Document:

Exhibit 10.13

 Exhibit 10.13 
  
 CACI INTERNATIONAL INC. 
 CACI, INC.- FEDERAL 
 CACI ACQUISITION
CORPORATION 
 ACTON BURNELL, INC. 
  
 AGREEMENT AND PLAN OF MERGER 
  
 TABLE OF CONTENTS 
  

	 Article 1 Definitions
	  	1
	 	  	1.1	  	 Certain Matters of Construction
	  	1
	 	  	1.2	  	 Cross References
	  	1
	 	  	1.3	  	 Certain Definitions
	  	3
		
	 Article 2 The Merger
	  	7
	 	  	2.1	  	 Procedure for the Merger
	  	7
	 	  	2.2	  	 Surviving Corporation.
	  	7
	 	  	 	  	 2.2.1
	  	 Corporate Existence
	  	7
	 	  	 	  	 2.2.2
	  	 Articles of Incorporation and By-laws
	  	7
	 	  	 	  	 2.2.3
	  	 Directors
	  	7
	 	  	 	  	 2.2.4
	  	 Effect of the Merger
	  	8
	 	  	2.3	  	 Conversion of Stock
	  	8
	 	  	 	  	 2.3.1
	  	 Stock of the Company
	  	8
	 	  	 	  	 2.3.2
	  	 Merger Price and Merger Price Per Share
	  	8
	 	  	 	  	 2.3.3
	  	 Stock of Merger Sub
	  	8
	 	  	2.4	  	 Appraisal Rights
	  	8
	 	  	 	  	 2.4.1
	  	 Major Stockholders’ Consent and Appraisal Rights
	  	9
	 	  	2.5	  	 Exercise of Options
	  	9
	 	  	2.6	  	 Payment of Merger Price
	  	9
	 	  	 	  	 2.6.1
	  	 Stockholder List
	  	9
	 	  	 	  	 2.6.2
	  	 Closing Certificate
	  	9
	 	  	 	  	 2.6.3
	  	 The Merger Price Paid at the Closing
	  	9
	 	  	 	  	 2.6.4
	  	 The Remaining Merger Price
	  	10
	 	  	 	  	 2.6.5
	  	 Letters of Transmittal
	  	10
	 	  	2.7	  	 Additional Actions
	  	10
	 	  	2.8	  	 Stockholders’ Representative
	  	10
	 	  	2.9	  	 Final Adjustment to Merger Price.
	  	12
	 	  	 	  	 2.9.1
	  	 Preparation of Closing Balance Sheet
	  	12
	 	  	 	  	 2.9.2
	  	 Review of Closing Balance Sheet
	  	12
	 	  	 	  	 2.9.3
	  	 Disputes
	  	12
	 	  	 	  	 2.9.4
	  	 Final Closing Balance Sheet
	  	13
	 	  	 	  	 2.9.5
	  	 Adjustments to the Merger Price
	  	13
		
	 Article 3 Representations And Warranties Of The Company
	  	13
	 	  	3.1	  	 Corporate Status of the Company
	  	13
	 	  	3.2	  	 Capital Stock.
	  	14
	 	  	 	  	 3.2.1
	  	 Authorized Stock of the Company
	  	14

	 	  	 3.2.2
	  	 Options and Convertible Securities of the Company
	  	14
	     3.3
	  	 Subsidiaries/Acquisitions/Divestures
	  	14
	     3.4
	  	 Authority for Agreement; Noncontravention.
	  	14
	 	  	 3.4.1
	  	 Authority
	  	14
	 	  	 3.4.2
	  	 No Conflict
	  	15
	     3.5
	  	 Financial Statements
	  	15
	     3.6
	  	 Absence of Material Adverse Changes
	  	16
	     3.7
	  	 Absence of Undisclosed Liabilities
	  	16
	     3.8
	  	 Compliance with Applicable Law, Charter and By-Laws
	  	16
	     3.9
	  	 Litigation and Audits
	  	16
	     3.10
	  	 Tax Matters
	  	17
	 	  	 3.10.1
	  	 Filing of Returns
	  	17
	 	  	 3.10.2
	  	 Payment of Taxes
	  	17
	 	  	 3.10.3
	  	 Assessments or Disputes
	  	17
	 	  	 3.10.4
	  	 Waiver of Statute of Limitations
	  	17
	 	  	 3.10.5
	  	 Collapsible Corporations, Golden Parachutes, Real Property Holding Corporations
	  	17
	 	  	 3.10.6
	  	 No Changes in Accounting, Closing Agreement, Installment Sale
	  	17
	     3.11
	  	 Employee Benefit Plans.
	  	18
	 	  	 3.11.1
	  	 List of Plans
	  	18
	 	  	 3.11.2
	  	 ERISA
	  	18
	 	  	 3.11.3
	  	 Plan Determinations
	  	19
	 	  	 3.11.4
	  	 Funding
	  	19
	     3.12
	  	 Employment-Related Matters.
	  	20
	 	  	 3.12.1
	  	 Labor Relations
	  	20
	 	  	 3.12.2
	  	 Employee List
	  	20
	     3.13
	  	 Environmental.
	  	20
	 	  	 3.13.1
	  	 Environmental Laws
	  	20
	 	  	 3.13.2
	  	 Environmental Claims
	  	20
	     3.14
	  	 No Broker’s or Finder’s Fees
	  	20
	     3.15
	  	 Assets Other Than Real Property.
	  	21
	 	  	 3.15.1
	  	 Title
	  	21
	 	  	 3.15.2
	  	 Accounts Receivable
	  	21
	 	  	 3.15.3
	  	 Pre-Closing Receivables
	  	21
	 	  	 3.15.4
	  	 Condition
	  	21
	 	  	 3.15.5
	  	 Unclaimed Property
	  	21
	     3.16
	  	 Real Property.
	  	21
	 	  	 3.16.1
	  	 Company Real Property
	  	21
	 	  	 3.16.2
	  	 Company Leases
	  	22
	     3.17
	  	 Agreements, Contracts and Commitments.
	  	22
	 	  	 3.17.1
	  	 Company Agreements
	  	22
	 	  	 3.17.2
	  	 Validity
	  	23
	 	  	 3.17.3
	  	 Third-Party Consents
	  	24
	     3.18
	  	 Intellectual Property.
	  	24
	 	  	 3.18.1
	  	 Right to Intellectual Property
	  	24
	 	  	 3.18.2
	  	 No Conflict
	  	24

  

 ii 

	 	  	 	  	 3.18.3
	  	 Employee Agreements
	  	25
	 	  	3.19	  	 Insurance Contracts
	  	25
	 	  	3.20	  	 Banking Relationships
	  	25
	 	  	3.21	  	 Absence of Certain Relationships
	  	26
		
