Exhibit 99.1
CACI International Inc
CACI Acquisition Corporation
QuesTech, Inc.
AGREEMENT and PLAN OF MERGER
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Table of Contents
Article 1 Definitions
1.1 Certain Matters of Construction
1.2 Cross References
1.3 Certain Definitions
Article 2 The Merger
2.1 Procedure for the Merger
2.2 Surviving Corporation
2.2.1 Corporate Existence
2.2.2 Certificate of Incorporation and By-laws
2.2.3 Directors
2.2.4 Effect of the Merger
2.3 Conversion of Stock
2.3.1 Stock of the Company
2.3.2 Merger Price Per Share
2.3.3 Adjustment to Merger Price Per Share
2.3.4 Stock of Merger Sub
2.4 Payment of Merger Price
2.4.1 Stockholder List
2.4.2 Payment to Paying Agent
2.4.3 Letters of Transmittal
2.5 Additional Actions
Article 3 Representations And Warranties Of The Company
3.1 Corporate Status of the Company
3.2 Capital Stock
3.2.1 Authorized Stock of the Company
3.2.2 Options and Convertible Securities of the Company
3.3 Subsidiaries
3.4 Authority for Agreement; Noncontravention
3.4.1 Authority
3.4.2 No Conflict
3.5 Financial Statements
3.6 Absence of Material Adverse Changes and Undisclosed
Liabilities
3.7 Compliance with Applicable Law, Articles and By-Laws
3.8 Litigation and Audits
3.9 Tax Matters
3.9.1 Filing of Returns
3.9.2 Payment of Taxes
3.9.3 Withholding
3.9.4 Assessments
3.9.5 Access to Returns
3.9.6 Definition of Taxes
3.10 Employee Benefit Plans
3.10.1 List of Plans
3.10.2 ERISA
3.10.3 Plan Determinations
3.10.4 Funding
3.11 Employment-Related Matters
3.11.1 Labor Relations
3.11.2 Employee List
3.12 Environmental
3.12.1 Environmental Laws
3.12.2 Environmental Claims
3.12.3 No Basis for Claims
3.13 No Broker's or Finder's Fees
3.14 Assets Other Than Real Property
3.14.1 Title
3.14.2 Accounts Receivable
3.14.3 Condition
3.15 Real Property
3.15.1 Company Real Property
3.15.2 Company Leases
3.15.3 Condition
3.16 Agreements, Contracts and Commitments
3.16.1 Company Agreements
3.16.2 Validity
3.17 Intellectual Property
3.17.1 Right to Intellectual Property
3.17.2 No Conflict
3.17.3 Employee Agreements
3.18 Insurance Contracts
3.19 Banking Relationships
3.20 Proxy Statement
Article 4 Representations And Warranties Of Parent And Merger Sub
4.1 Corporate Status of Parent and its Subsidiaries
4.2 Authorized Stock of Merger Sub
4.3 Authority for Agreement; Noncontravention
4.3.1 Authority of Parent
4.3.2 No Conflict
4.4 SEC Statements, Reports and Documents
4.5 Absence of Material Adverse Changes
4.6 Litigation and Audits
4.7 Proxy Statement
Article 5 Conduct Prior To The Effective Time
5.1 Conduct of Business of the Company
5.2 Conduct of Business of Parent
Article 6 Additional Agreements
6.1 Proxy Statement
6.2 Meeting of Stockholders
6.3 Amendment of Stock Options
6.4 Disposition of QTPI
6.5 Exclusivity
6.6 Expenses
6.7 Affiliate Agreements
6.8 Access and Information
6.9 Public Disclosure
6.10 No Solicitation of Employees
6.11 Directors and Officers Indemnification
6.12 Reasonable Efforts
Article 7 Conditions Precedent
7.1 Conditions Precedent to the Obligations of Each Party
7.1.1 Stockholder Approval
7.1.2 Xxxx-Xxxxx-Xxxxxx Compliance
7.1.3 No Injunction
7.1.4 Illegality
7.2 Conditions Precedent to Obligation of Parent and Merger
Sub to Effect the Merger
7.2.1 Representations and Warranties
7.2.2 Agreements and Covenants
7.2.3 Legal Opinion
7.2.4 Closing Documents
7.2.5 Third Party Consents
7.2.6 Material Adverse Effect
7.2.7 Company Closing Certificate
7.2.8 Stockholder List
7.2.9 Disposition of QTPI
7.2.10 Amendment of Stock Options
7.3 Conditions to Obligations of the Company to Effect
the Merger
7.3.1 Representations and Warranties
7.3.2 Agreements and Covenants
7.3.3 Legal Opinion
7.3.4 Closing Documents
7.3.5 Material Adverse Effect
7.3.6 Parent Closing Certificate
7.3.7 Payment of Purchase Price
Article 8 Survival Of Representations
8.1 Survival of Representations
8.1.1 The Company's Representations
8.1.2 Parent's Representations
Article 9 Other Provisions
9.1 Termination Events
9.2 Notices
9.3 Entire Agreement
9.4 Assignability
9.5 Validity
9.6 Specific Performance
9.7 Governing Law
9.8 Counterparts
AGREEMENT AND PLAN OF MERGER
----------------------------
Agreement and Plan of Merger, dated as of July 30, 1998 (the
"Agreement"), by and among CACI International Inc, a Delaware corporation
("Parent"), CACI Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Parent, ("Merger Sub") and QuesTech, Inc., a
Virginia corporation (the "Company"). Merger Sub and the Company together are
sometimes referred to herein as the "Constituent Corporations."
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the respective boards of directors of Parent, Merger Sub and the
Company have determined that it is advisable that Merger Sub be merged with
and into the Company (the "Merger") on the terms and conditions set forth
herein and in accordance with the provisions of the General Corporation Law of
the State of Delaware (the "DGCL") and the Stock Corporation Act of the
Commonwealth of Virginia (the "VSCA");
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations and warranties and other agreements in connection with the
Merger;
NOW, THEREFORE, Parent, Merger Sub and the Company hereby agree as
follows:
ARTICLE 1
DEFINITIONS
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1.1 CERTAIN MATTERS OF CONSTRUCTION. A reference to an Article, Section,
Exhibit or Schedule shall mean an Article of, a Section in, or Exhibit or
Schedule to, this Agreement unless otherwise expressly stated. The titles and
headings herein are for reference purposes only and shall not in any manner
limit the construction of this Agreement which shall be considered as a
whole. The words "include," "includes" and "including" when used herein shall
be deemed in each case to be followed by the words "without limitation."
1.2 CROSS REFERENCES. The following terms defined elsewhere in this
Agreement in the Sections set forth below shall have the respective meanings
therein defined:
Term Definition
---- ----------
Acquisition Proposals Section 6.5
Adjustment Amount Section 2.3.3
Adjustment Price Per Share Section 2.3.3
Affiliate Agreements Section 6.7
Agreement Preamble
Certificate of Merger Section 2.1
Closing Section 2.1
Closing Date Section 2.1
Company Preamble
Company Balance Sheet Section 3.5
Company Common Stock Section 2.3.1
Company Financial Statements Section 3.5
Company Insurance Contracts Section 3.18
Company Meeting Section 3.20
Company Proprietary Rights Section 3.17.1
Company Plans Section 3.10.1
Constituent Corporations Preamble
Effective Date Section 2.1
Effective Time Section 2.1
Employee List Section 3.11.2
Encumbrances Section 3.14.1
GAAP Section 3.5
DGCL Preamble
Governmental Entity Section 3.4.2
Indemnified Parties Section 6.12
Independent Accountants Section 2.3.3
Liabilities Section 3.6.
Merger Preamble
Merger Price Per Share Section 2.3.2
Merger Sub Preamble
Merger Sub Stock Section 2.3.3.
Net Proceeds Notification Section 2.3.3
Net Proceeds of Sale Section 2.3.3
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Parent Preamble
Parent Balance Sheet Section 4.4
Parent Reports Section 4.4.
Parent Stock Section 2.3.1.
Paying Agent Section 2.4
Permits Section 3.7.
Proxy Statement Section 3.20.
Stockholder List Section 2.4.1.
Stockholders Section 2.4.1.
Surviving Corporation Section 2.1.
Taxes Section 3.9.6.
Transmittal Letter Section 2.4.3.
VSCA Preamble
1.3 Certain Definitions. As used herein, the following terms shall have the
following meanings:
Affiliate: with respect to any Person, any Person which, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person.
COBRA: the provisions of Section 4980B of the Code and Part 6 of Title I of
ERISA.
Closing Certificate: a certificate of the secretary of the entity certifying
as to the incumbency of officers, corporate resolutions to effect the
transactions contemplated by this Agreement and as to the articles of
organization and by-laws.
Code: the U.S. Internal Revenue Code of 1986, as amended from time to time.
Commercial Software: packaged commercial software programs generally
available to the public through retail dealers in computer software or
directly from the manufacturer which have been licensed to the Company and
which are used in the Company's business but are in no way a component of or
incorporated in or specifically required to develop or support any of the
Company's products and related trademarks, technology and know-how.
Company Leases: each lease, sublease, license or other agreement under which
the Company or any of its Subsidiaries uses, occupies or has the right to
occupy any real property or interest therein that (a) provides for future
minimum payments of $50,000 or more (ignoring any right of cancellation or
termination) or (b) the cancellation or termination of which would have a
Company Material Adverse Effect.
Company Material Adverse Effect: any materially adverse change in or effect on
the financial condition, business, operations, assets, properties, results of
operations or prospects of the Company and its Subsidiaries considered on a
consolidated basis.
Company Option Plans: the Company's 1994 and 1996 Incentive Stock Option
Plans and its 1996 Stock Option Plan for Non-Employee Directors.
Company SECT: the Stock Employee Compensation Trust governed by the Amended
and Restated Trust Agreement effective as of March 25, 1998, by and among the
Company and certain individual Directors of the Company as Trustees.
Company Stock Options: options to purchase Company Common Stock outstanding
under the Company Option Plans.
control (including with correlative meaning, controlled by and under common
control with): as used with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
Environmental Claim: any notice alleging potential liability (including,
without limitation, potential liability for investigatory costs, cleanup
costs, response or remediation costs, natural resources damages, property
damages, personal injuries, fines or penalties) arising out of, based on or
resulting from (a) the presence, or release of any Material of Environmental
Concern at any location, whether or not owned by that party or any of its
Subsidiaries or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
Environmental Laws: any and all statutes, regulations and ordinances relating
to the protection of public health, safety or the environment.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate: with respect to a party, any member (other than that party)
of a controlled group of corporations, group of trades or businesses under
common control or affiliated service group that includes that party (as
defined for purposes of Section 414(b), (c) and (m) of the Code).
Exchange Act: the Securities Exchange Act of 1934, as amended.
