EXHIBIT 10.20
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("AGREEMENT") is made and entered into as
of October 10, 1996, by and among THE XXXXXXXX GROUP, INC., a Texas
corporation formerly known as X.X. Xxxxxxxx and Associates, Inc. ("COMPANY"),
X.X. XXXXXXXX ("XXXXXXXX") and SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION, a Delaware corporation ("SAIC").
RECITALS
WHEREAS, the Company and SAIC each desire to form a strategic alliance
in an effort to maximize their respective diverse and complementary
capabilities;
WHEREAS, the Company is authorized to issue shares ("SHARES") of the
Company's no par value Class A (voting) and Class B (non-voting) common stock
(individually "Class A Common Stock" and "Class B Common Stock") and
collectively ("COMMON STOCK");
WHEREAS, the strategic alliance provides for a cooperative arrangement
between the parties pursuant to a strategic alliance agreement ("STRATEGIC
ALLIANCE AGREEMENT"), an equity investment by SAIC in the Company and certain
other arrangements pursuant to this Agreement and a shareholder agreement by
and among SAIC, the Company and Xxxxxxxx ("SHAREHOLDER AGREEMENT");
WHEREAS, the Company desires to sell to SAIC, and SAIC desires to
purchase from the Company, one hundred thousand six hundred forty-five
(100,645) Shares of the Company's Class A Common Stock, pursuant to this
Agreement;
WHEREAS, it is the intention of the parties hereto that upon
consummation of the purchase and sale of the Shares pursuant to this
Agreement, SAIC shall own not less than eight percent (8%) of the issued and
outstanding Shares of Common Stock (including treasury Shares and Shares for
issuance under existing stock options) in the amount of 1,258,074 Shares; and
WHEREAS, in consideration of such purchase of Shares and the strategic
alliance, the Company desires to grant to SAIC and SAIC desires to grant to
the Company an option to purchase Shares in the future on the terms and
conditions set forth in the Shareholder Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I
SALE OF SHARES
1.1 PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
of this Agreement and in reliance upon the representations, warranties and
agreements herein contained,
on the Closing Date (as defined in Section 2.1), the Company shall issue and
sell to SAIC, and SAIC shall purchase from the Company, the Shares free and
clear of all liens, security interests, options, rights, mortgages, pledges,
restrictions on transferability of any type, (other than restrictions on
transferability as may be applicable under federal and state securities
laws), defective titles, claims, charges or encumbrances of any nature
whatsoever on any property interests, other than liens for personal property
taxes that are not yet due ("ENCUMBRANCES"). Immediately after the sale of
the Shares to SAIC, such Shares shall represent not less than eight percent
(8%) of the sum of (a) the issued and outstanding Shares of the Common Stock
of the Company as of the Closing Date (including treasury Shares) and (b) all
Shares of the Common Stock of the Company which as of the Closing Date are
the subject of outstanding options.
1.2 PURCHASE PRICE. The purchase price for the Shares ("PURCHASE
PRICE") shall be Two Million Dollars ($2,000,000.00). At the Closing, SAIC
shall pay the Purchase Price to the Company, at Company's option, either (a)
by delivery of SAIC's corporate check or (b) by wire transfer to such account
as is designated by the Company.
ARTICLE II
CLOSING
2.1 THE CLOSING. The consummation of the sale and purchase of the
Shares referred to in Section 1.1 (the "CLOSING") shall take place on October
___, 1996 at the executive offices of the Company, in Dallas, Texas, or at
such other date or place as the parties hereto mutually determine, either
verbally or in writing. Such date is referred to herein as the "Closing
Date" and the Closing shall be deemed to be effective as of 5:00 p.m.,
Central Daylight Savings Time on the Closing Date.
2.2 DELIVERY AT CLOSING.
(a) At the Closing, SAIC shall deliver to the Company the following:
(i) the Purchase Price as provided for in Section 1.2
above;
(ii) the Strategic Alliance Agreement described in
Section 5.7 below, duly executed by SAIC;
(iii) the Shareholder Agreement described in Section 5.8
below, duly executed by SAIC;
(iv) the Nonsolicitation Agreement described in
Section 5.9, duly executed by SAIC; and
(v) an officer's certificate as described in Section 6.1
below.
(b) At the Closing, the Company shall deliver to SAIC the following:
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(i) a duly authorized and issued stock certificate
representing the Shares;
(ii) certified copies of resolutions of its Board of
Directors authorizing the execution and delivery of
this Agreement the Strategic Alliance Agreement, the
Shareholder Agreement and the consummation of the
transactions set forth herein and therein;
(iii) the Strategic Alliance Agreement described in
Section 5.7 below, duly executed by the Company;
(iv) the Shareholder Agreement described in Section 5.8
below, duly executed by the Company;
(v) the Nonsolicitation Agreement described in
Section 5.9 below, duly executed by the Company;
(vi) the Release Agreement described in Section 5.10
below, duly executed by the Company and Pacific
Technology Services, Inc. ("Pacific"); and
(vii) an officer's certificate as described in Section 5.3
below.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Whenever the term "knowledge" is used herein, it shall mean that the
Company has made due investigation and inquiry of its officers as to their
individual knowledge of any fact, event, statement representation, warranty
or otherwise which relates to or concerns the subject matter of the knowledge
referred to herein. Each of the Company and Xxxxxxxx, jointly and severally,
represents and warrants to SAIC as of the Closing Date (unless otherwise
indicated) as follows:
3.1 CORPORATE ORGANIZATION: DIRECTORS AND OFFICERS. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Texas. The Company has full corporate power and
authority to carry on its business as it is now being conducted and as
proposed to be conducted and to own the properties and assets, property
rights, goodwill and rights of any kind, real and personal, tangible and
intangible wherever situated ("ASSETS") and whether or not reflected in the
Balance Sheet or Financial Statements as defined in Section 3.10 below it now
owns. The character or location of the property owned by the Company and the
nature of the business conducted by the Company does not require the Company
to be qualified or licensed to conduct business in any state or jurisdiction
other than Texas. Set forth in Section 3.1 of the disclosure schedule
attached hereto ("DISCLOSURE SCHEDULE") is a listing of the current directors
and officers of the Company.
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3.2 CAPITAL STOCK. The authorized capital stock of the Company
consists solely of 17,500,000 Shares, of which (a) 12,500,000 Shares are
common stock, no par value, of which (i) 12,000,000 Shares are classified as
Class A Common Stock and (ii) 500,000 Shares are classified as Class B Common
Stock, and (b) 5,000,000 are classified as preferred stock, no par value, of
which 825,426 Shares of Class A Common Stock (excluding treasury Shares) and
667 Shares of Class B Common Stock are issued and outstanding, and which are
owned by the persons and entities in the numbers (with respect to each class
of stock outstanding) identified in Section 3.2 of the Disclosure Schedule.
Except as set forth in Section 3.2 of the Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, rights, calls, commitments,
preemptive rights, rights of first refusal or similar rights, conversion
rights, rights of exchange, plans or other agreements of any character
providing for the purchase, issuance, transfer or sale of any Shares of the
capital stock of the Company, other than as contemplated by this Agreement.
3.3 VALID ISSUANCE OF CAPITAL STOCK.
(a) The Shares, when issued, sold and delivered, in
accordance with the provisions and conditions of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid
and non-assessable and, assuming the accuracy of the representation and
warranty of SAIC set forth in Section 4.5, will be issued in compliance with
all applicable federal and state securities laws.
(b) The outstanding Shares of the Company have been duly and
validly authorized, issued and delivered, and are validly outstanding, fully
paid and non-assessable and have been issued in compliance with all
applicable federal and state securities laws. Immediately after the issuance
and sale of the Shares to SAIC, there will be issued and outstanding 926,071
Shares (excluding treasury Shares) of the Company's Class A Common Stock and
667 Shares of the Company's Class B Common Stock and the ownership of the
capital stock of the Company shall be as listed on EXHIBIT 3.3(b) hereto.
3.4 NO INVESTMENTS. Except as set forth in Section 3.4 of the
Disclosure Schedule, the Company does not own or control, directly or
indirectly, any capital stock or other equity, debt, ownership or proprietary
interest in any corporation, partnership, association, trust, joint venture
or other entity.
3.5 AUTHORIZATION, ETC. The Company has full corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The Company has taken all action required by law, its
Articles of Incorporation and Bylaws or otherwise to authorize the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby. This Agreement and all other agreements delivered hereunder are
valid and binding agreements of the Company, enforceable against the Company
in accordance with their terms, except that (a) the enforceability of this
Agreement may be subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at
law; and (b) the enforceability of this Agreement may be subject to or
limited by bankruptcy, insolvency, reorganization, arrangement, moratorium,
or other similar laws relating to or affecting the rights of creditors
generally.
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3.6 RESTRICTIVE DOCUMENTS. Except as set forth in Section 3.6 of the
Disclosure Schedule, the Company is not subject to or a party to, any
charter, bylaw, mortgage, lien, lease, license, permit agreement contract
instrument, law, rule, ordinance, regulation, order, judgment or decree, or
any other restriction of any kind or character, which materially and
adversely affects the business practices, operations or condition of the
Company or any of its Assets or property, or which would prevent consummation
of the transactions contemplated by this Agreement, compliance by the Company
with the terms, conditions and provisions hereof or the continued operation
of the Company's business after the Closing Date on substantially the same
basis as previously operated or which would restrict the ability of the
Company to acquire any property or conduct business in any area.
3.7 NO VIOLATION. Except as set forth in Section 3.7 of the
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transaction contemplated hereby will violate any
provision of the Articles of Incorporation or Bylaws of the Company, or
violate, or be in conflict with, or constitute a default (or an event, which,
with a notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
cause acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or imposition of any security interest, lien or other
Encumbrance upon any property or Assets of the Company under, or give any
person the right to terminate, modify or otherwise change the rights and
obligations of the Company under, any mortgage, bond, indenture, agreement,
lease or other instrument, obligation or commitment to which the Company is a
party or by it or any of its property or Assets are subject, or violate any
statute or law, or any judgment, decree, order, regulation or rule of any
court or governmental authority.
3.8 CONSENTS. Except as set forth in Section 3.8 of the Disclosure
Schedule, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any person, entity or
governmental authority is required in connection with the consummation of the
transactions contemplated hereby, including, without limitation, consents
from all parties to loans, contracts, leases or other agreements and consents
from governmental agencies, whether federal, state or local.
3.9 BOOKS AND RECORDS. The Company has furnished or made available to
SAIC and its representatives:
(a) a true, correct and complete copy of the Articles of
Incorporation and the Bylaws of the Company, with all amendments thereto;
(b) a true, correct and complete copy of the minute books of
the Company containing all records required to be set forth of all
proceedings, consents, actions and meetings of the shareholders and the Board
of Directors of the Company;
(c) a true, correct and complete copy of all permits, orders
and consents issued by the state securities commissioner with respect to the
Company and all applications for such permits, orders and consents; and
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(d) a true, correct and complete schedule of all issuances
and transfers of any capital stock of the Company.
3.10 FINANCIAL STATEMENTS. The Company previously has furnished SAIC
with the balance sheet of the Company dated as of June 30, 1996 (the "BALANCE
SHEET") and the related statement of income, for the five months then ended
(such financial statements are collectively referred to herein as the
"FINANCIAL STATEMENTS"). The Balance Sheet is true, complete and accurate in
all material respects (except for year-end adjustments) and fairly presents
the Assets, Liabilities (as defined below) and financial conditions of the
Company as of the date thereof. The statement of income included in the
Financial Statements is true, complete and accurate in all material respects
and fairly present the results of operations for the periods referred to
therein. The Financial Statements were prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
indicated.
3.11 ASSETS. The Company has good, valid and, in the case of real
property owned in fee simple by the Company, marketable title to all Assets,
owned by the Company, including, without limitation, all Assets reflected in
the Company's Balance Sheet and all Assets purchased by the Company since the
date of the Balance Sheet (except for Assets reflected in the Balance Sheet
or acquired since the date of the Balance Sheet which have been sold or
otherwise disposed of in the ordinary course of business), free and clear of
all Encumbrances, except for (a) the Encumbrances set forth in Section 3.11
of the Disclosure Schedule, (b) liens for current taxes not yet due and (c)
such Encumbrances which do not materially and adversely effect the use of
such Assets for the purpose for which they are presently being used.
3.12 INSURANCE. Section 3.12 of the Disclosure Schedule lists all
policies of title, property, fire, hazard, casualty, liability, life,
worker's compensation and other forms of insurance of any kind owned or held
by the Company. All such policies: (a) are with insurance companies believed
by the Company to be financially sound and reputable; (b) are in full force
and effect; (c) to the Company's knowledge are sufficient for compliance by
the Company with all requirements of law and of all agreements to which the
Company is a party; and (d) provide that they will remain in full force and
effect through the respective dates set forth in the Disclosure Schedule.
3.13 DEBT INSTRUMENTS. Except as set forth in Section 3.13 of the
Disclosure Schedule, neither the Company nor any of its Assets is subject to
any Encumbrance, including any mortgage, indenture, note, guarantee or other
agreement for or relating to borrowed money (including, without limitation,
conditional sales agreements and capital leases).
3.14 LEASES. Section 3.14 of the Disclosure Schedule lists all leases
and other agreements involving payments of more than Twenty-Five Thousand
Dollars ($25,000) during any twelve (12) month period under which the Company
is lessee or lessor of any Asset, or holds, manages or operates any asset
owned by any third party, or under which any Asset owned by the Company is
held, operated or managed by a third party. The Company is the owner and
holder of all the leasehold estates purported to be granted to it described
in Section 3.14 of the Disclosure Schedule and is the owner of all equipment,
machinery and other Assets thereon or
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in buildings and structures thereon, in each case free and clear of all
Encumbrances, except for the Encumbrances set forth in Section 3.14 of the
Disclosure Schedule and such Encumbrances which do not materially and
adversely effect the use of such Assets for the purpose for which they are
presently being used. Each such lease and other agreement is in full force
and effect and constitutes a legal, valid and binding obligation of, and is
legally enforceable against, the Company and, to the Company's knowledge, the
other parties thereto, and grants the leasehold estate it purports to grant
free and clear of all Encumbrances, except as provided therein. To the
Company's knowledge, all necessary governmental approvals with respect
thereto, if any, have been obtained, all necessary filings or registrations
therefor, if any, have been made, and there have been no threatened
cancellations thereof and are no outstanding disputes thereunder. To the
Company's knowledge, the Company has in all material respects performed all
obligations thereunder required to be performed by the Company to date. To
the Company's knowledge, no party is in default in any material respect under
any of the foregoing, and there has not occurred any event which (whether
with or without notice, lapse of time or the happening or occurrence of any
other event) would constitute such a default. All of the Assets subject to
such leases are in good operating condition and repair, normal wear and tear
excepted.
3.15 MATERIAL CONTRACTS AND AGREEMENTS.
(a) Other than agreements which are terminable by the Company
within thirty (30) days or upon thirty (30) days' (or less) notice or which
provide for the payment of no more than $25,000, Section 3.15 of the
Disclosure Schedule lists all of the following contracts and agreements to
which the Company is a party or by which the Company or its Assets are bound
at the date hereof: (i) agreements involving payments by the Company of more
than Twenty-Five Thousand Dollars ($25,000) during any twelve (12) month
period, (ii) agreements for the employment of any officer, employee,
consultant or independent contractor; (iii) license agreements or
distributor, dealer, manufacturer's representative, sales agency or brokerage
agreements; (iv) agreements with any labor organization or other collective
bargaining unit; (v) agreements for the future purchase of materials,
supplies, services, merchandise or equipment involving payments of more than
Twenty-Five Thousand Dollars ($25,000) over their remaining term (including,
without limitation, periods covered by any option to renew by either party),
except for agreements for the purchase of such materials, supplies, services,
merchandise or equipment which are resold in the ordinary course of business;
(vi) profit-sharing, bonus, incentive compensation, deferred compensation,
stock option, severance pay, stock purchase, employee benefit, insurance,
hospitalization, pension, retirement or other similar plans or agreements;
(vii) agreements for the sale or purchase of any Assets or the grant of any
preferential rights to purchase any Assets or rights, other than in the
ordinary course of business; (viii) agreements that contain any provisions
requiring the Company to indemnify any other party thereto; (ix) joint
venture agreements or other agreements involving the sharing of profits; (x)
outstanding loans to any persons or entity; (xi) any agreements or
understandings (including, without limitation, agreements not to compete and
exclusivity agreements) that reasonably could be interpreted to impose
restrictions on any business operations of the Company which, either
individually or in the aggregate, could reasonably be expected to have a
material adverse impact on the Company; or (xii) agreements involving
payments to the Company which are reasonably
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expected to be in excess of $100,000 during any twelve (12) month period
(each, individually a "MATERIAL CONTRACT AND AGREEMENT" and collectively,
"MATERIAL CONTRACTS AND AGREEMENTS").
