any failure (or alleged failure) to pay any Tax.
2.20.2 All Taxes of IMS attributable to Tax periods or portions
thereof ending on or prior to the Closing Date that have not yet been paid
have in the aggregate been adequately reflected as a liability on the books
of IMS in accordance with generally accepted accounting principles
consistently applied.
2.20.3 IMS has withheld and paid all Taxes required to have been
withheld and paid in connection with payments to foreign persons, sales and
use Tax obligations with respect to any and all states, and amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
person.
2.20.4 Exhibit 2.20 hereto lists all federal and state income Tax
Returns filed with respect to IMS for Tax periods ended on or after December
31, 1991, indicates those Tax Returns that have been audited, and indicates
those Tax Returns that currently are the subject of audit. Exhibit 2.20 also
sets forth all deficiencies of Tax that have been asserted for all periods up
to and including the date hereof.
2.20.5 There are no outstanding agreements or waivers extending the
statute of limitations applicable to any Tax Return of IMS for any period.
2.20.6 IMS has delivered to CACI and CASub true, correct and complete
copies of all United States federal income Tax Returns, examination reports,
and statements of deficiencies assessed against, proposed in writing to be
assessed against, or agreed to by any of the Company and its Subsidiaries for
all Tax periods ending on or after December 31, 1991.
2.20.7 IMS has not filed a consent under Section 341(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), concerning
collapsible corporations. IMS has not made any payments, is not obligated to
make any payments, and is not a party to any agreement that could obligate it
to make any payments that will be an "excess parachute payment" under Code
Section 280G. IMS has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii), nor has IMS
been a passive foreign investment company as defined in Code Sections
1291-1297. IMS has disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Code Section 6662. IMS is not a party to
any Tax allocation or sharing agreement. IMS has no liability for any Taxes
of any person (other than its own) under Treas. Reg. Section 1.1502-6 (or any
similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
2.20.8 IMS has not made any elections under the Code, including,
without limitation, elections under Code Section 1362 (relating to taxation
as an S Corporation) or elections under Code Section 338 (relating to the
treatment of certain stock purchases as asset acquisitions).
2.21 Employee Benefit Plans; Compliance with ERISA. Exhibit 2.21
contains a true, correct and complete list of all pension, profit sharing,
retirement, deferred compensation, welfare, insurance, disability, bonus,
vacation pay, severance pay and other similar plans, programs or agreements,
and every material personnel policy, whether reduced to writing or not,
relating to any persons employed by IMS and maintained by IMS or by any other
member (hereinafter, "Affiliate") of a controlled group of corporations,
group of trades or businesses under common control or affiliated service
group which includes IMS (as defined for purposes of Section 414(b), (c) and
(m) of the Code) (collectively, the "IMS Plans"). Neither IMS nor any
Affiliate has ever been obligated to contribute to any "multi-employer plan,"
as defined in Section 3(37) of ERISA. Neither IMS nor any Affiliate has
incurred any "withdrawal liability" calculated under Section 4211 of ERISA
and there has been no event or circumstance which would cause them to incur
any such liability. Except as indicated in Exhibit 2.21, neither IMS nor any
Affiliate has ever maintained an IMS Plan providing health or life insurance
benefits to former employees (other than as required by Part 6 of Subtitle B
of Title I of ERISA). Except as indicated in Exhibit 2.21, no IMS Plan which
was subject to ERISA has been terminated; no proceedings to terminate any
such IMS Plan have been instituted within the meaning of Subtitle C of Title
IV of ERISA; and no reportable event within the meaning of Section 4043 of
said Subtitle C has occurred with respect to any such IMS Plan, and no
liability to the Pension Benefit Guaranty Corporation has been incurred.
With respect to all the IMS Plans, IMS and every Affiliate are in material
compliance with all requirements prescribed by all statutes, regulations,
orders or rules currently in effect, and have in all material respects
performed all obligations required to be performed by them. Neither IMS nor
any Affiliate, nor to Sellers' Knowledge any of its or their directors,
officers, employees or agents, nor any trustee or administrator of any trust
created under the IMS Plans, has engaged in or been a party to any
"prohibited transaction" as defined in Section 4975 of the Code and Section
406 of ERISA which could subject IMS or CACI or their Subsidiaries,
affiliates, directors or employees or the IMS Plans or the trusts relating
thereto or any party dealing with any of the IMS Plans or trusts to any Tax
or penalty on "prohibited transactions" imposed by Section 4975 of the Code.
Neither the IMS Plans nor the trusts created thereunder have incurred any
"accumulated funding deficiency," as such term is defined in Section 412 of
the Code and regulations issued thereunder, whether or not waived.
Each IMS Plan intended to qualify under Section 401(a) of the Code has been
determined by the Internal Revenue Service to so qualify, and the trusts
created thereunder have been determined to be exempt from Tax under Section
501(a) of the Code; copies of all determination letters have been delivered
to CACI and CASub; and to Sellers' Knowledge nothing has occurred since the
date of such determination letters which might cause the loss of such
qualification or exemption. With respect to each IMS Plan that is a "defined
benefit plan" as defined in Section 3(35) of ERISA, the present value of the
actuarial accrued liability, determined on a plan termination basis, does not
exceed the fair market value of the assets held under such IMS Plan, and
there is no unpaid contribution for any IMS Plan year ended prior to the
Closing as required under Section 412 of the Code. With respect to each IMS
Plan which is a qualified profit sharing or stock bonus plan, all employer
contributions accrued for plan years ending prior to the Closing under the
IMS Plan terms and applicable law have been made.
To Sellers' Knowledge, there is no Action threatened or pending or that can
reasonably be expected to be asserted with respect to any of the IMS Plans or
any prior plan maintained by IMS, and there are no outstanding written
requests, other than routine requests for information concerning such IMS
Plans, by participants, beneficiaries or any government agency.
2.22 Employment-Related Matters. To Sellers' Knowledge, IMS is in
compliance in all material respects with all applicable laws respecting
employment, consulting, employment practices, wages, hours, and terms and
conditions of employment. IMS is not a party to any collective bargaining
agreement or other contract or agreement with any labor organization or other
representative of any employees of IMS. There is no labor strike, dispute,
slowdown, work stoppage, lockout or other labor controversy in effect or
pending or to Sellers' Knowledge threatened against or otherwise affecting
IMS. IMS has not experienced any labor controversy within the past three
years. No labor representation question exists or to Sellers' Knowledge has
been raised respecting any of IMS's employees. IMS has not closed any plant
or facility, or effectuated any layoffs of employees or implemented any early
retirement, separation or window program at any time from or after October 1,
1992 nor has IMS planned or announced any action or program for the future
with respect to which IMS has or may have any material liability. IMS is in
compliance in all material respects with its obligations pursuant to the
Worker Adjustment and Retraining Notification Act of 1988, and all other
notification and bargaining obligations arising under any collective
bargaining agreement or statute relating to employment; provided, however,
that nothing in this Section 2.22 shall be construed as any representation or
warranty relating to the Code or ERISA.