H-S-R Act: the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
Letter of Intent: the letter dated May 18, 1998 from the Chairman and Chief
Executive Officer of Parent to the Chairman and Chief Executive Officer of the
Company expressing the companies' intention to effect the merger and related
transactions, subject to execution of this Agreement and other matters.
Materials of Environmental Concern: petroleum and its by-products and all
substances or constituents that are regulated by, or form the basis of
liability under, any Environmental Law.
Parent Material Adverse Effect: any materially adverse change in or effect on
the financial condition, business, operations, assets, properties, results of
operations or prospects of Parent and its Subsidiaries considered on a
consolidated basis.
Permitted Encumbrances: (a) liens for current taxes and other statutory liens
and trusts not yet due and payable or that are being contested in good faith,
(b) liens that were incurred in the ordinary course of business, such as
carriers', warehousemen's, landlords' and mechanics' liens and other similar
liens arising in the ordinary course of business, (c) liens on personal
property leased under operating leases, (d) liens, pledges or deposits
incurred or made in connection with workmen's compensation, unemployment
insurance and other social security benefits, or securing the performance of
bids, tenders, leases, contracts (other than for the repayment of borrowed
money), statutory obligations, progress payments, surety and appeal bonds and
other obligations of like nature, in each case incurred in the ordinary course
of business, (e) pledges of or liens on manufactured products as security for
any drafts or bills of exchange drawn in connection with the importation of
such manufactured products in the ordinary course of business, (f) liens under
Article 2 of the Uniform Commercial Code that are special property interests
in goods identified as goods to which a contract refers, (g) liens under
Article 9 of the Uniform Commercial Code that are purchase money security
interests, and (h) such imperfections or minor defects of title, easements,
rights-of-way and other similar restrictions (if any) as are insubstantial in
character, amount or extent, do not materially detract from the value or
interfere with the present or proposed use of the properties or assets of the
party subject thereto or affected thereby, and do not otherwise adversely
affect or impair the business or operations of such party.
Person: an individual, a corporation, an association, a partnership, an
estate, a trust and any other entity or organization.
QTPI: QuesTech Packaging, Inc., a Virginia corporation wholly owned by the
Company.
SEC: the Securities and Exchange Commission, or any Governmental Entity
succeeding to its functions.
Securities Act: the Securities Act of 1933, as amended.
Subsidiary: any corporation, association, or other business entity a majority
(by number of votes on the election of directors or persons holding positions
with similar responsibilities) of the shares of capital stock (or other voting
interests) of which is owned by Parent, the Company or their respective
Subsidiaries, as the case may be. Except when expressly included as a
Subsidiary in any provision of this Agreement, QTPI shall not be considered a
Subsidiary.
ARTICLE 2
THE MERGER
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2.1 Procedure for the Merger. The closing of the transactions contemplated
by this Agreement ("Closing") shall take place at the offices of Parent in
Arlington, Virginia, commencing at 10:00 a.m. local time on September 30,
1998, or on such other date as the parties may agree after the satisfaction or
waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby ("Closing Date"). At the Closing, Merger
Sub shall be merged, in accordance with section 252 of the DGCL and section
13.1-722 of the VSCA, with and into the Company, which shall be and is
sometimes referred to herein to as the"Surviving Corporation@. The Merger
shall be effected by filing a certificate of merger/articles of merger,
substantially in the form of Exhibit 2.1 attached hereto (the "Certificate of
Merger"), with the Secretary of State of Delaware in accordance with section
252(c) of the DGCL and with the Secretary of State of Virginia in accordance
with section 13.1-720 of the VSCA. Each certificate filed shall provide that
the merger will be effective at 12:01 am (the "Effective Time") on the Closing
Date.
2.2 Surviving Corporation.
2.2.1 Corporate Existence. The Surviving Corporation shall continue its
corporate existence under the laws of the Commonwealth of Virginia. The
separate corporate existence of Merger Sub shall cease at the Effective Time.
2.2.2 Certificate of Incorporation and By-laws. The articles of
incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the articles of incorporation of the Surviving Corporation
until the same shall be amended thereafter in accordance with the VSCA and
such articles of incorporation. The by-laws of Company, as in effect
immediately prior to the Effective Time, shall be the by-laws of the Surviving
Corporation until the same shall be amended thereafter in accordance with the
VSCA, the certificate of incorporation of the Surviving Corporation and such
by-laws.
2.2.3 Directors. As of the Effective Time, J. P. London, Xxxxx X.
Xxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx, and Xxxxxxx X. Xxxxxxx shall
be the directors of the Surviving Corporation, to hold office in accordance
with the certificate of incorporation and by-laws of the Surviving
Corporation.
2.2.4 Effect of the Merger. As of the Effective Time, the effect of
the Merger shall be as provided in this Agreement and the applicable
provisions of the DGCL and the VSCA. Without limiting the generality of the
foregoing, at the Effective Time, all the property, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger
Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
2.3 Conversion of Stock.
2.3.1 Stock of the Company. At the Effective Time, by virtue of the
Merger and without any action on the part of the holders thereof, each share
of Common Stock, $.05 par value per share, of the Company ("Company Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than Company Common Stock held in the Company's treasury) will be canceled and
extinguished and be converted automatically into the right to receive payment
of the Merger Price Per Share in accordance with the terms and provisions of
this Agreement.
2.3.2 Merger Price Per Share. The Merger Price Per Share shall be
Eighteen Dollars and Thirty-Seven and One-Half Cents ($18.375) plus the
Adjustment Price Per Share.
2.3.3 Adjustment to Merger Price Per Share.
(a) As soon as practicable after the Company completes
disposition of its entire interest in QTPI, the Company and Parent shall
cooperate to determine the Net Proceeds of Sale (as defined herein) received
by the Company or QTPI on that disposition. The Net Proceeds of Sale shall be
calculated by deducting from the purchase price received by the Company or
QTPI from the sale of QTPI's stock or assets (a) the costs and expenses
(including attorney, broker, and accounting fees and expenses) incurred in
connection with the sale of QTPI's stock or assets, (b) any liquidation costs
of QTPI and (c) any reserves for any liabilities or obligations of QTPI,
fixed, accrued, contingent or otherwise.
(b) Upon agreement of the Net Proceeds of Sale, the aggregate
Merger Price to be paid by Parent shall be increased or decreased, as the case
may be by the Adjustment Price Per Share, which shall be calculated by
dividing the Net Proceeds of Sale by the Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than Company Common
Stock held in the Company's treasury.)
2.3.4 Stock of Merger Sub. At the Effective Time, each share of the
Common Stock, par value $.01 per share, of Merger Sub ("Merger Sub Stock")
issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be converted into and become one validly issued, fully paid and nonassessable
share of Common Stock, par value $.01 per share, of the Surviving Corporation.
2.4 Payment of Merger Price.
2.4.1 Stockholder List. The Company shall prepare a list (the
"Stockholder List") setting forth the names and addresses of all Persons who
are the record holders of Company Common Stock immediately prior to the
Effective Time (the "Stockholders"), which it shall deliver to Parent at the
Closing.
2.4.2 Payment to Paying Agent. At the Closing, Parent shall pay the
aggregate Merger Price by wire transfer to a bank, trust company, or similar
professional fiduciary appointed jointly by Parent and the Company (the
"Paying Agent"), to be held for distribution to the Stockholders as provided
in this Section 2.4.
2.4.3 Letters of Transmittal. At or promptly after the Effective Time,
the Surviving Corporation will send or deliver to each Stockholder two or more
copies of a Letter of Transmittal in a form mutually agreed by the parties.
Thereafter, the Paying Agent shall pay to each Stockholder who submits a
properly completed and executed Letter of Transmittal accompanied by surrender
of the certificate or certificates for shares of Company Common Stock for
which that Stockholder claims payment, the aggregate amount of the Purchase
Price Per Share to which that Stockholder is entitled.
2.5 Additional Actions. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest, perfect or confirm in the Surviving Corporation title to
or ownership or possession of any property, right, privilege, power, franchise
or other asset of either Constituent Corporation acquired or to be acquired by
reason of, or as a result of, the Merger, the officers and directors of the
Company and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and
necessary action, so long as such action is consistent with this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and Merger Sub as follows:
3.1 Corporate Status of the Company. Except as set forth on Schedule 3.1
hereto, the Company and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite corporate power to own,
operate and lease its properties and to carry on its business as now being
conducted. Except as set forth on Schedule 3.1 hereto, the Company and its
Subsidiaries are duly qualified or licensed to do business as foreign
corporations and are in good standing in all jurisdictions in which the
character of the properties owned or held under lease by each or the nature of
the business transacted by each makes qualification necessary, except where
failure to be so qualified would not have a Company Material Adverse Effect.
All jurisdictions in which the Company and its Subsidiaries are qualified to
do business are set forth on Schedule 3.1 hereto.
3.2 Capital Stock.
3.2.1 Authorized Stock of the Company. The authorized capital stock of
the Company consists of 3,000,000 shares of Company Common Stock, of which
1,916,004 shares were issued and outstanding (excluding 9,900 shares held in
Treasury) as of March 31, 1998 All of the outstanding shares of Company
Common Stock have been duly authorized and validly issued, were not issued in
violation of any person's preemptive rights, and are fully paid and
nonassessable.
3.2.2 Options and Convertible Securities of the Company. Except as set
forth on Schedule 3.2, there are no outstanding subscriptions, options,
warrants, conversion rights or other rights, securities, agreements or
commitments obligating the Company to issue, sell or otherwise dispose of
shares of its capital stock, or any securities or obligations convertible
into, or exercisable or exchangeable for, any shares of its capital stock.
Since March 31, 1998, the Company has not issued, sold or otherwise disposed
of any shares of its capital stock, other than pursuant to the Company Option
Plans. Except for the Affiliate Agreements and except as set forth on
Schedule 3.2, there are no voting trusts or other agreements or understandings
to which the Company or any Stockholder is a party with respect to the voting
of the shares of Company Common Stock and the Company is not a party to or
bound by any outstanding restrictions, options or other obligations,
agreements or commitments to sell, repurchase, redeem or acquire any
outstanding shares of Company Common Stock or other equity securities of the
Company.
3.3 Subsidiaries. A list of the Company's Subsidiaries and their respective
jurisdictions of incorporation is set forth on Schedule 3.3 hereto. Except as
set forth on Schedule 3.3, immediately prior to the Closing, the Company will
beneficially and of record own all of the outstanding securities of its
Subsidiaries (except for directors qualifying shares, nominee shares and the
like), free and clear of all liens, charges, pledges, security interests,
encumbrances, and other restrictions and agreements with respect thereto. All
of the outstanding shares of capital stock of the Company's Subsidiaries have
been duly authorized and validly issued, were not issued in violation of any
person's preemptive rights, and are fully paid and nonassessable. Except as
contemplated by this Agreement, there are no outstanding subscriptions,
options, warrants, conversion rights or other rights, securities, agreements
or commitments obligating the Company or any of its Subsidiaries to issue,
sell or otherwise dispose of any shares of capital stock, or any securities or
obligations convertible into, or exercisable or exchangeable for, any shares
of capital stock of any of the Company's Subsidiaries.