(b) Each of the Material Contracts and Agreements is in full
force and effect and constitutes a legal, valid and binding obligation of,
and is legally enforceable against, the Company and, to the Company's
knowledge, the other parties thereto. All necessary governmental approvals
with respect thereto, if any, have been obtained, all necessary filings or
registrations therefor, if any, have been made, and there have been no
threatened cancellations thereof and there are no outstanding disputes
thereunder. The Company has in all material respects performed all the
obligations thereunder required to be performed by the Company to date. To
the Company's knowledge, no party is in default in any material respect under
any of the contracts or agreements set forth in Section 3.15 of the
Disclosure Schedule, and there has not occurred any event which (whether with
or without notice, lapse of time or the happening or occurrence of any other
event) would constitute such a default.
3.16 BOOKS AND RECORDS. The books of account stock records, minute
books and other records of the Company are true and complete in all material
respects and have been maintained in accordance with good business practices,
and the matters contained therein which are material to the business or
operations of the Company are appropriately and accurately reflected in the
financial statements of the Company.
3.17 LABOR RELATIONS. There are no strikes, work stoppages, grievance
proceedings, union organization efforts or other employment related
controversies pending, or, to the Company's knowledge, threatened between the
Company and (a) any current or former employees of the Company or (b) any
union or other collective bargaining unit representing such employees. The
Company has complied and is in compliance in all material respects with all
laws relating to employment or the workplace, including, without limitation
provisions relating to wages, hours, collective bargaining, safety and
health, work authorization, equal employment opportunity, immigration,
withholding, unemployment compensation and worker's compensation. There are
no collective bargaining agreements or employment agreements between the
Company and any of its employees.
3.18 ENVIRONMENTAL MATTERS.
(a) To the Company's knowledge, the Company has complied and
is in compliance with, and the real property whether leased or owned and all
improvements thereon are in compliance with, all environmental laws in all
material respects.
(b) There are no pending or, to the Company's knowledge,
threatened actions, suits, claims, legal proceedings or other proceedings
based on, and the Company has not received any notice of any complaint order,
directive, citation, notice of responsibility, notice of potential
responsibility, or information request from any governmental authority or any
other person or knows of any fact(s) which would reasonably be expected to
form the basis for any such actions or notices arising out of or attributable
to: (i) the current or past presence at any part of the real property of
hazardous or toxic materials or any substances that pose a hazard to human
health
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or an impediment to working conditions; (ii) the current or past release or
threatened release into the environment from the real property (including,
without limitation, into any storm drain, sewer, septic system or publicly
owned treatment works) of any hazardous or toxic materials or any substances
that pose a hazard to human health or an impediment to working conditions;
(iii) the off-site disposal of hazardous or toxic materials originating on or
from the real property or the business Assets of the Company; (iv) any
facility operations, procedures or designs of the Company which do not
conform to requirements of the environmental laws; or (v) any violation of
environmental laws related to the Company's operations at any part of the
real property or otherwise arising from the Company's activities (or the
activities of the Company's predecessors) involving hazardous or toxic
materials.
(c) To the Company's knowledge, the Company has been duly
issued, and currently has all permits, licenses, certificates and approvals
required under any environmental law. A true and complete list of such
permits, licenses, certificates and approvals, all of which are valid and in
full force and effect, is set out in Section 3.18 of the Disclosure Schedule.
(d) To the Company's knowledge, the real property contains no
underground storage tanks, or underground piping associated with such tanks,
used cuff entry or in the past for the management of hazardous materials. To
the Company's knowledge, neither PCBs nor asbestos-containing materials are
present on or in the real property.
3.19 ERISA.
(a) All employee benefit plans of the Company ("BENEFIT
PLANS") (as defined in the Employee Retirement Income Security Act of 1977,
"ERISA") conform (and at all times have conformed) in all material respects
to, and are being administered and operated (and have at all times been
administered and operated) in material compliance with, the requirements of
ERISA, the Internal Revenue Code ("CODE") and all other applicable ERISA and
Code Regulations (including code provisions governing entitlement to
deductions claimed by Company or any exemption or non-taxable benefit claimed
or provided to any Plan participant). All returns, reports and disclosure
statements required to be made under the Code or ERISA with respect to all
Benefit Plans have been timely filed or delivered. There have not been any
"prohibited transactions," as such term is defined in Section 4975 of the
Code or Section 406 of ERISA, involving any of the Benefit Plans that could
subject the Company to any material penalty or tax imposed under the Code or
ERISA.
(b) Except as is set forth in Section 3.19 of the Disclosure
Schedule, each such qualified Benefit Plan has been determined by the
Internal Revenue Service to be so qualified, and such determination remains
in effect and has not been revoked. Nothing has occurred since the date of
any such determination that is reasonably likely to affect adversely such
qualification or exemption, or result in the imposition of excise taxes or
income taxes on unrelated business income under ERISA with respect to any
Benefit Plan.
(c) The Company does not have a defined benefit plan subject
to Title IV of ERISA. The Company does not have a current or contingent
obligation to contribute to any
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multiemployer plan (as defined in Section 3(37) of ERISA) nor has incurred or
has any potential to incur any withdrawal liability with respect to such a
multiemployer plan.
(d) There are no pending or, to the knowledge of the Company,
threatened claims by or on behalf of any Benefit Plans, or by or on behalf of
any individual participants or beneficiaries of any Benefit Plans, alleging
any breach of fiduciary duty on the part of the Company or any of its
officers, directors or employees under ERISA or any other applicable
regulations, or claiming benefit payments other than those made in the
ordinary operation of such plans, nor is there, to the knowledge of the
Company, any basis for such claim. The Benefit Plans are not the subject of
any pending or, to the knowledge of the Company, threatened investigation,
audit or action by the Internal Revenue Service, the Department of Labor or
the Pension Benefit Guaranty Corporation.
(e) The Company has made all required contributions under the
Benefit Plans, including the payment of any insurance premiums on a timely
basis.
3.20 LITIGATION. There is no action, suit, inquiry, proceeding or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or threatened against or
involving the Company, or any of its officers, directors or employees if
related to the business or operations of the Company, or which questions or
challenges the validity of this Agreement or any action taken or to be taken
by the Company, pursuant to this Agreement or in connection with the
transactions contemplated hereby, nor is there any valid basis for any such
action, proceeding or investigation. Except as set forth in Section 3.20 of
the Disclosure Schedule, the Company is not subject to any judgment order or
decree entered in any lawsuit or proceeding which is likely to have a
material adverse effect on the business of the Company, the Assets or
property of the Company or the financial condition, business practices or
prospects of the Company or on the Company's ability to conduct its business
in any area. There is no matter as to which the Company has received any
notice, claim or assertion, or which otherwise has been threatened or which
reasonably is expected to be threatened or initiated against or involving any
director, officer, employee, agent or representative of the Company, nor is
there any reasonable basis therefor, in connection with which any such person
has any right to be indemnified by the Company. Except as set forth in
Section 3.20 of the Disclosure Schedule, there is no action, suit, proceeding
or investigation by the Company currently pending or which the Company
intends to initiate.
3.21 COMPLIANCE WITH LAW. To the Company's knowledge, the business and
operations of the Company have been conducted in accordance with all
applicable laws, regulations, rules and other requirements of all national
governmental authorities, and of all states, municipalities and other
political subdivisions and agencies thereof, having jurisdiction over the
Company which if not complied with by the Company would have a material
adverse effect on the Company. To the Company's knowledge, the Company has
not received any notification of any asserted present or past failure by the
Company to comply with such laws, rules or regulations.
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3.22 NO LIABILITIES. The Company has no outstanding claims,
liabilities or indebtedness of any nature, whether accrued, absolute,
contingent, known or unknown or otherwise, and whether due, or to become due,
probable of assertion or not (collectively, "LIABILITIES"), except:
(a) Liabilities, the amounts of which are stated or reserved
against in the Balance Sheet;
(b) Liabilities incurred subsequent to the date of the
Balance Sheet in the ordinary course of business not involving borrowings by
the Company which, individually or in the aggregate, do not materially impair
the financial condition or business prospects of the Company; or
(c) Liabilities set forth in Section 3.22 of the Disclosure
Schedule.
3.23 INTELLECTUAL PROPERTY. The Company has sufficient title and
ownership of all patents, trademarks, service marks, trade names, copyrights,
trade secrets, information, software, proprietary rights and processes
necessary for its business as now conducted and as proposed to be conducted
("INTELLECTUAL PROPERTY") without any conflict with or infringement of the
rights of others. Except as set forth in Section 3.23 of the Disclosure
Schedule, there are no outstanding options, licenses or agreements of any
kind relating to the foregoing, which are material to the business of the
Company nor is the Company bound by or a party to any options, licenses or
agreements of any kind with respect to the patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information,
software, proprietary rights and processes of any other person or entity or
the Company's Intellectual Property that would have a material adverse effect
on the Company's ability to carry on its business as it is currently
undertaken. The Company has not received any communications alleging that
the Company has violated or, by conducting its business as proposed, would
violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person
or entity. The Company is not aware that any of its employees is obligated
under any contract (including licenses, covenants or commitments of any
nature) or other agreement, or subject to any judgment, decree (except as
imposed by laws of general application) or order (except as imposed by laws
of general application) of any court or administrative agency, that would
interfere with the use of his or her best efforts to promote the interests of
the Company or that would conflict with the Company's business as proposed to
be conducted. Neither the execution nor delivery of this Agreement nor the
carrying on of the Company's business by the employees of the Company, nor
the conduct of the Company's business as proposed, will, to the Company's or
Xxxxxxxx'x knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated,
which conflict or default would be materially adverse to the Company, its
properties or its business.
3.24 INVENTION AND SECRECY AND COMMON STOCK PURCHASE AGREEMENTS. All
key employees and officers of the Company have executed an employee's
invention and proprietary information, assignment and non-disclosure
agreement (the "INVENTION AND NON-DISCLOSURE AGREEMENT") in substantially the
form previously provided to SAIC. To the Company's
-11-
knowledge, the Company is not aware that any of such key employees or
officers is in violation thereof.
3.25 GOVERNMENT CLAIMS. Except as set forth in Section 3.25 of the
Disclosure Schedule, no state of facts exists or has existed which would
constitute valid grounds for the assertion of a claim against the Company for
any of the following:
(a) Defective pricing;
(b) Cost Accounting Standards noncompliance;
(c) unallowable costs per FAR Part 31 including those which
may be included in Indirect Cost claims for prior years that have not yet
been finally agreed to by DCAA and the ACO;
(d) fraud; and
(e) all other bases for monetary claims relating to the
performance or administration of government contracts or subcontracts.
3.26 ABSENCE OF QUESTIONABLE PAYMENTS. Except as set forth in Section
3.26 of the Disclosure Schedule, neither the Company nor any director,
officer, agent employee or other person acting on behalf of the Company, has
used any corporate funds for unlawful contributions, payments, gifts or
entertainment or made any unlawful corporate expenditures relating to
political activity to government officials or others or established or
maintained any unlawful or unrecorded funds. To the Company's knowledge,
neither the Company nor any director, officer, agent employee or other person
acting on behalf of the Company, has accepted or received any unlawful
contributions, payments, gifts or expenditures.
3.27 BROKERS AND FINDERS. Neither the Company nor any of its
directors, officers or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees
in connection with the transactions contemplated by this Agreement.
3.28 VOTING AGREEMENTS, REGISTRATION RIGHTS. Except (a) for the
Shareholder Agreement described in Section 5.8 hereof, and (b) as set forth
in Section 3.28 of the Disclosure Schedule, there are no proposed or existing
shareholder agreements, voting trusts, proxies or other arrangements or
understandings among the shareholders of the Company relating to the voting
of their respective Shares and the Company has not granted or agreed to grant
any registration rights, including piggyback rights, to any person or entity.
3.29 OTHER AGREEMENTS. Except as set forth in Section 3.29 of the
Disclosure Schedule, or otherwise disclosed herein, there are no material
agreements, understandings or proposed transactions between the Company and
any of its shareholders, officers or directors.
-12-
3.30 INSIDER INTERESTS. Except as set forth in Section 3.30 of the
Disclosure Schedule, no officer or employee of the Company has any material
interest in any property, real or personal, tangible or intangible of the
Company, is indebted or otherwise obligated to the Company, in any material
respects, has any contractual relation with the Company or, to the Company's
knowledge, is an officer, director, employee or consultant of a competitor of
the Company. The Company is not indebted or otherwise obligated to any such
person, except for amounts due under normal arrangements applicable to all
employees generally as to salary or reimbursement of ordinary business
expenses not unusual in amount or significance. The consummation of the
transactions contemplated by this Agreement will not (either alone, or upon
the occurrence of any act or event or with the lapse or time, or both) result
in any benefit or payment (severance or other) arising or becoming due from
the Company to any Shareholder, director, officer, employee or consultant of
the Company (other than any benefit which may result from the Company's
payment of attorneys' fees, accountants' fees and other customary and
ordinary transaction costs incurred as a result of this transaction).
3.31 TAXES. The Company has filed or caused to be filed, within the
manner prescribed by law, all federal tax returns and tax returns required by
the State of Texas and tax return in other jurisdictions where the Company
has made a determination that a tax return would be required to be filed
("TAX RETURNS"). Such Tax Returns, including amendments to date, reflect
completely and accurately in all material respects all liability for taxes of
the Company for the periods covered thereby, whether or not due and payable
and whether or not disputed. To the Company's knowledge, all Taxes payable
by, or due from, the Company have been fully paid or adequately disclosed and
fully provided for in the books and financial statements of the Company. To
the Company's knowledge, no state of facts exists which would constitute
grounds for the assertion of a deficiency by any federal, state or local tax
authority for any Tax with respect to any post-Closing tax period which, if
adversely determined, would have a material adverse effect on the Company.
To the Company's knowledge, no examination of any Tax Return of the Company
currently is in progress. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any Tax Return of
the Company. The Company's Federal tax identification number is 00-0000000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SAIC
SAIC represents and warrants to the Company as follows:
4.1 CORPORATE ORGANIZATION. SAIC is a corporation duty organized,
validly existing and in good standing under the laws of the State of
Delaware. SAIC has full corporate power and authority to carry on its
business as it is now being conducted and to own the properties and Assets it
now owns.
4.2 AUTHORIZATION. SAIC has full corporate power and authority to
enter into this Agreement and to carry out the transactions contemplated
hereby. SAIC has taken all action required by law, its Certificate of
Incorporation and Bylaws or otherwise to authorize the
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execution and delivery of this Agreement and the transactions contemplated
hereby. This Agreement and all other agreements delivered hereunder are
valid and binding agreements of SAIC enforceable in accordance with their
terms, except that: (a) the enforceability of this Agreement may be subject
to general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and (b) the enforceability of
this Agreement may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement moratorium, or other similar laws relating to or
affecting the rights of creditors generally.
4.3 NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
violate any provisions of the Certificate of Incorporation or Bylaws of SAIC
or violate, or be in conflict with, or constitute a default under, or cause
the acceleration of the maturity of any debt or obligation pursuant to, any
agreement or commitment to which SAIC is a party or by which SAIC is bound,
or violate any statute or law or any judgment, decree, order, regulation or
rule of any court or governmental authority.
4.4 BROKERS AND FINDERS. Neither SAIC nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
4.5 INVESTMENT INTENT. SAIC is purchasing the Shares for its own
account for an investment and with no present intention of distributing the
Shares or any part thereof.
ARTICLE V
CONDITIONS OF SAIC'S OBLIGATIONS TO CLOSE
The obligations of SAIC to the Company under this Agreement are subject
to the fulfillment by the Company on or before the Closing of each of the
following conditions, unless waived by SAIC in writing:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such closing.