	 Article 4 Representations And Warranties Of Parent, Federal and Merger Sub
	  	26
	 	  	4.1	  	 Corporate Status of Parent, Federal and Merger Sub
	  	26
	 	  	4.2	  	 Authorized Stock of Merger Sub
	  	26
	 	  	4.3	  	 Authority for Agreement; Noncontravention.
	  	26
	 	  	 	  	 4.3.1
	  	 Authority of Parent
	  	26
	 	  	 	  	 4.3.2
	  	 No Conflict
	  	26
	 	  	4.4	  	 SEC Statements, Reports and Documents
	  	27
	 	  	4.5	  	 Absence of Material Adverse Changes
	  	27
	 	  	4.6	  	 Sophisticated Investor
	  	27
	 	  	4.7	  	 Brokers’, Finders’ Fees, etc
	  	28
	 	  	4.8	  	 No Knowledge of Misrepresentations or Omissions
	  	28
	 	  	4.9	  	 Litigation
	  	28
		
	 Article 5 Conduct Prior To The Closing Date
	  	28
	 	  	5.1	  	 Conduct of Business of the Company
	  	28
	 	  	5.2	  	 Conduct of Business of Parent
	  	30
		
	 Article 6 Additional Agreements
	  	31
	 	  	6.1	  	 Exclusivity
	  	31
	 	  	6.2	  	 Expenses.
	  	31
	 	  	 	  	 6.2.1
	  	 General
	  	31
	 	  	 	  	 6.2.2
	  	 Broker Fees
	  	31
	 	  	 	  	 6.2.3
	  	 Uncovered Expenses
	  	31
	 	  	6.3	  	 Indemnification Provisions
	  	31
	 	  	 	  	 6.3.1
	  	 Indemnification
	  	31
	 	  	 	  	 6.3.2
	  	 Claims for Indemnification
	  	32
	 	  	 	  	 6.3.3
	  	 Defense by Indemnifying Party
	  	32
	 	  	 	  	 6.3.4
	  	 Limitation on Liability for Indemnity
	  	33
	 	  	 	  	 6.3.5
	  	 Claims Period
	  	33
	 	  	 	  	 6.3.6
	  	 Losses Not to Include Amounts in Net Assets
	  	33
	 	  	 	  	 6.3.7
	  	 Exclusive Remedy
	  	33
	 	  	 	  	 6.3.8
	  	 Express Waiver of Other Remedies
	  	33
	 	  	 	  	 6.3.9
	  	 Insurance
	  	34
	 	  	 	  	 6.3.10
	  	 Subrogation
	  	34
	 	  	 	  	 6.3.11
	  	 Merger Price
	  	34
	 	  	 	  	 6.3.12
	  	 Effect of Notice
	  	34
	 	  	 	  	 6.3.13
	  	 Overestimation of Loss
	  	34
	 	  	 	  	 6.3.14
	  	 Certain Limitations
	  	34
	 	  	6.4	  	 Disclosure Generally.
	  	35
	 	  	6.5	  	 Disclaimer of Implied Warranties
	  	35
	 	  	6.6	  	 Access and Information
	  	35
	 	  	6.7	  	 Public Disclosure
	  	35

  

 iii 

	 	  	6.8	  	 No Solicitation of Employees
	  	35
	 	  	6.9	  	 Further Assurances.
	  	36
	 	  	 	  	 6.9.1
	  	 Generally
	  	36
	 	  	 	  	 6.9.2
	  	 Novation of the Material Contracts
	  	36
	 	  	6.10	  	 Certain Tax Matters.
	  	36
	 	  	 	  	 6.10.1
	  	 Tax Periods Ending on or before the Closing Date
	  	36
	 	  	 	  	 6.10.2
	  	 Tax Periods Beginning Before and Ending after the Closing Date
	  	37
	 	  	 	  	 6.10.3
	  	 Cooperation on Tax Matters
	  	37
	 	  	 	  	 6.10.4
	  	 Tax Sharing Agreements
	  	38
	 	  	 	  	 6.10.5
	  	 Certain Taxes
	  	38
	 	  	 	  	 6.10.6
	  	 Tax Treatment of the Merger
	  	38
	 	  	 	  	 6.10.7
	  	 Section 338 Election
	  	38
	 	  	6.11	  	 Notification
	  	38
	 	  	6.12	  	 Amendment of Charter Documents
	  	39
	 	  	6.13	  	 Employee Matters
	  	39
	 	  	6.14	  	 Payment of Bonuses to Company Employees
	  	39
	 	  	6.15	  	 Books and Records
	  	39
	 	  	6.16	  	 Stockholders’ Meeting
	  	39
		
	 Article 7 Conditions Precedent
	  	39
	 	  	7.1	  	 Conditions Precedent to the Obligations of Each Party
	  	39
	 	  	 	  	 7.1.1
	  	 No Illegality
	  	40
	 	  	 	  	 7.1.2
	  	 Government Consents
	  	40
	 	  	 	  	 7.1.3
	  	 No Injunction
	  	40
	 	  	7.2	  	 Conditions Precedent to Obligation of Parent, Federal and Merger Sub to Consummate the Merger
	  	40
	 	  	 	  	 7.2.1
	  	 Representations and Warranties
	  	40
	 	  	 	  	 7.2.2
	  	 Agreements and Covenants
	  	40
	 	  	 	  	 7.2.3
	  	 Legal Opinion
	  	41
	 	  	 	  	 7.2.4
	  	 Closing Documents
	  	41
	 	  	 	  	 7.2.5
	  	 Third Party Consents
	  	41
	 	  	 	  	 7.2.6
	  	 Diligence Review
	  	41
	 	  	 	  	 7.2.7
	  	 Employment Agreements
	  	41
	 	  	 	  	 7.2.8
	  	 Consulting, Non-Compete, Non-Solicitation and Non-Disturbance Agreement
	  	41
	 	  	 	  	 7.2.9
	  	 Material Adverse Effect
	  	41
	 	  	7.3	  	 Conditions to Obligations of the Company and the Stockholders to Consummate the Merger
	  	41
	 	  	 	  	 7.3.1
	  	 Representations and Warranties
	  	42
	 	  	 	  	 7.3.2
	  	 Agreements and Covenants
	  	42
	 	  	 	  	 7.3.3
	  	 Legal Opinion
	  	42
	 	  	 	  	 7.3.4
	  	 Closing Documents
	  	42
	 	  	 	  	 7.3.5
	  	 Material Adverse Effect
	  	42
	 	  	 	  	 7.3.6
	  	 Payment of Merger Price
	  	42
	 	  	 	  	 7.3.7
	  	 Written Waiver
	  	42
		