3.4 Authority for Agreement; Noncontravention.
3.4.1 Authority. The Company has the corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the board of directors of the Company and no other corporate proceedings on
the part of the Company are necessary to authorize the execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby, other than the approval of the Merger by the vote of the holders of at
least two-thirds of the Company's Common Stock. This Agreement and the other
agreements contemplated hereby to be signed by the Company have been duly
executed and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to the qualifications that enforcement of the rights and
remedies created hereby and thereby is subject to (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws of general
application affecting the rights and remedies of creditors and (b) general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
3.4.2 No Conflict. Except as set forth on Schedule 3.4 hereto, neither
the execution and delivery of this Agreement by the Company, nor the
performance by the Company of its obligations hereunder, nor the consummation
by the Company of the transactions contemplated hereby will (a) conflict with
or result in a violation of any provision of the charter documents or by-laws
of the Company or its Subsidiaries, (b) with or without the giving of notice
or the lapse of time, or both, conflict with, or result in any violation or
breach of, or constitute a default under, or result in any right to accelerate
or result in the creation of any lien, charge or encumbrance pursuant to, or
right of termination under, any provision of any note, mortgage, indenture,
lease, instrument or other agreement, permit, concession, grant, franchise,
license, judgment, order, decree, statute, ordinance, rule or regulation to
which the Company or any of its Subsidiaries is a party or by which any of
them or any of their assets or properties is bound or which is applicable to
any of them or any of their assets or properties. No authorization, consent
or approval of, or filing with or notice to, any United States or foreign
governmental or public body or authority (each a "Governmental Entity") is
necessary for the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby,
except for (i) the filing of the Certificate of Merger with the Secretaries of
State of the Commonwealth of Virginia and the State of Delaware, (ii) the
filing of the Proxy Statement with the SEC in accordance with the Exchange
Act, (iii) filing with the Federal Trade Commission and the United States
Department of Justice pursuant to the provisions of the H-S-R Act, and (iv)
such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not have a Company Material Adverse
Effect.
3.5 Financial Statements. The Company has previously furnished Parent with
an accurate and complete copy of the consolidated balance sheets of the
Company as of December 31, 1997, 1996, and 1995 and March 31, 1998 and the
consolidated statements of operations, cash flows and changes in stockholders'
equity of the Company and its Subsidiaries for the respective years and the
three-month period then ended. The annual financial statements were audited by
Xxxxx Xxxxxxxx LLP, the Company's certified public accountants. Collectively,
the financial statements referred to in the immediately preceding sentence are
sometimes referred to herein as the "Company Financial Statements" and the
audited consolidated balance sheet of the Company and its Subsidiaries
(including QTPI) as of December 31, 1997 is referred to herein as the "Company
Balance Sheet." Each of the balance sheets included in the Company Financial
Statements (including any related notes) fairly presents in all material
respects the financial position of the Company and its Subsidiaries (including
QTPI) as of its date, and the other statements included in the Company
Financial Statements (including any related notes) fairly present in all
material respects the results of operations, cash flows and stockholders'
equity, as the case may be, of the Company and its Subsidiaries (including
QTPI) for the periods therein set forth, in each case in accordance with
United States generally accepted accounting principles ("GAAP") consistently
applied, subject, in the case of the three-month period, to normal year-end
adjustments (all except as otherwise stated therein).
3.6 Absence of Material Adverse Changes and Undisclosed Liabilities. Except
as set forth on Schedule 3.6 hereto, since the date of the Company Balance
Sheet, (a) the Company has not suffered any Company Material Adverse Effect,
nor has there occurred or arisen any event, condition or state of facts of any
character that could reasonably be expected to result in a Company Material
Adverse Effect and (b) there have been no dividends or other distributions
declared or paid in respect of, or any repurchase or redemption by the Company
of, any of the shares of capital stock of the Company, or any commitment
relating to any of the foregoing. Except as set forth on Schedule 3.6, neither
the Company nor any of its Subsidiaries (including QTPI) has any material
liabilities or obligations, fixed, accrued, contingent or otherwise
(collectively, "Liabilities"), that are not fully reflected or provided for
on, or disclosed in the notes to, the balance sheets included in the Company
Financial Statements, except (i) Liabilities incurred in the ordinary course
of business since the date of the Company Balance Sheet, none of which
individually or in the aggregate has had or could reasonably be expected to
have a Company Material Adverse Effect, (ii) Liabilities permitted or
contemplated by this Agreement, and (iii) Liabilities expressly disclosed on
the Schedules delivered hereunder.
3.7 Compliance with Applicable Law, Articles and By-Laws. Each of the
Company and its Subsidiaries has all requisite licenses, permits and
certificates from all Governmental Entities (collectively, "Permits")
necessary to conduct its business as currently conducted, and to own, lease
and operate its properties in the manner currently held and operated, except
as set forth on Schedule 3.7 hereto. All of the Company's and its
Subsidiaries' Permits are in full force and effect. Each of the Company and
its Subsidiaries is in compliance in all material respects with all the terms
and conditions related to such Permits. There are no proceedings in progress,
pending or, to the knowledge of the Company, threatened, which may result in
revocation, cancellation, suspension, or any material adverse modification of
any of such Permits. The business of the Company and its Subsidiaries is not
being conducted in violation of any applicable law, statute, ordinance,
regulation, rule, judgment, decree, order, Permit, concession, grant or other
authorization of any Governmental Entity, except for any violations that, in
the aggregate, do not and could not reasonably be expected to have a Company
Material Adverse Effect or prevent or materially delay the consummation of the
transactions contemplated hereby. Neither the Company nor its Subsidiaries is
in default or violation of any provision of its charter documents or its
by-laws.
3.8 Litigation and Audits. Except for any claim, action, suit or proceeding
set forth on Schedule 3.8 or 3.9 hereto, (a) there is no investigation by any
Governmental Entity with respect to the Company or its Subsidiaries (including
QTPI) pending or, to the knowledge of the Company, threatened, nor has any
Governmental Entity indicated to the Company or any of its Subsidiaries
(including QTPI) an intention to conduct the same; (b) there is no claim,
action, suit, arbitration or proceeding pending or, to the knowledge of the
Company, threatened against or involving the Company or any of its
Subsidiaries (including QTPI), or any of its or their assets or properties, at
law or in equity, or before any arbitrator or Governmental Entity, that, if
adversely determined, either singly or in the aggregate, would have a Company
Material Adverse Effect or prevent or materially delay the consummation of the
transactions contemplated hereby; and (c) there are no judgments, decrees,
injunctions or orders of any Governmental Entity or arbitrator outstanding
against the Company or any of its Subsidiaries (including QTPI).
3.9 Tax Matters.
3.9.1 Filing of Returns. Except as set forth on Schedule 3.9 hereto,
the Company and its Subsidiaries have prepared and filed on a timely basis
with all appropriate governmental authorities all material returns in respect
of Taxes that they are required to file on or prior to the Closing, and all
such returns are correct and complete in all material respects.
3.9.2 Payment of Taxes. Except as set forth on Schedule 3.9, the
Company and its Subsidiaries have paid in full all Taxes due on or before the
Closing and, in the case of Taxes accruing on or before the Closing that are
not due on or before the Closing, the Company has made adequate provision in
its books and records and financial statements for such payment.
3.9.3 Withholding. Except as set forth on Schedule 3.9, the Company
and its Subsidiaries have withheld from each payment made to any of its
present or former employees, officers and directors all amounts required by
law to be withheld and has, where required, remitted such amounts within the
applicable periods to the appropriate governmental authorities.
3.9.4 Assessments. Except as set forth on Schedule 3.9, there are no
assessments of the Company or its Subsidiaries with respect to Taxes that have
been issued and are outstanding. Except as set forth on Schedule 3.9, no
Governmental Entity has examined or audited the Company in respect of Taxes.
Except as set forth on Schedule 3.9, neither the Company nor any of its
Subsidiaries has received any indication in writing from any Governmental
Entity that an assessment in respect of the Company or any of its Subsidiaries
is proposed. Except with respect to the matters set forth on Schedule 3.9
hereof, neither the Company nor any of its Subsidiaries has executed or filed
any agreement extending the period of assessment or collection of any Taxes.
3.9.5 Access to Returns. Parent has been provided with a copy of or
access to all federal, state, local and foreign income Tax returns filed by
the Company and its Subsidiaries since January 1, 1990. Parent has been
provided with a copy of or access to all assessments, extensions and waivers
resulting from any audits of the Company or its Subsidiaries by a Governmental
Entity in respect of Taxes, and all such assessments and related penalties and
interest have been paid in full unless being contested in good faith by the
Company or its Subsidiaries.
3.9.6 Definition of Taxes. As used herein, "Taxes" means all taxes,
levies and other assessments, including all income, sales, use, goods and
services, value added, capital, capital gains, net worth, transfer, profits,
withholding, payroll, employer health, excise, real property and personal
property taxes, and any other taxes, assessments or similar charges in the
nature of a tax including unemployment insurance payments and workers
compensation premiums, together with any installments with respect thereto,
and any interest, fines and penalties, imposed by any Governmental Entity
(including federal, state, municipal and foreign Governmental Entities), and
whether disputed or not.
3.10 Employee Benefit Plans.
3.10.1 List of Plans. Schedule 3.10 hereto contains a correct and
complete list of all pension, profit sharing, retirement, deferred
compensation, welfare, legal services, medical, dental or other employee
benefit or health insurance plans, life insurance or other death benefit
plans, disability, stock option, stock purchase, stock compensation, bonus,
vacation pay, severance pay and other similar plans, programs or agreements,
and every material written personnel policy, relating to any persons employed
by the Company or in which any person employed by the Company is eligible to
participate and which is currently maintained or that was maintained at any
time in the last five calendar years by the Company or any ERISA Affiliate
(collectively, the "Company Plans"). The Company has made available to Parent
complete copies, as of the date hereof, of all of the Company Plans that have
been reduced to writing, together with all documents establishing or
constituting any related trust, annuity contract, insurance contract or other
funding instrument, and summaries of those that have not been reduced to
writing. The Company has made available to Parent complete copies of current
plan summaries, employee booklets, personnel manuals and other material
documents or written materials concerning the Company Plans that are in the
possession of the Company as of the date hereof. Except as set forth on
Schedule 3.10, the Company does not have any "defined benefit plans" as
defined in Section 3(35) of ERISA.
