Exhibit 99.1
CACI International Inc
CACI, Inc.
Government Systems, Inc.
ACQUISITION AGREEMENT
Table of Contents
ARTICLE 1
PURCHASE OF ASSETS
1.1 Purchase and Sale
1.2 Excluded Assets
1.3 Assumption of Liabilities
1.4 Instruments of Transfer
1.5 Purchase Price
1.6 Taxes
1.7 Closing
1.8 Working Capital
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF GSI
2.1 Corporate Status of GSI
2.2 Authority for Agreement
2.3 No Default or Violation
2.4 Financial Statements
2.5 Absence of Material Adverse Changes and Undisclosed Liabilities
2.6 Assets Other Than Assigned Contracts
2.7 Assigned Contracts
2.8 Compliance with Applicable Law
2.9 Litigation
2.10 Tax Matters
2.11 Employee Benefit Plans; Compliance with ERISA
2.12 Employment-Related Matters
2.13 Environmental
2.14 Customers
2.15 Suppliers
2.16 Absence of Certain Payments
2.17 Intellectual Property
2.18 Insurance Contracts
2.19 Interests of Officers
2.20 No Misrepresentations
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CACI AND CASUB
3.1 Corporate Status of CACI and CASub.
3.2 Authority for Agreement
3.3 No Default or Violation
3.4 Annual Reports
3.5 Absence of Material Adverse Changes and Undisclosed Liabilities
3.6 No Misrepresentations
3.7 Employment Offers
ARTICLE 4
COVENANTS
4.1 Further Assurances
4.2 Assignment of Assigned Contracts
4.3 Customers
4.4 Returns of Defective Goods
4.5 Excluded Assets
4.6 Defense of Claims and Litigation
4.7 Retention of Books and Records
4.8 Employees
4.9 Bulk Transfer Compliance
4.10 Indemnities
4.10.1 Indemnification of CACI
4.10.2 Indemnification of GSI
4.10.3 Third Party Claims
4.10.4 Claims
4.10.5 Limitation of Liability
ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions Precedent to the Obligations of Each Party
5.2 Conditions to Obligations of CACI and CASub to Effect
the Acquisition
5.3 Conditions to Obligations of GSI to Effect the Acquisition
ARTICLE 6
DEFINITIONS AND MISCELLANEOUS
6.1 Definitions of Certain Terms
6.2 Brokerage
6.3 Survival of Representations and Warranties
6.4 Expenses
6.5 Governing Law
6.6 Notice
6.7 Entire Agreement, Assignability, etc
6.8 Cumulative Rights and Remedies
6.9 Severability
6.10 Counterparts
ACQUISITION AGREEMENT
ACQUISITION AGREEMENT (the "Agreement"), dated as of October 31, 1997, by and
among Government Systems, Inc., a Delaware corporation ("GSI"), CACI
International Inc, a Delaware corporation ("CACI"), and CACI, Inc., a Delaware
corporation ("CASub") and a wholly-owned subsidiary of CACI.
WITNESSETH
WHEREAS CACI provides information systems and services for U.S. Government and
other customers; and
WHEREAS GSI delivers global communications services and solutions to the
desktop for U.S. Government customers, Government prime contractors, and other
customers; and
WHEREAS CACI wishes to purchase from GSI, and GSI wishes to sell to CACI, the
business of GSI, consisting of certain assets of GSI hereinafter defined,
together with assumption of certain liabilities of GSI hereinafter defined;
GSI, CACI and CASub hereby agree as follows:
ARTICLE 1
PURCHASE OF ASSETS
1.1 Purchase and Sale. Upon and subject to the terms and conditions hereof,
at the Closing (as hereinafter defined), GSI shall sell, transfer and assign
to CASub, and CASub shall purchase and acquire from GSI, all right, title and
interest in and to the following described tangible and intangible assets of
GSI (the "Assets") other than the Excluded Assets, as hereinafter defined, in
each case free and clear of all liens, charges, security interests and other
encumbrances except for the "Assumed Liabilities" (as hereinafter defined):
1.1.1 All items set forth on Exhibit 1.1.1 (collectively the
"Inventory");
1.1.2 Machinery, equipment, tools, furniture, fixtures, vehicles,
related parts and supplies and other tangible assets owned by GSI and all
related computer programs, software and firmware owned by GSI and used in
connection with the maintenance or operation of the business of GSI, to the
extent set forth on Exhibit 1.1.2 (collectively, "Tangible Assets");
1.1.3 All rights of GSI, whether now existing or hereafter arising,
against manufacturers, vendors or subcontractors with respect to any of the
Inventory or Tangible Assets or any part thereof, including, without
limitation, all product warranties thereon and all rights set forth in Exhibit
1.1.3;
1.1.4 All books and records or parts thereof under the control of GSI
(collectively, the "Asset Documents") relating to the Assets and the
Intellectual Property (as hereinafter defined), including, without limitation,
price lists, customer and vendor lists, historical sales data, payroll data
and other accounting and business records, files and data relating to
producing and selling the goods and services of GSI, maps, plans, diagrams,
process and notebooks, specifications, test results, diagrams, flow charts,
blueprints, drawings, schematics, manuals, maintenance logs, specifications
and other documents, books, papers, ledgers and records, including, without
limitation, the items set forth in Exhibit 1.1.4;
1.1.5 All advances, prepaid expenses, other prepayments and related
rights paid or obtained in connection with the Assets (collectively, the
"Prepaid Expenses"), including, without limitation, the items set forth in
Exhibit 1.1.5;
1.1.6 All rights, registrations and applications for the trademarks,
service marks and trade names set forth in Exhibit 1.1.6, all good will
related thereto, all licensed software, and all know-how, copyrights,
inventions and trade secrets and all registrations and applications for the
registration thereof (collectively, the "Intellectual Property"), in each case
relating to or used or useful in connection with the Assets or the business of
GSI, including, without limitation, the items set forth in Exhibit 1.1.6;
1.1.7 All rights and interests in, to and under all leases, contracts,
licenses and other agreements set forth in Exhibit 1.1.7 (collectively, the
"Assigned Contracts");
1.1.8 All orders, deposits and payments set forth in Exhibit 1.1.8
(collectively, the "Orders"); and
1.1.8 All rights of GSI, whether now existing or hereafter arising,
against manufacturers, vendors or subcontractors with respect to any of the
Assets or any part thereof, including, without limitation, all guarantees and
product and other warranties issued in connection with the manufacture, sale
or repair of the Assets, including, without limitation, the items set forth in
Exhibit 1.1.9.
1.2 Excluded Assets. None of the items listed in Exhibit 1.2 is being sold,
assigned or otherwise transferred to CASub.
1.3 Assumption of Liabilities. CACI and CASub hereby agree to assume and
perform the Assumed Liabilities. The "Assumed Liabilities" shall mean (a) the
current liabilities listed in Exhibit 1.3, (b) GSI's obligations under the
Orders, payment or performance of which is due after the Closing and which
relate to goods to be delivered or services to be performed after the Closing
and (c) GSI's obligations under the Assigned Contracts, excluding the
obligations described in Section 1.3.1.1.
1.3.1 Except for the Assumed Liabilities, CACI and CASub are assuming no
liabilities of GSI or any other person or entity in connection with this
transaction. Without limiting the generality of the foregoing, GSI shall be
solely responsible for payment of all amounts at any time owing by GSI with
respect to the business, operations or property of GSI, both before and after
the Closing, whether accrued or contingent, known or unknown, other than the
Assumed Liabilities. CACI specifically assumes no liability for, and GSI
specifically retains sole responsibility for, the following, regardless of
when discovered or asserted:
1.3.1.1 Obligations under the Assigned Contracts arising as a
result of any breach of any term or any default by GSI occurring before the
Closing;
1.3.1.2 All medical, dental, life insurance, workmen's
compensation and other pension and welfare benefit obligations under any
Benefit Plan for all hourly and salaried employees of GSI who terminated
employment or retired before the Closing and all such obligations for claims
under any Benefit Plan that were incurred or (with respect to workmen's
compensation) injuries that occurred before the Closing;
1.3.1.3 Any warranty or other claim relating to goods delivered or
services performed by GSI before the Closing; and
1.3.1.4 Any claim relating to failure to comply before the Closing
with any Environmental Permit or Environmental Law (as hereinafter defined) or
relating to any Environmental Contamination (as hereinafter defined), or use,
disposal or discharge of any Materials of Environmental Concern (as
hereinafter defined) by GSI or its lessees, agents or representatives,
occurring or in existence on or before the Closing.