	 Article 8 Survival Of Representations
	  	43

  

 iv 

	 	  	8.1	  	 The Company’s Representations
	  	43
	 	  	8.2	  	 Parent’s Representations
	  	43
		
	 Article 9 Other provisions
	  	43
	 	  	9.1	  	 Termination Events
	  	43
	 	  	9.2	  	 Notices
	  	44
	 	  	9.3	  	 Entire Agreement
	  	46
	 	  	9.4	  	 Assignability
	  	46
	 	  	9.5	  	 Validity
	  	46
	 	  	9.6	  	 Specific Performance
	  	46
	 	  	9.7	  	 Governing Law
	  	46
	 	  	9.8	  	 Counterparts
	  	46
	 	  	9.9	  	 Jurisdiction
	  	46
	 	  	9.10	  	 Legal Representation
	  	46
	 	  	9.11	  	 Amendment
	  	47

  

 v 

 AGREEMENT AND PLAN OF MERGER 
  
 AGREEMENT AND PLAN OF MERGER, dated as of
September 21, 2002 (the “Agreement”), by and among CACI International Inc, a Delaware corporation (“Parent”), CACI, INC.—FEDERAL, a Delaware corporation and wholly-owned subsidiary of Parent
(“Federal”), CACI Acquisition Corporation, a Virginia corporation and wholly-owned subsidiary of Federal (“Merger Sub”), and Acton Burnell, Inc., a Virginia corporation (the “Company”), and the
stockholders of the Company listed on Schedule A attached hereto (collectively, the “Major Stockholders”). Merger Sub and the Company together are sometimes referred to herein as the “Constituent Corporations.” 
  
 W I T N E S S E T H 
  
 WHEREAS, the respective boards of directors of Parent, Federal, Merger Sub
and the Company have determined that it is advisable that the Merger Sub be merged with and into the Company (the “Merger”) on the terms and conditions set forth herein and in accordance with the provisions of Title 13.1 of the Code of
Virginia (the “CV”); 
  
 WHEREAS, as of the date hereof,
the Major Stockholders respectively own the number of issued and outstanding shares of common stock, $.002 par value per share, of the Company (“Common Stock”), in each case as set forth opposite such Stockholder’s name on Schedule A
hereto; and 
  
 WHEREAS, Parent, Federal, Merger Sub, the Major
Stockholders and the Company desire to make certain representations and warranties and other agreements in connection with the Merger; 
  
 NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereby agree as follows: 
  
 Article 1 
 DEFINITIONS 
  
 1.1 Certain Matters of Construction. A reference to an Article, Section, Exhibit or Schedule shall mean an Article
of, a Section in, or Exhibit or Schedule to, this Agreement unless otherwise expressly stated. The titles and headings herein are for reference purposes only and shall not in any manner limit the construction of this Agreement which shall be
considered as a whole. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” 
  
 1.2 Cross References. The following terms defined elsewhere in this
Agreement in the Sections set forth below shall have the respective meanings therein defined: 

	 Term

	  	Definition

	 Acquisition Proposals
	  	Section 6.1
	 Agreement
	  	Preamble
	 Articles of Merger
	  	Section 2.1
	 Auditor
	  	Section 2.9.3
	 Broker
	  	Section 2.6.3
	 Closing
	  	Section 2.1
	 Closing Balance Sheet
	  	Section 2.9.1
	 Closing Date
	  	Section 2.1
	 Common Stock
	  	Preamble
	 Company
	  	Preamble
	 Company Balance Sheet
	  	Section 3.5
	 Company Financial Statements
	  	Section 3.5
	 Company Insurance Contracts
	  	Section 3.19
	 Company Proprietary Rights
	  	Section
3.18.1
	 Company Plans
	  	Section
3.11.1
	 Constituent Corporations
	  	Preamble
	 Consulting Agreement
	  	Section 7.2.8
	 CV
	  	Preamble
	 Demand Notice
	  	Section 6.1
	 Dissenting Shares
	  	Section 2.4
	 DSMO
	  	Section 9.10
	 Effective Time
	  	Section 2.1
	 Employee List
	  	Section
3.12.2
	 Encumbrances
	  	Section
3.15.1
	 Exercise Amount
	  	Section 2.5
	 Expenses
	  	Section 6.2.1
	 Federal
	  	Preamble
	 Final Closing Balance Sheet
	  	Section 2.9.4
	 First Payment
	  	Section 2.6.3
	 GAAP
	  	Section 2.9.1
	 Holdback Amount
	  	Section 2.6.3
	 Governmental Entity
	  	Section 3.4.2
	 Indemnification Claim
	  	Section 6.3.2
	 Indemnified Party
	  	Section 6.3.2
	 Indemnifying Party
	  	Section 6.3.2
	 Indemnity Cap
	  	Section 6.3.4
	 Indemnity Deductible
	  	Section 6.3.4
	 Liabilities
	  	Section 3.7
	 Major Stockholders
	  	Preamble
	 Material Contracts
	  	Section
3.17.1
	 Merger
	  	Preamble
	 Merger Price
	  	Section 2.3.2
	 Merger Price Per Share
	  	Section 2.3.2

  

 2 

	 Merger Sub
	  	Preamble
	 Merger Sub Stock
	  	Section 2.3.3
	 Notice of Claim
	  	Section 6.3.2
	 Parent
	  	Preamble
	 Parent Balance Sheet
	  	Section 4.4
	 Parent Indemnified Parties
	  	Section 6.3.1
	 Parent Reports
	  	Section 4.4
	 Permits
	  	Section 3.8
	 Second Payment
	  	Section 2.6.4
	 Stockholder List
	  	Section 2.6.1
	 Stockholder Indemnified Parties
	  	Section 6.3.1
	 Stockholders’ Objection
	  	Section 0
	 Stockholders
	  	Section 2.6.1
	 Stockholders’ Representative
	  	Section 2.8
	 Surviving Corporation
	  	Section 2.1
	 Third Party Claim
	  	Section 6.3.3
	 Updated Schedules
	  	Section 6.11

  
 1.3 Certain
Definitions. As used herein, the following terms shall have the following meanings: 
  
 Affiliate: with respect to any Person, any Person which, directly or indirectly, controls, is controlled by, or is under common control with, such Person. 
  
 Affiliated Group: means any affiliated group within the meaning of
Code section 1504(a). 
  
 Closing Certificate: the
certificate of the Company, substantially in the form attached hereto as Exhibit D. 
  
 COBRA: the provisions of Section 4980B of the Code and Part 6 of Title I of ERISA. 
  
 Code: the U.S. Internal Revenue Code of 1986, as amended from time to time. 
  
 Commercial Software: packaged commercial software programs generally available to the public through retail dealers
in computer software or directly from the manufacturer which have been licensed to the Company and which are used in the Company’s business but are in no way a component of or incorporated in or specifically required to develop any of the
Company’s products and related trademarks and technology. 
  
 Company: Acton Burnell, Inc. 
  