3.10.2 ERISA. Neither the Company nor any ERISA Affiliate of the
Company has incurred any "withdrawal liability" calculated under Section 4211
of ERISA and there has been no event or circumstance which would cause them to
incur any such liability. Neither the Company nor any ERISA Affiliate of the
Company has ever maintained a Company Plan providing health or life insurance
benefits to former employees, other than as required pursuant to Section 4980B
of the Code or to any state law conversion rights. No plan previously
maintained by the Company or its ERISA Affiliates which was subject to ERISA
has been terminated; no proceedings to terminate any such plan have been
instituted within the meaning of Subtitle C of Title IV of ERISA; and no
reportable event within the meaning of Section 4043 of said Subtitle C of
Title IV of ERISA with respect to which the requirement to file a notice with
the Pension Benefit Guaranty Corporation has not been waived has occurred with
respect to any such Company Plan, and no liability to the Pension Benefit
Guaranty Corporation has been incurred by the Company or its ERISA
Affiliates. Except as set forth on Schedule 3.10, with respect to all the
Company Plans, the Company and every ERISA Affiliate of the Company are in
material compliance with all requirements prescribed by all statutes,
regulations, orders or rules currently in effect, and have in all material
respects performed all obligations required to be performed by them. Neither
the Company nor any ERISA Affiliate of the Company, nor any of their
directors, officers, employees or agents, nor any trustee or administrator of
any trust created under the Company Plans, has engaged in or been a party to
any "prohibited transaction" as defined in Section 4975 of the Code and
Section 406 of ERISA which could subject the Company or its Affiliates,
directors or employees or the Company Plans or the trusts relating thereto or
any party dealing with any of the Company Plans or trusts to any tax or
penalty on "prohibited transactions" imposed by Section 4975 of the Code.
Except as set forth on Schedule 3.10, neither the Company Plans nor the trusts
created thereunder has incurred any "accumulated funding deficiency," as such
term is defined in Section 412 of the Code and regulations issued thereunder,
whether or not waived.
3.10.3 Plan Determinations. Each Company Plan intended to qualify
under Section 401(a) of the Code has been determined by the Internal Revenue
Service to so qualify, and the trusts created thereunder have been determined
to be exempt from tax under Section 501(a) of the Code; copies of all
determination letters have been delivered to the Company; and, to the
knowledge of the Company, nothing has occurred since the date of such
determination letters which might cause the loss of such qualification or
exemption. With respect to each Company Plan which is a qualified profit
sharing plan, all employer contributions accrued for plan years ending prior
to the Closing under the Company Plan terms and applicable law have been made.
3.10.4 Funding. Except as set forth on Schedule 3.10:
(a) all contributions, premiums or other payments due or
required to be made to the Company Plans as of the date hereof have been made
as of the date hereof or are properly reflected on the Company Balance Sheet;
(b) there are no actions, liens, suits or claims pending or, to
the knowledge of the Company, threatened (other than routine claims for
benefits) with respect to any Company Plan;
(c) to the knowledge of the Company, no event has occurred, and
there exists no condition or set of circumstances, which presents a material
risk of a partial termination (within the meaning of Section 411(d)(3) of the
Code) of any Company Plan;
(d) each Company Plan that is a "group health plan" (as defined
in Section 607(1) of ERISA) has been operated at all times in substantial
compliance with the provisions of COBRA and any applicable, similar state law;
and
(e) with respect to any Company Plan that is qualified under
Section 401(k) of the Code, individually and in the aggregate, no event has
occurred, and to the knowledge of the Company, there exists no condition or
set of circumstances in connection with which the Company could be subject to
any liability that is reasonably likely to have a Company Material Adverse
Effect (except liability for benefits claims and funding obligations payable
in the ordinary course) under ERISA, the Code or any other applicable law.
3.11 Employment-Related Matters.
3.11.1 Labor Relations. Except to the extent set forth on Schedule
3.11 hereto: (a) neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or other contract or agreement with any
labor organization or other representative of any of the employees of the
Company or any of its Subsidiaries; (b) there is no labor strike, dispute,
slowdown, work stoppage or lockout that is pending or threatened against or
otherwise affecting the Company or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries has experienced the same since January 1,
1992; (c) neither the Company nor any of its Subsidiaries has closed any plant
or facility, effectuated any layoffs of employees or implemented any early
retirement or separation program at any time from or after January 1, 1992,
nor has the Company or any of its Subsidiaries planned or announced any such
action or program for the future with respect to which the Company has any
material liability; and (d) all salaries, wages, vacation pay, bonuses,
commissions and other compensation due from the Company or its Subsidiaries to
the employees of the Company and its Subsidiaries before the date hereof have
been paid or accrued in all material respects as of the date hereof.
3.11.2 Employee List. The Company has heretofore delivered to Parent a
list (the "Employee List") dated as of June 1, 1998 containing the name of
each employee of the Company and its Subsidiaries, and each such employee's
position, starting employment date and annual salary. The Employee List is
correct and complete as of the date of the Employee List. No third party has
asserted any claim, or, to the knowledge of the Company, has any reasonable
basis to assert any valid claim, against the Company or its Subsidiaries that
either the continued employment by, or association with, the Company or its
Subsidiaries of any of the present officers or employees of, or consultants
to, the Company or its Subsidiaries contravenes any agreements or laws
applicable to unfair competition, trade secrets or proprietary information.
3.1 Environmental.
3.12.1 Environmental Laws. Except for matters which, individually or
in the aggregate, would not have a Company Material Adverse Effect, (a) the
Company and each of its Subsidiaries is in compliance with all applicable
Environmental Laws in effect on the date hereof; (b) the Company and each of
its Subsidiaries has not received any written communication that alleges that
the Company or any of its Subsidiaries is not in compliance in all material
respects with all applicable Environmental Laws in effect on the date hereof;
(c) to the knowledge of the Company, there are no circumstances that may
prevent or interfere with compliance in the future with all applicable
Environmental Laws; (d) all material Permits and other governmental
authorizations currently held by the Company and each of its Subsidiaries
pursuant to the Environmental Laws are in full force and effect, the Company
and its Subsidiaries are in compliance with all of the terms of such Permits
and authorizations, and no other Permits or authorizations are required by the
Company or its Subsidiaries for the conduct of its and their business on the
date hereof; and (e) the management, handling, storage, transportation,
treatment, and disposal by the Company and each of its Subsidiaries of all
Materials of Environmental Concern has been in compliance with all applicable
Environmental Laws.
3.12.2 Environmental Claims. Except as set forth on Schedule 3.12
hereto and except for Environmental Claims which, individually or in the
aggregate, would not have a Company Material Adverse Effect, there is no
Environmental Claim pending or, to the knowledge of the Company, threatened
against or involving the Company or any of its Subsidiaries or against any
person or entity whose liability for any Environmental Claim the Company or
any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law.
3.12.3 No Basis for Claims. Except for matters which, individually or
in the aggregate, would not have a Company Material Adverse Effect, to the
knowledge of the Company, there are no past or present actions or activities
by the Company or any of its Subsidiaries, or any circumstances, conditions,
events or incidents, including the storage, treatment, release, emission,
discharge, disposal or arrangement for disposal of any Material of
Environmental Concern, that could reasonably form the basis of any
Environmental Claim against the Company or any of its Subsidiaries or against
any person or entity whose liability for any Environmental Claim the Company
or any of its Subsidiaries may have retained or assumed either contractually
or by operation of law.
3.13 No Broker's or Finder's Fees. Except as disclosed in Schedule 3.13, the
Company has not paid or become obligated to pay any fee or commission to any
broker, finder, financial advisor or intermediary in connection with the
transactions contemplated by this Agreement.
3.14 Assets Other Than Real Property.
3.14.1 Title. The Company or one of its Subsidiaries has good and
marketable title to all of the tangible assets shown on the Company Balance
Sheet, in each case, free and clear of any mortgage, pledge, lien, security
interest, lease or other encumbrance (collectively, "Encumbrances"), except
for (a) assets disposed of since the date of the Company Balance Sheet in the
ordinary course of business and in a manner consistent with past practices,
(b) liabilities, obligations and Encumbrances reflected in the Company Balance
Sheet or otherwise in the Company Financial Statements, (c) Permitted
Encumbrances, and (d) liabilities, obligations and Encumbrances set forth on
Schedule 3.14 hereto.
3.14.2 Accounts Receivable. Except as set forth on Schedule 3.14, all
receivables shown on the Company Balance Sheet and all receivables accrued by
the Company since the date of the Company Balance Sheet, have been collected
or are collectible in all material respects in the aggregate amount shown,
less any allowances for doubtful accounts reflected therein, and, in the case
of receivables arising since the date of the Company Balance Sheet, any
additional allowance in respect thereof calculated in a manner consistent with
the allowance reflected in the Company Balance Sheet.
3.14.3 Condition. All material plant, equipment and personal property
owned by the Company and its subsidiaries and regularly used in its and their
businesses is in good operating condition and repair, ordinary wear and tear
excepted.
3.15 Real Property.
3.15.1 Company Real Property. Neither the Company nor any of its
Subsidiaries owns any real property.
3.15.2 Company Leases. Schedule 3.15 hereto lists all of the Company
Leases. Complete copies of the Company Leases, and all material amendments
thereto (which are identified on Schedule 3.15), have been made available by
the Company to Parent. The Company Leases grant leasehold estates free and
clear of all Encumbrances granted by or caused by the actions of the Company.
To the knowledge of the Company, the Company Leases are in full force and
effect and are binding and enforceable against each of the parties thereto in
accordance with their respective terms. Except as set forth on Schedule 3.15,
neither the Company nor any of its Subsidiaries, nor, to the knowledge of the
Company, any other party to a Company Lease, has committed a material breach
or default under any Company Lease, nor has there occurred any event that with
the passage of time or the giving of notice or both would constitute such a
breach or default, nor are there any facts or circumstances that would
reasonably indicate that the Company or any of its Subsidiaries is likely to
be in material breach or default thereunder. Schedule 3.15 correctly
identifies each Company Lease the provisions of which would be materially and
adversely affected by the transactions contemplated hereby and each Company
Lease that requires the consent of any third party in connection with the
transactions contemplated hereby. No material construction, alteration or
other leasehold improvement work with respect to the real property covered by
any of the Company Leases remains to be paid for or to be performed by the
Company or any of its Subsidiaries. No Company Leases have an unexpired term
which including any renewal or extensions of such term provided for in the
Company Lease could exceed fifty years.
3.15.3 Condition. All buildings, structures and fixtures, or parts
thereof, used by the Company or any of its Subsidiaries in the conduct of its
business are in good operating condition and repair, ordinary wear and tear
excepted, and are insured with coverages that are usual and customary for
similar properties and similar businesses or are required, pursuant to the
terms of the Company Leases, to be insured by third parties.