1.4 Instruments of Transfer. The transfer of the Assets to be transferred
to CASub at the Closing shall be effected by bills of sale, assignments and
the other instruments of transfer as shall transfer to CASub full title to the
Assets free and clear of all liens, charges, security interests and other
encumbrances whatsoever except the Assumed Liabilities, all of which documents
shall be substantially in the form attached hereto as Exhibit 1.4.
1.5 Purchase Price. CACI shall pay to GSI, for the transfer of the Assets,
a total purchase price of Twenty-Eight Million Dollars ($28,000,000) (the
"Purchase Price"), allocated in the manner specified in Exhibit 1.5. The
Purchase Price shall be payable at the Closing by wire transfer of immediately
available funds to an account specified in writing by GSI.
1.6 Taxes. GSI shall pay all sales, use, transfer or documentary taxes, or
stamps and filing fees arising out of or relating to the sale of the Assets to
CACI hereunder that are imposed as of the closing by any taxing authority.
1.7 Closing.
1.7.1 The closing of the purchase and sale of the Assets (the "Closing")
shall occur simultaneously with the execution of this Agreement. All
transactions occurring at the Closing shall be deemed to be effective as of
12:01 a.m. on November 1, 1997.
1.7.2 At the Closing,
1.7.2.1 GSI shall deliver to CACI:
1.7.2.1.1 Bills of sale, assignments and other instruments
of transfer of title to the Assets in substantially the form set forth in
Exhibit 1.7.2.1.1;
1.7.2.1.2 Licenses to use GSI's intellectual property (as
defined therein) in substantially the form set forth in Exhibit 1.7.2.1.2;
1.7.2.1.3 A certification, as described in Treasury
Regulation Section 1.1445-2(b)(2), to the effect that GSI is not a "foreign
person" within the meaning of Section 1445(a) of the Internal Revenue Code of
1986, as amended (the "Code");
1.7.2.1.4 Agreed forms of assignments of the Assigned Contra
cts and consents to such assignments;
1.7.2.1.5 All originals and records of the Orders;
1.7.2.1.6 The Asset Documents; and
1.7.2.1.7 The documents required by Section 5.2 to be
delivered by GSI as a condition to the obligations of CACI and CASub
hereunder.
1.7.2.2 CACI shall deliver to GSI:
1.7.2.2.1 CACI and CASub's written assumption of and
agreement to perform the Assumed Liabilities in substantially the form set
forth in Exhibit 1.7.2.2.1;
1.7.2.2.2 The payment required by Section 1.5; and
1.7.2.2.3 The documents required by Section 5.3 to be
delivered by CACI and CASub as a condition to GSI's obligations hereunder.
1.8 Working Capital. At the Closing, CACI shall pay to GSI by wire transfer
of immediately available funds to an account specified by GSI Five Million
Five Hundred Twenty-Two Thousand Dollars ($5,522,000) (the Working Capital
Payment), which payment is based in part on the trial balance set forth as
Exhibit 1.8, and in part on the agreement of the parties that the net value of
the Assets at Closing (the value of the Assets less the value of the Assumed
Liabilities) is Eleven Million Two Hundred Ninety-Four Thousand Dollars
($11,294,000).
1.8.1 CASub shall provide GSI with assistance required by GSI to
complete a formal closing of the books of GSI for the period ending October
31, 1997 within thirty (30) days of the Closing.
1.8.2 Within ten (10) days of completion of the closing of GSI's books
for the period ending October 31, 1997, representatives of CACI and GSI shall
confer and, based on the value of the Assets and the Assumed Liabilities as of
October 31, 1997 (as modified by the following understanding: the parties
agree that the value of the Assets and Assumed Liabilities shall be determined
in accordance with generally accepted accounting principles, except with
respect to the value of Work-In-Process Inventory Balance on Contract No.
DCA200-94D-0089 (the "ADTN Contract"), which shall be stated at the value of
future ▇▇▇▇▇▇▇▇ for equipment already purchased for that contract, less an
allowance for fifteen percent profit; that amount is estimated to be
$5,130,000 as at September 26, 1997), agree upon a net value of the Assets at
Closing (the Final Working Capital Value). If the Final Working Capital Value
exceeds Eleven Million Two Hundred Ninety-Four Thousand Dollars ($11,294,000),
CACI shall pay to GSI an amount equal to the amount by which such Final
Working Capital Value exceeds Eleven Million Two Hundred Ninety-Four Thousand
Dollars ($11,294,000). If, on the other hand, the Final Working Capital Value
is less than Eleven Million Two Hundred Ninety-Four Thousand Dollars
($11,294,000) GSI shall pay to CACI an amount equal to the amount by which the
Final Working Capital Value is less than Eleven Million Two Hundred
Ninety-Four Thousand Dollars ($11,294,000). Any payment required to be paid
pursuant to this Section 1.8.2 shall be made by wire transfer of immediately
available funds to an account specified by the payee within ten (10) days of
agreement on the Final Working Capital Value.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF GSI
GSI represents and warrants to CACI as follows:
2.1 Corporate Status of GSI. GSI is a corporation duly organized, validly
existing and in good standing under the laws of Delaware. GSI is duly
qualified to do business as a foreign corporation and is in good standing in
all jurisdictions in which the character of the properties owned, leased or
operated by GSI and used in the business of GSI or the nature of the business
transacted by GSI makes such qualification necessary, except where failure to
be so qualified would not have a materially adverse effect on the Assets or
CASub's ability to purchase or use the assets as contemplated by this
Agreement.
2.2 Authority for Agreement. GSI has the full corporate power to own, lease
and operate the Assets as currently owned, leased, operated and conducted and
to execute, deliver, and perform this Agreement and the other transactions
contemplated herein and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement and the other
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of GSI and the stockholders of GSI, and no other corporate
proceedings on the part of GSI remain necessary to authorize the execution,
delivery and performance of this Agreement and the other transactions
contemplated hereby. This Agreement and the related documents have been duly
executed and delivered by GSI and are legal, valid and binding obligations of
GSI enforceable against GSI in accordance with their respective terms except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other laws affecting generally the enforcement of creditors' rights and except
to the extent that courts may award money damages rather than specific
performance of contractual provisions.
2.3 No Default or Violation. The execution, delivery and performance of
this Agreement and the other transactions contemplated hereby do not and will
not (a) conflict with or result in a violation of any provision of the
Certificate of Incorporation or By-Laws or other organizational documents of
GSI, or (b) with or without the giving of notice or the lapse of time, or
both, conflict with, or result in any violation or breach of or constitute a
default under, or (except as otherwise contemplated by this Agreement) require
the consent of any other party to, or result in any right to accelerate or the
creation of any lien, charge or encumbrance pursuant to, or right of
termination under, any provision of any note, mortgage, indenture, lease,
agreement or other instrument, permit, concession, grant, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation that
could have a materially adverse effect on the Assets or CASub's ability to
purchase or use the Assets as contemplated by this Agreement. Except as
otherwise contemplated by this Agreement, no authorization, consent, approval,
license, order, or permit of, or declaration of, or filing with or notice to,
any governmental body or authority or any other person or entity is necessary
for the execution and delivery of this Agreement by GSI or the consummation by
GSI of the other transactions contemplated hereby.
2.4 Financial Statements. GSI has previously furnished to CACI true and
complete copies of its financial statements for each of the three fiscal years
ended in March 1995, 1996, and 1997 (the "GSI Financial Statements"). Each of
the balance sheets included in the GSI Financial Statements (including any
related notes and schedules) fairly presents the consolidated financial
position of GSI as of its date and the other financial statements included in
the GSI Financial Statements (including any related notes and schedules)
fairly present the consolidated results of operations or other information
included therein of GSI for the periods or as of the dates therein set forth,
in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved.
2.5 Absence of Material Adverse Changes and Undisclosed Liabilities. Since
March 28, 1997, there has not occurred or arisen, whether or not in the
ordinary course of business: (a) any material adverse change in the business,
operations, assets, financial condition, results of operations or properties
of GSI, or (b) any event, condition or state of facts of any character that
might materially and adversely affect the Assets. GSI has no material
liabilities or obligations, fixed, accrued, contingent or otherwise, that
relate to the Assets and are not fully reflected or provided for on, or
disclosed in the notes to, the consolidated balance sheet for the fiscal year
ended March 28, 1997 included in the GSI Financial Statements (the "1997
Balance Sheet"), except (a) liabilities and obligations incurred in or as a
result of the ordinary course of business since March 28, 1997, none of which
individually or in the aggregate has been or is materially adverse to the
Assets, (b) liabilities and obligations permitted by or provided for or
contemplated by this Agreement and (c) liabilities and obligations disclosed
on the Exhibits delivered hereunder.
