CONTRIBUTIONAGREEMENT byand among D.PATRICK CURRY 2008DENNIS PATRICK CURRY GRANTOR RETAINED ANNUITY TRUST KEVINB. WILSHERE TAGHOLDINGS, LLC THEANALYSIS GROUP, LLC and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit A – Member Ownership of Contributor

Exhibit B-l – Form of Consideration Note

Exhibit B-2 – Form of Escrow Note

Exhibit C – DCU Participants and Payments

 

 

THIS CONTRIBUTION AGREEMENT, is dated as of February 22, 2010 (the “Agreement”), among The KEYW Holding Corporation, a Maryland corporation (“KHC”), TAG Holdings, LLC, a Virginia limited liability company (“Contributor”), The Analysis Group, LLC, a Virginia limited liability company (“Company”), D. Patrick Curry (“Curry”), 2008 Dennis Patrick Curry Grantor Retained Annuity Trust, (“Trust”), Kevin B. Wilshere (“Wilshere” and together with Curry and the Trust, the “Members” and each a “Member”) and solely for purposes of Section 10.11 below, The KEYW Corporation, a Maryland corporation and a wholly-owned subsidiary of KHC (the “Guarantor” or “KEYW”).

 

 

WHEREAS, Members are the owners of all the issued and outstanding limited liability company interests of Contributor;

 

WHEREAS, Contributor is the owner of all of the issued and outstanding limited liability company interests of the Company (the “Interests”);

 

WHEREAS, KHC desires to acquire all of the Interests and Contributor desires to contribute to KHC, all right, title and interest of Contributor in and to the Interests, in exchange the consideration set forth herein, on the terms and subject to the conditions set forth herein;

 

WHEREAS, following the transactions contemplated hereby, KHC will own 100% of the ownership interests in the Company; and

 

WHEREAS, the transactions contemplated hereby are in contemplation of a potential subsequent initial public offering of KHC.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

 

For purposes of this Agreement, the following terms have the meanings specified in this Section 1.1:

 

“2009 Financial Statements” shall have the meaning set forth in Section 5.7(b).

 

“A5XP Contract” shall mean that certain contract for Strategic Plans and Policy Support Services to be awarded by the United States Air Force under procurement number GSC-TFMG-09-32148.

 

“A5XP Protest Reimbursements” shall mean amounts reimbursed to the Company following the Closing for Company costs and expenses incurred by the Company in connection with the Company’s successful protest of the award of the A5XP Contract (Bid No. B-401726).

 

“Accounts Receivable” means the accounts receivable, and any other accounts, notes and other receivables of the Company, calculating using line items and methodology consistent with the Balance Sheet.

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) 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.

 

“Aggregate Consideration” shall have the meaning set forth in Section 2.2(a).

 

“Agreement” shall have the meaning set forth in the preamble hereto.

 

“Allocation Schedule” shall have the meaning set forth in Section 7.9(e).

 

“Annual Financial Statements” shall have the meaning set forth in Section 5.7(a).

 

“Average Gross Margin” shall mean the sum of (A) (1) the Gross Margin for the period beginning January 1, 2010 through December 31, 2010 plus (2) the Gross Margin for the period beginning January 1, 2011 through December 31, 2011, divided by (B) 2.

 

“Average Revenue” shall have the meaning set forth in Section 2.2(d)(i)(l).

 

“Balance Sheet” means the unaudited balance sheet of the Company as of October 31, 2009.

 

“Balance Sheet Date” means the date of the Balance Sheet.

 

“Buy-Sell Agreement” means the Buy-Sell Agreement, dated January 1, 2007, by and among the Company and the Contributors.

 

“Business Day” means any day other than a Saturday, Sunday or a day on which the banks in New York City are authorized or obligated by Law or executive order to close.

 

“Cash” means, as of the date of determination, the difference of (a) the aggregate amount of cash and cash equivalents held as of 5:00 p.m. (Eastern Time) in the bank accounts, including money market accounts, of the Company, plus (b) deposits in transit and deposits not yet cleared minus (c) the aggregate balance of all outstanding checks written against such accounts.

 

“Cash Consideration” shall have the meaning set forth in Section 2.2(a).

 

“Change of Control” shall mean (i) any change, in a single or series of related transactions, of fifty percent (50%) or more of the combined voting power of all classes of the voting equity or other economic interests (including assets) of any member or members of the KEYW Group whose revenue, individually or combined, is equal to or greater than fifty percent (50%) of the aggregate revenue of all members of the KEYW Group immediately prior to such transaction or series of related transactions; provided, that the issuance of the equity of a member of the KEYW Group as consideration in connection with a member of the KEYW Group’s acquisition of assets, equity or other property of another Person or Persons shall not in any event constitute a Change of Control, or (ii) (x) a sale, or other disposition of a majority of the assets of the Company, (y) a transfer or sale of more than fifty percent (50%) of the combined voting power of all classes of the voting equity of the Company, or (z) a merger or consolidation involving the Company in which the Company’s voting equity interests outstanding immediately prior to such merger or consolidation are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, and a third party controls the Company as a result.

 

“Claim” shall have the meaning set forth in Section 8.4.

 

“Closing” means the consummation of the transactions set forth in Section 2.

 

“Closing Date” means the date hereof.

 

“Closing Date Net Working Capital” shall have the meaning set forth in Section 2.2(b).

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company” shall have the meaning set forth in the preamble hereto.

 

“Company Material Adverse Effect” means any event, change, circumstance or effect that, individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on the business, assets, liabilities (contingent or otherwise), properties, results of operations, or financial condition of the Company; provided, however, that effects caused solely by (a) adverse changes in general economic or political conditions or (b) changes in Laws or orders of any Governmental Authority or changes in GAAP or other applicable accounting rules, in each case, which do not affect the Company disproportionately to other companies in its industry, shall be deemed to not constitute a “Company Material Adverse Effect” and shall not be considered in determining whether a “Company Material Adverse Effect” has occurred.

 

“Company Operating Agreement” shall have the meaning set forth in Section 2.1(c).

 

“Consideration Note” shall have the meaning set forth in Section 2.2(a).

 

“Contribution” shall have the meaning set forth in Section 2.1(a).

 

“Contributor” shall have the meaning set forth in the preamble hereto.

 

“Contributor Indemnified Parties” shall have the meaning set forth in Section 8.3.

 

“Contributor Redemption Rights” shall mean the Contributor’s rights to elect to have KHC repurchase KHC Shares pursuant to Section 2.2(d)(i)(l)(A), Section 2.2(d)(i)(3), Section 2.2(d)(i)(4)(A) and/or Section 2.2(d)(v).