3.16 Agreements, Contracts and Commitments.
3.16.1 Company Agreements. Except as set forth on Schedule 3.16 hereto
or any other Schedule hereto, neither the Company nor any of its Subsidiaries
is a party to:
(a) any bonus, deferred compensation, pension, severance,
profit-sharing, stock option, employee stock purchase or retirement plan,
contract or arrangement or other employee benefit plan or arrangement;
(b) any employment agreement with any present employee,
officer, director or consultant (or former employees, officers, directors and
consultants to the extent there remain at the date hereof obligations to be
performed by the Company or any of its Subsidiaries);
(c) any agreement for personal services or employment with a
term of service or employment specified in the agreement or any agreement for
personal services or employment in which the Company or any of its
Subsidiaries has agreed on the termination of such agreement to make any
payments greater than those that would otherwise be imposed by law;
(d) any agreement of guarantee or indemnification in an amount
that is material to the Company and its Subsidiaries taken as a whole;
(e) any agreement or commitment containing a covenant limiting
or purporting to limit the freedom of the Company or any of its Subsidiaries
to compete with any person in any geographic area or to engage in any line of
business;
(f) any lease other than the Company Leases under which the
Company or any of its Subsidiaries is lessee that involves payments of $50,000
or more per annum or is material to the conduct of the business of the
Company;
(g) any joint venture or profit-sharing agreement (other than
with employees);
(h) except for trade indebtedness incurred in the ordinary
course of business and equipment leases entered into in the ordinary course of
business, any loan or credit agreements providing for the extension of credit
to the Company or any of its Subsidiaries or any instrument evidencing or
related in any way to indebtedness incurred in the acquisition of companies or
other entities or indebtedness for borrowed money by way of direct loan, sale
of debt securities, purchase money obligation, conditional sale, guarantee, or
otherwise that individually is in the amount of $50,000 or more;
(i) any license agreement, either as licensor or licensee,
involving payments (including past payments) of $50,000 in aggregate or more,
or any material distributor, dealer, reseller, franchise, manufacturer's
representative, or sales agency or any other similar material contract or
commitment;
(j) any agreement granting exclusive rights to, or providing
for the sale of, all or any portion of the Company Proprietary Rights;
(k) any agreement or arrangement providing for the payment of
any commission based on sales other than to employees of the Company or any of
its Subsidiaries;
(l) any agreement for the sale by the Company or its
Subsidiaries of materials, products, services or supplies that involves future
payments to the Company or its Subsidiaries of more than $50,000;
(m) any agreement for the purchase by the Company or any of its
Subsidiaries of any materials, equipment, services, or supplies, that either
(i) involves a binding commitment by the Company or any of its Subsidiaries to
make future payments in excess of $50,000 and cannot be terminated by it
without penalty upon less than three months' notice or (ii) was not entered
into in the ordinary course of business;
(n) any agreement or arrangement with any third party to
develop any intellectual property or other asset expected to be used or
currently used or useful in the business of the Company and its Subsidiaries;
(o) any agreement or commitment for the acquisition,
construction or sale of fixed assets owned or to be owned by the Company or
any of its Subsidiaries that involves future payments by it of more than
$50,000;
(p) any agreement or commitment to which present or former
directors, officers or Affiliates of the Company (or directors or officers of
an Affiliate of the Company) are also parties;
(q) any agreement not described above (ignoring, solely for
this purpose, any dollar amount thresholds in those descriptions) involving
the payment or receipt by the Company or any of its Subsidiaries of more than
$100,000, other than the Company Leases; or
(r) any agreement not described above that was not made in the
ordinary course of business and that is material to the financial condition,
business, operations, assets, results of operations or prospects of the
Company and its Subsidiaries taken as a whole.
3.16.2 Validity. Except as set forth on Schedule 3.16, to the
knowledge of the Company, all contracts, leases, instruments, licenses and
other agreements required to be set forth on Schedule 3.16 are valid and in
full force and effect and the Company has not, nor, to the knowledge of the
Company, has any other party thereto, breached any provision of, or defaulted
under the terms of any such contract, lease, instrument, license or other
agreement, except for any breaches or defaults that, in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect or have
been cured or waived. Schedule 3.16 identifies each contract and other
document set forth on Schedule 3.16 or disclosed by the Company on another
Schedule hereto that requires the consent of a third party in connection with
the transactions contemplated hereby.
3.17 Intellectual Property.
3.17.1 Right to Intellectual Property.17.1 Right to Intellectual Property.
Except as set forth on Schedule 3.17 hereto, the Company and its Subsidiaries
own, or have perpetual, fully paid, worldwide rights to use, all patents,
trademarks, trade names, service marks, copyrights, and any applications
therefor, maskworks, net lists, schematics, technology, know-how, computer
software programs or applications (in both source code and object code form),
and tangible or intangible proprietary information or material (excluding
Commercial Software) that are used in the business of the Company and its
Subsidiaries as currently conducted (the "Company Proprietary Rights").
3.17.2 No Conflict. Set forth on Schedule 3.17 is a complete list of
all patents, trademarks, registered copyrights, trade names and service marks,
and any applications therefor, included in the Company Proprietary Rights,
specifying, where applicable, the jurisdictions in which each such Company
Proprietary Right has been issued or registered or in which an application for
such issuance and registration has been filed, including the respective
registration or application numbers and the names of all registered owners.
Except as set forth on Schedule 3.17, none of the Company's or its
Subsidiaries' currently marketed software products has been registered for
copyright protection with the United States Copyright Office or any foreign
offices nor has the Company or any of its Subsidiaries been requested to make
any such registration. Set forth on Schedule 3.17 is a complete list of all
material licenses, sublicenses and other agreements as to which the Company or
any of its Subsidiaries is a party and pursuant to which the Company or any of
its Subsidiaries or any other person is authorized to use any Company
Proprietary Right (excluding End-User Licenses) or other trade secret material
to the business of the Company and its Subsidiaries, and includes the identity
of all parties thereto, a description of the nature and subject matter
thereof, the applicable royalty and the term thereof. Neither the Company nor
any of its Subsidiaries is in violation of any license, sublicense or
agreement described on such list except such violations as do not materially
impair the Company or its Subsidiaries' rights under such license, sublicense
or agreement. Except as disclosed in this Article 3, the execution and
delivery of this Agreement by the Company, and the consummation of the
transactions contemplated hereby, will neither cause the Company nor any of
its Subsidiaries to be in violation or default under any such license,
sublicense or agreement, nor entitle any other party to any such license,
sublicense or agreement to terminate or modify such license, sublicense or
agreement. Except as set forth on Schedule 3.17, the Company or one of its
Subsidiaries is the sole and exclusive owner or licensee of, with all right,
title and interest in and to (free and clear of any and all liens, claims and
encumbrances), the Company Proprietary Rights, and has sole and exclusive
rights (and is not contractually obligated to pay any compensation to any
third party in respect thereof) to the use thereof or the material covered
thereby in connection with the services or products in respect of which the
Company Proprietary Rights are being used. No claims with respect to the
Company Proprietary Rights have been asserted or, to the knowledge of the
Company, are threatened by any person nor are there any valid grounds for any
bona fide claims to the effect that the manufacture, sale, licensing or use
of any of the products of the Company and its Subsidiaries as now
manufactured, sold or licensed or used or proposed for manufacture, use, sale
or licensing by the Company and its Subsidiaries infringes on any copyright,
patent, trademark, service xxxx or trade secret, against the use by the
Company or any of its Subsidiaries of any trademarks, service marks, trade
names, trade secrets, copyrights, patents, technology, know-how or computer
software programs and applications used in the Company's or any of its
Subsidiaries' business as currently conducted or as proposed to be conducted
by the Company or any of its Subsidiaries, or challenging the ownership by
the Company or any of its Subsidiaries, or the validity or effectiveness of
any of the Company Proprietary Rights. All material registered trademarks,
service marks and copyrights held by the Company and its Subsidiaries are
valid and subsisting. To the knowledge of the Company there is no material
unauthorized use, infringement or misappropriation of any of the Company
Proprietary Rights by any third party, including any employee or former
employee of the Company or any of its Subsidiaries. No Company Proprietary
Right or product of the Company or any of its Subsidiaries is subject to any
outstanding decree, order, judgment, or stipulation restricting in any manner
the licensing thereof by the Company or any of its Subsidiaries. Except as
set forth in Schedule 3.17, neither the Company nor any of its Subsidiaries
has entered into any agreement (other than exclusive distribution agreements)
under which the Company or its Subsidiaries are restricted from selling,
licensing or otherwise distributing any of its products to any class of
customers, in any geographic area, during any period of time or in any segment
of the market. The Company's products, packaging and documentation contain
copyright notices sufficient to maintain copyright protection on the
copyrighted portions of the Company Proprietary Rights.
3.17.3 Employee Agreements. Except as set forth on Schedule 3.17, each
employee, officer and consultant of the Company and its Subsidiaries has
executed a confidentiality agreement in substantially the form attached hereto
as Schedule 3.17.3, providing the Company or one of its Subsidiaries with
title and ownership to the Company Proprietary Rights developed or used by the
Company and its Subsidiaries in their business. No employee, officer or
consultant of the Company and its Subsidiaries is in violation of any term of
any employment or consulting contract, proprietary information and inventions
agreement, non-competition agreement, or any other contract or agreement
relating to the relationship of any such employee, officer or consultant with
the Company or any previous employer.
3.18 Insurance Contracts. Schedule 3.18 hereto lists all contracts of
insurance and indemnity in force at the date hereof with respect to the
Company and its Subsidiaries. Such contracts of insurance and indemnity and
those shown in other Schedules to this Agreement (collectively, the "Company
Insurance Contracts") insure against such risks, and are in such amounts, as
appropriate and reasonable considering the Company and its Subsidiaries'
property, business and operations. All of the Company Insurance Contracts are
in full force and effect, with no default thereunder by the Company or its
Subsidiaries which could permit the insurer to deny payment of claims
thereunder. The Company has not received notice from any of its insurance
carriers that any insurance premiums will be materially increased in the
future or that any insurance coverage provided under the Company Insurance
Contracts will not be available in the future on substantially the same terms
as now in effect. The Company has not received or given a notice of
cancellation with respect to any of the Company Insurance Contracts.
3.19 Banking Relationships. Schedule 3.19 hereto shows the names and
locations of all banks and trust companies in which the Company or any of its
Subsidiaries has accounts, lines of credit or safety deposit boxes and, with
respect to each account, line of credit or safety deposit box, the names of
all persons authorized to draw thereon or to have access thereto.
