Exhibit 99(b)
CACI INTERNATIONAL INC
CACI, INC.
SUNSET RESOURCES, INC.
Acquisition Agreement
Dated as of October 1, 1996
Table of Contents
Article 1
PURCHASE OF ASSETS
1.1 Purchase and Sale
1.2 Excluded Assets
1.3 Assumption of Liabilities
1.4 Excluded Liabilities
1.5 Purchase Price
1.6 Taxes
1.7 Closing
1.8 Post-Closing Adjustment
Article 2
REPRESENTATIONS AND WARRANTIES OF SUNSET
2.1 Corporate Status of Sunset
2.2 Authority for Agreement
2.3 No Default or Violation
2.4 Financial Statements
2.5 Absence of Material Adverse Changes and Undisclosed
Liabilities
2.6 Title to Assets; Condition
2.7 Receivables
2.8 Assigned Contracts
2.9 Completeness of Documentation
2.10 Compliance with Applicable Law
2.11 Absence of Certain Changes
2.12 Litigation
2.13 Tax Matters
2.14 Employee Benefit Plans; Compliance with ERISA
2.15 Employment-Related Matters
2.16 Environmental
2.17 Product and Service Liability Claims
2.18 Agreements, Contracts and Commitments
2.18.1 Existence
2.18.2 Breach
2.19 Customers and Orders
2.20 Suppliers
2.21 Absence of Certain Payments
2.22 Intellectual Property
2.23 Insurance Contracts; Banking Relationships
2.24 Interests of Officers and Directors
2.25 No Misrepresentations
Article 3
REPRESENTATIONS AND WARRANTIES OF CACI AND
CASUB
3.1 Corporate Status of CACI and CASub
3.2 Authority for Agreement
3.3 No Default or Violation
3.4 Absence of Material Adverse Changes
3.5 Assigned Contracts
3.6 Responsible Prospective Contractor; Assigned Contracts
Article 4
COVENANTS
4.1 Confidentiality
4.2 Further Assurances
4.2.1 Generally
4.2.2 Assignment of the Assigned Contracts
4.2.3 Collection of Receivables
4.2.4 Outstanding Proposals
4.3 Customers
4.4 Returns of Defective Goods
4.5 Excluded Assets
4.6 Liens
4.7 Defense of Claims and Litigation
4.8 Retention of Books and Records
4.9 Non-Competition Agreement
4.10 Employees
4.11 Bulk Transfer Compliance
4.12 Indemnities
4.12.1 Indemnification of CACI
4.12.2 Indemnification of Sunset
4.12.3 Third Party Claims
Article 5
DEFINITIONS AND MISCELLANEOUS
5.1 Definitions of Certain Terms
5.2 Brokerage
5.3 Amendments and Supplements
5.4 Extensions and Waivers
5.5 Survival of Representations and Warranties
5.6 Expenses
5.7 Governing Law
5.8 Alternative Dispute Resolution
5.9 Notice
5.10 Entire Agreement, Assignability, etc
5.11 Cumulative Rights and Remedies
5.12 Severability
5.13 Counterparts
ACQUISITION AGREEMENT
Acquisition Agreement (the "Agreement"), dated as of
October 1, 1996,
by and among Sunset Resources, Inc., a Texas corporation
("Sunset"), CACI
International Inc, a Delaware corporation ("CACI", which term
shall include
any Subsidiary of CACI International Inc to the extent that the
Subsidiary
may perform any of the Assigned Contracts, as hereinafter
defined, or own or
use any of the Assets, as hereinafter defined), and CACI, Inc., a
Delaware
corporation ("CASub") and a wholly-owned subsidiary of CACI,
W I T N E S S E T H
WHEREAS CACI has a strong commitment to the government
information
technology industry; and
WHEREAS Sunset is concentrated in the information
technology industry;
and
WHEREAS CASub wishes to purchase from Sunset, and Sunset
wishes to sell
to CASub, all of the assets and liabilities other than certain
excluded
assets and liabilities of Sunset; and
WHEREAS Sunset wishes to assign to CASub, and CASub wishes
to assume,
certain existing contracts of Sunset identified in this
Agreement,
NOW, THEREFORE, Sunset, CACI and CASub hereby agree as
follows:
Article 1
PURCHASE OF ASSETS
1.1 Purchase and Sale. Upon and subject to the terms
and
conditions hereof, at the "Closing" (as defined in Section 1.7),
Sunset shall
sell, transfer and assign to CASub, and CASub shall purchase and
acquire from
Sunset, all right, title and interest in and to all the tangible
and
intangible assets of Sunset, other than the "Excluded Assets" (as
defined in
Section 1.2) (collectively, the "Assets"), including, without
limitation, all
assets described in this Section 1.1. Such unlimited rights
shall continue
in perpetuity. In each case, the sale, transfer and assignment
of all right,
title and interest in, to and under the Assets shall be free and
clear of all
liens, tax liens, charges, security interests and other
encumbrances except
for the "Assumed Liabilities" (as defined in Section 1.3). The
Assets
include:
1.1.1 All rights and interests in, to and under
all leases,
contracts, licenses and other agreements (collectively, the
"Assigned
Contracts"), including the contracts or other agreements with the
customers
of Sunset; the leases for machinery, equipment, tools, furniture,
fixtures,
vehicles and related parts and supplies; the licenses for
Intellectual
Property (as hereinafter defined); the agreements or other
arrangements for
shipping, maintenance, repair and other services; the agreements
or other
arrangements for fuel, raw materials, machine, clothing and other
supplies
and materials and sewer, electrical and other utilities; and the
agreements
with brokers, agents, distributors and others and including the
leases,
contracts, licenses, and other agreements set forth in EXHIBIT
1.1.1(a) and
excluding only the leases, contracts, licenses and other
agreements set forth
in EXHIBIT 1.1.1(b);
1.1.2 All outstanding customer proposals (the
"Outstanding
Proposals"), including the proposals set forth in EXHIBIT
1.1.2(a), and all
subcontracts to perform Sunset's obligations under the contracts
(the
"Subcontracts"), including the subcontracts set forth in EXHIBIT
1.1.2(b);
1.1.3 All customer orders (the "Orders") and all
deposits and
other payments relating thereto, including those orders, deposits
and
payments set forth in EXHIBIT 1.1.3;
1.1.4 All machinery, equipment, tools, firmware,
furniture,
fixtures, supplies, raw materials, work in process, accessories,
vehicles,
related parts and supplies, other items related to the Assigned
Contracts,
all related computer programs, software and firmware owned by
Sunset, and all
other tangible assets (collectively, "Tangible Assets"),
including the items
set forth in EXHIBIT 1.1.4;
1.1.5 All supplies, raw materials, work in
process,
accessories and items related to inventory (collectively the
"Inventory"),
including the items set forth in EXHIBIT 1.1.5;
1.1.6 All rights to all patents, trademarks,
service marks,
trade names, mask works, software, programs, development tools,
methodologies, specifications, processes, know-how, blueprints,
drawings,
designs, patterns, copyrights, formulae, inventions, technology,
trade
secrets, proprietary information, confidential information and
other
information and documents, and the registrations and applications
therefor
and the goodwill related thereto (collectively, the "Intellectual
Property")
relating to or useful in connection with the development,
manufacture,
distribution or sale of the products or services or other aspects
of the
business of Sunset and all goodwill related thereto, including
non-exclusive
rights to use of the names Sunset, Sunset Resources and SRI
(provided that no
confusion results from such use as to the identity of the party
providing
goods or services to, or otherwise dealing with, any third party
or parties
after the Closing with respect to any transaction or transactions
of any kind
whatsoever) to the extent necessary to realize the full value of
the other
Assets being transferred pursuant to this Agreement and including
the items
set forth in EXHIBIT 1.1.6;
1.1.7 All third party licenses (the "Third Party
Licenses"),
including the third party licenses for patents, trademarks,
service marks,
trade names, mask works, software, programs, development tools,
methodologies, specifications, processes, know-how, blueprints,
drawings,
designs, patterns, copyrights, formulae, inventions, technology,
trade
secrets, proprietary information, confidential information and
other
information and documents, and the registrations and applications
therefor
and the goodwill related thereto (collectively, the "Licensed
Intellectual
Property"), including the third party licenses set forth in
EXHIBIT 1.1.7,
and a copy of each license;
1.1.8 All advances, prepaid expenses, other
prepayments and
related rights (collectively, the "Prepaid Expenses"), including
the items
set forth in EXHIBIT 1.1.8;
1.1.9 All accounts receivable (the
"Receivables"), including
the items set forth in EXHIBIT 1.1.9;
1.1.10 All leases relating to leased properties
(the "Leased
Properties"), all of which leases and Leased Properties are set
forth in
EXHIBIT 1.1.10;
1.1.11 All leases relating to all leased
machinery,
equipment, tools, firmware, furniture, fixtures, vehicles,
related parts and
supplies and all other leased assets (the "Leased Equipment"),
all of which
leases and Leased Equipment are set forth in EXHIBIT 1.1.11;
1.1.12 All rights to use any government furnished
property
(the "Government Furnished Property"), all of which Government
Furnished
Property is set forth in EXHIBIT 1.1.12;
1.1.13 All rights of Sunset, whether now existing
or
hereafter arising, against manufacturers, suppliers, vendors or
subcontractors with respect to any of the Assets or Assumed
Liabilities or
any part thereof, including all guarantees and product and other
warranties
thereon, including the items set forth in EXHIBIT 1.1.13;
1.1.14 All books, records, price lists, customer
lists,
vendor lists, historical sales data, payroll data, accounting
records,
business records, files and data relating to the goods and
services provided
in connection with the Assigned Contracts, maps, plans, diagrams,
processes,
notebooks, specifications, test results, diagrams, flow charts,
blueprints,
drawings, schematics, manuals, maintenance logs, specifications,
papers,
ledgers, marketing brochures, prospect lists, proposals, previous
proposals,
proposals in preparation, contract documents and other documents
related to
the Assets (collectively, the "Asset Documents"), excluding only
the books
and records set forth in EXHIBIT 1.1.14;
1.1.15 All other currently existing rights and
assets of
Sunset, not set forth in any Exhibit to any part of this Section
1.1, which
are being or have been used by Sunset in connection with the
performance of
any of the Assigned Contracts, including end-user licenses of
commercially
available software, or which may be needed for the performance of
Outstanding
Proposals or Orders or proposals in process, except the Excluded
Assets and
the general corporate assets of Sunset.
For purposes of this Agreement, the Assets described in this
Section 1.1 and
the Assumed Liabilities described in Section 1.3 shall constitute
the
"Acquired Business."
1.2 Excluded Assets. None of the items listed in
EXHIBIT 1.2
which may be deemed to relate to the Acquired Business are being
sold,
assigned or otherwise transferred to CASub.
1.3 Assumption of Liabilities. CACI and CASub hereby
agree to
assume and perform all of the liabilities and obligations of
Sunset properly
recorded on its books as of the Closing in accordance with
generally accepted
accounting principles ("GAAP"), including, without limitation,
those
liabilities and obligations reflected in the "June 30, 1996
Balance Sheet"
(as defined in Section 2.5 hereof) or identified in EXHIBIT 1.3,
other than
the "Excluded Liabilities" (as defined below) (the "Assumed
Liabilities").
The Assumed Liabilities include, without limitation, (a) Sunset's
obligations
under the Assigned Contracts, (b) Sunset's obligations under the
Outstanding
Proposals and the Subcontracts, payment or performance of which
is due after
the Closing and which relate to goods to be delivered or services
to be
performed after the Closing, and (c) the current liabilities set
forth in
EXHIBIT 1.3.