5.2 PERFORMANCE. The Company shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
5.3 COMPLIANCE CERTIFICATE. The Chairman of the Board, President or a
Vice President of the Company shall deliver to SAIC at the Closing a
certificate certifying that the conditions specified in Sections 5.1 and 5.2
have been fulfilled and stating that except as set forth in the Disclosure
Schedule hereto, there has been no material adverse change in the business,
affairs, prospects, operations, properties, Assets or conditions of the
Company since June 30, 1996, such certificate being substantially in the form
of Exhibit 5.3.
-14-
5.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to SAIC, and they shall have received all such counterpart original
and certified or other copies of such documents as they may reasonably
request.
5.5 BOARD OF DIRECTORS. Effective as of the Closing, the Board of
Directors shall consist of not more than twelve (12) members and shall be
comprised of the persons listed on Exhibit 5.5 hereto.
5.6 STRATEGIC ALLIANCE AGREEMENT. The Company and SAIC shall have
entered into a Strategic Alliance Agreement substantially in the form
attached hereto as Exhibit 5.6.
5.7 SHAREHOLDER AGREEMENT. The Company, Xxxxxxxx and SAIC shall have
entered into a Shareholder Agreement substantially in the form attached
hereto as Exhibit 5.7.
5.8 NONSOLICITATION AGREEMENT. The Company and SAIC shall have
entered into a Nonsolicitation Agreement substantially in the form attached
hereto as Exhibit 5.8.
5.9 RELEASE AGREEMENT. The Company and Pacific shall have entered
into a Release Agreement substantially in the form attached hereto as Exhibit
5.9 and the Company shall have delivered said Release Agreement to SAIC.
ARTICLE VI
CONDITIONS OF THE COMPANY'S OBLIGATIONS TO CLOSE
The obligations of the Company to SAIC under this Agreement are subject
to the fulfillment on or before the Closing of each of the following
conditions, unless waived by the Company in writing:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of SAIC contained in Section 4 hereof shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing and a Closing Certificate
executed by an officer of SAIC to the foregoing effect shall be delivered at
Closing.
6.2 PAYMENT OF PURCHASE PRICE. SAIC shall have delivered the Purchase
Price specified in Section 1.2.
6.3 STRATEGIC ALLIANCE AGREEMENT. The Company and SAIC shalt have
entered into a Strategic Alliance Agreement substantially in the form
attached hereto as Exhibit 5.6.
6.4 SHAREHOLDER AGREEMENT. The Company, Xxxxxxxx and SAIC shall have
entered into a Shareholder Agreement substantially in the form attached
hereto as Exhibit 5.7.
-15-
6.5 NONSOLICITATION AGREEMENT. The Company and SAIC shall have
entered into a Nonsolicitation Agreement substantially in the form attached
hereto as Exhibit 5.8.
ARTICLE VII
CONTINUING COVENANTS OF COMPANY
Subject to Section 8.1 herein, so long as SAIC owns any Shares, Company
covenants as follows:
7.1 DELIVERY OF FINANCIAL STATEMENTS. The Company shall deliver to
SAIC, as soon as practicable, but in any event within 45 days after the end
of each month, a statement of operations for such period and a balance sheet
of the Company as of the end of such period, such financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles in all material respects ("FINANCIAL REPORTS"). The Company also
shall deliver to SAIC, as soon as practicable but in any event within 90 days
after the end of each fiscal year of the Company, an annual audited set of
Financial Reports.
7.2 INSPECTION. Upon reasonable notice and at SAIC's expense, the
Company shall permit SAIC to examine the Company's books of account and
records at such reasonable times as may be requested by SAIC and, once each
quarter, to inspect the Company's properties and to discuss the Company's
affairs, finances and accounts with its officers.
7.3 BOARD OF DIRECTORS REPRESENTATION. SAIC shall have the right to
designate one representative as a member of the Company's Board of Directors;
provided, however, that if the Company increases the size of its Board of
Directors above twelve (12) directors, or if SAIC's percentage of ownership
interest in the Company increases above eight percent (8%) of the Company's
issued and outstanding Shares of Class A and Class B Common Stock (including
treasury Shares and Shares issued under options) on a fully diluted basis,
SAIC shall have the right to designate more than one representative to the
Company's Board of Directors, and the Company and SAIC shall undertake good
faith negotiations to determine the number of representatives to the
Company's Board of Directors that SAIC shall be entitled to designate.
7.4 PROMPT PAYMENT OF TAXES, ETC. Company will promptly pay and
discharge, or cause to be paid and discharged, when due and payable, all
lawful taxes, assessments and governmental charges or levies imposed upon the
income, profits, property or business of Company or any subsidiary; provided,
however, that any such tax, assessment charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by appropriate
proceedings and if Company shall have set aside on its books adequate
reserves with respect thereto, and provided, further, that Company will pay
all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien which may have attached as
security therefor. Company will promptly pay or cause to be paid when due,
or in conformance with customary trade terms or otherwise in accordance with
policies related thereto adopted by Company's Board of Directors, all other
indebtedness incident to operations of Company.
-16-
7.5 MAINTENANCE OF PROPERTIES AND LEASES. Company will keep its
properties in good repair, working order and condition, reasonable wear and
tear excepted, and from time to time make all needful and proper repairs,
renewals, replacements, additions and improvements thereto; and Company will
at all times comply with each material provision of all leases to which it is
a party or under which it occupies property if the breach of such provision
might have a material and adverse effect on the condition, financial or
otherwise, or operations of Company.
7.6 INSURANCE. Except as otherwise decided in accordance with
policies adopted by Company's Board of Directors, Company will keep its
Assets and those of its subsidiaries which are of an insurance character
insured by financially sound and reputable insurers against loss or damage by
fire, explosion and other risks customarily insured against by companies in
Company's line of business, and Company will maintain, with financially sound
and reputable insurers, insurance against other hazards and risks and
liability to persons and property to the extent and in the manner customary
for companies in similar businesses similarly situated.
7.7 ACCOUNTS AND RECORDS. Company will keep true records and books of
account in which full, true and correct entries will be made of all dealings
or transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.
7.8 COMPLIANCE WITH REQUIREMENTS OF GOVERNMENTAL AUTHORITIES. Company
and all its subsidiaries shall duly observe and conform to all valid
requirements of governmental authorities relating to the conduct of their
businesses or to their properties or assets which, if the Company or its
subsidiaries failed to observe and conform, would have a material adverse
effect on the Company as a whole.
7.9 MAINTENANCE OF CORPORATE EXISTENCE, ETC. Company shall maintain
in full force and effect its corporate existence, rights and franchises and
all licenses and other rights in or to use patents, processes, licenses,
trademarks, trade names or copyrights owned or possessed by it and deemed by
Company to be necessary to the conduct of its business.
7.10 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Company will
cause each person now or hereafter employed by it or any subsidiary with
access to confidential information to enter into an Invention and
Non-Disclosure Agreement substantially in the form previously provided to
SAIC and referred to in Section 3.24 above.
7.11 INDEBTEDNESS. Company shall not without the prior approval of the
Company's Board of Directors incur any indebtedness in excess of its existing
bank line of credit other than trade credit incurred in the ordinary course
of business.
7.12 EXTENSION OF CREDIT. Company shall not, without the prior
approval of the Company's Board of Directors, extend trade credit by any
method or in any form or manner in excess of $250,000 other than open account
credit extended to customers in the ordinary course of business. The
extension of credit does not encompass the loaning of money.
-17-
7.13 TRANSACTIONS WITH AFFILIATES. Company shall not, without the
approval of the disinterested members of Company's Board of Directors, enter
into or engage in any loans, leases, contracts or other transactions of a
material nature with any director, officer or key employee of Company, or any
member of any such person's immediate family, including the parents, spouse,
children and other relatives of any such person.
7.14 TRANSACTIONS OUTSIDE THE ORDINARY COURSE OF BUSINESS AND EXCLUSIVE
DEALINGS. Company will not, without the prior approval of the Board of
Directors, enter into any agreement or understanding concerning the Company's
Common Stock, merger, acquisition, material change in ownership, joint
venture or other combination or any agreement undertaking, commitment or
transaction outside the ordinary course of business of the Company, nor will
the Company enter into any transaction or understanding granting any person
the exclusive right to ownership or use of any of Company's Intellectual
Property.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES INDEMNIFICATION
8.1 SURVIVAL OF REPRESENTATIONS. All covenants and agreements of the
parties as contained in this Agreement shall survive the Closing; provided,
however, the covenants of the Company set forth in Article VII shall
terminate upon the first closing of the first firmly underwritten public
offering of Common Stock of the Company that (i) is pursuant to a
registration statement filed with, and declared effective by the Securities
and Exchange Commission under the Securities Act of 1933, as amended, and
(ii) has an aggregate offering price to the public of at least Fifteen
Million Dollars $15,000,000). All representations and warranties of the
parties as contained in this Agreement shall terminate on September 30, 1999.
8.2 STATEMENTS AS REPRESENTATIONS. All statements contained in the
Disclosure Schedule and all Exhibits or in any certificate or other document
delivered pursuant to this Agreement shall be deemed representations and
warranties within the meaning of Section 8.1 hereof.
8.3 INDEMNIFICATION BY THE COMPANY AND XXXXXXXX. Subject to the terms
and conditions of this Article VIII, the Company and Xxxxxxxx (individually,
an "INDEMNIFYING PARTY" and collectively, "INDEMNIFYING PARTIES") each hereby
agrees to indemnify, defend and hold harmless SAIC, any subsidiary, director,
officer, employee, agent or representative of SAIC (individually, an
"INDEMNITEE" and collectively, "INDEMNITEES") from and against all demands,
claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses, including, without limitation, interest
penalties, attorneys' fees and expenses (collectively, "DAMAGES"), imposed
upon or incurred by the Indemnitees or any Indemnitee, resulting from, or
arising out of any breach of any representation, warranty or agreement of the
Company, contained in or made pursuant to this Agreement. Any liability of
Xxxxxxxx under this Section 8.3 shall be limited in time to one (1) year from
the date of Closing and a maximum liability of $500,000. Any liability of
the Company under this Section 8.3 shall be limited in time to September 30,
1999 and a maximum liability of $2,000,000.
-18-
8.4 INDEMNIFICATION BY SAIC. Subject to the terms and conditions of
this Article VIII, SAIC (sometimes referred to herein as the "INDEMNIFYING
PARTY") hereby agrees to indemnify, defend and hold harmless the Company and
any agent or representative of the Company ("INDEMNITEE" and collectively,
"INDEMNITEES") from and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest penalties, attorneys' fees and
expenses (collectively, "DAMAGES"), asserted against, resulting from, imposed
upon or incurred by the Indemnitees or any Indemnitee, resulting from,
relating to or arising out of a breach of any representation, warranty or
agreement of SAIC contained in or made pursuant to this Agreement. Any
liability of SAIC under this Section 8.4 shall be limited in time to one (1)
year from the date of Closing and a maximum liability of $500,000.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 AMENDMENT AND MODIFICATIONS. Subject to applicable law, this
Agreement may be amended, modified and supplemented only by written agreement
between the parties hereto which states that it is intended to be a
modification of this Agreement.
9.2 WAIVER OF COMPLIANCE. Any failure of the Company, Xxxxxxxx or
SAIC to comply with any obligation, covenant, agreement or condition herein
may be expressly waived in writing by the other party, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
9.3 EXPENSES. The parties agree that all fees and expenses incurred
by them in connection with this Agreement and the transaction contemplated
hereby shall be borne by the party incurring such fees and expenses,
including, without limitation, all fees of counsel, actuaries and accountants.
9.4 TRANSFER TAXES. The Company shall be responsible for and shall
pay all taxes levied or to be levied with respect to the sale of the Shares.
9.5 REMEDIES WAIVER. All rights and remedies existing under this
Agreement are cumulative to and not exclusive of, any rights or remedies
otherwise available under applicable law. No failure on the part of any
party to exercise or delay in exercising any right hereunder shall be deemed
a waiver thereof, nor shall any single or partial exercise preclude any
further or other exercise of such or any other right. No right or remedy of
a party shall be deemed waived unless expressly made a term, covenant or
condition in this Agreement.
9.6 NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duty given if personally delivered, sent by facsimile transmission,
or mailed by certified or registered mail with postage prepaid:
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(a) if to the Company, to:
X. X. Xxxxxxxx
The Xxxxxxxx Group
00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxx, Xx.
Locke, Purnell, Rain, Xxxxxxx
0000 Xxxx Xxx., Xxxxx 0000
Xxxxxx XX 00000-0000
or to such other person or address as the Company shall furnish to SAIC in
writing;
(b) if to SAIC, to:
Xxxxx X. Xxxxxx
Corporate Vice President
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0
Xxx Xxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxxx
Corporate Counsel
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0
Xxx Xxxxx, XX 00000
or to such other person or address as SAIC shall furnish to the Seller in
writing. Any notice given in accordance with the foregoing shall be deemed
to have been given when personally received by personal delivery or telecopy
or on the second business day following the date on which it was mailed.
9.7 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
party.
9.8 PUBLICITY. Neither the Company nor SAIC shall make or issue, or
cause to be made or issued, any announcement or written statement concerning
this Agreement or the transactions contemplated hereby for dissemination to
the general public without the prior consent
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of the other parties. This provision shall not apply, however, to any
announcement or written statement required to be made by law or the
regulations of any federal or state governmental agency, except that the
party required to make such announcement shall, whenever practicable, consult
with the other party concerning the timing and content of such announcement
before such announcement is made.
9.9 SEVERABILITY. If any portion of this Agreement shall be deemed
unenforceable by a court of competent jurisdiction, the remaining portions
shall be valid and enforceable.
9.10 ATTORNEYS' FEES. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement or because of an
alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Agreement, the successful or prevailing party shall
be entitled to recover reasonable attorneys' fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it may be
entitled.
9.11 GOVERNING LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws
of the State of Texas.
9.12 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
9.13 HEADINGS. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
9.14 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules hereto, the other documents and certificates delivered pursuant to
the terms hereof, set forth the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein, and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by
any officer, employee or representative of any party hereto, including but
not limited to the letter of July 10, 1996 authored by Xxxxx X. Xxxxxx on
behalf of SAIC and signed by X.X. Xxxxxxxx on behalf of the Company.
9.15 THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or corporation other than the parties
hereto and their successors or assigns, any rights or remedies under or by
reason of this Agreement.
9.16 FURTHER ASSURANCES. Each of the parties hereto agrees that from
time to time, at the request of any of the other parties hereto and without
further consideration, it will execute and deliver such other documents and
take such other action as such other party may reasonably request in order to
consummate more effectively the transactions contemplated hereby.
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9.17 SCHEDULES AND EXHIBITS. The Exhibits and the Disclosure Schedule
are deemed incorporated in this Agreement and may contain information that is
not expressly required to be disclosed by this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duty executed and if a corporation have caused their respective corporate
seats to be affixed hereto, all as of the day and year first above written.
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Corp. Vice President
Attest:
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
THE XXXXXXXX GROUP, INC.,
a Texas corporation
By: /s/ X. X. Xxxxxxxx
Name: X. X. Xxxxxxxx
Title: President
Attest:
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Xxxxxxxxx
-00-
XXXXXXXXXX XXXXXXXX
To the extent an item is disclosed on any schedule, it shall be deemed to be
disclosed for purposes of any and all other schedules, regardless of whether
a cross reference to such other schedule has been made.