 

“Copyrights” means copyrights, including in and to works of authorship and all other rights corresponding thereto throughout the world, whether published or unpublished, including rights to prepare, reproduce, perform, display and distribute copyrighted works and copies, compilations and derivative works thereof.

 

“Credit Agreement” means that certain term loan between the Company and Commerce Bank (now TD Bank) dated as of June 27, 2007.

 

“Current Assets” and “Current Liabilities” mean, as of any date, the current assets and current liabilities, respectively, of the Company as of such date, determined in accordance with GAAP and consistent with prior accounting principles, policies, practices, classifications and methodologies used in preparation of the Balance Sheet, and not considering any event, change or effect occurring subsequent to the Closing; provided, that, notwithstanding GAAP, (i) current assets will exclude (A) Cash (which may be distributed to the Contributors on or prior to the Closing) and (B) any deferred Tax asset, (ii) current assets shall include $116,787.48 of A5XP Protest Reimbursements, and (iii) current liabilities will exclude (A) any Indebtedness of the Company paid pursuant to Section 2.2, (B) any transaction expenses of the Company paid pursuant to Section 2.2, (C) any payments made under the DCU Plans pursuant to Section 2.2, (D) all amounts due after the Closing Date under operating leases, and (E) any deferred Tax liability.

 

“Curry” shall have the meaning set forth in the preamble hereof.

 

“Deferred Consideration” shall have the meaning set forth in Section 7.11.

 

“Determination Date” shall have the meaning set forth in Section 2.2(d)(i)(l)(A)(l).

 

“Disclosure Schedules” shall have the meaning set forth in Section 5 hereof.

 

“Dispute Notice” shall have the meaning set forth in Section 2.2(b).

 

“DCU Termination Agreements” shall have the meaning set forth in Section 2.2(a)(i)(3).

 

“DCU Participants” shall mean the individuals entitled to payments at and/or after the Closing under the DCU Plans.

 

“DCU Plans” shall have the meaning set forth in Section 9.1(g).

 

“Environmental Laws” means any applicable Laws relating to (a) the remediation, generation, production, installation, use, storage, treatment, transportation, release, or disposal of Hazardous Materials or (b) the protection of natural resources, the environment, or human health and safety including the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. sections 9601 et seq. (“CERCLA”), the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., the Clean Water Act, 33 U.S.C. § 1251 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 Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et seq., the Oil Pollution Act of 1990, 33 U.S.C § 2701 et seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent it relates to Hazardous Materials), as such Laws have been amended or supplemented, and the regulations promulgated pursuant thereto, and all analogous applicable foreign, federal, state or local Laws.

 

“ERISA” shall have the meaning set forth in Section 5.19(a).

 

“ERISA Affiliate” means any trade or business, whether or not incorporated, that together with the Company or any of its Affiliates would be deemed a single employer for purposes of Section 4001 of ERISA or Section 414 of the Code.

 

“Escrow Note” shall have the meaning set forth in Section 2.2(a).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Facility Security Clearances” shall have the meaning set forth in Section 5.2l(o).

 

“Fair Market Value” of a share of KHC common stock shall be determined as follows:

 

(a)           if traded on a securities exchange or the NASDAQ Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or market over the 30-period ending three days prior to the date of payment of the applicable indemnity obligation under Section 8;

 

(b)           if actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the 30-day period ending three days prior to the date of payment of the applicable indemnity obligation under Section 8; or

 

(c)           if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors of KHC.

 

“Flow of Funds Memorandum” shall have the meaning set forth in Section 2.2(a).

 

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

“Government Contract” means any Government Prime Contract, Government Subcontract, Offer or Teaming Agreement and any current proposals related to the foregoing and contracts issued in response to any such proposals, in each case including any Loss Contract; provided that for purposes of this definition and the definitions of “Government Prime Contract” and “Government Subcontract” any purchase order, delivery order or task order under a Government Contract, Government Prime Contract or Government Subcontract shall not constitute a separate Government Contract, Government Prime Contract or Government Subcontract, as applicable, but shall be part of the Government Contract, Government Prime Contract or Government Subcontract to which it relates.

 

“Government Prime Contract” means any prime contract, basic ordering agreement, letter contract, change, arrangement or other commitment of any kind, on which final payment has not been made and close-out not completed, between the Company and a Governmental Authority.

 

“Government Subcontract” means any subcontract, basic ordering agreement, letter subcontract, change, arrangement or other commitment of any kind, on which final payment has not been made, between the Company and any prime contractor to a Governmental Authority or any subcontractor with respect to a Government Prime Contract.

 

“Governmental Authority” means any government or political subdivision, whether federal, state, local, foreign or supranational, or any agency, authority, official or instrumentality of any such government or political subdivision, or any federal, state, local, foreign or supranational court, tribunal or arbitrator.

 

“Gross Margin” shall mean, for the applicable measurement period, Revenue minus the aggregate amounts of labor and other direct expenses, including expenses for materials, subcontracts, consultants and travel incurred by the Company in providing services under the applicable contracts and shall exclude overhead, fringe and general and administrative expenses, in each case calculated in accordance with GAAP consistent with the Company’s historical practices, divided by Revenue, and expressed as a percentage.

 

“Guarantor” shall have the meaning set forth in the preamble hereto.

 

“Hazardous Materials” means methyl tertiary butyl ether (MTBE), toxic mold, asbestos, polychlorinated biphenyls, and any wastes, substances, radiation, or materials (whether solids, liquids or gases) that are listed, regulated or defined under any Environmental Laws, including but not limited to “hazardous substances” listed under “CERCLA” and petroleum or any derivatives thereof.

 

“Indebtedness” means, without duplication, all indebtedness of a Person for borrowed money, whether secured or unsecured, including, without limitation, (a) indebtedness of such a Person for the deferred purchase price of property or services represented by a note, earnout or contingent purchase payment, (b) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (c) all indebtedness of such Person secured by a mortgage or other Lien to secure all or part of the purchase price of the property subject to such lien or mortgage, (d) all obligations under leases which are required under GAAP to be recorded as capital leases in respect of which such Person is liable as the lessee, (e) any liability of such Person in respect of banker’s acceptances or letters of credit, (f) any obligations under any interest rate swap agreements, (g) all interest, fees and other expenses owed with respect to the indebtedness referred to above and (h) all indebtedness referred to above which is directly or indirectly guaranteed by such Person.

 

“Independent Accounting Firm” shall have the meaning set forth in Section 2.2(b).

 

“Indemnified or Indemnifying Party” shall have the meaning set forth in Section 8.4.