1.4 Excluded Liabilities. CACI and CASub specifically
assume no
liability for, and Sunset specifically retains sole
responsibility for, the
following liabilities and obligations (the "Excluded
Liabilities"),
regardless of when discovered or asserted:
1.4.1 Obligations under the Assigned Contracts
arising as a
result of any breach of any term or any default by Sunset
occurring before
the Closing;
1.4.2 All medical, dental, life insurance,
workmen's
compensation and other pension and welfare benefit obligations
for all hourly
and salaried employees of Sunset who terminated employment or
retired on or
before the date of the Closing and all such obligations for
claims that were
incurred or (with respect to workmen's compensation) for injuries
that
occurred on or before the date of the Closing; and
1.4.3 Any warranty or other claim relating to
goods delivered
or services performed by Sunset before the Closing; and
1.4.4 Any claim relating to failure by Sunset to
comply
before the Closing with any "Environmental Permit" or
"Environmental Law" (as
defined in Section 5.1) or relating to any "Environmental
Contamination" (as
defined in Section 5.1) caused by Sunset before the Closing, or
use, disposal
or discharge of any "Materials of Environmental Concern" (as
defined in
Section 5.1) by Sunset or its lessees, agents or representatives,
occurring
or in existence on or before the date of the Closing.
1.4.5 Any amount payable, due or owed, whether
before or
after the date of the Closing, or other liability or obligation
under the
Bank One line of credit.
1.4.6 Any amount payable, due or owed, whether
before or
after the date of the Closing, or other liability or obligation
under the
notes set forth on EXHIBIT 1.4.6.
1.5 Purchase Price. CACI shall pay to Sunset, for the
transfer of
the Assets, a total purchase price of $5,336,278 (the "Purchase
Price"),
subject to post-closing adjustment as provided in Section 1.8,
allocated in
the manner specified in EXHIBIT 1.5. The Purchase Price shall be
payable at
the Closing by wire transfer or by CACI's certified or bank
cashier's check
payable to Sunset.
1.6 Taxes. Sunset shall pay all sales, use, transfer
or
documentary taxes, or stamps and filing fees arising out of or
relating to
the sale of the Assets to CACI hereunder that are imposed by any
taxing
authority. Sunset shall pay all other taxes that are imposed by
any taxing
authority with respect to the sale. It shall be the
responsibility of Sunset
to see that all taxes are paid to the appropriate taxing
authority in
accordance with all applicable laws and regulations.
1.7 Closing.
1.7.1 The closing of the purchase and sale of the
Assets and
Assumed Liabilities (the "Closing") shall be held at the offices
of CACI
International Inc, 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxxx, XX 00000 at
9:30 A.M. on
September 30, 1996 or on such later date as the parties hereto
may mutually
agree upon in writing. All transactions contemplated by this
Agreement shall
be deemed to have become effective as of 12:01 A.M. on October 1,
1996.
1.7.2 At the Closing,
1.7.2.1 Sunset shall deliver to CACI:
1.7.2.1.1 All appropriate deeds,
bills of
sale, assignments and other instruments of conveyance, sale and
transfer of
title to the Assets (including any consents thereto by third
parties (other
than the Government) necessary to make the same valid and
effective) and
confirmation of notices sent to third parties holding any such
Assets;
1.7.2.1.2 Assignments of the
Licensed
Intellectual Property;
1.7.2.1.3 Such affidavits and
certificates,
from Sunset and from such other essential parties, as CACI shall
deem
necessary to relieve CACI of any obligation to deduct and
withhold any
portion of the Purchase Price pursuant to Section 1445 of the
Internal
Revenue Code of 1986, as amended (the "Code");
1.7.2.1.4 Assignments of the
Assigned
Contracts and consents to such assignments (other than
documentation under
Part 42 of the Federal Acquisition Regulations, which
documentation is to be
completed promptly after the Closing pursuant to Section 4.2.2)
and any other
documents necessary to effect the assignment of the Assigned
Contracts;
1.7.2.1.5 Duly executed
subcontracts
subcontracting to CASub Sunset's performance of all the Assigned
Contracts
that may not be assigned without the consent of the "Government"
(as defined
in Section 5.1) or of any "Prime Contractor" (as defined in
Section 5.1),
each of which subcontract shall remain in effect until either (a)
an
assignment, with the consent of the Government or of the Prime
Contractor, of
the Assigned Contract to which the subcontract relates, or (b) a
novation,
substituting CASub for Sunset, of the Assigned Contract to which
the
subcontract relates;
1.7.2.1.6 All originals and
records of the
Receivables;
1.7.2.1.7 The Asset Documents;
1.7.2.1.8 All consents, approvals
and waivers
under any loan or other agreements of Sunset that are required to
consummate
this Agreement or any of the transactions contemplated hereby
(other than
consents and novations of the Government under the Assigned
Contracts); and
all filings, registrations, approvals, consents and
authorizations by or
with, and notifications to, all third parties (including, without
limitation,
governmental entities and authorities, domestic and foreign)
required to
consummate this Agreement or any of the transactions contemplated
hereby,
which approvals and authorizations shall be effective and shall
not have been
suspended, revoked or stayed by action of any governmental entity
or
authority;
1.7.2.1.9 Certifications from the
appropriate
officials of each state in which the Assets may be located that
Sunset has
paid all taxes that may result in the imposition of any lien on
any of the
Assets;
1.7.2.1.10 A certificate, dated
the date of
the Closing and signed by the President of Sunset, that the
representations
and warranties of Sunset contained in this Agreement shall be
true and
correct in all material respects as of the date hereof, except
for
representations and warranties made expressly as of a specified
date (which
representations and warranties shall be true and correct in all
material
respects as of such date);
1.7.2.1.11 An opinion or opinions
of counsel
to Sunset in form and substance reasonably satisfactory to
counsel to CACI,
dated the date of the Closing; and
1.7.2.1.12 All other documents
consistent
with the purposes of this Agreement as CACI shall have reasonably
requested
(other than additional opinions of counsel); and
1.7.2.2 CACI shall deliver to Sunset, in
such form and
containing such terms and provisions as shall reasonably satisfy
Sunset and
its counsel:
1.7.2.2.1 CACI and CASub's
written assumption
of and agreement to perform the Assumed Liabilities;
1.7.2.2.2 The payment required by
Section
1.5;
1.7.2.2.3 A certificate, dated
the date of
the Closing and signed by the President or a Vice-President of
CACI, that the
representations and warranties of CACI and CASub contained in
this Agreement
shall be true and correct in all material respects as of the date
hereof,
except for representations and warranties made expressly as of a
specified
date (which representations and warranties shall be true and
correct in all
material respects as of such date);
1.7.2.2.4 An opinion or opinions
of counsel
to CACI in form and substance reasonably satisfactory to counsel
to Sunset,
dated the date of the Closing; and
1.7.2.2.5 All other documents
consistent with
the purposes of this Agreement as Sunset shall have reasonably
requested
(other than additional opinions of counsel).
1.8 Post-Closing Adjustment. The parties agree that
the Purchase
Price has been determined on the basis of an agreed adjusted net
book value
of $772,693.00 at June 30, 1996 (the "Adjusted Base Book Value").
As soon as
practicable after the Closing, CACI shall cause representatives
of Deloitte &
Touche, LLP ("Deloitte") to audit the financial statements of
Sunset
Resources, Inc. as of close of business on September 30, 1996
(the "Audit
Date"). If the adjusted net book value of Sunset at the Audit
Date, as
determined by Deloitte in accordance with GAAP after making the
appropriate
adjustments concerning the value of the Excluded Assets and the
amount of the
relevant Excluded Liabilities as of the Audit Date in the same
manner as
reflected in Attachment D to the letter of intent dated August
23, 1996,
executed by CACI and Sunset (the "Audited Book Value"), is
greater or less
than the Adjusted Base Book Value, then the Purchase Price will
be adjusted
by the amount of the difference. If the Audited Book Value
exceeds the
Adjusted Base Book Value, CACI will pay to Sunset the amount of
such excess.
If the Audited Book Value is less than the Adjusted Base Book
Value, Sunset
will pay to CACI the amount of such deficit. Any amounts due
under this
Section 1.8 will be payable within ten (10) days after written
demand by the
party entitled to payment. However, if Sunset, after
consultation with an
independent accountant or accountants of its choosing, believes
in good faith
that the determination made by Deloitte of the Audited Book Value
is
incorrect in some material respect, Sunset shall, within twenty
(20) days
after receipt by Sunset of the written determination by Deloitte,
so notify
CACI and Deloitte in writing, describing Sunset's objection in
reasonable
detail. In such event, the determination of the Audited Book
Value by
Deloitte shall not be deemed conclusively binding upon the
parties hereunder,
and the dispute as to the proper determination shall be subject
to the
provisions of Section 5.8 below.
Article 2.
REPRESENTATIONS AND WARRANTIES OF SUNSET
Sunset represents and warrants to CACI and CASub as
follows:
2.1 Corporate Status of Sunset. Sunset is a
corporation duly
organized, validly existing and in good standing under the laws
of the State
of Texas. Sunset is currently doing business as a foreign
corporation in
Ohio and Oklahoma, and these are the only jurisdictions in which
the
character of the properties owned, leased or operated by Sunset
or the nature
of the business transacted by Sunset might make qualification as
a foreign
corporation doing business in the state necessary. The failure
of Sunset to
have qualified as a foreign corporation doing business in any
state other
than Texas does not and will not have a materially adverse effect
upon the
Assets to be transferred or the Acquired Business. Sunset has no
Subsidiaries and no investment or ownership interest in any other
corporation, partnership, joint venture, trust or unincorporated
organization.
2.2 Authority for Agreement. Sunset has the full
corporate power
to own, lease and operate its properties and to conduct its
business as
currently owned, leased, operated and conducted and to execute,
deliver, and
perform this Agreement and the other transactions contemplated
herein and to
carry out its obligations hereunder. The execution, delivery and
performance
of this Agreement and the other transactions contemplated hereby
have been
duly and validly authorized by Sunset's Board of Directors and
shareholders,
and no other corporate proceedings on the part of Sunset,
including, without
limitation, stockholder approval, are necessary to authorize the
execution,
delivery and performance of this Agreement and the other
transactions
contemplated hereby.
2.3 No Default or Violation. Except as contemplated
by Section
2.8 and except for such matters, if any, which, together, do not
and will not
have a material adverse effect upon the Assets to be transferred
or the
Acquired Business, the execution, delivery and performance of
this Agreement
and the other transactions contemplated hereby do not and will
not (a)
conflict with or result in a violation of any provision of the
Certificate of
Incorporation or By-Laws or other organizational documents of
Sunset, or (b)
with or without the giving of notice or the lapse of time, or
both, conflict
with, or result in any violation or breach of or constitute a
default under,
or require the consent of any other party to, or result in any
right to
accelerate or the creation of any lien, charge or encumbrance on
any of the
Assets pursuant to, or right of termination under, any provision
of any note,
mortgage, indenture, lease, agreement or other instrument,
permit,
concession, grant, franchise, license, judgment, order, decree,
statute, law,
ordinance, rule or regulation to which Sunset is a party or by
which Sunset
or any of its assets or properties may be bound or which is
applicable to
Sunset or any of its assets or properties. Except as
contemplated by Section
2.8 and except for such matters, if any, which, together, do not
and will not
have a material adverse effect upon the Assets to be transferred
or the
Acquired Business, no authorization, consent, approval, license,
order, or
permit of, or declaration of, or filing with or notice to, any
governmental
body or authority or any other person or entity is necessary for
the
execution, delivery and performance of this Agreement by Sunset
or the
consummation by Sunset of this Agreement and the other
transactions
contemplated hereby.