SECTION SUBJECT MATTER
------- --------------
3.1 List of Current Directors and Officers
3.2 List of Holders of Company Stock
3.2 Capital Stock Exceptions
3.3(b) Valid Issuance of Capital Stock
3.4 Investments
3.6 Restrictive Documents
3.7 Violations
3.8 Consents Required
3.11 Encumbrances on Assets
3.12 Insurance Policies
3.13 Debt Instruments
3.14 Leases
3.15 Material Contracts and Agreements
3.18 Environmental Permits
3.19 ERISA Plans
3.20 Litigation
3.22 Liabilities
3.23 Intellectual Property
3.25 Government Claims
3.26 Questionable Payments
3.28 Shareholder Agreements
3.29 Other Agreements
3.30 Insider Interests
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SCHEDULE 3.01
THE XXXXXXXX GROUP
THE OFFICERS
Xxxx X. Xxxxxxxx President & Chief Executive Officer
0000 Xxxxxxxx Xxxxx, Xxxxxx, XX 00000
Xxxxx Xxxxx Executive Vice President
0000 Xxxxxxxx, Xxxxx, XX 00000
Xxxx Xxxxxxx Executive Vice President
0000 Xxxxx Xxxxx, Xxxxxxx, XX 00000
Xxx Xxxxx Executive Vice President
000 Xxxxxxx Xxxx, Xxxxxxx Xxxxxxx, XX 00000
Xxxxx Xxxx Senior Vice President, Treasurer, & Chief Financial Officer
0000 Xxxxxx Xxxxx, Xxxxxx Xxxxx, XX 00000
Xxxx Xxxxx Senior Vice President
0000 Xxxxxx Xxxxx, XxXxxxxx, XX 00000
Xxxx Xxxx Senior Vice President
0000 Xxxxxx Xxxxx, XxXxxxxx, XX 00000
Xxxxxx Xxxx Senior Vice President
0000 Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxx Senior Vice President
000 Xxxxxxxx, Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxxx Corporate Secretary
0000 Xxxxx Xxxxxxxxxx, Xxxxxx, XX 00000
Xxxxxxx Xxxxxxxxx Assistant Secretary
X.X. Xxx 000000, Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx Assistant Treasurer
0000 Xxx Xxxxx, Xxxxxx, XX 00000
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SCHEDULE 3.01
THE XXXXXXXX GROUP
THE BOARD OF DIRECTORS
Xxxx X. Xxxxxxxx Chairman
Xxxxx X. Xxxxxxxx Director
Xxx X. Xxxxxx Director
Xxxxx X. Xxxxxxx Director
Xxxxxxx X. Xxx Director
Xxxxx X. Xxxx Director
Xxxxxxx X. Xxxxxxx Corporate Secretary
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SCHEDULE 3.02
List of Holders of Company Stock
CLASS CLASS B CLASS B
CLASS A B PREFERRED STOCK STOCK
STOCK STOCK STOCK OPTIONS OPTIONS
NAME ISSUED ISSUED ISSUED GRANTED RESERVED TOTAL
X.X. Xxxxxxxx 655,514 0 0 0 0 655,514
Xxx Xxxxx 755 0 0 60,000 10,000 70,755
Xxxxx Xxxxx 14,095 0 0 35,000 0 49,095
1984 ESOP 42,036 0 0 0 0 42,036
1992 ESOP 36,111 0 0 0 0 38,111
Xxxx Xxxxxxx 0 0 0 21,667 3,333 25,000
Xxxxx Xxxx 23,170 0 0 0 0 23,170
Xxx XxXxxxxxx 14,300 0 0 7,177 0 21,477
(deceased)
Xxxx Xxxx 0 0 0 20,500 0 20,500
Xxxx Xxxxx 0 0 0 14,334 5,866 20,000
Xxxxxx Xxxx 0 0 0 14,667 5,333 20,000
Xxx Xxxxxxx 10,029 0 0 7,177 0 17,206
Xxx Xxxxxxxx 0 0 0 5,834 10,666 16,500
Xxx Xxxxxxxx 7,329 0 0 7,177 0 14,506
Xxxxxxx Xxx 7,329 0 0 7,177 0 14,506
Xxx Xxxxxx 7,329 0 0 7,177 0 14,506
Xxxx Xxxxxx 0 0 0 6,334 6,666 13,000
Xxxx Xxxxxxxx 0 0 0 3,334 6,666 10,000
Xxxxx Xxxx 0 0 0 3,334 6,666 10,000
Xxxxx Xxxxx 0 0 0 3,334 6,666 10,000
Xxxxx Xxxxxx 0 0 0 4,667 5,333 10,000
Xxxx Xxxxxxx 0 0 0 2,667 5,333 8,000
Xxxxx X. Xxxxxx 7,329 667 0 0 0 7,996
Xxxxx Xxxxxxxx 0 0 0 2,500 5,000 7,500
Xxxxx Xxxx 0 0 0 1,667 3,333 5,000
Xxxxxxx Xxxxxxx 0 0 0 0 5,000 5,000
Xxx Xxxxxxxx 0 0 0 3,667 1,333 5,000
Xxxx Xxxxxx 0 0 0 1,667 3,333 5,000
Xxx Xxxxxxxx 0 0 0 4,000 0 4,000
Xxxx Xxxxxxxx 0 0 0 1,000 0 1,000
Xxxxx Xxxxx 100 0 0 600 0 600
Unassigned 0 0 0 0 27,000 27,000
-------------------------------------------------------------------------------------------------
-4-
SCHEDULE 3.02
Total Issued & 825,426 667 0 246,558 117,327 1,189,978
outstanding
Treasury (FY95) 821 821
Treasury (PUSA) 184,602 184,602
-------------------------------------------------------------------------------------------------
Total Issued 1,010,849 667 0 246,558 117,327 1,375,401
Reserved options represent options which have not yet been granted, but
have been set aside to be granted upon meeting pro-established
performance criteria.
-5-
SCHEDULE 3.02
Capital Stock Exceptions
Agreement between the company and Xxxx Xxxxx whereby, following the close of
the current fiscal year (January 31, 1997), Xxxx Xxxxx will use the amount of
his incentive bonus payment net of taxes which exceeds $105,000, if any, to
purchase Class A Shares in the company at the market price as of the date of
purchase. Assuming a full payout on his bonus, the value of his purchase is
anticipated to be at least $75,000.
Employee Stock Ownership Program (ESOP)
Under the terms of the companies ESOP program the company is obligated to
repurchase shares of stock from the plan which the plan is required to sell
in order to fund payments to participants who resign, retire, are dismissed
or die. Payments for any individual participant are to be made in a lump sum
if the amount is less than $3,500. For payments which excised $3,500,
payments are to be made in equal amounts over a period of five years.
-6-
3.03(B)
OWNERSHIP AT CLOSING
NAME SHARES SHARES SHARES
A B TOTAL
X.X. Xxxxxxxx 655,514 0 655,514
SAIC 100,645 0 100,645
1984 ESOP 42,036 0 42,036
1992 ESOP 36,111 0 36,111
Xxxxx Xxxx 23,170 0 23,170
Xxx XxXxxxxxx (deceased) 14,300 0 14,300
Xxxxx Xxxxx 14,095 0 14,095
Xxx Xxxxxxx 10,029 0 10,029
Xxxxx X. Xxxxxx 7,329 667 7,996
Xxx Xxxxxxxx 7,329 0 7,329
Xxxxxxx Xxx 7,329 0 7,329
Xxx Xxxxxx 7,329 0 7,329
Xxx Xxxxx 755 0 755
Xxxxx Xxxxx 100 0 100
---------------------------------
Total Issued at Closing 926,071 667 926,738
-7-
SCHEDULE 3.04
Investments
The company holds an investment interest in Payment Solutions Network, Inc.
(Holdings).
The company entered into an agreement with PSN whereby the company is
entitled to a Payment of $250,000, subject to certain restrictions, on
January 1, 1996 and on each January 1 thereafter through January 1, 2000.
Each payment represents a repurchase of the companies interest in PSN on a $1
per share basis. In addition, the company is entitled to a contingent
Payment of 7% of the first $60,000,000 of PSN revenue and 6.25% of all PSN
revenues above $60,000,000 for the fiscal year ended December 31, 1999 less
amounts previously paid an each January 1.
-8-
SCHEDULE 3.06
Restrictive Documents
None
-9-
SCHEDULE 3.07
Violations
None
-10-
SCHEDULE 3.09
Consents
- Under the companies Revolving Line of Credit agreement with Compass Bank,
the company has agreed not to make material changes in the ownership or
management of the company. While not deemed a material change by the
company, the company has requested and received confirmation from the bank
that the transaction will not violate our loan covenants or change our
current borrowing relationship.
-11-
SCHEDULE 3.11
Encumbrances on Assets
Collateral provided to Compass Bank to secure $1,000,000 Revolving Line of
Credit as follows:
a. All present and future accounts, contract rights, general
intangibles, chattel paper, documents and instruments now existing or
hereafter arising from the business of Borrower together with an returned,
refused and/or repossessed goods, as well as an cash and noncash proceeds and
other rights arising from or by virtue of or from the voluntary or
involuntary sale, lease or other disposition of, or collections with respect
to, or insurance proceeds payable by virtue of warranty or other claims
against manufacturers of or claims against any other person with respect to
all or part of the collateral heretofore described in this clause.
b. AR goods, inventory, raw materials, work in progress or materials
used or consumed in Borrower's business, whether now owned or hereafter
acquired and all products and accessions thereof, whether in the possession
of Borrower, warehouseman, bailee or any other person together with all
proceeds thereof, including an accounts receivable, instruments and notes.
c. AR substitutes and replacements for, accessions attachments and
other additions to, proceeds and products of, the above collateral (including
all income and benefits resulting from any of the above, such as dividends
payable or distributable in cash, property or stock; interest, premium and
principal payments; redemption proceeds and subscription rights- and shares
or other proceeds of conversions or splits or any securities in collateral),
and returned or repossessed collateral.
d. All other interests of every kind and character which Borrower now
has or at any time hereafter acquires in and to the property described or
referred to in the preceding paragraphs.
-12-
SCHEDULE 3.12
Insurance Policies
1. General Liability Travelers Insurance Co.
- General Aggregate $2,000,000
- Products - Comp/OP Agg. $2,000,000
- Personal & Adv Injury $1,000,000
- Each Occurrence $1,000,000
- Fire Damage $50,000
- Med Exp. $50,000
2. Automobile Liability Travelers Insurance Co.
- Combined Single Limit $1,000,000
3. Excess Liability Umbrella Travelers Insurance Co.
- Each Occurrence $4,000,000
- Aggregate $4,000,000
4. Workers Compensation Travelers Insurance Co.
- EL each Accident $1,000,000
- EL Disease - Policy Limit $1,000,000
- FI Disease - EA Employee $1,000,000
5. Property Travelers Insurance Co.
- Contents $338,000
6. Specialty Errors & Omissions Liability
- Retro Date of 6/23/83 $2,000,000
7. Life Policy on Xxxxx Xxxxxxxx Transamerica Life Companies
- $10,000,000
- Assignment of proceeds to cover
outstanding debt on Pacific Technology
Promissory Note and Compass Revolving
Line of Credit
-13-
SCHEDULE 3.13
Debt Instruments
1. Compass Bank $1,000,000 Revolving Line Of Credit
- No amounts borrowed as of this date
2. Pacific Technology Services, Inc. $1,400,000 Promissory Note (to be
paid off immediately following Closing)
-14-
SCHEDULE 3.13
Debt Instruments
1. Compass Bank $1,000,000 Revolving Line Of Credit
- No amounts borrowed as of this date
2. Pacific Technology Services, Inc. $1,400,000 Promissory Note
-15-
SCHEDULE 3.14
Leases
Lease of Office space at 00000 Xxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxx
Landlord: Crescent Real Estate Equities, Ltd. Partnership
- Term ends May 31, 1999
- Base monthly lease commitment $24,400
-16-
SCHEDULE 3.15
Material Contracts and Agreements
Defaults in contracts or Agreements
- None
I. Agreements involving payments by the Company of more than $25,000 during
any 12 month period:
- None
II. Agreements for the employment of any officer, employee, consultant or
independent contractor:
- Board members are compensated $2,500 per quarter for board meeting
attended and $1,250 per quarter for meetings held which they did
not attend
- SCON Inc. retainer agreement for Xxxxx Xxxx at $4,166.67/month as
a consultant less amounts paid for board membership
- Xxxxxxx Xxxxxxx minimum retainer agreement at $4,000/month as a
consultant
- Xxxx Xxxxx minimum retainer agreement at $5,000/month as a
consultant
- Proposed retainer agreement with DRH Strategic Consulting, Inc. at
$12,500 per quarter
- Employees are provided an initial offer of employment which
outlines the specific salary and benefits which they will be
entitled to. The company operates as an "at will" employer and
has taken the position that employment can be terminated "at
will". No fixed duration or payment agreements exist with any
employee.
III. License agreements or distributor, dealer, manufacturer's
representative, sales agency or brokerage agreements:
- The company entered into an agreement with World Savings whereby
the company has agreed to pay a finders fee if sales of the
companies ReserveLink software product are sold to banks where
World Savings has provided an introduction. The fee terms are as
follows:
- 10% of sales up to $350,000
- $50,000 on sales of $350,000
- For sales in excess of $350,000 fee is $50,000 plus 10% of
the sale which exceeds $350,000
- The company entered into an agreement with Mr. Xxx Xxxxxxxx
whereby Xx. Xxxxxxxx would be paid a commission of $5,000 for
banks that he signs up to install the PSN Smartnotes product. PSN
will reimburse the company for this cost plus 20%.
- The company entered into an agreement with Michigan National Bank
under which the company agreed to pay a royalty for Cash
Forecaster sales an or before November 1997 either at the rate of
25% of each sale up to a maximum aggregate payment of $100,000 or
$100,000 in November 1997.
- The company entered into an agreement with Mr. Drolinger whereby
Mr. Drolinger would be paid 7% of each CheckLink CPCS software
sale up to a
-17-
maximum aggregate payment of $210,000. To date the company has
paid or accrued payments of $129,010.
IV. Agreements with any labor organization or other collective bargaining
unit:
- None
V. Agreements for the future purchase of materials, supplies, services,
merchandise or equipment involving payments of more the $25,000 over
their remaining term:
- None
VI. Profit-sharing, bonus, incentive compensation, deferred compensation,
stock option, severance pay, stock purchase, employee benefit,
insurance, hospitalization, pension, retirement or other similar plans
or agreements:
- Incentive bonus program under which employees are entitled to
receive a bonus payment following year end based on a percentage
of their base compensation, The bonus is determined based on the
company's performance against net income targets and the
contribution of the employee.
- The company maintains an incentive stock option plan under which
grants are made based on recommendations from company management.
- The company maintains an Employee Stock Ownership Plan for the
benefit of it's employees. There are currently no funding
obligations with respect to the plan and all contributions have
been fully allocated.
- The company provide standard health, life and disability insurance
for it's full time employees. Employees may elect to cover their
dependents for health Insurance with the increased premium cost
being deducted from their paycheck.
- The company maintains a 401(k) plan for the benefit of it's
employees. Employees can contribute by payroll deduction into the
plan subject to limits established by the IRS. Contributions are
matched 100% by the company.
- The company does not maintain a formal severance pay plan.
- The company has an agreement to sell stock to one employee as
described in schedule 3.28
VII. Agreements for the sale or purchase of any Assets or the grant of any
preferential rights to purchase any Assets or rights, other than in the
ordinary course of business:
- None
VIII. Agreements that contain any provisions requiring the Company to indents
any other party thereto:
- Standard contract indemnity
IX. Joint venture agreements or other agreements involving the sharing of
profits:
- The company has entered into an agreement with VISA for the
sharing of license fees due from PSN from installed SmartNotes
software. Under the agreement fees will be split 80% to VISA and
20% to the company until such time as VISA collects $350,000.
After such time the percentages will reverse.
- The company has entered into an agreement with ETC involving the
sharing of license fees due from PSN from installed Tnotes
software. Under the agreement, fees will be split 50% to ETC and
50% to the company.
-18-
X. Outstanding loans to any persons or entity:
- The company is obligated under loans as described in schedule 3.13
XI. Any agreement or understandings that reasonably could be interpreted to
impose restrictions on any business operations of the Company which,
either individually or in the aggregate, could reasonably be expected to
have a material adverse impact on the Company.
- None
XII. Commitments to lend money
- The Company loaned PSN $200,000 to fund general working capital
requirements of PSN. The company has given consideration to
loaning an additional $200,000 under similar terms.
- The company has committed to loaning PSN up to $200,000 to fund
the installation cost of SmartNotes in banks who have contracted
with PSN for the SmartNote service. To date, $13,685 has been
drawn on the loan.