 

“Indemnity Cap” shall have the meaning set forth in Section 8.5(a).

 

“Intellectual Property” means Patents, Trademarks, trade names, service marks, Copyrights and all pending applications for and registrations of any of the foregoing, and websites, domain names, computer software programs and Trade Secrets and other proprietary intellectual property rights.

 

“Interests” shall have the meaning set forth in the recitals hereto.

 

“Inventory” means all raw materials, work-in-process, goods, supplies, inventory, spare parts, replacement and component parts, and materials used or consumed in a Person’s business.

 

“IRS” shall have the meaning set forth in Section 5.19(a).

 

“KEYW” shall have the meaning set forth in the preamble hereto.

 

“KEYW Government Contract” means any prime contract, subcontract, teaming agreement or arrangement, joint venture, basic ordering agreement, blanket purchase agreement, letter agreement, grant, cooperative agreement, change order or other commitment or funding vehicle between KEYW and (a) a Governmental Authority, (b) any prime contractor to a Governmental Authority or (c) any subcontractor with respect to any contract described in clause (a) or (b) and any current proposals related to the foregoing and contracts issued in response to any such proposals. A purchase order, delivery order, or task order under a KEYW Government Contract shall not constitute a separate KEYW Government Contract for purposes of this definition, but shall be part of the KEYW Government Contract to which it relates.

 

“KEYW Group” shall mean the Company, KHC, KEYW and any Person directly or indirectly controlling the Company, KHC and/or KEYW.

 

“KHC” shall have the meaning set forth in the preamble hereto.

 

“KHC Balance Sheet” means the unaudited balance sheet of KEYW as of December 31, 2009.

 

“KHC Disclosure Schedules” shall have the meaning set forth in Section 6 hereof.

 

“KHC Financial Statements” shall have the meaning set forth in Section 6.10(a).

 

“KHC Indemnified Parties” shall have the meaning set forth in Section 8.2(a).

 

“KHC Indemnity Cap” shall have the meaning set forth in Section 8.5(b).

 

“KHC Material Contracts” means all material contracts, agreements, bonds, notes, indentures, mortgages, debt instruments, licenses (or other agreements concerning Intellectual Property), franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications thereto), to which KHC or KEYW is a party or which are binding upon KHC or KEYW or their respective assets.

 

“KHC Material Adverse Effect” means any event, change, circumstance or effect that, individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on the business, assets, liabilities (contingent or otherwise), properties, results of operations, or financial condition of KHC or its Affiliates; provided, however, that effects caused solely by (a) adverse changes in general economic or political conditions or (b) changes in Laws or orders of any Governmental Authority or changes in GAAP or other applicable accounting rules, in each case, which do not affect KHC or its Affiliates disproportionately to other companies in their industry, shall be deemed to not constitute a “KHC Material Adverse Effect” and shall not be considered in determining whether a “KHC Material Adverse Effect” has occurred.

 

“KHC Non-Basket Representations” shall have the meaning set forth in Section 8.5(b).

 

“KHC Shares” shall mean the shares of common stock, par value $.001 per share, of KHC, that may be issued to the Contributor pursuant to Section 2.2(a).

 

“Knowledge of Contributor” means the actual awareness of a particular fact or matter by Contributor and each of the Chief Executive Officer of the Company (a position held by D. Patrick Curry) and the President of the Company (a position held by Kevin B. Wilshere) and all knowledge which could have been obtained by them upon reasonable inquiry and investigation in their capacities as officers, members or managers of Contributor or the Company.

 

“Knowledge of KHC” means the actual awareness of a particular fact or matter by each of the Chief Executive Officer, the President and the Chief Financial Officer of KHC and KEYW, respectively, and all knowledge which could have been obtained by them upon reasonable inquiry and investigation.

 

“Law” means any law, statute, code, ordinance, regulation or other legally enforceable requirement of any Governmental Authority.

 

“Lien” means any mortgage, lien, option, encumbrance, restriction, pledge, adverse claim, interest, charge or other similar encumbrance, in each case other than (a) any lien for Taxes not yet due or delinquent or that are being contested in good faith by appropriate proceedings or that may thereafter be paid without penalty or (b) any lien which is a carrier’s, warehousemen’s, mechanic’s, materialmen’s, repairmen’s or other similar lien arising in the ordinary course of business or (c) with respect to the Interests, any liens created by the Company Operating Agreement or imposed by applicable securities Laws.

 

“Loss Contracts” means any contract for the sale of goods and/or services which, after allocation of costs including overhead and general and administrative expenses, would result in negative profit on the contract; provided, that Loss Contracts shall not include any contracts in which the net loss is de minimus.

 

“Losses” shall have the meaning set forth in Section 8.2(a).

 

“Material Contracts” shall have the meaning set forth in Section 5.9(a).

 

“Members” shall have the meaning set forth in the preamble hereto.

 

“Minimum Deemed Value Per Share” shall have the meaning set forth in Section 2.2(e).

 

“Multiplier” shall mean: (A) if Average Gross Margin equals 20%, 0.76, (B) if Average Gross Margin is greater or less than 20%, (1) 0.76 multiplied by (2) the Average Gross Margin divided by .20.

 

“Net Working Capital” means Current Assets minus Current Liabilities.

 

“Non-Basket Representations” shall have the meaning set forth in Section 8.5(a).

 

“Obligation” shall have the meaning set forth in Section 10.11.

 

“Offer” means an “offer” to which the Company is a party as defined in the Federal Acquisition Regulation (“FAR”) 2.101.

 

“Patents” means all United States and foreign patents and utility models and applications, and all reissues, divisions, re-examinations, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and equivalent or similar rights anywhere in the world in inventions and discoveries, including invention disclosures related to the business of the Company.

 

“PBGC” shall have the meaning set forth in Section 5.19(h).

 

“Permitted Use” shall have the meaning set forth in Section 7.2(b).

 

“Person” means any individual, corporation, partnership, firm, joint venture, association, limited liability company, limited liability partnership, joint-stock company, trust, joint venture, unincorporated organization, governmental, judicial or regulatory body, business unit, division or any other business entity, organization or Governmental Authority.

 

“Plans” shall have the meaning set forth in Section 5.19(a).

 

“Promissory Notes” shall have the meaning set forth in Section 2.2(a).

 

“Publicly Traded Company” shall have the meaning provided under Section 409A of the Code and the rules and regulations thereunder for the purposes of determining a “specified employee” thereunder.

 

“Real Property” shall have the meaning set forth in Section 5.10(c).