 Company
Leases: each lease, sublease, license or other agreement under which the Company uses, occupies or has the right to occupy any real property or interest therein that (a) provides for future minimum payments of $25,000 or more (ignoring any right
of cancellation or termination) or (b) the cancellation or termination of which would have a Company Material Adverse Effect. 
  

 3 

 Company Material Adverse Effect: any materially adverse change in or effect on the financial
condition, business, operations, assets, properties, results of operations or, for the time period between the execution of the Agreement and the Closing, prospects of the Company; provided, however, that any such effect resulting from (i) any
continuation of any specific adverse trend or condition or (ii) any actions required to be taken by this Agreement or any agreement contemplated herein, shall not be considered when determining whether a Company Material Adverse Effect has occurred.
 
  
 Control (including with correlative meaning,
controlled by and under common control with): as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. 
  
 Determination: with respect to an indemnification claim pursuant to Section 6.3, means (a) a written compromise or settlement signed by Parent, Federal or the Surviving Corporation, on the one hand, and the Stockholders’
Representative on the other, or (b) a binding arbitration award or a judgment of a court of competent jurisdiction in the United States of America or elsewhere (the time for appeal having expired and no appeal having been perfected) in favor of an
Indemnified Party against an Indemnifying Party. 
  
 Environmental Claim: any actual notice alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, response or remediation costs, natural resources damages, property
damages, personal injuries, fines or penalties) arising out of, based on or resulting from (a) the presence, or release of any Material of Environmental Concern at any location, whether or not owned by that party or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law. 
  
 Environmental Laws: any and all Federal, state or local statutes, regulations and ordinances relating to the protection of public health, safety or the environment. 
  
 ERISA: the Employee Retirement Income Security Act of 1974, as
amended. 
  
 ERISA Affiliate: with respect to a party, any
member (other than that party) of a controlled group of corporations, group of trades or businesses under common control or affiliated service group that includes that party (as defined for purposes of Section 414(b), (c) and (m) of the Code).

  
 Estimated Net Assets: the estimated Net Assets of the
Company on the Closing Date as set forth on the Closing Certificate. 
  
 Estimated Net Assets Adjustment: the Net Assets Adjustment determined on the Closing Date and set forth on the Closing Certificate, calculated using the Estimated Net Assets, less $300,000. 
  
 Exchange Act: the Securities Exchange Act of 1934, as amended.

  

 4 

 Knowledge of the Company: shall mean the actual, current knowledge of the following individuals:
Stan Ecton, Charles Olsick, Jr., Bill Wydo, John Visbarus, Elaine Stricklett, Lisa Redenson, Bill Betzner and Ronda Lin. 
  
 Letter of Intent: the letter dated July 22, 2002 from Stephen L. Waechter, Executive Vice President and Chief Financial Officer of Parent to Mr.
Stan Ecton, Chief Executive Officer of the Company, expressing the companies’ intention to effect the stock purchase and related transactions, subject to execution of this Agreement and other matters. 
  
 Losses: the amount of any actual damages, liabilities, obligations,
deficiencies, losses, expenditures, costs or expenses (including without limitation reasonable attorneys’ fees and disbursements). For purposes of determining the amount of any Loss, the amount of any Loss shall be reduced by any insurance
proceeds received or receivable in respect thereof (in each case net of costs of recovery). For purposes of determining the amount of any Loss incurred by reason of any breach of any representation or warranty made by the Company under this
Agreement, each such representation or warranty would read as if all qualifications as to materiality were deleted therefrom. 
  
 Materials of Environmental Concern: petroleum and its by-products and any and all other substances or constituents to the extent that they are
regulated by any Environmental Law. 
  
 Net Assets: total
assets of the Company less total liabilities as of the Closing Date, each as determined in accordance with GAAP and the Principles and Procedures. 
  
 Net Assets Adjustment: the number (positive or negative) calculated on the basis of the Net Assets, which is determined as follows: 
  
 (i) if Net Assets are greater than $3,000,000, then the Net Assets
Adjustment is a positive number equal to such excess; 
  
 (ii)
if Net Assets equal $3,000,000 then the Net Assets Adjustment is zero; and 
  
 (iii) if Net Assets are less than $3,000,000, then the Net Assets Adjustment is a negative number equal to such deficit. 
  
 Options: the non-qualified or incentive stock options granted pursuant to the Company’s 1999 Stock Option Plan to purchase shares of Common
Stock. 
  
 Parent Material Adverse Effect: any
change in or effect on the financial condition, business, operations, assets, properties, or results of operations or, for the time between period the execution of Agreement and the Closing, prospects of Parent and its Subsidiaries considered on a
consolidated basis that might reasonably be expected to impair the ability of Parent to provide funds for payment of the entire Merger Price in accordance with the terms of this Agreement. 
  
 Paying Agent Procedures: the paying agent procedures in the form
attached hereto as Exhibit E. 
  

 5 

 Permitted Encumbrances: (a) liens for current taxes and other statutory liens and trusts not yet
due and payable or that are being contested in good faith, (b) liens that were incurred in the ordinary course of business, such as carriers’, warehousemen’s, landlords’ and mechanics’ liens and other similar liens arising in the
ordinary course of business, (c) liens on personal property leased under operating leases, (d) liens, pledges or deposits incurred or made in connection with workmen’s compensation, unemployment insurance and other social security benefits, or
securing the performance of bids, tenders, leases, contracts (other than for the repayment of borrowed money), statutory obligations, progress payments, surety and appeal bonds and other obligations of like nature, in each case incurred in the
ordinary course of business, (e) pledges of or liens on manufactured products as security for any drafts or bills of exchange drawn in connection with the importation of such manufactured products in the ordinary course of business, (f) liens under
Article 2 of the Uniform Commercial Code that are special property interests in goods identified as goods to which a contract refers, (g) liens under Article 9 of the Uniform Commercial Code that are purchase money security interests, (h) those
liens disclosed on Exhibit A hereto, and (i) such imperfections or minor defects of title, easements, rights-of-way and other similar restrictions (if any) as are insubstantial in character, amount or extent, do not materially detract from the value
or interfere with the present use of the properties or assets of the party subject thereto or affected thereby, and do not otherwise adversely affect or impair the business or operations of such party as currently conducted. 
  
 Person: an individual, a corporation, an association, a partnership,
an estate, a trust and any other entity or organization. 
  
 Principles and Procedures: the accounting principles and procedures set forth in Exhibit F. 
  
 SEC: the United States Securities and Exchange Commission, or any Governmental Entity succeeding to its functions. 
  
 Securities Act: the Securities Act of 1933, as amended. 

 
 Security Interest: means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic’s, materialman’s, and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money liens and liens securing rental payments under capital lease arrangements, and
(d) other liens arising in the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency) and not incurred in connection with the borrowing of money. 
  