2.4 Financial Statements. Sunset has previously
furnished to CACI
true and complete copies of its financial statements for each of
the three
years ended December 31, 1993, 1994, and 1995 and the six months
ended June
30, 1996 and identified on EXHIBIT 2.4 (the "Sunset Reports").
Each of the
balance sheets included in the Sunset Reports (including any
related notes
and schedules) fairly presents the financial position of Sunset
as of its
date, and the other financial statements included in the Sunset
Reports
(including any related notes and schedules) fairly present the
results of
operations or other information included therein of Sunset for
the periods or
as of the dates therein set forth, in each case in accordance
with generally
accepted accounting principles consistently applied during the
periods
involved.
2.5 Absence of Material Adverse Changes and
Undisclosed
Liabilities. Since June 30, 1996, there has not occurred or
arisen, whether
or not in the ordinary course of business, (a) any material
adverse change in
the business, operations, assets, financial condition, results of
operations,
properties or prospects of Sunset considered as a whole or of the
Acquired
Business considered alone, or (b) any event, condition or state
of facts of
any character that might materially and adversely affect the
business,
operations, assets, financial condition, results of operations,
properties or
prospects of Sunset considered as a whole or of the Acquired
Business
considered alone. Sunset has no material liabilities or
obligations, fixed,
accrued, contingent or otherwise, that are not fully reflected or
provided
for on, or disclosed in the notes to, the consolidated balance
sheet at June
30, 1996 (the "June 30, 1996 Balance Sheet") or elsewhere in the
Sunset
Reports, except (a) liabilities and obligations incurred in or as
a result of
the ordinary course of business since June 30, 1996, none of
which
individually or in the aggregate has been or is materially
adverse to the
business, operations, assets, financial condition, results of
operations,
properties or prospects of Sunset considered as a whole or of the
Acquired
Business considered alone, (b) liabilities and obligations
permitted by or
provided for or contemplated by this Agreement and (c)
liabilities and
obligations disclosed on EXHIBIT 2.5 or any other Exhibit
attached hereto or
delivered hereunder.
2.6 Title to Assets; Condition.
2.6.1 Sunset has good record title to, or a valid
leasehold
interest in, all of the Assets. None of the Assets is subject to
any
mortgage, pledge, lien, security interest or other encumbrance.
The
Inventory consists of items of a quantity and quality usable or
saleable in
the normal course of business of Sunset. All plant, equipment
and personal
property owned by Sunset and related to the Acquired Business are
in good
operating condition and repair. The Assets are in a condition
sufficient to
enable CACI to conduct operations with respect to the Acquired
Business as
currently being conducted. No written notice has been received
by Sunset
from any insurance company that has issued a policy with respect
to any of
the Assets or from any board of fire underwriters (or other body
exercising
similar functions) claiming any defects or deficiencies or
requesting the
performance of any repairs, alterations or other work relating to
the Assets.
2.6.2 EXHIBIT 1.1.10 sets forth a true, correct
and complete
list as of the date hereof of all leases, and all amendments,
modifications
and supplemental agreements thereto, of real property related to
the Acquired
Business to which Sunset is a party and which are being assigned
to CASub
(the "Leases"). True, correct and complete copies of the Leases
have been
delivered by Sunset to CACI. Except for such matters, if any,
which,
together, do not and will not have a material adverse effect upon
the Assets
to be transferred or the Acquired Business, the Leases grant
leasehold
estates free and clear of all mortgages, liens, claims, charges,
security
interests, encumbrances or other restrictions or limitations
whatsoever
granted by or caused by the actions of Sunset, and Sunset enjoys
a right of
quiet possession as against any lien or other encumbrance on the
property.
The Leases are in full force and effect, are binding and
enforceable against
each of the parties thereto in accordance with their respective
terms and
have not been modified or amended since the date of delivery to
CACI. No
party to any Lease has sent written notice to the other claiming
that such
party is in default thereunder, which remains uncured. There has
not
occurred any event that would constitute a breach of or default
in the
performance of any material covenant, agreement or condition
contained in any
Lease, nor has there occurred any event that with the passage of
time or the
giving of notice or both would constitute such a breach or
material default.
Sunset is not obligated to pay any leasing or brokerage
commission relating
to any Lease and will not have any enforceable obligation to pay
any leasing
or brokerage commission upon the renewal of any Lease. No
material
construction, alteration or other leasehold improvement work with
respect to
any of the Leases remains to be paid for or to be performed by
Sunset. The
June 30 Balance Sheet contains adequate reserves to provide for
the
restoration of the properties subject to the Leases at the end of
the
respective lease terms, to the extent required by the Leases.
2.6.3 Except for such matters, if any, which,
together, do
not and will not have a material adverse effect upon the Assets
to be
transferred or the Acquired Business, Sunset is not in violation
of any law,
regulation or ordinance (including, without limitation, laws,
regulations or
ordinances relating to building, zoning, environmental, city
planning, land
use or similar matters) relating to its properties. There are no
proceedings
materially affecting the present or future use of any such
property for the
purposes for which it is used or the purposes for which it is
intended to be
used. All buildings, structures and fixtures used by Sunset in
connection
with the Acquired Business are in good operating condition and
repair and are
insured with coverages that are usual and customary for similar
properties
and similar businesses.
2.7 Receivables. All of the Receivables set forth in
EXHIBIT
1.1.9 are good, valid and existing accounts; and EXHIBIT 1.1.9
sets forth all
accounts receivable of Sunset. Sunset has good title to all of
the
Receivables, free and clear of all liens, security interests,
encumbrances
and other rights and claims of other persons or entities.
2.8 Assigned Contracts. Sunset has delivered to CACI
or made
available to CACI a true and complete copy of each of the
Assigned Contracts
and all amendments thereto. All Assigned Contracts are in full
force and
effect. With respect to goods and services delivered by Sunset
pursuant to
the Assigned Contracts before the Closing, Sunset has
substantially performed
its obligations under the Assigned Contracts and has complied in
all material
respects with all specifications thereto, and Sunset has not
received any
notice of default, nor is it in material default, nor does any
condition
exist which with notice or the lapse of time, or both, will
render Sunset in
material default, under any of the Assigned Contracts. All the
Assigned
Contracts are fully assignable to CACI or to CASub, provided that
(a) certain
of the Assigned Contracts require the consent of the other
party(ies) thereto
as indicated on EXHIBIT 2.8, and (b) each Assigned Contract with
the United
States Government may not be assigned without the consent of the
Government
and must be novated in accordance with the rules and regulations
contained in
Section 42.12 et seq. of the Federal Acquisition Regulations.
Neither Sunset
nor any of its officers, directors, employees, representatives or
other
agents has any knowledge or reason to believe or suspect that any
party to
any of the Assigned Contracts, including, without limitation, the
Government
or any Prime Contractor, will not approve or consent to the
assignment or
novation of any of the Assigned Contracts or will otherwise
prohibit or
materially restrict the assignment or novation of any of the
Assigned
Contracts. To Sunset's knowledge, the other parties to the
Assigned
Contracts are in compliance with all material terms and
conditions of the
Assigned Contracts. No party to an Assigned Contract has
notified Sunset of
its intention to terminate or materially change the nature of its
transaction
or relationship with Sunset or CACI under any such Assigned
Contract.
2.9 Completeness of Documentation. Except for the
Excluded
Assets, the Exhibits referred to in Section 1.1 describe all
currently
existing outstanding proposals, tangible assets, intellectual
property,
tools, third party licenses, prepaid assets, receivables, leased
property,
leased equipment, government furnished property, books and
records and other
assets of Sunset used in connection with the performance of the
Assigned
Contracts or in connection with the preparation of proposals in
process,
including, without limitation, all machinery, equipment, tools,
furniture,
fixtures, vehicles, related parts and supplies and leases for the
same; all
intellectual property (including software, development tools and
kits)
relating to or used in connection with the development,
manufacture,
distribution or sale of any products or services provided in
connection with
the Assigned Contracts; agreements or other arrangements for
shipping,
maintenance, repair and other services; agreements or other
arrangements for
supplies and materials; sewer, electrical and other utilities;
and
prepayments for any of the preceding items.
2.10 Compliance with Applicable Law. Sunset has all
requisite
licenses, permits and certificates from all foreign, federal,
state and local
authorities necessary to perform the Assigned Contracts and to
conduct the
Acquired Business as presently conducted, and to own, lease and
operate its
properties. Sunset has performed the Assigned Contracts and
conducted the
Acquired Business in compliance in all material respects with all
applicable
laws, statutes, ordinances, regulations, rules, judgments,
decrees, orders,
permits, licenses, concessions, grants or other authorizations of
any court
or of any governmental entity or authority.
2.11 Absence of Certain Changes. Since September 1,
1996, Sunset
has conducted its business only in the ordinary course and
consistent with
prior practice, and Sunset has not:
2.11.1 discharged, satisfied or paid any
obligation or
liability, absolute, accrued, contingent or otherwise, whether
due or to
become due, material to Sunset considered as a whole or to the
Acquired
Business considered alone, other than current liabilities and
current portion
of long-term debt shown on the June 30, 1996 Balance Sheet and
current
liabilities incurred since the date of the June 30, 1996 Balance
Sheet in the
ordinary course of business and consistent with its prior
practice;
2.11.2 suffered any damage or destruction in the
nature of a
casualty loss or other loss that would be treated as an
extraordinary item
pursuant to Opinion No. 30 of the Accounting Principles Board,
whether
covered by insurance or not, adversely affecting any property or
business of
Sunset or of the Acquired Business, that might reasonably be
expected to be
material to the business, operations, assets, financial
condition, results of
operations, properties or prospects of the Acquired Business;
2.11.3 granted any increase in the compensation
payable or to
become payable by Sunset to its directors, officers, managers,
consultants or
agents employed in the Acquired Business or any increase in
benefits under
any bonus, insurance, pension or other benefit plan made for or
with any of
such persons other than increases that are provided to broad
categories of
employees and do not discriminate in favor of the aforementioned
persons;
2.11.4 encountered any labor union organizing
activity
material to the business, operations, assets, financial
condition, results of
operations, properties or prospects of Sunset considered as a
whole or of the
Acquired Business considered alone, had any employee strike,
work-stoppage,
slow-down or lockout, or any substantial threat of any imminent
strike, work-
stoppage, slow-down or lock-out, or had any adverse change in its
relations
with its employees, agents, customers or suppliers or any
governmental or
regulatory authorities, that, in any of the foregoing cases, has
had or could
reasonably be expected to have, individually or in the aggregate,
a material
adverse effect on the business, operations, assets, financial
condition,
results of operations, properties or prospects of Sunset
considered as a
whole or of the Acquired Business considered alone;
2.11.5 transferred or granted any rights under,
or entered
into any settlement regarding the breach or infringement of, any
United
States or foreign intellectual property, or modified any existing
rights with
respect thereto, as related to the Acquired Business, other than
in the
ordinary course of business and consistent with prior practice;
2.11.6 cancelled or compromised any debts or
waived or
permitted to lapse any claims or rights of substantial value, or
sold,
leased, transferred or otherwise disposed of any of its
properties or assets
(real, personal or mixed, tangible or intangible), except in the
ordinary
course of business and consistent with prior practice;
2.11.7 made any material capital expenditure or
commitment
for any addition to property, plant or equipment not in the
ordinary course
of business and consistent with prior practice;
2.11.8 made any change in any method of
accounting or
accounting practice;
2.11.9 paid, loaned or advanced any amount to, or
sold,
transferred or leased any properties or assets (real, personal or
mixed,
tangible or intangible) to, or entered into any agreement or
arrangement
with, any officer, director, "affiliate," officer of an
"affiliate," director
of an "affiliate," "associate" of an officer, "associate" of a
director, or
"associate" of an "affiliate" (as such terms are defined in the
rules and
regulations of the Securities and Exchange Commission), except
for normal
business advances to employees consistent with prior practices;
or
2.11.10 agreed, whether in writing or otherwise,
to take any
action described in this Section 2.11.