2.6 Assets Other Than Assigned Contracts.
2.6.1 GSI has good record and marketable title to, or a valid leasehold
interest in, all of the Assets. None of the Assets is subject to any
mortgage, pledge, lien, security interest, lease or other encumbrance.
2.6.2 The Inventory consists of items of a quantity and quality usable
or saleable in the normal course of business of GSI. All plant, equipment and
personal property included in the Assets are in good operating condition and
repair.
2.6.3 GSI is not in material violation of any law, regulation or
ordinance (including, without limitation, laws, regulations or ordinances
relating to building, zoning, environmental, city planning, land use or
similar matters) relating to its leased property located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇. There are no proceedings materially
affecting the present or future use of such property for the purpose for which
it is used or the purpose for which it is intended to be used. All buildings,
structures and fixtures used by GSI at such property are in good operating
condition and repair and are insured with coverages that are usual and
customary for similar properties and similar businesses.
2.6.4 The Assets constitute substantially all of the assets used by GSI
prior to the Closing in the conduct of its business. The Assets when
delivered at the Closing shall be in a condition sufficient to enable CASub to
utilize the Assets as they were utilized by GSI prior to the Closing. No
written notice has been received by GSI from any insurance company that has
issued a policy with respect to any of the Assets or from any board of fire
underwriters (or other body exercising similar functions) claiming any defects
or deficiencies or requesting the performance of any repairs, alterations or
other work relating to the Assets.
2.7 Assigned Contracts. GSI has delivered to CACI or made available to CACI
a true and complete copy of each of the Assigned Contracts and all amendments
thereto. All Assigned Contracts are in full force and effect, and GSI has not
received any notice of default, nor is it in default, nor does any condition
exist which with notice or the lapse of time, or both, will render GSI in
default, under any of the Assigned Contracts, other than defaults that would
not materially impair CASub's ability to assume, perform and receive the
benefits of the Assigned Contracts and except as the parties have previously
discussed with respect to the Globalstar contract number GSC-96-0064. Neither
GSI nor any of its directors, officers, employees, representatives, or other
agents has any knowledge or reason to believe or suspect that GSI will be
unable to assign the Assigned Contracts or that any other party, including,
without limitation, the Government, will not approve or consent to the
assignment of any of the Assigned Contracts or will otherwise prohibit or
materially restrict the assignment of any of the Assigned Contracts. To the
best of GSI's knowledge, the other parties to the Assigned Contracts are in
compliance with all material terms and conditions of the Assigned Contracts,
and no party thereto has notified GSI of an intention to terminate or
materially change the nature of its transaction or relationship with GSI or
CACI thereunder.
2.8 Compliance with Applicable Law. GSI has all requisite licenses, permits
and certificates from all foreign, federal, state and local authorities
necessary to utilize the Assets as presently utilized, and to own, lease and
operate the Assets, and the business of GSI which relates to the Assets is not
being conducted in violation of any applicable law, statute, ordinance,
regulation, rule, judgment, decree, order, permit, license, concession, grant
or other authorization of any court or of any governmental entity or
authority, in any case where the violation or failure to comply, individually
or in the aggregate, would have a material adverse effect on the Assets.
2.9 Litigation.
2.9.1 There is no investigation, inquiry or review by any governmental
entity or authority with respect to GSI pending or, to the best of GSI's
knowledge, threatened, nor has any governmental entity indicated to GSI an
intention to conduct the same; and
2.9.2 There is no claim, action, suit, arbitration, labor dispute,
investigation or proceeding of any kind, pending or, to the best of GSI's
knowledge, threatened, at law or in equity, before any court, arbitrator,
governmental entity or authority, and there is no order, writ, injunction,
decree or judgment of any court, arbitrator, governmental entity or authority,
that involves, affects or relates to the Assets that either singly or in the
aggregate may have any material adverse effect on the Assets.
2.10 Tax Matters. GSI has filed all federal, state, local and foreign
income, corporate excise and payroll tax returns and reports required to be
filed by it or on its behalf. All taxes shown by such returns to be due and
payable have been paid or are reflected as a liability on the GSI Financial
Statements. All tax returns of GSI that have been examined by any
governmental authority since January 1, 1994 are identified on Exhibit 2.10
along with the respective authority; CACI has been provided with a copy of all
returns and any assessments resulting from such examinations and all
assessments, penalties and interest have been paid in full. GSI is not a
party to any tax indemnity or tax sharing agreement. GSI has informed CACI of
a pending claim by GSI for collection from the Federal Aviation Administration
of sales taxes in the aggregate amount of approximately $586,000. GSI warrants
to CACI collection of the amount determined to be due; and, in the event that
CACI is required to pursue or determines in the exercise of CACI's reasonable
judgement that it is prudent for CACI to pursue collection efforts itself, GSI
undertakes to pay or to reimburse CACI for the reasonable costs of collection.
If GSI elects to pursue collection, CACI will cooperate with GSI's effort in
good faith and at no material out-of-pocket cost to CACI.
2.11 Employee Benefit Plans; Compliance with ERISA.
2.11.1 Exhibit 2.11 sets forth all Employee Benefit Plans and Benefit
Arrangements that are sponsored or contributed to by GSI or any of its ERISA
Affiliates covering GSI's employees or former employees. True and complete
copies of all such Employee Benefit Plans and Benefit Arrangements have been
delivered to CACI.
2.11.2 With respect to each Employee Pension Benefit Plan sponsored,
maintained or contributed to by GSI or any ERISA Affiliate, or with respect to
which GSI or any ERISA Affiliate previously had an obligation to contribute:
(a) No such plan has been terminated so as to subject, directly
or indirectly, any assets of GSI or its ERISA Affiliates to any liability,
contingent or otherwise, or the imposition of any liens under Title IV of
ERISA;
(b) No proceeding has been initiated or threatened by any person,
including the PBGC, to terminate any such plans;
(c) No liability to the PBGC has been incurred;
(d) No "reportable event," as defined in Section 4043 of ERISA
(to the extent that the reporting of such event to the PBGC has not been
waived) has occurred and is continuing with respect to any such plan.
2.11.3 Neither GSI nor any of its ERISA Affiliates has at any time been
obliged to contribute to any Multiemployer Plan.
2.11.4 Neither GSI nor any of its ERISA Affiliates sponsors or has
previously sponsored, maintained, contributed to or incurred an obligation to
contribute to any Employee Benefit Plan that provides benefits described in
Section 3(1) of ERISA to any former employee or retiree of GSI or any ERISA
Affiliate of any of them, except as required under Part 6 of Title I of ERISA
and Section 4980B of the Code.
2.11.5 Each Benefit Plan has at all times prior hereto been maintained
in all material respects in accordance with all applicable laws. GSI and its
ERISA Affiliates have made full and timely payment of all amounts required to
be contributed under the terms of any Benefit Plan that is a profit sharing or
stock bonus plan designed to comply with the qualification requirements of
Code Section 401(a).
2.11.6 Each Benefit Plan that is intended to qualify under Section
401(a) of the Code is the subject of a favorable determination letter from the
IRS, a copy of which has been delivered to CACI, and, to GSI's knowledge,
nothing has occurred which may reasonably be expected to impair such
determination or otherwise adversely affect the tax-qualified status of such
Benefit Plan.
2.12 Employment-Related Matters. To the extent the Assets are affected (a)
GSI is in compliance with all applicable laws respecting employment,
consulting, employment practices, wages, hours, and terms and conditions of
employment; (b) GSI is not a party to any collective bargaining agreement or
other contract or agreement with any labor organization or other
representative of any of the employees GSI; (c) there is no labor strike,
dispute, slowdown, work stoppage, lockout or other labor controversy in
effect, that is pending or, to the best of GSI's knowledge, threatened against
or otherwise affecting GSI, and GSI has not experienced any labor controversy
within the past three years; (d) no labor representation question exists or
has been raised respecting any of the employees of GSI; (e) GSI has not closed
any plant or facility, effectuated any layoffs of employees or implemented any
early retirement, separation or window program at any time from or after
January 1, 1991 except, in each case, actions involving no more than ten (10)
employees at any one time, nor has GSI planned or announced any action or
program for the future with respect to which GSI has or may have any material
liability; and (f) GSI is in compliance with its obligations pursuant to the
Worker Adjustment and Retraining Notification Act of 1988, and all other
notification and bargaining obligations arising under any collective
bargaining agreement or statute relating to employment.