 Subsidiary: any corporation, association, or other business entity a
majority (by number of votes on the election of directors or persons holding positions with similar responsibilities) of the shares of capital stock (or other voting interests) of which is owned by Parent, the Company or their respective
Subsidiaries, as the case may be. 
  
 Tax: means any
federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, 

  

 6 

 
environmental (including taxes under Code section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not. 
  
 Tax Return: means any return,
declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. 
  
 Treasury Regulation: means a regulation promulgated by the United States Treasury Department under one or more
provisions of the Code. 
  
 Article 2 
 THE MERGER 
  
 2.1 Procedure for the Merger. The closing of the transactions contemplated by this Agreement (“Closing”) shall take place at the offices
of Parent in Arlington, Virginia, commencing at 9 a.m. local time on October 16, 2002, or on such other date as the parties may agree after the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions
contemplated hereby (“Closing Date”). At the Closing, Merger Sub shall be merged, in accordance with section 13.1-722 of the CV, with and into the Company, which shall be and is sometimes referred to herein as the “Surviving
Corporation.” The Merger shall be effected by filing articles of merger, substantially in the form of Exhibit 2.1 attached hereto (the “Articles of Merger”) with the State Corporation Commission of Virginia in accordance with section
13.1-720 of the CV. The Articles of Merger filed shall provide that the Merger will be effective on October 16, 2002 (the “Effective Time”),or on such other date or times as the parties mutually agree. 
  
 2.2 Surviving Corporation. 
  
 2.2.1 Corporate Existence. The Surviving Corporation shall continue
its corporate existence under the laws of the Commonwealth of Virginia. The separate corporate existence of Merger Sub shall cease at the Effective Time. 
  
 2.2.2 Articles of Incorporation and By-laws. The articles of incorporation of the Company, as in effect immediately prior to the Effective Time,
shall be the articles of incorporation of the Surviving Corporation until the same shall be amended thereafter in accordance with the CV and such articles of incorporation. The by-laws of the Company, as in effect immediately prior to the Effective
Time, shall be the by-laws of the Surviving Corporation until the same shall be amended thereafter in accordance with the CV, the certificate of incorporation of the Surviving Corporation and such by-laws. 
  
 2.2.3 Directors. As of the Effective Time, J.P. London and Jeffrey P.
Elefante shall be the directors of the Surviving Corporation, to hold office in accordance with the certificate of incorporation and by-laws of the Surviving Corporation. 
  

 7 

 2.2.4 Effect of the Merger. As of the Effective Time, the effect of the Merger shall be as
provided in this Agreement and the applicable provisions of the CV. Without limiting the generality of the foregoing, at the Effective Time, all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation. 
  
 2.3 Conversion of Stock. 
  
 2.3.1 Stock of the Company. At the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each
share of Common Stock, issued and outstanding immediately prior to the Effective Time, including those shares of Common Stock issued pursuant to the exercise of Options in accordance with Section 2.5 (other than Company Common Stock held in the
Company’s treasury and except any Dissenting Shares) will be canceled and extinguished and be converted automatically into the right to receive payment of the Merger Price Per Share in accordance with the terms and provisions of this Agreement.

  
 2.3.2 Merger Price and Merger Price Per Share. The
aggregate merger price (the “Merger Price”) shall be $23,500,000 (Twenty-Three Million Five Hundred Thousand Dollars) plus the Net Assets Adjustment. The merger price per share (the “Merger Price Per Share”) shall be the amount
obtained by dividing the Merger Price by the number of shares of Common Stock, issued and outstanding immediately prior to the Effective Time, including those shares of Common Stock issued pursuant to the exercise of Options in accordance with
Section 2.5 (including any Dissenting Shares). 
  
 2.3.3 Stock
of Merger Sub. At the Effective Time, each share of the common stock, par value $0.01 per share, of the Merger Sub (“Merger Sub Stock”) issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and become one validly issued, fully paid and nonassessable share of common stock, $0.002 par value per share, of the Surviving Corporation. 
  
 2.4 Appraisal Rights. Notwithstanding any other provision herein to
the contrary, if appraisal rights are available under the CV to holders of shares of Common Stock in connection with the Merger, shares of Common Stock that are outstanding immediately prior to the Effective Time and that are held by any shareholder
who shall not have voted such shares in favor of adoption of the Merger and who shall have taken the necessary steps under the CV to seek appraisal of, and demand payment for, the shares and is otherwise entitled to payment under the CV
(“Dissenting Shares”) shall not be converted into the right to receive the Merger Price Per Share at or after the Effective Time, unless and until the holder of the Dissenting Shares withdraws his or her demand for appraisal or ceases to
have a right of appraisal (through failure to perfect or otherwise). If a holder of Dissenting Shares shall withdraw his or her demand for appraisal or shall cease to have a right of appraisal, then, as of the later of the Effective Time or the
occurrence of such event, the holder’s Dissenting Shares shall be automatically converted into and represent the right to receive the Merger Price Per Share as provided above. Except to the extent otherwise required by the CV, Dissenting Shares
shall not, after the Effective Time, be entitled to vote for any purpose or be entitled to the payment of dividends or other distributions 

  

 8 

 
(except dividends or other distributions payable to stockholders of record prior to the Effective Time). 
  
 2.4.1 Major Stockholders’ Consent and Appraisal Rights. By
executing this Agreement, each of the Major Stockholders consent, in their capacity as stockholders of the Company and with the same effect as if they had so voted at a meeting of stockholders called for that purpose (and if such a meeting of
stockholders is called, the Major Stockholders agree that they will so vote), that the Company enter into this Agreement and consummate the Merger and other transactions contemplated by this Agreement in accordance with the terms and conditions of
the Merger as set forth in this Agreement. The Major Stockholders hereby waive and agree not to seek any appraisal rights that may be available to them under the CV in connection with the Merger and agree that all shares of the Common Stock that are
outstanding immediately prior to the Effective Time and held by them shall be converted into the right to receive the appropriate Merger Price Per Share at or after the Effective Time, as set forth in Section 2.3.2. 
  
 2.5 Exercise of Options. Pursuant to the terms of the Company’s
1999 Stock Option Plan, the Company shall cause each option holder to (i) prior to the Closing, exercise or forfeit all Options owned by such holder, (ii) satisfy the exercise prices of all Options exercised by such holder (the “Exercise
Amount”) with an obligation to pay the Exercise Amount to the Company at Closing; (iii) allow Federal to deduct the Exercise Amount from the amounts otherwise due and owing to such holder under this Agreement and to make payment of such amount
to the Company at the Closing (in satisfaction of such holder’s obligation described in clause (ii) above); and (iv) allow Federal to withhold from the amounts otherwise due and owing to such holder under this Agreement all withholding and
employment taxes required to be withheld from such holder with respect to the exercise of such Options, which amounts shall be promptly paid by Federal to the Company at Closing, who in turn will promptly pay such amount to the appropriate
governmental authorities. 
  
