Exhibit 99.2
EXECUTION COPY
STOCK PURCHASE AGREEMENT
DATED AS OF JULY 20, 2001
AMONG
IMC ACQUISITION CORP.,
FT KNOWLEDGE (HOLDINGS) INC.,
INTERACTIVE MEDIA CORP.,
ANTEON CORPORATION,
AZIMUTH TECHNOLOGIES, INC.,
AND
ANTEON INTERNATIONAL CORPORATION
CONTENTS
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ARTICLE I DEFINITIONS.............................................. 1
1.1 Defined Terms................................................ 1
1.2 Other Terms.................................................. 1
ARTICLE II PURCHASE AND SALE OF THE STOCK; CLOSING.................. 1
2.1 Purchase and Sale of the Stock............................... 1
2.2 Purchase Price............................................... 2
2.3 Purchase Price Adjustment.................................... 2
2.4 Method of Payment............................................ 3
2.5 Closing...................................................... 3
2.6 Closing Deliveries by the Buyer.............................. 3
2.7 Closing Deliveries by the Seller and the Company............. 3
2.8 Treatment of Options......................................... 4
2.9 EBITDA Adjustment............................................ 6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER............. 7
3.1 Organization of the Seller................................... 7
3.2 Authorization of Transaction; Noncontravention............... 7
3.3 Brokers' Fees................................................ 8
3.4 The Stock.................................................... 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY... 8
4.1 Organization, Qualification and Corporate Power.............. 9
4.2 Authorization of Transaction; Noncontravention............... 9
4.3 Capitalization.............................................. 10
4.4 Brokers' Fees............................................... 10
4.5 Title to Assets............................................. 10
4.6 Subsidiaries................................................ 10
4.7 Financial Statements........................................ 10
4.8 Events Subsequent to Most Recent Fiscal Year End............ 10
4.9 Undisclosed Liabilities..................................... 12
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CONTENTS
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4.10 Compliance with Laws....................................... 12
4.11 Taxes...................................................... 12
4.12 Real Property.............................................. 13
4.13 Intellectual Property...................................... 15
4.14 Contracts.................................................. 16
4.15 Notes and Accounts Receivable.............................. 17
4.16 Insurance.................................................. 17
4.17 Litigation................................................. 18
4.18 Product and Service Warranty............................... 18
4.19 Employees.................................................. 18
4.20 Employee Benefits Plans and Arrangements................... 19
4.21 Environmental Matters...................................... 20
4.22 Certain Business Relationships with the Company............ 21
4.23 Governmental Authorizations and Regulations................ 21
4.24 Sufficiency of Assets...................................... 21
4.25 Divestiture of the Government Business..................... 22
4.26 Corporate Matters.......................................... 22
ARTICLE V REPRESENTATIONS AND WARRANTIES BY THE BUYER............. 22
5.1 Organization of the Buyer.................................. 22
5.2 Authorization of Transaction; Noncontravention............. 22
5.3 Brokers' Fees.............................................. 23
5.4 Access to Funds............................................ 23
5.5 Securities Act of 1933..................................... 23
ARTICLE VI SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS................................ 23
ARTICLE VII INDEMNIFICATION......................................... 24
7.1 Indemnification Obligations................................ 24
7.2 Method of Asserting Claims................................. 25
7.3 Further Items Relating to Indemnification.................. 27
7.4 Right of Set-Off........................................... 28
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CONTENTS
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7.5 Computation of Losses Subject to Indemnification........... 28
7.6 Indemnification as Sole Remedy and Waiver.................. 28
7.7 Indemnification Payments................................... 29
ARTICLE VIII TAX MATTERS............................................ 29
8.1 Tax Indemnities............................................ 29
8.2 Refunds and Tax Benefits................................... 30
8.3 Contests................................................... 31
8.4 Preparation of Returns..................................... 32
8.5 Cooperation and Exchange of Information.................... 33
8.6 Transfer Taxes............................................. 33
8.7 Miscellaneous.............................................. 33
ARTICLE IX COVENANTS.............................................. 34
9.1 Further Action; Access to Records.......................... 34
9.2 Non-Competition............................................ 35
9.3 Non-Solicitation........................................... 36
9.4 Employee Benefit Matters................................... 37
9.5 Xxxxxx Property Conveyance................................. 39
9.6 Accounting Matters......................................... 39
9.7 Consents to Assignment; Covenant to Assist................. 40
9.8 Access and Use of Premises................................. 40
9.9 Payment to Marino.......................................... 41
9.10 Financial Reporting and Calculation of EBITDA.............. 41
ARTICLE X MISCELLANEOUS.......................................... 41
10.1 Notices.................................................... 41
10.2 Entire Agreement........................................... 43
10.3 Expenses................................................... 43
10.4 Public Announcements....................................... 43
10.5 Confidentiality............................................ 43
10.6 Waiver; Remedies Cumulative................................ 44
10.7 Amendment.................................................. 44
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CONTENTS
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10.8 No Third Party Beneficiary................................ 44
10.9 No Assignment; Binding Effect............................. 44
10.10 Headings.................................................. 44
10.11 Invalid Provisions........................................ 44
10.12 Governing Law............................................. 45
10.13 Consent to Jurisdiction................................... 45
10.14 Counterparts.............................................. 45
10.15 Disclosure Schedule....................................... 45
10.16 Guaranty.................................................. 45
ANNEX OF DEFINED TERMS
EXHIBITS
Exhibit A - Lease for the Xxxxxx Property
Exhibit B - FIRPTA Certificate
Exhibit C - Legal Description of the Xxxxxx Property
Exhibit D - Form of Conversion and Release Agreement
Exhibit E - Form of Option Conversion Agreement
Exhibit F - Software License Agreement
Exhibit G - Form of Non-Exercising Option Holder Note
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT dated as of July 20, 2001 among IMC
Acquisition Corp., a Delaware corporation (the "BUYER"), Interactive Media
Corp., a Delaware corporation (the "COMPANY"), Anteon Corporation, a Virginia
corporation (the "SELLER"), for the purposes of Section 10.16 only, FT Knowledge
(Holdings) Inc., a Delaware corporation ("PARENT"), and for the purpose of
Section 9.2 and Section 9.3 only, Azimuth Technologies, Inc., a Delaware
corporation ("AZIMUTH") and Anteon International, a Virginia corporation
("ANTEON INTERNATIONAL").
WHEREAS, the Seller owns and desires to sell to the Buyer upon the
terms and conditions hereinafter set forth all of the issued and outstanding
shares of capital stock of the Company (the "STOCK") and the Buyer desires to
purchase the Stock from the Seller.
NOW, THEREFORE, in consideration of the representations, warranties
and covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. Defined terms used in this Agreement shall have
the meanings ascribed to them in the ANNEX OF DEFINED TERMS attached hereto.
1.2 OTHER TERMS. Other terms may be defined elsewhere in this
Agreement and, for the purposes of this Agreement, those other terms shall have
the meanings specified in those other places of this Agreement unless the
context requires otherwise. Meanings specified in this Agreement shall be
applicable to both the singular and plural forms of such terms and to the
masculine, feminine and neuter genders, as the context requires.
ARTICLE II
PURCHASE AND SALE OF THE STOCK; CLOSING
2.1 PURCHASE AND SALE OF THE STOCK. Subject to the terms and
conditions set forth in this Agreement, at the Closing (a) the Buyer agrees to
purchase and accept delivery of the Stock from the Seller and (b) the Seller
agrees to sell, assign, transfer and deliver to the Buyer the Stock by
delivering to the Buyer stock certificates evidencing such Stock duly endorsed
in blank or accompanied by stock powers duly executed in blank, and proper forms
for transfer, with all required stock transfer stamps affixed or provided for.
2.2 PURCHASE PRICE. As consideration for the purchase of the Stock,
the Buyer shall pay to the Seller an aggregate of $13,500,000 (as adjusted
pursuant to Section 2.3 and Section 2.9, the "PURCHASE PRICE"). The Purchase
Price (minus the aggregate amount of Non-Exercising Option Holder Notes issued
pursuant to Section 2.8(c)) shall be paid by the Buyer to the Seller in cash on
the Closing Date (the "CLOSING PAYMENT").
2.3 PURCHASE PRICE ADJUSTMENT.
(a) As soon as possible, but in any case within 20 days
following the Closing Date, the Seller shall prepare and deliver to the Buyer a
balance sheet for the Company as of the close of business on the Closing Date
(the "CLOSING DATE BALANCE SHEET"). The Closing Date Balance Sheet shall be
prepared in accordance with GAAP, applied in the same manner used by the Company
in preparing the Financial Statements. At the Seller's option, such Closing Date
Balance Sheet may be audited at the Seller's sole cost and expense. The Buyer
shall notify the Seller in writing within 30 days following delivery of the
Closing Date Balance Sheet if the Buyer disputes any item therein (the "PURCHASE
PRICE ADJUSTMENT NOTICE"), and if the Purchase Price Adjustment Notice is not
delivered within such time period, the Buyer shall be deemed to have accepted
the Closing Date Balance Sheet and it shall be final and binding upon all the
parties hereto. If the Buyer timely disputes any item in the Closing Date
Balance Sheet, the Seller and the Buyer agree to use their best efforts to reach
agreement upon any disputed items in the Closing Date Balance Sheet (the
"DISPUTED ITEMS"). Any Disputed Items remaining unresolved on the 30th day after
delivery by the Buyer of a Purchase Price Adjustment Notice shall forthwith be
submitted to the Arbitrator. The Seller and the Buyer shall promptly present
their positions with respect to the Disputed Items to the Arbitrator, together
with such other materials as the Arbitrator may deem appropriate. Any
determination by the Arbitrator with respect to any Disputed Item shall be final
and binding on each party. The cost of the Arbitrator shall be borne 50% by the
Seller and 50% by the Buyer.
(b) If the Working Capital of the Company on the Closing Date
Balance Sheet is: (i) less than the Target by $50,000 or more, then the amount
of such deficiency (the "SHORTFALL") shall be paid by the Seller to the Buyer
within five Business Days after the final determination of the Working Capital
of the Company on the Closing Date or (ii) greater than the Target by $50,000 or
more, then the amount of such excess (the "EXCESS") shall be paid by the Buyer
to the Seller within five Business Days after the final determination of the
Working Capital of the Company on the Closing Date. Interest on the Shortfall
(the "SHORTFALL INTEREST") shall accrue from the Closing Date through the date
that the Shortfall is paid by the Seller to the Buyer or that the Buyer,
pursuant to the immediately following sentence, offsets such amounts from the
EBITDA Payment, at an annual rate of 9% and compounded monthly at a rate of
0.75%. At the Buyer's option, the EBITDA Payment shall be reduced, dollar for
dollar, by the amount of such Shortfall and Shortfall Interest, up to the full
amount of the EBITDA Payment. If the Shortfall and the Shortfall Interest equals
or exceeds the amount of the EBITDA Payment, and the Buyer has notified the
Seller in writing that it is opting to offset the amount of the EBITDA Payment
by the Shortfall and the Shortfall Interest, then no EBITDA Payment shall be
made and, in such event, the Seller shall be liable for any amount in excess of
the
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amount of the EBITDA Payment as of the time of such notice. Interest on the
Excess shall accrue from the Closing Date through the date that the Excess is
paid by the Buyer to the Seller, at an annual rate of 9% and compounded monthly
at a rate of 0.75%.
2.4 METHOD OF PAYMENT. Each payment to be made pursuant to this
Article II shall be made by wire transfer in immediately available funds to the
Seller to the account designated in writing by the Seller at least two Business
Days prior to the Closing Date.
2.5 CLOSING. The closing of the purchase and sale of the Stock (the
"CLOSING") is occurring on the date hereof at the offices of Xxxxxx, Xxxxx &
Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at such other place
as the parties may mutually agree) simultaneously with the execution and
delivery of this Agreement.
2.6 CLOSING DELIVERIES BY THE BUYER.
(a) At the Closing, the Buyer shall deliver to the Seller the
Closing Payment.
(b) At the Closing, the Buyer shall deliver to the Seller the
lease agreement for the Xxxxxx Property attached hereto as Exhibit A (the "LEASE
AGREEMENT"), duly executed and delivered by the Buyer.
(c) At the Closing, the Buyer shall deliver to the Seller a
software license agreement attached hereto as Exhibit F (the "LICENSE
AGREEMENT"), duly executed and delivered by the Buyer.
2.7 CLOSING DELIVERIES BY THE SELLER AND THE COMPANY. At the
Closing, the Seller and the Company, as applicable, shall deliver to the Buyer
each of the following items:
(a) Certificates evidencing the Stock, properly endorsed by
the Seller for transfer or accompanied by properly executed stock assignments in
proper form, together with any required stock transfer tax stamps.
(b) Subject to the Buyer's obligations under Section 9.7,
evidence of the Company having divested itself of the Government Business (the
"GOVERNMENT BUSINESS DIVESTITURE").
(c) Releases, pay-off letters and UCC-3 termination statements
(in recordable form) from all parties holding Liens on any assets, rights, or
properties of the Company, including, without limitation, releases of the
Company's obligations under the: (i) Credit Agreement, (ii) Pledge Agreement,
(iii) Indemnity, Subrogation and Contribution Agreement, (iv) Subsidiary
Guarantee Agreement, (v) Security Agreement and (vi) First Supplemental
Indenture.
(d) The FIRPTA certificates described in Section 8.7(d).
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(e) Evidence that the Company shall have transferred, conveyed
and assigned the Xxxxxx Property to the Seller (or a Subsidiary of the Seller)
(the "XXXXXX PROPERTY DIVESTITURE").
(f) Consulting or employment agreements with the following
individuals: Xxxx X. Xxxxx and Xxxxxx Xxxxxxxxxx.
(g) A consent to the transactions contemplated by this
Agreement if reasonably required by a landlord under a Real Property Lease.
(h) Resignations of the directors and officers of the Company.
(i) The third party consents set forth on SECTION 2.7(i) OF
THE DISCLOSURE SCHEDULE, in form and substance reasonably satisfactory to the
Buyer.
(j) The Lease Agreement, duly executed and delivered by the
Seller.
(k) Simultaneously with the Closing, the Seller shall deliver
a check (the "XXXXX PAYMENT") (minus any applicable employee withholding Taxes
withheld from the XxXxx Payment, the "XXXXX WITHHOLDING TAX AMOUNT") to Xxxx X.
XxXxx, and Xxxx X. XxXxx shall receive the amount set forth in the Conversion
and Release Agreement, in the form attached hereto as Exhibit D, from Xxxx X.
XxXxx executed as of the date hereof (less the applicable XxXxx Withholding Tax
Amount), and the Seller shall deliver to the Buyer at the Closing evidence of
such payment and the amount of such payment, and the Seller shall simultaneously
deliver to the: (i) appropriate Taxing Authorities the XxXxx Withholding Tax
Amount and the applicable employer share of employment Taxes due on the XxXxx
Payment, if any, and (ii) Company evidence of such delivery promptly thereafter;
provided, however, that the Seller shall have no obligation to make any payment
to Xxxx X. XxXxx unless Xxxx X. XxXxx has executed and delivered to the Seller,
on or before the Closing Date, the Conversion and Release Agreement
(l) The License Agreement, duly executed and delivered by the
Seller.
2.8 TREATMENT OF OPTIONS.
(a) At the Closing, the Seller shall deliver checks in an
amount equal to the aggregate Option Payment Amounts (as defined below) (minus
any applicable employee withholding Taxes withheld from the Option Payment
Amounts, the "OPTION WITHHOLDING TAX AMOUNT") (the "OPTION CONSIDERATION") to
all holders (each, an "OPTION HOLDER" and collectively, the "OPTION HOLDERS") of
options granted by the Company obligating the Company to issue, transfer or sell
any shares of common stock of the Company (each, an "OPTION" and collectively
the "OPTIONS") to cause the rights of each Option Holder to be converted into
the right to receive the Option Payment Amount (as defined below) set forth
opposite such Option Holder's name on SECTION 2.8 OF THE DISCLOSURE SCHEDULE,
and the Seller shall simultaneously deliver to the: (i) appropriate
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Taxing Authorities the Option Withholding Tax Amount and the applicable employer
share of employment Taxes due on the Option Payment Amounts, if any and (ii)
Company evidence of such delivery promptly thereafter.
(b) Each Option Holder shall execute and deliver to the
Company an Option Conversion Agreement in the form attached hereto as Exhibit E
(an "OPTION CONVERSION AGREEMENT") and all Options held by such Option Holder
shall be terminated, and the Option Holder shall receive, in complete
satisfaction of such Option Holder's rights with respect to such Options, an
amount (the "OPTION PAYMENT AMOUNT") payable to such Option Holder in the form
of a cashiers check and calculated as follows:
(i) the number of shares of common stock of the Company
issuable to such Option Holder, assuming exercise in full of such Options
on the Closing Date;
(ii) multiplied by $18.155 (the "PER OPTION PRICE");
(iii) minus (x) the aggregate exercise price
(disregarding Options being cancelled pursuant to the next following
sentence) of all Options held by such Option Holder on the Closing Date
and (y) the Option Withholding Tax Amount applicable to such Options. If
the exercise price of an Option is greater than the Per Option Price, such
Option shall be canceled without payment.
(c) If an Option Holder shall fail to execute and deliver to
the Company, on or prior to the Closing Date, an Option Conversion Agreement
with respect to all Options held by such Option Holder on the Closing Date (such
Option Holder, a "NON-EXERCISING OPTION HOLDER"), the Seller may exercise (or
cause the Company to exercise) its right under the option agreement pursuant to
which such Options were issued (each a "STOCK OPTION AGREEMENT" and
collectively, the "STOCK OPTION AGREEMENTS") to purchase all Options held by
such Option Holder immediately prior to the Closing Date for an amount equal to
such Option Holder's Option Payment Amount (minus the Option Withholding Tax
Amount) payable to such Option Holder in the form of a promissory note
("NON-EXERCISING OPTION HOLDER NOTE") payable by the Company, bearing interest
at the publicly announced prime rate of Credit Suisse First Boston, as publicly
reported from time to time, on the date of issuance and payable to such
Non-Exercising Option Holder in five (5) equal annual installments,
substantially in the form of Exhibit G attached hereto.
(d) Each Option Holder shall, on the Closing Date, cease to
have any rights as an Option Holder (other than rights to receive the payments
provided for in this Section 2.8) and each Option Holder shall cease to have any
rights under the Company's 1998 Stock Option Plan or the Stock Option Agreements
(other than to receive the payment provided for in this Section 2.8).
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2.9 EBITDA ADJUSTMENT.
(a) On or before April 1, 2002, the Buyer shall prepare and
deliver to the Seller a balance sheet for the Company for the period from the
Closing Date through December 31, 2001 (the "EBITDA BALANCE SHEET"). The EBITDA
Balance Sheet shall be prepared in accordance with GAAP, applied in the same
manner used by the Company in preparing the Financial Statements and shall be
audited by the Boston, Massachusetts office of PricewaterhouseCoopers. The
EBITDA Balance Sheet shall be accompanied by a profit and loss statement of the
Company as well as a calculation of EBITDA of the Company (the "EBITDA
CALCULATION"), in each case for the period from the Closing Date through
December 31, 2001. The Seller shall notify the Buyer in writing within 30 days
following delivery of the EBITDA Balance Sheet and the EBITDA Calculation if the
Seller disputes any item therein (the "EBITDA ADJUSTMENT NOTICE"), and if the
EBITDA Adjustment Notice is not delivered within such time period, the Seller
shall be deemed to have accepted the EBITDA Balance Sheet and the EBITDA
Calculation and they shall be final and binding upon all the parties hereto. If
the Seller timely disputes any item in the EBITDA Balance Sheet or the EBITDA
Calculation, the Seller and the Buyer agree to use their best efforts to reach
agreement upon any disputed items in the EBITDA Balance Sheet and the EBITDA
Calculation (the "EBITDA DISPUTED ITEMS"). Any EBITDA Disputed Items remaining
unresolved on the 30th day after delivery by the Seller of an EBITDA Adjustment
Notice shall forthwith be submitted to the Arbitrator. The Seller and the Buyer
shall promptly present their positions with respect to the EBITDA Disputed Items
to the Arbitrator, together with such other materials as the Arbitrator may deem
appropriate. Any determination by the Arbitrator with respect to any EBITDA
Disputed Item shall be final and binding on each party. The cost of the
Arbitrator shall be borne 50% by the Seller and 50% by the Buyer.