2.13 Environmental.
2.13.1 To the extent the Assets are affected and to the best of GSI's
knowledge, (a) GSI is in material compliance with all applicable Environmental
Laws (as defined in Section 6.1), (b) GSI has not received any communication
(written or oral), whether from a governmental authority, employee, or any
other person that alleges that GSI is not in material compliance, (c) there
are no circumstances that may prevent or interfere with material compliance in
the future, and (d) all permits and other governmental authorizations
currently held by GSI pursuant to the Environmental Laws are in full force and
effect and no other permits are required by GSI.
2.13.2 There is no Environmental Claim (as defined in Section 6.1)
pending or, to the best of GSI's knowledge, threatened against or involving
the Assets.
2.13.3 To the best of GSI's knowledge, GSI has not undertaken or caused
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, threatened release,
emission, discharge or disposal of any Material of Environmental Concern (as
defined in Section 6.1), that could form the basis of any Environmental Claim
against CASub as the owner of the Assets.
2.13.4 Without in any way limiting the generality of the foregoing and
to the extent the Assets are affected, (a) no polychlorinated biphenyls are or
have been used or stored at any property owned or leased by GSI or used by
GSI, and (b) to the best of GSI's knowledge, no friable asbestos or friable
asbestos-containing material is present at any property owned or leased by
GSI.
2.14 Customers. Exhibit 2.14 hereto contains a materially true and complete
list of all customers of GSI during the period from January 1, 1996 through
August 1, 1997 for goods or services. None of the present listed customers
has notified GSI of an intention to cease purchasing goods or services from
GSI.
2.15 Suppliers. Exhibit 2.15 hereto contains a materially true and complete
list of all suppliers from or through whom GSI has purchased products or
services during the period from January 1, 1996 through August 1, 1997 for
use in connection with operation of GSI. None of the present listed suppliers
has notified GSI of an intention materially to change its business
relationship with GSI.
2.16 Absence of Certain Payments. Neither GSI nor any director, officer,
agent, employee or other person associated with or acting on behalf of any of
them has used any funds of GSI for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, or
made any direct or indirect unlawful payments to government officials or
employees from corporate funds, or established or maintained any unlawful or
unrecorded funds, or violated any provisions of the Foreign Corrupt Practices
Act of 1977 or any rules or regulations promulgated thereunder.
2.17 Intellectual Property. GSI owns, or is licensed or otherwise has the
full right to use all Intellectual Property of material importance to the
conduct of the business of GSI as presently conducted. Exhibit 1.1.6 lists
all Intellectual Property, and all applications therefor, that are owned by
GSI and that relate to the business of GSI. Exhibit 2.17 lists all material
license agreements pursuant to which GSI is licensed under any Intellectual
Property (the "Licensed Intellectual Property"). (a) All Intellectual
Property, and each application therefor, that is identified on Exhibit 1.1.6
as owned by GSI is, together with the goodwill of the business associated with
any marks, owned by GSI free and clear of any license, sublicense, agreement,
judgment, order, decree, stipulation or material adverse lien or encumbrance;
(b) to the extent the Assets are affected, the business and operations of GSI
do not infringe upon or violate any Intellectual Property owned by any third
party; (c) GSI has not received, within the past four years, notice of any
claim that GSI has infringed or violated any Intellectual Property of any
third party, or that any Intellectual Property identified on Exhibit 1.1.6 as
owned by GSI is invalid or violates or infringes upon the rights of any third
party; and (d) GSI has not sent or otherwise communicated to another person
any notice, charge, claim or other assertion of, nor does GSI have any
knowledge of, any present, impending or threatened infringement or violation
by any third party of any Intellectual Property or Licensed Intellectual
Property of GSI, or any acts of unfair competition by any third party. To the
extent the Assets are affected, GSI maintains reasonable security measures to
prevent disclosure or transfer to unauthorized persons of any trade secrets
and confidential information that are proprietary and material to the business
of GSI.
2.18 Insurance Contracts. Exhibit 2.18 lists all contracts of insurance and
indemnity (not shown in any other schedule referred to in this Agreement) in
force at the date hereof with respect to the Assets. GSI shall keep all such
insurance in full force and effect for not less than one year after the
Closing to provide for any claims which may be made with respect to items
included in the Assets for which GSI is or may be responsible.
2.19 Interests of Officers. None of the officers or directors of GSI has any
interest in any property, real or personal, tangible or intangible, including
Intellectual Property used in or pertaining to the business of GSI, except for
the normal rights of a shareholder, and except for rights under existing
employee benefit plans.
2.20 No Misrepresentations. No representation or warranty by GSI in this
Agreement, nor any statement, certificate or schedule furnished or to be
furnished by or on behalf of GSI pursuant to this Agreement nor any document
or certificate delivered to CACI pursuant to this Agreement, when taken
together with the foregoing, contains or shall contain any untrue statement of
material fact or omits or shall omit to state a material fact necessary to
make the statements not misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CACI AND CASUB
CACI and CASub represent and warrant to GSI as follows:
3.1 Corporate Status of CACI and CASub. CACI and CASub are corporations
duly organized, validly existing and in good standing under the laws of
Delaware. CACI and CASub are duly qualified to do business as foreign
corporations and are in good standing in all jurisdictions in which the
character of the properties owned, leased or operated by each or the nature of
the business transacted by each makes such qualification necessary, except
where failure to be so qualified would not have a materially adverse effect on
the business, operations, assets, financial condition, results of operations,
properties or prospects of CACI and its Subsidiaries considered as a whole.
3.2 Authority for Agreement. CACI and CASub have the full corporate power
to own, lease and operate their properties and to conduct their businesses as
currently owned, leased, operated and conducted and to execute, deliver, and
perform this Agreement and the other transactions contemplated herein and to
carry out their obligations hereunder. The execution, delivery and
performance of this Agreement and the other transactions contemplated hereby
have been duly and validly authorized by CACI's Board of Directors and no
other corporate proceedings on the part of CACI or CASub including, without
limitation, stockholder approval, are necessary to authorize the execution,
delivery and performance of this Agreement and the other transactions
contemplated hereby. This Agreement and the related documents have been duly
executed and delivered by CACI and are legal, valid and binding obligations of
CACI enforceable against CACI in accordance with their respective terms except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other laws affecting generally the enforcement of creditors' rights and except
to the extent that courts may award money damages rather than specific
performance of contractual provisions.
3.3 No Default or Violation. The execution, delivery and performance of
this Agreement and the other transactions contemplated hereby do not and will
not (a) conflict with or result in a violation of any provision of the
Certificate of Incorporation or By-Laws or other organizational documents of
CACI or CASub, or (b) with or without the giving of notice or the lapse of
time, or both, conflict with, or result in any violation or breach of or
constitute a default under, or require the consent of any other party to, or
result in any right to accelerate or the creation of any lien, charge or
encumbrance pursuant to, or right of termination under, any provision of any
note, mortgage, indenture, lease, agreement or other instrument, permit,
concession, grant, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation to which CACI or CASub is a party or by which
either of them or any of their assets or properties may be bound or which is
applicable to either of them or any of their assets or their properties. No
authorization, consent, approval, license, order, or permit of, or declaration
of, or filing with or notice to, any governmental body or authority or any
other person or entity is necessary for the execution and delivery of this
Agreement by CACI and CASub or the consummation by CACI and CASub of the other
transactions contemplated hereby or to enable CACI and CASub to continue to
conduct their business after the Closing in a manner consistent in all
material respects with that in which they are currently conducted.
3.4 Annual Reports. CACI has previously furnished to GSI true and complete
copies of its Annual Reports for each of the three fiscal years ending June
30, 1994, 1995 and 1996 and its Quarterly Report for the nine months ended
March 31, 1997 (the "CACI Reports"). Each of the balance sheets included in
the CACI Reports (including any related notes and schedules) fairly presents
the consolidated financial position of CACI as of its date and the other
financial statements included in the CACI Reports (including any related notes
and schedules) fairly present the consolidated results of operations or other
information included therein of CACI for the periods or as of the dates
therein set forth, in each case in accordance with generally accepted
accounting principles consistently applied during the periods involved.