 

“Release” means any presence, emission, spill, seepage, leak, escape, leaching, discharge, injection, pumping, pouring, emptying, dumping, disposal, migration, or release of Hazardous Materials from any source into or upon the environment, including the air, soil, improvements, surface water, groundwater, the sewer, septic system, storm drain, publicly owned treatment works, or waste treatment, storage, or disposal systems.

 

“Remediation” means any investigation, clean-up, removal action, remedial action, restoration, repair, response action, corrective action, abatement, monitoring, sampling and analysis, installation, reclamation, closure, or post-closure in connection with the suspected, threatened or actual Release of Hazardous Materials.

 

“Retained Losses” shall have the meaning set forth in Section 8.2(a).

 

“Revenue” shall mean, for the applicable measurement period, the Company’s revenue, determined on the accrual basis in accordance with GAAP consistent with the Company’s historical practices.

 

“Revenue Floor” shall have the meaning set forth in Section 2.2(d)(i)(2).

 

“Revenue Payments” shall have the meaning set forth in Section 2.2(d)(i)(l)(B).

 

“Revenue Target” shall have the meaning set forth in Section 2.2(d)(i)(l).

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

 

“Security Clearances” shall have the meaning set forth in Section 5.2l(o).

 

“Survival Termination Date” shall have the meaning set forth in Section 8.1.

 

“Target Net Working Capital” shall have the meaning set forth in Section 2.2(c).

 

“Tax” or “Taxes” means any taxes of any kind, including but not limited to any and all federal, state, local and foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, branch, profits, license, withholding, payroll, social security, unemployment, disability, ad valorem, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other similar taxes (together with any and all interest, penalties and additions to tax imposed with respect thereto) imposed by any governmental or Tax authority.

 

“Tax Amount” shall have the meaning set forth in Section 7.11.

 

“Tax Losses” shall have the meaning set forth in Section 8.2(c).

 

“Tax Returns” means any and all returns, declarations, claims for refund, or information returns or statements, reports and forms relating to Taxes filed with any Tax authority (including any schedule or attachment thereto) with respect to the Company, including any amendment thereof.

 

“Teaming Agreement” means a “contractor team arrangement(s)” as referenced in the FAR Subpart 9.601 to which the Company is a party.

 

“Trademarks” means any and all trademarks, service marks, logos, trade names, corporate names, Internet domain names and addresses and general-use e-mail addresses, and all goodwill associated therewith throughout the world.

 

“Trade Secrets” means all trade secrets under applicable Law and other rights in know-how and confidential or proprietary information, processing, manufacturing or marketing information, including new developments, inventions, processes, ideas or other proprietary information that provide a Person with advantages over competitors who do not know or use it and documentation thereof (including related papers, blueprints, drawings, chemical compositions, formulae, diaries, notebooks, specifications, designs, methods of manufacture and data processing software, compilations of information) and all claims and rights related thereto.

 

“Transaction Documents” means this Agreement and each agreement, instrument or document attached hereto as an Exhibit and the other agreements, certificates and instruments to be executed by any of the parties in connection with or pursuant to this Agreement.

 

“Trust” shall have the meaning set forth in the preamble hereto.

 

“Unaudited KHC Financial Statements” shall have the meaning set forth in Section 6.10(b).

 

“Unresolved Claim” shall have the meaning set forth in Section 8.2(b).

 

“WARN Act” shall have the meaning set forth in Section 5.20(c).

 

“Wilshere” shall have the meaning set forth in the preamble hereto.

 

 

2.1         Contribution.

 

(a)           Subject to the terms and conditions of this Agreement, in reliance upon the representations, warranties, covenants and agreements of KHC set forth herein and for the consideration set forth in Section 2.2 below, Contributor hereby contributes or otherwise transfers, assigns and conveys to KHC, and KHC acquires and accepts from Contributor, simultaneously with the execution of this Agreement, all of Contributor’s right, title and interest in and to the Interests held by such Contributor, free and clear of all Liens (the “Contribution”).

 

(b)           By execution of this Agreement, the Members hereby irrevocably constitutes and appoints the Secretary of Contributor, as attorney-in-fact, with full power of substitution, to transfer such Interests on Contributor’s books sufficient to vest in KHC good and marketable title to such Interests.

 

(c)           In exchange for the release of claims by the Company set forth below, Contributor and each Member, on Contributor’s and such Member’s own behalf and on behalf of Contributor’s and such Member’s respective heirs, successors and assigns, hereby voluntarily and irrevocably (i) releases, acquits and forever discharges the Company and the Company’s officers, managers, and Affiliates from any and all liabilities, obligations, claims, demands, actions or causes of action arising from or relating to the Interests (whether absolute, contingent, accrued or otherwise) and any event, occurrence, act, omission or condition occurring or existing on or prior to the Closing Date; and (ii) waives all breaches, defaults or violations of any agreement applicable to any of the Interests transferred and contributed hereunder and releases any and all claims arising in connection with any prior default, violation or failure to comply with or satisfy any such preemptive or other rights relating to the Interests or the Contribution; provided, that notwithstanding the preceding release, under no circumstances does Contributor or such Member release such named Persons from (even if in conflict with the foregoing) and Contributor and such Member specifically reserve all rights to (i) any rights or obligations under this Agreement or the other Transaction Documents, (ii) rights to indemnification provided for in Sections 2 and 3 of Article XIII of The Analysis Group, LLC Operating Agreement, dated January 1, 2007 (as amended as of the date hereof, the “Company Operating Agreement”) and in Section 5.09 of the TAG Holdings, LLC Operating Agreement, dated February 19, 2010, (iii) rights of such Member as an employee of Company (if applicable) to receive current earned and accrued but unpaid compensation, un-reimbursed business expenses or other employment benefits generally available to all employees of the Company and (iv) any Losses, acts or omissions occurring after the Closing Date.

 

(d)          In exchange for the release of claims by the Contributor and the Members set forth above, the Company, on its own behalf and on behalf of its successors and assigns, hereby voluntarily and irrevocability releases, acquits and forever discharges Contributor and each Member, and their respective trustees, heirs, successors and assigns from any and all liabilities, obligations, claims, demands, actions or causes of action arising from or relating to the Interests (whether absolute, contingent, accrued or otherwise) and any event, occurrence, act, omission or condition occurring or existing on or prior to the Closing Date; provided, that notwithstanding the preceding release, under no circumstances does the Company release such named Persons from (even if in conflict with the foregoing) and the Company specifically reserves all rights to (i) any rights or obligations under this Agreement or the other Transaction Documents and (ii) any Losses, acts or omissions occurring after the Closing Date.