XIII. Contracts for Services
- The company performs management and other services for PSN under a
management service agreement
See following attachment
-19-
SCHEDULE 3.15
THE XXXXXXXX GROUP
ANALYSIS OF CONTRACT COMMITMENT
REMAINING AS OF 8/31/96
--------------------------------------------------------------------------------------------------
REMAINING
TOTAL COMMITMENT
CLIENT PROJECT PHASE CONTRACT AS OF 8/31/96
--------------------------------------------------------------------------------------------------
UNION PLANTERS SWEEP LICENSE 100,000 100,000
IMPLEMENTATION 100,000 100,000
RESIDUAL 200,000 200,000
---------- ---------
400,000 400,000
BANK OF MISSISSIPPI SWEEP LICENSE 100,000 100,000
IMPLEMENTATION 50,000 20,000
RESIDUAL 100,000 100,000
---------- ---------
250,000 220,000
WORLD SAVINGS SWEEP LICENSE 68,000 0
DEFERRED MAINTENANCE 32,000 30,700
RESIDUAL 250,000 100,000
---------- ---------
350,000 130,700
FIRST CHICAGO SWEEP LICENSE 100,000 0
IMPLEMENTATION 100,000 92,400
RESIDUAL 200,000 0
---------- ---------
400,000 92,400
US BANCORP SWEEP LICENSE 74,400 20,600
DEFERRED MAINTENANCE 25,600 13,000
IMPLEMENTATION 100,000 66,400
RESIDUAL 350,000 350,000
---------- ---------
550,000 450,000
UNITED JERSEY (SUMMIT) SWEEP LICENSE 100,000 0
IMPLEMENTATION 50,000 48,500
RESIDUAL 110,000 110,000
---------- ---------
260,000 158,500
XXXXX SWEEP LICENSE 84,000 0,
DEFERRED MAINTENANCE 16,000 8,200
IMPLEMENTATION 50,000 50,000
RESIDUAL 5,000 5,000
---------- ---------
155,000 63,200
COMPASS BANK SWEEP LICENSE 100,000 0
IMPLEMENTATION 50,000 48,800
RESIDUAL 250,000 0
---------- ---------
400,000 48,800
WESTAMERICA SWEEP LICENSE 60,000 60,000
DEFERRED MAINTENANCE 5,000 5,000
IMPLEMENTATION 50,000 50,000
RESIDUAL 10,000 10,000
---------- ---------
125,000 125,000
-20-
SCHEDULE 3.15
--------------------------------------------------------------------------------------------------
REMAINING
TOTAL COMMITMENT
CLIENT PROJECT PHASE CONTRACT AS OF 8/31/96
--------------------------------------------------------------------------------------------------
COMMERCE BANK SWEEP LICENSE 54,000 0
DEFERRED MAINTENANCE 6,000 6,000
IMPLEMENTATION 50,000 32,000
RESIDUAL 15,000 0
---------- ---------
125,000 38,000
OLD KENT SWEEP LICENSE 50,000 0
IMPLEMENTATION 50,000 22,100
RESIDUAL 50,000 50,000
---------- ---------
150,000 72,100
CITIZENS MARYLAND SWEEP LICENSE 75,000 0
IMPLEMENTATION 50,000 45,100
RESIDUAL 50,000 50,000
---------- ---------
175,000 95,100
US TRUST SWEEP LICENSE 46,200 0
DEFERRED MAINTENANCE 3,800 1,400
IMPLEMENTATION 50,000 0
---------- ---------
100,000 1,400
BANK OF LANCASTER SWEEP LICENSE 100,000 0
IMPLEMENTATION 50,000 50,000
---------- ---------
150,000 50,000
BANK OF THE WEST SWEEP LICENSE IMPLEMENTATION 50,000 0
50,000 50,000
---------- ---------
100,000 50,000
MICHIGAN NATIONAL SWEEP LICENSE 25,000 0
DEFERRED MAINTENANCE 75,000 73,800
IMPLEMENTATION 50,000 50,000
CASH FORECASTER DEVELOPMENT/CONSULTING 150,000 141,100
---------- ---------
300,000 264,900
NORWEST SWEEP LICENSE 284,000 0
DEFERRED MAINTENANCE 18,000 4,100
IMPLEMENTATION 350,000 52,200
RESIDUAL 100,000 100,000
BSE CORPORATE 136,000 0
REGIONAL 326,000 186,400
FLOAT FLOAT MANAGEMENT 580,000 286,800
RECONFIGURATION PMO 1,375,000 566,500
IMPLEMENTATION 500,000 500,000
---------- ---------
3,647,000 1,716,000
NORWEST BSE PHASE I - (1995) 850,000 30,000
NORWEST CASH MANAGEMENT XXXXX 75,000 72,500
CASH MANAGEMENT XXXX 75,000 74,000
---------- ---------
150,000 146,500
CITIBANK INTERNATIONAL
PRICING PHASE I 45,000 21,300
SAIC XXXXXXX MAC PHASE I 20,000 13,700
IBM AGREEMENT
#ATLCON-223 PHASE II 6,000 2,000
-21-
SCHEDULE 3.15
--------------------------------------------------------------------------------------------------
REMAINING
TOTAL COMMITMENT
CLIENT PROJECT PHASE CONTRACT AS OF 8/31/96
--------------------------------------------------------------------------------------------------
PSN MANAGEMENT MANAGEMENT SERVICES
SERVICES (ESTIMATED) 1,029,400 400,000
MANAGEMENT FEES
(ESTIMATED) 263,200 100,000
---------- ---------
1,292,600 500,000
ECCHO MANAGEMENT ECCHO ADMINISTRATION
SERVICES (ESTIMATED) 631,200 250,000
ECCHO CONFERENCE
(ESTIMATED) 95,700 53,000
---------- ---------
726,900 303,000
NORTHERN TRUST NPPC PRODUCT DEVELOPMENT 100,000 22,800
SUNTRUST NPPC PRODUCT DEVELOPMENT 100,000 29,600
NORWEST NPPC PRODUCT DEVELOPMENT 100,000 51,100
BANK OF BOSTON NPPC PRODUCT DEVELOPMENT 100,000 75,800
SOFTWARE MAINTENANCE DEFERRED REVENUE CHECKLINK CPCS 294,866 168,679
FROM CURRENT CHECKLINK CICS 193,897 94,173
CONTRACTS STILL FPS/FAS 623,381 338,608
TO BE RECOGNIZED ALC 8,250 6,875
---------- ---------
1,120,394 608,335
CITIBANK CHECKLINK CPCS WORK ORDER 150,000 138,200
FROST FPS INSTALLATION 176,000 143,900
SIGNET CHECKLINK CICS INSTALLATION 231,000 84,000
BANK OF HAWAII FPS INSTALLATION 126,600 100,700
KEY FPS INSTALLATION 175,300 124,700
M & I FPS INSTALLATION 67,000 63,200
FIRST ALABAMA ALC DEVELOPMENT/
INSTALLATION 50,000 35,100
NORWEST FPS TECHNICAL SUPPORT 66,100 47,600
PSN SMART NOTES IMPLEMENTATION 197,400 134,400
VISA SMART NOTES PRODUCT
DEVELOPMENT PILOT 242,500 6,200
199,000 29,800
---------- ---------
441,500 36,000
COMERICA CONSOLIDATION PHASE II AND III 1,410,000 1,355,000
HOME SAVINGS OPERATIONS CASH MANAGEMENT 600,000 222,900
SUPPORT OPERATIONS REVIEW 600,000 183,800
ACH & WIRE 62,300 7,200
---------- ---------
1,262,300 413,900
SIGNET BSE CONTINGENCY (ESTIMATED) 250,000 250,000
CENTRAL FIDELITY BSE CONTINGENCY (ESTIMATED) 500,000 500,000
UNITED JERSEY (SUMMIT) MARKET
SEGMENTATION PHASE I 105,000 14,300
--------------------------------------------------------------------------------------------------
TOTAL 17,455,094 9,221,235
--------------------------------------------------------------------------------------------------
-22-
SCHEDULE 3.18
Environmental Permits
None
-23-
SCHEDULE 3.19
ERISA Plans
The company has received a determination letter (as provided to SAIC) from
the IRS dated August 19, 1996 relating to it's Employee Stock Ownership Plan
(ESOP) which provides that the company is required to adopt certain
amendments to it's ESOP no later than 90 days following the date of the
letter (November 19, 1996). The company is in the process of amending it's
ESOP in accordance with said determination letter.
-24-
SCHEDULE 3.20
Litigation
None
-25-
SCHEDULE 3.22
Liabilities
None
-26-
SCHEDULE 3.23
Intellectual Property
- The company is obligated to a royalty arrangement (as described in
schedule 3.15) on the sale of it's CheckLink CPCS software.
- The company is obligated to a royalty arrangement (as described in
schedule 3.15) on the sale of it's Cash Forecaster software.
-27-
SCHEDULE 3.25
Government Claim
None
-28-
SCHEDULE 3.26
Questionable Payments
None
-29-
SCHEDULE 3.28
Shareholder Agreements
- Agreement between X.X. Xxxxxxxx and Xxx Xxxxx whereby X.X. Xxxxxxxx has
committed to Xxx Xxxxx, that without the consent of Xxx Xxxxx, he will
not vote his shares of Class A Stock in favor of a Corporate Transaction
unless the Class B Stock is treated equally in all material respects,
from an economic standpoint, with the Class A Stock in such Corporate
Transaction.
- Agreement between X.X. Xxxxxxxx and Xxxxx Xxxx as follows:
- TAKE-ALONG SECURITIES. If Xxxxx decides to sell any of his shares
in a third-party negotiated transaction, Xxxxx has the right to
participate in the sale on a pro rata basis and on the same terms.
- BOARD SEAT. Xxxxx agreed to vote his shares to elect Xxxxx to the
Board as long as Xxxxx owns at least 15,000 shares.
- The company his a right of first refusal with certain of it's holders of
class A common stock which gives the company the right to purchase
shares under certain circumstances (copies of agreement previously
provided)
-30-
SCHEDULE 3.29
Other Agreements
None
-31-
SCHEDULE 3.30
Insider Interests
None
-32-
EXHIBIT 5.03
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CLOSING CERTIFICATE
The undersigned, XXXXX X. XXXXXX, Corporate Vice President of Science
Applications International Corporation, a Delaware corporation, hereby
delivers this Closing Certificate in connection with that certain Stock
Purchase Agreement (the "Stock Purchase Agreement") dated as of October _,
1996, by and among The Xxxxxxxx Group, Inc., a Texas corporation, X. X.
Xxxxxxxx, a resident of Texas, and Science Applications International
Corporation, a Delaware corporation, and certifies as follows:
1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties by Science Applications International Corporation set forth
in Article IV of the Stock Purchase Agreement are true and correct on
and as of this date with the same effect as though such representations
and warranties had been made on and as of this date.
IN WITNESS WHEREOF, the undersigned has executed this Closing
Certificate as of October , 1996.
/s/ Xxxxx X. Xxxxxx
-------------------------------------------------
Xxxxx X. Xxxxxx, Corporate Vice President of
Science Applications International Corporation
-33-
EXHIBIT 5.05
MEMBERS OF THE BOARD OF DIRECTORS AT CLOSING
1. X. X. Xxxxxxxx (Chairman)
2. Xxx Xxxxxxxx
3. Xxxxx Xxxx
4. Xxxxxxx Xxx
5. Xxx Xxxxxx
6. Xxx Xxxxxxx
7. Xxxxx Xxxx
-34-
Exhibit 5.06
STRATEGIC ALLIANCE AGREEMENT
THIS STRATEGIC ALLIANCE AGREEMENT ("AGREEMENT"), is made effective as of
October __, 1996, by and between SCIENCE APPLICATIONS INTERNATIONAL CORPORATION,
a Delaware corporation ("SAIC"), and THE XXXXXXXX GROUP, INC., a Texas
corporation ("XXXXXXXX"), who agree as follows:
1. RECITALS. This Agreement is entered into in contemplation of the
following facts and circumstances:
1.1 OBJECTIVES. Xxxxxxxx and SAIC desire to establish an
arrangement whereby they can in the future jointly offer such services,
products and technology as they may possess to prospective users of the
services, products and/or technology the parties may offer with
particular emphasis on commercial financial institutions and federal
government agencies ("CUSTOMERS") pursuant to terms, conditions and
prices mutually agreed upon by the parties in advance of entering any
contract with a Customer. The parties also anticipate that each may
identify opportunities which they do not pursue jointly, but with
respect to which the services, products and/or technology of the other
party may be marketed and sold to a Customer. This Agreement pertains
only to the SAIC Financial Services Practice within SAIC's Technology
Solutions Sector (the "SAIC FINANCIAL SERVICES PRACTICE").
1.2 PURPOSE. This Agreement (a) sets forth (i) the provisions
and conditions pursuant to which either party may identify and advise
the other party of a mutually beneficial business opportunity and
(ii) the circumstances under which parties may pursue the opportunity
jointly, and (b) establishes the basis of payments to a party that
introduces an opportunity which is not pursued jointly but with respect
to which the other party successfully markets and sells its services,
products and/or technology.
2. SCOPE OF AGREEMENT. The parties specifically acknowledge and
agree that this Agreement shall not apply to any work or contracts that
commenced prior to the date of this Agreement, unless the parties otherwise
agree in writing. This Agreement is not an exclusive dealings agreement and
each party is free to do business with others with respect to Customers or
otherwise; PROVIDED, HOWEVER, during the first three (3) years of this
Agreement, Xxxxxxxx shall provide SAIC with a preferential opportunity to
provide services, products and/or technology to each prospective Customer that
Xxxxxxxx solicits in those instances where it appears to Xxxxxxxx that a teaming
relationship is necessary and that SAIC could provide the services, products
and/or technology that is the subject matter of the solicitation.
Exhibit 5.06 - 1
EXHIBIT 5.06
3. MUTUAL BUSINESS OPPORTUNITIES.
3.1 REPRESENTATIVES. Each party shall designate one or more
authorized representatives to interact with the other for purposes
hereof ("REPRESENTATIVE") until such time as either party notifies the
other of its decision to designate a new Representative.
3.2 REVIEW OF OPPORTUNITIES. The parties' Representatives may
select and submit to the other for its consideration such business
opportunities identified by a party that the party believes may be of
mutual interest and the Representatives shall jointly determine whether
to pursue such business opportunity together. If the parties determine
to pursue an opportunity jointly, they also shall determine the terms,
conditions and prices that will be offered to the prospective Customer
and the strategy by which the parties will attempt to acquire the
business (including, without limitation, designation of the party which
shall serve as the prime contractor, the party which will perform the
necessary services and provide the appropriate products and/or
technology, and the party which will assume responsibility for
presentation of the parties' proposal). The Representatives shall meet
and confer, either in person or by teleconference, at least once
monthly, to discuss prospective business opportunities and performance
with respect to existing accounts.
3.3 COOPERATION. If the parties pursue a business opportunity
jointly, each party shall utilize commercially reasonable efforts to
market and obtain the targeted business; PROVIDED, HOWEVER, that the
parties shall coordinate their activities so as to provide a unified
presentation to the prospective Customer.
4. TRANSACTIONS.
4.1 JOINT TRANSACTIONS. Whenever a mutually satisfactory
contract to perform or provide services, products and/or technology to a
Customer has been obtained due to the active and substantial marketing
and sales efforts of both parties, Xxxxxxxx will have the right to
provide services, products and/or technology having a value up to fifty
percent (50%) of the estimated value of the contract and Xxxxxxxx shall
be entitled to its proportion of the revenue derived from the services,
products and/or technology provided by Xxxxxxxx. SAIC shall provide or
obtain all services, products and/or technology not provided by Xxxxxxxx
and shall receive the revenue represented by the proportion of the
revenue derived from the services, products and/or technology provided
by SAIC.
4.2 SOLE EFFORTS TRANSACTIONS. Whenever a mutually satisfactory
contract to provide services, products and/or technology to a Customer
has been obtained by the sole marketing and sales efforts of such party,
the contracting party shall make a commercially reasonable good faith
effort to enter into a subcontract or other arrangement to have the
other party provide up to five percent (5%) of the services, products
and/or technology required under the contract and the non-contracting
party shall receive its share of revenues accordingly.
Exhibit 5.06 - 2
EXHIBIT 5.06
4.3 FACILITATING TRANSACTIONS. Whenever a mutually satisfactory
contract to provide services, products and/or technology to a Customer
has been obtained by a party and the other party has provided limited
solicitation assistance, such as by way of introduction, endorsement,
referral or similar facilitating activity ("FACILITATING EFFORT"), the
contracting party shall make a commercially reasonable good faith effort
to enter into a subcontract or other arrangement to have the party
providing the Facilitating Effort to provide up to five percent (5%) of
the services, products and/or technology required under the contract and
the party providing the Facilitating Effort shall receive its share of
the revenues accordingly; PROVIDED, HOWEVER, that any contract under
this Section 4.3 entered into must have been entered into within one (1)
year of the performance of the initial Facilitating Effort.
4.4 LIMITATION. Notwithstanding the foregoing, should it be
discovered that any SAIC organization or affiliate other than the SAIC
Financial Services Practice is marketing, performing or providing
services, products and/or technology independently of the relationship
described in this Agreement, no subcontracting shall be required by the
other SAIC organization or affiliate with Xxxxxxxx.