2.12 Litigation.
2.12.1 Except as separately disclosed to CACI,
there is no
investigation, inquiry or review by any governmental entity or
authority with
respect to Sunset pending or threatened, nor has any governmental
entity
indicated to Sunset an intention to conduct the same;
2.12.2 except as identified in EXHIBIT 2.12,
there is no
"Action" (as defined in Section 5.1) of any kind, pending or
threatened, at
law or in equity, before any court, arbitrator, governmental
entity or
authority, that involves, affects or relates to Sunset or any of
its
officers, directors, employees, properties or assets in
connection with the
business and affairs of the Acquired Business or Sunset, that
either singly
or in the aggregate may have any material adverse effect on the
business,
operations, assets, financial condition, results of operations,
properties or
prospects of Sunset considered as a whole or of the Acquired
Business
considered alone;
2.12.3 to Sunset's knowledge, there is no basis
or ground for
any Action; and
2.12.4 neither Sunset nor any of its directors,
officers,
employees or properties is subject to any order, writ,
injunction, decree or
judgment of any court, arbitrator or governmental entity or
authority that
involves, affects or relates to the Acquired Business.
2.13 Tax Matters. Sunset has complied in all material
respects
with the requirements for filing federal, state, local and
foreign tax
returns and reports required to be filed by it or on its behalf.
All taxes
shown by the returns to be due and payable have been paid or are
reflected as
a liability on the Sunset balance sheets included in the Sunset
Reports. All
tax returns of Sunset that have been examined by any governmental
authority
since December 31, 1992 are identified on EXHIBIT 2.13 along with
the
respective authority; CACI has been provided with a copy of all
returns and
any assessments resulting from such examinations, and all
assessments,
penalties and interest have been paid in full. Sunset has not
been notified
in writing or otherwise by any taxing authority of any pending
actions,
claims, suits or assessments for any tax deficiency. The
accruals for taxes
reflected on the Sunset balance sheets are adequate under
generally accepted
accounting principles for all unpaid federal, state, local or
foreign taxes
(including but not limited to interest, charges, fees, levies or
other
assessments, gross receipts, excise and franchise taxes and
penalties, if
any, thereon) due or that will become due for any period
commencing prior to
the date of the Closing. Sunset has no material liability,
contingent or
otherwise, for unpaid federal, state, local or foreign taxes
(including, but
not limited to interest, charges, fees, levies or other
assessments, gross
receipts, excise and franchise taxes and penalties, if any,
thereon) due or
that will become due for any period commencing prior to the date
of such
Sunset balance sheets that is not reflected on such Sunset
balance sheets.
Sunset has not made an election under Section 341(f) of the Code.
Sunset is
not a party to any tax indemnity or tax sharing agreement.
2.14 Employee Benefit Plans; Compliance with ERISA.
EXHIBIT 2.14
contains a true, correct and complete list of all pension, profit
sharing,
retirement, deferred compensation, welfare, insurance,
disability, bonus,
vacation pay, severance pay and other similar plans, programs or
agreements,
and every material personnel policy, whether reduced to writing
or not,
relating to any persons employed by Sunset and related to the
Acquired
Business and maintained at any time after December 31, 1992, by
Sunset or by
any other member (hereinafter, "Affiliate") of a controlled group
of
corporations, group of trades or businesses under common control
or
affiliated service group which includes Sunset (as defined for
purposes of
Section 414(b), (c) and (m) of the Code) (collectively, the
"Sunset Plans").
Sunset has made available to CACI true, correct and complete
copies of all
Sunset 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. With respect to any "defined benefit
plan," as
defined in Section 3(35) of ERISA, Sunset has made available a
copy of the
latest annual actuarial report, and with respect to all Sunset
Plans the
latest Forms 5500. Neither Sunset nor any Affiliate has any
obligation or
other employee benefit plan liability under applicable law; nor
has Sunset or
any Affiliate ever been obligated to contribute to any
"multi-employer plan,"
as defined in Section 3(37) of ERISA. Neither Sunset nor any
Affiliate has
incurred any "withdrawal liability" calculated under Section 4211
of ERISA
and there has been no event or circumstance which would cause
them to incur
any such liability. Neither Sunset nor any Affiliate has ever
maintained a
Sunset Plan providing health or life insurance benefits to former
employees
(other than as required by Part 6 of Subtitle B of Title I of
ERISA). No
plan previously maintained by Sunset or its Affiliates which was
subject to
ERISA has been terminated; no proceedings to terminate any such
Sunset Plan
have been instituted within the meaning of Subtitle C of Title IV
of ERISA;
and no reportable event within the meaning of Section 4043 of
said Subtitle C
has occurred with respect to any such Sunset Plan, and no
liability to the
Pension Benefit Guaranty Corporation has been incurred. With
respect to all
the Sunset Plans, Sunset and every Affiliate are in material
compliance with
all requirements prescribed by all statutes, regulations, orders
or rules
currently in effect, and have in all material respects performed
all
obligations required to be performed by them. Neither Sunset nor
any
Affiliate, nor any of their directors, officers, employees or
agents, nor any
trustee or administrator of any trust created under the Sunset
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 Sunset
or CACI or their Subsidiaries, affiliates, directors or employees
or the
Sunset Plans or the trusts relating thereto or any party dealing
with any of
the Sunset Plans or trusts to any tax or penalty on "prohibited
transactions"
imposed by Section 4975 of the Code. Neither the Sunset Plans
nor the trusts
created thereunder have incurred any "accumulated funding
deficiency," as
such term is defined in Section 412 of the Code and regulations
issued
thereunder, whether or not waived.
Each Sunset Plan intended to qualify under Section 401(a)
of the Code
has been determined by the Internal Revenue Service to so
qualify, and the
trusts created thereunder have been determined to be exempt from
tax under
Section 501(a) of the Code; copies of all determination letters
have been
delivered to CACI; and nothing has occurred since the date of
such
determination letters which might cause the loss of such
qualification or
exemption. With respect to each Sunset Plan that is a "defined
benefit plan"
as defined in Section 3(35) of ERISA, the present value of the
actuarial
accrued liability, determined on a plan termination basis, does
not exceed
the fair market value of the assets held under such Sunset Plan,
and there is
no unpaid contribution for any Sunset Plan year ended prior to
the Closing as
required under Section 412 of the Code. With respect to each
Sunset Plan
which is a qualified profit sharing or stock bonus plan, all
employer
contributions accrued for plan years ending prior to the Closing
under the
Sunset Plan terms and applicable law have been made.
There is no Action threatened or pending or that can
reasonably be
expected to be asserted with respect to any of the Sunset Plans
or any prior
plan maintained by Sunset, and there are no outstanding written
requests,
other than routine requests for information concerning such
Sunset Plans, by
participants, beneficiaries or any government agency. All of the
liabilities
with respect to all of the Sunset Plans are accurately reflected
in Sunset's
financial statements and Sunset's balance sheets included in the
Sunset
Reports.
2.15 Employment-Related Matters. Except for such
matters, if any,
which, together, do not and will not have a material adverse
effect upon the
Assets to be transferred or the Acquired Business, (a) Sunset is
in
compliance with all applicable laws respecting employment,
consulting,
employment practices, wages, hours, and terms and conditions of
employment;
(b) Sunset is not a party to any collective bargaining agreement
or other
contract or agreement affecting the Acquired Business with any
labor
organization or other representative of any employees related to
the Acquired
Business; (c) there is no labor strike, dispute, slowdown, work
stoppage,
lockout or other labor controversy in effect, that is pending or
threatened
against or otherwise affecting the Acquired Business or Sunset,
and Sunset
has not experienced any labor controversy within the past three
years; (d) no
labor representation question exists or has been raised
respecting any of the
employees of Sunset; (e) Sunset has not closed any plant or
facility, or
effectuated any layoffs of employees or implemented any early
retirement,
separation or window program at any time from or after June 30,
1996 nor has
Sunset planned or announced any action or program for the future
with respect
to which Sunset has or may have any material liability; and (f)
Sunset is in
compliance in all material respects with its obligations pursuant
to the
Worker Adjustment and Retraining Notification Act of 1988, and
all other
notification and bargaining obligations arising under any
collective
bargaining agreement or statute relating to employment; provided,
however,
that nothing in this Section 2.15 shall be construed as any
representation or
warranty relating to the Code or ERISA.
2.16 Environmental.
2.16.1 (a) There is no liability for violation of
any
applicable Environmental Law (as defined in Section 5.1) or for
clean-up or
similar costs with respect to any Environmental Contamination (as
defined in
Section 5.1) as a result of (i) an act or omission of Sunset or,
(ii) to
Sunset's knowledge, acts or omissions of third parties, (b)
Sunset has not
received any communication (written or oral), whether from a
governmental
authority, employee, or any other person that alleges that Sunset
is not in
compliance, (c) there are no circumstances that may prevent or
interfere with
full compliance in the future, and (d) all permits and other
governmental
authorizations currently held by Sunset pursuant to the
Environmental Laws
are in full force and effect and no other permits are required by
Sunset.
2.16.2 There is no Environmental Claim (as
defined in Section
5.1) pending or threatened against or involving Sunset or against
any person
or entity whose liability for any Environmental Claim Sunset has
or may have
retained or assumed either contractually or by operation of law.
2.16.3 (a) There are no past or present actions,
activities,
circumstances, conditions, events or incidents caused, performed
or omitted
by Sunset, including, without limitation, the release, threatened
release,
emission, discharge or disposal of any Material of Environmental
Concern (as
defined in Section 5.1), that could form the basis of any
Environmental Claim
against Sunset, and, (b) to Sunset's knowledge, there are no such
actions,
activities, circumstances, conditions, events or incidents
caused, performed
or omitted by third parties, that could form the basis of any
Environmental
Claim against any person or entity whose liability for any
Environmental
Claim Sunset may have retained or assumed either contractually or
by
operation of law.
2.17 Product and Service Liability Claims. No product
liability,
service liability or warranty claims have been made against
Sunset for goods
or services provided since September 30, 1993.