 2.6 Payment of Merger Price.

  
 2.6.1 Stockholder List. The Company shall prepare a
list (the “Stockholder List”) setting forth the names and addresses of all Persons who are the record holders of Company Common Stock immediately prior to the Effective Time and who are not holders of the Dissenting Shares (including the
Major Stockholders, the “Stockholders”), the number of shares of Company Common Stock held by each and a percentage such number of shares represents with respect to the total number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time (including Dissenting Shares), which it shall deliver to Federal at the Closing. 
  
 2.6.2 Closing Certificate. At the Closing, an officer of the Company shall deliver to Federal the Closing Certificate, which shall set forth his
best estimate of the Estimated Net Assets and Estimated Net Assets Adjustment. 
  
 2.6.3 The Merger Price Paid at the Closing. $20,500,000 (Twenty Million Five Hundred Thousand Dollars) plus the Estimated Net Assets Adjustment, less (i) the amount of the fees owed by the Company or the
Stockholders to Raymond James and Associates, Inc. (“Broker”) which will be paid by Federal directly to Broker pursuant to Section 6.2.2 and (ii) 

  

 9 

 
One Million Dollars ($1,000,000) (the “Holdback Amount”) which will be paid by Federal to the Stockholders’ Representative, as paying agent
pursuant to the terms of the Paying Agent Procedures, shall be made available for payment in immediately available funds (in accordance with the procedures set forth in Section 2.6.5) on the Closing Date by Federal to the Stockholders in the
respective pro rata amounts set forth in the Stockholder List. (The “First Payment”) 
  
 2.6.4 The Remaining Merger Price. $3,000,000 (Three Million Dollars) of the total Merger Price plus interest (at the simple interest rate of 1.75% per annum) shall be paid on the first anniversary of the
Closing Date by Federal, less the remaining amount of fees owed to the Broker (as advised by the Stockholders’ Representative) which will be paid directly to Broker, to the Stockholders’ Representative, as paying agent on behalf of the
Stockholders. Except as specifically provided in Section 6.3.4, Parent, Federal and the Surviving Corporation shall not be entitled to offset any claim against, or any amount owed by, any Stockholder to the Company, Parent, Federal or the Merger Sub
against any payment due to the Stockholders under this Section 2.6.4. (The “Second Payment”) 
  
 2.6.5 Letters of Transmittal. At or promptly after the Effective Time, the Surviving Corporation will send or deliver to each Stockholder two or
more copies of a Letter of Transmittal in a form mutually agreed by the parties. Thereafter, Federal shall pay to each Stockholder who submits a properly completed and executed Letter of Transmittal accompanied by surrender of the certificate or
certificates for shares of Company Common Stock for which that Stockholder claims payment, the aggregate amount to which that Stockholder is entitled based pursuant to Section 2.6.3 above. 
  
 2.7 Additional Actions. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this Agreement or to vest, perfect or confirm in the Surviving Corporation title to or ownership or possession of any property, right, privilege, power, franchise or other asset
of either Constituent Corporation acquired or to be acquired by reason of, or as a result of, the Merger, the officers and directors of the Company and Merger Sub are fully authorized in the name of their respective corporations or otherwise to
take, and will take, all such lawful and necessary action, so long as such action is consistent with this Agreement. 
  
 2.8 Stockholders’ Representative. Upon approval of the Merger, the Stockholders shall have been deemed to appoint Stan Ecton as the true and
lawful agent and attorney-in-fact (the “Stockholders’ Representative”) of the Stockholders with full power of substitution to act in the name, place and stead of the Stockholders with respect to the surrender of the Stock certificates
owned by the Stockholders to Federal in accordance with the terms and provisions of this Agreement, and to act on behalf of the Stockholders in any litigation or arbitration involving this Agreement, act as the paying agent on behalf of the
Stockholders, do or refrain from doing all such further acts and things, and execute all such documents as the Stockholders’ Representative shall deem necessary or appropriate in connection with the transactions contemplated by this Agreement,
including, without limitation, the power: 
  
 (i) to act for the
Stockholders with regard to matters pertaining to indemnification referred to in this Agreement, including the power to compromise any indemnity claim on behalf of the Stockholders and to transact matters of litigation; 
  

 10 

 (ii) to execute and deliver all ancillary agreements, certificates and documents that the
Stockholders’ Representative deems necessary or appropriate in connection with the consummation of the transactions contemplated by this Agreement; 
  
 (iii) to act as the paying agent and to receive funds and give receipts for funds, including in respect of any adjustments to the Merger Price, and to do
or refrain from doing the actions further described in the Paying Agent Procedures; 
  
 (iv) to do or refrain from doing any further act or deed on behalf of the Stockholders that the Stockholders’ Representative deems necessary or appropriate in his sole discretion relating to the subject matter of
this Agreement and the Paying Agent Procedures as fully and completely as the Stockholders could do if personally present; and 
  
 (v) to receive service of process in connection with any claims under this Agreement. 
  
 The appointment of the Stockholders’ Representative shall be deemed coupled with an interest and shall be irrevocable,
and Parent, Federal and the Surviving Corporation may conclusively and absolutely rely, without inquiry, upon any action of the Stockholders’ Representative in all matters referred to herein. 
  
 If Stan Ecton resigns, dies or is otherwise unable to serve as the
Stockholders’ Representative, the successor Stockholders’ Representative shall be Ronald Moreau. If Ronald Moreau subsequently resigns, dies or is otherwise unable to serve as the Stockholders’ Representative, the successor
Stockholders’ Representative shall be designated in writing by the Stockholders which held a majority of the Company Common Stock immediately prior to the Closing. 
  
 If any individual Stockholders should die or become incapacitated, if any trust or estate should terminate or if any other
such event should occur, any action taken by the Stockholders’ Representative pursuant to this Section 2.8 shall be as valid as if such death or incapacity, termination or other event had not occurred, regardless of whether or not the
Stockholders’ Representative or the Surviving Corporation shall have received notice of such death, incapacity, termination or other event. 
  
 All notices required to be made or delivered by Parent, Federal or the Surviving Corporation to the Stockholders shall be made to the Stockholders’
Representative for the benefit of the Stockholders and shall discharge in full all notice requirements of Parent, Federal or the Surviving Corporation to the Stockholders with respect thereto. The Stockholders hereby confirm all that the
Stockholders’ Representative shall do or cause to be done by virtue of his appointment as the Stockholders’ Representative of the Stockholders. 
  