3.5 Absence of Material Adverse Changes and Undisclosed Liabilities. Except
as set forth on Exhibit 3.5 or as disclosed in the CACI Reports, since March
31, 1997 there has not occurred or arisen, whether or not in the ordinary
course of business: (a) any material adverse change in the business,
operations, assets, financial condition, results of operations, properties or
prospects of CACI and CASub considered as a whole, or (b) any event, condition
or state of facts of any character that might materially and adversely affect
the business, operations, assets, financial condition, results of operations,
properties or prospects of CACI and CASub considered as a whole. Except as
set forth on Exhibit 3.5 or as disclosed in the CACI Reports, CACI and CASub,
considered as a whole, have no material liabilities or obligations, fixed,
accrued, contingent or otherwise, that are not fully reflected or provided for
on, or disclosed in the notes to, the consolidated balance sheet as at March
31, 1997 included in the CACI Reports or elsewhere in the CACI Reports, except
(a) liabilities and obligations incurred in or as a result of the ordinary
course of business since March 31, 1997, none of which individually or in the
aggregate has been or is materially adverse to the business, operations,
assets, financial condition, results of operations, properties or prospects of
CACI and CASub considered as a whole, (b) liabilities and obligations
permitted by or provided for or contemplated by this Agreement and (c)
liabilities and obligations disclosed on the Exhibits delivered hereunder.
3.6 No Misrepresentations. No representation or warranty by CACI or CASub
in this Agreement, nor any statement, certificate or schedule furnished or to
be furnished by or on behalf of CACI or CASub pursuant to this Agreement nor
any document or certificate delivered to GSI pursuant to this Agreement, when
taken together with the foregoing, contains or shall contain any untrue
statement of material fact or omits or shall omit to state a material fact
necessary to make the statements not misleading.
3.7 Employment Offers. Prior to the Closing, CACI and CASub have made
offers of employment to substantially all of the employees of GSI.
ARTICLE 4
COVENANTS
It is further agreed as follows:
4.1 Further Assurances. Subject to terms and conditions herein provided and
to the fiduciary duty of each party's Board of Directors and officers, each of
the parties agrees to use its best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the Agreement and the other transactions contemplated by this
Agreement. In case at any time any further action, including the obtaining of
waivers and consents under material contracts and leases, is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement are hereby directed and authorized
to use their efforts to effectuate all required action. GSI agrees to use its
best efforts to effect assignments of all the Assigned Contracts, and further
agrees to provide all documentation necessary to effect such assignments,
including, without limitation, all instruments, certifications, requests,
legal opinions, audited financial statements, and other documents required by
Part 42 of the Federal Acquisition Regulations to effect an assignment of any
contract with the Government.
4.2 Assignment of Assigned Contracts.
4.2.1 With respect to any Assigned Contract or any claim, right or
benefit arising thereunder or resulting therefrom GSI, CACI and CASub shall
use their respective best efforts to obtain the written consent of the other
parties to such Assigned Contract for the assignment or novation thereof to
CASub or written confirmation from such parties reasonably satisfactory in
form and substance to CACI and GSI that such consent is not required. As soon
as practicable following the date hereof, with respect to each Assigned
Contract to which the United States government or an agency thereof is a
party, GSI shall either obtain written confirmation reasonably satisfactory in
form and substance to CACI and GSI that novation of such Assigned Contract is
not required or submit to the relevant responsible contracting officer a
written request that the United States government or the relevant agency enter
into a government contract novation with GSI with respect to such Assigned
Contract. GSI shall take in this regard all actions required or customary
under the Federal Acquisition Regulations. Except as provided in the
immediately preceding sentence, in no event shall GSI, CACI or CASub or any of
their respective Affiliates be obligated to pay any money to the United States
government, any agency thereof or any other person or entity or to offer or
grant other financial or other accommodations in connection with obtaining any
novation, assignment, consent or waiver.
4.2.2 Until such novation, assignment, consent or waiver is obtained
with respect to any Assigned Contract to which the United States government or
an agency thereof is a party, GSI, CACI and CASub will cooperate in an
arrangement reasonably satisfactory to GSI and CACI under which CASub will
obtain, to the extent practicable, the claims, rights and benefits and assume
the corresponding obligations thereunder in accordance with this Agreement,
including, without limitation, subcontracting, sub-licensing or sub-leasing to
the benefit of CASub, with CASub assuming GSI's obligations, any and all
claims, rights and benefits of GSI against a third party thereto.
4.2.3 The ADTN Contract
4.2.3.1 The parties understand and agree that, after the Closing
Date, negotiations with the Government in connection with the ADTN Contract)
to finalize the pricing of network management services for the period from
July 1, 1997 through the remainder of the ADTN Contract (the "Go Forward
Period") shall be the responsibility of CACI and CASub and that CACI and/or
CASub shall bear the cost of conducting such negotiations. CACI and CASub
shall keep GSI informed as to the progress of those negotiations and shall
consult with GSI concerning any agreement or other final action resulting from
those negotiations. GSI shall use its best efforts to assist CACI and CASub
with such negotiations from time to time upon the request of CACI and/or CASub
with such negotiations from time to time upon the request of CACI and/or
CASub, provided that GSI shall not be obligated to pay any money to any person
or entity or to incur any material out-of-pocket expenses in connection with
such assistance. It is further agreed that GSI shall make available any of
its employees and/or records that may be reasonably required by CACI or CASub
in connection with this matter. In order to assist CACI or CASub with such
responsibility, GSI agrees to authorize its outside counsel involved in this
matter to represent CACI and/or CASub for purposes related to the ADTN
Contract. The parties hereby waive any claim of conflict of interest in
connection with such representation and further agree to execute a final joint
defense agreement or other instrument which will permit such counsel to share
any required information with CACI and/or CASub without waiving any claim of
attorney-client or attorney work privilege.
4.2.3.2 GSI further agrees that if CACI and/or CASub filed (or, if
the novation of the ADTN Contract shall not have occurred prior to March 31,
1998, requests GSI in writing to file) a claim or lawsuit against the
Government relating to the pricing of network management services during the
Go Forward Period under the ADTN Contract as a result of a breakdown of the
ongoing negotiations (the "Claim/Lawsuit"), then GSI shall reimburse CACI
and/or CASub for the out-of-pocket costs (including, without limitation,
attorneys' fees) incurred by CACI and/or CASub in connection with the
Claim/Lawsuit; provided, however, that (a) GSI shall not be responsible for
any such reimbursement if the Government has agreed to pay (or is paying) at
least $330,000 per month for network management services during the Go Forward
Period and (b) GSI's total reimbursement obligation under this Section 4.2.3
shall not exceed $100,000.
4.2.3.3 In the event of any conflict between the provisions of
this Section 4.2.3 and the provisions of Section 4.2.1 or Section 4.2.2, then
the provisions of this Section 4.2.3 shall control.
4.3 Customers. During the twelve-month period commencing on the Closing,
GSI shall inform CACI promptly of all inquiries from potential customers
concerning the possible purchase of any product or service provided by GSI.
In this connection, GSI shall provide CACI with the name and address of each
potential customer and the substance of each inquiry. GSI shall refer each
potential customer who shall make any inquiry to CACI. During the period, GSI
shall use its best efforts to introduce CACI to GSI's customers for the
products and services of GSI and to cooperate with and assist CACI in
establishing a relationship with each customer.
4.4 Returns of Defective Goods. If any goods sold by GSI prior to the
Closing are returned to CACI or CASub by the customer, or proposed to be
returned, during the twelve-month period after the Closing because of defects
in materials or workmanship or other noncompliance with specifications, CACI
shall give notice to GSI of the return or proposed return and shall discuss
with GSI the nature of the defect or noncompliance and the disposition of any
goods that are so returned or are to be so returned. Following the discussion
and any investigation CACI shall deem appropriate, CACI may, at its option,
provide a refund or allowance to the customer in an amount reasonably
consistent with CACI's or GSI's prior practice. If CACI provides a refund or
allowance to a customer with respect to any returned merchandise, CACI may
cause the merchandise to be returned to GSI or GSI's designee and CACI shall
cooperate with GSI's efforts to resell or dispose thereof. If the aggregate
amount so refunded and allowed by CACI for the merchandise exceeds $5,000,
then GSI shall reimburse CACI for the excess, less the reasonable residual
value, if any, of any of the returned goods retained by CACI and not delivered
to GSI.
4.5 Excluded Assets. Within thirty days after the Closing, GSI, at its own
expense and in compliance with all applicable laws, shall remove all Excluded
Assets from any premises to be transferred to or occupied by CASub.