2.18 Agreements, Contracts and Commitments.
2.18.1 Existence. Except as described in EXHIBIT
2.18.1,
Sunset is not a party to:
2.18.1.1 any bonus, deferred compensation,
pension,
severance, profit-sharing, stock option, employee stock purchase
or
retirement plan, contract or arrangement or other employee
benefit plan or
arrangement;
2.18.1.2 any employment agreement that
contains any
severance pay liabilities or obligations;
2.18.1.3 any agreement for personal
services or
employment;
2.18.1.4 any agreement of guarantee or
indemnification
in an amount that (a) could exceed $5,000, or (b) is material to
the
business, operations, assets, financial condition, results of
operations,
properties or prospects of Sunset considered as a whole or of the
Acquired
Business considered alone;
2.18.1.5 any agreement or commitment
containing a
covenant limiting or purporting to limit the freedom of Sunset to
compete
with any person in any geographic area or to engage in any line
of business;
2.18.1.6 any lease (other than equipment
leases under
which Sunset is lessor) to which Sunset is a party as lessor or
lessee that
(a) provides for future payments of $2,500 or more, or (b) is
material to the
business, operations, assets, financial condition, results of
operations,
properties or prospects of Sunset considered as a whole or of the
Acquired
Business considered alone;
2.18.1.7 any joint venture agreement or
profit-sharing
agreement (other than with employees);
2.18.1.8 except for trade indebtedness
incurred in the
ordinary course of business, any loan or credit agreements
providing for the
extension of credit to Sunset 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 (a) individually is in the amount of $5,000 or
more, or (b) is
material to the business, operations, assets, financial
condition, results of
operations, properties or prospects of Sunset considered as a
whole or of the
Acquired Business considered alone;
2.18.1.9 any license agreement, either as
licensor or
licensee, or distributor, dealer, franchise, manufacturer's
representative,
sales agency or other similar agreement or commitment;
2.18.1.10 any contract or agreement for
the future
sale by Sunset of materials, products, services or supplies that
is material
to the business, operations, assets, financial condition, results
of
operations, properties or prospects of Sunset considered as a
whole or of the
Acquired Business considered alone;
2.18.1.11 any contract or agreement for
the future
purchase by Sunset of any materials, equipment, services, or
supplies, that
either provides for payments in excess of $2,500 and cannot be
terminated by
it without penalty upon less than three (3) months' notice or was
not made in
the ordinary course of business and consistent with prior
practice;
2.18.1.12 any agreement that provides for
the sale of
goods or services that will result in a loss as a result of costs
already
incurred or expected to be incurred to complete the agreement;
2.18.1.13 any agreement or arrangement for
the
assignment, sale or other transfer by Sunset of any agreement or
lease (or
right to payment thereunder) by which it leases materials,
products or other
property to a third party;
2.18.1.14 any contract or agreement that
provides for
any discount other than pursuant to Sunset's standard discount
terms, which
are described in EXHIBIT 2.18.1.14;
2.18.1.15 any agreement or commitment for
the
acquisition, construction or sale of fixed assets owned or to be
owned by
Sunset;
2.18.1.16 any contract or agreement not
described
above involving the payment or receipt by Sunset of more than
$500
individually or $5,000 in the aggregate other than contracts or
agreements in
the ordinary course of business for the purchase of inventory,
supplies or
services or for the sale of current requirements and consistent
with prior
practice, or for the sale or lease of finished goods or services
in the
ordinary course of business and consistent with prior practice;
or
2.18.1.17 any contract or agreement not
described
above that was not made in the ordinary course of business and
consistent
with prior practice and that is material to the business,
operations, assets,
financial condition, results of operations, properties or
prospects of Sunset
considered as a whole or of Acquired Business considered alone.
2.18.2 Breach. All agreements, contracts, plans,
leases,
instruments, arrangements, licenses and commitments listed in
EXHIBIT 2.18.1
pursuant to this Section 2.18 are valid and in full force and
effect, and
except for such matters, if any, which, together, do not and will
not have a
material adverse effect upon the Assets to be transferred or the
Acquired
Business, Sunset has not, nor has any other party thereto,
breached any
provision of, or defaulted under the terms of, nor are there any
facts or
circumstances that would reasonably indicate that Sunset will or
may be in
such breach or default under, any such contract, agreement,
instrument,
arrangement, commitment, plan, lease or license, which breach or
default has
or could reasonably be expected to have a material adverse effect
on the
business, operations, assets, financial condition, results of
operations,
properties or prospects of the Acquired Business. EXHIBIT 2.18.1
correctly
identifies each contract the provisions of which would be
materially and
adversely affected by this Agreement and each contract that
requires the
consent of a third party to the Agreement in order to assign the
contract.
2.19 Customers and Orders.
2.19.1 EXHIBIT 2.19.1 hereto contains a materially
true and
complete list of all customers of Sunset for goods or services.
None of the
present listed customers has notified Sunset of an intention to
cease
purchasing goods or services from Sunset.
2.19.2 EXHIBIT 2.19.2 hereto contains a
materially true and
complete list of all customer orders to Sunset outstanding and
unfilled as of
September 24, 1996. During the period from September 1, 1996
through the
date of this Agreement Sunset has not accepted customer orders on
any terms
other than the standard terms set forth in EXHIBIT 2.19.2.
2.20 Suppliers. EXHIBIT 2.20 hereto contains a
materially true and
complete list of all suppliers from or through whom Sunset has
purchased
products or services for use in connection with operation of the
Acquired
Business. None of the present listed suppliers has notified
Sunset of an
intention materially to change its business relationship with
Sunset.
2.21 Absence of Certain Payments. Neither Sunset nor
any director,
officer, agent, employee or other person associated with or
acting on behalf
of Sunset has used any funds of Sunset for unlawful
contributions, gifts,
entertainment or other unlawful expenses relating to political
activity, or
made any direct or indirect unlawful payments to government
officials or
employees from corporate funds, or established or maintained any
unlawful or
unrecorded funds, or violated any provisions of the Foreign
Corrupt Practices
Act of 1977 or any rules or regulations promulgated thereunder.
2.22 Intellectual Property. Sunset owns, or is
licensed or
otherwise has the full right to use and to transfer to CACI, all
Intellectual
Property of material importance to the conduct of the Acquired
Business as
presently conducted. EXHIBIT 1.1.6 lists all Intellectual
Property owned by
Sunset and related to the Acquired Business. EXHIBIT 1.1.7 lists
all
Licensed Intellectual Property and third party licenses related
to the
Acquired Business (other than end-user licenses of commercially
available
software related to the Acquired Business). Sunset has the full
right to
transfer to CACI and CASub all end-user licenses of commercially
available
software related to the Acquired Business. (a) All Intellectual
Property
that is identified on EXHIBIT 1.1.6 as owned by Sunset is,
together with the
goodwill of the business associated with any Intellectual
Property, owned by
Sunset free and clear of any license or sublicense that would
prevent the use
of the Intellectual Property by CACI, or any agreement, judgment,
order,
decree, stipulation or material adverse lien or encumbrance; (b)
the business
and operations of Sunset do not infringe upon or violate any
intellectual
property owned by any third party; (c) Sunset has not received,
within the
past three (3) years, notice of any claim that Sunset has
infringed or
violated any intellectual property of any third party, or that
any
Intellectual Property identified on EXHIBIT 1.1.6 as owned by
Sunset is
invalid or violates or infringes upon the rights of any third
party; and (d)
Sunset has not sent or otherwise communicated to another person
any notice,
charge, claim or other assertion of, nor does Sunset have any
knowledge of,
any present, impending or threatened infringement or violation by
any third
party of any Intellectual Property or Licensed Intellectual
Property of
Sunset, or any acts of unfair competition by any third party.
Sunset
maintains reasonable security measures to prevent disclosure or
transfer to
unauthorized persons of any trade secrets and confidential
information that
are proprietary to Sunset and material to the Acquired Business.
2.23 Insurance Contracts; Banking Relationships.
EXHIBIT 2.23
lists all contracts of insurance and indemnity (not shown in any
other
Exhibit referred to in this Agreement) in force at the date
hereof with
respect to Sunset and relating to the Acquired Business. Sunset
shall keep
policy number 3533-74-21-CCG dated May 18, 1996, issued by
Pacific Indemnity
Company, in full force and effect for not less than one year
after the
Closing Date to provide for any claims which may be made with
respect to
items included in the Assets for which Sunset is or may be
responsible.
EXHIBIT 2.23 also shows the names and locations of all banks in
which Sunset
has accounts or lines of credit and, with respect to each such
account or
line of credit, the names of all persons authorized to draw
thereon.
2.24 Interests of Officers and Directors. None of the
officers or
directors of Sunset has any material interest in any property,
real or
personal, tangible or intangible, including Intellectual Property
used in or
pertaining to the Acquired Business, except for the normal rights
of a
shareholder, and except for rights under existing employee
benefit plans.
2.25 No Misrepresentations. No representation or
warranty by
Sunset in this Agreement, nor any statement, certificate, list,
exhibit or
schedule furnished or to be furnished by or on behalf of Sunset
pursuant to
this Agreement nor any document or certificate delivered to CACI
pursuant to
this Agreement, when taken together with the foregoing, contains
or shall
contain any untrue statement of material fact or omits or shall
omit to state
a material fact necessary to make the statements not misleading.
Article 3.
REPRESENTATIONS AND WARRANTIES OF CACI AND CASUB
CACI and CASub represent and warrant to Sunset as follows:
3.1 Corporate Status of CACI and CASub. CACI and
CASub are
corporations duly organized, validly existing and in good
standing under the
laws of Delaware. CACI and CASub are duly qualified to do
business as foreign
corporations and are in good standing in all jurisdictions in
which the
character of the properties owned, leased or operated by each or
the nature
of the business transacted by each makes such qualification
necessary, except
where failure to be so qualified would not have a materially
adverse effect
on the business, operations, assets, financial condition, results
of
operations, properties or prospects of CACI and its Subsidiaries
considered
as a whole.
3.2 Authority for Agreement. CACI and CASub have the
full
corporate power to execute, deliver, and perform this Agreement
and the other
transactions contemplated hereby and to carry out their
obligations
hereunder. The execution, delivery and performance of this
Agreement and the
other transactions contemplated hereby have been duly and validly
authorized
by the Board of Directors of both CACI and CASub, and no other
corporate
proceedings on the part of CACI or CASub including, without
limitation,
stockholder approval, are necessary to authorize the execution,
delivery and
performance of this Agreement and the other transactions
contemplated hereby.
3.3 No Default or Violation. The execution, delivery
and
performance of this Agreement and the other transactions
contemplated hereby
do not and will not (a) conflict with or result in a violation of
any
provision of the Certificate of Incorporation or By-Laws or other
organizational documents of CACI or CASub, or (b) with or without
the giving
of notice or the lapse of time, or both, conflict with, or result
in any
violation or breach of or constitute a default under, or require
the consent
of any other party to, or result in any right to accelerate or
the creation
of any lien, charge or encumbrance pursuant to, or right of
termination
under, any provision of any note, mortgage, indenture, lease,
agreement or
other instrument, permit, concession, grant, franchise, license,
judgment,
order, decree, statute, law, ordinance, rule or regulation to
which CACI or
CASub is a party or by which either of them or any of their
assets or
properties may be bound or which is applicable to either of them
or any of
their assets or their properties. No authorization, consent,
approval,
license, order, or permit of, or declaration of, or filing with
or notice to,
any governmental body or authority or any other person or entity
is necessary
for the execution, delivery and performance of this Agreement by
CACI and
CASub or the consummation by CACI and CASub of this Agreement or
the other
transactions contemplated hereby.
3.4 Absence of Material Adverse Changes. Except as
set forth on
EXHIBIT 3.4, since June 30, 1996 there has not occurred or
arisen, whether or
not in the ordinary course of business: (a) any material adverse
change in
the business, operations, assets, financial condition, results of
operations,
properties or prospects of CACI and CASub considered as a whole,
or (b) any
event, condition or state of facts of any character that might
materially and
adversely affect the business, operations, assets, financial
condition,
results of operations, properties or prospects of CACI and CASub
considered
as a whole.