(b) If the EBITDA Calculation equals or exceeds $1,100,000,
then on the date which is one year from the Closing Date (i) the Buyer shall pay
to the Seller an aggregate amount of $1,500,000 within five Business Days after
the final determination of the EBITDA Calculation and (ii) the Seller shall
deliver checks (minus any applicable employee withholding Taxes withheld from
the Management Payments, the "MANAGEMENT WITHHOLDING TAX AMOUNT") to each of
Xxxx X. Xxxxx, Xxxxxx Xxxxxxxxxx, Xxxxx Xxxx and Xxxxx Xxxxxxxxx (each a
"MANAGER" and collectively, the "MANAGEMENT GROUP"), and each Manager shall
receive the amount set forth in the Conversion and Release Agreement, in the
form attached hereto as Exhibit D, from the Manager executed and delivered to
the Buyer and the Seller prior to the date the Management Payments are made
(less the applicable Management Withholding Tax Amount), and the Seller shall
deliver to the Buyer evidence of such payments and the amounts of such payments
promptly thereafter, and the Seller shall simultaneously deliver to the
appropriate Taxing Authorities the Management Withholding Tax Amount and the
applicable employer share of employment Taxes due on the Management Payments, if
any; provided, however, that the Buyer shall have no obligation to deliver to
the Seller any portion of the Management Payment for any Manager who has not
executed and delivered to the Buyer and the Seller on or prior to the date that
the Management Payments are to be made the Conversion and Release Agreement and
the Seller shall have no obligation to make any payment to such Manager.
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(c) If the EBITDA Calculation is less than $1,100,000 but
equal to or in excess of $825,000, then on the date which is one year from the
Closing Date (i) the Buyer shall deliver to the Seller an aggregate amount equal
to the sum of (I) $500,000 plus (II) the product of: (A) the EBITDA Calculation
minus $825,000 multiplied by (B) 1.818, and the Seller shall deliver the
foregoing amount (minus the Management Withholding Tax Amount) to the Management
Group, and each Manager shall receive an amount equal to the product of: (A) the
amount set forth in the Conversion and Release Agreement, in the form attached
hereto as Exhibit D, from the Manager executed and delivered to the Buyer and
the Seller prior to the date the Management Payments are made (less the
applicable Management Withholding Tax Amount) multiplied by (B) a fraction, the
numerator of which is the amount delivered to the Seller under this clause (i)
and denominator of which is $1,000,000, and the Seller shall simultaneously
deliver to the appropriate Taxing Authorities the Management Withholding Tax
Amount and the applicable employer share of employment Taxes due on the
Management Payments, if any; provided however, that the Buyer shall have no
obligation to deliver to the Seller any portion of the Management Payment for
any Manager who has not executed and delivered to the Buyer and the Seller on or
prior to the date the Management Payments are made, the Conversion and Release
Agreement and the Seller shall have no obligation to make any payment to such
Manager and (ii) the Buyer shall pay to the Seller an aggregate amount equal to
the product of: (A) the EBITDA Calculation MINUS $825,000 multiplied by (B)
1.818.
(d) If the EBITDA Calculation is less than $825,000 then (i)
no Management Payment shall be due or paid to any member of the Management
Group, and (ii) no payment shall be due or paid to the Seller as a result of or
pursuant to this Section 2.9.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
As an inducement to the Buyer to enter into this Agreement, the
Seller makes the following representations and warranties to the Buyer.
3.1 ORGANIZATION OF THE SELLER. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia.
3.2 AUTHORIZATION OF TRANSACTION; NONCONTRAVENTION.
(a) The Seller has the requisite corporate power, authority,
and the legal capacity to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Seller. This Agreement has
been duly executed and delivered by the Seller and upon due execution and
delivery by the Buyer, will constitute the legal,
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valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms. Except for such notices, consents, authorizations or
approvals which would not have a Material Adverse Effect, the Seller need not
give any notice to, make any filing with or obtain any authorization, consent or
approval of any Governmental or Regulatory Authority in order to consummate the
transactions contemplated by this Agreement.
(b) Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will (i) violate any
Law, Order or other restriction of any Governmental or Regulatory Authority to
which the Seller may be subject or any provision of the Seller's articles of
incorporation or bylaws or (ii) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel or require any notice under any Contract
to which the Seller is a party, by which the Seller is bound or to which any of
the Seller's assets is subject, except for such breaches, defaults,
acceleration, or right to terminate, modify or cancel any Contract which would
not have a Material Adverse Effect.
3.3 BROKERS' FEES. The Seller has no liability or obligation to pay
any fees or commissions to any broker, finder or similar agent with respect to
the transactions contemplated by this Agreement.
3.4 THE STOCK. The Seller owns, beneficially and of record, the
Stock, free and clear of all Liens, subscriptions, options, warrants, calls,
proxies, rights, commitments or similar restrictions. No shares of capital stock
of the Company are issued and outstanding except for the Stock. The Stock has
been duly authorized and is validly issued, fully paid and nonassessable. Except
as set forth in SECTION 3.4 OF THE DISCLOSURE SCHEDULE, the Seller is not a
party to (a) any option, warrant, purchase right or other Contract or commitment
that could require the Seller to sell, transfer or otherwise dispose of any
capital stock of the Company (other than this Agreement), or (b) any voting
trust, proxy or other agreement or understanding with respect to the voting of
any capital stock of the Company including, without limitation, the election of
directors of the Company. Upon delivery to the Buyer of certificates
representing the Stock pursuant to the provisions of this Agreement, good and
valid title to such Stock will pass to the Buyer.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
RELATING TO THE COMPANY
As an inducement to the Buyer to enter into this Agreement, the
Company and the Seller, jointly and severally, make the following
representations and warranties to the Buyer. Except for the representations and
warranties of the Seller and the Company specifically contained herein: (A)
neither the Seller nor the Company makes any representation or warranty of any
kind whatsoever, express or implied, and (B) neither the Seller nor the Company
makes any representation or warranty with respect to any
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information, documents or material made available to the Buyer in certain "data
rooms," in connection with any management presentations (including, without
limitation, the provision of any business or financial estimates and projections
and other forecasts and plans (including the reasonableness of the assumptions
underlying such estimates and projections and forecasts)).
4.1 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of Delaware. The Company is duly authorized to conduct its business as
presently conducted and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the failure to be so
authorized and qualified would not have a Material Adverse Effect. The Company
has the requisite corporate power and authority to conduct its business as
presently conducted and to own and use the properties presently owned and used
by it.
4.2 AUTHORIZATION OF TRANSACTION; NONCONTRAVENTION.
(a) The Company has the requisite power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and, upon the due execution and delivery
by the Buyer, will constitute the legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms. Except for such
notices, consents, authorizations or approvals, the failure of which to make or
obtain would not have a Material Adverse Effect, the Company is not required to
give any notice to, make any filing with or obtain any authorization, consent or
approval of any Governmental or Regulatory Authority in order for the parties to
consummate the transactions contemplated by this Agreement.
(b) Neither the execution and the delivery of this Agreement
nor the consummation of the transactions contemplated hereby (i) will violate
any Law, Order or other restriction of any Governmental or Regulatory Authority
to which the Company may be subject or any provision of the Company's articles
of incorporation or bylaws, except in the case of any Law, Order or other
restriction of any Governmental or Regulatory Authority, for violations which
would not have a Material Adverse Effect, (ii) will conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify or cancel or require any
notice under, any Contract or Permit to which the Company is a party or by which
it is bound or to which any of its assets is subject, except for such breaches,
defaults, acceleration or rights to terminate, modify or cancel any Contract
which would not have a Material Adverse Effect, (iii) will result in the
creation or any imposition of any Lien upon or give to any Person any interest
or right (including any right of termination or cancellation) in or with respect
to any of the property, assets, business, Contracts or Permits of the Company,
except for such Liens, interests or rights that would not have a Material
Adverse Effect or (iv) is prohibited by or requires the Company to obtain or
make any consent, authorization, approval or registration with or from any
9
Person, except for such consents, authorizations, approvals or registrations as
would not have a Material Adverse Effect.
4.3 CAPITALIZATION. The Company has authorized capital stock
consisting of 2,500,000 shares of common stock, $0.01 par value per share, of
which 810,000 shares are issued and outstanding. All of the issued and
outstanding shares of capital stock of the Company have been duly authorized,
are validly issued, fully paid and nonassessable and are owned of record by the
Seller. Except as set forth in SECTION 4.3 OF THE DISCLOSURE SCHEDULE, there are
no (a) authorized or outstanding options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights or other Contracts or
commitments that could require the Company to issue, sell, redeem, purchase or
otherwise acquire any of its capital stock, (b) authorized or outstanding stock
appreciation, phantom stock, profit participation or similar rights with respect
to the Company, or (c) voting trusts, proxies, stockholder agreements or other
agreements with respect to the voting of the capital stock of the Company.
4.4 BROKERS' FEES. The Company has no liability or obligation to pay
any fees or commissions to any broker, finder or similar agent with respect to
the transactions contemplated by this Agreement.
4.5 TITLE TO ASSETS. The Company has good and valid title to, or a
valid leasehold interest in, the properties and assets used by it in the conduct
of its business, free and clear of all Liens, except Permitted Liens. The
machinery, equipment and other tangible assets that the Company owns and leases
have been reasonably maintained and are in good operating condition and repair
(subject to normal wear and tear).
4.6 SUBSIDIARIES. The Company has no Subsidiaries and holds no
equity or debt investment in any Person.
4.7 FINANCIAL STATEMENTS. Prior to the date of the Agreement, the
Company has delivered to the Buyer copies of the audited balance sheet as of
September 30, 2000, and an unaudited balance sheet of the Company for its fiscal
year ended December 31, 2000 (collectively, the "2000 FINANCIAL STATEMENTS"),
and an unaudited interim balance sheet for the period ended May 31, 2001(the
"INTERIM FINANCIAL STATEMENTS" and together with the 2000 Financial Statements,
the "FINANCIAL STATEMENTS") together with related statements of operations and
retained earnings and statements of cash flows for the periods then ended and
all supporting notes, schedules and reports thereon of the Company's
accountants. The Financial Statements (including the notes thereto) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby (except as may be indicated in the notes thereto, if
any) and present fairly the financial condition of the Company as of such dates
and the results of operations of the Company for such periods, except where the
Financial Statements were or are subject to normal year-end adjustments.
4.8 EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Except as set
forth in SECTION 4.8 OF THE DISCLOSURE SCHEDULE or in the Financial Statements
and other
10
than the Xxxxxx Property Divestiture and the Government Business Divestiture,
since September 30, 2000, there has not been any material adverse change in the
Company's business, financial condition, operations or results of operations,
taken as a whole. Without limiting the generality of the foregoing, since such
date and except as set forth in SECTION 4.8 OF THE DISCLOSURE SCHEDULE and other
than matters relating to the Xxxxxx Property Divestiture and the Government
Business Divestiture:
(a) the Company has not sold, leased, transferred or assigned
any assets, tangible or intangible (excluding services), in each case with a
value in excess of $25,000;
(b) the Company has not entered into any material Contract or
Permit;
(c) the Company has not received notice and to the Knowledge
of the Seller, no party (including the Company) has accelerated, terminated,
made material modifications to or canceled any material Contract or Permit to
which the Company is a party or by which it is bound;
(d) the Company has not imposed any Lien or allowed any Lien
to be imposed upon any of its assets, tangible or intangible, except for
Permitted Liens;
(e) the Company has not made any capital expenditure in excess
of $25,000;
(f) the Company has not made any capital investment in or loan
to any other Person in excess of $10,000;
(g) the Company has not created, incurred, assumed or
guaranteed more than $20,000 in aggregate indebtedness for borrowed money and
capitalized lease obligations;
(h) the Company has not granted any license, sublicense or
other rights to use or register any Intellectual Property;
(i) the Company has not experienced any material damage,
destruction or loss (whether or not covered by insurance) to its property,
except for such damage, destruction or loss which would not have a Material
Adverse Effect;
(j) the Company has not made a loan to, nor entered into any
other transaction with, the Seller or any of the Company's Affiliates,
directors, officers or employees, other than transactions with such parties in
their capacity as such, consistent with past practice of the Company;
(k) the Company has not entered into any employment Contract
that is not terminable by the Company at will with no cost or expense to the
11
Company or collective bargaining agreement, whether written or oral, or modified
the terms of any existing such Contract or agreement;
(l) except for payments referred to in Section 2.7(k) and
Section 2.9(b), the Company has not granted any increase in excess of 10% in the
base compensation of any of its directors, officers or employees other than in
the ordinary course of business consistent with past practice;
(m) except as set forth in Section 2.8, the Company has not
adopted, amended, modified or terminated any bonus, profit-sharing, incentive,
severance or other plan, Contract or commitment for the benefit of any of its
directors, officers or employees (or taken any such action with respect to any
other Benefit Plan), other than in the ordinary course of business consistent
with past practice;
(n) the Company has not made any other material change in
employment terms for any of its directors, officers or employees, other than in
the ordinary course of business consistent with past practice;
(o) the Company has not made any change in any method of
accounting or accounting practices or policies with respect to its condition,
operations, business, properties, assets or liabilities; and
(p) the Company has not agreed to do any of the foregoing.
4.9 UNDISCLOSED LIABILITIES. Except as set forth in SECTION 4.9 OF
THE DISCLOSURE SCHEDULE or as set forth in the Financial Statements for the
period ended September 30, 2000, the Company has no material claims,
obligations, liabilities or indebtedness, whether known or unknown, asserted or
unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due, including any liability for Taxes, other
than liabilities and obligations incurred in the regular course of business
consistent with past practice after September 30, 2000, except for such claims,
obligations, liabilities or indebtedness that would not have a Material Adverse
Effect.
4.10 COMPLIANCE WITH LAWS. The Company has at all times complied and
is in compliance with all Laws applicable to the Company and its assets,
properties, operations and business, except for any failures so to comply that
would not have a Material Adverse Effect.
4.11 TAXES.
(a) All Returns required to have been filed on or before the
Closing Date by or with respect to the Company or any affiliated, combined,
consolidated, unitary or similar group of which the Company is or was a member
(a "RELEVANT GROUP") with any Taxing Authority have been duly and timely filed
and each such Return presents fairly the income, franchise or other Tax
liability and all other information required to be reported thereon. All Taxes
owed by the Company or any member of a Relevant Group (whether or not shown on
any Return) have been paid. All monies required to be withheld by the Company
from employees, independent
12
contractors, creditors, customers or other third parties for Taxes have been
collected or withheld, and either duly and timely paid to the appropriate Taxing
Authorities or (if not yet due for payment) set aside in accounts for such
purposes. The liability provision for deferred income Taxes (as opposed to any
reserve for deferred Taxes) made on the Financial Statement for the year ended
September 30, 2000 is sufficient for the payment of all accrued and unpaid Taxes
not yet due and payable as of such date and, adjusted for the passage of time
and transactions in the ordinary course of business consistent with past
practice, will be sufficient for the payment of all accrued and unpaid Taxes not
yet due and payable as of the date hereof.
(b) No Taxing Authority is now asserting or threatening to
assert against the Company any deficiency or claim for Taxes, and, to the
Knowledge of the Seller, there is no reasonable basis for any such assertion.
There are no Liens for Taxes upon the assets of the Company other than statutory
Liens for Taxes not yet due and payable. SECTION 4.11(b) OF THE DISCLOSURE
SCHEDULE lists all income Returns filed by the Company for all taxable periods
ending on or after December 31, 1997, lists all Returns of any kind that have
been audited, if any, and indicates those Returns that currently are the subject
of audit. The Company has delivered to the Buyer complete and correct copies of
all income Returns filed by, and all Tax examination reports and statements of
deficiencies assessed against or agreed to by, the Company since December 31,
1997. No claim or inquiry has ever been made in writing by any jurisdiction in
which the Company does not file Returns that it is or may be subject to taxation
by that jurisdiction. The Company is not a party to any agreement extending, or
having the effect of extending, the time within which to file any Return or the
period of assessment or collection of any Taxes.
(c) The Company (i) is not a party to or bound by any
obligations under any Tax sharing, Tax indemnity or similar Contract, (ii) has
not made or is subject to any election under section 341(f) of the Code, (iii)
has not agreed to or is required to make, or reasonably expects that it might
have to make, any adjustment under section 481 of the Code (or any comparable
provision of Law) by reason of a change in accounting method or otherwise, (iv)
has not entered into any Contract that could result, individually or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of section 280G of the Code, (v) is not a party to any joint venture,
partnership or other arrangement that is treated as a partnership for federal
income Tax purposes, (vi) since 1990, has not been a member of any affiliated,
consolidated, combined, unitary or similar group for any Tax purpose (other than
the consolidated group of which Azimuth Technologies, Inc. is, and Analysis &
Technology, Inc. was, the common parent) and (vii) has no liability for Taxes of
any Person other than the Company as a transferee or successor, by Contract or
otherwise, except by reason of being a member of the consolidated group referred
to in the preceding clause.
4.12 REAL PROPERTY.
(a) The Company does not own any real property, and no real
property is used by the Company, other than the Leased Real Property. SECTION
4.12(a) OF THE DISCLOSURE SCHEDULE contains a true, correct and complete list of
all leases and
13
subleases (including, without limitation, all modifications, extensions or
amendments thereto) under which the Company is tenant or subtenant (as so
modified, extended or amended, the "REAL PROPERTY LEASES"), including the
premises demised thereunder (the "LEASED REAL PROPERTY"), the commencement date
and expiration date of such Real Property Lease. The Real Property Leases are
subject to no Liens (including, without limitation, leases, occupancy
agreements, possessory rights, options and rights of first refusal) except for
Permitted Liens.
(b) True and correct copies of the Real Property Leases have
been made available to the Buyer by the Seller. Subject to the terms of the
respective Real Property Leases and the Permitted Liens the Company has a valid
and subsisting leasehold estate in and the right to quiet enjoyment to each
parcel of Leased Real Property for the full term of the respective Real Property
Lease. The Real Property Leases are in full force and effect and are enforceable
in accordance with their respective terms, except as such enforceability may be
subject to or limited by bankruptcy, insolvency, reorganization, moratorium or
other similar Laws relating to creditors' rights generally. Since September 30,
2000, the Company has not assigned, pledged, mortgaged, hypothecated or
otherwise transferred any Real Property Lease. Except as set forth on SECTION
4.12(b) OF THE DISCLOSURE SCHEDULE, no portion of any Leased Real Property is
subject to any sublease. The Company is in possession of the Leased Real
Property. There are no material defaults by the Seller or, to the Knowledge of
the Seller, any other party under any Real Property Lease, and no event has
occurred or failed to occur which, with the giving of notice or with the passage
of time, would constitute a default under any Real Property Lease. There are no
disputes under any Real Property Lease. No penalties are accrued and unpaid
under any Real Property Lease. No landlord or tenant under any Real Property
Lease has exercised any option or right to (i) cancel or terminate such Real
Property Lease or shorten the term thereof, (ii) lease additional premises,
(iii) reduce or relocate the premises demised by such Real Property Lease or
(iv) purchase any property. The Company does not owe or will not owe any
brokerage commissions or finders fees with respect to any Real Property Lease or
any renewal or extension thereof or the exercise of any right or option
thereunder.
(c) The Company is not in default under, and has not breached
any of the terms of, any of the Permitted Liens, except for such defaults or
breaches which would not have a Material Adverse Effect.
(d) All facilities leased or subleased have been operated and
maintained in all material respects in accordance with applicable Laws, except
where the failure to be so operated or maintained would not have a Material
Adverse Effect.
(e) Prior to the Closing, the Company has transferred,
conveyed and assigned the Xxxxxx Property to the Seller (or a Subsidiary of the
Seller), and as of the date of this Agreement, the Seller (or such Subsidiary)
is the owner of such property.