2.23 Environmental.
2.23.1 To Sellers' Knowledge, IMS is in compliance in all material
respects with all applicable Environmental Laws. IMS has not received any
communication (written or oral), whether from a governmental authority,
employee, or any other person that alleges that IMS is not in compliance with
such laws. To Sellers' Knowledge, all material Permits and other
governmental authorizations currently held by IMS pursuant to the
Environmental Laws are in full force and effect and no other material Permits
are required by IMS.
2.23.2 To Sellers' Knowledge, there is no Environmental Claim pending
or threatened against or involving IMS or against any person or entity whose
liability for any Environmental Claim IMS has or may have retained or assumed
either contractually or by operation of law.
2.23.3 To Sellers' Knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, threatened release, emission, discharge or
disposal of any Material of Environmental Concern, that could form the basis
of any Environmental Claim against IMS or against any person or entity whose
liability for any Environmental Claim IMS may have retained or assumed either
contractually or by operation of law.
2.23.4 Without in any way limiting the generality of the foregoing, to
Sellers' Knowledge, (a) no polychlorinated biphenyls are or have been used or
stored at any of the Leased Properties, and (b) no friable asbestos or
asbestos-containing material is present at any of the Leased Properties.
2.24 Absence of Certain Payments. Neither IMS nor any director, officer,
agent, employee or other person associated with or acting on behalf of IMS
has used any funds of IMS for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity, or made any direct or
indirect unlawful payments to government officials or employees from
corporate funds, or established or maintained any unlawful or unrecorded
funds, or violated any provisions of the Foreign Corrupt Practices Act of
1977 or any rules or regulations promulgated thereunder.
2.25 Interests of Officers. Except as described in Exhibit 2.25, none of
the officers or directors of IMS has any interest in any property, real or
personal, tangible or intangible, including Intellectual Property used in the
conduct of the business of IMS, except for rights under existing employee
benefit plans.
2.26 No Brokers or Finders. Except as described in Exhibit 2.26, no
broker or finder has acted for IMS in connection with this Agreement or the
transactions contemplated hereby, and no broker or finder is entitled to any
brokerage or finder's fee or other commissions in respect of such
transactions based upon agreements, arrangements or understandings made by or
on behalf of IMS.
2.27 No Pending Actions. There is no Action pending or threatened to
which IMS is a party or of which IMS is aware which questions or challenges
the validity of this Agreement or any action taken or to be taken by IMS
pursuant to this Agreement or in connection with the transactions
contemplated hereby.
2.28 No Misrepresentations. No representation or warranty by IMS in this
Agreement, nor any statement, certificate, list, exhibit or schedule
furnished or to be furnished by or on behalf of IMS pursuant to this
Agreement nor any document or certificate delivered to CACI or CASub pursuant
to this Agreement, when taken together with the foregoing, contains or shall
contain any untrue statement of material fact or omits or shall omit to state
a material fact necessary to make the statements not misleading.
2.29 No Implied Representations. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, IMS IS BEING MERGED ON AN "AS IS, WHERE IS" BASIS, WITH ALL
FAULTS, AND EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF IMS AND THE
PRINCIPAL SHAREHOLDERS EXPRESSLY CONTAINED HEREIN, IMS DISCLAIMS ALL
WARRANTIES, EXPRESSED, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.
Article 3
REPRESENTATIONS AND WARRANTIES OF CACI, CASUB, AND ACQUISITION
CACI, CASub, and Acquisition represent and warrant to IMS as follows:
3.1 Corporate Status of CACI, CASub, and Acquisition. CACI, CASub, and
Acquisition are corporations duly organized, validly existing and in good
standing under the laws of Delaware. CACI, CASub, and Acquisition are duly
qualified to do business as foreign corporations and are in good standing in
all jurisdictions in which the character of the properties owned, leased or
operated by each or the nature of the business transacted by each makes such
qualification necessary, except where failure to be so qualified would not
have a materially adverse effect on the business, operations, assets,
financial condition, results of operations, properties or prospects of CACI
and its Subsidiaries considered as a whole.
3.2 Authority for Agreement. CACI, CASub, and Acquisition have the full
corporate power to execute, deliver, and perform this Agreement, to
consummate the transactions contemplated hereby and to carry out their
obligations hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of CACI, CASub,
and Acquisition and by CASub in its capacity as sole shareholder of
Acquisition. No other corporate proceedings on the part of CACI or CASub
including, without limitation, stockholder approval, are necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
3.3 No Default or Violation. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
do not and will not (a) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-Laws or other
organizational documents of CACI, CASub, or Acquisition, or (b) with or
without the giving of notice or the lapse of time, or both, conflict with, or
result in any violation or breach of or constitute a default under, or
require the consent of any other party to, or result in any right to
accelerate or the creation of any lien, charge or encumbrance pursuant to, or
right of termination under, any provision of any note, mortgage, indenture,
lease, agreement or other instrument, permit, concession, grant, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
to which CACI, CASub, or Acquisition is a party or by which either of them or
any of their assets or properties may be bound or which is applicable to
either of them or any of their assets or their properties. Other than in
connection with or in compliance with the provisions of the Securities Act,
the Exchange Act, the HSR Act and applicable state securities laws, no
authorization, consent, approval, license, order, or permit of, or
declaration of, or filing with or notice to, any governmental body or
authority or any other person or entity is necessary for the execution,
delivery and performance of this Agreement by CACI and CASub or the
consummation by CACI and CASub of the transactions contemplated hereby.
3.4 Responsible Prospective Contractor. Each of CACI and CASub is a
"responsible prospective contractor," as defined in 48 C.F.R. Part 9, Section
9.101 and Section 9.104, and other applicable sections of the Federal
Acquisition Regulation.
3.5 No Brokers or Finders. Except as described on Exhibit 3.5, no broker
or finder has acted for CACI, CASub, or Acquisition in connection with this
Agreement or the transactions contemplated hereby, and no broker or finder is
entitled to any brokerage or finder's fee or other commissions in respect of
such transactions based upon agreements, arrangements or understandings made
by or on behalf of CACI, CASub, or Acquisition.
3.6 No Pending Actions. There is no Action pending or threatened to
which CACI, CASub, or Acquisition is a party or of which CACI, CASub, or
Acquisition is aware which questions or challenges the validity of this
Agreement or any action taken or to be taken by CACI, CASub, or Acquisition
pursuant to this Agreement or in connection with the transactions
contemplated hereby.