 

 

(a)          Subject to the terms and conditions of this Agreement, in reliance upon the representations, warranties, covenants and agreements of the Members, Contributor and the Company set forth herein, and as consideration for the contribution of the Interests, KHC agrees to pay the Contributor an aggregate of (A) Twenty-Three Million Dollars ($23,000,000) in cash (the “Cash Consideration”), payable in the manner set forth below in Section 2.2(a)(i)(4), (B) (1) an unsecured subordinated promissory note in the principal amount of Eight Million Two Hundred Fifty-One Thousand Seventy-Six Dollars ($8,251,076), in the form attached hereto as Exhibit B-l (the “Consideration Note”) and (2) an unsecured subordinated promissory note in the principal amount of Three Million Four Hundred Thousand Dollars ($3,400,000), in the form attached hereto as Exhibit B-2 (the “Escrow Note”, and collectively with the Consideration Note, the “Promissory Notes”), payable in the manner set forth below in Section 2.2(a)(ii), and (C) the right to receive up to Three Million (3,000,000) KHC Shares, in accordance with Section 2.2(d) (collectively and as adjusted pursuant to Sections 2.2(c) and 2.2(d), the “Aggregate Consideration”). Simultaneously with the execution and delivery of this Agreement, KHC will pay the Aggregate Consideration, as follows:

 

(i)          The Cash Consideration by wire transfer of immediately available funds to the recipients as designated in a flow of funds memorandum (with wire instructions for the below payments or instructions to pay certain amounts by check) prepared by the Members, Contributor and reasonably acceptable to KHC (the “Flow of Funds Memorandum”) containing the following:

 

(1)

The amount of Indebtedness (if any) that will be paid at Closing;

 

(2)

The amount of the expenses payable by the Members, Contributor and the Company in connection with the consummation of the transactions contemplated hereby (e.g., payment to legal counsel, accountants and financial advisors) to the extent remaining unpaid as of the Closing;

 

(3)

The aggregate amount of cash payable at the Closing by Contributor to the DCU Participants pursuant to DCU Termination Agreements to be entered into prior to the Closing by and among each DCU Participant, Contributor and the Company and providing for the cancellation of the DCUs and consideration therefor (the “DCU Termination Agreements”); and

 

(4)

The Cash Consideration (less the amounts set forth in clauses (1), (2) and (3) above) to Contributor.

 

After receipt of the Cash Consideration set forth in clause (3) above, Contributor will immediately pay thereafter the DCU Payments to the DCU Participants (except Contributor’s payment of the DCU Payments to the DCU Participants will be net of applicable withholding Taxes). All applicable withholding Taxes withheld from the DCU Payments will be paid by Contributor to the applicable Tax authority when due; and

 

(iii)      The Promissory Notes to the Contributor.

 

(b)          Within sixty (60) days after the Closing Date, KHC shall prepare and deliver to the Contributors the calculation of Net Working Capital as of 11:59 p.m. on the Closing Date (the “Closing Date Net Working Capital”), which calculation shall contain reasonable details and statements as to the assumptions, means and other inputs by which such calculation was determined. The calculation of the Closing Date Net Working Capital will be prepared by applying the definition of Net Working Capital herein. The calculation of the Closing Date Net Working Capital shall be final and binding on the parties unless, within thirty (30) days after delivery to Contributor, Contributor delivers to KHC a notice of dispute (a “Dispute Notice”) specifying in reasonable detail the items in dispute. During such 30-day review period, KHC will provide Contributor and its representatives with reasonable access during normal business hours to the books and records of the Company and all work papers and back up materials relating to the determination of Closing Date Net Working Capital. Such items in dispute shall be limited to claims of KHC’s error or use of accounting principles, policies, practices, classifications or methodologies other than the Company used in preparation of the 2009 Financial Statements. After delivery of a Dispute Notice, Contributor and KHC shall promptly negotiate in good faith with respect to the subject of the Dispute Notice, and if they are unable to reach an agreement within fifteen (15) days after delivery to Contributor of the Dispute Notice, the dispute shall be submitted (no later than five (5) Business Days at the end of such 15-day resolution period) by the parties to RSM McGladrey, Inc., or such other independent public accounting firm as mutually agreed to by KHC and Contributor (the “Independent Accounting Firm”). Each party agrees to execute, if requested by the Independent Accounting Firm, a reasonable engagement letter with respect to the work to be performed by the Independent Accounting Firm. The Independent Accounting Firm shall be directed by KHC and Contributor to issue a final and binding decision within thirty (30) days of submission of the Dispute Notice to the Independent Accounting Firm, as to the issues of disagreement referred to in the Dispute Notice and not resolved by KHC and the Contributor. The Independent Accounting Firm shall determine only those items still in dispute by the parties and the Independent Accounting Firm’s determination will be based upon and consistent with the terms and conditions of this Agreement. The determination by the Independent Accounting Firm will be based solely on presentations with respect to such disputed items by KHC and the Contributor to the Independent Accounting Firm and not on the Independent Accounting Firm’s independent review. KHC and Contributor will use their reasonable best efforts to make their respective presentations as promptly as practicable following submission to the Independent Accounting Firm of the disputed items, and each party shall be entitled, a part of its presentation, to respond to the presentation of the other party and any questions and requests of the Independent Accounting Firm. In deciding any matter, the Independent Accounting Firm (i) will be bound by the provisions of this Section 2.2(b) and (ii) may not assign a value to any item greater than the greatest value for such item claimed by either KHC or Contributor or less than the smallest value for such item claimed by KHC or Contributor. Each of the parties hereto agrees that it shall be bound by the determination of the Independent Accounting Firm and such determination may only be reviewed, corrected or set aside by a court of competent jurisdiction only upon a finding by such court that the Independent accounting Firm committed manifest error with respect to its determination. The determination of the Independent Accounting Firm will not be deemed an award subject to review under the Federal Arbitration Act or any other statute. The fees and expenses of the Independent Accounting Firm shall be borne by the non-prevailing party to the decision of the Independent Accounting Firm if one party prevails on all disputed items; if neither KHC or Contributor were correct with respect to all of the disputed items, then KHC, on the one hand, and Contributor, on the other hand, will each pay half of the Independent Auditor’s fees. Any such fees and expenses of the Independent Auditor payable by Contributor will be paid, at Contributor’s option by either (i) payment in cash or (ii) set off of the outstanding principal under Section 8.2(b) hereof and the terms of the Escrow Note. Except as provided in the preceding sentences, all other costs and expenses incurred by the parties in connection with resolving any dispute hereunder before the Independent Accounting Firm will be borne by the party incurring such cost and expense.