(f) SECTION 4.12(f) OF THE DISCLOSURE SCHEDULE contains a
true, correct and complete list of all Liens securing interests, pledges, deeds
of trust, mortgages
14
encumbering the Xxxxxx Property (the "MORTGAGES"). Prior to any transfer of the
Xxxxxx Property, the Seller shall obtain all consents required in connection
with such transfers (including, without limitation, the consent of any lender
under the Mortgages).
4.13 INTELLECTUAL PROPERTY.
(a) SECTION 4.13(a)(i) OF THE DISCLOSURE SCHEDULE sets forth a
true and complete list of all (x) issued patents and patent applications,
trademark and service xxxx registrations and applications, Internet domain name
registrations, material software, copyright registrations and applications owned
by the Company. The Company has sufficient rights to the Intellectual Property
adequate and sufficient to permit the Company to conduct its business as
presently being conducted. No other material Intellectual Property is used or
necessary for the proper operation of the business of the Company. Except as set
forth on SECTION 4.13(a)(ii) OF THE DISCLOSURE SCHEDULE or as would not
otherwise have a Material Adverse Effect, the Company owns all right to use,
sell and/or license all the Intellectual Property owned by the Company free and
clear of all Liens (other than Permitted Liens). All patents, trademark or
service xxxx registrations, Internet domain name registrations and copyright
registrations and applications for each of the foregoing required to be set
forth on SECTION 4.13(a)(i) OF THE DISCLOSURE SCHEDULE have been properly
maintained and, if applicable, renewed in accordance with the Laws of the
relevant jurisdictions. Except as set forth in SECTION 4.13(A)(III) OF THE
DISCLOSURE SCHEDULE, no material claim has been asserted or threatened by any
third party against the Company that the Intellectual Property violates the
rights of a third party or that challenges the protection or enforcement of any
right or interest of the Company in and to the Intellectual Property.
(b) Except for off-the-shelf software licenses to which the
Company is a party SECTION 4.13(b) OF THE DISCLOSURE SCHEDULE, sets forth all
material Intellectual Property licensed by the Company and (i) the Company owns
or possesses written and transferable licenses or other rights to use all such
Intellectual Property and (ii) assuming the Company complies with the terms of
such licenses and operates and conducts its business consistent with past
practice, the transactions contemplated by this Agreement will not have a
Material Adverse Effect on the rights of the Company to such Intellectual
Property. The Company is in compliance with the terms of all material
Intellectual Property and is not, nor has it received any notice that it is, in
default (or with the giving of notice or lapse of time or both, would be in
default) under any such license.
(c) Except for off-the-shelf software licenses to which the
Company is a party and except as set forth on SECTION 4.13(c) OF THE DISCLOSURE
SCHEDULE, to the Knowledge of the Seller, the right, title and interest of the
Company in and to the material Intellectual Property are freely assignable and
not subject to any Liens (other than Permitted Liens), licenses or other
interests of any other Person (in whole or in part), including any right to
royalties or other compensation in connection therewith, and are adequate and
sufficient to permit the Company to conduct its business as presently being
conducted.
15
(d) Except as disclosed on SECTION 4.13(d) OF THE DISCLOSURE
SCHEDULE, (i) to the Knowledge of the Seller, no Person has infringed, violated,
conflicted or interfered with or is infringing, violating, conflicting with or
interfering with, or is engaged in any activity which would constitute an
infringement, violation, conflict or misappropriation of, any of the rights or
interest of the Company in and to any of the Intellectual Property, (ii) the
rendering by the Company of their services and use of the Intellectual Property
does not infringe, violate, conflict with or interfere with the copyright,
trademark, service xxxx, trade secret, trade name or other intellectual property
or proprietary right of any third party, or to the Knowledge of the Seller, the
patent of any third party and (iii) except as disclosed on SECTION 4.13(d) OF
THE DISCLOSURE SCHEDULE, the Company has not received any notice or any threat
of claim that the Intellectual Property infringes, violates, misappropriates,
conflicts with or interferes with any intellectual property or proprietary right
of any other Person.
(e) The Company has taken reasonable security measures to
protect and preserve the secrecy, confidentiality and value of its trade secrets
and proprietary information.
4.14 CONTRACTS. SECTION 4.14 OF THE DISCLOSURE SCHEDULE lists the
following Contracts to which the Company is a party:
(a) any Contract for the lease of personal property to or from
any Person;
(b) any Contract for (i) the purchase or sale of supplies,
products or other personal property, the performance of which will extend over a
period of more than one year or involve consideration in excess of $10,000 or
(ii) for the furnishing or receipt of services, the performance of which will
extend over a period of more than one year or involve consideration in excess of
$50,000;
(c) any Contract under which the Company has created,
incurred, assumed or guaranteed any indebtedness for borrowed money or any
capitalized lease obligation, in excess of $15,000 or under which it has imposed
a Lien on any of its assets, tangible or intangible;
(d) any Contract concerning noncompetition;
(e) any Contract with the Seller or any Affiliate of the
Seller (other than the Company);
(f) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance or other material Contract, plan
or arrangement for the benefit of its current or former directors, officers or
employees;
(g) any Contract concerning collective bargaining;
(h) except for standard employee confidentiality agreements
entered into the ordinary course of business, any Contract for the employment of
any
16
individual on a full-time, part-time, consulting or other basis or providing
severance benefits;
(i) any Contract under which the Company has advanced or
loaned any amount to any of its directors, officers or employees;
(j) any Contract with any Governmental or Regulatory Authority
other than Contracts transferred as part of the Government Business Divestiture;
and
(k) any other Contract not made in the ordinary course of
business consistent with past practice.
The Seller has caused the Company to make available to the Buyer a correct and
complete copy of each written Contract required to be listed on SECTION 4.14 OF
THE DISCLOSURE SCHEDULE and a written summary setting forth the material terms
and conditions of each oral Contract, if any, required to be listed on SECTION
4.14 OF THE DISCLOSURE SCHEDULE. With respect to each Contract required to be
listed on SECTION 4.14 OF THE DISCLOSURE SCHEDULE: (x) the Contract is valid and
binding, in full force and effect and enforceable against the Company and, to
the Knowledge of the Seller, each other party thereto in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or similar Laws relating to creditors' rights generally, (y) the Company is not,
and, to the Knowledge of the Seller, no other party is in breach or default
under, the Contract, and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination, modification or
acceleration under the Contract, except for such breaches or events which would
not have a Material Adverse Effect and (z) no party has repudiated any provision
of the Contract except for such repudiation which would not have a Material
Adverse Effect.
4.15 NOTES AND ACCOUNTS RECEIVABLE. Except as set forth in SECTION
4.15(i) OF THE DISCLOSURE SCHEDULE or in the Company Aging Report set forth in
SECTION 4.15(ii) OF THE DISCLOSURE SCHEDULE, all notes and accounts receivable
of the Company (a) are reflected properly on its books and records and (b) are
valid receivables subject to no setoffs or counterclaims. The Company Aging
Report as set forth on SECTION 4.15(ii) OF THE DISCLOSURE SCHEDULE is accurate
and presents fairly the notes and accounts receivables of the Company.
4.16 INSURANCE. SECTION 4.16 OF THE DISCLOSURE SCHEDULE sets forth
the following information with respect to each insurance policy in force as of
the date hereof (including policies providing property, casualty, liability,
advertising injury or other Intellectual Property insurance and workers'
compensation coverage and bond and surety arrangements) to which the Company is
a party, a named insured or otherwise the beneficiary of coverage:
(i) the name, address and telephone number of the agent;
17
(ii) the name of the insurer, the policyholder and the
name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope of coverage; and
(v) a description of any retroactive premium adjustments
or other loss-sharing arrangements, except for such adjustments or
arrangements which are set forth in such policies or which would not
have a Material Adverse Effect.
With respect to each such insurance policy: (x) the policy is
legal, valid, binding, enforceable (except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws relating to creditors' rights
generally) and in full force and effect against the Company and to the Knowledge
of the Seller, each other party thereto in accordance with its terms, (y)
neither the Company nor, to the Knowledge of the Seller, any other party to the
policy, is in breach or default (including with respect to the payment of
premiums or the giving of notices) and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default or permit
termination, modification or acceleration, under the policy, (z) no party to the
policy has repudiated any material provision thereof. SECTION 4.16 OF THE
DISCLOSURE SCHEDULE lists any material self-insurance arrangements affecting the
Company.
4.17 LITIGATION. SECTION 4.17 OF THE DISCLOSURE SCHEDULE sets forth
each instance, except those which would not have a Material Adverse Effect, in
which the Company (a) is subject to any outstanding Order or (b) is a party to
any action, suit, proceeding, hearing or, to the Knowledge of the Seller,
investigation of, in or before any Governmental or Regulatory Authority or
before any arbitrator or (c) to the Knowledge of the Seller, is threatened to be
made a party to any action, suit, proceeding, hearing or investigation of, in or
before any Governmental or Regulatory Authority or before any arbitrator. To the
Knowledge of the Seller, there are no facts or circumstances that could
reasonably be expected to give rise to any litigation.
4.18 PRODUCT AND SERVICE WARRANTY. The Seller has caused the Company
to make available to the Buyer copies of the standard terms and conditions with
respect to the sale, license and distribution of such products and services
(containing applicable guaranty, warranty and indemnity provisions). The Seller
has caused the Company to make available to the Buyer copies of the standard
terms and conditions with respect to the sale, license and distribution of such
products and services.
4.19 EMPLOYEES. SECTION 4.19(i) OF THE DISCLOSURE SCHEDULE sets
forth the names of all employees who are employed by the Company together with
each such individual's position or function, annual base salary or wages or
other compensation and any incentives or bonus arrangement with respect to each
such individual. To the Knowledge of the Seller, no executive, key employee or
significant group of employees plans to terminate employment with the Company
during the next twelve months. The
18
Company is not a party to or bound by (a) any collective bargaining agreement
nor has it experienced any strike or material grievance, claim of unfair labor
practices or other collective bargaining dispute within the past four years, (b)
any employment Contract with any employee that is not terminable by the Company
at will with no cost or expense to the Company, or (c) except as set forth on
SECTION 4.19(ii) OF THE DISCLOSURE SCHEDULE, any Contract pursuant to which
severance payments may be payable to any employee. The Company has not committed
any unfair labor practice. To the Knowledge of the Seller, no organizational
effort is presently being made or threatened by or on behalf of any labor union
with respect to employees of the Company. All Persons who render services to the
Company as independent contractors or in any other non-employee classification
have been properly classified as such, and such Persons satisfy and have at all
times satisfied the requirements of applicable Law to be so classified.
4.20 EMPLOYEE BENEFITS PLANS AND ARRANGEMENTS. All Benefit Plans are
listed on SECTION 4.20 OF THE DISCLOSURE SCHEDULE and copies of all material
documentation relating to Benefit Plans have been delivered or made available to
the Buyer (including, if applicable, copies of written Benefit Plans, written
descriptions of oral Benefit Plans, summary plan descriptions, trust agreements,
the three most recent annual returns and IRS determination letters).
(a) Except to the extent that any failure to comply, qualify
and/or be tax-exempt could not result in any material liability to the Company
or any of its Affiliates, each Benefit Plan and the administration thereof
complies, and has at all times complied, in all material respects with its terms
and with the requirements of all applicable Laws, including ERISA and the Code,
and each Benefit Plan intended to qualify under section 401(a) of the Code has
at all times since its adoption been so qualified, and each trust which forms a
part of any such plan has at all times since its adoption been tax-exempt under
section 501(a) of the Code.
(b) No Benefit Plan is a "defined benefit plan" within the
meaning of section 414(j) of the Code.
(c) No Benefit Plan is a multiemployer plan within the meaning
of section 3(37) of ERISA.
(d) No direct, contingent or secondary liability has been
incurred or is expected to be incurred by the Company under Title IV of ERISA to
any party with respect to any Benefit Plan (except as contemplated by the terms
of such Benefit Plan), or with respect to any other Plan presently or heretofore
maintained or contributed to by any ERISA Affiliate.
(e) Neither the Company nor any ERISA Affiliate has incurred
any material liability for any Tax imposed under Chapter 43 of the Code or civil
liability under section 502(i) or (l) of ERISA.
(f) No benefit under any Benefit Plan, including, without
limitation, any severance or parachute payment plan or agreement, will be
established or
19
become accelerated, vested or payable by reason of the transactions contemplated
under this Agreement.
(g) No Benefit Plan provides health or death benefit coverage
beyond the termination of an employee's employment with the Company, except as
required by Part 6 of Subtitle B of Title I of ERISA or section 4980B of the
Code or any federal or state Laws requiring continuation of benefits coverage
following termination of employment.
(h) No suit, actions or other litigation (excluding claims for
benefits incurred in the ordinary course consistent with past practice of Plan
activities) have been brought, or to the Knowledge of the Seller threatened,
against or with respect to any Benefit Plan which could result in any material
liability to the Company or any of its Affiliates.
(i) All contributions to Benefit Plans that were required to
be made under such Benefit Plans have been made, and all benefits accrued under
any unfunded Benefit Plan have been paid, accrued or otherwise reserved in
accordance with GAAP, and the Company has performed all material obligations
required to be performed under all Benefit Plans.
4.21 ENVIRONMENTAL MATTERS. Except as disclosed in SECTION 4.21 OF
THE DISCLOSURE SCHEDULE:
(a) The Company and its Affiliates have obtained and hold all
Environmental Permits necessary for the proper operation of the business of the
Company, except for such Environmental Permits the failure to have would not
have a Material Adverse Effect; each such Environmental Permit is identified on
SECTION 4.21 OF THE DISCLOSURE SCHEDULE; and each such Environmental Permit will
remain valid and effective after the Closing without any notice to or consent of
any Governmental or Regulatory Authority.
(b) Except as would not have a Material Adverse Effect, each
of the Company and its Affiliates is and has been in compliance with all terms,
conditions and provisions of all applicable (i) Environmental Permits, and (ii)
Environmental Laws.
(c) There are no past, pending, or to the Knowledge of the
Seller, threatened Environmental Claims against the Company or its Affiliates,
and to the Knowledge of the Seller, no facts or circumstances exist which could
reasonably be expected to form the basis for any Environmental Claim against the
Company or its Affiliates.
(d) No Releases of Hazardous Materials have occurred at, from,
in, to, on, or under any Site and no Hazardous Materials are present in, on,
about or migrating to or from any Site that are reasonably likely to give rise
to an Environmental Claim against the Company or any of its Affiliates.
20
(e) Neither the Company or its Affiliates, any predecessors of
the Company or its Affiliates, nor any entity previously owned by the Company or
any of its Affiliates, has transported or arranged for the treatment, recycling,
storage, handling, disposal, or transportation of any Hazardous Material to any
off-Site location which is reasonably likely to result in an Environmental Claim
against the Company or its Affiliates.
(f) No Site is a current or, to the Knowledge of the Seller,
proposed Environmental Clean-up Site.
(g) There are no (i) underground storage tanks, active or
abandoned, (ii) polychlorinated biphenyl containing equipment, or (iii) asbestos
containing material currently or formerly located at any Site.
(h) Neither the Company nor its Affiliates have, either
expressly or by operation of law, assumed or undertaken, or agreed to assume or
undertake, responsibility for any liability or obligation of any other Person,
arising under or relating to Environmental Laws, including but not limited to,
any obligation for investigation, corrective or remedial action.
(i) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, on behalf of, or which
are in the possession of the Seller or the Company or their Affiliates with
respect to any Site which have not been delivered to the Buyer prior to the
execution of this Agreement.
4.22 CERTAIN BUSINESS RELATIONSHIPS WITH THE COMPANY. Except in
their respective capacities as officers, directors, shareholders or employees of
the Company and except as set forth on SECTION 4.22 OF THE DISCLOSURE SCHEDULE,
neither the Seller nor any of its Affiliates has been involved in any material
business arrangement or relationship with the Company within the past twelve
months, and neither the Seller nor any of its Affiliates own any material asset,
tangible or intangible, which is used in the business of the Company. Except as
otherwise expressly disclosed in SECTION 4.22 OF THE DISCLOSURE SCHEDULE, all
arrangements described on SECTION 4.22 OF THE DISCLOSURE SCHEDULE have been and
are on an arm's-length basis.
4.23 GOVERNMENTAL AUTHORIZATIONS AND REGULATIONS. Except as set
forth in SECTION 4.23(i) OF THE DISCLOSURE SCHEDULE, the Company holds all
Permits necessary and material to the conduct of its business, and SECTION
4.23(ii) OF THE DISCLOSURE SCHEDULE lists all such Permits. Such Permits are
valid, binding and in full force and effect. The Company has received no notice
and, to the Knowledge of the Seller, no Governmental or Regulatory Authority
intends to cancel, terminate or not renew any such Permit. The Company is in
compliance in all material respects with the terms of the Permits listed on
SECTION 4.23(ii) OF THE DISCLOSURE SCHEDULE.
4.24 SUFFICIENCY OF ASSETS. Except as set forth on SECTION 4.24 OF
THE DISCLOSURE SCHEDULE, the assets and properties of the Company, taken in the
aggregate, used by it in the conduct of its business are sufficient, and
constitute all of the property
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and rights necessary, for the continuation of the business of the Company and
all operations of the Company on a basis consistent with the past conduct and
operation of the non-Governmental Business related business of the Company.
4.25 DIVESTITURE OF THE GOVERNMENT BUSINESS. The Seller has, with
respect to the Government Business divested by the Company, assumed all the
liabilities of the Government Business, subject to Section 9.7.
4.26 CORPORATE MATTERS. Complete and correct copies of the minute
books, organizational records and stock transfer books and ledgers of the
Company have been made available to the Buyer. Such minute books and
organizational records correctly reflect in all material respects all actions
taken by the directors and shareholders of the Company and such organizational
records, stock transfer books and ledgers correctly reflect all issuances and
transfers of capital stock or other ownership interests of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES BY THE BUYER
As an inducement to the Seller and the Company to enter into this
Agreement, the Buyer makes the following representations and warranties to the
Seller.
5.1 ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
5.2 AUTHORIZATION OF TRANSACTION; NONCONTRAVENTION.
(a) The Buyer has the requisite corporate power, authority and
legal capacity to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Buyer. This Agreement has
been duly executed and delivered by the Buyer and upon due execution and
delivery by the Seller, will constitute the legal, valid and binding obligation
of the Buyer, enforceable against it in accordance with its terms. The Buyer
need not give any notice to, make any filing with or obtain any authorization,
consent or approval of any Governmental or Regulatory Authority in order to
consummate the transactions contemplated by this Agreement.
(b) Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will (i) violate
any Law, Order or other restriction of any Governmental or Regulatory Authority
to which the Buyer may be subject or any provision of its certificate of
incorporation or bylaws or (ii) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel or require any notice under, any
Contract or Permit to which the Buyer is a party or by which it is bound or to
which any of its assets is subject.
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5.3 BROKERS' FEES. The Buyer has no liability or obligation to pay
any fees or commissions to any broker, finder or similar agent with respect to
the transactions contemplated by this Agreement.
5.4 ACCESS TO FUNDS. The Buyer shall have or have access to
sufficient funds to pay the Purchase Price.
5.5 SECURITIES ACT OF 1933. The Buyer is acquiring the Stock solely
for its own account and for the purpose of investment only and not with a view
to any distribution thereof. The Buyer acknowledges that the Stock is not
registered under the Securities Act of 1933, as amended, and that such Stock may
not be transferred or sold except pursuant to the registration provisions of
such act or pursuant to an applicable exemption therefrom and pursuant to
applicable state securities Laws.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS
Notwithstanding any right of any party (whether or not exercised) to
investigate the accuracy of the representations and warranties of the other
party contained in this Agreement, the Seller, on the one hand, and the Buyer,
on the other hand, have the right to rely fully upon the representations,
warranties, covenants and agreements of the other contained in this Agreement.