4.6 Defense of Claims and Litigation. At all times from and after the
Closing, GSI, CACI and CASub shall consult, confer and cooperate in good faith
on a reasonable basis with the other party (including, without limitation, the
making available of witnesses and cooperation in discovery proceedings) in the
conduct or defense of any claim, litigation or proceeding against either party
or its Affiliates by any third party which relates to any of the Assets or
Assumed Liabilities, or any matter which, directly or indirectly, arises
therefrom, whether known at the Closing or arising thereafter. To the extent
the indemnification provisions of this Agreement or of any other document
delivered in connection with the transactions contemplated hereby apply to any
such conduct or defense, they shall control as to the payment of costs and expen
ses.
4.7 Retention of Books and Records. For a period of seven years after the
Closing, each party shall retain its books and records relating to the Assets
and the Assumed Liabilities. If any party desires to obtain any such books
and records it may do so by notifying the other party, in writing, at any time
prior to the end of such seven-year period. The notice must specify the
documents which the requesting party wishes to obtain. The parties shall then
promptly arrange for the delivery of copies of such documents. All
out-of-pocket costs associated with the delivery of the requested documents
shall be paid by the requesting party.
4.8 Employees.
4.8.1 CACI and CASub shall offer to hire the employees of GSI agreed
upon by GSI, CACI and CASub management effective as of the Closing on terms
and conditions that are substantially comparable to the terms and conditions
of employment of such employees with GSI immediately prior to the Closing.
GSI shall not interfere with CACI or CASub in their efforts to employ
particular employees of GSI.
4.8.2 At or before the Closing GSI shall pay all compensation accrued
and payable as of the Closing to all of its present and former employees and
independent contractors who work or worked in GSI, including, without
limitation, straight time and overtime pay, fringe benefits, severance pay,
disability payments and payments for medical, dental, life insurance,
workmen's compensation and benefits under any Benefit Plan that are payable at
Closing, and shall pay over to the appropriate governmental agencies or other
appropriate persons or entities all withheld taxes, social security and other
similar payments accrued and payable as of the Closing with respect to such
present and former employees and independent contractors through the Closing,
except for amounts and taxes included in the Assumed Liabilities. Notwithstandi
ng the foregoing, any employee of GSI who has accrued vacation leave for
vacation not yet taken ("Vacation Leave") as of the Closing Date may elect
either to receive a payment equal to the applicable wages (less applicable
withholding for federal, state and local income and employment taxes) for such
Vacation Leave, as determined by GSI, or to retain credit for such Vacation
Leave for purposes of his or her employment with CACI or CASub. In the event
the employee elects to receive payment for his Vacation Leave, such payment
shall be made by GSI no later than the Closing Date. In the event the
employee elects to retain credit for such Vacation Leave, then CACI and CASub
agree to grant credit for such Vacation Leave under its vacation policy,
without regard to any limit on vacation accruals that may be set forth in such
policy.
4.8.3 After the Closing, GSI shall pay all amounts due from GSI to all
of its present and former employees and independent contractors who work or
worked in GSI for (a) medical, dental, life insurance and other welfare
benefits due under any Benefit Plan for claims incurred before the Closing and
(b) for workmen's compensation claims incurred before or after the Closing for
injuries that occurred prior to the Closing. Except as otherwise agreed
between GSI and the relevant employee and as provided in Section 4.8.2, GSI
shall pay or shall cause to be paid any benefits that become payable under any
Benefit Plan on or after the Closing to any employee of GSI who accepts the
offer of employment extended by CACI and CASub ("Transferred Employee") in
accordance with the terms of any such Benefit Plan. CACI and CASub agree to
cooperate, in a complete, timely and diligent manner to provide GSI or its
ERISA Affiliates with such service and census data, including prompt
notification of the termination of employment of any Transferred Employee, as
may be required by GSI or any of them for the purposes of effecting
distribution of benefits to which any Transferred Employee may be entitled
under any such Benefit Plan.
4.8.4 Effective at the Closing, CACI and CASub shall offer coverage
under a comprehensive group health plan ("Group Health Plan") to all
Transferred Employees, taking into account for eligibility purposes under such
plan the service accrued by any such individual as an employee of GSI or its
ERISA Affiliates. CACI and CASub shall waive all exclusions and limitations
for preexisting conditions under such Group Health Plan for all Transferred
Employees and their dependents who were covered under a group health plan of
GSI or its ERISA Affiliates prior to Closing. For purposes of participation
in such Group Health Plan, each Transferred Employee shall also receive credit
for all payments made toward their annual deductible under the group health
plan of GSI or its ERISA Affiliates in which such Transferred Employee was a
participant immediately prior to the Closing.
4.8.5 Effective at the Closing, Transferred Employees will immediately
be eligible to participate in the CACI $MART [401K] Plan. CACI and CASub will
accept the direct rollover of the Transferred Employee's account balance in
the Infonet Matched Asset Plan ("GSI Plan") including any outstanding loan
balances. At the request of a Transferred Employee, the Trustees of the GSI
Plan will assign the Transferred Employee's loan note to Franklin ▇▇▇▇▇▇▇▇▇
Trust Co., Trustees for the CACI $MART [401K] Plan.
4.8.6 For purposes of calculating service credits for eligibility and
vesting under the Employee Benefit Plans and Benefit Arrangements maintained
by CACI or CASub (or the ERISA Affiliates of either of them) for the benefit
of the Transferred Employees, CACI or CASub (or the ERISA Affiliates of either
of them), as applicable, shall grant to any Transferred Employee credit for
all service earned as an employee of GSI.
4.9 Bulk Transfer Compliance. GSI covenants and agrees to pay and discharge
promptly and when due, and in all respects to defend CACI and CASub against,
all claims which are asserted against CACI or CASub by reason of noncompliance
with the bulk transfer provisions of the Uniform Commercial Code or similar
statutory provisions applicable to this Agreement and the transactions
contemplated hereunder at the Closing. To the extent the indemnification
provisions of this Agreement or of any other document delivered in connection
with the transactions contemplated hereby apply to any such conduct or
defense, they shall control as to the payment of costs and expenses.
4.10 Indemnities.
4.10.1 Indemnification of CACI. Subject to the limitations set forth in
this Agreement, GSI shall indemnify and hold harmless CACI and CASub and their
respective successors by merger or other operation of law (the "Successors"),
directors and officers from and against all losses, liabilities, claims,
damages, costs or expenses (including, without limitation, reasonable expenses
of investigation and reasonable attorneys' fees and disbursements) suffered,
incurred or paid:
4.10.1.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of GSI in this
Agreement or any document delivered by GSI or Infonet pursuant to this
Agreement (including without limitation the Subcontracts and the letter
agreement relating to the Globalstar contract) or in any other instrument or
document described in Section 5.2 hereof had been (with respect to
representations and warranties) true and had been (with respect to covenants
and agreements) fully performed and fulfilled;
4.10.1.2 under the Worker Adjustment and Retraining Notification
Act of 1988 ("WARN") or similar law as the result of any "plant closing" or
"mass layoff," within the meaning of WARN, that occurs at or prior to Closing;
4.10.1.3 as a result of any "Action" (as hereinafter defined)
arising out of or relating to the conduct of the business of GSI before or
after the Closing or any liability or obligation, or alleged liability, of GSI
not specifically assumed by CACI under this Agreement; and
4.10.1.4 as a result of any Action which arises out of or relates
to the failure of GSI to pay, promptly and when due, any tax, fee or other
charge which shall become due or shall have accrued on account of the use,
acquisition or ownership of GSI of any of the Assets or any tax, fee or other
charge GSI is obligated to pay, or to reimburse CACI or CASub for, hereunder
on account of any sale of the Assets or the transactions contemplated hereby.
Notwithstanding anything herein to the contrary, if GSI shall be required to
indemnify CACI, CASub or any of their Subsidiaries or any of their respective
directors, officers or Successors with respect to the same item of damage and
amount, the satisfaction of such indemnity to one of them shall discharge
GSI's obligations to the other to the extent of the amount paid.
4.10.2 Indemnification of GSI. Subject to the limitations set forth in
this Agreement, CACI and CASub shall indemnify and hold harmless GSI and its
directors, officers and Successors from and against all losses, liabilities,
claims, damages, costs or expenses (including, without limitation, reasonable
expenses of investigation and reasonable attorney's fees and disbursements)
suffered, incurred or paid:
4.10.2.1 that would not have been suffered, incurred or paid if
all the representations, warranties, covenants and agreements of CACI and
CASub in this Agreement or in any other instrument or document furnished to
GSI pursuant to Section 5.3 hereof had been (with respect to representations
and warranties) true and had been (with respect to covenants and agreements)
fully performed and fulfilled; or
4.10.2.2 as a result of any Action arising out of or relating to
the conduct of business involving some or all of the Assets or the Assumed
Liabilities as of or after the Closing or to any failure of CACI or CASub to
perform any liability specifically assumed by it pursuant to this Agreement or
any document delivered by CACI or CASub pursuant to this Agreement (including
without limitation the Subcontracts and the letter agreement relating to the
Globalstar contract).