 The Stockholders’ Representative shall act for the Stockholders on all of the matters set forth in this Agreement in the manner the
Stockholders’ Representative believes to be in the best interest of the Stockholders and consistent with the obligations under this Agreement, but the Stockholders’ Representative shall not be responsible to the Stockholders for any loss
or damages the Stockholders may suffer by the performance by the Stockholders’ Representative of his duties under this Agreement, other than loss or damage arising from willful violation of the law by the Stockholders’ Representative of
his duties under this Agreement. The Stockholders’ Representative and his heirs and personal or legal representatives shall be held harmless by the 

  

 11 

 
Stockholders from, and indemnified against any loss or damages arising out of or in connection with the performance of his obligations in accordance with the
provisions of this Agreement, except for any of the foregoing arising out of the willful violation of the law by the Stockholders’ Representative or of his duties hereunder. The foregoing indemnity shall survive the resignation or substitution
of the Stockholders’ Representative. 
  
 Notwithstanding
anything to the contrary herein, the Stockholders’ Representative shall have no liability or obligation to any Parent Indemnified Party otherwise than, and only to the extent of, his individual liability as a Stockholder as set forth in Section
6.3. 
  
 2.9 Final Adjustment to Merger Price. 

 
 2.9.1 Preparation of Closing Balance Sheet. As soon as reasonably
possible after the Closing Date (but not later than 45 days thereafter), Federal shall prepare or cause to be prepared and shall deliver to the Stockholders’ Representative a Closing Balance Sheet for the Company as of the opening of business
on the Closing Date (the “Closing Balance Sheet”). The Closing Balance Sheet shall be prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and the Principles and Procedures. 
  
 2.9.2 Review of Closing Balance Sheet. The Stockholders’
Representative, upon receipt of the Closing Balance Sheet, shall (i) review the Closing Balance Sheet and (ii) to the extent the Stockholders’ Representative may deem necessary, make reasonable inquiry of the Company, Federal and its
accountants (if any are used), relating to the preparation of the Closing Balance Sheet. The Stockholders’ Representative and his advisors shall have full access upon prior written notice and during normal business hours to the books, papers
and records of the Company and its accountants (if any are used), relating to the preparation of the Closing Balance Sheet in connection with such inquiry and the preparation of the Stockholders’ Objection thereto. The Closing Balance Sheet
shall be binding and conclusive upon, and deemed accepted by, the Stockholders unless the Stockholders’ Representative shall have notified Federal in writing of any objections thereto (the “Stockholders’ Objection”) within 20
days after receipt of the Closing Balance Sheet. 
  
 2.9.3
Disputes. In the event of the Stockholders’ Objection, Federal shall have 20 days to review and respond to the Stockholders’ Objection, and Federal and the Stockholders’ Representative shall attempt to resolve the differences
underlying the Stockholders’ Objection within 20 days following completion of Federal’s review of the Stockholders’ Objection. Disputes between Federal and the Stockholders’ Representative which cannot be resolved by them within
such 20-day period shall be referred no later than such 20th day for decision to a nationally-recognized independent
public accounting firm mutually selected by the Stockholders’ Representative and Federal (which firm shall not be the independent public accountants for any of the Company, the Surviving Corporation, Parent or Federal) (the “Auditor”)
who shall act as arbitrator and determine, based solely on presentations by the Stockholders’ Representative and Federal and only with respect to the remaining differences so submitted, whether and to what extent, if any, the Closing Balance
Sheet requires adjustment. The Auditor shall deliver its written determination to Federal and the Stockholders’ Representative no later than the 30th day after the remaining differences underlying the Stockholders’ Objection are referred to the Auditor, or such longer period of time as the Auditor determines is necessary. The Auditor’s
determination shall be conclusive and binding upon the 

  

 12 

 
parties. The fees and disbursements of the Auditor shall be allocated to the party or parties as determined by the Auditor. Federal and the
Stockholders’ Representative shall make readily available to the Auditor all relevant information, books and records and any work papers relating to the Closing Balance Sheet and all other items reasonably requested by the Auditor. In no event
may the Auditor’s resolution of any difference be for an amount which is outside the range of Federal’s and the Stockholders’ Representative’s disagreement. 
  
 2.9.4 Final Closing Balance Sheet. The Closing Balance Sheet shall become final and binding upon the parties upon the
earlier of (i) the failure by the Stockholders’ Representative to object thereto within the period permitted under Section 2.9.2, (ii) the agreement between Federal and the Stockholders’ Representative with respect thereto and (iii) the
decision by the Auditor with respect to any disputes under Section 2.9.3. The Closing Balance Sheet, as adjusted pursuant to the agreement of the parties or decision of the Auditor, when final and binding is referred to herein as the “Final
Closing Balance Sheet.” 
  
 2.9.5 Adjustments to the
Merger Price. As soon as practicable (but not more than five business days) after the date on which the Final Closing Balance Sheet shall have been determined in accordance with this Section 2.9, (A) the Stockholders’ Representative, as
paying agent, shall pay to Federal in immediately available funds in U.S. dollars the amount, if any, by which the Net Assets in the Final Closing Balance Sheet is less than the Estimated Net Assets, which shall constitute an immediate adjustment of
the Merger Price in such amount or (B) Federal shall pay to the Stockholders’ Representative, as paying agent on behalf of the Stockholders, in immediately available funds in U.S. dollars the amount, if any, by which the Net Assets in the Final
Closing Balance Sheet is greater than the Estimated Net Assets, which shall constitute an immediate adjustment of the Merger Price in such amount. Parent, Federal and the Surviving Corporation shall not be entitled to offset any claim against, or
any amount owed by, any Stockholder to the Company, Parent, Federal or the Merger Sub against any payment due to the Stockholders under this Section 2.9.5. 
  
 Article 3 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
  
 Except for those representations and warranties expressly set forth in this Article 3, neither the Company nor any Stockholder makes any representations
or warranties, express or implied, at law or in equity, of any kind or nature whatsoever concerning the organization, business, assets, liabilities and operations of the Company and any such other representations or warranties are hereby expressly
disclaimed in full and for all time. The Company represents and warrants to Parent, Federal and Merger Sub as follows: 
  
 3.1 Corporate Status of the Company. Except as set forth on Schedule 3.1 hereto, the Company is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Virginia, with the requisite corporate power to own, operate and lease its properties and to carry on its business as now being conducted. Except as set forth on Schedule 3.1 hereto, the Company
is duly qualified or licensed to do business as a foreign corporation and is in good standing in all jurisdictions in which the character of the properties owned or held under lease by it or the nature of the business transacted by it makes
qualification 

  

 13 

 
necessary, except where failure to be so qualified would not have a Company Material Adverse Effect. All jurisdictions in which the Company is qualified to
do business are set forth on Schedule 3.1 hereto. 
  