3.5 Assigned Contracts. To the knowledge of CACI and
CASub and
subject to approval by the Government, all the Assigned Contracts
are fully
assignable to CACI or to CASub. Neither CACI, CASub, nor any of
their
directors, officers, employees, representatives, or other agents
has any
knowledge or reason to believe or suspect that Sunset will be
unable to
assign the Assigned Contracts or that any other party, including,
without
limitation, the Government, will not approve or consent to the
assignment of
any of the Assigned Contracts or will otherwise prohibit or
materially
restrict the assignment of any of the Assigned Contracts. No
party to the
Assigned Contracts has notified CACI or CASub of an intention to
terminate or
materially change the nature of its transaction or relationship
with Sunset
or CACI thereunder.
3.6 Responsible Prospective Contractor; Assigned
Contracts. Each
of CACI and CASub is a "responsible prospective contractor," as
defined in 48
C.F.R. Part 9, Section 9.101 and Section 9.104, and other
applicable sections
of the Federal Acquisition Regulation. No director or officer of
CACI or
CASub has been informed by any party to any of the Assigned
Contracts that
such other party, including, without limitation, the Government,
will not
approve or consent to the assignment of any of the Assigned
Contracts.
Article 4.
COVENANTS
It is further agreed as follows:
4.1 Confidentiality. Except as required by law, each
party and
its representatives will hold in strict confidence all documents
and
information concerning any of the other parties furnished in
connection with
the transactions contemplated by this Agreement (except to the
extent that
such information can be shown to have been (a) in the public
domain through
no action by the party in violation of this Section 4.1, (b) in
the party's
possession at the time of disclosure and not acquired by the
party directly
or indirectly from such other party on a confidential basis or
(c) disclosed
by such other party to others on an unrestricted,
non-confidential basis) and
will not release or disclose any such documents or information to
any other
person and shall not use nor permit others to use such documents
or
information except in connection with this Agreement and the
transactions
contemplated hereby.
4.2 Further Assurances.
4.2.1 Generally. Subject to the terms and
conditions herein
provided and to the fiduciary duty of each party's Board of
Directors and
officers, each of the parties agrees to use its best reasonable
efforts to
take, or cause to be taken, all action and to do, or cause to be
done, all
things necessary, proper or advisable under applicable laws and
regulations
to consummate and make effective this Agreement and the
transactions
contemplated hereby. In case at any time any further action,
including the
obtaining of waivers and consents under material contracts and
leases and the
execution and delivery of any licenses or sublicenses, is
necessary or
desirable to carry out the purposes of this Agreement, the proper
officers
and directors of each party to this Agreement are hereby directed
and
authorized to use their reasonable best efforts to effectuate all
required
action.
To the extent that the assignment of any lease, contract,
commitment or
right shall require the consent of other parties thereto, this
Agreement
shall not constitute an assignment thereof; however, Sunset
agrees to use all
reasonable efforts after the Closing to obtain any necessary
consents or
waivers to assure CACI and CASub of the benefits of such leases,
contracts,
commitments or rights.
4.2.2 Assignment of the Assigned Contracts. Each
party
agrees to use all reasonable efforts to effect assignments of all
the
Assigned Contracts and further agrees to provide all
documentation necessary
to effect such assignments, including, without limitation, all
instruments,
certifications, requests, legal opinions, financial statements,
and other
documents required by Part 42 of the Federal Acquisition
Regulation ("FAR")
to effect a novation of all contracts with the Government. In
particular and
without limiting the generality of the foregoing,
4.2.2.1 Sunset shall continue to
communicate with
responsible officers of the Government and/or any Prime
Contractor from time
to time as may be appropriate and permissible, to request speedy
action on
any and all requests for consent to novation with respect to any
or all of
the Assigned Contracts (the "Novation Applications");
4.2.2.2 At or before the Closing, or as
soon
thereafter as is reasonably practicable (and in no event more
than forty (40)
days after the Closing), CACI will prepare and submit to Sunset a
copy of the
proposed novation agreement required by FAR Section 42.1204(c)
together with
copies of all other documents required under such regulation to
be submitted
to the responsible contracting officer of the Government in
connection with
the Novation Applications except those solely relating to or
under the
control of Sunset (collectively, the "Proposed Novation
Submission");
4.2.2.3 As soon as practicable after
receiving the
Proposed Novation Submission (and in no event later than thirty
(30) days
thereafter), Sunset will submit to CACI those documents required
to be
included in the Novation Application which solely relate to or
are under the
control of Sunset and any suggestions for revision or
supplementation of the
Proposed Novation Submission prepared by CACI;
4.2.2.4 CACI, CASub and Sunset shall each
exercise all
reasonable efforts to complete the Novation Applications and
submit them to
the Government as soon as practicable after the Closing (but in
no event
later than ninety (90) days after the Closing). For this
purpose, the
parties agree to cooperate with each other in the timely
completion of the
Novation Applications and to provide to each other prompt written
notice and
a reasonable opportunity to cure any real or perceived deficiency
in the
performance by any other party of its obligations hereunder;
4.2.2.5 Pending the effective novation of
the Assigned
Contracts, Sunset, CACI and CASub will enter into one or more
subcontracts in
form and substance mutually acceptable to the parties by which
CACI and CASub
will agree to assume and perform, and will assume and perform,
each and every
obligation of Sunset, arising under or with respect to each of
the Assigned
Contracts from and after the Closing; and
4.2.2.6 In the event that one or more of
the Assigned
Contracts is ultimately not approved for novation, or not in fact
novated,
CACI and CASub will nonetheless completely perform and discharge
all
obligations of Sunset arising under or with respect to such
contracts from
and after the Closing, in a timely manner and in accordance with
all
applicable terms and conditions of such contracts (as if a
novation or
novations with respect to such contracts had occurred) subject
to, however,
in all events, the provisions of any applicable subcontract or
subcontracts
between CACI and/or CASub and Sunset relating to the Assigned
Contracts.
4.2.3 Collection of Receivables.
4.2.3.1 Sunset shall provide CACI and
CASub reasonable
assistance in the collection of the Receivables and any other
amounts due
CACI and CASub with respect to the Acquired Business, including,
without
limitation, the submission of claims to government contracting
officers and
any necessary appeals to the Board of Contract Appeals. Sunset
shall bear
its own expenses relating to the provision of any assistance to
CACI and
CASub under this Section 4.2.3, except that Sunset shall be
reimbursed by
CACI for all reasonable expenses incurred by Sunset in connection
with the
submission of claims to government contracting officers and any
necessary
appeals to the Board of Contract Appeals and for any collection
efforts
directed or requested by CACI or CASub involving more than
routine
correspondence or telephone contacts.
4.2.3.2 Sunset agrees that it will,
promptly after
receipt and in any event within three (3) business days of
receipt, transfer
and deliver to CACI any amounts that Sunset may receive in
respect of the
Receivables or the Acquired Business, or any mail or other
documents relating
to the Acquired Business. If Sunset receives funds with respect
to the
Receivables or the Acquired Business, Sunset shall notify CACI,
and CACI
shall provide Sunset with such documentary evidence of the amount
so
applicable as Sunset may reasonably request. Any funds not
delivered by
Sunset to CACI within three (3) business days shall thereafter
bear interest
at the rate of one and one-half percent (1.5%) per month, or the
highest rate
permitted under law, whichever is lower. Funds shall be deemed
delivered
when Sunset delivers or mails to CACI a check in such amount.
4.2.4 Outstanding Proposals. CACI and CASub
agree to use
reasonable efforts to obtain recognition as Sunset's successor in
interest
from any party to whom Sunset has submitted an Outstanding
Proposal. The
parties agree that if, after the Closing, a party to whom Sunset
has
submitted an Outstanding Proposal accepts the Outstanding
Proposal and awards
Sunset a contract pursuant to the Outstanding Proposal, each
party shall use
its best efforts to effect a novation of such contract,
substituting CACI
and/or CASub for Sunset, or to otherwise subcontract to CACI
and/or CASub
Sunset's rights and obligations under such contract.
4.3 Customers. During the six-month period commencing
on the date
of the Closing, Sunset shall inform CACI promptly of all
inquiries from
potential customers concerning the possible purchase of any
product or
service provided by Sunset. In this connection, Sunset shall
provide CACI
with the name and address of each potential customer and the
substance of
each inquiry. Sunset shall refer each potential customer who
shall make any
inquiry to CACI. During the period, Sunset shall use its best
reasonable
efforts to introduce CACI to Sunset's customers for the products
and services
of the Acquired Business and to cooperate with and assist CACI in
establishing a relationship with each customer.
4.4 Returns of Defective Goods. If any goods sold by
Sunset prior
to the Closing are returned to CACI by the customer, or proposed
to be
returned, during the six-month period after the Closing Date
because of
defects in materials or workmanship or other noncompliance with
specifications, CACI shall give notice to Sunset of the return or
proposed
return and shall discuss with Sunset the nature of the defect or
noncompliance and the disposition of any goods that are so
returned or are to
be so returned. Following the discussion and any investigation
CACI shall
deem appropriate, CACI may, at its option, provide a refund or
allowance to
the customer in an amount reasonably consistent with Sunset's
prior practice
or as Sunset may otherwise agree. If CACI provides a refund or
allowance to
a customer with respect to any returned merchandise, CACI may
cause the
merchandise to be returned to Sunset or Sunset's designee and
CACI shall
cooperate with Sunset's efforts to resell or dispose thereof. If
the
aggregate amount so refunded and allowed by CACI for the
merchandise exceeds
$1,000, then Sunset shall reimburse CACI for the excess, less the
reasonable
residual value, if any, of any of the returned goods retained by
CACI and not
delivered to Sunset.
4.5 Excluded Assets. On or prior to the Closing,
Sunset, at its
own expense and in compliance with all applicable laws, shall
remove all
Excluded Assets from any premises to be transferred to or
occupied by CASub.
4.6 Liens. On or prior to the Closing, or promptly
following
CACI's request or Sunset's learning of the existence thereof,
Sunset shall
pay and discharge every lien, charge, security interest or other
encumbrance
on or with respect to any of the Assets other than the Assumed
Liabilities
and any encumbrances attributable to the actions, activities or
omissions of
CACI or CASub.
4.7 Defense of Claims and Litigation. At all times
from and after
the Closing, each party shall consult, confer and cooperate in
good faith on
a reasonable basis with the other (including, without limitation,
the making
available of witnesses and cooperation in discovery proceedings)
in the
conduct or defense of any claim, litigation or proceeding which
relates to
the Acquired Business, or any matter which, directly or
indirectly, arises
therefrom, whether known at the Closing or arising thereafter,
against the
other or any of their affiliates by any third party. To the
extent the
indemnification provisions of this Agreement or of any other
document
delivered in connection with the transactions contemplated hereby
apply to
any such conduct or defense, they shall control as to the payment
of costs
and expenses.
4.8 Retention of Books and Records. For a period of
three (3)
years after the date of the Closing, each party shall retain its
books and
records relating to the Acquired Business. If any party desires
to obtain
any such books and records it may do so by notifying the other
party, in
writing, at any time prior to the end of such three-year period.
The notice
must specify the documents which the requesting party wishes to
obtain. The
parties shall then promptly arrange for the delivery of copies of
such
documents. All out-of-pocket costs associated with the delivery
of the
requested documents shall be paid by the requesting party.