Notwithstanding anything herein to the contrary, if CACI or CASub shall be
required to indemnify GSI or any of its directors, officers or Successors with
respect to the same item of damage and amount, such payment or satisfaction of
such indemnity to one of them shall discharge the obligations of CACI and
CASub to the other to the extent of the amount paid.
4.10.3 Third Party Claims. The obligations and liabilities of a party
from which indemnification is sought (an "Indemnifying Party") by a person or
entity seeking indemnification (an "Indemnified Party") under this Section
4.10 with respect to claims resulting from the assertion of liability by third
parties shall be subject to the following conditions:
4.10.3.1 The Indemnified Party shall give written notice to the
Indemnifying Party of the nature of the assertion of liability by a third
party and the amount thereof promptly after the Indemnified Party learns of
such assertion. The foregoing notwithstanding, failure of an Indemnified
Party to comply with its obligations under this Section 4.10.3 shall affect
its right to indemnity only to the extent the Indemnifying Party demonstrates
actual damage caused by such failure.
4.10.3.2 If any claim, action, suit or proceeding (an "Action")
is brought by a third party against an Indemnified Party, the Action shall be
defended by the Indemnifying Party and such defense shall include all appeals
or reviews which counsel for the Indemnifying Party shall deem appropriate.
Until the Indemnifying Party shall have assumed the defense of any such
Action, or if the Indemnified Party shall have reasonably concluded that there
are likely to be defenses available to the Indemnified Party that are
different from or in addition to those available to the Indemnifying Party (in
which case the Indemnifying Party shall not be entitled to assume the defense
of such Action), all legal or other expenses reasonably incurred by the
Indemnified Party shall be borne by the Indemnifying Party and shall be repaid
to the Indemnifying Party by the Indemnified Party if it is finally determined
that the Indemnifying Party was not liable or responsible for the claim
underlying the Action.
4.10.3.3 In any Action initiated by a third party and defended by
the Indemnifying Party, (a) the Indemnified Party shall have the right to be
represented by advisory counsel and accountants, at its own expense, (b) the
Indemnifying Party shall keep the Indemnified Party fully informed as to the
status of such Action at all stages thereof, whether or not the Indemnified
Party is represented by its own counsel, (c) the Indemnified Party shall make
available to the Indemnifying Party, and its attorneys and accountants, all
books and records of the Indemnified Party relating to such Action, and (d)
the parties shall render to each other such assistance (including, without
limitation, as contemplated by Section 4.6) as may be reasonably required for
the proper and adequate defense of such Action.
4.10.3.4 In any Action initiated by a third party and defended by
the Indemnifying Party, the Indemnifying Party shall not make any settlement
of any claim without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld or delayed. Without limiting the
generality of the foregoing, it shall not be deemed unreasonable to withhold
consent to a settlement involving injunctive or other equitable relief against
the Indemnified Party or its assets, employees or business.
4.10.4 Claims. If a claim is to be made by a party pursuant to Section
4.10.1, 4.10.2 or 4.10.3 hereunder against the other party, the claiming party
shall give written notice (a "Claim Notice") to the other party as soon as
practicable after the claiming party becomes aware of any fact, condition or
event which may give rise to a claim for which indemnification may be sought
under this Section 4.10.
4.10.5 Limitation of Liability. Notwithstanding anything herein to the
contrary, GSI shall not be liable to CACI or CASub, and CACI and CASub shall
not be liable to GSI, in connection with this Agreement or the transactions
contemplated by this Agreement for any indemnification or other form of
obligation (i) unless (A) the claim is ripe, (B) the Claim Notice delivered in
connection with such claim describes an actual occurrence giving rise to such
claim and (C) the Claim Notice is received by the party from which
indemnification is sought on or before June 30, 2000 and (ii) unless and until
the aggregate amount of liability for any reason exceeds $25,000 (provided
that thereafter the Indemnifying Party shall make indemnification thereunder
for the aggregate amount of such liability, including, without limitation,
such $25,000). The total amount of GSI's obligation to indemnify or otherwise
pay CACI, CASub or any other person or entity for any reason in connection
with this Agreement or the transactions contemplated by this Agreement shall
not exceed, in aggregate, the Purchase Price.
PAGE
Article 5
CONDITIONS PRECEDENT
5.1 Conditions Precedent to the Obligations of Each Party. The obligations
of GSI, CACI and CASub to effect the transactions contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing of
the following conditions:
5.1.1 No injunction or restraining or other order issued by a court of
competent jurisdiction that prohibits or materially restricts the consummation
of any transaction contemplated by this Agreement or any other material
transaction contemplated by this Agreement shall be in effect, and no action
or proceeding shall have been commenced or threatened in writing seeking any
injunction or restraining or other order that seeks to prohibit, restrain,
invalidate or set aside consummation of the Acquisition.
5.1.2 There shall not have been any action taken, and no statute, rule
or regulation shall have been enacted, by any state or federal government
agency that would prohibit or materially restrict the Acquisition.
5.1.3 All filings with and notifications to, and all approvals and
authorizations of, third parties (including, without limitation, governmental
entities and authorities) required for the consummation of the Acquisition
shall have been made or obtained and all such approvals and authorizations
obtained shall be effective and shall not have been suspended, revoked or
stayed by action of any governmental entity or authority.
5.1.4 All applicable waiting periods (and any extensions thereof) under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, shall
have expired or otherwise been terminated.
5.2 Conditions to Obligations of CACI and CASub to Effect the Acquisition.
The obligation of CACI and CASub to effect the transactions contemplated by
this Agreement shall be subject to the fulfillment at or prior to the Closing
of the following additional conditions:
5.2.1 CACI, CASub, and Infonet Services Corporation ("ISC") shall have
entered into contractual arrangements satisfactory to CACI for the provision
by ISC to CASub of all services required in support of the contractual
commitments of GSI assumed by CASub pursuant to this Agreement and for
indemnification by ISC with respect to all the matters as to which GSI is to
provide indemnification pursuant to Section 4.10;
5.2.2 CACI, CASub and ISC shall have entered into contractual
arrangements satisfactory to CACI with respect to the employment of the senior
executives of GSI identified in Exhibit 5.2.2;
5.2.3 GSI shall have delivered to CASub all appropriate deeds and
instruments of transfer, conveyance, sale and assignment in respect of the
Assets, consisting of bills of sale, assignments, confirmation of notices sent
to third parties holding any such Assets, and such other good and sufficient
instruments of conveyance and transfer (including, without limitation, any
consents thereto by third parties necessary to make the same valid and
effective), in such form and containing such terms and provisions as CACI may
reasonably request, including, without limitation, the documents listed in
Section 1.7.2.1.1;
5.2.4 CACI and CASub shall have received an opinion of Infonet's general
counsel, on behalf of Infonet and GSI in form and substance satisfactory to
counsel to CACI, dated the date of the Closing, to the effect set forth in
Exhibit 5.2.4;
5.2.5 Since March 31, 1997, there shall not have been any material
adverse change of any nature in the business, operations, assets, financial
condition, results of operations, properties or prospects of GSI that affects
the Assets.
5.2.6 CACI shall not have any knowledge or reason to believe or suspect
that GSI will be unable to assign the Assigned Contracts or that any other
party, including, without limitation, the Government, will not approve or
consent to the assignment of any of the Assigned Contracts or will otherwise
prohibit or materially restrict the assignment of any of the Assigned
Contracts; and
5.2.7 CACI and CASub shall have received from GSI all other documents
consistent with the purposes of this Agreement, in form and substance
satisfactory to CACI and its counsel, as CACI shall have reasonably requested
(other than additional opinions of counsel).
5.3 Conditions to Obligations of GSI to Effect the Acquisition. The
obligation of GSI to effect the Acquisition shall be subject to the
fulfillment at or prior to the Closing of the following additional conditions:
5.3.1 GSI shall have received an opinion of CACI's general counsel in
form and substance satisfactory to counsel to GSI, dated the date of the
Closing, to the effect set forth in Exhibit 5.3.1; and
5.3.2 GSI shall have received from CACI and CASub all such other
documents consistent with the purposes of this Agreement, in form and
substance satisfactory to GSI and its counsel, as GSI shall have reasonably
requested (other than additional opinions of counsel).