3.20 Proxy Statement. The information supplied by the Company for inclusion
in the proxy statement/prospectus to be sent to the stockholders of the
Company in connection with the meeting of the Company's stockholders to
consider the Merger (the "Company Meeting") (such proxy statement/prospectus
as amended or supplemented is referred to herein as the "Proxy Statement")
shall not, on the date the Proxy Statement is first mailed to the Company's
stockholders, at the time of the Company Meeting and at the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not false or misleading; or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Company Meeting which has become false or
misleading. The Proxy Statement will comply as to form with the provisions of
the Exchange Act and the rules and regulations thereunder. If at any time
prior to the Effective Time any event relating to the Company or any of its
affiliates, officers or directors should be discovered by the Company which
should be set forth in an amendment or a supplement to the Proxy Statement,
the Company shall promptly inform Parent. Notwithstanding the foregoing, the
Company makes no representation or warranty with respect to any information
supplied by Parent or Merger Sub which is contained in any of the foregoing
documents.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
-------------------------------------------------------
Parent and Merger Sub, jointly and severally, represent and warrant to the
Company as follows:
4.1 Corporate Status of Parent and its Subsidiaries. Parent and each of its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, with the
requisite corporate power to own, operate and lease its properties and to
carry on its business as now being conducted.
4.2 Authorized Stock of Merger Sub. The authorized capital stock of Merger
Sub consists of 100 shares of Merger Sub Stock, of which all 100 shares are
issued and outstanding. All of the outstanding shares of Merger Sub Stock
have been duly authorized and validly issued, were not issued in violation of
any person's preemptive rights, and are fully paid and nonassessable.
4.3 Authority for Agreement; Noncontravention.
4.3.1 Authority of Parent. Each of Parent and Merger Sub has the
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the boards of directors of Parent and
Merger Sub and the stockholder of Merger Sub and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement and the other agreements
contemplated hereby to be signed by Parent or Merger Sub have been duly
executed and delivered by Parent and Merger Sub, as the case may be, and
constitute valid and binding obligations of Parent and Merger Sub, as the case
may be, enforceable against Parent and Merger Sub in accordance with their
terms, subject to the qualifications that enforcement of the rights and
remedies created hereby and thereby are subject to (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws of general
application affecting the rights and remedies of creditors and (b) general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
4.3.2 No Conflict. Except as set forth on Schedule 4.3.2 hereto,
neither execution and delivery of this Agreement by Parent or Merger Sub, nor
the performance by Parent or Merger Sub of its obligations hereunder, nor the
consummation by Parent or Merger Sub of the transactions contemplated hereby
will (a) conflict with or result in a violation of any provision of the
charter documents or by-laws of Parent or its Subsidiaries (including Merger
Sub), or (b) with or without the giving of notice or the lapse of time, or
both, conflict with, or result in any violation or breach of, or constitute a
default under, or result in any right to accelerate or result in the creation
of any lien, charge or encumbrance pursuant to, or right of termination under,
any provision of any note, mortgage, indenture, lease, instrument or other
agreement, Permit, concession, grant, franchise, license, judgment, order,
decree, statute, ordinance, rule or regulation to which Parent, Merger Sub or
any of Parent's other Subsidiaries is a party or by which any of them or any
of their assets or properties is bound or which is applicable to any of them
or any of their assets or properties. No authorization, consent or approval
of, or filing with or notice to, any Governmental Entity is necessary for the
execution and delivery of this Agreement by Parent or Merger Sub or the
consummation by Parent or Merger Sub of the transactions contemplated hereby,
except for (i) the filing of the Certificate of Merger with the Secretaries of
State of the State of Delaware and the Commonwealth of Virginia, (iii) filing
with the Federal Trade Commission and the United States Department of Justice
pursuant to the provisions of the H-S-R Act, and (iii) such other consents,
authorizations, filings, approvals and registrations which if not obtained or
made would not have a Parent Material Adverse Effect.
4.4 SEC Statements, Reports and Documents. Parent has timely filed all
required forms, reports, statements and documents with the SEC since January
1, 1993. Parent heretofore has delivered or made available to counsel for the
Company true and complete copies of (a) its Annual Reports on Form 10-K for
the fiscal years ended June 30, 1996 and 1997, respectively, (b) its Quarterly
Reports on Form 10-Q for the fiscal quarters ended September 30, 1996,
December 31, 1996, September 30,1997, December 31, 1997 and March 31, 1998,
respectively, (c) all proxy statements relating to Parent's meetings of
stockholders (whether annual or special) held since June 30, 1996, (d) all
other forms, reports, statements and documents filed or required to be filed
by it with the SEC since June 30, 1996, and (e) all amendments and supplements
to all such reports and registration statements filed by Parent with the SEC
(the documents referred to in clauses (a), (b), (c), (d) and (e) being
hereinafter referred to as the "Parent Reports"). As of their respective
dates, the Parent Reports complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder, and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements (including any related notes) of Parent included in the Parent
Reports were prepared in conformity with GAAP applied on a consistent basis
(except as otherwise stated in the financial statements), and present fairly
the consolidated financial position, results of operations and changes in
financial position of Parent and its consolidated Subsidiaries as of the dates
and for the periods indicated, subject, in the case of unaudited interim
consolidated financial statements, to (i) the absence of certain notes thereto
and (ii) normal year-end audit adjustments which are not in the aggregate
material. The consolidated balance sheet of Parent and its subsidiaries at
June 30, 1997, including the notes thereto, is hereinafter referred to as the
"Parent Balance Sheet."
4.5 Absence of Material Adverse Changes. Since the date of the Parent
Balance Sheet, Parent has not suffered any Parent Material Adverse Effect, nor
has there occurred or arisen any event, condition or state of facts of any
character that could reasonably be expected to result in a Parent Material
Adverse Effect.
4.6 Litigation and Audits. Except for any claim, action, suit or proceeding
disclosed in the Parent Reports or set forth on Schedule 4.6 hereto, (a) there
is no investigation by any Governmental Entity with respect to Parent or its
Subsidiaries pending or, to the knowledge of Parent, threatened, nor has any
Governmental Entity indicated to Parent or any of its Subsidiaries an
intention to conduct the same, and (b) there is no claim, action, suit,
arbitration or proceeding pending or threatened against or involving Parent or
any of its Subsidiaries, or any of its or their assets or properties, at law
or in equity, or before any arbitrator or Governmental Entity, in each case
that, if adversely determined, either singly or in the aggregate, would
prevent or materially delay the consummation of the transactions contemplated
hereby.
4.7 Proxy Statement. The information provided by Parent or Merger Sub for
inclusion in the Proxy Statement shall not, on the date the Proxy Statement is
first mailed to the Company's stockholders, at the time of the Company Meeting
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they are made, not false or misleading; or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Company Meeting which has
become false or misleading. If at any time prior to the Effective Time any
event relating to Parent, Merger Sub or any of their respective affiliates,
officers or directors should be discovered by Parent or Merger Sub which
should be set forth in an amendment or a supplement to the Proxy Statement,
Parent or Merger Sub shall promptly inform the Company. Notwithstanding the
foregoing, Parent and Merger Sub make no representation or warranty with
respect to any information supplied by the Company which is contained in any
of the foregoing documents.
ARTICLE 5
CONDUCT PRIOR TO THE EFFECTIVE TIME
-----------------------------------
5.1 Conduct of Business of the Company. Except as set forth on Schedule 5.1
hereto, between the date of this Agreement and the Effective Time or the date,
if any, on which this Agreement is earlier terminated pursuant to its terms,
the Company and each of its Subsidiaries shall, except to the extent that
Parent shall otherwise consent in writing, (i) carry on its business in the
usual, regular and ordinary course in substantially the same manner as
heretofore conducted, pay its debts and taxes when due subject to good faith
disputes over such debts or taxes, pay or perform other material obligations
when due subject to good faith disputes over such obligations, and use all
reasonable efforts consistent with past practices and policies to preserve
intact the Company's present business organizations, keep available the
services of its present officers and employees and preserve its relationships
with customers, suppliers and others having business relationships with it, to
the end that the Company's and each of its Subsidiaries' goodwill and ongoing
business be unimpaired at the Effective Time, and (ii) promptly notify Parent
of any event or occurrence not in the ordinary course of business of the
Company and each of its Subsidiaries which will have or could reasonably be
expected to have a Company Material Adverse Effect. In addition, between the
date of this Agreement and the Effective Time or the date, if any, on which
this Agreement is earlier terminated pursuant to its terms, the Company and
each of its Subsidiaries shall not, except to the extent that Parent shall
otherwise consent in writing:
(a) amend its charter documents or by-laws;
(b) declare or pay any dividends or distributions on the Company's
outstanding shares of capital stock nor purchase, redeem or otherwise acquire
for consideration any shares of the Company's capital stock or other
securities except in accordance with agreements existing as of the date hereof
or as permitted under the Company Option Plans;
(c) issue or sell any shares of its capital stock, effect any stock
split or otherwise change its capitalization as it exists on the date hereof,
or issue, grant, or sell any options, stock appreciation or purchase rights,
warrants, conversion rights or other rights, securities or commitments
obligating it to issue or sell any shares of its capital stock, or any
securities or obligations convertible into, or exercisable or exchangeable
for, any shares of its capital stock, other than the issuance of shares of
Company Common Stock pursuant to the conversion, exercise or exchange of
securities therefor outstanding as of the date hereof in accordance with their
terms;
(d) borrow or agree to borrow any funds or voluntarily incur, or
assume or become subject to, whether directly or by way of guaranty or
otherwise, any obligation or Liability, except obligations incurred in the
ordinary course of business consistent with past practices;
(e) pay, discharge or satisfy any claim, obligation or Liability in
excess of $50,000 (in any one case) or $100,000 (in the aggregate), other than
the payment, discharge or satisfaction in the ordinary course of business of
obligations reflected on or reserved against in the Company Balance Sheet, or
incurred since the date of the Company Balance Sheet in the ordinary course of
business consistent with past practices or in connection with this
transaction;
(f) except as required by applicable law, adopt or amend in any
material respect, any agreement or plan (including severance arrangements) for
the benefit of its employees;
(g) sell, mortgage, pledge or otherwise encumber or dispose of any of
its assets which are material, individually or in the aggregate, to the
business of the Company and its Subsidiaries, except in the ordinary course of
business consistent with past practices;
(h) acquire by merging or consolidating with, or by purchasing any
equity interest in or a material portion of the assets of, any business or any
corporation, partnership interest, association or other business organization
or division thereof, or otherwise acquire any assets which are material,
individually or in the aggregate, to the business of the Company and its
Subsidiaries, except in the ordinary course of business consistent with past
practices;
(i) subject to Section 5.1(o), increase the following amounts payable
or to become payable: (i) the salary of any of its directors or officers,
other than increases in the ordinary course of business consistent with past
practices and not exceeding, in any case, ten percent (10%) of the director's
or officer's salary on the date hereof, (ii) any other compensation of its
directors or officers, including any increase in benefits under any bonus,
insurance, pension or other benefit plan made for or with any of those
persons, other than increases that are provided in the ordinary course of
business consistent with past practices to broad categories of employees and
do not discriminate in favor of the aforementioned persons, and (iii) the
compensation of any of its other employees, consultants or agents except in
the ordinary course of business consistent with past practices;
(j) dispose of, permit to lapse, or otherwise fail to preserve the
rights of the Company or any of its Subsidiaries to use the Company
Proprietary Rights or enter into any settlement regarding the breach or
infringement of, any Company Proprietary Rights, or modify any existing rights
with respect thereto, other than in the ordinary course of business consistent
with past practices, and other than any such disposal, lapse, failure,
settlement or modification that does not have and could not reasonably be
expected to have a Company Material Adverse Effect;
(k) sell, or grant any right to exclusive use of, all or any part of
the Company Proprietary Rights;
(l) enter into any contract or commitment or take any other action
that is not in the ordinary course of its business or could reasonably be
expected to have an adverse impact on the transactions contemplated hereunder
or that would have or could reasonably be expected to have a Company Material
Adverse Effect;
(m) amend in any material respect any agreement to which the Company
or any of its Subsidiaries is a party the amendment of which will have or
could reasonably be expected to have a Company Material Adverse Effect;
(n) waive, release, transfer or permit to lapse any claims or rights
(i) that has a value, or involves payment or receipt by it, of more than
$50,000 or (ii) the waiver, release, transfer or lapse of which would have or
could reasonably be expected to have a Company Material Adverse Effect;
(o) take any action that would materially decrease the Company's net
worth, provided, however, that payments by the Company of reasonable legal and
accounting fees related to the Merger and/or the disposition of QTPI shall not
be deemed to be a breach of this Section 5.1(o);
(p) make any change in any method of accounting or accounting practice
other than changes required to be made in order that the Company's financial
statements comply with GAAP; or
(q) agree, whether in writing or otherwise, to take any action
described in this Section 5.1.