4.9 Non-Competition Agreement. Unless otherwise
agreed between
the parties, for a period of three (3) years after the date of
the Closing,
neither Sunset nor any of its affiliates shall participate,
directly or
indirectly, as owner, stockholder, joint venturer, subcontractor,
supplier,
manager, partner, agent, consultant, representative or otherwise,
in any
business, firm or corporation that manufactures, produces, sells,
leases or
otherwise provides any products or services similar to, or
directly or
indirectly competitive with, the products and services of the
Acquired
Business to any customer which is a branch or agency of the
Government or any
state or foreign government. Further, for this same three-year
period,
neither Sunset nor any of its affiliates shall, without the prior
written
consent of CACI and CASub, market or sell or attempt to market or
sell any
products or services which are similar to, or directly or
indirectly
competitive with, the products and services of the Acquired
Business, to any
client/customer organizations that are included in the Acquired
Business,
whether a government organization or a commercial organization,
to include
all client/customer organizations currently under contract or to
which
proposals have been submitted. As used in this Section 4.9 of
the Agreement
only, the term "affiliates" means the stockholders of Sunset.
4.10 Employees.
4.10.1 CACI and CASub shall have no obligation
hereunder to
employ any employee of Sunset or to make any payment to any
employee of
Sunset. Sunset agrees that CACI and CASub may employ any present
employee of
Sunset whose work relates to the Acquired Business. Sunset
hereby waives all
contractual or other rights it may have with respect to any such
employee so
as to permit CACI and CASub to employ such employee for any job
CACI and
CASub shall deem appropriate and without any conflicting
obligation to
Sunset, and Sunset shall not interfere with CACI or CASub in
their efforts to
employ particular employees of Sunset.
4.10.2 Except for accrued vacation benefits
payable to those
Sunset employees who accept employment with one of the CACI group
of
companies from and after the Closing, at or before the Closing
Sunset shall
pay all amounts payable as of the Closing to all of its present
and former
employees and independent contractors whose work relates or
related to the
Acquired Business, including, without limitation, straight time
and overtime
pay, vacation pay, fringe benefits, severance pay, disability
payments and
payments for medical, dental, life insurance, workmen's
compensation and
other pension and welfare benefits and claims related thereto,
and shall pay
over to the appropriate governmental agencies or other
appropriate persons or
entities all withheld taxes, social security and other similar
payments
accrued and payable as of the Closing Date with respect to such
present and
former employees and independent contractors through the Closing
Date, except
for amounts and taxes included in the Assumed Liabilities.
4.10.3 At the Closing, Sunset shall pay all
amounts due from
Sunset to all of its present and former employees whose work
relates or
related to the Acquired Business for (a) medical, dental, life
insurance,
profit-sharing and other welfare benefit claims incurred before
the Closing,
(b) for worker's compensation claims incurred before or after the
Closing for
injuries that occurred prior to the Closing and (c) for severance
and pension
benefits and claims that may be payable before or after the
Closing under
Sunset's plans, policies and agreements.
4.11 Bulk Transfer Compliance. Sunset covenants and
agrees to pay
and discharge promptly and when due, and in all respects to
defend CACI and
CASub against, all claims which are asserted against CACI or
CASub by reason
of noncompliance with the bulk transfer provisions of the Uniform
Commercial
Code or similar statutory provisions applicable to this Agreement
and the
transactions contemplated hereby on the date of the Closing.
Sunset hereby
agrees to defend and to indemnify and hold CACI and CASub
harmless from,
against and in respect of (and shall on receipt of evidence of
loss,
liability or damage reimburse CACI and CASub for) any loss,
liability,
damage, cost or expense, including, without limitation,
reasonable attorneys'
fees, suffered or incurred by CACI or CASub by reason of any
failure of
Sunset to pay or discharge any such claim promptly and when due
or the
failure of Sunset to comply with such statutory provisions.
4.12 Indemnities.
4.12.1 Indemnification of CACI. Subject to the
limitations
set forth in Section 4.12.3, Sunset shall indemnify and hold
harmless CACI
and CASub and their respective successors by merger or other
operation of law
(the "Successors"), directors, officers and assigns from and
against all
losses, liabilities, claims, damages, costs or expenses
(including, without
limitation, reasonable expenses of investigation and reasonable
attorneys'
fees and disbursements) suffered, incurred or paid:
4.12.1.1 that would not have been
suffered, incurred
or paid if all the representations, warranties, covenants and
agreements of
Sunset in this Agreement or in any other instrument or document
described in
Section 1.7.2.1 hereof had been (with respect to representations
and
warranties) true and had been (with respect to covenants and
agreements)
fully performed and fulfilled;
4.12.1.2 as a result of any Action arising
out of or
relating to the conduct of Sunset before or after the Closing or
any
liability or obligation, or alleged liability, of Sunset,
including, without
limitation, any liability or obligation arising out of or
relating to the
employment of any employees of Sunset before the Closing, in each
case to the
extent not specifically assumed by CACI under this Agreement; and
4.12.1.3 as a result of any Action which
arises out of
or relates to the failure of Sunset to pay, promptly and when
due, any tax,
fee or other charge which shall become due or shall have accrued
on account
of the use, acquisition or ownership of Sunset of any of the
Assets or any
tax, fee or other charge Sunset is obligated to pay, or to
reimburse CACI or
CASub for, hereunder on account of any sale of the Assets or the
transactions
contemplated hereby.
Notwithstanding anything herein to the contrary, if Sunset shall
be required
to indemnify CACI, CASub or any of their Subsidiaries or any of
their
respective directors, officers, Successors or permitted assigns
with respect
to the same item of damage and amount, the satisfaction of such
indemnity to
one of them shall discharge Sunset's obligations to the other to
the extent
of the amount paid.
4.12.2 Indemnification of Sunset. Subject to the
limitations
set forth in Section 4.12.3, CACI and CASub jointly and severally
shall
indemnify and hold harmless Sunset and its directors, officers,
Successors
and assigns from and against all losses, liabilities, claims,
damages, costs
or expenses (including, without limitation, reasonable expenses
of
investigation and reasonable attorney's fees and disbursements)
suffered,
incurred or paid:
4.12.2.1 that would not have been
suffered, incurred
or paid if all the representations, warranties, covenants and
agreements of
CACI and CASub in this Agreement or in any other instrument or
document
furnished to Sunset pursuant to Section 1.7.2.2 hereof had been
(with respect
to representations and warranties) true and had been (with
respect to
covenants and agreements) fully performed and fulfilled;
4.12.2.2 as a result of any Action arising
out of or
relating to the conduct of the Acquired Business after the
Closing or any
liability or obligation, or alleged liability or obligation of
CACI or CASub,
including, without limitation, any liability or obligation
arising out of the
employment of former employees of Sunset after the Closing;
4.12.2.3 as a result of any Action arising
out of or
relating to the failure of CACI or CASub to perform any of the
Assumed
Liabilities; and
4.12.2.4 as a result of any Action which
arises out of
or relates to the failure of CACI or CASub to pay, promptly and
when due, any
tax, fee or other charge which shall become due or shall accrue
on account of
the use, acquisition or ownership of the Assets or the operation
or conduct
of the Acquired Business by CACI or CASub after the Closing.
Notwithstanding anything herein to the contrary, if CACI or CASub
shall be
required to indemnify Sunset or any of its directors, officers,
Successors or
permitted assigns with respect to the same item of damage and
amount, such
payment or satisfaction of such indemnity to one of them shall
discharge the
obligations of CACI and CASub to the other to the extent of the
amount paid.
4.12.3 Third Party Claims. The obligations and
liabilities
of a party for which indemnification is sought (an "Indemnifying
Party") by a
person or entity seeking indemnification (an "Indemnified Party")
under this
Section 4.12 with respect to claims resulting from the assertion
of liability
by third parties shall be subject to the following conditions:
4.12.3.1 The Indemnified Party shall give
written
notice to the Indemnifying Party of the nature of the assertion
of liability
by a third party and the amount thereof promptly after the
Indemnified Party
learns of such assertion. The foregoing notwithstanding, failure
of an
Indemnified Party to comply with its obligations under this
Section 4.12.3
shall affect its right to indemnity only to the extent such
failure shall
have a material adverse effect on the Indemnifying Party's
ability to defend.
4.12.3.2 If any Action is brought by a
third party
against an Indemnified Party, the Action shall be defended by the
Indemnifying Party and such defense shall include all appeals or
reviews
which counsel for the Indemnifying Party shall deem appropriate.
Until the
Indemnifying Party shall have assumed the defense of any such
Action, or if,
because of material conflicts of interest or defenses available
to one but
not both the Indemnified and the Indemnifying Parties or other
matter which
makes it professionally impermissible for both parties to be
represented by
the same counsel (in which case the Indemnifying Party shall not
be entitled
to assume the defense of such Action), all legal or other
expenses reasonably
incurred by the Indemnified Party shall be borne by the
Indemnifying Party.
4.12.3.3 In any Action initiated by a
third party and
defended by the Indemnifying Party, subject to the
confidentiality provisions
of this Agreement, (a) the Indemnified Party shall have the right
to be
represented by advisory counsel and accountants, at its own
expense, (b) the
Indemnifying Party shall keep the Indemnified Party fully
informed as to the
status of such Action at all stages thereof, whether or not the
Indemnified
Party is represented by its own counsel, (c) the Indemnified
Party shall make
available to the Indemnifying Party, and its attorneys and
accountants, all
books and records of the Indemnified Party relating to such
Action and (d)
the parties shall render to each other such assistance as may be
reasonably
required for the proper and adequate defense of such Action.
4.12.3.4 In any Action initiated by a
third party and
defended by the Indemnifying Party, the Indemnifying Party shall
not make any
settlement of any claim without the written consent of the
Indemnified Party,
which consent shall not be unreasonably withheld or delayed.
Without
limiting the generality of the foregoing, it shall not be deemed
unreasonable
to
withhold consent to a settlement involving injunctive or other
equitable
relief against the Indemnified Party or its assets, employees or
business.
Article 5.
DEFINITIONS AND MISCELLANEOUS
5.1 Definitions of Certain Terms. As used herein, the
following
terms shall have the following meanings:
Acquired Business: as defined in Section 1.1
hereof.
Action: any suit, claim, action, arbitration,
dispute,
investigation, inquiry, review, or proceeding.
Adjusted Base Book Value: as defined in Section
1.8 hereof.
Affiliate: as defined in Section 2.14 hereof.
Assets: as defined in Section 1.1 hereof.
Asset Documents: as defined in Section 1.1.14
hereof.
Assigned Contracts: as defined in Section 1.1.1
hereof.
Assumed Liabilities: as defined in Section 1.3
hereof.
Audited Book Value: as defined in Section 1.8
hereof.
Audit Date: as defined in Section 1.8 hereof.
Closing: as defined in Section 1.7 hereof.
Code: as defined in Section 1.7.2.1.3 hereof.
Deloitte: as defined in Section 1.8 hereof.
Environmental Claim: any written notice by any
governmental
agency alleging potential liability (including, without
limitation, potential
liability for investigatory costs, cleanup costs, governmental
response
costs, natural resources damages, property damages, personal
injuries, fines
or penalties) arising out of, based on or resulting from (a) the
presence, or
release into the environment, of any Material of Environmental
Concern at any
location, whether or not owned by CACI or any of its Subsidiaries
or (b)
circumstances forming the basis of any violation, or alleged
violation, of
any Environmental Law.