All representations, warranties, covenants, indemnities and agreements contained
in Section 4.11 and Article VIII relating to Tax matters, in Section 4.20
relating to Benefit Plans, and in any certificate, instrument or document
furnished in connection with Section 8.7(d), are and will be deemed and
construed to be continuing representations, warranties, covenants, indemnities
and agreements and shall survive the Closing until sixty (60) calendar days
after the date of expiration of the applicable statutes of limitations
pertaining thereto. With respect to all other matters, the representations,
warranties, covenants, indemnities and agreements contained herein and in any
certificate, instrument or document furnished in connection herewith are and
will be deemed and construed to be continuing representations, warranties,
covenants, indemnities and agreements and shall survive the Closing (w) in the
case of any covenant and agreement that is to be performed in whole or in part
subsequent to the Closing Date and that by its terms terminates on a specified
date subsequent to the Closing Date, until the first anniversary of the date on
which such obligation expires, (x) in the case of the representations and
warranties contained in Section 4.21 relating to environmental matters, until
five years after the Closing Date, (y) in the case of the representations and
warranties set forth in Sections 3.1, 3.3, 4.2, 4.3, 4.6, 4.12(e), 4.25 and 5.2,
and the indemnity obligations set forth in Sections 7.1(a)(iii), 7.1(a)(iv),
7.1(a)(v), 7.1(a)(vi), 7.1(a)(vii), 7.1(a)(viii), 7.1(a)(ix), 7.1(a)(x) and
7.1(a)(xi), indefinitely and (z) in the case of all of the other
representations, warranties, covenants, indemnities and agreements contained in
this Agreement, until eighteen months after the Closing Date. Notwithstanding
the foregoing, any representation, warranty, covenant, indemnity or agreement
that would otherwise terminate in accordance with the immediately preceding two
sentences will continue to survive if a Claim Notice or
23
Indemnity Notice (as applicable) shall have been timely given under Article VII,
or a notification pursuant to Section 8.3(a) shall have been timely given, on or
prior to such termination date (but such survival shall be only as to the claim
which is the subject of such Claim Notice, Indemnity Notice or notification
under Section 8.3(a) (as applicable)), until the related claim for
indemnification has been satisfied or otherwise resolved as provided in Article
VII or Article VIII (as applicable).
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION OBLIGATIONS.
(a) The Seller shall indemnify (subject to the limitations set
forth in Section 7.3) the Buyer and the Company in respect of, and hold each of
them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to (i) any misrepresentation or breach of
representation and warranty on the part of the Company or the Seller contained
in this Agreement, (ii) any nonfulfillment of or failure to perform any covenant
or agreement on the part of the Company, the Seller, Azimuth or Anteon
International contained in this Agreement, (iii) the complaint (the "XXXXXX
COMPLAINT") filed by Xxxx Xxxxxx in the Superior Court of California, Marin
County on April 4, 2001, arising out of the acquisition by the Company of the
assets of Interactive Media Solutions, Inc., (iv) any claims, obligations or
liabilities relating to the Government Business (whether or not arising out of
or relating to facts or matters arising before or after the Closing), (v) any
claims, obligations or liabilities relating to the Xxxxxx Property Divestiture
or to the Xxxxxx Property (whether or not arising out of or relating to facts or
matters arising before or after the Closing), other than obligations or
liabilities of the Company under the Xxxxxx Lease, (vi) any claims or suits made
by Xxxxxx Xxxxxx against the Buyer, the Company or any of their Affiliates in
connection with his past ownership of shares of common stock of the Company
including, without limitation, any claims or suits pursuant to the exercise of
his appraisal rights against the Company in connection with such past ownership
of shares in the Company and any other claims or suits a minority shareholder of
a corporation may have under the Delaware General Corporation Law, (vii) any
claims against, obligations or liabilities of the Company in connection with XML
Solutions Corporation, (viii) any claims against, obligations or liabilities of
the Company in connection with the grant received by Analysis & Technology, Inc.
from the Department of Economic and Community Development of the State of
Connecticut, (ix) the complaint filed by Xxxxx X. Xxxxxxxx in the U.S. District
Court, Eastern District of Virginia, Alexandria Division (the "XXXXXXXX
COMPLAINT"), (x) any claims, obligations or liabilities relating to Up, Inc.
that would result in any representation and warranty contained in Article IV or
Article VIII to be untrue, including, but not limited to, the former ownership
of the stock of Up, Inc. by the Company, the sale or divestiture of Up, Inc. to
the Seller or one of its Affiliates (other than the Company) or any of the
assets and liabilities of Up, Inc. and (xi) any obligations relating to the
mortgages described on SECTION 4.12(f) OF THE DISCLOSURE SCHEDULE.
24
(b) The Buyer shall indemnify the Seller in respect of, and
hold the Seller harmless from and against, any and all Losses suffered, incurred
or sustained by the Seller or to which the Seller becomes subject, resulting
from, arising out of or relating to any misrepresentation, breach of
representation or warranty or nonfulfillment of or failure to perform any
covenant or agreement on the part of the Buyer contained in this Agreement.
7.2 METHOD OF ASSERTING CLAIMS. Claims for indemnification by any
Indemnified Party under Section 7.1 must be made within the survival periods set
forth in Article VI and will be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an
Indemnified Party might seek indemnity under Section 7.1 is asserted against or
sought to be collected from such Indemnified Party by a Person other than the
Seller, the Buyer, the Company or any Affiliate of the Seller, the Buyer or the
Company (a "THIRD PARTY CLAIM"), the Indemnified Party shall deliver a Claim
Notice with reasonable promptness to the Indemnifying Party. If the Indemnified
Party fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying
Party will not be obligated to indemnify the Indemnified Party with respect to
such Third Party Claim to the extent that the Indemnifying Party is prejudiced
by such failure of the Indemnified Party. The Indemnifying Party will notify the
Indemnified Party as soon as practicable within the Dispute Period whether the
Indemnifying Party accepts or disputes its liability to the Indemnified Party
under Section 7.1 and whether the Indemnifying Party desires, at its sole cost
and expense, to defend the Indemnified Party against such Third Party Claim.
(i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that the Indemnifying
Party desires to defend the Indemnified Party with respect to the
Third Party Claim pursuant to this Section 7.2, then the
Indemnifying Party will have the right to defend, with counsel
reasonably satisfactory to the Indemnified Party, at the sole cost
and expense of the Indemnifying Party, such Third Party Claim by all
appropriate proceedings, which proceedings will be reasonably
prosecuted or defended by the Indemnifying Party to a final
conclusion or will be settled at the discretion of the Indemnifying
Party (but only with the consent of the Indemnified Party in its
sole discretion in the case of any settlement that provides for any
relief other than the payment of monetary damages with respect to
which the Indemnified Party will be obligated or that provides for
the payment of monetary damages as to which the Indemnified Party
will not be indemnified in full pursuant to Section 7.1). Subject to
the foregoing, the Indemnifying Party will have full control of such
defense and proceedings, including any compromise or settlement
thereof; PROVIDED, HOWEVER, that the Indemnified Party may, at the
cost and expense of the Indemnifying Party, at any time prior to the
Indemnifying Party's delivery of the notice referred to in the first
sentence of this Section 7.2(a)(i) after giving reasonable notice to
the Indemnifying Party, file any motion, answer or other pleadings
or take any other action that the Indemnified Party reasonably
believes to be necessary or
25
appropriate to protect its interests; and PROVIDED, FURTHER, that if
requested by the Indemnifying Party, the Indemnified Party will, at
the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnifying Party in contesting any
Third Party Claim that the Indemnifying Party elects to contest. The
Indemnified Party may participate in, but not control, any defense
or settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this Section 7.2 and, except as
provided in the preceding sentence, the Indemnified Party will bear
its own costs and expenses with respect to such participation.
Notwithstanding the foregoing, the Indemnified Party may take over
the control of the defense or settlement of a Third Party Claim at
any time if it irrevocably waives its right to indemnity under
Section 7.1 with respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the
Indemnified Party within the Dispute Period that the Indemnifying
Party desires to defend the Third Party Claim, or if the
Indemnifying Party gives such notice but any time thereafter fails
to reasonably prosecute or defend or settle the Third Party Claim,
or if the Indemnifying Party fails to give any notice whatsoever
within the Dispute Period, then the Indemnified Party will have the
right to defend, at the sole cost and expense of the Indemnifying
Party, the Third Party Claim by all reasonably appropriate
proceedings, which proceedings will be prosecuted by the Indemnified
Party in good faith or will be settled at the reasonable discretion
of the Indemnified Party. The Indemnified Party will have full
control of such defense and proceedings, including any compromise or
settlement thereof; PROVIDED, HOWEVER, that if requested by the
Indemnified Party, the Indemnifying Party will, at the sole cost and
expense of the Indemnifying Party, provide reasonable cooperation to
the Indemnified Party and its counsel in contesting any Third Party
Claim which the Indemnified Party is contesting. Notwithstanding the
foregoing provisions of this Section 7.2, if the Indemnifying Party
has notified the Indemnified Party within the Dispute Period that
the Indemnifying Party disputes its liability hereunder to the
Indemnified Party with respect to such Third Party Claim and if such
dispute is resolved in favor of the Indemnifying Party in the manner
provided in clause (iii) below, the Indemnifying Party will not be
required to bear the costs and expenses of the Indemnified Party's
defense pursuant to this Section 7.2 or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the
Indemnified Party will reimburse the Indemnifying Party in full for
all reasonable costs and expenses incurred by the Indemnifying Party
in connection with such litigation. The Indemnifying Party may
participate in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this Section 7.2,
and the Indemnifying Party will bear its own costs and expenses with
respect to such participation.
(iii) If the Indemnifying Party notifies the
Indemnified Party that it accepts its indemnification liability to
the Indemnified Party with respect to the Third Party Claim under
Section 7.1 or fails to notify the
26
Indemnified Party within the Dispute Period whether the Indemnifying
Party disputes its liability to the Indemnified Party with respect
to such Third Party Claim, the Loss identified in the Claim Notice,
as finally determined, will be conclusively deemed a liability of
the Indemnifying Party under Section 7.1 and the Indemnifying Party
shall pay the amount of such Loss to the Indemnified Party on
demand. If the Indemnifying Party timely disputes its liability with
respect to such Third Party Claim, the Indemnifying Party and the
Indemnified Party will proceed in good faith to negotiate a
resolution of such dispute, and if not resolved through negotiations
within the Resolution Period, such dispute shall be resolved by
litigation in a court of competent jurisdiction.
(b) In the event any Indemnified Party should have a claim
under Section 7.1 against any Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver an Indemnity Notice with
reasonable promptness to the Indemnifying Party. The failure or delay by any
Indemnified Party to give the Indemnity Notice shall not impair such party's
rights hereunder except to the extent that an Indemnifying Party is prejudiced
by such failure or delay. If the Indemnifying Party notifies the Indemnified
Party that it does not dispute the claim described in such Indemnity Notice or
fails to notify the Indemnified Party within the Dispute Period whether the
Indemnifying Party disputes the claim described in such Indemnity Notice, the
Loss indemnified in the Indemnity Notice will be conclusively deemed a liability
of the Indemnifying Party under Section 7.1 to the extent that the costs
incurred by the Indemnified Party in connection with such claims are
commercially reasonable and the Indemnifying Party shall pay the amount of such
Loss to the Indemnified Party on demand. If the Indemnifying Party has timely
disputed its liability with respect to such claim, the Indemnifying Party and
the Indemnified Party will proceed in good faith to negotiate a resolution of
such dispute and, if not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by litigation in a court of competent
jurisdiction.
7.3 FURTHER ITEMS RELATING TO INDEMNIFICATION. Notwithstanding the
foregoing, the right to indemnification under this Article VII shall be subject
to the following terms.
(a) The aggregate liability of the Seller on the one hand, and
the Buyer on the other hand, for all claims for indemnification under this
Article VII shall not exceed $5,000,000; PROVIDED, HOWEVER, that the foregoing
limitation shall not apply to: (i) claims relating to the Buyer's obligation to
deliver the Purchase Price pursuant to Article II; (ii) any Losses resulting
from, arising out of or relating to any misrepresentation or breach of
representation and warranty on the part of the Company or the Seller contained
in Sections 4.11, 4.12(e) and 4.21; (iii) the indemnification obligations of the
Seller under Sections 7.1(a)(iv), 7.1(a)(v), 7.1(a)(vi), 7.1(a)(x) and
7.1(a)(xi) and (iv) any Losses resulting from, arising out of or relating to any
breach of the covenants of the Seller, Azimuth and Anteon International
contained in Section 9.2 and Section 9.3.
27
(b) The Buyer shall not be entitled to receive any
indemnification payments pursuant to this Article VII with respect to Losses
incurred by the Buyer based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation or warranty on the part of the
Seller or the Company, except those based upon, arising out of or otherwise in
respect of Sections 4.11, 4.12(e), 4.21, 7.1(a)(iii), 7.1(a)(iv), 7.1(a)(v),
7.1(a)(vi), 7.1(a)(vii), 7.1(a)(viii), 7.1(a)(ix), 7.1(a)(x) and 7.1(a)(xi) (the
"BASKET EXCLUSIONS"), until the aggregate indemnification payments, exclusive of
the Basket Exclusions, equal $300,000 (the "BASKET AMOUNT") (it being understood
and agreed that the Seller shall be liable for all Losses of the Buyer (subject
to Section 7.3(a)) if this threshold is met).
(c) The Seller shall not be entitled to receive any
indemnification payments pursuant to this Article VII with respect to Losses
incurred by the Seller based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation or warranty on the part of the
Buyer until the aggregate indemnification payments equal $300,000 (it being
understood and agreed that the Buyer shall be liable for all Losses of the
Seller (subject to Section 7.3(a)) if this threshold is met).
(d) For purposes of computing any Loss under this Article VII
with respect to any representation, warranty, covenant or agreement that is
qualified as to materiality or Material Adverse Effect, the amount of the Loss
shall be the entire Loss arising by reason of the breach of such representation,
warranty, covenant or agreement and not merely the amount of such Loss in excess
of an amount that constitutes a material Loss or in excess of an amount that
constitutes a Material Adverse Effect.
(e) Any indemnity payment made under this Agreement shall be
treated by the parties hereto as a purchase price adjustment and the parties
agree to report such payments consistent therewith.
7.4 RIGHT OF SET-OFF. The Buyer shall have the right to offset any
damages suffered by the Buyer against the amount of the EBITDA Payment to the
full extent that the Buyer would be entitled to indemnification under this
Agreement.
7.5 COMPUTATION OF LOSSES SUBJECT TO INDEMNIFICATION. The amount of
any Loss for which indemnification is provided under this Article VII or
otherwise in this Agreement shall be computed net of any third party insurance
proceeds actually received by the Indemnified Party pursuant to an insurance
policy with respect to such Loss, net of the direct increased cost of obtaining
insurance as a consequence of such Loss.
7.6 INDEMNIFICATION AS SOLE REMEDY AND WAIVER. From and after the
Closing, except with respect to claims (i) based on actual fraud or (ii) for
specific performance, the indemnities provided herein shall be the sole and
exclusive remedy of the parties hereto with respect to any and all claims for
Losses sustained, incurred or suffered directly or indirectly relating to or
arising out of this Agreement and the transactions contemplated hereby. Except
for Losses for which an Indemnified Party is expressly required to indemnify an
Indemnified Party under this Agreement, the Buyer
28
and the Seller, on their own behalf, and or on behalf of their successors and
assigns, waive any and all rights, legal or equitable, to pursue any other
remedies, including, without limitation, all rights under CERCLA and any
comparable state law.
7.7 INDEMNIFICATION PAYMENTS. Any indemnification payments pursuant
to this Article VII shall be reduced by (or the Indemnified Party shall pay to
the Indemnifying Party) (i) any federal income tax benefit ("TAX BENEFIT") which
the Indemnified Party reasonably determines is directly attributable to the
indemnification payment or the expenditure to which the indemnification relates
and that is actually realized in the same Tax period in which the
indemnification payment is paid or accrued promptly after realizing such
offsetting Tax Benefit in cash and (ii) any amounts actually recovered by the
Indemnified Party for the damages for which such indemnification payment is
made, under any warranty or indemnity from any third party existing at the
Closing Date.
ARTICLE VIII
TAX MATTERS
8.1 TAX INDEMNITIES.
(a) From and after the Closing Date, the Seller shall be
responsible for, shall pay or cause to be paid, and shall indemnify, defend and
hold harmless the Buyer, the Company and their Affiliates against and reimburse
the Buyer, the Company and their Affiliates for all Taxes (i) arising directly
or indirectly from a breach of a representation or warranty set forth in Section
4.11, (ii) imposed on the Seller or any member of an affiliated group with which
the Seller files a consolidated or combined income Tax Return (other than the
Company) with respect to any taxable period that ends on or before the Closing
Date or portion thereof that includes the Closing Date (a "PRE-CLOSING PERIOD"),
(iii) imposed on the Company with respect to any Pre-Closing Period, (iv)
imposed on or payable by the Company under Treasury Regulation 1.1502-6 (or any
similar provision of state, local or foreign Law) by reason of the Company being
included in any consolidated, affiliated, combined or unitary group at any time
on or before the Closing Date or (v) relating to the Government Business
Divestiture, in excess of the amount specifically reserved for such Taxes in the
Financial Statement for the period ended September 30, 2000.
(b) From and after the Closing Date, the Buyer and the Company
shall be responsible for, shall pay or cause to be paid, and shall jointly and
severally, indemnify, defend and hold harmless the Seller and their Affiliates
against and reimburse the Seller and their Affiliates for all Taxes imposed on
or with respect to the Company that are not subject to indemnification pursuant
to paragraph (a) of this Section 8.1.
(c) Payment by the indemnitor of any amount due under this
Section 8.1 shall be made within 10 days following written notice by the
indemnitee that payment of such amounts to the appropriate Taxing Authority is
due by the indemnitee;
29
provided that the indemnitor shall not be required to make any payment earlier
than two Business Days before it is due to the appropriate Taxing Authority. If
the Seller receives an assessment or other notice of Tax due with respect to the
Company for any Pre-Closing Period for which the Seller is not responsible, in
whole or in part, pursuant to paragraph (a) of this Section 8.1, because all or
a part of such Tax does not exceed the amount reserved for Taxes in the
Financial Statement for the period ended September 30, 2000, and the Seller or
any of its Affiliates pay such Tax, then the Buyer or the Company shall pay to
the Seller, in accordance with the first sentence of this Section 8.1(c), the
amount of such Tax for which the Seller is not responsible. In the case of a Tax
that is contested in accordance with the provisions of Section 8.3, payment of
the Tax to the appropriate Taxing Authority will not be considered to be due
earlier than the date a final determination to such effect is made by such
Taxing Authority or a court.
(d) For purposes of this Agreement, in the case of any Tax
that is imposed on a periodic basis and is payable for a period that begins
before the Closing Date and ends after the Closing Date, the portion of such
Taxes payable for the period ending on the Closing Date shall be (i) in the case
of any Tax other than a Tax based upon or measured by income, the amount of such
Tax for the entire period multiplied by a fraction, the numerator of which is
the number of days in the period ending on the Closing Date and the denominator
of which is the number of days in the entire period and (ii) in the case of any
Tax based upon or measured by income, the amount which would be payable if the
taxable year ended on the Closing Date. Any credit shall be prorated based upon
the fraction employed in clause (i) of the next preceding sentence. In the case
of any Tax based upon or measured by capital (including net worth or long-term
debt) or intangibles, any amount thereof required to be allocated under this
Section 8.1(d) shall be computed by reference to the level of such items on the
Closing Date.
8.2 REFUNDS AND TAX BENEFITS.
(a) Any refund of Taxes (including any interest thereon) that
relates to the Company and that is attributable to any taxable period or portion
thereof that begins after the Closing Date (a "POST-CLOSING PERIOD") shall be
the property of the Company and shall be retained by the Company (or promptly
paid by the Seller to the Company if any such refund (or interest thereon) is
received by the Seller or any of its Affiliates). Without limiting the
generality of the preceding sentence, any such refund or other benefit realized
by the Company in a Post-Closing Period that results from the carry forward of
any Tax attribute from a Pre-Closing Period shall be the property of the Company
and shall be retained by the Company.