3.7 No Misrepresentations. No representation or warranty by CACI, CASub,
or Acquisition in this Agreement, nor any statement, certificate, list,
exhibit or schedule furnished or to be furnished by or on behalf of CACI,
CASub, or Acquisition pursuant to this Agreement nor any document or
certificate delivered to IMS pursuant to this Agreement, when taken together
with the foregoing, contains or shall contain any untrue statement of
material fact or omits or shall omit to state a material fact necessary to
make the statements not misleading.
Article 4
COVENANTS
It is further agreed as follows:
4.1 Conduct of Business. Between the date of this Agreement and the
Effective Time, except as contemplated by this Agreement or as otherwise
consented to by CACI and CASub in writing, IMS shall keep and observe the
following covenants:
4.1.1 IMS shall conduct its operations and pay its accounts payable
according to its ordinary and usual course of business consistent with prior
practice and shall use its best efforts to preserve intact its business
organization, facilities, good will, assets, prospects, and licenses, permits
and certificates from federal, state and local authorities, retain its
present officers, and to maintain satisfactory relationships with businesses,
suppliers, distributors, customers and others having business relationships
with it, and further:
4.1.1.1 shall maintain in full force and effect all contracts
of insurance and indemnity specified in any Exhibit;
4.1.1.2 shall repair and maintain all of its tangible
properties and assets in accordance with its usual and ordinary repair and
maintenance
standards;
4.1.1.3 shall promptly satisfy in all material respects all
its obligations under the Material Contracts and with respect to other
current liabilities;
4.1.1.4 shall confer on a regular and frequent basis with
representatives of CACI and CASub to report material operational matters and
the general status of ongoing operations; and
4.1.1.5 shall notify CACI and CASub of any material emergency
or other material change in its business, operations, assets, financial
condition, results of operations, properties or prospects and of any
governmen tal complaints, investigations, inquiries or hearings (or
communications indicating that the same may be contemplated).
4.1.2 IMS shall not, without the prior written consent of CACI and
CASub:
4.1.2.1 amend its Certificate of Incorporation or By-Laws;
4.1.2.2 issue, sell, purchase, redeem or grant any options,
warrants, conversion or other rights to purchase or otherwise acquire any
shares of its capital stock or other security;
4.1.2.3 authorize, declare, set aside or pay any dividend or
make any other distribution with respect to any share of its capital stock
or other security;
4.1.2.4 borrow or agree to borrow any funds or incur, or
assume or become subject to, whether directly or by way of guaranty or
otherwise, any obligation or liability (absolute or contingent), except
obligations incurred in the ordinary course of business and consistent with
prior practice;
4.1.2.5 pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with prior practice of obligations reflected on or reserved
against in the Unaudited Balance Sheet or incurred since date thereof in the
ordinary course of business and consistent with prior practice or in
connection with this transaction;
4.1.2.6 grant or make any general increase (including any
increase pursuant to any bonus, pension, insurance, profit-sharing or other
plan or commitment) in the compensation of officers, managers, employees,
agents, consultants or other personnel or any increase in the compensation or
benefits payable or to become payable to any officer, manager, employee,
agent, consultant or other personnel;
4.1.2.7 except as required by this Agreement or by applicable
law, amend or adopt in any material respect, any agreement or plan (including
severance arrangements) for the benefit of the employees of IMS;
4.1.2.8 make any capital expenditure or commitment for
addition to IMS's assets, property, plant or equipment not in the ordinary
course of business and consistent with prior practice or in any event in
excess of an aggregate of Five Thousand Dollars ($5,000);
4.1.2.9 sell, transfer, dispose, mortgage, pledge, or
otherwise encumber or agree to sell, transfer, dispose, mortgage, pledge or
otherwise encumber any of its properties or assets, incur any Prepaid
Expenses or enter into any Material Contracts, except in the ordinary course
of business and consistent with prior practice;
4.1.2.10 amend, modify or cancel any Material Contract, other
than amendments, modifications and cancellations that individually and in the
aggregate will not have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties,
or prospects of IMS, CACI or CASub;
4.1.2.11 enter into an agreement, contract, or commitment that,
if entered into prior to the date hereof, would be required to be listed on a
Exhibit delivered to CACI or CASub pursuant to the terms of this Agreement;
4.1.2.12 amend, terminate or change in any material respect
any lease, contract, undertaking or other commitment listed in any Exhibit or
do any act or omit to do any act, or permit an act or omission to act, that
will cause a breach of any such lease, contract, undertaking or other
commitment;
4.1.2.13 transfer or grant any rights under, or enter into any
settlement regarding the breach or infringement of, any United States or
foreign Intellectual Property or modify any existing rights with respect
thereto other than in the ordinary course of business and consistent with
prior practice;
4.1.2.14 cancel or compromise any debts, or waive, release,
transfer or permit to lapse any claims or rights of substantial value, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
(real, personal or mixed, tangible or intangible), except in the ordinary
course of business and consistent with prior practice;
4.1.2.15 make any change in any method of accounting or
accounting practice;
4.1.2.16 enter any transaction which, in CACI's or CASub's
reasonable judgment, may have a material adverse effect on the business,
operations, assets, financial condition, results of operations, properties or
prospects of IMS, whether or not such transaction is in the ordinary course
of business and consistent with prior practice; or
4.1.2.17 agree in writing or otherwise to take any of the
foregoing actions or any action that would make any representation or
warranty in this Agreement materially untrue or incorrect.
4.1.3 IMS will promptly advise CACI and CASub in writing of the
commencement or threat of any Action against Seller or IMS, whether covered
by insurance or not, (a) when the amount claimed exceeds One Thousand Dollars
($1,000) in any one case or Ten Thousand Dollars ($10,000) in the aggregate,
or (b) when such Action or the threat thereof relates in any way to this
Agreement or to any of the transactions contemplated hereby.
4.2 Payment of Taxes. IMS shall pay, promptly and when due, whether at
the original time fixed therefor or pursuant to any extension of time to pay,
any and all Taxes, fees and other charges which shall become due or shall
have accrued on account of the operation and conduct of the business of IMS
on or before the Closing Date; provided, however, that IMS shall not be
required to pay any such Tax, fee or charge if they are contesting the
validity thereof through proper proceedings, in good faith and with
reasonable diligence, provided that in any event IMS shall promptly pay any
such Tax, fee or charge if a failure to pay would have a material adverse
effect on the business, operations, assets, financial condition, results of
operations, properties or prospects of IMS, CACI or CASub or result in any
lien on any of the properties or assets of IMS, CACI or CASub.
4.3 Filings and Submissions. The parties hereto shall cooperate with
each other and promptly prepare and make all filings and notices required
under the Securities Act, the Exchange Act, the HSR Act, any other federal or
state securities laws and any other applicable laws and regulations relating
to the sale of the Shares or the other transactions contemplated hereby. The
parties hereto agree to cooperate and promptly respond to any inquiries or
investigations initiated by the Federal Trade Commission, the Department of
Justice or any other governmental entity or authority in connection with such
filings and notices.