ARTICLE 6
DEFINITIONS AND MISCELLANEOUS
6.1 Definitions of Certain Terms. As used herein, the following terms shall
have the following meanings:
1997 Balance Sheet: as defined in Section 2.5 hereof.
Action: any claim, action, suit or proceeding.
ADTN Contract: as defined in Section 1.8.2 hereof.
Affiliate: with respect to any entity, any person or entity that controls, is
controlled by, or is under common control with such entity.
Assets: as defined in Section 1.1 hereof.
Asset Documents: as defined in Section 1.1.4 hereof.
Assigned Contracts: as defined in Section 1.1.7 hereof.
Assumed Liabilities: as defined in Section 1.3 hereof.
Benefit Arrangement: any material benefit arrangement that is not an Employee
Benefit Plan, including (i) any employment or consulting agreement, (ii) any
arrangement providing for insurance coverage or workers' compensation
benefits, (iii) any incentive or deferred bonus arrangement, (iv) any
arrangement providing termination allowance, severance or similar benefits,
(v) any equity compensation plan, and (vi) any deferred compensation plan.
Benefit Plan: any Employee Benefit Plan or Benefit Arrangement that is
sponsored or contributed to by GSI or any of its ERISA Affiliates covering
GSI's employees or former employees.
CACI Reports: as defined in Section 3.4 hereof.
Closing: as defined in Section 1.7 hereof.
Code: as defined in Section 1.7.2.1.3 hereof.
Employee Benefit Plan: any employee benefit plan, as defined in Section 3(3)
of ERISA.
Employee Pension Benefit Plan: any employee pension benefit plan as defined in
Section 3(2) of ERISA that is subject to regulation under Title IV of ERISA,
other than a Multiemployer Plan.
Environmental Claim: any written notice by any governmental agency alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties)
arising out of, based on or resulting from (a) the presence, or release into
the environment, of any Material of Environmental Concern at any location,
whether or not owned by CACI or any of its Subsidiaries or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.
Environmental Contamination: (a) an occurrence occurring or a condition
existing relating to GSI at or before the Closing if such occurrence or
condition was in violation of any Environmental Law or Environmental Permit
existing at or before the Closing and if CACI or CASub is specifically
required to take remedial action with respect thereto by a governmental agency
or a negotiated agreement, decree or clean-up plan with a governmental agency,
regardless of when such occurrence or condition is discovered or when such
remedial action is required, (b) any use, disposal or discharge of Materials
of Environmental Concern by GSI before the Closing resulting in liability to a
third party, regardless of when such use, disposal or discharge is discovered
or (c) an occurrence occurring or condition existing which is caused by GSI at
or before the Closing if CACI or CASub investigates or takes remedial action
with respect thereto as required by applicable Environmental Laws.
Environmental Laws: mean all Federal, state and local laws, rules and
regulations relating to pollution or protection of the environment, or
occupational or human health and safety, including, without limitation, laws,
rules and regulations relating to handling, processing, storage, recycling,
emission, discharge, disposal, treatment, transportation, release or
threatened release of any Material of Environmental Concern or other waste or
material into ambient air, surface water, ground water or land, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. 1801 et seq.), the Federal Water Pollution
Control Act (38 U.S.C. 1251 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), the Clean Air Act (42 U.S.C. 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the Occupational Safety
and Health Act (29 U.S.C. 651 et seq.), the Emergency Planning and Community
Right to Know Act (42 U.S.C. 11001 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. 135 et seq.), and the Food, Drug and
Cosmetic Act (15 U.S.C. 2000 et seq.), in each case as these laws have been
amended or supplemented.
Environmental Permit: all certificates, consents, permits, licenses,
authorizations and approvals required under or relating to any Environmental
Law.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
ERISA Affiliate: any person that, together with GSI as of the relevant
measuring date under ERISA, was or is required to be treated as single
employer under Section 414 of the Code.
Government: the federal government of the United States of America.
GSI Financial Statements: as defined in Section 2.4 hereof.
GSI Plans: as defined in Section 4.8.5 hereof.
Indemnified Party: as defined in Section 4.10.3 hereof.
Indemnifying Party: as defined in Section 4.10.3 hereof.
Intellectual Property: as defined in Section 1.1.6 hereof.
Inventory: as defined in Section 1.1.1 hereof.
ISC: as defined in Section 5.2.1 hereof.
Licensed Intellectual Property: as defined in Section 2.17 hereof.
Materials of Environmental Concern: those substances or constituents which are
regulated by, or form the basis of liability under, any Environmental Law.
Multiemployer Plan: a multiemployer plan, as defined in Section 3(37) and
4001(a)(3) of ERISA.
Orders: as defined in Section 1.1.8 hereof.
PBGC: the Pension Benefit Guaranty Corporation.
Prepaid Expenses: as defined in Section 1.1.5 hereof.
Purchase Price: as defined in Section 1.5 hereof.
SEC: the Securities and Exchange Commission, or any governmental agency
succeeding to its functions.
Subsidiary: any corporation, association, or other business entity a majority
(by number of votes) of the shares of capital stock (or other voting
interests) of which is owned by GSI, CACI or their respective Subsidiaries.
Successors: as defined in Section 4.10.1 hereof.
Tangible Assets: as defined in Section 1.1.2 hereof.
6.2 Brokerage. Each party shall be solely responsible for payment of any
fee or charge of any broker, finder, financial advisor or intermediary
engaged, employed, or consulted by that party in connection with negotiations
or discussions incident to the execution of this Agreement or any of the
transactions contemplated hereby.
6.3 Survival of Representations and Warranties. Notwithstanding any
investigation conducted before or after the Closing, and notwithstanding any
knowledge or notice of any fact or circumstance which either CACI or GSI may
have as the result of such investigation or otherwise, CACI, CASub and GSI
shall each be entitled to rely upon the representations, warranties and
covenants of the other in this Agreement. Each of the representations,
warranties and covenants contained in this Agreement, made in any document
delivered hereunder or otherwise made in connection with the Closing hereunder
shall survive the Closing and shall expire on June 30, 2000.
6.4 Expenses. Each party shall pay its own expenses, including the fees of
attorneys, accountants, investment bankers, valuation experts and others, in
connection with the transactions contemplated hereby, whether or not they are
completed, except that in the event of a conflict between this provision and
the indemnification provisions of this Agreement, the indemnification
provisions shall control.
6.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
6.6 Notice. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand sent via a reputable
nationwide courier service or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice) and shall be deemed
given on the date on which so hand-delivered or on the third business day
following the date on which so mailed or sent:
To CACI and CASub:
CACI International Inc
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Dr. J. P. London, Chairman
With copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President, General Counsel and Secretary
CACI International Inc
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To GSI:
Government Systems, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
With copies to:
Infonet Services Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice
President, General Counsel and Secretary
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
6.7 Entire Agreement, Assignability, etc. This Agreement (a) constitutes
the entire agreement, and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, (b) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder, except as otherwise
expressly provided herein, and (c) shall not be assignable by operation of law
or otherwise. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective legal representatives and
Successors, and shall inure to the benefit of the Indemnified Parties and
their respective legal representatives and Successors. All Exhibits mentioned
in this Agreement shall be attached to this Agreement, and shall form an
integral part hereof. All capitalized terms defined in this Agreement which
are used in any Exhibit shall, unless the context otherwise requires, have the
same meaning therein as given herein.
6.8 Cumulative Rights and Remedies. GSI, CACI and CASub each acknowledge
that money damages alone will not adequately compensate the other party for
breach of a party's obligations under this Agreement and, therefore, agree
that in the event of the breach or threatened breach of any such obligation,
in addition to all other remedies available, at law, in equity or otherwise,
each party shall be entitled to injunctive relief compelling specific
performance of, or other compliance with, the terms of this Agreement. All
rights and remedies under this Agreement are cumulative and are in addition to
and not exclusive of any other rights and remedies provided hereunder, under
any other document delivered as part of a transaction contemplated hereby or
otherwise by agreement or law, at equity or otherwise. Without limiting the
generality of the foregoing, the parties expressly recognize that specific
performance is not either party's sole remedy for any reason hereunder.
6.9 Severability. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
6.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same
Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
CACI International Inc
[SEAL]
By: /s/
------------------------------------
Chairman and Chief Executive Officer
CACI, Inc.
[SEAL]
By: /s/
------------------------------------
Chief Executive Officer
Government Systems, Inc.
[SEAL]
By: /s/
------------------------------------
Authorized signer