 

(c)           If the Closing Date Net Working Capital, as determined in accordance with Section 2.2(b) above, is less than $3,000,000 (the “Target Net Working Capital”), the Aggregate Consideration shall be reduced on a dollar-for-dollar basis by the amount by which the Target Net Working Capital exceeds the Closing Date Net Working Capital, and Contributor shall pay such deficit to KHC, at Contributor’s option by either (i) payment in cash or (ii) set off of the outstanding principal under Section 8.2(b) hereof and the terms of the Escrow Note. If the Closing Date Net Working Capital is greater than the Target Net Working Capital, then the Cash Consideration shall be increased on a dollar-for-dollar basis by the amount by which the Closing Date Net Working Capital exceeds the Target Net Working Capital, and KHC shall pay Contributor the dollar amount by which the Closing Date Net Working Capital exceeds the Target Net Working Capital. Any such payment due under this Section 2.2(c) shall be made in cash or same day funds or reduction of the outstanding principal under the Escrow Note within five (5) Business Days after the final determination of the Closing Date Net Working Capital pursuant to Section 2.2(b).

 

(d)         Contributor will be entitled to receive KHC Shares and additional cash payments following the Closing in accordance with the following terms and conditions.

 

(i)        (1)         If the sum of (x) the Revenue of the Company for the period beginning January 1, 2010 through December 31, 2010 plus (y) the Revenue of the Company for the period beginning January 1, 2011 through December 31, 2011, divided by two (the “Average Revenue”) is greater than or equal to Sixty-Seven Million Five Hundred Forty-Four Thousand Dollars ($67,544,000) (the “Revenue Target”), then:

 

(A)

KHC shall issue to Contributor, within three (3) Business Days of the date Average Revenue and Average Gross Margin are finally determined (the “Determination Date”), Three Million (3,000,000) KHC Shares; provided, that in the event that KHC is not a Publicly Traded Company as of the Determination Date, upon notice delivered with thirty (30) days of the Determination Date by either (i) Contributor to KHC electing to have up to 32.5% of the KHC Shares issued to Contributor under this Section 2.2(d)(i)(l)(A) repurchased, or (ii) KHC to Contributor electing to repurchase from Contributor up to all of the KHC Shares issued to Contributor under this Section 2.2(d)(i)(l)(A). KHC shall, within five (5) Business Days of the date of such notice, repurchase the KHC Shares so elected to be repurchased, at a price per share equal to the greater of (x) the fair market value of a KHC Share determined by an independent valuation firm mutually agreed upon by KHC and the Contributors and (y) the Minimum Deemed Value Per Share; and

 

(B)

Within three (3) Business Days of the Determination Date, KHC shall pay to the Contributor an aggregate amount in cash equal to the Multiplier times the amount by which the Average Revenue exceeds the Target (collectively such payments, the “Revenue Payment”).

 

 

(3)

If the Average Revenue is less than the Revenue Target and greater than the Revenue Floor, then KHC shall issue to Contributor, within three (3) Business Days of the Determination Date, an aggregate number of KHC Shares equal to sum of (A)(1) the Average Revenue less (2) the Revenue Floor times (3) the Multiplier divided by (B) the Minimum Deemed Value Per Share; provided, that in the event that KHC is not a Publicly Traded Company as of the Determination Date, upon notice delivered with thirty (30) days of the Determination by either (i) Contributor to KHC electing to have up to 32.5% of the KHC Shares issued to Contributor under this Section 2.2(d)(i)(3) repurchased, or (ii) KHC to Contributor electing to repurchase from Contributor up to all of the KHC Shares issued to Contributor under this Section 2.2(d)(i)(3), KHC shall, within five (5) Business Days of the date of such notice, repurchase the KHC Shares so elected to be repurchased, at a price per share equal to the greater of (x) the fair market value of a KHC Share determined by an independent valuation firm mutually agreed upon by KHC and the Contributors and (y) the Minimum Deemed Value Per Share.

 

(4)

If the Company is awarded, either as a prime contractor or as a direct or indirect subcontractor to a prime contractor, the A5XP Contract on or before July 30, 2010 and such contract will result in revenue of at least $4 million dollars over two years, then:

 

(A)

KHC shall issue to Contributor, within three (3) Business Days of the award of the A5XP Contract meeting the condition set forth above, Seven Hundred Fifty Thousand (750,000) KHC Shares; provided, that in the event that KHC is not a Publicly Traded Company as of the date such 750,000 KHC Shares are issued under this clause (4), upon notice delivered with thirty (30) days of the date of issuance of such KHC Shares by either (i) Contributor to KHC electing to have up to 32.5% of the KHC Shares issued to Contributor under this Section 2.2(d)(i)(4)(A)  repurchased, or (ii) KHC to Contributor electing to repurchase from Contributor up to all of the KHC Shares issued to Contributor under this Section 2.2(d)(i)(4)(A), KHC shall, within five (5) Business Days of the date of such notice, repurchase the KHC Shares so elected to be repurchased, at a price per share equal to the greater of (x) the fair market value of a KHC Share determined by an independent valuation firm mutually agreed upon by KHC and the Contributors and (y) the Minimum Deemed Value Per Share; provided, further, that, in the event KHC has a Registration Statement on Form S-l on file with the SEC at the time of any request for repurchase by Contributor under (i) above, KHC shall not be required to repurchase such portion of the KHC Shares until the earlier of 30 days following effectiveness of the Registration Statement or six (6) months from the date of issuance of such KHC Shares.

 

 

Promptly after the receipt by either a Contributor Indemnified Party or a KHC Indemnified Party (in either case an “Indemnified Party”) of notice of the commencement of any action against such Indemnified Party by a third party (a “Claim”), such Indemnified Party shall, if a Claim with respect thereto is to be made pursuant to Section 8.2 or Section 8.3, give the Members and Contributor or KHC, as the case may be (in either case an “Indemnifying Party”) written notice thereof in reasonable detail in light of the circumstances then known to such Indemnified Party along with a copy of the Claim. The failure to give such notice shall not relieve the Indemnifying Party from any obligation under this Section 8 except where, and then solely to the extent that, such failure actually and materially prejudices the rights of the Indemnifying Party. If the Claim relates to Losses for which the Indemnified Party is entitled to indemnification pursuant to this Section 8, the Indemnifying Party shall have the right to defend such Claim, at the Indemnifying Party’s expense and with counsel of its choice reasonably satisfactory to Indemnified Party. If the Indemnifying Party assumes the defense of such Claim, the Indemnified Party shall reasonably cooperate in such defense so long as the Indemnified Party is not materially prejudiced thereby. The Indemnified Party may retain separate co-counsel at its sole cost and expense and may participate in the defense of such claim. Neither the Indemnifying Party nor any Indemnified Party will consent, without the prior written consent of the other, to the entry of any judgment or enter into any settlement with respect to such Claim that does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party a release from all liability in respect of such Claim. Notwithstanding the foregoing, an Indemnified Party shall be entitled to participate with separate counsel at the expense of the Indemnifying Party if (i) so requested by the Indemnifying Party or, (ii) in the reasonable written opinion of counsel to the Indemnified Party, a conflict or potential conflict exists between either the Indemnifying Party and the Indemnified Party which would materially prejudice the Indemnified Party. Regardless of which party shall assume the defense of such Claim, each party shall provide to the other parties on request all information and documentation reasonably necessary to support and verify any Losses which give rise to such claim for indemnification and shall provide reasonable access to all books, records and personnel in their possession or under their control which would have a bearing on such Claim.