4.4 Release of Information. Except as required by law, no party to this
Agreement shall announce or disclose to any non-party (other than the
directors, officers, employees, attorneys, accountants, advisors or other
representatives or agents who have a "need to know" in order to consummate
this Agreement and the transactions contemplated hereby) the terms or
provisions of the Letter of Intent or this Agreement without the prior
consent of the other parties hereto (which consent shall not be unreasonably
withheld). Each party shall consult with the other parties before issuing
any press release or other public announcement referring to this Agreement,
the Letter of Intent or the terms and conditions of the transactions
contemplated hereby or thereby.
4.5 Confidentiality. Except as required by law, each party and its
representatives will hold in strict confidence all documents and information
concerning the other party furnished in connection with the transactions
contemplated by this Agreement (except to the extent that such information
can be shown to have been (a) in the public domain through no action by the
party in violation of this Section 4.5, (b) in the party's possession at the
time of disclosure and not acquired by the party directly or indirectly from
the other party on a confidential basis or (c) disclosed by the other party
to others on an unrestricted, non-confidential basis) and will not, without
the consent of the other party, (i) release or disclose any such documents or
information to any other person or (ii) use or permit others to use such
documents or informa tion except in connection with this Agreement and the
transactions contemplated hereby. In the event of the termination of this
Agreement, each party shall return to the other parties all documents, work
papers and other material so obtained by it, or on its behalf, and all
copies, digests, abstracts or other materials relating thereto, whether so
obtained before or after the execution hereof, and will comply with the terms
of the confidentiality provisions set forth herein.
4.6 Further Assurances.
4.6.1 Generally. Subject to terms and conditions herein provided
and to the fiduciary duties of the Board of Directors and officers of any
party, each of the parties agrees to use his or its best reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective this Agreement and the other transactions
contemplated hereby. In case at any time any further action, including,
without limitation, the obtaining of waivers and consents under any
agreements, material contracts or leases and the execution and delivery of
any licenses or sublicenses for any software, is necessary, proper or
advisable to carry out the purposes of this Agreement, the proper officers
and directors of each corporate party to this Agreement are hereby directed
and authorized to use their reasonable best efforts to effectuate all
required action.
4.6.2 Novation of the Material Contracts. Each party agrees to use
its best reasonable efforts to effect the novation of each Material Contract
that may require novation under its terms or under applicable laws or
regulations, and further agrees to provide all documentation necessary to
effect each such novation, including, without limitation, all instruments,
certifications, requests, legal opinions, audited financial statements, and
other documents required by Part 42 of the Federal Acquisition Regulation to
effect a novation of any contract with the Government. In particular and
without limiting the generality of the foregoing, IMS shall continue to
communicate with responsible officers of the Government and/or any Prime
Contractor from time to time as may be appropriate and permissible, to
request speedy action on any and all requests for consent to novation.
4.7 Defense of Claims and Litigation. At all times from and after the
Closing, the Principal Shareholders shall consult, confer and cooperate in
good faith on a reasonable basis with CACI, CASub and IMS (including, without
limitation, the making available of witnesses and cooperation in discovery
proceedings) in the conduct or defense of any Action related to the business
of IMS before the Effective Time, or any matter which, directly or
indirectly, arises therefrom, whether known at the Closing or arising
thereafter, against CACI, CASub IMS or any of their affiliates by any third
party. To the extent the indemnification provisions of this Agreement or of
any other document delivered in connection with the transactions contemplated
hereby apply to any such conduct or defense, they shall control as to the
payment of costs and expenses.
4.8 Indemnification.
4.8.1 Indemnification of CACI, CASub and IMS. Subject to the
limitations set forth in Sections 4.8.3 and 4.8.4, the Principal Shareholders
shall indemnify and hold harmless CACI, CASub and IMS and their respective
successors by merger or other operation of law (the "Successors"), directors,
officers and assigns from and against all losses, liabilities, claims,
damages, costs or expenses (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and disbursements)
suffered, incurred or paid:
4.8.1.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of the
Principal Shareholders and IMS in this Agreement or in any other instrument
or document delivered to CACI, CASub, or Acquisition pursuant to this
Agreement had been (with respect to representations and warranties) true and
had been (with respect to covenants and agreements) fully performed and
fulfilled;
4.8.1.2 as a result of any Action arising out of or relating
to the conduct of the business of IMS before the Closing; and
4.8.1.3 as a result of any Action arising out of or relating
to the failure of the Principal Shareholders to pay, promptly and when due,
any Tax, fee or other charge which shall become due or shall have accrued on
account of the conversion of the Shares owned by any of the Principal
Shareholders, or any other Tax, fee or charge that any of the Principal
Shareholders is obligated to pay hereunder on account of the Merger or the
other transactions contemplated hereby.
Notwithstanding anything herein to the contrary, if the Principal
Shareholders shall be required to indemnify CACI, CASub, IMS or any of their
Subsidiaries or respective directors, officers, Successors or permitted
assigns with respect to the same item of damage and amount, the satisfaction
of such indemnity to one of such indemnitees shall discharge the Principal
Shareholders' obligations to the others to the extent of the amount paid.
4.8.2 Indemnification of the Principal Shareholders. Subject to the
limitations set forth in Sections 4.8.3 and 4.8.4, CACI, CASub and IMS shall
indemnify and hold harmless the Principal Shareholders and their heirs,
Successors and assigns from and against all losses, liabilities, claims,
damages, costs or expenses (including, without limitation, reasonable
expenses of investigation and reasonable attorney's fees and disbursements)
suffered, incurred or paid:
4.8.2.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of CACI and
CASub in this Agreement or in any other instrument or document delivered to
the Principal Shareholders pursuant to this Agreement had been (with respect
to representations and warranties) true and had been (with respect to
covenants and agreements) fully performed and fulfilled; and
4.8.2.2 as a result of any Action arising out of or relating
to the conduct of the business of IMS after the Closing.
Notwithstanding anything herein to the contrary, if CACI, CASub or
IMS shall be required to indemnify the Principal Shareholders or any of their
respective heirs, Successors or assigns with respect to the same item of
damage and amount, the satisfaction of such indemnity to one of such
indemnitees shall discharge the obligations of CACI, CASub and IMS to the
others to the extent of the amount paid.
4.8.3 Third Party Claims. The obligations and liabilities of a
party for which indemnification is sought (an "Indemnifying Party") by a
person or entity seeking indemnification (an "Indemnified Party") under this
Section 4.8 with respect to claims resulting from the assertion of liability
by third parties shall be subject to the following conditions:
4.8.3.1 The Indemnified Party shall give written notice to the
Indemnifying Party of the nature of the assertion of liability by a third
party and the amount thereof promptly after the Indemnified Party learns of
such assertion. The foregoing notwithstanding, failure of an Indemnified
Party to comply with its obligations under this Section 4.8.3.1 shall affect
its right to indemnity only to the extent such failure shall have a material
adverse effect on the Indemnifying Party's ability to defend.