Environmental Contamination: (a) an occurrence
occurring or a
condition existing relating to the Acquired Business at or before
the Closing
if such occurrence or condition was in violation of any
Environmental Law or
Environmental Permit existing at or before the Closing and if
CACI or CASub
is specifically required to take remedial action with respect
thereto by a
governmental agency or a negotiated agreement, decree or clean-up
plan with a
governmental agency, regardless of when such occurrence or
condition is
discovered or when such remedial action is required, (b) any use,
disposal or
discharge of Materials of Environmental Concern before the
Closing resulting
in liability to a third party, regardless of when such use,
disposal or
discharge is discovered or (c) an occurrence occurring or
condition existing
at or before the Closing if CACI or CASub investigates or takes
remedial
action with respect thereto as required by applicable law or
regulation.
Environmental Laws: mean all Federal, state and
local laws,
rules and regulations relating to pollution or protection of the
environment,
or occupational or human health and safety, including, without
limitation,
laws, rules and regulations relating to handling, processing,
storage,
recycling, emission, discharge, disposal, treatment,
transportation, release
or threatened release of any Material of Environmental Concern or
other waste
or material into ambient air, surface water, ground water or
land, including,
without limitation, the Comprehensive Environmental Response,
Compensation,
and Liability Act (42 U.S.C. 9601 et seq.), the Hazardous
Material
Transportation Act (49 U.S.C. 1801 et seq.), the Federal Water
Pollution
Control Act (38 U.S.C. 1251 et seq.), the Resource Conservation
and Recovery
Act (42 U.S.C. 6901 et seq.), the Clean Air Act (42 U.S.C. 7401
et seq.), the
Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the
Occupational
Safety and Health Act (29 U.S.C. 651 et seq.), the Emergency
Planning and
Community Right to Know Act (42 U.S.C. 11001 et seq.), the
Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 135 et
seq.), and the
Food, Drug and Cosmetic Act (15 U.S.C. 2000 et seq.), in each
case as these
laws have been amended or supplemented.
Environmental Permit: all certificates, consents,
permits,
licenses, authorizations and approvals required under or relating
to any
Environmental Law.
ERISA: the Employee Retirement Income Security
Act of 1974,
as amended.
Excluded Assets: as defined in Section 1.2
hereof.
Excluded Liabilities: as defined in Section 1.4
hereof.
FAR: as defined in Section 4.2.2 hereof.
GAAP: as defined in Section 1.3 hereof.
Government: the Federal Government of the United
States of
America.
Government Furnished Property: as defined in
Section 1.1.12
hereof.
Indemnified Party: as defined in Section 4.12.3
hereof.
Indemnifying Party: as defined in Section 4.12.3
hereof.
Intellectual Property: as defined in Section 1.1.6
hereof.
Inventory: as defined in Section 1.1.5 hereof.
June 30, 1996 Balance Sheet: as defined in
Section 2.5
hereof.
Leased Equipment: as defined in Section 1.1.11
hereof.
Leased Properties: as defined in Section 1.1.10
hereof.
Leases: as defined in Section 2.6.2 hereof.
Licensed Intellectual Property: as defined in
Section 1.1.7
hereof.
Materials of Environmental Concern: those
substances or
constituents which are regulated by, or form the basis of
liability under,
any Environmental Law.
Novation Applications: as defined in Section
4.2.2.1 hereof.
Orders: as defined in Section 1.1.3 hereof.
Outstanding Proposals: as defined in Section
1.1.2 hereof.
Prepaid Expenses: as defined in Section 1.1.8
hereof.
Prime Contractor: with respect to any Assigned
Contract, the
contracting party, other than the Government, to whom Sunset may
be liable
for performance as a subcontractor.
Proposed Novation Submission: as defined in
Section 4.2.2.2
hereof.
Purchase Price: as defined in Section 1.5 hereof.
Receivables: as defined in Section 1.1.9 hereof.
Subcontracts: as defined in Section 1.1.2 hereof.
Subsidiary: any corporation, association, or
other business
entity a majority (by number of votes) of the shares of capital
stock (or
other voting interests) of which is owned by Sunset, CACI or
their respective
Subsidiaries.
Successors: as defined in Section 4.12.1 hereof.
Sunset Plans: as defined in Section 2.14 hereof.
Sunset Reports: as defined in Section 2.4 hereof.
Tangible Assets: as defined in Section 1.1.4
hereof.
Third Party Licenses: as defined in Section 1.1.7
hereof.
5.2 Brokerage. Each party shall be solely responsible
for payment
of any fee or charge of any broker, finder, financial advisor or
intermediary
engaged, employed, or consulted by that party in connection with
negotiations
or discussions incident to the execution of this Agreement or any
of the
transactions contemplated hereby.
5.3 Amendments and Supplements. This Agreement may be
amended or
supplemented by a written instrument signed by Sunset and CACI
and approved
by their respective Boards of Directors.
5.4 Extensions and Waivers. The parties hereto may
(a) extend the
time for the performance of any of the obligations or other acts
of the
parties hereto, (b) waive any inaccuracies in the representations
and
warranties contained herein or in any document delivered pursuant
hereto, and
(c) waive compliance with any of the covenants or conditions
contained
herein. Any agreement on the part of a party hereto to any such
extension or
waiver shall be valid only if set forth in an instrument in
writing signed on
behalf of such party. Neither party's refusal to waive
fulfillment of any
condition precedent to its obligations under this Agreement shall
constitute
a breach of its duty under this Agreement. No failure on the
part of any
party to exercise, and no delay in exercising, any right or
remedy hereunder
shall operate as a waiver thereof, nor shall any single or
partial exercise
of any such right or remedy by such party preclude any other or
further
exercise thereof or the exercise of any other right or remedy.
The waiver by
any party hereto of a breach of any provision of this Agreement
shall not
operate as a waiver of any subsequent breach.
5.5 Survival of Representations and Warranties.
Notwithstanding
any investigation conducted before or after the Closing, and
except as
provided below, notwithstanding any knowledge or notice of any
fact or
circumstance which a party may have as the result of such
investigation or
otherwise, each party and its successors and assigns shall be
entitled to
rely upon the representations, warranties and covenants of the
other in this
Agreement. Each of the representations, warranties and covenants
contained
in this Agreement, made in any document delivered hereunder or
otherwise made
in connection with the Closing hereunder shall survive the
Closing.
5.6 Expenses. Each party shall pay its own expenses,
including
the fees of attorneys, accountants, investment bankers, valuation
experts and
others, in connection with the transactions contemplated hereby,
whether or
not they are completed, except that in the event of a conflict
between this
provision and the provisions of either Section 4.12 or Section
4.2.3, the
latter provisions shall control.
5.7 Governing Law. This Agreement shall be governed
by and
construed in accordance with the laws of the State of Texas,
without regard
for its principles of conflicts of laws.
5.8 Alternative Dispute Resolution. In the event that
any dispute
arises under any provision of this Agreement, the parties agree
to make
reasonable efforts to resolve the dispute by negotiation,
mediation, or
alternative dispute resolution before any resort to legal
remedies; provided,
however, that the provisions hereof shall not prevent any party
from filing a
lawsuit, or taking any other action, as may be necessary to
preserve the
legal rights of such party from impairment or extinction under
any applicable
statute of limitations or other similar statute or rule of law,
and that no
party shall be bound by the determination of any mediation or
alternative
dispute resolution proceeding without that party's consent to the
proceeding.
5.9 Notice. All notices and other communications
hereunder shall
be in writing and shall be deemed given if delivered by hand sent
via a
reputable nationwide courier service or mailed by registered or
certified
mail (return receipt requested) to the parties at the following
addresses (or
at such other address for a party as shall be specified by like
notice) and
shall be deemed given on the date on which so hand-delivered or
on the third
business day following the date on which so mailed or sent:
To CACI:
CACI International Inc
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Dr. J. P. London, Chairman
With copies to:
Xxxxxxx X. Xxxxxxxx, Esq.
Executive Vice President and General Counsel
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 Sunset:
Sunset Resources, Inc.
0000 Xxxxxx Xxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx, Chairman and Chief Executive
Officer
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxx
118 Frost Bank Tower
000 Xxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000-0000
5.10 Entire Agreement, Assignability, etc. This
Agreement and the
Exhibits and documents delivered at the Closing pursuant to
Section 1.7 (a)
constitute the entire agreement, and supersede all other prior
agreements and
understandings, both written and oral, between the parties with
respect to
the subject matter hereof, (b) are not intended to confer upon
any person
other than the parties hereto any rights or remedies hereunder,
except as
otherwise expressly provided herein, and (c) shall not be
assignable by
operation of law or otherwise. The representations and
warranties of the
parties shall not be enlarged or restricted by any statement in
any
instrument of assignment or other Closing document. This
Agreement shall
inure to the benefit of, and be binding upon, the parties hereto
and their
respective legal representatives, Successors and permitted
assigns, and shall
inure to the benefit of the Indemnified Parties and their
respective legal
representatives, Successors and permitted assigns. All Exhibits
mentioned in
this Agreement shall be attached to this Agreement, and shall
form an
integral part hereof. All capitalized terms defined in this
Agreement which
are used in any Exhibit shall, unless the context otherwise
requires, have
the same meaning therein as given herein.
5.11 Cumulative Rights and Remedies. Each party
acknowledges that
money damages alone will not adequately compensate the other
party for breach
of a party's obligations under this Agreement and, therefore,
agrees that in
the event of the breach or threatened breach of any such
obligation, in
addition to all other remedies available, at law, in equity or
otherwise,
each party shall be entitled to injunctive relief compelling
specific
performance of, or other compliance with, the terms of this
Agreement.
Except as provided in Section 4.12, all rights and remedies under
this
Agreement are cumulative and are in addition to and not exclusive
of any
other rights and remedies provided hereunder, under any other
document
delivered as part of a transaction contemplated hereby or
otherwise by
agreement or law, at equity or otherwise. Without limiting the
generality of
the foregoing, the parties expressly recognize that specific
performance is
not either party's sole remedy for any reason hereunder.
5.12 Severability. 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.
5.13 Counterparts. This Agreement may be executed in
one or more
counterparts, all of which together shall constitute one and the
same
Agreement.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of
the date first above written.
CACI INTERNATIONAL INC
[SEAL]
By: /s/
----------------------------------------
President
CACI, INC.
[SEAL]
By: /s/
----------------------------------------
President
SUNSET RESOURCES, INC.
[SEAL]
By: /s/
----------------------------------------
Chairman and Chief Executive
Officer
Index of Exhibit References
Exhibit 1.1.1(a)
Exhibit 1.1.1(b)
Exhibit 1.1.2(a)
Exhibit 1.1.2(b)
Exhibit 1.1.3
Exhibit 1.1.4
Exhibit 1.1.5
Exhibit 1.1.6
Exhibit 1.1.7
Exhibit 1.1.8
Exhibit 1.1.9
Exhibit 1.1.10
Exhibit 1.1.11
Exhibit 1.1.12
Exhibit 1.1.13
Exhibit 1.1.14
Exhibit 1.2
Exhibit 1.3
Exhibit 1.4.6
Exhibit 1.5
Exhibit 2.4
Exhibit 2.5
Exhibit 2.8
Exhibit 2.12
Exhibit 2.13
Exhibit 2.14
Exhibit 2.18.1
Exhibit 2.15.1.14
Exhibit 2.19.1
Exhibit 2.19.2
Exhibit 2.20
Exhibit 2.23
Exhibit 3.4