 

 

(a)           Other than Losses arising from breach of Sections 4.1 (Title to Interests), 4.2 (Organization, Authority, and Capacity), 4.3 (Execution and Enforceability), 5.2 (Authorization, Execution and Enforceability), 5.5 (The Interests), 5.16 (Environmental Matters), 5.18 (Tax Matters), and 5.19 (Employee Benefit Plans) (collectively, the “Non-Basket Representations”), breach of the covenants contained in this Agreement, and the Retained Losses, no amount is required to be paid by the Members or Contributor with respect to claims for indemnification under this Section 8 unless and until the aggregate amount of all Losses arising out of Claims otherwise payable by the Members under this Section 8 exceeds $400,000. At such time as the total amount payable by the Members and Contributor exceeds $400,000 in the aggregate, the KHC Indemnified Parties shall be entitled to be indemnified against the full amount of all Losses that have been incurred or suffered by the KHC Indemnified Parties in excess of the $400,000 threshold (i.e., a deductible basket). The Members’ total liability under this Section 8 shall not exceed, in the aggregate, Five Million Five Hundred Thousand Dollars ($5,500,000)(the “Indemnity Cap”); provided, however, that the Indemnity Cap shall not apply to indemnification obligations relating to or arising out of the breach of any of the Non-Basket Representations, the Retained Losses or the covenants set forth in this Agreement; and provided, further that in no event shall the total liability of the Members and Contributor hereunder exceed the Aggregate Consideration (with the KHC Shares valued at the Minimum Deemed Value Per Share) and provided, further, that each Member’s total liability under this Agreement shall not exceed the value of the Aggregate Consideration (with the KHC Shares on a per share basis valued at the Minimum Deemed Value Per Share) received by such Member.

 

(b)         Other than Losses arising from breach of representations and warranties set forth in 6.2 (Authorization, Execution and Enforceability), 6.9 (Capitalization; KHC Shares) and 6.15 (Tax Matters) (collectively, the “KHC Non-Basket Representations”), breach of the covenants contained in this Agreement, no amount is required to be paid by KHC with respect to claims for indemnification under this Section 8 unless and until the aggregate amount of all Losses arising out of Claims otherwise payable by KHC under this Section 8 exceeds $400,000. At such time as the total amount payable by KHC exceeds $400,000 in the aggregate, the Contributor Indemnified Parties shall be entitled to be indemnified against the full amount of all Losses that have been incurred or suffered by the KHC Indemnified Parties in excess of the $400,000 threshold (i.e., a deductible basket). The KHC’s total liability under this Section 8 shall not exceed, in the aggregate, Five Million Five Hundred Thousand Dollars ($5,500,000) (the “KHC Indemnity Cap”); provided, however, that the KHC Indemnity Cap shall not apply to indemnification obligations relating to or arising out of the breach of any of the Non-Basket Representations or the covenants set forth in this Agreement.

 

(c)         Solely for purposes of determining the amount of Losses or Tax Losses that an Indemnified Party has suffered, and not for determining whether a representation or warranty in this Agreement is inaccurate or has been breached by a party hereunder, where such representation or warranty is modified or otherwise qualified by the terms “material” or Material Adverse Effect“ (or other words of similar import), such terms or qualifiers will be ignored.

 

(d)        The amount of any Losses or Tax Losses payable under this Section 8 shall be net of any amounts actually recovered by Indemnified Parties under applicable insurance policies after reducing such amounts by the costs of recovery (including deductibles, retroactive or retrospective premium adjustments, experienced based premiums) and any increase in the cost of insurance. If an Indemnified Party receives any amounts under such applicable insurance policies subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by the Indemnifying Party in connection with providing such indemnification payment up to the amount received by the Indemnified Party, net of any expenses incurred by such Indemnified Party in collecting such amount and any increased insurance costs resulting therefrom. The Indemnified Parties shall be under no obligation to seek first recovery under such insurance coverage, but will use commercially reasonable efforts subsequently to seek recovery from any insurance coverage that may be available if, in the reasonable opinion of such Indemnified Party, doing so will not materially jeopardize any rights to continued coverage it may have under its insurance coverage.

 

(e)         To the extent claims for indemnification pursuant to this Section 8 do not involve a third party claim, an Indemnifying Party shall not be responsible or liable for Losses or Tax Losses or other amounts under this Section 8 that are speculative, punitive, consequential, incidental, indirect or special damages, “multiple of profit or cash flow”, diminution of value or other premium damages.

 

(f)         Notwithstanding anything herein to the contrary, no party is entitled to indemnification or reimbursement under any provision of this Agreement for any amount to the extent such party or its Affiliate has been indemnified or reimbursed for such amount under any other provision of this Agreement, or any other Transaction Document executed in connection with this Agreement or otherwise.

 

(g)         Notwithstanding anything else in this Section 8 to the contrary, no party shall be limited, at any time, from recovering any and all Losses or Tax Losses incurred or suffered by it relating to or arising out of or in connection with fraud.

 

 

The parties shall cooperate with any reasonable request of the other and make available, at the other’s expense, all information (but excluding privileged communications) necessary for the other to pursue any indemnification or reimbursement from a third party for any Losses or Tax Losses in the event that the other elects to pursue such indemnification or reimbursement. Each party agrees to use reasonable efforts to mitigate any Loss or Tax Loss which forms the basis of a Claim hereunder. Unless otherwise required by applicable Law, all indemnification payments will constitute adjustments to the Aggregate Consideration for all Tax purposes, and no party will take any position inconsistent with such characterization.