4.8.3.2 If any Action is brought by a third party against an
Indemnified Party, the Action shall be defended by the Indemnifying Party and
such defense shall include all appeals or reviews which counsel for the
Indemnifying Party shall deem appropriate. Until the Indemnifying Party
shall have assumed the defense of any such Action, or if the Indemnified
Party shall have reasonably concluded that there are likely to be defenses
available to the Indemnified Party that are different from or in addition to
those available to the Indemnifying Party (in which case the Indemnifying
Party shall not be entitled to assume the defense of such Action), all legal
or other expenses reasonably incurred by the Indemnified Party shall be borne
by the Indemnifying Party.
4.8.3.3 In any Action initiated by a third party and defended
by the Indemnifying Party, subject to the confidentiality provisions of this
Agreement, (a) the Indemnified Party shall have the right to be represented
by advisory counsel and accountants, at its own expense, (b) the Indemnifying
Party shall keep the Indemnified Party fully informed as to the status of
such Action at all stages thereof, whether or not the Indemnified Party is
represented by its own counsel, (c) the Indemnified Party shall make
available to the Indemnifying Party, and its attorneys and accountants, all
books and records of the Indemnified Party relating to such Action and (d)
the parties shall render to each other such assistance as may be reasonably
required for the proper and adequate defense of such Action.
4.8.3.4 In any Action initiated by a third party and defended
by the Indemnifying Party, the Indemnifying Party shall not make any
settlement of any claim without the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld or delayed. Without
limiting the generality of the foregoing, it shall not be deemed unreasonable
to withhold consent to a settlement involving injunctive or other equitable
relief against the Indemnified Party or its assets, employees or business.
4.8.4 Minimum Liability. The Principal Shareholders shall not be
liable under Section 4.8.1, and CACI, CASub and IMS shall not be liable under
Section 4.8.2, unless and until the aggregate amount of liability under such
Section shall exceed $25,000, in which case the Indemnifying Party shall make
indemnification thereunder for the aggregate amount of such liability,
including, without limitation, such $25,000.
4.8.5 Limitation of the Principal Shareholders' Liability. The
obligation of any Principal Shareholder to indemnify pursuant to Section
4.8.1 (i) shall not in any event exceed in the aggregate an amount equal to
the aggregate amount paid or to be paid to that Principal Shareholder on
account of his share of the Merger Consideration and pursuant to the
Consulting Agreement to which he is a party, and (ii) shall be the exclusive
remedy for any breach of this Agreement by that Principal Shareholder.
4.9 Indemnification of IMS Directors and Officers. CACI and CASUb agree
that, until the third anniversary of the Closing, they will cause IMS to
maintain indemnification provisions in its Certificate of Incorporation or
By-Laws or both at least as favorable as those in effect at the date of this
Agreement for the benefit of those persons who are officers and directors of
IMS immediately before the Closing.
4.10 Annuity. CACI and CASub shall purchase one or more annuity
contracts sufficient to fund the obligations of IMS to pay deferred
compensation to the Principal Stockholders and to Mr. Howell Mei (together,
the "Beneficiaries") under the IMS Deferred Compensation Plan, as amended by
an Amendment dated December 21, 1995, and CACI and CASub shall consult with
the Beneficiaries concerning their preferences with respect to the timing and
amounts of payment under such Deferred Compensation Plan; provided, however,
that in no event shall CACI and CASub be required to expend more than Seven
Hundred Thousand Dollars ($700,000) (including, without limitation,
reasonable expenses and reasonable attorneys' fees and disbursements) to
satisfy its obligations under this Section 4.10.
Article 5
CONDITIONS PRECEDENT
5.1 Conditions to Obligations of Each Party. The obligations of CACI,
CASub, Acquisition, the Principal Shareholders and IMS to effect the Merger
and to consummate the other transactions contemplated hereby shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions and CACI, CASub, Acquisition, the Principal Shareholders and IMS
shall exert their best efforts to cause each such condition to be so
fulfilled:
5.1.1 No injunction or restraining or other order issued by a court
of competent jurisdiction that prohibits or materially restricts the
consummation of the Merger or any other material transaction contemplated by
this Agreement shall be in effect (each party agreeing to use its best
efforts to have any such injunction or other order lifted), and no Action
shall have been commenced or threatened seeking any injunction or restraining
or other order that seeks to prohibit, restrain, invalidate or set aside
consummation of the Merger or any other material transaction contemplated
hereby.
5.1.2 There shall not have been any action taken, and no statute,
rule or regulation shall have been enacted, by any state or federal
government agency since the date of this Agreement that would prohibit or
materially restrict the Merger or any other material transaction contemplated
hereby.
5.1.3 All filings with and notifications to, and all approvals and
authorizations of, third parties (including, without limitation, governmental
entities and authorities) required for the consummation of the Merger and the
other material transactions contemplated hereby shall have been made or
obtained and all such approvals and authorizations obtained shall be
effective and shall not have been suspended, revoked or stayed by action of
any governmental entity or authority.
5.1.4. Any waiting period (and any extension thereof) applicable to
the sale of the Shares under the HSR Act shall have expired or been
terminated.
5.2 Conditions to Obligations of CACI, CASub, and Acquisition. The
obligations of CACI, CASub, and Acquisition to consummate the Merger and the
other transactions contemplated hereby shall be subject to the fulfillment at
or prior to the Effective Time of the following additional conditions and the
Principal Shareholders and IMS shall exert their best efforts to cause each
such condition to be so fulfilled:
5.2.1 Since the date of the Letter of Intent there shall not have
been any adverse Material Change of any nature in the business, operations,
assets, financial condition, results of operations, properties or prospects
of IMS; and IMS shall have delivered to CACI and CASub a certificate to that
effect, dated the Closing Date and signed by the President of IMS.
5.2.2 IMS shall have received, each in form and substance
satisfactory to CACI and CASub, all approvals, authorizations, licenses,
orders, waivers, Permits and other consents under any contract, Material
Contract, plan, lease, instrument, arrangement, license, commitment or other
agreement of IMS that are required (i) to consummate the Merger, (ii) to
permit CACI and CASub to continue to conduct their businesses and the
business of IMS as they are currently conducted or (iii) in connection with
the transactions contemplated hereby; and all filings, registrations,
covenants, approvals, orders, consents and authorizations by or with, and
notifications to, all governmental authorities or regulators, domestic or
foreign, or other Persons by IMS required to consummate the transactions
contemplated by this Agreement shall have been made or received, and shall be
in full force and effect.
5.2.3 CACI, CASub, and Acquisition shall have obtained all covenants,
consents, approvals, authorizations, licenses, orders, waivers and other
Permits and all transfers of Permits that they and their counsel reasonably
deem necessary (i) to consummate the Merger, (ii) to permit CACI and CASub to
continue to conduct their businesses and the business of IMS as they are
currently conducted and (iii) in connection with the transactions
contemplated hereby.