(b) The Seller shall be entitled to any refund or credit
(including the after-Tax amount of any interest paid or credited with respect
thereto), and the Buyer shall promptly pay to the Seller any refund or credit
(including the after-Tax amount of any interest paid or credited with respect
thereto) received by the Buyer or the Company (i) relating to Pre-Closing
Periods or (ii) attributable to an amount for which the Seller is responsible
under Section 8.1(a). At the Seller's request, the Buyer shall certify as to the
amount of any refund or credit received by the Buyer or the Company as
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to any year, and provide such information as the Seller may reasonably request
regarding such certification.
(c) If, as a result of any adjustment that occurs after the
Closing Date, pursuant to an audit or examination by a Taxing Authority or any
resolution thereof by settlement, judicial determination or otherwise, to the
taxable income or loss reported by any of the Seller, the Company or their
Affiliates on the Returns for any Pre-Closing Period, the Buyer or the Company
becomes entitled to any deductions or tax credits in any Tax period or portion
thereof ending after the Closing Date (a "POST-CLOSING DATE TAX BENEFIT"), then
the Buyer shall pay the Seller an amount that will leave the Buyer in the same
after-Tax position as if such Post-Closing Date Tax Benefit had not been
realized. All payments to the Seller pursuant to this Section 8.2(c) shall be
made within 30 days after the filing of a Return for the Tax period in which a
Post-Closing Date Tax Benefit results in a reduction in the Taxes paid by the
Buyer. At the Seller's request, the Buyer shall certify as to the amount, if
any, due to the Seller pursuant to this Section 8.2(c) as to any year, and
provide such information as the Seller may reasonably request regarding such
certification.
(d) In applying Sections 8.2(a), 8.2(b) and 8.2(c), any refund
of Taxes (including any interest thereon) for a taxable period that includes but
does not end on the Closing Date shall be allocated between the Pre-Closing
Period and the Post-Closing Period in accordance with Section 8.1(d).
(e) Neither the Seller nor any Affiliate thereof shall be
required to pay to the Buyer or the Company any refund or credit of Taxes that
results from the carryback to any Pre-Closing Period of any net operating loss,
capital loss or Tax credit incurred by the Company in any Post-Closing Period.
(f) If the Company realizes any item of loss or credit for Tax
purposes for any Post-Closing Period, it may, in its sole discretion, carry
forward such loss or credit.
(g) From and after the Closing Date, if the Seller takes or
permits to be taken any action with respect to a Tax imposed on or a Return of,
or that includes or affects, the Company for a Pre-Closing Period and such
action affects adversely the Tax position of the Buyer or the Company in a
Post-Closing Period, then the Seller shall indemnify the Buyer or the Company
and hold it harmless from and against any incremental liability for Tax that may
reasonably be viewed as resulting from such action.
8.3 CONTESTS.
(a) After the Closing, the Buyer shall promptly notify the
Seller in writing of the commencement of any Tax audit or judicial or
administrative proceeding or of any demand or claim on the Buyer or the Company
which, if determined adversely to the taxpayer or after the lapse of time would
be grounds for indemnification under Section 8.1. Such notice shall contain
factual information (to the extent known)
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describing the asserted Tax liability in reasonable detail and shall include
copies of any notice or other document received from any Taxing Authority in
respect of any such asserted Tax liability. If the Buyer fails to give the
Seller prompt notice of an asserted Tax liability as required by this Section
8.3 and such failure to give prompt notice results in a detriment to the Seller,
then any amount which the Seller is otherwise required to pay the Buyer pursuant
to Section 8.1 with respect to such liability shall be reduced by the amount of
such detriment.
(b) The Seller (or its designee) may elect to direct, through
counsel of its own choosing and at its own expense, any audit, claim for refund
and administrative or judicial proceeding involving any asserted liability with
respect to which indemnity may be sought under Section 8.1 (any such audit,
claim for refund or proceeding relating to an asserted Tax liability is referred
to herein as a "CONTEST"). If the Seller (or its designee) elects to control a
Contest, it shall within 30 calendar days of receipt of the notice of asserted
Tax liability notify the Buyer of its intent to do so, and the Seller (or its
designee) shall have all rights to settle, compromise and/or concede such
asserted liability and the Buyer shall cooperate and shall cause the Company or
any of its successors to cooperate, at the reasonable expense of the Seller, in
each phase of such Contest; provided, however, that if the results of such
Contest could reasonably be expected to have a material Tax cost to the Buyer or
the Company for any Tax period including or ending after the Closing Date, then
the Seller shall not settle or compromise such Contest without the Buyer's
consent, which shall not be unreasonably withheld. If the Seller elects not to
direct a Contest, fails to notify the Buyer of its election as herein provided
or contests its obligation to indemnify under Section 8.1, the Buyer or the
Company may pay, compromise or contest, at the Seller's expense, such asserted
liability. However, in such case, neither the Buyer nor the Company may settle
or compromise any asserted liability over the objection of the Seller; provided,
however, that consent to settlement or compromise shall not be unreasonably
withheld. In any event, the Seller may participate, at its own expense, in the
Contest. If the Seller (or its designee) chooses to direct the Contest, the
Buyer shall promptly empower and shall cause the Company or any of its
successors promptly to empower (by power of attorney and such other
documentation as may be appropriate) such representatives of the Seller as it
may designate to represent the Buyer, the Company or any of their successors in
the Contest insofar as the Contest involves an asserted Tax liability for which
the Seller would be liable under Section 8.1(a).
8.4 PREPARATION OF RETURNS. The Seller shall prepare and timely file
U.S. federal, state and local income and franchise Tax Returns relating to the
Company for any Tax period ending on or prior to the Closing Date and which are
required to be filed after the Closing Date. With respect to any Returns for
which the Seller has filing responsibility pursuant to the preceding sentence,
the Company will be included in the consolidated, combined or unitary Tax
Returns of the Seller or an Affiliate of the Seller on a basis consistent with
prior Tax years unless a different treatment is required by an intervening
change in Law. The parties agree that if the Company is permitted, but not
required, under applicable state or local income or franchise tax Laws to treat
the Closing Date as the last day of a Tax period, they will treat the Tax period
as ending on the Closing Date. The Seller shall prepare and timely file all
other Returns for any period
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ending on or prior to the Closing Date to the extent the Seller or an Affiliate
of the Seller (other than the Company) previously was responsible for the
preparation and filing of such returns for the immediately preceding Tax period.
All such Returns required to be filed by the Seller pursuant to the preceding
sentence for tax periods that include the Closing Date shall be prepared and
filed by the Seller in a manner that is consistent with the prior practice of
the Company (including, without limitation, prior Tax elections and accounting
methods or conventions made or utilized by the Company), except as required by
applicable Law or regulations. The Buyer shall prepare and timely file or cause
the Company to prepare and timely file all Returns for which the Seller is not
responsible pursuant to this Section 8.4. The Buyer will deliver to the Seller a
complete and accurate copy of each Return required to be filed by the Buyer or
the Company under this Section 8.4 for Tax periods that include the Closing
Date, and any amendment to such Return, at least 30 days prior to the date such
Return is filed with the appropriate Taxing Authority.
8.5 COOPERATION AND EXCHANGE OF INFORMATION. The Seller, the Buyer
and the Company will provide each other with such cooperation and information as
any of them reasonably may request of the other in filing any Return, amended
return or claim for refund, determining a liability for Taxes or a right to a
refund of Taxes or participating in or conducting any audit or other proceeding
in respect of Taxes. Such cooperation and information shall include providing
copies of relevant Returns or portions thereof, together with accompanying
schedules and related work papers and documents relating to rulings or other
determinations by Taxing Authorities. Each such party shall make its employees
available on a mutually convenient basis to provide explanations of any
documents or information provided hereunder. Each such party will retain all
Returns, schedules and work papers and all material records or other documents
relating to Tax matters of the Company for their taxable period first ending
after the Closing Date and for all prior taxable periods until the later of (i)
the expiration of the statute of limitations of the taxable periods to which
such Returns and other documents relate, without regard to extensions except to
the extent notified by another party in writing of such extensions for the
respective Tax periods, or (ii) eight years following the due date (without
extension) for such Returns. Any information obtained under this Section 8.5
shall be kept confidential, except as may be otherwise necessary in connection
with the filing of Returns or claims for refund or in conducting an audit or
other proceeding.
8.6 TRANSFER TAXES. The Seller agrees to assume liability for and to
pay all Transfer Taxes incurred as a result of the sale of the Company
contemplated hereby. In addition, the Seller agrees to indemnify the Buyer and
its Affiliates for any and all Losses incurred by the Buyer and its Affiliates
arising out of the Seller's failure to make timely or full payments of such
Transfer Taxes.
8.7 MISCELLANEOUS.
(a) The parties agree to treat all payments made under Article
VII or this Article VIII as adjustments to the purchase price for Tax purposes.
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(b) Except as expressly provided and except for the
representations contained in Section 4.11, the survival of the representations
and warranties contained in Article VI, this Article VIII shall be the sole
provision governing Tax matters and indemnities therefor under this Agreement.
(c) For purposes of this Article VIII, all references to the
Buyer or the Seller include successors thereto.
(d) The Seller shall deliver to the Buyer on the Closing Date
a duly completed and executed certificate of non-foreign status attached hereto
as Exhibit B pursuant to Section 1.1445-2(b)(2) of the Treasury regulations
promulgated under the Code.
(e) Any indemnification pursuant to this Article VIII by the
Seller shall not be subject to the limitations set forth in Section 7.3.
ARTICLE IX
COVENANTS
9.1 FURTHER ACTION; ACCESS TO RECORDS.
(a) If at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, the Seller will take such
further action (including the execution and delivery of such other documents,
releases, assignments and other instruments as may be reasonably required to
effectuate completely the transfer and assignment to the Buyer of, and to vest
fully in the Buyer title to, the Stock) as the Buyer reasonably may request. The
Seller acknowledges and agrees that, from and after the Closing, the Buyer will
be entitled to possession of all documents, books, records (including tax
records), agreements and financial data of any sort relating to the Company.
(b) The Buyer agrees that it shall preserve and keep the
records held by it relating to the business of the Company (including, without
limitation, the Government Business) that could reasonably be required after the
Closing by the Seller for a period of five (5) years after the Closing Date. If
the Buyer desires to destroy any such records after expiration of the five (5)
year period, the Buyer agrees, prior to destroying any such documents, to notify
the Seller and to make such records reasonably available to the Seller at the
Seller's sole cost and expense and during normal business hours upon reasonable
notice given by the Seller. In addition, the Buyer shall make such records
available to the Seller as may be reasonably required by the Seller for
legitimate business reasons, such as, but not limited to, the preparation of Tax
Returns, the preparation of incurred cost submissions or other financial data to
the Defense Contract Audit Agency or other Governmental or Regulatory Authority
or the defense of litigation or other proceedings. The Seller will hold in
confidence all confidential information identified as such by, and obtained
from, the Buyer pursuant to this Section.
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(c) The Seller agrees that it shall promptly after the Closing
deliver to the Buyer any records relating to the business of the Company not
then held by the Company and that notwithstanding the foregoing obligation, the
Seller shall preserve and keep the records held by it relating to the business
of the Company that could reasonably be required after the Closing by the Buyer
for a period of five (5) years after the Closing Date. If the Seller desires to
destroy any such records after expiration of the five (5) year period, the
Seller agrees, prior to destroying any such documents, to notify the Buyer and
to make such records reasonably available to the Buyer at the Buyer's sole cost
and expense and during normal business hours upon reasonable notice given by the
Buyer. In addition, the Seller shall make such records available to the Buyer as
may be reasonably required by the Buyer for legitimate business reasons, such
as, but not limited to, the preparation of Tax Returns or the defense of
litigation or other proceedings. The Buyer will hold in confidence all
confidential information identified as such by, and obtained from, the Seller
pursuant to this Section.
9.2 NON-COMPETITION.
(a) The Seller, Azimuth and Anteon International shall not,
and shall cause each of their respective controlled Affiliates not to, directly
or indirectly, either alone or in conjunction with any other Person:
(i) for a period of three years from the Closing
Date, engage in, or otherwise lend assistance (financial or
otherwise) to any Person engaging in, a Competing Business anywhere
in the United States. Notwithstanding anything to the contrary
contained in this subsection (i), the foregoing shall not be
breached as a result of only the ownership or other right to acquire
by the Seller, Azimuth, Anteon International or any of their
respective controlled Affiliates of not more than an aggregate of 5%
of any class of securities registered under the Securities Exchange
Act of 1934, as amended, of a Person engaged in a Competing
Business; and
(ii) for a period of three years from the Closing
Date, cause or attempt to cause any client, customer, supplier,
lessor, licensor or other business associate of the Company to
terminate or materially reduce its business with the Company as it
maintained with the Company prior to the Closing.
The parties hereto expressly acknowledge and agree that any obligation of the
Seller, Azimuth or Anteon International or any of their respective controlled
Affiliates contained in this Section 9.2(a) shall terminate in all respects upon
any Person or group not Affiliated with Azimuth obtaining more than 50% of the
issued and outstanding voting stock of the Seller, Azimuth or Anteon
International; PROVIDED, HOWEVER, if such event occurs within one (1) year of
the Closing Date and within such one (1) year period the covenant contained in
this Section 9.2(a) is violated by the succeeding Person or group, then the
Seller agrees to forfeit all rights, title and interest in and to the amount of
the EBITDA Payment (if any).
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(b) The parties hereto recognize that the laws and public
policies of various jurisdictions may differ as to the validity and
enforceability of covenants similar to those set forth in Section 9.2. It is the
intention of the parties that the provisions of Section 9.2 be enforced to the
fullest extent permissible under the Laws and policies of each jurisdiction in
which enforcement may be sought, and that the unenforceability (or the
modification to conform to such Laws or policies) of any provisions of Section
9.2 shall not render unenforceable, or impair, the remainder of the provisions
of Section 9.2. Accordingly, if at the time of enforcement of any provision of
Section 9.2, a court of competent jurisdiction holds that the restrictions
stated therein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period, scope, or geographic area reasonable under
such circumstances will be substituted for the stated period, scope or
geographical area and that such court shall be allowed to revise the
restrictions contained therein to cover the maximum period, scope and
geographical area permitted by Law.
(c) The Seller, Azimuth and Anteon International each
expressly acknowledges that the restrictive covenants set forth in this Section
9.2, including, without limitation, the geographic scope and duration of such
covenants, are necessary in order to protect and maintain the proprietary
interests and other legitimate business interests of the Buyer, and that any
violation thereof would result in irreparable injuries to the Buyer that would
not be readily ascertainable or compensable in terms of money, and therefore the
Buyer shall be entitled to obtain from any court of competent jurisdiction
temporary, preliminary and permanent injunctive relief as well as damages, which
rights shall be cumulative and in addition to any other rights or remedies to
which it may be entitled. Each of the Seller, Azimuth and Anteon International
further agrees that if it is determined that it has willfully breached the terms
of this Section 9.2, the Buyer shall be entitled to recover from such party all
costs and reasonable attorneys' fees incurred as a result of its attempts to
redress such breach or to enforce its rights and protect its legitimate
interests.
9.3 NON-SOLICITATION.
(a) The Seller, Azimuth and Anteon International shall not,
and shall cause each of their respective controlled Affiliates not to, for a
period of three years from the Closing Date, solicit or recruit any employee of
the Company as of the Closing Date; PROVIDED that this Section 9.3 shall not be
breached as a result of any general solicitation that is not directed at the
employees of the Company. The parties hereto expressly acknowledge and agree
that any obligation of the Seller, Azimuth or Anteon International or any of
their respective controlled Affiliates contained in this Section 9.3(a) shall
terminate in all respects upon any Person or group not Affiliated with Azimuth
obtaining more than 50% of the issued and outstanding voting stock of the
Seller, Azimuth or Anteon International; PROVIDED, HOWEVER, if such event occurs
within one (1) year of the Closing Date and within such one (1) year period the
covenant contained in this Section 9.3(a) is violated by the succeeding Person
or group, then the Seller agrees to forfeit all rights, title and interest in
and to the amount of the EBITDA Payment (if any).
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(b) The parties hereto recognize that the laws and public
policies of various jurisdictions may differ as to the validity and
enforceability of covenants similar to those set forth in Section 9.3. It is the
intention of the parties that the provisions of Section 9.3 be enforced to the
fullest extent permissible under the Laws and policies of each jurisdiction in
which enforcement may be sought, and that the unenforceability (or the
modification to conform to such Laws or policies) of any provisions of Section
9.3 shall not render unenforceable, or impair, the remainder of the provisions
of Section 9.3. Accordingly, if at the time of enforcement of any provision of
Section 9.3, a court of competent jurisdiction holds that the restrictions
stated therein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period or scope reasonable under such
circumstances will be substituted for the stated period or scope and that such
court shall be allowed to revise the restrictions contained therein to cover the
maximum period and scope permitted by Law.
(c) The Seller, Azimuth and Anteon International each
expressly acknowledges that the restrictive covenants set forth in this Section
9.3, including, without limitation, the duration of such covenants, are
necessary in order to protect and maintain the proprietary interests and other
legitimate business interests of the Buyer, and that any violation thereof would
result in irreparable injuries to the Buyer that would not be readily
ascertainable or compensable in terms of money, and therefore the Buyer shall be
entitled to obtain from any court of competent jurisdiction temporary,
preliminary and permanent injunctive relief as well as damages, which rights
shall be cumulative and in addition to any other rights or remedies to which it
may be entitled. Each of the Seller, Azimuth and Anteon International further
agrees that if it is determined that it has willfully breached the terms of this
Section 9.3, the Buyer shall be entitled to recover from such party all costs
and reasonable attorneys' fees incurred as a result of its attempts to redress
such breach or to enforce its rights and protect its legitimate interests.
9.4 EMPLOYEE BENEFIT MATTERS.
(a) The Seller shall take all such actions as may be necessary
to cause employees of the Company (which, for the purposes of clarification
shall not include employees of the Government Business) who are participants in
the Anteon Corporation 401(k) Plan (the "SELLER 401(k) PLAN") at the Closing to
become fully vested in their accounts (the "ACCOUNTS") under the Seller 401(k)
Plan, effective as of the Closing. As soon as practicable following the Closing,
the Seller and the Buyer shall arrange for the transfer of the Accounts, valued
as of the date of transfer, from the Seller 401(k) Plan to one or more
tax-qualified plans established by the Buyer and designated by the Buyer as the
recipient of such transfer. The transfer described in the preceding sentence
shall be made in cash or in other property acceptable to the Buyer. Prior to the
date of transfer, the administrator of the Seller 401(k) Plan shall accept from
the Company and credit to the appropriate account under the Seller 401(k) Plan
loan repayments so as to prevent the occurrence of the default of any
outstanding loan which a Company employee has under the Seller 401(k) Plan.
37
(b) After the Closing and until December 31, 2001, at the
Buyer's reasonable request, the Seller shall provide the Buyer with access to
such of the Seller's payroll and human resource administrative systems
("Seller's HR System") as the Buyer shall request to enable the Buyer to
continue to maintain the Benefit Plans for which the Company is the sponsoring
employer. The Buyer expressly acknowledges the Seller's right to institute such
limitations, restrictions and controls on the Buyer's access to such
administrative systems as the Seller shall reasonably deem necessary in order to
safeguard and protect the confidentiality and integrity of the Seller's
information contained on such systems or as may be required by any third party
licensor of such systems and related software. Notwithstanding anything
contained herein to the contrary, on or prior to December 31, 2001, the parties
shall take all necessary actions to facilitate a transfer of all pertinent
information relating to employees of the Company contained on the Seller's HR
System as the Buyer reasonably requests to the Buyer's or its designee's payroll
and human resource administrative system at the Seller's sole cost and expense.
(c) The Buyer shall cause the Company to honor, from and after
the Closing, all obligations under the terms of the employment and severance
agreements to which the Company is a party as set forth in SECTION 9.4(c) OF THE
DISCLOSURE SCHEDULE, except as may otherwise be agreed to by the parties
thereto.