5.2 Conduct of Business of Parent. Between the date of this Agreement and
the Effective Time or the date, if any, on which this Agreement is earlier
terminated pursuant to its terms, Parent and each of its Subsidiaries shall
not, except to the extent that the Company shall otherwise consent in writing,
take any action that would materially impair Parent's ability to pay the
aggregate Merger Price or otherwise to perform its obligations under this
Agreement.
ARTICLE 6
ADDITIONAL AGREEMENTS
---------------------
6.1 Proxy Statement. As promptly as practicable after the execution of this
Agreement, the Company shall prepare and file with the SEC the Proxy
Statement. The Proxy Statement shall include the recommendation of the Board
of Directors of the Company in favor of the Merger which shall not be
withdrawn, modified or withheld except in compliance with the fiduciary duties
of the Company's Board under applicable law.
6.2 Meeting of Stockholders. Promptly after execution of this Agreement,
the Company shall take all action necessary in accordance with the VSCA and
its certificate of incorporation and by-laws to convene the Company Meeting to
be held as promptly as practicable for the purpose of voting upon this
Agreement and the Merger.
6.3 Amendment of Stock Options. Promptly after execution of this Agreement,
the Company shall take such action as may be practicable under the terms of
all outstanding Company Stock Options and the Company SECT to ensure that at
the Effective Time, each Company Stock Option then outstanding shall be
converted into the right to receive payment from the Company SECT of the
amount of the excess, if any, of the Merger Price Per Share for each share of
Company Common Stock for which that Company Stock Option was theretofore
exercisable over the exercise price per share for each such share of Company
Common Stock. It is understood that, since the Company will not receive the
exercise price for any Company Stock Option amended as provided in this
paragraph, there will be no Principal Reduction (as defined in section 2.3 of
the Amended and Restated Trust Agreement effective as of March 25, 1998) with
respect to any payment by the Company SECT to the holder of any Company Stock
Option so converted.
6.4 Disposition of QTPI. As promptly as practicable after execution of this
Agreement, the Company shall take action to dispose entirely of its interest
in QTPI.
6.5 Exclusivity. From and after the date of this Agreement until the
earlier of the Effective Time and termination of this Agreement in accordance
with Article 9 hereof, the Company and its Subsidiaries will not, directly or
indirectly, through their respective affiliates, agents, officers and
directors, directly or indirectly, solicit, initiate, or participate in
discussions or negotiations or otherwise cooperate in any way with, or provide
any information to, any corporation, partnership, person, or other entity or
group concerning any tender offer, exchange offer, merger, business
combination, sale of substantial assets, sale of shares of capital stock, or
similar transaction involving the Company or any of its Subsidiaries (all such
transactions being referred to herein as "Acquisition Proposals").
Notwithstanding the foregoing, the Company may furnish information concerning
its business, properties, or assets to and enter into negotiations with a
corporation, partnership, person, or other entity or group, if the party
receives an unsolicited Acquisition Proposal and outside counsel to the
Company advises the Company's Board of Directors in writing that the Board's
fiduciary responsibilities under applicable law require that such information
be provided or negotiations be held with the person presenting the Acquisition
Proposal in order to avoid a breach of such fiduciary responsibilities.
6.6 Expenses. Each party hereto shall be responsible for its own costs and
expenses in connection with the Merger, including fees and disbursements of
consultants, investment bankers and other financial advisors, counsel and
accountants.
6.7 Affiliate Agreements. Set forth on Schedule 6.7 is a list of those
Affiliates of the Company who have executed agreements in the form attached
hereto as Exhibit 6.7 (the "Affiliate Agreements"), effective simultaneously
with the effectiveness of this Agreement.
6.8 Access and Information. The Company shall afford to Parent and to its
officers, employees, accountants, counsel and other authorized representatives
full and complete access, upon 24 hours advance telephone notice, during
regular business hours, throughout the period prior to the earlier of the
Effective Time or the termination of this Agreement pursuant to its terms, to
its offices, properties, books and records and those of its Subsidiaries, and
shall use reasonable efforts to cause its representatives and independent
public accountants to furnish to Parent such additional financial and
operating data and other information as to its business, customers, vendors
and properties and those of its Subsidiaries as Parent may from time to time
reasonably request.
6.9 Public Disclosure. Except as otherwise required by law, any press
release or other public disclosure of information regarding the proposed
transaction (including the negotiations with respect to the Merger and the
terms and existence of this Agreement) shall be developed by Parent, subject
to the Company's review. The Company and Parent agree that each party's
non-disclosure obligations contained in the Letter of Intent shall remain in
full force and effect in accordance with the terms of such Agreement.
6.10 No Solicitation of Employees. Parent and the Company agree that between
the date of this Agreement and the Effective Time or the date one year after
the date, if any, on which this Agreement is earlier terminated pursuant to
its terms, neither party shall solicit, induce or recruit any of the other
party's employees to leave their employment, otherwise than in response to
general advertisements or solicitations not directed specially to employees of
the other party.
6.11 Directors and Officers Indemnification. From and after the Effective
Time, Parent and the Surviving Corporation shall indemnify, defend and hold
harmless each person who is now, or has been at any time prior to the date
hereof, an officer or director of the Company (the "Indemnified Parties") to
the same extent that such Indemnified Parties are currently indemnified by the
Company pursuant to the Company's Certificate of Incorporation and By-Laws and
the VSCA for acts or omissions in their capacities as officers or directors of
the Company occurring on or prior to the Effective Time.
6.12 Reasonable Efforts. Subject to terms and conditions herein provided,
each of the parties agrees to use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the Merger and the other transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, the Company and
Parent each will use all reasonable efforts to obtain all approvals,
authorizations, consents and waivers from, and give all notices to, any public
or private third parties that are necessary on its part in order to effect the
transactions contemplated hereby.
ARTICLE 7
CONDITIONS PRECEDENT
--------------------
7.1 Conditions Precedent to the Obligations of Each Party. The obligations
of the parties hereto to effect the Merger shall be subject to the fulfillment
at or prior to the Closing of the following conditions:
7.1.1 Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the requisite vote under
applicable law of the stockholders of the Company.
7.1.2 Xxxx-Xxxxx-Xxxxxx Compliance. All applicable waiting periods
(and any extensions thereof) under the H-S-R Act shall have expired or
otherwise been terminated.
7.1.3 No Injunction. No injunction or restraining or other order
issued by a court of competent jurisdiction that prohibits or materially
restricts the consummation of the Merger or the other transactions
contemplated hereby shall be in effect (each party agreeing to use all
reasonable efforts to have any injunction or other order immediately lifted),
and no action or proceeding shall have been commenced or threatened in writing
seeking any injunction or restraining or other order that seeks to prohibit,
restrain, invalidate or set aside consummation of the Merger or any of the
other transactions contemplated hereby.
7.1.4 Illegality. There shall not have been any action taken, and no
statute, rule or regulation shall have been enacted, by any state or federal
government agency that would prohibit or materially restrict the consummation
of the Merger or the other transactions contemplated hereby.
7.2 Conditions Precedent to Obligation of Parent and Merger Sub to Effect
the Merger. The obligation of Parent and Merger Sub to effect the Merger
shall be subject to the fulfillment at or prior to the Closing of the
following additional conditions:
7.2.1 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and
correct in all material respects on and as of the Effective Time, except for
changes contemplated by this Agreement and except for those representations
and warranties which address matters only as of a particular date (which shall
remain true and correct as of such date), with the same force and effect as if
made on and as of the Effective Time, except in all such cases, for such
breaches, inaccuracies or omissions of such representations and warranties
which have neither had nor reasonably would be expected to have a Company
Material Adverse Effect; and the Company shall have delivered to Parent a
certificate to that effect, dated the date of the Closing and signed on behalf
of the Company by the President and Chief Financial Officer of the Company.
7.2.2 Agreements and Covenants. The Company shall have performed in
all material respects all of its agreements and covenants set forth herein
that are required to be performed at or prior to the Effective Time; and the
Company shall have delivered to Parent a certificate to that effect, dated the
date of the Closing and signed on behalf of the Company by the President and
Chief Financial Officer of the Company.
7.2.3 Legal Opinion. Parent and Merger Sub shall have received an
opinion from Xxxxxxx X. Xxxxxx, counsel to the Company, in substantially the
form attached hereto as Exhibit 7.2.3 hereto.
7.2.4 Closing Documents. The Company shall have delivered to Parent
and Merger Sub such closing documents as Parent shall reasonably request
(other than additional opinions of counsel).
7.2.5 Third Party Consents. All third party consents or approvals
listed in Schedule 7.2.5 hereto shall have been obtained by the Company and
shall be effective and shall not have been suspended, revoked, or stayed by
action of any such third party.
7.2.6 Material Adverse Effect. Since the date of this Agreement, the
Company shall not have suffered a Company Material Adverse Effect.
7.2.7 Company Closing Certificate. The Company shall have delivered
the Company Closing Certificate to Parent.