5.2.4 The execution of this Agreement and performance of the
transactions contemplated hereby by appropriate officers of IMS shall have
been authorized by the shareholders and the Board of Directors of IMS in
accordance with applicable corporate law.
5.2.5 Dissenting shareholders' appraisal rights under Delaware law
shall not have been claimed by the holders of more than five per cent (5%) of
the outstanding Common Stock of IMS.
5.2.6 No information obtained by CACI, CASub, or Acquisition
concerning IMS during CACI's and CASub's "due diligence" investigation of IMS
shall have, in the sole judgment of CACI and CASub, adversely affected the
value of this Agreement or the transactions contemplated hereby.
5.2.7 The Principal Shareholders shall have executed and delivered
the Consulting Agreements.
5.2.8 IMS shall have performed in all material respects all of its
covenants set forth herein that are required to be performed at or prior to
the Effective Time; the representations and warranties of IMS contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and as of the Effective Time as if made at the Effective Time,
except for representations and warranties made expressly as of a specified
date (which representations and warranties shall be true and correct in all
material respects as of such date); and IMS shall have delivered to CACI and
CASub a certificate to that effect, dated the Closing Date and signed by one
or more executive officers of IMS.
5.2.9 The lease arrangements for the premises occupied by IMS at 2
Research Place, Rockville, Maryland, shall have been amended to provide
substantially as set forth in paragraph 5.D. of the Letter of Intent.
5.2.10 CACI and CASub shall have received from IMS and from such other
essential parties such affidavits and certificates as CACI and CASub shall
deem necessary to relieve CACI and CASub of any obligation to deduct and
withhold any portion of the Purchase Price pursuant to Code Section 1445.
5.2.11 CACI and CASub shall have received an opinion or opinions of
counsel to IMS in form and substance satisfactory to counsel to CACI and
CASub, dated the Closing Date, to the effect set forth in Exhibit 5.2.11.
5.2.12 CACI and CASub shall have received from IMS all other documents
consistent with the purposes of this Agreement, in form and substance
satisfactory to CACI and CASub and their counsel, as CACI and CASub shall
have reasonably requested (including but not limited to evidence of payment
of any broker's or finder's fee or other expense of the transaction for which
IMS is responsible under this Agreement).
5.2.13 CACI and CASub shall have received on or before the Closing
Date from the Principal Stockholders a guaranty of the payment in full of the
receivables due to IMS in the amount of NT$30,494,000 in connection with the
PFG-II-PHASE-III project with Institute for Information Industry of the
Republic of China of Taiwan in form and substance satisfactory to counsel for
CACI and CASub.
5.3 Conditions to Obligations of IMS and the Principal Shareholders. The
obligation of IMS and the Principal Shareholders to consummate the Merger and
the other transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Effective Time of the following additional
conditions, and CACI, CASub, and Acquisition shall exert their best efforts
to cause each such condition to be so fulfilled:
5.3.1 The shareholders of IMS shall have approved the Merger pursuant
to applicable Delaware law and the Certificate of Incorporation and By- Laws
of IMS.
5.3.2 CACI, CASub, and Acquisition shall have performed in all
material respects all of their covenants set forth herein that are required
to be performed at or prior to the Effective Time; the representations and
warranties of CACI, CASub, and Acquisition contained in this Agreement shall
be true and correct in all material respects as of the date hereof and as of
the Effective Time as if made at the Effective Time, except for
representations and warranties made expressly as of a specified date (which
representations and warranties shall be true and correct in all material
respects as of such date); and CACI and CASub shall have delivered to IMS a
certificate to that effect, dated the Closing Date and signed by the
President or a Vice President of each of CACI and CASub.
5.3.3 IMS shall have received an opinion of counsel to CACI and CASub
in form and substance satisfactory to counsel to IMS, dated the Closing Date,
to the effect set forth in Exhibit 5.3.3.
5.3.4 IMS shall have received from CACI, CASub, and Acquisition all
such other documents consistent with the purposes of this Agreement, in form
and substance satisfactory to IMS and his counsel, as IMS shall have
reasonably requested (including but not limited to evidence of payment of any
broker's or finder's fee or other expense of the transaction for which CACI,
CASub, or Acquisition is responsible under this Agreement).
Article 6
TERMINATION
6.1 Methods of Termination. This Agreement may be terminated, by written
notice promptly given to the other parties hereto, at any time prior to the
Effective Time:
6.1.1 By mutual written consent of the parties hereto.
6.1.2 By either CACI and CASub or IMS by notice to the other, if:
6.1.2.1 any injunction or restraining or other order issued by
a court of competent jurisdiction that prohibits or materially restricts the
consummation of the sale of the Shares or any other material transaction
contemplated by this Agreement shall be in effect, or any Action shall have
been commenced or threatened seeking any injunction or restraining or other
order that seeks to prohibit, restrain, invalidate or set aside consummation
of the sale of the Shares or any other material transaction contemplated by
this Agreement;
6.1.2.2 any action shall have been taken, or any statute, rule
or regulation shall have been enacted, by any state or federal government
agency since the date of this Agreement that would prohibit or materially
restrict the sale of the Shares or any other material transaction
contemplated by this Agreement; or
6.1.2.3 any filings with or notifications to, or any approvals
or authorizations of, third parties (including, without limitation,
governmental entities and authorities) required for the consummation of the
sale of the Shares shall not have been made or obtained or any such approvals
or authorizations obtained shall not be effective or shall have been
suspended, revoked or stayed by action of any governmental entity or
authority.
6.1.3 By CACI and CASub by notice to IMS:
6.1.3.1 if the Merger shall not have occurred on or before
January 15, 1996, unless the absence of the occurrence shall be solely due to
the failure of CACI, CASub, or Acquisition (or their Subsidiaries or
affiliates) to perform in all material respects each of their respective
material obligations under this Agreement required to be performed by it at
or prior to the Effective Time;
6.1.3.2 in the event of a material breach by the Principal
Shareholders or IMS of any representation, warranty, covenant or agreement
contained herein which has not been cured or is not curable by the earlier of
the Effective Time or the tenth day after written notice of that breach was
given to the Principal Shareholders and IMS; or
6.1.3.3 if the Board of Directors of IMS shall have withdrawn
or modified in any material respect its approval of this Agreement or the
transactions contemplated hereby.