 

 

Upon making an indemnity payment pursuant to this Agreement, the Indemnifying Party will, to the extent of such payment, be subrogated to all rights of the Indemnified Party against any third party in respect of the damages to which the payment related. Without limiting the generality of any other provision hereof, each such Indemnified Party and Indemnifying Party will duly execute upon request all instruments reasonably necessary to evidence and perfect the above described subrogation rights

 

 

Other than equitable remedies arising out of breaches or other violations of this Agreement, fraud, or as otherwise provided in other documents delivered in connection herewith, the indemnification provided by this Section 8 shall be the sole and exclusive remedy of the Indemnified Parties for any Claims in connection with the transactions contemplated by this Agreement.

 

 

 

At the Closing, the Members, Contributor or the Company, as applicable, shall deliver the following:

 

(a)          a certified copy of the resolutions adopted by the member and the board of managers of each of Contributor and the Company authorizing the transactions contemplated by this Agreement;

 

(b)          a Virginia good standing certificate for each of Contributor and the Company as of a date not more than fifteen days prior to the Closing Date;

 

(d)          the employment agreements entered into between each of Curry and Wilshere and KHC;

 

(e)          the Flow of Funds Memorandum;

 

(f)           evidence satisfactory to KHC of (i) the satisfaction of the obligations of the Contributor and the Company to be fulfilled at the Closing under the Deferred Compensation Unit Plan for Employees and Other Non-Advisors of The TAG Analysis Group, LLC and the Deferred Compensation Unit Plan for Advisors of the TAG Analysis Group, LLC (collectively, the “DCU Plans”), (ii) the termination of the DCU Plans, and (iii) full releases of those individuals listed on Exhibit C hereof who received payment pursuant to either of the DCU Plans;

 

(g)          all consents of third parties which are required to be obtained in order to consummate the transactions contemplated and are listed on Schedule 9.1(h);

 

(h)          joinder agreements to the Amended and Restated Stockholders’ Agreement dated as of May 22, 2009 and the Amended and Restated Registration Rights Agreement dated as of May 22, 2009; and

 

(i)           such other documents as KHC may reasonably request.

 

 

At the Closing, KHC shall deliver the following to the Members and Contributor, as applicable:

 

(a)          the Aggregate Consideration in accordance with Section 2.2(a);

 

(b)          a certified copy of the resolutions adopted by the board of directors of KHC and KEYW authorizing the transactions contemplated by this Agreement;

 

(c)          Maryland good standing certificates for KHC and KEYW as of a date not more than fifteen days prior to the Closing Date;

 

(d)          the employment agreements entered into between each of Curry and Wilshere and KHC;

 

(e)           joinder agreements to the Amended and Restated Stockholders’ Agreement dated as of May 22, 2009 and the Amended and Restated Registration Rights Agreement dated as of May 22, 2009; and

 

(f)           such other documents as the Contributors may reasonably request.

 

 

 

When a reference is made in this Agreement to a Section, Schedule or Exhibit, such reference shall be to a Section of, or a Schedule or Exhibit, to, this Agreement unless otherwise indicated. All terms used herein in the singular shall be deemed to include the plural, and vice versa, as the context may require. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

 

 

(a)           This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed under and in accordance with the Laws of the State of Maryland, excluding the choice of Law rules thereof.

 

(b)           THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER EXISTING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES HERETO AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT BETWEEN OR AMONG THE PARTIES HERETO IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN OR AMONG THEM RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

 

This Agreement may be executed in one or more counterparts and by facsimile (or other electronic transmission of signature pages), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

 

(a) All notices, demands, requests, or other communications which may be or are required to be given, served, or sent by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered, sent by overnight courier or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

(i)           If to Contributor:

TAG Holdings, LLC

c/o D. Patrick Curry

316 Van Buren Street

Falls Church, VA 22046

 

with a copy (which shall not constitute notice) to:

Holland Knight, LLP

1600 Tysons Boulevard, Suite 700

McLean, VA 22102

Attn: William Mutryn and Marisa C. Terrenzi

 

(iii)         If to the Members:

D. Patrick Curry

316 Van Buren Street

Falls Church, VA 22046

2008 Dennis Patrick Curry Grantor Retained Annuity Trust

c/o D. Patrick Curry, Trustee

316 Van Buren Street

Falls Church, VA 22046

Kevin B. Wilshere

12773 Lost Creek Court

Manassas, VA 20112

 

with a copy (which shall not constitute notice) to:

Holland Knight, LLP

1600 Tysons Boulevard, Suite 700

McLean, VA 22102

Attn: William Mutryn and Marisa C. Terrenzi

 

(ii)          If to KHC or the Company following the Closing:

The KEYW Holding Corporation

1334 Ashton Road, Suite A

Hanover, MD 21076

Attn: John Krobath

 

with a copy (which shall not constitute notice) to:

Hogan & Hartson LLP

100 International Drive, Suite 2000

Baltimore, Maryland 21202

Attention: A. Lynne Puckett

 

(b)           Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication which shall be hand delivered, sent, mailed, in the manner described above, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, or being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

 

If any provision of this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect.

 

 

All terms of this Agreement, whether so expressed or not, shall be binding upon the respective successors and assigns of the parties hereto and shall inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto.

 

 

This Agreement shall not be assignable by any of the parties hereto without the prior written consent of the other parties.

 

 

Except as specifically set forth in Section 8, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement.

 

 

[Reserved].

 

10.10     Entire Agreement; Amendments and Waivers. 

 

This Agreement and the exhibits, schedules, certificates and other documents delivered in connection with this Agreement and the Closing contain and constitute the entire agreement and understanding between the parties related to the subject matter hereof and the Closing and supersede and cancel all prior agreements and understandings relating to the subject matter hereof and the Closing, whether written or oral. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated, except in writing signed by the parties hereto.

 

 

Guarantor does hereby unconditionally and irrevocably guarantee to Contributor the prompt payment and performance of all obligations, monetary or non monetary, of KHC now or hereafter owed to the Contributor pursuant to this Agreement (collectively, the “Obligation”), and does hereby agree that if the Obligation or any portion thereof is not paid by KHC, Guarantor will make such payments upon written demand by Contributor. Guarantor hereby waives and agrees not to assert or take advantage of any defense, including unenforceability (because of bankruptcy or for any other reason) of the Obligation, except the defense of payment in full of the Obligation. Guarantor acknowledges that Guarantor is entering into this Agreement in order to induce Contributor to consummate the transaction contemplated by this Agreement.

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGES]

 

IN WITNESS WHEREOF, the parties hereto have caused this Contribution Agreement to be executed as of the date first written above.