7.2.8 Stockholder List. The Company shall have delivered to Parent the
Stockholder List.
7.2.9 Disposition of QTPI. The Company shall have disposed of its
entire interest in QTPI and shall have no continuing agreement, obligation,
liability or undertaking with respect to QTPI or any future interest in QTPI.
The Company and Parent shall have agreed in good faith on the determination of
the Adjustment Price Per Share.
7.2.10 Amendment of Stock Options. The Company shall have completed
the action to modify the terms of outstanding Company Stock Options as
provided in Section 6.3 hereof.
7.3 Conditions to Obligations of the Company to Effect the Merger. The
obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Closing of the following additional conditions:
7.3.1 Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement shall be true
and correct in all material respects on and as of the Effective Time, except
for changes contemplated by this Agreement and except for those
representations and warranties which address matters only as of a particular
date (which shall remain true and correct as of such date), with the same
force and effect as if made on and as of the Effective Time, except in all
such cases, for such breaches, inaccuracies or omissions of such
representations and warranties which have neither had nor reasonably would be
expected to have a Parent Material Adverse Effect; and Parent shall have
delivered to the Company a certificate to that effect, dated the date of the
Closing and signed on behalf of Parent by the President and Chief Financial
Officer of Parent.
7.3.2 Agreements and Covenants. Parent and Merger Sub shall have
performed in all material respects all of their agreements and covenants set
forth herein that are required to be performed at or prior to the Effective
Time; and Parent shall have delivered to the Company a certificate to that
effect, dated the date of the Closing and signed on behalf of Parent by the
President and Chief Financial Officer of Parent.
7.3.3 Legal Opinion. The Company shall have received opinions from
Xxxxxxx X. Xxxxxxxx, Executive Vice President of Parent, and Xxxxx, Xxxx &
Xxxxx LLP, counsel to Parent, in substantially the forms attached hereto as
Exhibit 7.3.3.
7.3.4 Closing Documents. Parent and Merger Sub shall have delivered to
the Company such closing documents as the Company shall reasonably request
(other than additional opinions of counsel).
7.3.5 Material Adverse Effect. Since the date of this Agreement,
Parent shall not have suffered a Parent Material Adverse Effect.
7.3.6 Parent Closing Certificate. The Parent shall have delivered the
Parent Closing Certificate to Company.
7.3.7 Payment of Purchase Price. The Parent shall have tendered the
aggregate Merger Price pursuant to the provisions of Section 2.4.2 hereof.
ARTICLE 8
SURVIVAL OF REPRESENTATIONS
---------------------------
8.1 Survival of Representations.
8.1.1 The Company's Representations. All representations and
warranties made by the Company in this Agreement or any certificate or other
writing delivered by the Company pursuant hereto or in connection herewith
shall survive the Closing and any investigation at any time made by or on
behalf of Parent and shall terminate on the first anniversary of the Closing
Date (except that Parent claims pending on the first anniversary of the
Closing Date shall continue until resolved. The covenants made by the Company
in this Agreement or any certificate or other writing delivered by the Company
or any of its Affiliates pursuant hereto or in connection herewith shall
survive the Closing and any investigation at any time made by or on behalf of
Parent.
8.1.2 Parent's Representations. All representations and warranties
made by Parent and Merger Sub in this Agreement or any certificate or other
writing delivered by Parent, Merger Sub or any of their respective Affiliates
pursuant hereto or in connection herewith shall survive the Closing and any
investigation at any time made by or on behalf of the Company and shall
terminate on the first anniversary of the Closing Date (except that Company
claims pending on the first anniversary of the Closing Date shall continued
until resolved). The covenants made by the Parent in this Agreement or any
certificate or other writing delivered by the Parent, Merger Sub and their
respective Affiliates pursuant hereto or in connection herewith shall survive
the Closing and any investigation at any time made by or on behalf of the
Company.
ARTICLE 9
OTHER PROVISIONS
----------------
9.1 Termination Events. This Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) by mutual written consent of Parent and the Company;
(b) by Parent if there has been a breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of the
Company and such breach has not been cured within ten business days after
written notice to the Company (provided, that neither Parent nor Merger Sub is
in material breach of the terms of this Agreement, and provided further, that
no cure period shall be required for a breach which by its nature cannot be
cured) such that the conditions set forth in Section 7.2.1 or Section 7.2.2
hereof, as the case may be, will not be satisfied;
(c) by Parent, if the Company or its Board of Directors shall have (i)
withdrawn, modified or amended in any material respect its approval of this
Agreement or the transactions contemplated herein, or (ii) taken any public
position inconsistent with its approval or recommendation, including, without
limitation, having failed (without the consent of Parent) after a reasonable
period of time to reject or disapprove any Acquisition Proposal (or after a reas
onable period of time to recommend to its shareholders such rejection or
disapproval), and in that event the Company shall pay to Parent, to compensate
it for its expenses incurred and effort expended in preparing for the
combination, a fee of one million dollars ($1,000,000);
(d) by the Company if there has been a breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
Parent or Merger Sub and such breach has not been cured within ten business
days after written notice to Parent (provided, that the Company is not in
material breach of the terms of this Agreement, and provided further, that no
cure period shall be required for a breach which by its nature cannot be
cured) such that the conditions set forth in Section 7.3.1 or Section 7.3.2
hereof, as the case may be, will not be satisfied;
(e) by the Company, if the Company accepts an Acquisition Proposal
pursuant to a good-faith determination by its Board of Directors, after taking
advice of counsel, that not to accept the Acquisition Proposal would
constitute a breach of the Directors' fiduciary duty under Virginia
corporation law, provided, however, that in that event the Company shall pay
to Parent, to compensate it for its expenses incurred and effort expended in
preparing for the combination, a fee of one million dollars ($1,000,000);
(f) by any party hereto if: (i) there shall be a final, non-appealable
order of a federal or state court in effect preventing consummation of the
Merger; (ii) there shall be any final action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Merger by any Governmental Entity which would make consummation of the Merger
illegal or which would prohibit Parent's ownership or operation of all or a
material portion of the business or assets of the Company, or compel Parent to
dispose of or hold separate all or a material portion of the business or
assets of the Company or Parent as a result of the Merger; (iii) if the
Company's stockholders do not approve this Agreement and the transactions
contemplated hereby at the Company Meeting; or
(g) by any party hereto if the Merger shall not have been consummated
by October 31, 1998, provided that the right to terminate this Agreement under
this Section 9.1(g) shall not be available to any party whose failure to
fulfill any material obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such
date.
9.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand sent via a reputable
nationwide courier service or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice) and shall be deemed
given on the date on which so hand-delivered or on the third business day
following the date on which so mailed or sent:
To Parent and Merger Sub:
CACI International Inc
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Dr. J. P. London, Chairman
with copies to:
Xxxxxxx X. Xxxxxxxx
Executive Vice President, General Counsel and Secretary
CACI International Inc
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxx, Esq.
Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
To the Company:
QuesTech, Inc.
0000-X Xxxxxxxx Xxxx,
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Chairman
with copies to:
Xxxxxxx X. Xxxxxx, Esq.
Vice President, General Counsel, and Secretary
QuesTech, Inc.
0000-X Xxxxxxxx Xxxx,
Xxxxx Xxxxxx, Xxxxxxxx 00000
9.3 Entire Agreement. This Agreement and the documents and instruments and
other agreements among the parties hereto as contemplated by or referred to
herein constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, including the Letter of Intent. Each party hereto
acknowledges that, in entering this Agreement and completing the transactions
contemplated hereby, such party is not relying on any representation,
warranty, covenant or agreement not expressly stated in this Agreement or in
the agreements among the parties contemplated by or referred to herein.
9.4 Assignability. This Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder, except
as otherwise expressly provided herein. Neither this Agreement nor any of the
rights and obligations of the parties hereunder shall be assigned or
delegated, whether by operation of law or otherwise, without the written
consent of all parties hereto, except that certain rights and obligations of
Merger Sub and the Company may be assigned and delegated to the Surviving
Corporation as a result of the Merger without any further consent hereunder.
9.5 Validity. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
9.6 Specific Performance. The parties hereto acknowledge that damages alone
may not adequately compensate a party for violation by another party of this
Agreement. Accordingly, in addition to all other remedies that may be
available hereunder or under applicable law, any party shall have the right to
any equitable relief that may be appropriate to remedy a breach or threatened
breach by any other party hereunder, including the right to enforce
specifically the terms of this Agreement by obtaining injunctive relief in
respect of any violation or non-performance hereof.
9.7 Governing Law. This Agreement shall take effect and shall be construed
as a contract under the laws of the Commonwealth of Virginia.
9.8 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement and Plan of
Merger under seal as of the date first above written.
CACI International Inc
By: ___________________________
Title:
CACI Acquisition Corporation
By: ___________________________
Title:
QuesTech, Inc.
By: ___________________________
Title:
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List of Exhibits
Exhibit Description
------- -----------
2.1 Form of Certificate of Merger
6.7 Form of Affiliate Agreement
7.2.3 Form of Opinion from the Company's Counsel
7.3.3 Form of Opinion from Parent's Counsel
AMENDMENT NO. 1 TO THE AGREEMENT AND PLAN OF MERGER
---------------------------------------------------
This Amendment No. 1 to the Agreement and Plan of Merger dated July 30, 1998
by and among CACI International Inc (Parent), CACI Acquisition Corporation
(Merger Sub) and QuesTech, Inc. (the Company) (the Merger Agreement) is
effective as of October 6, 1998.
WITNESSETH
----------
WHEREAS, the parties have been engaged in a range of actions aimed at
satisfying all of the conditions precedent to making the proposed merger of
Parent, Merger Sub, and the Company effective (the Merger);
WHEREAS, practical considerations attendant to such actions have caused the
parties to spend more time than originally anticipated in satisfying all of
the conditions precedent to closing the Merger;
WHEREAS, the parties remain committed to completing all transactions
contemplated by the Merger Agreement; and
WHEREAS, based on the current status of all activities related to the Merger
Agreement the parties anticipate that they will be able to effect a closing of
the Merger by November 15, 1998;
NOW, THEREFORE, Parent, Merger Sub and the Company hereby agree as follows:
1. Article 9, Subsection 9.1(g) of the Merger Agreement is, and hereby
shall be, amended by deleting the date "October 31, 1998" in the second line
of the Subsection and replacing it with the date "November 15, 1998;"
2. All of the other terms and conditions of the Merger Agreement shall
remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed this Amendment No. 1 to the
Agreement and Plan of Merger.
CACI International Inc
By: /s/ Xxxxxxx X. Xxxxxxxx Date 10/5/98
---------------------------------- ------------------------
CACI Acquisition Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx Date 10/5/98
---------------------------------- ------------------------
QuesTech, Inc.
By: /s/ X. X. Xxxxxx Date 10/5/98
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