6.1.4 By IMS by notice to CACI and CASub:
6.1.4.1 if the Merger shall not have occurred on or before
January 15, 1996, unless the absence of the occurrence shall be solely due to
the failure of the Principal Shareholders or IMS (or the affiliates of
either) to perform in all material respects each of their respective material
obligations under this Agreement required to be performed by it at or prior
to the Effective Time;
6.1.4.2 in the event of a material breach by CACI, CASub, or
Acquisition of any representation, warranty, covenant or agreement contained
herein which has not been cured or is not curable by the earlier of the
Effective Time or the tenth day after written notice of that breach was given
to CACI and CASub; or
6.1.4.3 if the Board of Directors of either CACI, CASub, or
Acquisition shall have withdrawn or modified in any material respect its
approval of this Agreement or the transactions contemplated hereby.
Each notice of breach under Section 6.1.3.2 or 6.1.4.2 and each
notice of termination under this Section 6.1 shall set forth the facts
believed to constitute the basis therefor, all with reasonable specificity in
light of the facts then known.
6.2 Payments on Termination. If this Agreement shall be terminated, any
payments or reimbursements of fees, costs, or expenses of any party shall be
governed by the provisions of paragraphs 8 and 9 of the Letter of Intent.
6.3 Effect of Termination. In the event of termination under Section
6.1, this Agreement shall forthwith become void and there shall be no
liability on the part of CACI, CASub, the Principal Shareholders or IMS,
except that the provisions of this Article 6, Article 7 (other than the
provisions of Section 7.5) and Sections 4.4 and 4.5 shall survive the
termination and continue in effect, provided that the foregoing shall not
relieve any party for liability for damages incurred as a result of any
willful breach of this Agreement or as a result of actual fraud. No party's
refusal to waive fulfillment of any condition precedent to its obligations
under this Agreement shall constitute a breach of its duty under this
Agreement.
Article 7
DEFINITIONS AND MISCELLANEOUS
7.1 Definitions of Certain Terms. As used herein, the following terms
shall have the following meanings:
Acquisition: as defined in the Preamble hereof.
Action: any suit, claim, action, litigation, arbitration, dispute,
investigation, inquiry, review, or proceeding.
Affiliate: as defined in Section 2.21 hereof.
Agent: as defined in Section 1.6.1 hereof.
Agreement: as defined in the Preamble hereof.
Audited Balance Sheets: as defined in Section 2.8 hereof.
Audited Financial Statements: as defined in Section 2.8 hereof.
CACI: as defined in the Preamble hereof.
CASub: as defined in the Preamble hereof.
Closing: as defined in Section 1.4.1 hereof.
Closing Date: as defined in Section 1.4.1 hereof.
Code: as defined in Section 2.20.7 hereof.
Effective Time: January 1, 1996 at 12:01 A.M. Eastern standard time.
Environmental Claim: any written notice by any governmental agency
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries, fines
or penalties) arising out of, based on or resulting from (a) the presence, or
release into the environment, of any Material of Environmental Concern at any
location, whether or not owned by IMS or (b) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law.
Environmental Contamination: (a) an occurrence occurring or a condition
existing at or before the Closing if such occurrence or condition was in
violation of any Environmental Law or Permit existing at or before the
Closing and if IMS, CACI, CASub, or Acquisition is specifically required to
take remedial action with respect thereto by a governmental agency or a
negotiated agreement, decree or clean-up plan with a governmental agency,
regardless of when such occurrence or condition is discovered or when such
remedial action is required, (b) any use, disposal or discharge of Materials
of Environmental Concern before the Closing resulting in liability to a third
party, regardless of when such use, disposal or discharge is discovered or
(c) an occurrence occurring or condition existing at or before the Closing if
IMS, CACI, CASub, or Acquisition investigates or takes remedial action with
respect thereto.
Environmental Laws: mean all Federal, state and local laws, rules and
regulations relating to pollution or protection of the environment, or
occupational or human health and safety, including, without limitation, laws,
rules and regulations relating to handling, processing, storage, recycling,
emission, discharge, disposal, treatment, transportation, release or
threatened release of any Material of Environmental Concern or other waste or
material into ambient air, surface water, ground water or land, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. 1801 et seq.), the Federal Water Pollution
Control Act (38 U.S.C. 1251 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the Occupational
Safety and Health Act (29 U.S.C. 651 et seq.), the Emergency Planning and
Community Right to Know Act (42 U.S.C. 11001 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 135 et seq.), and the
Food, Drug and Cosmetic Act (15 U.S.C. 2000 et seq.), in each case as these
laws have been amended or supplemented.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Government: the Federal Government of the United States of America.
HSR Act: as defined in Section 2.4 hereof.
IMS: as defined in the Preamble hereof.
IMS Plans: as defined in Section 2.21 hereof.
Indemnified Party: as defined in Section 4.8.3 hereof.
Indemnifying Party: as defined in Section 4.8.3 hereof.
Initial Consulting Fees: as defined in Section 1.4.3.2 hereof.
Insurance Policies: as defined in Section 2.19 hereof.
Intellectual Property: patents, trademarks, service marks, trade names,
mask works, software, programs, development tools, methodologies,
specifications, processes, know-how, blueprints, drawings, designs, patterns,
copyrights, formulae, inventions, technology, trade secrets, proprietary
information, confidential information and other information and documents,
and the registrations and applications therefor and the goodwill related
thereto.
Knowledge: as defined in Article 2 hereof.
Leased Properties: as defined in Section 2.10.4 hereof.
Leases: as defined in Section 2.10.3 hereof.
Letter of Intent: the letter agreement dated October 25, 1995 by and
between CACI and IMS.
Material Change: as to IMS, a circumstance or circumstances that may
reasonably be expected to cause a net change in the book value of IMS of at
least Two Hundred Thirty Thousand Dollars ($230,000) compared with the book
value at August 25, 1995, exclusive of any change in the book value of
"land", "investment in foreign subsidiary", or "deferred compensation plan"
as carried on the books of IMS at that date.
Material Contracts: as defined in Section 2.13 hereof.
Materials of Environmental Concern: those substances or constituents
which are regulated by, or form the basis of liability under, any
Environmental Law.
Merger Consideration: as defined in Section 1.2 hereof.
Permit: all certificates, consents, permits, licenses, authorizations
and approvals required under or relating to any Environmental Law.
Person: any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental entity or any other entity.
Prime Contractor: with respect to any Material Contract, the
contracting party, other than the Government, to whom IMS may be liable for
performance as a subcontractor.
Principal Shareholders: as defined in the Preamble hereof.
Securities Act: the Securities Act of 1933, as amended.
Shares: as defined in Section 1.1 hereof.
Subsidiary: any corporation, association, or other business entity a
majority (by number of votes) of the shares of capital stock (or other voting
interests) of which is owned by IMS, CACI or their respective Subsidiaries.
Successors: as defined in Section 4.8.1 hereof.
Tax: any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax or other fiscal
charges of any kind whatsoever, including without limitation any interest,
penalty, or addition thereto, whether disputed or not.
Tax Return: any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without
limitation any schedule or attachment thereto, and any amendment thereof.
Unaudited Balance Sheet: as defined in Section 2.8 hereof.