(d) After the Closing, until the date the Buyer determines in
its sole discretion to modify, amend, terminate or replace the Benefit Plans,
the Buyer shall cause the Company to maintain the Benefit Plans (other than
bonus or equity-based plans or any plan for which the Company is not the
sponsoring employer) on substantially similar terms to those in effect on the
date hereof. If, subsequent to the Closing Date, the Buyer decides to cover the
employees of the Company under an employee benefit plan sponsored or maintained
by the Buyer, such employees shall be permitted to participate in such employee
benefit plan of the Buyer on terms substantially similar to those provided to
employees of The Forum Corporation of North America; provided, that the Buyer's
obligation to provide such substantially similar benefits shall cease after
December 31, 2001.
(e) The Buyer acknowledges and agrees that the Seller shall,
after the Closing, process and administer the Company's payroll for one pay
period only, corresponding to the Company's pay date of August 3, 2001. The
Seller shall make such payroll payments and all deposits and filings in
connection with such payroll payments and shall withhold all applicable employee
withholding Taxes and shall simultaneously deliver to the appropriate Taxing
Authorities the amount withheld from such payroll payments and the applicable
employer share of the employment Taxes due on such payroll payments, if any. The
Seller shall deliver to the Buyer evidence of such payroll payments, deposits
and filings promptly thereafter. As soon as the Seller informs the Buyer of the
amount (the "PAYROLL REIMBURSEMENT AMOUNT") of such payroll payments and
applicable share of employer Taxes which are allocable to (i) the period between
the Closing Date and August 3, 2001, and (ii) the employees of the Company (and
not employees of the Seller or the Government Business), the Buyer shall pay to
the Seller the Payroll Reimbursement Amount.
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9.5 XXXXXX PROPERTY CONVEYANCE. The Seller will use its reasonable
efforts to sell the Xxxxxx Property. In the event that after the Closing the
Seller or any of its Affiliates shall convey fee title to the Xxxxxx Property,
it shall do so in a bona fide transaction and all of the proceeds of such sale
shall be payable at the closing of such conveyance. Simultaneously with receipt
of the purchase price by the Seller or its Affiliates, at the direction of the
Company, the Seller shall remit (or cause to be remitted) to the Company one
half of the net profits of such sale received by the Seller or its Affiliates
(i.e. the purchase price less any Taxes, reasonable costs, fees or expenses
incurred directly in connection with such sale or any payments made in
satisfaction of any mortgage on the Xxxxxx Property (but not in excess of the
amount of the mortgage on the Xxxxxx Property as of the Closing Date)). The
Seller shall forward to the Company (within three days of the execution and
delivery thereof) true and correct copies of any executed contracts of sale,
including, without limitation, any amendments, supplements and other documents
in connection with such conveyance. The Seller shall keep the Company reasonably
informed of the status of the conveyance.
9.6 ACCOUNTING MATTERS. For a period of up to four (4) months after
the Closing, at the Buyer's option, the Seller shall provide the Company with
General Corporate Accounting Services for the benefit of the Company, in a
professional and workmanlike manner consistent with past practice, by causing
each individual whose name is set forth on SCHEDULE 9.6 to provide such services
to the Company at a monthly charge to the Company set forth opposite such
individual's name on SCHEDULE 9.6. At any point during such four (4) month
period, the Company may terminate the services provided by any one or all of the
individuals whose names are set forth on SCHEDULE 9.6 upon 10 days notice prior
to any month end of such four (4) month period, and the monthly charge payable
by the Company shall be reduced by the amount set forth opposite such
individual's name on SCHEDULE 9.6 whose services are no longer required by the
Company. The Seller covenants and agrees not to terminate the employment during
the four (4) month period or prior to termination by the Company of any of the
individuals whose names are set forth on SCHEDULE 9.6 without cause. In the
event the Company initiates a request to terminate the services rendered by any
individual listed on SCHEDULE 9.6 and that a replacement (a "REPLACEMENT") be
found to provide the services rendered by such individual, the Seller shall
inform the Company of the monthly cost of the Replacement's salary and benefits
and the Seller shall obtain the Company's consent to hire the Replacement, which
consent shall not be unreasonably withheld, and in such case, the Company shall
pay the monthly cost of the Replacement's salary and benefits. If any individual
listed on SCHEDULE 9.6 is either terminated by the Seller or resigns from the
Seller, and the Company requests a Replacement, the Seller shall inform the
Company of the monthly cost of the Replacement's salary and benefits and the
Seller shall obtain the Company's consent to hire the Replacement, which consent
shall not be unreasonably withheld, and in such case, the Company shall pay the
lesser of (i) the monthly cost of the Replacement's salary and benefits or (ii)
the monthly cost of the salary and benefits of the individual that such
Replacement is replacing. If any individual whose name is set forth on SCHEDULE
9.6 ceases to provide services to the Company pursuant to this SECTION 9.6
during such four (4) month period and the Company does not request a
Replacement, then the monthly charge payable by the Company under this SECTION
9.6 shall be reduced by the amount set forth opposite such individual's name on
39
SCHEDULE 9.6. To the extent the Company terminates the services provided by an
individual whose name is set forth on Schedule 9.6 and does not request a
Replacement, the Seller would not be required to provide the same level of
service as a consequence of the termination and non-replacement of such
individual.
9.7 CONSENTS TO ASSIGNMENT; COVENANT TO ASSIST. Notwithstanding
anything to the contrary in this Agreement, this Agreement shall not constitute
an agreement to assign any Contracts relating to the Government Business
("GOVERNMENT CONTRACTS") or any claim, right or benefit arising thereunder or
resulting therefrom, if a necessary consent has not been obtained or if an
attempted assignment thereof would be ineffective or constitute a breach of such
agreement. If any such consent has not been obtained as of the Closing Date, or
if an attempted assignment of any such Government Contract would be ineffective:
(i) the Seller shall so advise the Buyer and (ii) the Buyer shall provide
reasonable assistance to the Seller in performing its obligations in all
material respects under such relating to the Government Contracts in the name of
the Buyer and the Buyer shall cooperate with the Seller in any reasonable
arrangement (which shall not unreasonably interfere with the conduct of the
business of the Company), including, without limitation, the execution by the
Buyer of sub-contracts with the Seller and awarding to the Seller all of the
work and financial rewards relating to any such Government Contract designed to
provide for the Seller the benefit under such Government Contract including
enforcement for the benefit of the Seller of any and all rights of the Seller
against a third party thereof arising out of breach or cancellation by such
third party or otherwise. Without limiting the generality of the foregoing, the
Buyer will use its commercially reasonable efforts to assist the Seller in
obtaining novations from the appropriate governmental customers to the
Government Contracts which have not been novated prior to Closing. Provided that
the Seller has complied with the immediately following sentence, if the Buyer
shall receive after the date hereof any payment under or any benefit from
relating to the Government Contracts, the Buyer shall promptly deliver the same
to the Seller. Notwithstanding anything in this Section 9.7, in no event shall
this Section 9.7 require the Buyer or the Company (or any of their Affiliates)
to incur any out-of-pocket expense, and the Seller shall promptly indemnify the
Buyer and the Company (and any of their Affiliates) for any Losses,
out-of-pocket costs or expenses suffered or incurred by the Buyer or the Company
(or any of their Affiliates) in providing the assistance to the Seller as
described in this Section 9.7.
9.8 ACCESS AND USE OF PREMISES. From and after the date of this
Agreement and for the period expiring on October 31, 2001, the Seller shall
permit employees of the Company to access its premises located at 0000 Xxxxx
Xxxxxx Xx., Xxxxx 000, XxXxxx, Xxxxxxxx and use approximately 62% of the space
thereat for a monthly charge to the Company of $17,916 per month PLUS 62% of the
Tenant's (as defined in the facility lease for the McLean premises to which the
Seller is a party, the "MCLEAN FACILITY LEASE") proportionate share of the
monthly operating costs thereof as set forth in the McLean Facility Lease for
the sole purpose of carrying on its business in a manner consistent with past
practice and the Seller shall provide the Company with the type, quality and
level of office services consistent with those currently provided at such
premises. The Seller may, at its option and upon reasonable advance written
notice to the Buyer, reasonably relocate any employee of the Company within such
premises, provided
40
such relocation does not materially interfere with the ability of the relocated
employee to carry on its business in a manner consistent with past practice. The
foregoing arrangement shall immediately terminate upon objection by the landlord
of such premises at which time the parties shall use their reasonable best
efforts to negotiate a sublease for such premises, PROVIDED that the Seller's
obligation to enter into a sublease with respect to such premises shall be
subject to consent of the landlord of such premises. The Company may terminate
the foregoing arrangement, with or without cause, upon sixty (60) days' prior
written notice to the Seller.
9.9 PAYMENT TO MARINO. The Seller covenants and agrees that it will,
on behalf of the Company, under that certain Agreement and Plan of Merger dated
as of June 15, 2001 (the "MERGER AGREEMENT") by and between the Company and IMC
Merger Co., pay to Xxxxxx Xxxxxx either (i) the Merger Consideration (as defined
in the Merger Agreement) or (ii) such sum as may be awarded to Xxxxxx Xxxxxx by
a court of competent jurisdiction in the event Xxxxxx Xxxxxx properly asserts
his rights under Section 262 of the Delaware General Corporation Law.
9.10 FINANCIAL REPORTING AND CALCULATION OF EBITDA. From and after
the Closing Date until December 31, 2001, the Buyer shall cause the Company to
maintain a financial reporting system that will be sufficient to determine
EBITDA. If after the Closing Date until December 31, 2001, other than in the
normal course of business, any assets (including Contracts) are transferred or
assigned to or from the Company, or otherwise allocated or attributed, for
financial reporting purposes, to the Company, then equitable and reasonable
adjustments shall be made in calculating EBITDA to eliminate the effect of such
transfer, assignment, allocation or attribution, and no such transfer,
assignment, allocation or attribution shall be made unless the financial
reporting system referred to in the immediately preceding sentence is capable of
tracking the performance of distinct Contracts in a manner that will permit such
determination of EBITDA.
ARTICLE X
MISCELLANEOUS
10.1 NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed to the parties at
the following addresses or facsimile numbers:
41
If to the Buyer, the Company or the Parent, to:
c/o FT Knowledge Limited
00 Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Telephone: 00 (0) 00 0000 0000
Facsimile: 00 (0) 00 0000 0000
Attention: Xxxxxx Xxxxxxx, Director of Legal Services
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
If to the Seller, Azimuth or Anteon International to:
Anteon Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, General Counsel
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
All such notices, requests and other communications will (a) if delivered
personally to the address as provided in this Section 10.1, be deemed given upon
delivery, (b) if delivered by facsimile transmission to the facsimile number as
provided in this Section 10.1, be deemed given upon confirmed receipt, and (c)
if delivered by mail in the manner described above to the address as provided in
this Section 10.1, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this Section
10.1). Any party from time to time may change its address, facsimile number or
other information for the purpose of notices to that party by giving notice
specifying such change to the other party hereto.
42
10.2 ENTIRE AGREEMENT. This Agreement and all agreements referred to
herein supersede all prior discussions and agreements between the parties with
respect to the subject matter hereof and thereof, and contain the sole and
entire agreement between the parties hereto and thereto with respect to the
subject matter hereof and thereof.
10.3 EXPENSES. Except as otherwise expressly provided in this
Agreement, each of the Buyer and the Seller will pay its own costs and expenses
incurred in connection with the negotiation and execution of this Agreement and
the consummation of the transactions contemplated hereby.
10.4 PUBLIC ANNOUNCEMENTS. All press releases and other public
disclosure concerning the transactions contemplated hereby from and after the
date hereof will be subject to review and approval by the Seller, the Company
and the Buyer, such approval not to be unreasonably withheld; PROVIDED, HOWEVER,
that to the extent a party or any of its Affiliates shall have received written
advice of counsel that it is required to make an announcement pursuant to the
Laws of its home jurisdiction or any jurisdiction in which any of its securities
are publicly traded, the rules of any stock exchange upon which its securities
are listed or any registered securities quotation system on which such
securities are traded, it shall be permitted to do so even if it has not
obtained the approval of the other parties hereto, provided that it has used
reasonable efforts to consult with such other parties and strictly limits such
announcement or filing to the minimum disclosure required by Law or such rules.
10.5 CONFIDENTIALITY. From and after the date hereof, each party
hereto will, and will cause its Affiliates and their respective agents and
representatives to, hold in strict confidence unless (a) such Person is
compelled to disclose such by judicial or administrative process (including,
without limitation, in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of any Governmental or
Regulatory Authority) or by other requirements of Law or (b) disclosed in any
action or proceeding brought by a party hereto in pursuit of its rights or in
the exercise of its remedies hereunder, all documents and information concerning
the other party or any of its Affiliates furnished to it by the other party or
such other party's representatives in connection with this Agreement or the
transactions contemplated hereby, except to the extent that such documents or
information can be shown to have been (i) previously known by the party
receiving such documents or information, (ii) in the public domain (either prior
to or after the furnishing of such documents or information hereunder) through
no fault of such receiving party or (iii) later acquired by the receiving party
from another source if the receiving party is not aware that such source is
under an obligation to another party hereto or to the Company to keep such
documents and information confidential; PROVIDED that the foregoing restrictions
will not apply to the Buyer's use or disclosure of documents and information
concerning the Company and its business furnished by the Seller hereunder; and
PROVIDED, FURTHER that the foregoing restrictions shall apply to the Seller with
respect to all confidential and proprietary information regarding the Company
and its business without reference to the qualification contained in clause (i)
above. The parties hereto acknowledge and agree that any remedy at law for any
breach of the provisions of this Section 10.5 would be inadequate, and each
party hereby consents to the granting by any court of an injunction
43
or other equitable relief, without the necessity of actual monetary Loss being
proved, in order that the breach or threatened breach of such provisions may be
effectively restrained.
10.6 WAIVER; REMEDIES CUMULATIVE. Any term or condition of this
Agreement may be waived at any time by the party that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a written
instrument duly executed by or on behalf of the party waiving such term or
condition. No waiver by any party of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future occasion.
Except as set forth in Section 7.6, all remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.
10.7 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
10.8 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective heirs, personal legal representatives, successors or permitted
assigns, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person other than any Person entitled to
indemnification under Article VII, Article VIII and Section 9.7.
10.9 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except that the Buyer may, without being released from its
obligations and duties hereunder, assign any or all of its rights, interests and
obligations hereunder (including, without limitation, its rights under Article
II) to any of its Subsidiaries (now or hereafter organized) or any Subsidiary of
or Affiliate of Xxxxxxx plc (now or hereafter organized), provided that any such
assignee agrees in writing to be bound by all of the terms, conditions and
provisions contained herein prior to such transfer. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors, heirs,
personal legal representatives, and assigns.
10.10 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
10.11 INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in
44
full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom and (d) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible.
10.12 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law or conflicts of law provision or rule that would
cause the application of the Laws of any jurisdiction other than the State of
New York.
10.13 CONSENT TO JURISDICTION. The parties hereto each hereby
irrevocably submit to the non-exclusive jurisdiction of the state courts of the
State of New York, and of the United States District Courts for the Southern
District of New York, for the purposes of any suit, action or other proceeding
arising out of or based upon this Agreement or the subject matter hereof brought
by any other party hereto. Each party hereto, to the extent permitted by
applicable law, hereby waives and agrees not to assert, by way of motion, as a
defense or otherwise, in any such suit, action or proceeding brought in such
courts, any claim that it is not subject personally to the jurisdiction of the
above-named courts, that the venue of the suit, action or proceeding is improper
or that this agreement or the subject matter hereof may not be enforced in or by
such court. Each party hereto consents to the service of process in any suit,
action or proceeding by the mailing of copies thereof to such party at any time
at its address to which notices are to be given pursuant to Section 10.1. Each
party hereto agrees that its submission to jurisdiction and consent to service
of process by mail is made for the express benefit of the other parties hereto.
Final judgment against any party hereto in any such suit, action or proceeding
shall be conclusive, and may be enforced in any other jurisdiction (a) by suit,
action or proceeding on the judgment, a certified or true copy of which shall be
conclusive evidence of the fact and the amount of liability of the party therein
described or (b) in any other manner provided by or pursuant to the Laws of such
other jurisdiction.
10.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
10.15 DISCLOSURE SCHEDULE. The mere inclusion of an item in the
Disclosure Schedule shall not be deemed an admission by the Seller that such
item represents a material exception or fact, event or circumstance or that such
item would result in a Material Adverse Effect. Unless otherwise specified, no
information contained in any particular numbered section of the Disclosure
Schedule shall be deemed to be contained in any other numbered section of the
Disclosure Schedule unless it is reasonably apparent that it should be included
therein.
10.16 GUARANTY. Parent hereby guarantees in favor of the Seller the
prompt performance by the Buyer (and assignees of the Buyer) of the covenants
and obligations of the Buyer hereunder. In the event of nonperformance by the
Buyer of any
45
such covenants or obligations, Parent shall promptly itself perform or cause the
Buyer to perform such covenants and obligations and hereby agrees to indemnify
and hold harmless (in the manner and to the extent set forth in Section 7.1(b)
of this Agreement) the Seller from and against any Losses suffered, incurred or
sustained by the Seller by reason of such nonperformance. The guaranty to the
Seller hereunder is in an absolute, continuing, unconditional and unlimited
guaranty of performance.
[Signature page follows]
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
THE BUYER:
IMC ACQUISITION CORP.
By: __________________________________
Name:
Title:
THE COMPANY:
INTERACTIVE MEDIA CORP.
By: __________________________________
Name:
Title:
THE SELLER:
ANTEON CORPORATION
By: __________________________________
Name:
Title:
FOR THE PURPOSES OF SECTION 10.16 ONLY
THE PARENT:
FT KNOWLEDGE (HOLDINGS) INC.
By: __________________________________
Name:
Title:
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
FOR THE PURPOSES OF SECTION 9.2
AND SECTION 9.3 ONLY
AZIMUTH TECHNOLOGIES, INC.
By: __________________________________
Name:
Title:
ANTEON INTERNATIONAL, INC.
By: __________________________________
Name:
Title:
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
ANNEX OF DEFINED TERMS
When used in this Agreement, the following terms shall have the
meanings set forth in this Annex of Defined Terms. All Article and Section
numbers used in this Annex of Defined Terms or otherwise in the Agreement refer
to articles and sections of the Agreement unless otherwise specifically
described. All references to Annexes, Schedules and Exhibits in this Annex of
Defined Terms or otherwise in the Agreement are references to annexes, schedules
and exhibits to this Agreement.
"Accounts" has the meaning given to it in Section 9.4(a).
"Affiliate" means, with respect to any Person, any other Person that
controls, is controlled by or is under common control with such Person. For the
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreement" means this Stock Purchase Agreement and the Annexes,
Schedules and Exhibits hereto and the certificates delivered in connection
herewith, as the same may be amended, supplemented or otherwise modified in
accordance with the provisions hereof.
"Anteon International" has the meaning given to it in the recitals.
"Arbitrator" means the Providence, Rhode Island office of KPMG Peat
Marwick.
"Azimuth" has the meaning given to it in the recitals.
"Basket Amount" has the meaning given to it in Section 7.3(b).
"Basket Exclusions" has the meaning given to it in Section 7.3(b).
"Benefit Plan" means any Plan, existing at the Closing Date or prior
thereto, established, presently or heretofore maintained, or to which
contributions have at any time been made by the Company or any predecessor of
the Company, or under which any employee, former employee, independent
contractor or director of the Company or any beneficiary thereof, in their
respective capacities as such, is covered, is eligible for coverage or has
benefit rights.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of New York are authorized or obligated to
close.
ANNEX-1
"Xxxxxx Property" means the real property (together with all
buildings, improvements and structures thereon and appurtenants thereto) located
at 000 Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx as further described on Exhibit C.
"Xxxxxx Property Divestiture" has the meaning given to it in Section
2.7(e).
"Buyer" has the meaning given to it in the recitals.
"Claim Notice" means written notification pursuant to Section 7.2(a)
of a Third Party Claim as to which indemnity under Section 7.1 is sought by an
Indemnified Party, enclosing a copy of all papers served, if any, and specifying
the nature of and basis for such Third Party Claim and for the Indemnified
Party's claim against the Indemnifying Party under Section 7.1, together with
the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such Third Party Claim.
"Closing" has the meaning given to it in Section 2.5.
"Closing Date" means the date of the Closing.
"Closing Date Balance Sheet" has the meaning given to it in Section
2.3(a).