5. BUSINESS DEVELOPMENT COMMITMENT.
5.1 During the first two (2) years of this Agreement, Xxxxxxxx
and SAIC agree to confer, develop, fund (either through the utilization
of internal personnel, resources, facilities, equipment, products and/or
other assets or by contributing cash) and implement mutually acceptable
business development plans approved in advance in writing by Xxxxxxxx'x
President and SAIC's Technology Solutions Sector Manager and which will
consist of (a) a public relations promotional program (the "PR PROGRAM")
and (b) the development of a joint marketing and sales plan such as, but
not limited to an electronic commerce strategic plan.
5.2 Each party shall equally contribute up to Twenty Thousand
Dollars ($20,000) in value per year to fund the PR Program, subject to a
maximum total contribution by each party of Forty Thousand Dollars
($40,000).
5.3 Each party shall equally contribute up to One Hundred
Thousand Dollars ($100,000) in value per year to fund the marketing and
sales plan agreed mutually upon and referred to in Section 5.1 above,
subject to a maximum total contribution by each party of Two Hundred
Thousand Dollars ($200,000).
6. CONTRACTING.
6.1 With respect to any undertaking proposed under this
Agreement, the parties shall confer and determine which of them should
be the party contracting with the Customer (the "PROJECT LEADER").
Exhibit 5.06 - 3
EXHIBIT 5.06
6.2 Each party shall (i) provide appropriate information and
personnel and use commercially reasonable good faith efforts to timely
prepare and submit to the Project Leader such data as are required for
use in preparation of that part of the proposal to be submitted to the
Customer and the services, products and/or technology to be provided to
the Customer and (ii) provide all other reasonable assistance to the
Project Leader in preparation of a proposal.
6.3 The Project Leader shall prepare the proposal, integrate the
information and data provided by the parties, submit the proposal to the
other party for advance review and written approval and submit the
resulting proposal to the Customer.
6.4 The Project Leader shall propose and promote the other party
as the subcontractor for the services, products and/or technology to be
provided under the contract with the Customer by such party.
6.5 The parties shall perform such additional effort subsequent
to submittal of the proposal to the Customer as appears reasonable to
obtain the contract with the Customer.
6.6 Each party shall perform its respective obligations
described in the contract with the Customer in a proper and workmanlike
manner and in accordance with the specifications, terms and conditions
of the contract with the Customer.
6.7 Any and all costs, expense or liability of either party
caused by or arising out of this Agreement, its implementation,
amendment, or expansion, shall be borne by each party separately and
individually and neither party shall be liable or obligated to the other
for any such cost, expense or liability except to the extent that such
costs, expense, or liabilities are reimbursed, paid or provided for,
under a written agreement entered into between the parties.
7. COMPLIANCE WITH LAW. Each Party agrees that in carrying out its
duties and responsibilities under this Agreement, it will neither undertake, nor
cause nor permit to be undertaken any activity which either (a) is illegal under
any laws, decrees, rules or regulations in effect in the United States, any
state or territory or in any other applicable jurisdiction, or (b) would have
the effect of causing the other party to be in violation of any laws, decrees,
rules or regulations in effect in the United States, any state or territory or
in any other applicable jurisdiction. Each party further acknowledges and
agrees that if either party breaches this Paragraph 7: (i) the non-breaching
party shall have the immediate right to terminate this Agreement; and (ii) the
breaching party shall indemnify the non-breaching party for any penalty, loss or
expenses incurred by the non-breaching party as a result of any such breach.
8. OWNERSHIP OF PRODUCTS AND WORK PRODUCT. Any patent, trademark,
copyright or intellectual property right in any software, software enhancements,
products,
Exhibit 5.06 - 4
EXHIBIT 5.06
services, technology, inventions, proprietary information or work product
("PRODUCTS") produced or created solely by one party as a result of the
activities contemplated by this Agreement shall be the sole and exclusive
property of such party. With respect to Products that are created directly
as a result of the combined work efforts of both parties (and not merely
because the contract with the Customer was jointly solicited), unless
otherwise agreed in advance in a document signed by Xxxxxxxx'x President and
SAIC's Technology Solutions Sector Manager, each party shall have a one-half
(1/2) undivided interest in the Products without a duty to account to the
other, provided that the Products are created or developed solely by the
combined work efforts of the parties and not merely because the contract was
jointly solicited.
9. CONFIDENTIAL AND/OR PROPRIETARY INFORMATION.
9.1 The parties anticipate that under this Agreement it may be
necessary for either to transfer to the other information of a
confidential and/or proprietary nature ("CONFIDENTIAL INFORMATION").
Confidential Information shall be clearly identified by the disclosing
party at the time of disclosure either by being marked with a legend
clearly indicating that it is confidential or proprietary and all oral
information that is reduced to writing and is identified as being
confidential or proprietary and such writing is given to the recipient
within fifteen (15) days of the date of the oral disclosure. Any
information otherwise provided shall be deemed to not be confidential or
proprietary.
9.2 Each of the parties agree that it will use the same efforts
to protect such Confidential Information as are used to protect its own
Confidential Information. Disclosures of such Confidential Information
shall be restricted to those individuals who are directly participating
in the proposal and contracting efforts hereunder.
9.3 Neither party shall make any reproductions, disclosure or
use of such Confidential Information except in performing its
obligations under this Agreement and as are set forth in the proposal to
the Customer, with appropriate restrictive legends to the extent that
either party specifically requests, and such legends as are permitted by
the Customer's regulations.
9.4 The limitations on reproduction, disclosure or use of
Confidential Information shall not apply to, and neither party shall be
liable for reproduction, disclosure or use of Confidential Information
with respect to which any of the following conditions exist:
(a) If, prior to the receipt thereof under this
Agreement, it has been developed independently by the party
receiving it, or was lawfully known to the party receiving it, or
has been lawfully received from other sources, including the
Customer, provided such other source did not receive it due to a
breach of this Agreement;
Exhibit 5.06 - 5
EXHIBIT 5.06
(b) If, subsequent to the receipt thereof under this
Agreement, (i) it is published by the party furnishing it or is
disclosed by the party furnishing it to others, including the
Customer, without restriction, or (ii) it has been lawfully
obtained by the party receiving it from other sources, including
the Customer, provided such other source did not receive it due to
a breach of this Agreement, or (iii) if such information otherwise
comes within the public knowledge or becomes generally known to
the public; or
(c) If any part of the Confidential Information has been
or hereafter shall be disclosed in a United States patent issued
to the party furnishing the Confidential Information hereunder,
then, after the issuance of said patent, the limitations on such
Confidential Information as disclosed in the patent shall be only
that afforded by the United States Patent Laws.
9.5 Neither the execution and delivery of this Agreement, nor
the furnishing of any Confidential Information by either party shall be
construed as granting to the other party either expressly, by
implication, estoppel, or otherwise, any license under any invention,
patent, trademark, or copyright now or hereafter owned or controlled by
the party furnishing same.
9.6 Notwithstanding the expiration of the other portions of this
Agreement, the obligations and provisions of this Article 9 shall
continue until terminated by either party upon five (5) days written
notice to the other; PROVIDED, HOWEVER, that the terms and conditions of
this Article shall continue to apply to all Confidential Information
disclosed prior to the effective date of such termination.
9.7 Each of the parties shall identify a person responsible for
receipt of Confidential Information subject to this Article.
10. RELATIONSHIP OF PARTIES.
10.1 INDEPENDENT CONTRACTORS. The parties hereto intend that the
relationship between them created by this Agreement shall be that of
independent contractors and that the relationship shall continue as such
as long as this Agreement remains in effect. Nothing contained in this
Agreement shall be construed to constitute either party as a partner,
employee or agent of the other, and no employee or agent of either party
shall be or be deemed to be the employee or agent of the other.
10.2 SCOPE OF AGREEMENT. Neither party shall have the authority
to make any agreement or commitment, or incur any liability on behalf of
the other party, nor shall either party be liable for any acts,
omissions to act, contracts, commitments, promises or representations
made by the other, except as specifically authorized in this Agreement
or as the parties hereafter may agree in writing.
Exhibit 5.06 - 6
EXHIBIT 5.06
11. INDEMNIFICATION. Each party shall be solely responsible for the
performances of its acts, duties and responsibilities under this Agreement and
for the acts, duties and responsibilities of its officers, employees and agents;
and each party agrees to indemnify the other, its officers, employees and
agents, and to hold harmless the other, its officers, employees and agents, and,
at the indemnifying party's sole expense, to defend the indemnified party, its
officers, employees and agents, from and against any claims, demands, causes of
action, loss, cost and expense, arising from, in connection with or based upon
the actions or omissions of the indemnifying party, its officers, employees or
agents pursuant to or in contravention of the provisions of this Agreement.
12. TERMINATION. This Agreement shall have an initial term of three
(3) years. Thereafter, except as to any contracts entered into with Customers
hereunder, either party shall have the right to terminate this Agreement at any
time, with or without cause, effective upon thirty (30) day's written notice to
the other party. Any amounts earned by either party as of the date of notice of
termination shall survive termination and shall continue to be payable, but
neither party shall be entitled to receive or obligated to pay any damages in
connection with such termination.
13. ARBITRATION OF DISPUTES. The parties agree that any controversy
or claim (whether such controversy or claim is based upon or sounds in statute,
contract, tort or otherwise) arising out of or relating to this Agreement, any
performance or dealings between the parties, or any dispute arising out of the
interpretation or application of this Agreement, which the parties are not able
to resolve, shall be settled exclusively by arbitration in Dallas, Texas by a
single arbitrator pursuant to the American Arbitration Association's Commercial
Arbitration Rules then obtaining and judgment upon the award rendered by the
arbitrator shall be entered in any court having Jurisdiction thereof and such
arbitrator shall have the authority to grant injunctive relief in a form similar
to that which a court of law would otherwise grant. The arbitrator shall be
chosen from a panel of licensed attorneys familiar with the subject matter of
this Agreement and shall be appointed within thirty (30) days of the date the
demand for arbitration was sent to the other party. Discovery shall be
permitted in accordance with the Federal Rules of Civil Procedure. If an
arbitration proceeding is brought pursuant to this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and
necessary disbursements incurred in addition to any other relief to which such
party may be entitled.
14. CHOICE OF LAW. The Agreement and the performance or breach
thereof shall be governed by and interpreted as to substantive matters in
accordance with the applicable laws of the State of Texas (excluding its choice
of law rules).
15. ASSIGNMENT. No portion of this Agreement or any right or
obligation hereunder can be assigned, in whole or in part, by either party
hereto without the prior written consent of the other party.
Exhibit 5.06 - 7
EXHIBIT 5.06
16. ENTIRE AGREEMENT. This Agreement contains the final, complete and
exclusive agreement of the parties with respect to the subject matter hereof and
supersedes all previous verbal and written agreements. This Agreement cannot be
amended, in whole or in part, without a written instrument signed by both of the
parties hereto.
17. WAIVER. No waiver of, no delay in the exercise of, and no
omission to exercise any rights or remedies by either party shall be construed
as a waiver by such party of any other rights or remedies that such party may
have under this Agreement.
18. NOTICE. Unless otherwise specified herein, any notice required or
permitted to be given under this Agreement shall be sufficient, if in writing,
and shall be deemed to be fully given if personally delivered, if sent by
registered mail, by facsimile with an original copy by regular mail, or by telex
with receipt acknowledged, to the following addresses:
(a) If to SAIC, to:
Xxxxx X. Xxxxxx
Science Applications International Corporation
0000 Xxxxxxxx Xx., Xxxxx 000
Xx Xxxxx XX 00000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
Corporate Counsel
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0
Xxx Xxxxx XX 00000
(b) If to Xxxxxxxx, to:
Xxxxxxx Xxxxxxx
Executive Vice President
The Xxxxxxxx Group, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx XX 00000
The foregoing addresses and individuals may be changed by either party by giving
to the other party prior written notice of any such change.
19. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Exhibit 5.06 - 8
EXHIBIT 5.06
20. THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or corporation other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
21. FURTHER ASSURANCES. Each of the parties hereto agrees that from
time to time, at the request of any of the other parties hereto and without
further consideration, it will execute and deliver such other documents and take
such other action as such other party may reasonably request in order to
consummate more effectively the transactions contemplated hereby.
IN WITNESS WHEREOF, as of the day first above written, the SAIC and
Xxxxxxxx have caused this Agreement to be signed by their respective duly
authorized officer.
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION,
a Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
THE XXXXXXXX GROUP, INC.,
a Texas corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Exhibit 5.06 - 9
EXHIBIT 5.07
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "AGREEMENT") is made and entered into
as of October __, 1996 by and among THE XXXXXXXX GROUP, INC., a Texas
corporation (the "COMPANY"), X.X. XXXXXXXX ("XXXXXXXX") and SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION, a Delaware corporation ("SAIC").
RECITALS
WHEREAS, the Company and SAIC desire to form a strategic alliance
between them, because of their diverse and complementary capabilities;
WHEREAS, the Company is authorized to issue shares ("SHARES") of the
Company's no par value Class A (voting) and Class B (non-voting) common stock
(individually "CLASS A COMMON STOCK") and "CLASS B COMMON STOCK") and
collectively "COMMON STOCK");
WHEREAS, in connection with the formation of the strategic alliance SAIC
desires to make an investment in the Company by purchasing 100,645 Shares of the
Company's Class A Common Stock ("SAIC SHARES") pursuant to a Stock Purchase
Agreement to be executed by the Company and SAIC contemporaneously with this
Agreement;
WHEREAS, Xxxxxxxx presently owns 655,514 Shares (approximately 79.41%)
of the issued and outstanding Shares of Class A Common Stock (the "XXXXXXXX
SHARES");
WHEREAS, upon the consummation of the purchase and sale of the Shares
pursuant to the Stock Purchase Agreement, SAIC will own not less than eight
percent (8%) of the issued and outstanding Shares of Common Stock (including
treasury Shares and Shares reserved for issuance under existing stock options)
in the amount of 1,258,074 Shares;
WHEREAS, the parties agree that SAIC should have the right to
participate in any future offerings of Common Stock by the Company so as to
avoid the dilution of SAIC's equity interest in the Company and that SAIC should
have the option to require the Company to purchase SAIC's Shares under certain
circumstances;
WHEREAS, the parties agree that the Company should have the right to
purchase SAIC's Shares under certain circumstances;
WHEREAS, the Company, SAIC and Xxxxxxxx agree that SAIC should have at
least one representative as a member of the Board of Directors of the Company at
all times during the term of this Agreement;
Exhibit 5.07 - 1
EXHIBIT 5.07
WHEREAS, the parties believe that it is of mutual benefit to the
Company, to SAIC and to Xxxxxxxx to provide for the nomination and election of
the representative of SAIC as a member of the Company's Board of Directors and
to provide for future dispositions of certain Shares;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE 1
ELECTION OF DIRECTORS
1.1 BOARD OF DIRECTORS. The Company and Xxxxxxxx hereby agree that
for so long as SAIC shall be entitled to have a representative on the Company's
Board of Directors pursuant to Section 1.2 below, neither the Company nor
Xxxxxxxx shall take or permit to be taken any action which would increase the
size of the Board of Directors to more than twelve (12) members, except as set
forth in this Article 1. In the event that the Board of Directors is increased
in size to more than twelve (12) members, the Company and Xxxxxxxx hereby agree
to take all such action as shall be necessary to ensure that SAIC shall be
entitled to designate a number of directors to the Board equal to the product of
one-twelfth (1/12th) times (ii) the total number of directors on the Board after
the increase, rounded down to the nearest whole number.
1.2 BOARD OF DIRECTORS REPRESENTATION. The Company and Xxxxxxxx agree
that SAIC shall have the right to have one (1) representative on the Company's
Board of Directors during the term of this Agreement. Xxxxxxxx hereby agrees to
vote for such SAIC nominated representative. Accordingly, contemporaneous with
the Closing of the Stock Purchase Agreement (as defined therein), the Company
agrees to nominate, and Xxxxxxxx agrees to elect, one representative to the
Company's Board of Directors designated by SAIC. Following such election, the
members of the Board of Directors shall be those persons set forth on
EXHIBIT 1.2 hereto. SAIC shall have the right to remove and replace its
representative at any time, in SAIC's sole discretion.
1.3 AGREEMENT COUPLED WITH INTEREST. The voting agreements set forth
in this Article 1 are coupled with an interest and may not be revoked without
the written consent of SAIC.