Unaudited Financial Statements: as defined in Section 2.8 hereof.
7.2 Brokerage. Each party shall be solely responsible for payment of any
fee or charge of any broker, finder, financial advisor or intermediary
engaged, employed, or consulted by that party in connection with negotiations
or discussions incident to the execution of this Agreement or any of the
transactions contemplated hereby.
7.3 Amendments and Supplements. This Agreement may be amended or
supplemented by a written instrument signed by CACI, CASub, the Principal
Shareholders and IMS and approved by their respective Boards of Directors.
7.4 Extensions and Waivers. The parties hereto may (a) extend the time
for the performance of any of the obligations or other acts of the parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the covenants or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
such party. No party's refusal to waive fulfillment of any condition
precedent to its obligations under this Agreement shall constitute a breach
of its duty under this Agreement. No party's failure to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or remedy
by such party preclude any other or further exercise thereof or the exercise
of any other right or remedy. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate as a waiver of any
subsequent breach.
7.5 Survival of Representations and Warranties. Notwithstanding any
investigation conducted before or after the Closing and notwithstanding any
knowledge or notice of any fact or circumstance which a party may have as the
result of such investigation or otherwise, each party and its Successors and
assigns shall be entitled to rely upon the representations, warranties and
covenants of the others in this Agreement. Each of the representations,
warranties and covenants contained in this Agreement, made in any document
delivered hereunder or otherwise made in connection with the Closing
hereunder shall survive the Closing until the third anniversary of the
Closing.
7.6 Expenses. Each party shall pay its own expenses, including the fees
of attorneys, accountants, investment bankers, valuation experts and others,
in connection with the transactions contemplated hereby, whether or not they
are completed, except that in the event of a conflict between this Section
7.6 and Section 4.8, the latter Section shall control. The Principal
Shareholders shall be responsible for payment of any and all Taxes arising
out of the conversion of the Shares or the other transactions contemplated
hereby.
7.7 Letter of Intent. The provisions of paragraphs 5.D, 6, 7, 8, 9, and
10 of the Letter of Intent are adopted and continued in effect as if
incorporated in this Agreement. Except as stated in the preceding sentence,
this Agreement supersedes the Letter of Intent and the letter dated October
24, 1995 from IMS to Dr. J.P. London as Chairman of the Board and Chief
Executive Officer of CACI; and this Agreement, together with the Exhibits and
related documents contemplated by this Agreement, constitutes the sole
Agreement among the parties with respect to the subject matter hereof.
7.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without regard for
its principles of conflicts of laws.
7.9 Alternative Dispute Resolution. In the event that any dispute arises
under any provision of this Agreement, the parties agree to make reasonable
efforts to resolve the dispute by negotiation, mediation, or alternative
dispute resolution before any resort to legal remedies; provided, however,
that no party shall be bound by the determination of any mediation or
alternative dispute resolution proceeding without that party's prior written
consent to the proceeding.
7.10 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand sent via a reputable
nationwide courier service or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice) and shall be
deemed given on the date on which so hand-delivered or on the third business
day following the date on which so mailed or sent:
To CACI:
CACI International Inc
1100 North Glebe Road
Arlington, VA 22201
Attn: Dr. J. P. London, Chairman
With copies to:
Jeffrey P. Elefante, Esq.
Senior Vice President and General Counsel
CACI International Inc
1100 North Glebe Road
Arlington, VA 22201
and
David W. Walker, Esq.
Foley, Hoag & Eliot
One Post Office Square
Boston, MA 02109
To IMS and the Principal Shareholders:
IMS Technologies, Inc.
2 Research Place
Rockville, MD 20850
Attention: Mr. John Yeh
With a copy to:
Mark R. Eaton, Esq.
Michaels, Wishner & Bonner
1140 Connecticut Avenue, N.W.
Suite 900
Washington, DC 20036
7.11 Entire Agreement, Assignability, etc. This Agreement and the
Exhibits and documents delivered at the Closing pursuant to Section 5: (a)
constitute the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof, including, without limitation, the Letter of
Intent, (b) are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder, except as otherwise expressly
provided herein, and (c) shall not be assignable by operation of law or
otherwise. The representations and warranties of the parties shall not be
enlarged or restricted by any statement in any document referred to herein.
This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective legal representatives, Successors and
permitted assigns, and shall inure to the benefit of the Indemnified Parties
and their respective legal representatives, Successors and permitted assigns.
All Exhibits mentioned in this Agreement shall be attached to this Agreement,
and shall form an integral part hereof. All capitalized terms defined in
this Agreement which are used in any Exhibit shall, unless the context
otherwise requires, have the same meaning therein as given herein. The
failure or omission by the Principal Shareholders and IMS, or either of them,
to disclose information required by a particular Exhibit to this Agreement
shall not constitute a breach of this Agreement if the same information is
disclosed on another Exhibit to this Agreement.
7.12 Cumulative Rights and Remedies. Each party acknowledges that money
damages alone will not adequately compensate another party for breach of a
party's obligations under this Agreement and, therefore, agrees that in the
event of the breach or threatened breach of any such obligation, in addition
to all other remedies available, at law, in equity or otherwise, each party
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms of this Agreement. All rights and remedies
under this Agreement are cumulative and are in addition to and not exclusive
of any other rights and remedies provided hereunder, under any other document
delivered as part of a transaction contemplated hereby or otherwise by
agreement or law, at equity or otherwise. Without limiting the generality of
the foregoing, the parties expressly recognize that specific performance is
not any party's sole remedy hereunder.
7.13 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of the
other provisions of this Agreement, each of which shall remain in full force
and effect.
7.14 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same
Agreement.
In Witness Whereof, the parties have duly executed this Agreement as of the
date first above written.
CACI International Inc
[SEAL]
/s/
--------------------------------------
By:
President
CACI, Inc.
[SEAL]
/s/
--------------------------------------
By:
President
IMS Technologies, Inc.
[SEAL]
/s/
--------------------------------------
By:
President
/s/
--------------------------------------
John Yeh
/s/
--------------------------------------
Joseph Yeh
/s/
--------------------------------------
James Yeh
/s/
---------------------------------------
Jeffry Yeh
<PAGE>
Index of Exhibits
Exhibit A
Exhibit 1.3.1
Exhibit 1.3.2
Exhibit 1.7
Exhibit 3.2
Exhibit 2.8
Exhibit 2.9
Exhibit 2.10.1
Exhibit 2.10.2
Exhibit 2.10.3
Exhibit 2.11(a)
Exhibit 2.11(b)
Exhibit 2.13
Exhibit 2.14
Exhibit 2.15
Exhibit 2.18
Exhibit 2.19
Exhibit 2.20
Exhibit 2.21
Exhibit 2.25
Exhibit 2.26
Exhibit 3.5
Exhibit 5.2.11
Exhibit 5.3.3