"Closing Payment" has the meaning given to it in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as amended, any
successor statute thereto and the regulations and interpretations promulgated
thereunder.
"Commercial Business" means the development of multimedia training
programs and services to the commercial sector.
"Company" has the meaning given to it in the introductory paragraph.
"Competing Business" means selling Corporate Learning goods or
services which would compete directly with the Private Sector business of the
Company on the Closing Date. For purposes of this definition, the term
"Corporate Learning" means Company or client proprietary computer based learning
content, delivery systems and associated services for corporate clients or
customers and "Private Sector" specifically excludes all Federal, state, local
and foreign governments, and governmental agencies and instrumentalities (both
civilian and military). It is understood that the provision of learning content
delivery systems and associated services as an ancillary and incidental part of
providing other information technology, engineering or other services does not
constitute a Competing Business.
"Contest" has the meaning given to it in Section 8.3(b).
"Contract" means any note, bond, mortgage, indenture, lease,
license, franchise, contract, agreement, instrument, obligation, understanding,
arrangement or commitment, whether written or oral and whether express or
implied.
ANNEX-2
"Credit Agreement" means the Credit Agreement, dated as of June 23,
1999, among the Seller, Credit Suisse First Boston, Mellon Bank, N.A., Deutsche
Bank AG and the lenders named therein.
"Current Site" means any of the real properties currently owned,
leased or operated by: (i) the Company or its Affiliates; (ii) any predecessors
of the Company or its Affiliates; or (iii) any entities previously owned by the
Company or its Affiliates, in each case, including all soil, subsoil, surface
waters and groundwater thereat.
"Disclosure Schedule" means the Disclosure Schedule delivered by the
Seller to the Buyer on the date hereof and attached hereto.
"Disputed Items" has the meaning given to it in Section 2.3(a).
"Dispute Notice" means a written notice provided by any party
against which indemnification is sought under this Agreement to the effect that
such party disputes its indemnification obligation under this Agreement.
"Dispute Period" means the period ending thirty (30) calendar days
following receipt by an Indemnifying Party of either a Claim Notice or an
Indemnity Notice.
"EBITDA" means for any period, (i) the net income or loss of the
Company for such period, plus (ii) to the extent deducted in computing net
income or loss for such period, the sum (without duplication) of interest,
income taxes, depreciation and amortization of the Company for such period, all
as determined in accordance with GAAP provided, however, EBITDA shall be
calculated (A) after charges to the Company for general accounting services
provided to the Company from either the Seller (or its Affiliates) (pursuant to
Section 9.6) or the Buyer (or its Affiliates, including The Forum Corporation of
North America, Inc.), provided that such charges shall not exceed $41,000 per
month; and (B) and before (excluding) (X) any portion of the home office general
and administrative and overhead expenses (excluding those expenses set forth in
clause (A) above) of the Buyer (or its Affiliates, including The Forum
Corporation of North America, Inc.) which will be allocated to the Company; (Y)
any costs or expenses relating to software developed by the Company deducted,
excluded or otherwise written-off by the Company; and (Z) any changes in bonus
provisions made to non-management employees of the Company. From and after the
Closing until December 31, 2001, all transactions between the Company, on the
one hand, and the Buyer or any of its Affiliates, on the other hand (each an
"AFFILIATE TRANSACTION"), shall, regardless of the actual economic terms
thereof, be assumed for purposes of calculating EBITDA to be upon fair and
reasonable terms no less favorable to either party thereto than would be
obtained in a comparable arm's length transaction with an unaffiliated third
person, such that the Seller will not be harmed by any negative effect that the
entry into such Affiliate Transaction has on the EBITDA Calculation. In
addition, the Buyer agrees that it shall not cause the Company to take any
action intended primarily to materially adversely effect the calculating of
EBITDA payable under this Agreement and will operate the business of the Company
in good faith.
ANNEX-3
"EBITDA Adjustment Notice" has the meaning given to it in Section
2.9(a).
"EBITDA Balance Sheet" has the meaning given to it in Section
2.9(a).
"EBITDA Calculation" has the meaning given to it in Section 2.9(a).
"EBITDA Disputed Items" has the meaning given to it in Section
2.9(a).
"EBITDA Payment" means any payment pursuant to Section 2.9 made to
the Seller and not distributed to the Management Group.
"Environment" or "Environmental" means all air, surface water,
groundwater, or land, including land surface or subsurface, including all fish,
wildlife, biota and all other natural resources.
"Environmental Claim" means any and all administrative or judicial
actions, suits, orders, claims, liens, notices of violations, investigations,
complaints, requests for information, proceedings, or other communication
(written or oral), whether criminal or civil, (collectively, "CLAIMS") pursuant
to or relating to any applicable Environmental Law by any Person (including but
not limited to any Governmental Authority, private person and citizens' group)
based upon, alleging, asserting, or claiming any actual or potential (i)
violation of or liability under any Environmental Law, (ii) violation of any
Environmental Permit, or (iii) liability for investigatory costs, cleanup costs,
removal costs, remedial costs, response costs, natural resource damages,
property damage, personal injury, fines, or penalties arising out of, based on,
resulting from, or related to the presence, Release, or threatened Release into
the Environment, of any Hazardous Materials at any location, including but not
limited to any off-Site location to which Hazardous Materials or materials
containing Hazardous Materials were sent for handling, storage, treatment, or
disposal.
"Environmental Clean-up Site" means any location which is listed or
proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or on any
similar state list of sites requiring investigation or cleanup, or which is the
subject of any pending or threatened action, suit, proceeding, or investigation
related to or arising from any alleged violation of any Environmental Law.
"Environmental Law" means any and all Laws, Environmental Permits,
or agreements with any Governmental or Regulatory Authority, relating to the
protection of the Environment, worker health and safety, and/or governing the
handling, use, generation, treatment, storage, transportation, disposal,
manufacture, distribution, formulation, packaging, labeling, or Release of
Hazardous Materials, whether now existing or subsequently amended or enacted,
including, without limitation: the Clean Air Act, 42 U.S.C. ss. 7401 ET SEQ.;
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. ss. 9601 ET SEQ.; the Federal Water Pollution Control Act, 33
X.X.X.xx. 1251 ET SEQ.; the Hazardous Material Transportation Act, 49 U.S.C. ss.
1801 ET SEQ.; the Federal Insecticide, Fungicide and Rodenticide Act, 7
ANNEX-4
U.S.C. ss. 136 ET SEQ.; the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. ss. 6901 ET SEQ.; the Toxic Substances Control Act, 15
U.S.C. ss. 2601 ET SEQ.; the Occupational Safety & Health Act of 1970, 29 U.S.C.
ss. 651 ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 ET SEQ.; and
the state analogies thereto all as amended or superseded from time to time.
"Environmental Permit" means any federal, state, local, provincial,
or foreign permits, licenses, approvals, consents or authorizations required by
any Governmental or Regulatory Authority under or in connection with any
Environmental Law and includes any and all orders, consent orders or binding
agreements issued or entered into by a Governmental or Regulatory Authority
under any applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor law, and the rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any Person who is, or at any time was, a
member of a controlled group (within the meaning of section 412(n)(6) of the
Code) that includes, or at any time included, the Company or any predecessor of
the Company.
"Excess" has the meaning given to it in Section 2.3(b).
"Financial Statements" has the meaning given to it in Section 4.7.
"First Supplemental Indenture" means the First Supplemental
Indenture, effective as of June 23, 1999, among the Seller, Analysis &
Technology, Inc., the Company and IBJ Whitehall Bank & Trust Company, as
trustee.
"Former Site" means any of the real properties previously owned,
leased or operated by: (i) the Company or its Affiliates; (ii) any predecessors
of the Company or its Affiliates; or (iii) any entities previously owned by the
Company or its Affiliates, including but not limited to the Xxxxxx Property, in
each case, including all soil, subsoil, surface waters and groundwater thereat.
"GAAP" means United States generally accepted accounting principles
as currently in effect and applied in a consistent manner.
"General Corporate Accounting Services" means normal recurring
general corporate accounting activities, including sales and use tax processing,
account reconciliation, financial accounting, and inventory accounting,
management account information (such management account information to be
provided to the Company within nine Business Days of each month end).
"Government Business" means the development of multimedia training
programs and services to the government sector.
"Government Business Divestiture" has the meaning given to it in
Section 2.7(b).
ANNEX-5
"Government Contracts" has the meaning given to it in Section 9.7.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Hazardous Material" means petroleum, petroleum hydrocarbons or
petroleum products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls; and
any other chemicals, materials, substances or wastes in any amount or
concentration which are now or hereafter become defined as or included in the
definition of "HAZARDOUS SUBSTANCES," "HAZARDOUS MATERIALS," "HAZARDOUS WASTES,"
"EXTREMELY HAZARDOUS WASTES," "RESTRICTED HAZARDOUS WASTES," "TOXIC SUBSTANCES,"
"TOXIC POLLUTANTS," "POLLUTANTS," "REGULATED SUBSTANCES," "SOLID WASTES," or
"CONTAMINANTS" or words of similar import, under any Environmental Law.
"Indemnified Party" means any Person claiming indemnification under
any provision of Article VII.
"Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Article VII.
"Indemnity Notice" means written notification pursuant to Section
7.2(b) of a claim for indemnity under Article VII by an Indemnified Party,
specifying the nature of and basis for such claim, together with the amount or,
if not then reasonably ascertainable, the estimated amount, determined in good
faith, of such claim.
"Indemnity Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, dated as of June 23, 1999,
among Anteon, Analysis & Technology, Inc., the Company, Techmatics, Inc., Vector
Data Systems, Inc. and Mellon Bank, N.A.
"Intellectual Property" means all of the following as they are owned
and used in connection with the rendering by the Company of their services, as
they exist in all jurisdictions throughout the world, in each case to the extent
owned by, licensed to or otherwise used by, held for use or reserved for use by,
the Company: (i) discoveries and inventions (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto, and all
patents, patent applications (either filed or in preparation for filing), and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (ii)
trademarks, service marks, trade dress, brand names, logos, trade names and
corporate names, whether or not registered, including all common law rights,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all applications
(either filed or in preparation for filing), registrations and renewals in
connection therewith, (iii) copyrightable works, all copyrights and all
applications (either filed or in preparation for filing), registrations and
ANNEX-6
renewals in connection therewith, (iv) trade secrets and confidential or
proprietary business information (including, without limitation, ideas, research
and development, know-how, compositions, business methods, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, customer profiles, user
preferences, click-stream data, pricing and cost information and business and
marketing plans and proposals), (v) computer software (including source code,
object code, data, databases, information systems, proprietary interfaces,
routines, modules, procedures, program specifications, and all rights under
license relating to the use thereof and other related documentation) (vi)
Internet domain names, (vii) copies and tangible embodiments of any of the
foregoing (in whatever form or medium), (viii) licenses and other agreements in
connection with any of the foregoing (in whatever form or medium), and (ix) the
right to xxx for infringement in connection with any of the foregoing and to
collect damages in such suits in each case to the extent relating to, or used,
useable, or held for use in connection with, the Company or the Company's
business.
"Interim Financial Statements" has the meaning given to it in
Section 4.7.
"IRS" means the U.S. Internal Revenue Service.
"Knowledge of the Seller", "Seller's Knowledge" and words of similar
import mean the actual knowledge after due and reasonable inquiry of the
directors and officers of the Company and the Seller.
"Laws" means all common laws, criminal laws, civil laws, laws,
codes, Orders, decrees, statutes, rules, regulations, guidance documents,
policies, ordinances and other pronouncements having the effect of law of the
United States, any foreign country or any domestic or foreign state, county,
province, city or other political subdivision or of any Governmental or
Regulatory Authority.
"Lease Agreement" has the meaning given to it in Section 2.6(b).
"Leased Real Property" has the meaning given to it in Section
4.12(a).
"License Agreement" has the meaning given to it in Section 2.6(c).
"Lien" means any restriction on voting or transfer or pledge,
easement, right of way, mortgage, assessment, security interest, lease, lien,
adverse claim, levy, charge or other encumbrance of any kind or any conditional
sale Contract, title retention Contract or other Contract to give any of the
foregoing.
"Loss" means any and all damages, fines, fees, awards, judgments,
penalties, deficiencies, losses and expenses (including, without limitation, all
environmental investigation, removal, remedial, monitoring and response costs,
natural resources damages, interest, court costs, reasonable fees of attorneys,
accountants, environmental consultants and engineers and other experts or other
expenses of litigation or other proceedings or of any claim, default or
assessment).
ANNEX-7
"Management Group" has the meaning given to it in Section 2.9(b).
"Management Payments" means the payments to be made to the Managers
under Section 2.9.
"Management Withholding Tax Amount" has the meaning given to it in
Section 2.9(b).
"Manager" has the meaning given to it in Section 2.9(b).
"Material Adverse Effect" means any circumstances, developments,
occurrences, state of facts or matters which, either individually or in the
aggregate, are material and adverse to the business, operations, condition
(financial or otherwise), results of the Company taken as a whole.
"XxXxx Payment" has the meaning given to it in Section 2.7(k).
"XxXxx Withholding Tax Amount" has the meaning given to it in
Section 2.7(k).
"XxXxxx Facility Lease" has the meaning given to it in Section 9.8.
"Xxxxxx Complaint" has the meaning given to it in Section
7.1(a)(iii).
"Merger Agreement" has the meaning given to it in Section 9.9.
"Mortgages" has the meaning given to it in Section 4.12(f).
"Non-Exercising Option Holder" has the meaning given to it in
Section 2.8(c).
"Non-Exercising Option Holder Note" has the meaning given to it in
Section 2.8(c).
"Option" has the meaning given to it in Section 2.8(a).
"Option Consideration" has the meaning given to it in Section
2.8(a).
"Option Conversion Agreement" has the meaning given to it in Section
2.8(b).
"Option Holder" has the meaning given to it in Section 2.8(a).
"Option Payment Amount" has the meaning given to it in Section
2.8(b).
"Option Withholding Tax Amount" has the meaning given to it in
Section 2.8(a).
ANNEX-8
"Order" means any writ, judgment, decree, ruling, charge, injunction
or similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"Parent" has the meaning given to it in the Recitals.
"Payroll Reimbursement Amount" has the meaning given to it in
Section 9.4(e).
"Xxxxxxx plc" means Xxxxxxx plc, a company organized under the laws
of the United Kingdom.
"Per Option Price" has the meaning given to it in Section
2.8(b)(ii).
"Permit" means any license, franchise, permit, consent, concession,
Order, approval, authorization or registration from, of or with a Governmental
or Regulatory Authority.
"Permitted Liens" means (i) mechanics', carriers', workmens',
repairmens' or other liens arising or incurred in the ordinary course of
business with respect to liabilities that are not yet due or delinquent, (ii)
liens for Taxes, assessments and other governmental charges which are not due
and payable or which may hereafter be paid without penalty and (iii) other
imperfections of title or encumbrances, if any, which imperfections of title or
other encumbrances, individually or in the aggregate, could not be reasonably
expected to materially impair the ability of the Company to use the property or
asset to which it relates in substantially the same manner as it was used on the
Closing Date.
"Person" means any individual, corporation, limited liability
company or partnership, general or limited partnership, association, trust or
any other entity or organization, including a Governmental or Regulatory
Authority.
"Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock option,
stock ownership, stock appreciation rights, phantom stock, leave of absence,
layoff, vacation, sick pay, sick leave, day or dependent care, legal services,
cafeteria, life, health, accident, disability, workers' compensation or other
insurance, severance, separation or other employee benefit plan, practice,
policy, commitment, or arrangement of any kind, whether written or oral, or
whether for the benefit of a single individual or more than one individual
including, without limitation, any "employee benefit plan" within the meaning of
section 3(3) of ERISA.
"Pledge Agreement" means the Pledge Agreement, dated as of June 23,
1999, among the Seller, Azimuth Technologies, Inc., Analysis & Technology, Inc.,
the Company, Techmatics, Inc., Vector Data Systems, Inc. and Mellon Bank, N.A.
"Post-Closing Period" has the meaning given to it in Section 8.2(a).
ANNEX-9
"Post-Closing Date Tax Benefit" has the meaning given to it in
Section 8.2(c).
"Pre-Closing Period" has the meaning given to it in Section 8.1(a).
"Purchase Price" has the meaning given to it in Section 2.2.
"Purchase Price Adjustment Notice" has the meaning given to it in
Section 2.3(a).
"Real Property Leases" has the meaning given to it in Section
4.12(a).
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of
Hazardous Materials into the Environment.
"Relevant Group" has the meaning given to it in Section 4.11(a).
"Replacement" has the meaning given to it in Section 9.6
"Resolution Period" means the period ending thirty (30) calendar
days following receipt by an Indemnified Party of a Dispute Notice.
"Returns" means any returns, reports or statements (including any
information returns) required to be filed for purposes of a particular Tax.
"Xxxxxxxx Complaint" has the meaning given to it in Section
7.1(a)(ix).
"Security Agreement" means the Security Agreement, dated as of June
23, 1999, among the Seller, Analysis & Technology, Inc., the Company,
Techmatics, Inc., Vector Data Systems, Inc. and Mellon Bank, N.A.
"Seller 401(k) Plan" has the meaning given to it in Section 9.4(a).
"Seller" has the meaning given to it in the recitals.
"Seller's HR System" has the meaning given to it in Section 9.4(b).
"Shortfall" has the meaning given to it in Section 2.3(b).
"Shortfall Interest" has the meaning given to it in Section 2.3(b).
"Site" means any of the real properties currently or previously
owned, leased or operated by: (i) the Company or its Affiliates; (ii) any
predecessors of the Company or its Affiliates; or (iii) any entities previously
owned by the Company or its Affiliates, in each case, including all soil,
subsoil, surface waters and groundwater thereat.
"Stock" has the meaning given to it in the Recitals.
ANNEX-10
"Stock Option Agreement" has the meaning given to it in Section
2.8(c).
"Subsidiary" means, with respect to any Person, any corporation,
general or limited partnership, limited liability company or partnership, joint
venture or other legal entity of any kind of which such Person (either alone or
through or together with one or more of its other Subsidiaries) owns, directly
or indirectly, more than 50% of the stock or other equity interests the holders
of which are (i) generally entitled to vote for the election of the board of
directors or other governing body of such legal entity or (ii) generally
entitled to share in the profits or capital of such legal entity.
"Subsidiary Guarantee" means the Subsidiary Guarantee Agreement,
dated as of June 23, 1999, among the Seller (as successor of Analysis &
Technology, Inc.), the Company, Techmatics, Inc., Vector Data Systems, Inc. and
Mellon Bank, N.A.
"Target" means $1,650,000.
"Tax" or "Taxes" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
alternative or add-on minimum, Environmental or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Tax Benefit" has the meaning given to it in Section 7.7.
"Taxing Authority" means any governmental agency, board, bureau,
body, department or authority of any United States federal, state or local
jurisdiction or any foreign jurisdiction, having or purporting to exercise
jurisdiction with respect to any Tax.
"Third Party Claim" has the meaning given to it in Section 7.2(a).
"Transfer Taxes" means sales, use, transfer, real property transfer,
recording, gains, stock transfer and other similar Taxes and fees.
"2000 Financial Statements" has the meaning given to it in Section
4.7.
"Working Capital" means current assets (other than the accounts
receivables of the Buyer and any of its Affiliates) minus current liabilities
determined in accordance with GAAP applied in a manner consistent with that used
by the Company in preparing the Financial Statements.
ANNEX-11
EXHIBIT A
LEASE FOR THE XXXXXX PROPERTY
SEE ATTACHED
EXHIBIT B
CERTIFICATION OF NONFOREIGN STATUS
Section 1445 of the Internal Revenue Code provides that a transferee
of a U.S. real property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding of tax is not required
upon the disposition of a U.S. real property interest by Anteon Corporation
("ANTEON"), the undersigned hereby certifies the following on behalf of Anteon:
1. Anteon is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);
2. Anteon's U.S. Employer Identification Number is 00-0000000; and
3. Anteon's office address is 0000 Xxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, XX 00000.
Anteon understands that this certification may be disclosed to the
Internal Revenue Service by the transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct,
and complete, and I further declare that I have authority to sign this document
on behalf of Anteon.