Exhibit 5.07 - 2
EXHIBIT 5.07
ARTICLE 2
RIGHTS OF FIRST REFUSAL, PUTS AND CALLS
2.1 SAIC RIGHT OF FIRST REFUSAL ON FUTURE SECURITIES. Subject to the
terms and conditions specified in this Section 2.1, the Company hereby grants to
SAIC a right of first refusal with respect to future sales by the Company of its
Future Securities (as hereinafter defined).
Each time the Company proposes to offer any Shares or options of,
or securities convertible into or exercisable or exchangeable for, any
class of its capital stock, including any Shares authorized by the
Company in the future which will result in the Company having in excess
of 1,258,074 Shares (including treasury Shares) issued and outstanding
and reserved for issuance upon exercise of existing stock options
("FUTURE SECURITIES"), the Company shall first make an offering of such
Future Securities to SAIC in accordance with the following provisions:
(a) The Company shall deliver a notice ("FUTURE SECURITIES
NOTICE") to SAIC stating (i) its bona fide intention to offer or issue
such Future Securities, (ii) the type and number of such Shares of
Future Securities to be offered, (iii) the price for which it proposes
to offer such Future Securities, and (iv) all other material terms and
conditions relating to such Future Securities.
(b) Within 30 calendar days after SAIC's receipt of the Future
Securities Notice, SAIC may elect to purchase, at the price and on the
terms and conditions specified in the Future Securities Notice, up to
that portion of such Shares of Future Securities which equals the
proportion that the number of Shares of Common Stock then issued and
held by SAIC bears to the total number of Shares of Common Stock of the
Company issued and outstanding and reserved for issuance upon exercise
of outstanding stock options.
(c) If all such Shares of Future Securities referred to in the
Future Securities Notice are not elected to be purchased by SAIC as
provided in subsection 2.1(b) hereof, the Company may, during the sixty
(60) day period following the expiration of the period provided in
subsection 2.1(b) hereof, offer the remaining unsubscribed Shares to any
person or persons at a price not less than that, and upon terms and
conditions no more favorable to the offeree than those, specified in the
Future Securities Notice. If the Company does not enter into an
agreement for the sale of the Shares within such period, or if such
agreement is not consummated within seventy-five (75) days of the
execution thereof, the right provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first reoffered to
SAIC in accordance herewith. Even though SAIC may decline to
participate in an offering of Future Securities, the provisions of this
Section 2.1 shall continue to apply to any subsequent offering of Future
Securities and SAIC shall be eligible to purchase subsequently offered
Future Securities on the same
Exhibit 5.07 - 3
EXHIBIT 5.07
basis provided herein, except that the anti-dilution percentage will be
reduced from eight percent (8%) to the SAIC percentage of ownership of
Shares that results from the transaction in which SAIC did not
participate.
(d) With respect to any Shares that may be issued, from time to
time, under stock options granted by the Company to its employees
pursuant to stock option plans approved by the Company's Board of
Directors, which result in the Company having in excess of 1,258,074
Shares (including treasury Shares) issued and outstanding, SAIC shall
have the right, at its option, to purchase such additional number of
Shares of the same class of Common Stock from the Company at the price
of the option(s) at the time the option is granted by the Company so as
to enable SAIC to maintain the same percentage of ownership stake in the
Company as it owned immediately preceding the date of grant of such
options.
2.2 SAIC'S STRATEGIC ALLIANCE PUT OPTION. Subject to the terms and
conditions specified in this Section 2.2, the Company hereby grants to SAIC a
right to require that the Company purchase, and the Company hereby agrees to
purchase from SAIC, all of the Shares then issued and held by SAIC, including
any Shares acquired by SAIC pursuant to this Article 2 (the "STRATEGIC ALLIANCE
PUT OPTION").
(a) The Strategic Alliance Put Option is only exercisable if the
cumulative revenues recognized by SAIC as a direct result of business
done jointly by SAIC and the Company pursuant to the Strategic Alliance
Agreement between SAIC and the Company of even date herewith do not
exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000) on or before the third
(3rd) anniversary of this Agreement. In the event this Agreement is
terminated pursuant to Article 3 prior to the third (3rd) anniversary of
this Agreement, the Strategic Alliance Put Option shall terminate.
(b) The price of the Shares under the Strategic Alliance Put
Option shall equal the aggregate price paid by SAIC to acquire the
Shares.
(c) To exercise the Strategic Alliance Put Option, on or before
the last day of the fortieth (40th) month after the first date written
above, SAIC shall provide Company with a written notice (the "STRATEGIC
ALLIANCE PUT NOTICE") of SAIC's desire to have the Company purchase the
Shares and, unless the provisions of subsection 2.2(d) apply, the
Company shall pay SAIC in cash and SAIC shall transfer, assign and
deliver the Shares, duly executed, to the Company on or before the
thirtieth (30th) business day after Company receives the Strategic
Alliance Put Notice.
(d) In the event Company's payment to SAIC pursuant to the
Strategic Alliance Put Option would cause the Company to violate any of
the covenants in Sections 5k, l, m, n or o (the "COMPASS BANK REVOLVER
COVENANTS") of the $1 million revolving Line of Credit Loan from Compass
Bank - Dallas to the Company dated October 26, 1995 (the
Exhibit 5.07 - 4
EXHIBIT 5.07
"COMPASS BANK REVOLVER"), or which would violate the covenants of any
future bank loan agreement (which such future covenants shall not be
more restrictive, individually or collectively, than those contained
in the Compass Bank Revolver in order to have the provisions of this
Section 2.2(d) to apply to any future bank loan agreement) so as to
prohibit borrowing by the Company under said agreement, Company may
elect to make and deliver a promissory note to SAIC substantially in
the form attached hereto as EXHIBIT 2.2(d) (the "PROMISSORY NOTE")
bearing an interest rate of the Prime Rate as defined hereafter plus
two percent (2%) with principal and interest payable semiannually over
a period of three (3) years but with no prepayment penalty; FURTHER,
PROVIDED, HOWEVER, that if the making of any payment under the
Promissory Note at any time would cause Company to be in default of
the Compass Bank Revolver Covenants (or in default under any future
bank loan agreement as provided above), then Company may postpone
payments under the Promissory Note, until the aforementioned default
ceases but in no event shall the postponement of payment of principal
and interest under the Promissory Note exceed five (5) years from the
date of the Strategic Alliance Put Notice. Interest will continue to
accrue during any such postponement at the Prime Rate plus two percent
(2%) per annum. The "PRIME RATE" shall mean the fluctuating per annum
interest rate established by NationsBank, N.A. in Dallas, Texas, as its
prime rate of interest offered from time to time. SAIC shall retain all
Shares until payment in full of the Promissory Note is made by Company.
In addition to the foregoing, during the period of any postponement of
payment of principal and interest by the Company to SAIC pursuant to the
Strategic Alliance Put Option, during such postponement, no base salary,
bonuses, awards or other payment for services rendered by Xxxxxxxx to
the Company shall be made if such payment to Xxxxxxxx would render the
Company insolvent or otherwise unable to pay its debts as they become
due.
2.3 SAIC'S XXXXXXXX SHARES PUT OPTION. Subject to the terms and
conditions specified in this Section 2.3, the Company hereby grants to SAIC a
right to require that the Company purchase any or all of the Shares owned by
SAIC, including any Shares acquired by SAIC pursuant to this Article 2 (the
"XXXXXXXX SHARES PUT OPTION").
(a) Xxxxxxxx may sell, assign, transfer, alienate, convey,
donate or otherwise in any manner dispose of (such dispositions are
hereafter collectively referred to as a "TRANSFER") his Xxxxxxxx Shares
by a bona fide sale to a third party, provided that Xxxxxxxx has first
complied with the procedures set forth in this Section 2.3. In the
event Xxxxxxxx, at any time, intends to Transfer to a third party an
amount of Xxxxxxxx Shares that would, at any time, result in such third
party owning more Shares than SAIC, Xxxxxxxx agrees to and shall deliver
to SAIC (with a copy to the Company) notice of such intention by
delivering a signed written statement setting forth Xxxxxxxx'x desire to
Transfer all or a portion of the Xxxxxxxx Shares, the number of Xxxxxxxx
Shares to be Transferred, the identity of the proposed Transferee, the
proposed Transfer price and all other material terms and conditions
relating to the proposed Transfer ("XXXXXXXX'X NOTICE OF INTENTION TO
TRANSFER"). The following shall not be considered a "third party" and
this Section 2.3
Exhibit 5.07 - 5
EXHIBIT 5.07
shall not apply to Transfers to (i) the Company; (ii) to Xxxxxxxx'x
immediate family (spouse, children, parents or siblings of Xxxxxxxx)
or to a trust for the benefit of Xxxxxxxx or his immediate family; or
(iii) to a corporation, all of whose capital stock is owned by Xxxxxxxx.
(b) Within thirty (30) days after SAIC's receipt of Xxxxxxxx'x
Notice of Intention to Transfer, SAIC may, at its option, elect to
exercise the Xxxxxxxx Shares Put Option by providing the Company (with a
copy to Xxxxxxxx) with a written notice (the "SAIC XXXXXXXX SHARE PUT
OPTION NOTICE") of SAIC's desire to have the Company purchase or all of
any SAIC's Shares.
(c) The price for Shares under the Xxxxxxxx Shares Put Option
shall be the highest of (i) the then fair market value of the Shares or
(ii) the price paid by SAIC to acquire SAIC's Shares or (iii) the price
at which Xxxxxxxx Proposes to Transfer the Xxxxxxxx Shares.
(d) The Company shall pay SAIC in cash and SAIC shall transfer,
assign and deliver the Shares, duly executed, to the Company on or
before the thirtieth (30th) business day after the Company receives the
Xxxxxxxx Share Put Option Notice.
(e) This Xxxxxxxx Shares Put Option shall apply to each and
every Transfer of Xxxxxxxx Shares during the term of this Agreement.
2.4 COMPANY'S RIGHT OF FIRST REFUSAL ON SAIC'S SHARES. Subject to the
terms and conditions of this Section 2.4 and during the term of this Agreement,
SAIC hereby grants to the Company a right of first refusal with respect to any
Shares that SAIC proposes to sell to a third party (excluding thereby, from the
scope of this Section 2.4, any Transfers by SAIC to any subsidiary or Affiliate
of SAIC as defined below ("COMPANY'S RIGHT OF FIRST REFUSAL"). An "Affiliate of
SAIC" shall mean any corporation which controls SAIC or is controlled by SAIC or
is under common control of or with SAIC.
(a) SAIC may Transfer any or all of the Shares then owned by
SAIC by a bona fide sale to a third party, provided that SAIC has first
complied with the procedures set forth in this Section 2.4. In the
event SAIC intends to Transfer any of the Shares owned by SAIC, SAIC
agrees to and shall deliver to the Company notice of such intention by
delivering a signed written statement setting forth SAIC's desire to
Transfer all or a portion of the Shares owned by SAIC, the number of
such Shares to be Transferred, the identity of the proposed Transferee,
the proposed Transfer price and all other materials terms and conditions
relating to the proposed Transfer ("SAIC'S NOTICE OF INTENTION TO
TRANSFER").
(b) Within thirty (30) days after Company's receipt of SAIC's
Notice of Intention to Transfer, the Company may, at its option, elect
to purchase the quantity of
Exhibit 5.07 - 6
EXHIBIT 5.07
Shares SAIC proposes to sell, each time SAIC decides to sell Shares,
by providing a written notice of Company's desire to purchase the SAIC
Shares (the "COMPANY EXERCISE NOTICE").
(c) The price for Shares under the Company's Right of First
Refusal shall be the price offered to SAIC by the third party.
(d) The Company shall pay SAIC on the same terms and conditions
as offered by the third party and SAIC shall transfer, assign and
deliver the Shares, duly executed, to the Company on or before the
thirtieth (30th) business day after the Company receives the Company
Exercise Notice.
2.5 COMPANY'S CALL OPTION TO REPURCHASE SAIC'S SHARES. Subject to the
terms and conditions specified in this Section 2.5, SAIC hereby grants to the
Company a right to require that SAIC sell, and SAIC hereby agrees to sell to the
Company, all of the Shares then issued and held by SAIC (the "CALL OPTION").
(a) The Call Option is only exercisable if the cumulative
revenues recognized by the Company as a direct result of business done
jointly by SAIC and the Company pursuant to the Strategic Alliance
Agreement do not exceed $10,000,000 on or before the third (3rd)
anniversary of this Agreement. In the event this Agreement is
terminated pursuant to Article 3 prior to the third (3rd) anniversary of
this Agreement, the Call Option shall terminate.
(b) The price for the Shares under the Call Option shall be the
higher of (i) the then fair market value of the Shares or (ii) the
aggregate price paid by SAIC to acquire the Shares; PROVIDED, HOWEVER,
that in the event the Company sells any Shares of its Common Stock
(other than Shares issued upon exercise of outstanding employee stock
options) to any other person or entity within twelve (12) months
following the date of the Company's payment to SAIC under the Call
Option at a per Share price in excess of the price paid per Share to
SAIC under this Section 2.5(b), then within thirty (30) days of the
closing of any such subsequent sale of Shares of Common Stock the
Company shall pay such excess price per Share to SAIC for its Shares
sold under the Call Option up to the number of Shares sold to the other
person or entity.
(c) To exercise the Call Option, on or before the last day of
the fortieth (40th) month after the first date written above, the
Company shall provide SAIC with a written notice (the "CALL NOTICE") of
the Company's desire to purchase the Shares. The Company shall pay SAIC
in cash and SAIC shall transfer, assign and deliver the Shares, duly
executed, to the Company on or before the thirtieth (30th) business day
after SAIC receives the Call Notice.
Exhibit 5.07 - 7
EXHIBIT 5.07
ARTICLE 3
TERM
This Agreement shall continue in full force and effect during the period
that SAIC owns any Shares; PROVIDED, HOWEVER, that this Agreement shall
terminate upon (a) the first closing of the first firmly underwritten public
offering of Common Stock of the Company that (i) is pursuant to a registration
statement filed with, and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and (ii) has an
aggregate offering price to the public of at least Fifteen Million Dollars
($15,000,000); (b) the sale of all or substantially all of the assets of the
Company to any person or entity that is not affiliated with or controlled by the
Company; or (c) a merger between the Company and another corporation or entity
that is not affiliated with or controlled by the Company in which the Company is
not the surviving corporation in the merger, whichever occurs first.
ARTICLE 4
MISCELLANEOUS
4.1 LEGEND ON SHARE CERTIFICATES. Xxxxxxxx agrees to surrender the
certificate(s) evidencing Xxxxxxxx'x ownership of Shares to the Secretary of the
Company and the Company agrees to cause the Secretary to stamp on the Xxxxxxxx'x
Share certificate(s), in a prominent manner, the following legend:
The transfer, sale, assignment, hypothecation, encumbrance
or alienation of the Shares represented by this
certificate may result in a put option in favor of SAIC or
a right of first refusal in favor of the Company pursuant
to a Shareholder Agreement, by and among X.X. Xxxxxxxx,
The Xxxxxxxx Group, Inc. and Science Applications
International Corporation, dated as of October ,
1996, a copy of which is available for inspection during
normal business hours at the principal executive office of
the Company.
The Company agrees that it shall cause all certificates for Shares
subsequently issued by the Company to Xxxxxxxx to bear such legend in a
prominent manner on the face or back of the stock certificate.
The aforementioned legend shall also be placed on all certificates
for Shares issued to SAIC.
4.2 FURTHER ASSURANCES. The parties agree to execute such further
instruments and to take such further actions as may be reasonably required to
carry out the intent of this Agreement. The parties hereby authorize the
Company and/or its transfer agents to make such transfers as are permitted by
this Agreement upon the books and records of the Company.
Exhibit 5.07 - 8
EXHIBIT 5.07
4.3 ARBITRATION OF DISPUTES. The parties agree that any controversy
or claim (whether such controversy or claim is based upon or sounds in statute,
contract, tort or otherwise) arising out of or relating to this Agreement, any
performance or dealings between the parties, or any dispute arising out of the
interpretation or application of this Agreement, which the parties are not able
to resolve, shall be settled exclusively by arbitration in Dallas, Texas by a
single arbitrator pursuant to the American Arbitration Association's Commercial
Arbitration Rules then obtaining and judgment upon the award rendered by the
arbitrator shall be entered in any court having jurisdiction thereof and such
arbitrator shall have the authority to grant injunctive relief in a form similar
to that which a court of law would otherwise grant. The arbitrator shall be
chosen from a panel of licensed attorneys familiar with the subject matter of
this Agreement and shall be appointed within thirty (30) days of the date the
demand for arbitration was sent to the other party. Discovery shall be
permitted in accordance with the Federal Rules of Civil Procedure. If an
arbitration proceeding is brought pursuant to this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and
necessary disbursements incurred in addition to any other relief to which such
party may be entitled.
4.4 NOTICES. All notices, requests, demands or other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, sent by facsimile transmission, or mailed by certified or
registered mail, postage prepaid and addressed as follows:
If to the Company: Xxxxx X. Xxxx
Chief Financial Officer
The Xxxxxxxx Group, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx XX 00000
If to Xxxxxxxx: X.X. Xxxxxxxx
0000 Xxxxxxxx
Xxxxxx XX 00000
If to SAIC: Xxxxx X. Xxxxxx
Science Applications International Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx XX 00000
with a copy to: Xxxxx X. Xxxxxx, Esq.
Corporate Counsel
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0
Xxx Xxxxx XX 00000
Exhibit 5.07 - 9
EXHIBIT 5.07
or to such other address as the party to be notified shall have furnished to the
other party in writing. Any notice given in accordance with the foregoing shall
be deemed to have been given when personally received by personal delivery or
telecopy or on the third (3rd) day following the date on which it was mailed.
4.5 SPECIFIC PERFORMANCE. The parties agree that it is impossible to
measure in money the damages that which will accrue to a party hereto by reason
of a failure to perform any of the obligations under this Agreement and that
irreparable harm will result from any such breach. Therefore, if any party to
this Agreement shall institute any action or proceeding to enforce the
provisions hereof, any party against whom such action or proceeding is brought
hereby waives the claim or defense therein that the party initiating the action
or proceeding has an adequate remedy at law.
4.6 APPLICABLE LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of Texas.
4.7 SUCCESSORS. This Agreement shall inure to the benefit of the
successors and assigns of the Company and subject to the restrictions on
transfer herein set forth, be binding upon SAIC and Xxxxxxxx, their respective
heirs, executors, administrators, successors, transferees and assigns.
4.8 ENTIRE AGREEMENT. This Agreement contains all the agreements,
representations and understandings of the parties hereto and supersedes and
replaces any and all previous understandings, commitments of agreements, oral or
written, relating to the subject matter of this Agreement. The invalidity or
unenforceability of any particular provision of this Agreement shall not effect
the other provisions hereof, and this Agreement shall be construed and enforced
in all respects as if such invalid or unenforceable provisions were omitted.
4.9 AMENDMENTS. This contract may not be modified or terminated
orally, and no modification nor any claimed waiver of any of the provisions
hereof shall be binding unless in writing and signed by the party against whom
such modification or waiver is sought to be enforced.
4.10 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Exhibit 5.07 - 10
EXHIBIT 5.07
IN WITNESS WHEREOF, as of the day first above written, the Company and
SAIC have caused this Agreement to be signed by their respective duly authorized
officer, and Xxxxxxxx has signed this Agreement.
THE XXXXXXXX GROUP, INC.,
a Texas corporation
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
X.X. XXXXXXXX
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION,
a Delaware corporation
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit 5.07 - 11
EXHIBIT 5.07
EXHIBIT 2.2(d)
PROMISSORY NOTE
DATE:
------------------------
MAKER: THE XXXXXXXX GROUP, INC.
PAYEE: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
Maker promises to pay to the order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at rates
stated below:
PRINCIPAL AMOUNT: TWO MILLION AND NO/100 DOLLARS ($2,000,000.00)
ANNUAL INTEREST RATE ON UNPAID PRINCIPAL FROM DATE HEREOF:
This Promissory Note shall bear interest equal to the Prime Rate
(defined below) in effect from time to time, plus two percent
(2%) computed on the basis of a year of three hundred sixty (360)
days and actual days elapsed. As used herein, the term "Prime
Rate" means the fluctuating per annum rate established by
NationsBank, N.A. in Dallas, Texas as its prime rate of interest
from time to time. Postponed payments, as provided herein, shall
bear the interest rate stated above.
TERMS OF PAYMENT (PRINCIPAL AND INTEREST):
All accrued and unpaid principal and interest shall be paid on a
semi-annual basis over a period of three (3) years with the first
payment commencing six (6) months after the date of this
Promissory Note.
ANNUAL INTEREST RATE ON MATURED, UNPAID AMOUNTS:
Eighteen percent (18%) or the highest rate allowed by applicable
law, whichever is the lesser.
PLACE FOR PAYMENT: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
00000 Xxxxxx Xxxxx Xx. X/X X0
Xxx Xxxxx XX 00000
or such other place as Payee or any other holder may, by
reasonable notice, direct.
POSTPONEMENT OF PAYMENT:
The payment of principal and accrued interest may be postponed,
if and only if, the making of any such payment would immediately
cause the Maker to violate any of the covenants in Sections 5k,
l, m, n or o of the $1 million Revolving Line of Credit Loan from
Compass Bank-Dallas to Maker dated October 26, 1995.
Notwithstanding the foregoing, no postponement shall extend
beyond and payments shall recommence on the earlier of W the date
any such violation would cease, or (ii) the fifth (5th)
anniversary of this Promissory Note at which time payment in full
shall be made. Interest win continue to accrue at all times on
the unpaid principal and interest.
Exhibit 2.2(d) - 1
SUBSTANTIATION:
In order for Maker to be entitled to or exercise any postponement
under this Promissory Note, Maker must first provide Payee with
all documents and information requested by Payee which relate or
concern Maker's claimed entitlement to any postponement of
principal and interest hereunder.
On default in the payment of this note or any installment hereof, then this
note shall become immediately due in full at the election of Payee. Maker
waives all demands for payment, presentations for payment, notices of
intention to accelerate maturity, and notices of protest. Time is of the
essence hereof.
In any litigation arising out of or relating to this note in which Payee and
the Maker or any subsequent holder shall be adverse parties, the Maker waives
the right to interpose any defense, set-off, or counterclaim other than
payment in accordance with the terms hereof.
The holder's acceptance of any installment or payment after it of the full
amount thereof may have become due and payable hereunder shall not be deemed
to alter the holder's rights or Maker's obligations with respect to any
subsequent payments or defaults hereunder.
The Maker shall have the right to prepay the principal amount outstanding, in
whole or in part, together with any accrued interest thereon, without
penalty. Any partial prepayment shall be first applied against any interest
then due and owing and then against the payment of principal outstanding.
If this note is given to an attorney for collection, or if suit is brought
for collection, or if it is collected through probate, bankruptcy, or other
judicial proceeding, then Maker shall pay Payee reasonable attorneys fees and
court costs, in addition to other amounts due. Reasonable attorney's fees
are agreed to be 10% of all remaining amounts due.
Nothing in this note shall authorize the collection of interest in excess of
the highest rate allowed by applicable law.
The terms "Maker" and "Payee" and other nouns and pronouns include the plural
if more than one, and include each gender. The terms "Maker" and "Payee"
also include their respective heirs, personal representatives, successors,
and assigns.
THIS NOTE IS GIVEN FOR A BUSINESS-PURPOSE LOAN OR EXTENSION OF CREDIT, AND
NOT FOR MAKERS PERSONAL, FAMILY HOUSEHOLD OR AGRICULTURAL USE. Chapter 15 of
the Texas Credit Code shall not apply hereto. This note shall be governed by
and construed in accordance with the local law of the State of Texas unless,
and then to the extent, preempted by federal law. This note is in all things
performable in Dallas County, Texas. In the event of litigation arising out
of or related to this note or its subject matter between or among the parties
hereto, then the parties consent to the personal jurisdiction of the state
and federal courts located in Dallas County, Texas, and, in the event of
litigation in federal courts, to the venue of such federal courts. The
parties hereby stipulate to the convenience of such fora.
Exhibit 2.2(d) - 2
MAKER:
THE XXXXXXXX GROUP, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
PREPARED IN THE LAW OFFICE OF:
Xxxxxx and Xxxxx, L.L.P.
000 Xxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000-0000
Exhibit 2.2(d) - 3
EXHIBIT 5.08
NONSOLICITATION AGREEMENT
THIS NONSOLICITATION AGREEMENT (this "AGREEMENT") is made and entered
into as of October , 1996 by and between SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION, a Delaware corporation ("SAIC"), and THE XXXXXXXX GROUP, INC., a
Texas corporation (the "COMPANY"), who agree as follows:
1. RECITALS. Company and SAIC desire to establish a relationship
whereby SAIC shall acquire an ownership in Company and the parties will enter
into a strategic alliance arrangement to develop mutually beneficial
contractual relationships with financial institutions. The parties
acknowledge that the employment relationship each party has with its
respective personnel are among the most important assets of such company and
that they both agree to refrain from soliciting the employees and former
employees of the other as provided herein.
2. NONSOLICITATION. The parties agree that during the period in
which SAIC holds any ownership interest in Company and for a period of one
(1) year after SAIC's ownership interest in Company ceases (the
"NONSOLICITATION PERIOD"), neither party will knowingly solicit, directly or
indirectly, for employment by such party, any employees of the other party or
any person who was employed by the other party within one (1) year prior to
the date of such solicitation for employment. Indirect solicitation includes
the use of employment or placement firms, or initiating the use of
intermediaries to contact a specific employee or former employee identified
to the employment or placement xxxx or intermediary by the party hiring an
employee or former employee. Indirect solicitation does not include the
placement of an advertisement for employment in a newspaper of general
circulation, job fairs, internet postings, trade publications, use of
employment or placement firms without identifying a particular person and
other similar activities. Neither party shall be prohibited from discussing
employment opportunities or hiring an employee or former employee of the
other party if such discussion or hiring is initiated by the employee or
former employee.
3. COOPERATION. During the Nonsolicitation Period and for one (1)
year thereafter, each party agrees, upon the receipt of a written request, to
provide the other party with full and complete access to all documents and
information such party has concerning any employee or former employee of a
party that is hired by the other party to this Agreement. The information to
be provided hereunder shall be delivered to the requesting party within ten
(10) business days from the hiring party's receipt of a request for same by
the former employer.
4. ARBITRATION OF DISPUTES. The parties agree that any controversy
or claim (whether such controversy or claim is based upon or sounds in
statute, contract, tort or otherwise) arising out of or relating to this
Agreement, any performance or dealings between the parties, or
Exhibit 5.08 - 1
any dispute arising out of the interpretation or application of this
Agreement, which the parties are not able to resolve, shall be settled
exclusively by arbitration in Dallas, Texas by a single arbitrator pursuant
to the American Arbitration Association's Commercial Arbitration Rules then
obtaining and judgment upon the award rendered by the arbitrator shall be
entered in any court having jurisdiction thereof and such arbitrator shall
have the authority to grant injunctive relief in a form similar to that which
a court of law would otherwise grant. The arbitrator shall be chosen from a
panel of licensed attorneys familiar with the subject matter of this
Agreement and shall be appointed within thirty (30) days of the date the
demand for arbitration was sent to the other party. Discovery shall be
permitted in accordance with the Federal Rules of Civil Procedure. If an
arbitration proceeding is brought pursuant to this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees, costs and
necessary disbursements incurred in addition to any other relief to which
such party may be entitled.
5. CHOICE OF LAW. The Agreement and the performance or breach
thereof shall be governed by and interpreted as to substantive matters in
accordance with the applicable laws of the State of Texas (excluding its
choice of law rules).
6. ASSIGNMENT. No portion of this Agreement or any right or
obligation hereunder can be assigned, in whole or in part, by either party
hereto without the prior written consent of the other party.
7. ENTIRE AGREEMENT. This Agreement contains the final, complete
and exclusive agreement of the parties with respect to the subject matter
hereof and supersedes all previous verbal and written agreements. This
Agreement cannot be amended, in whole or in part, without a written
instrument signed by both of the parties hereto.
8. WAIVER. No waiver of, no delay in the exercise of, and no
omission to exercise any rights or remedies by either party shall be
construed as a waiver by such party of any other rights or remedies that such
party may have under this Agreement.
9. NOTICE. Unless otherwise specified herein, any notice required
or permitted to be given under this Agreement shall be sufficient, if in
writing, and shall be deemed to be fully given if personally delivered, if
sent by registered mail, by facsimile with an original copy by regular mail,
or by telex with receipt acknowledged, to the following addresses:
If to SAIC, to:
----------------------
----------------------
----------------------
----------------------
Exhibit 5.08 - 2
With a copy to:
Xxxxx X. Xxxxxx, Esq.
Corporate Counsel
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, XX X0
Xxx Xxxxx XX 00000
If to Company, to:
Xxxxx X. Xxxx
The Xxxxxxxx Group, Inc.
00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
The foregoing addresses and individuals may be changed by either party by
giving to the other party prior written notice of any such change.
10. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
11. THIRD PARTIES. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or corporation other than the parties
hereto and their successors or assigns, any rights or remedies under or by
reason of this Agreement.
IN WITNESS WHEREOF, as of the day first above written, the SAIC and
Company have caused this Agreement to be signed by their respective duly
authorized officers.
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION,
a Delaware corporation
BY:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Exhibit 5.08 - 3
THE XXXXXXXX GROUP, INC.,
a Texas corporation
BY:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Exhibit 5.08 - 4
EXHIBIT 5.09
RECEIPT AND RELEASE
This Receipt and Release is made and entered into this 10th day of
October, 1996 by and between The Xxxxxxxx Group, Inc. ("XXXXXXXX") and
Pacific Technology Services, Inc. ("PACIFIC TECHNOLOGY").
1. PAYMENT OF PROMISSORY NOTE. Reference is made to that certain
Promissory Note dated June 17, 1996 (the "PROMISSORY NOTE") payable by
Xxxxxxxx, as Maker, to Pacific Technology, as Payee, issued pursuant to that
certain Stock Redemption Agreement (the "STOCK REDEMPTION AGREEMENT") by and
between Xxxxxxxx and Pacific Technology dated as of may 30, 1996. Xxxxxxxx
intends to make full payment on this date, by wire transfer of funds as
instructed by Pacific Technology, of principal and accrued interest on the
Promissory Note in the aggregate amount of $1,440,801.37. In the event
payment is received after October 10, 1996, an additional per diem payment of
$354.80 will be due on the Promissory Note.
2. MUTUAL RELEASE. Subject only to the receipt of funds from
Xxxxxxxx in full payment of the Promissory note as provided above, each party
hereto and its respective officers, directors, employees, representatives and
agents (collectively, "RELATED PARTIES") and their respective predecessors,
successors, transferees, successors and assigns (collectively "ASSIGNEES")
hereby release and discharge the other party and such other party's Related
Parties and Assignees, and each of them, from any and all claims, debts,
liabilities, demands, causes of action, obligations, promises, acts,
agreements, costs, attorneys' fees, expenses and damages, of any kind and
nature whatsoever, whether known or unknown, suspected or unsuspected,
claimed or unclaimed, fixed or contingent, or apparent or concealed
(collectively, "CLAIMS") that exist between the parties on the date hereof,
including, without limitation, any Claims which arise out of or are connected
with the redemption by Xxxxxxxx of 185,357 shares of its Class A Common Stock
from Xxxxxxxx Technology pursuant to that Stock Redemption Agreement or any
other document, instrument or transaction between the parties.
3. RETURN OF PLEDGED SHARES. Pursuant to that certain Stock Pledge
Agreement (the "STOCK PLEDGE AGREEMENT") dated as of June 17, 1996 by and
between Xxxxxxxx, as Pledgor, Pacific Technology, as Secured Party, and Xxxxx
X. Xxxxxxx, as Pledgeholder, the Pledge Shares (as defined in the Stock
Pledge Agreement) are being held by Pledgeholder to secure the payment of all
Secured Obligations (as defined in the Stock Purchase Agreement). Upon
receipt of funds from Xxxxxxxx in full payment of the Promissory Note, this
Receipt and Release shall constitute notice to the Pledgeholder that the
Secured Obligations have been satisfied in full and that the Pledged Shares
shall be returned to Xxxxxxxx.
Exhibit 5.09 - 1
THE XXXXXXXX GROUP, INC.
By:
-------------------------------------
PACIFIC TECHNOLOGY SERVICES, INC.
By:
-------------------------------------
Exhibit 5.09 - 2