______________________________
Name:
Title:
Date:
EXHIBIT C
LEGAL DESCRIPTION OF
THE XXXXXX PROPERTY
ALL that certain piece, parcel or tract of land situate in the
Township of Xxxxxx, County of Xxxxxx and State of Pennsylvania, being bounded
and described as follows:
BEGINNING at the northwest corner of the tract herein described,
said point being located North 88(degree) 13' 00" East, a distance of 35.00 feet
from the original centerline of Legislative Route 72, more commonly known as
State Xxxxxxx Xxxxx 0; thence along the southern right of way line of a 00 xxxx
xxxxxx, Xxxxx 00(xxxxxx) 13' 00" East, a distance of 477.80 feet to a monument;
thence along lands of now or formerly of Xxxx Xxxxxx and Xxxx Xxxxxx, on a line
which passes through a monument, South 04(degree) 33' 00" West, a distance of
651.34 feet to the centerline of Legislative Route 10011, a 40 foot right of
way; thence along the centerline of Legislative Route 10011, South 68(degree)
08' 00" West, a distance of 115.00 feet to a point; thence by same, South
74(degree) 50' 00" West, a distance of 91.00 feet to a point; thence by same,
South 86(degree) 00'00" West, a distance of 100.00 feet to a point; thence by
same, North 87(degree) 53' 38" West, a distance of 100.14 feet to a point;
thence along lands of now or formerly L. H. flat, north 05(degree) 39' 00" East,
a distance of 120.00 feet to a monument; thence by same, North 84(degree) 31'
00" West, a distance of 101.19 feet to a point, said point being located South
84(degree) 31' 00" East, a distance of 35.00 feet from the original centerline
of Route 8; thence along the eastern right of way line of Route 8, North
05(degree) 44(degree) 00" East, a distance of 578.13 feet to the point of
beginning.
Being property surveyed by Xxxxx, Xxxxxxx & Xxxxxxx, Inc., said
survey dated February 26, 1985 and being part of Lot 1 and all of Lots 2, 3, 6
and 7 of the X. Xxxxxxx Plan as recorded in the Xxxxxx County Office of the
Recorder in Rack 14, page 14 and also being property as surveyed by Xxxxxxxxx &
Xxxxxxxxx, Inc. for Peoples United Telephone Company dated July 1996.
Being the same property which The United Telephone Company of
Pennsylvania conveyed to Community Development Corporation of Xxxxxx County by
deed dated May 17, 1985 and recorded in Record Book Volume 1230, page 578.
Also being the same property which Community Development Corporation
of Xxxxxx County agreed to convey to Applied Science Associates, Inc. by
Articles dated May 28, 1985 and recorded in Record Book Volume 1230, page 600.
EXHIBIT D
FORM OF CONVERSION AND RELEASE AGREEMENT
INTERACTIVE MEDIA CORP.
0000 XXXXXXXXXX XXXX
XXXXX 000
XXXXXXX, XX 00000
July __, 2001
Dear [Manager]:
Pursuant to the terms of a proposed Stock Purchase Agreement,
Interactive Media Corp. (the "Company") is to be acquired by IMC Acquisition
Corp., an affiliate of Xxxxxxx plc (the "Transaction"). This letter provides
information regarding (i) the treatment of your stock options (the "Options")
under the Interactive Media Corp. 1998 Stock Option Plan (the "Option Plan") and
(ii) your Management Payment (as defined below).
Immediately prior to the closing of the Transaction (the "Closing"),
all of your Options, whether or not exercisable, will be converted into the
right to receive a cash payment (the "Option Payment") equal to (a) $3.97
multiplied by the number of shares of Company common stock subject to your
Options, minus (b) the aggregate exercise price of your Options. The Option
Payment to you will be reduced by any applicable withholding obligations.
In addition, simultaneously with the Closing you are to receive a
cash payment (the "Management Payment") equal to $____. Your Management Payment
will be reduced by any applicable withholding obligations.
Attached to this letter is a Conversion and Release Agreement (the
"Conversion and Release Agreement") regarding the termination of your Options,
the Management Payment and your release of claims against the Company and any of
its representatives, affiliates or successors with respect to such Options and
your employment with the Company. Upon executing and delivering the Conversion
and Release Agreement to the Company, you will receive the Option Payment and
the Management Payment in cash, minus any applicable withholding obligations. If
you fail to execute and deliver the Conversion and Release Agreement to the
Company on or prior to the Closing, the Company will exercise its right under
the option agreement pursuant to which your Options were issued to pay the
Option Payment to you in the form of a five year promissory note, substantially
in form attached hereto as Annex A.
If you have any questions or need any additional information, please
contact me at (000) 000-0000.
Very truly yours,
Xxxx X. Xxxxx
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CONVERSION AND RELEASE AGREEMENT
The undersigned holder (the "Manager") of stock options (the
"Options") to acquire shares of common stock, par value $0.01 per share, of
Interactive Media Corp. (the "Company"), issued under the Interactive Media
Corp. 1998 Stock Option Plan, hereby authorizes the termination of all Options
held by him, effective immediately prior to the closing of the acquisition of
the Company by IMC Acquisition Corp., an affiliate of Xxxxxxx plc, as further
described in the attached letter from Xxxx X. Xxxxx, President and Chief
Executive Officer of the Company, dated July __, 2001.
In consideration of (i) the Company's immediate payment for the
Options (the "OPTION PAYMENT") and (ii) the Company's immediate payment of $ ___
(the "Management Payment") as contemplated by the Stock Purchase Agreement,
dated as of July __, 2001 by and among the Company, IMC ACQUISITION CORP., A
DELAWARE CORPORATION, AND FOR THE LIMITED PURPOSES SPECIFIED THEREIN, FT
KNOWLEDGE (HOLDINGS) INC., A DELAWARE CORPORATION, AZIMUTH TECHNOLOGIES, INC.
AND ANTEON INTERNATIONAL, INC., and as may be adjusted pursuant to Section
2.9(c) of the Stock Purchase Agreement, and except with respect to the Company's
obligations arising under or preserved in this Agreement, the Manager, for and
on behalf of himself and his heirs and assigns, hereby waives and releases any
common law, statutory or other complaints, claims, charges or causes of action
arising out of or relating to the Manager's employment, both known and unknown,
in law or in equity, which the Manager may have as of the date hereof or ever
had against the Company, including, without limitation, any complaint charge or
cause of action arising out of the Civil Rights Act of 1991; 42 U.S.C. 1981, as
amended; the Americans With Disabilities Act of 1990; Title VII of the Civil
Rights Act of 1964, as amended; the Employee Retirement Income Security Act of
1974, as amended; and any other federal, state and local human rights laws. By
signing this Agreement, the Manager acknowledges that he intends to waive and
release any rights known or unknown he may have as of the date hereof under
these laws; PROVIDED, HOWEVER, that the Manager does not waive or release claims
with respect to the right to enforce this Agreement.
The Manager acknowledges that he has not filed, nor will he initiate
or cause to be initiated on his behalf, any complaint, charge, claim or
proceeding against the Company or, including, without limitation, each of its
parents, affiliates and subsidiaries before any local, state or federal agency,
court or other body relating to his employment as of the date hereof (each
individually a "Proceeding"), nor will he participate in any Proceeding, in each
case, except as required by law. The Manager represents that he is not aware of
any basis on which such a Proceeding could reasonably be instituted. The Manager
waives any right he may have to benefit in any manner from any relief (whether
monetary or otherwise) arising out of any Proceeding, including any Proceeding
conducted by the Equal Employment Opportunity Commission ("EEOC"). The Manager
understands that by entering into this Agreement, he will be limiting the
availability of certain remedies that he may have against the Company and
limiting also his ability to pursue certain claims against the Company.
The Manager acknowledges that he has read this Agreement carefully
and fully understands that by signing below he is giving up certain rights which
he may have to xxx or assert a claim against the Company. The Manager
acknowledges that he has not been forced or pressured in any manner whatsoever
to sign this Agreement and the Manager agrees to all of its terms voluntarily.
In the event the Manager initiates or voluntarily participates in
any Proceeding, or if he fails to abide by any of the terms of this Agreement
provided hereunder, the Company may, in addition to any other remedies it may
have, reclaim any amounts paid to him under the provisions of this Conversion
and Release Agreement or terminate any benefits or payments that are
subsequently due under this Agreement, without waiving the release granted
herein.
The Manager further understands and agrees that the Option Payment
and the Management Payment described herein and in the attached letter
represents full and final satisfaction of any liability of the Company, its
successors and current, past and former stockholders, subsidiaries and
affiliates in respect of the Options and the Manager's employment with the
Company as of the date hereof.
Signature:________________________
Name:_____________________________
(please print)
Date: July __, 2001
ANNEX A
FORM OF NON-EXERCISING
OPTION HOLDER NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
$__________
New York, New York July __, 2001
SECTION 1. FOR VALUE RECEIVED, the undersigned, Interactive Media
Corp., a Delaware corporation (the "Maker"), hereby promises to pay to the order
of (the "Holder"), the principal sum of ________ ($___) on each Payment Date (as
defined herein), with interest thereon from time to time as provided herein.
SECTION 2. Stock Purchase Agreement. This promissory note (this
"Note") is issued by the Maker, on the date hereof, pursuant to a Stock Purchase
Agreement (the "Purchase Agreement"), dated as of July __, 2001, by and among
the Maker, IMC Acquisition Corp., a Delaware corporation, and for the limited
purposes specified therein, FT Knowledge (Holdings) Inc., a Delaware
corporation, Azimuth Technologies, Inc. and Anteon International, Inc. Unless
otherwise noted, capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Purchase Agreement.
SECTION 3. Principal. On each of July _, 2002, July _, 2003, July
__, 2004, July _, 2005 and July _, 2006 (each, a "Payment Date"), the Maker will
pay to the Holder _______ ($___________).
SECTION 4. Interest. The Maker promises to pay interest on the
principal amount of this Note at the rate of Credit Suisse First Boston Prime
Rate, as reported from time to time. The Maker shall pay accrued interest on
each Payment Date or, if any such date shall not be a Business Day, on the next
succeeding Business Day to occur after such date. Interest shall accrue and be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 5. Optional Prepayment.
(a) Upon notice given to the Holder as provided in Section
5(b), the Maker may, at its option, prepay all, but not less than all, of this
Note at any time, by paying an amount equal to the outstanding principal amount
of this Note, together with interest accrued and unpaid hereon to the date fixed
for prepayment, without penalty or premium.
(b) The Maker may give written notice of prepayment of this
Note not less than ten (10) nor more than sixty (60) days prior to the date
fixed for such prepayment. Upon notice of prepayment being given by the Maker,
the Maker covenants and agrees that it will prepay, on the date therein fixed
for prepayment, this Note in an amount equal to the outstanding principal amount
hereof together with interest accrued and unpaid hereon to the date fixed for
such prepayment.
(c) All optional prepayments under this Section 5 shall include
payment of accrued interest on the principal amount so prepaid and shall be
applied first to all costs, expenses and indemnities payable hereunder, then to
payment of accrued interest, and thereafter to principal.
SECTION 6. No Transfers. The Holder may not sell, convey, assign or
otherwise transfer this Note or any interest herein.
SECTION 7. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of New York applicable to
instruments made and to be performed entirely within such State.
_______________________________
INTERACTIVE MEDIA CORP.
EXHIBIT E
FORM OF OPTION CONVERSION AGREEMENT
INTERACTIVE MEDIA CORP.
0000 XXXXXXXXXX XXXX
XXXXX 000
XXXXXXX, XX 00000
July __, 2001
Dear [ ]:
Pursuant to the terms of a proposed Stock Purchase Agreement,
Interactive Media Corp. (the "Company") is to be acquired by IMC Acquisition
Corp., an affiliate of Xxxxxxx plc (the "Transaction"). This letter provides
information regarding the treatment of your stock options (the "Options") under
the Interactive Media Corp. 1998 Stock Option Plan (the "Option Plan") in
connection with the Transaction.
Immediately prior to the closing of the Transaction (the "Closing"),
all of your Options, whether or not exercisable, will be converted into the
right to receive a cash payment (the "Option Payment") equal to (a) $3.97
multiplied by the number of shares of Company common stock subject to your
Options, minus (b) the aggregate exercise price of your Options. The Option
Payment to you will be reduced by any applicable withholding obligations.
Attached to this letter is an Option Conversion Agreement (the
"Conversion Agreement") regarding the termination of your Options. Upon
executing and delivering the Conversion Agreement to the Company, you will
receive the Option Payment in cash, minus any applicable withholding
obligations. If you fail to execute and deliver the Conversion Agreement to the
Company on or prior to the Closing, the Company will exercise its right under
the option agreement pursuant to which such Options were issued to pay the
Option Payment to you in the form of a five year promissory note, substantially
in form attached hereto as Annex A.
If you have any questions or need any additional information, please
contact me at (000) 000-0000.
Very truly yours,
Xxxx X. Xxxxx
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OPTION CONVERSION AGREEMENT
The undersigned holder of stock options (the "Options") to acquire
shares of common stock, par value $0.01 per share, of Interactive Media Corp.
(the "Company"), issued under the Interactive Media Corp. 1998 Stock Option
Plan, hereby authorizes the termination of all Options held by the undersigned,
effective immediately prior to the closing of the acquisition of the Company by
IMC Acquisition Corp., an affiliate of Xxxxxxx plc, as further described in the
attached letter from Xxxx X. Xxxxx, President and Chief Executive Officer of the
Company, dated July __, 2001. The undersigned further understands and agrees
that the consideration into which the Options have been converted as described
in the preceding sentence and the attached letter represents full and final
satisfaction of any liability of the Company, its successors and current, past
and former stockholders, subsidiaries and affiliates in respect of the Options.
Signature:________________________
Name:_____________________________
(please print)
Date: July __, 2001
ANNEX A
FORM OF NON-EXERCISING
OPTION HOLDER NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
$___________
New York, New York
July __, 2001
SECTION 1. FOR VALUE RECEIVED, the undersigned, Interactive Media
Corp., a Delaware corporation (the "Maker"), hereby promises to pay to the order
of (the "Holder"), the principal sum of ________ ($___) on each Payment Date (as
defined herein), with interest thereon from time to time as provided herein.
SECTION 2. Stock Purchase Agreement. This promissory note (this
"Note") is issued by the Maker, on the date hereof, pursuant to a Stock Purchase
Agreement (the "Purchase Agreement"), dated as of July __, 2001, by and among
the Maker, IMC Acquisition Corp., a Delaware corporation, and for the limited
purposes specified therein, FT Knowledge (Holdings) Inc., a Delaware
corporation, Azimuth Technologies, Inc. and Anteon International, Inc. Unless
otherwise noted, capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Purchase Agreement.
SECTION 3. Principal. On each of July _, 2002, July _, 2003, July _,
2004, July _, 2005 and July _, 2006 (each, a "Payment Date"), the Maker will pay
to the Holder _______ ($___________).
SECTION 4. Interest. The Maker promises to pay interest on the
principal amount of this Note at the rate of Credit Suisse First Boston Prime
Rate, as reported from time to time. The Maker shall pay accrued interest on
each Payment Date or, if any such date shall not be a Business Day, on the next
succeeding Business Day to occur after such date. Interest shall accrue and be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 5. Optional Prepayment.
(a) Upon notice given to the Holder as provided in Section
5(b), the Maker may, at its option, prepay all, but not less than all, of this
Note at any time, by paying an amount equal to the outstanding principal amount
of this Note, together with interest accrued and unpaid hereon to the date fixed
for prepayment, without penalty or premium.
(b) The Maker may give written notice of prepayment of this
Note not less than ten (10) nor more than sixty (60) days prior to the date
fixed for such prepayment. Upon notice of prepayment being given by the Maker,
the Maker covenants and agrees that it will prepay, on the date therein fixed
for prepayment, this Note in an amount equal to the outstanding principal amount
hereof together with interest accrued and unpaid hereon to the date fixed for
such prepayment.
(c) All optional prepayments under this Section 5 shall
include payment of accrued interest on the principal amount so prepaid and shall
be applied first to all costs, expenses and indemnities payable hereunder, then
to payment of accrued interest, and thereafter to principal.
SECTION 6. No Transfers. The Holder may not sell, convey, assign or
otherwise transfer this Note or any interest herein.
SECTION 7. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of New York applicable to
instruments made and to be performed entirely within such State.
__________________________________
INTERACTIVE MEDIA CORP.
EXHIBIT F
SOFTWARE LICENSE AGREEMENT
SEE ATTACHED
EXHIBIT G
FORM OF NON-EXERCISING OPTION HOLDER NOTE
FORM OF NON-EXERCISING
OPTION HOLDER NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT
TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND SUCH LAWS.
$____________
New York, New York
July __, 2001
SECTION 1. FOR VALUE RECEIVED, the undersigned, Interactive Media
Corp., a Delaware corporation (the "Maker"), hereby promises to pay to the order
of (the "Holder"), the principal sum of ________ ($___) on each Payment Date (as
defined herein), with interest thereon from time to time as provided herein.
SECTION 2. Stock Purchase Agreement. This promissory note (this
"Note") is issued by the Maker, on the date hereof, pursuant to a Stock Purchase
Agreement (the "Purchase Agreement"), dated as of July __, 2001, by and among
the Maker, IMC Acquisition Corp., a Delaware corporation, and for the limited
purposes specified therein, FT Knowledge (Holdings) Inc., a Delaware
corporation, Azimuth Technologies, Inc. and Anteon International, Inc. Unless
otherwise noted, capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Purchase Agreement.
SECTION 3. Principal. On each of July _, 2002, July _, 2003, July _,
2004, July _, 2005 and July _, 2006 (each, a "Payment Date"), the Maker will pay
to the Holder _______ ($___________).
SECTION 4. Interest. The Maker promises to pay interest on the
principal amount of this Note at the rate of Credit Suisse First Boston Prime
Rate, as reported from time to time. The Maker shall pay accrued interest on
each Payment Date or, if any such date shall not be a Business Day, on the next
succeeding Business Day to occur after such date. Interest shall accrue and be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 5. Optional Prepayment.
(a) Upon notice given to the Holder as provided in Section
5(b), the Maker may, at its option, prepay all, but not less than all, of this
Note at any time, by paying an amount equal to the outstanding principal amount
of this Note, together with interest accrued and unpaid hereon to the date fixed
for prepayment, without penalty or premium.
(b) The Maker may give written notice of prepayment of this
Note not less than ten (10) nor more than sixty (60) days prior to the date
fixed for such prepayment. Upon notice of prepayment being given by the Maker,
the Maker covenants and agrees that it will prepay, on the date therein fixed
for prepayment, this Note in an amount equal to the outstanding principal amount
hereof together with interest accrued and unpaid hereon to the date fixed for
such prepayment.
(c) All optional prepayments under this Section 5 shall include
payment of accrued interest on the principal amount so prepaid and shall be
applied first to all costs, expenses and indemnities payable hereunder, then to
payment of accrued interest, and thereafter to principal.
SECTION 6. No Transfers. The Holder may not sell, convey, assign or
otherwise transfer this Note or any interest herein.
SECTION 7. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of New York applicable to
instruments made and to be performed entirely within such State.
_____________________________
INTERACTIVE MEDIA CORP.
SCHEDULE 9.6
INDIVIDUALS PROVIDING GENERAL
CORPORATE ACCOUNTING SERVICES TO THE COMPANY
INTERACTIVE MEDIA CORP.
MONTHLY ACCOUNTING COSTS
--------------------------------------------------------
COST
--------------------------------------------------------
Xxxx XxXxx $14,520
--------------------------------------------------------
Xxx Xxxxxxxx 9,533
--------------------------------------------------------
Xxxxx Xxxxxx 5,796
--------------------------------------------------------
Xxx Xxxxxx 5,579
--------------------------------------------------------
TOTAL ACCOUNTING $35,428
========================================================
SITE SUPPORT
--------------------------------------------------------
Xxxxx Xxxxxx $4,658
========================================================
TOTAL ACCOUNTING/SITE SUPPORT $40,087
--------------------------------------------------------