 3.2
Capital Stock. 
  
 3.2.1 Authorized Stock of the
Company. As of the date hereof, the authorized capital stock of the Company consists of 5,000,000 shares of Company Common Stock, of which 3,936,417 shares are issued and outstanding (excluding 1,063,583 shares held in Treasury). All of the
outstanding shares of Company Common Stock have been duly authorized and validly issued, were not issued in violation of any person’s preemptive rights, and are fully paid and nonassessable. Each Stockholder is the owner of record of the number
of shares of Company Common Stock set forth in Schedule 3.2, which schedule will be replaced with the Stockholder List at Closing. As of the date hereof, Schedule 3.2 sets forth a true and accurate list of the outstanding capital stock of the
Company. As of the Closing Date, the Stockholder List shall set forth a true and accurate list of the outstanding capital stock of the Company. 
  
 3.2.2 Options and Convertible Securities of the Company. Except as set forth on Schedule 3.2, there are no outstanding subscriptions, options,
warrants, conversion rights or other rights, securities, agreements or commitments obligating the Company to issue, sell or otherwise dispose of shares of its capital stock, or any securities or obligations convertible into, or exercisable or
exchangeable for, any shares of its capital stock. Except as set forth on Schedule 3.2, there are no voting trusts or other agreements or understandings to which the Company or any Stockholder is a party with respect to the voting of the shares of
Company Common Stock and the Company is not a party to or bound by any outstanding restrictions, other obligations, agreements or commitments to sell, repurchase, redeem or acquire any outstanding shares of Company Common Stock or other equity
securities of the Company. 
  
 3.3
Subsidiaries/Acquisitions/Divestures. The Company has no Subsidiaries. The Company has not acquired, sold, divested or liquidated any companies, Subsidiaries or lines of business. 
  
 3.4 Authority for Agreement; Noncontravention. 
  
 3.4.1 Authority. The Company has the corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby to the extent of its obligations hereunder (subject to, with respect to the Merger, the adoption of this Agreement by the requisite stockholders of the Company). The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, to the extent of its obligations hereunder, have been duly and validly authorized by the board of directors of the Company and no other corporate proceedings on the part of the Company are
necessary to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, to the extent of its obligations hereunder (subject to, with respect to the Merger, the adoption of this Agreement by
the requisite stockholders of the Company). This Agreement and the other agreements contemplated hereby to be signed by the Company have been duly executed and delivered by the Company and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the 

  

 14 

 
qualifications that enforcement of the rights and remedies created hereby and thereby is subject to (a) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and (b) general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 
  
 3.4.2 No Conflict. Except as set forth on Schedule 3.4 hereto, neither
the execution and delivery of this Agreement by the Company, nor the performance by the Company of its obligations hereunder, nor the consummation by the Company of the transactions contemplated hereby, to the extent of its obligations hereunder,
will (a) conflict with or result in a violation of any provision of the charter documents or by-laws of the Company, (b) with or without the giving of notice or the lapse of time, or both, conflict with, or result in any violation or breach of, or
constitute a default under, or result in any right to accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any note, mortgage, indenture, lease, instrument or other
agreement, permit, concession, grant, franchise, license, judgment, order, decree, statute, ordinance, rule or regulation to which the Company is a party or by which it or any of its assets or properties is bound, except for, in the case of (b),
such violations, breaches, defaults, rights to accelerate, creation of any liens changes or encumbrances or rights to terminate, which individually or in the aggregate would not have a Company Material Adverse Effect. No authorization, consent or
approval of, or filing with or notice to, any United States or foreign governmental or public body or authority (each a “Governmental Entity”) is necessary for the execution and delivery of this Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby, except (i) the filing of the Articles of Merger with the State Corporation Commission of Virginia, (ii) the extent that novation is required as further described in Section 6.9.2 below, and
(iii) to such other consents, authorizations, filings, approvals and registrations which if not obtained or made would not have a Company Material Adverse Effect. 
  
 3.5 Financial Statements. The Company has previously furnished Parent with a copy of the balance sheet of the Company
as of March 31, 2002 and the statements of operations, cash flows and changes in the stockholders’ equity of the Company for the year then ended and the balance sheet of the Company as of July 31, 2002 and the statements of operations, cash
flows and changes in the stockholders’ equity of the Company for the period then ended. The annual financial statements were audited by Stokes & Company P.C., certified public accountants. Collectively, the financial statements referred to
in the immediately preceding sentence are sometimes referred to herein as the “Company Financial Statements” and the balance sheet of the Company as of July 31, 2002 is referred to herein as the “Company Balance Sheet.” Each of
the balance sheets included in the Company Financial Statements (including any related notes) fairly presents in all material respects the financial position of the Company as of its date, and the other statements included in the Company Financial
Statements (including any related notes) fairly present in all material respects the results of operations, cash flows and the stockholders’ equity, as the case may be, of the Company for the periods therein set forth, in each case in
accordance with GAAP consistently applied, subject, in the case of the four month period ended on July 31, 2002, to normal year-end adjustments, the absence of notes, and, in the event that such period ended on a date other than the end of a fiscal
quarter, the absence of tax accruals (all except as otherwise stated therein). 
  

 15 

 3.6 Absence of Material Adverse Changes. Except as set forth on Schedule 3.6 hereto, since the
date of the Letter of Intent, the Company has not suffered any Company Material Adverse Effect. Since the date of the Letter of Intent, except as set forth on Schedule 3.6, there have been no dividends or other distributions declared or paid in
respect of, or any repurchase or redemption by the Company of, any of the shares of capital stock of the Company, or any commitment relating to any of the foregoing. 
  
 3.7 Absence of Undisclosed Liabilities. Except as set forth on Schedule 3.7, the Company has no material liabilities
or obligations, fixed, accrued, contingent or otherwise (collectively, “Liabilities”), that are not fully reflected or provided for on, or disclosed in the notes to, the balance sheets included in the Company Financial Statements that
would be required to be disclosed on a balance sheet as of such date in accordance with GAAP consistently applied, except (i) Liabilities incurred in the ordinary course of business since the date of the Company Balance Sheet, (ii) Liabilities
permitted or contemplated by this Agreement, and (iii) Liabilities expressly disclosed on the Schedules delivered hereunder. 
  
 3.8 Compliance with Applicable Law, Charter and By-Laws. The Company has all requisite licenses, permits and certificates from all Governmental
Entities necessary to conduct its business as currently conducted, and to own, lease and operate its properties in the manner currently held and operated (collectively, “Permits”), except as set forth on Schedule 3.8 hereto and except for
any Permits the absence of which, in the aggregate, do not and could not reasonably be expected to have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby. The Company is in
compliance in all material respects with all the terms and conditions related to such Permits. There are no proceedings in progress, pending or, to the Knowledge of the Company, threatened, which may result in revocation, cancellation, suspension,
or any material adverse modification of any of such Permits. To the Knowledge of the Company, the business of the Company is not being conducted in violation of any applicable law, statute, ordinance, regulation, rule, judgment, decree, order,
Permit, concession, grant or other authorization of any Governmental Entity except for any such violations which would not have a Company Material Adverse Effect. The Company is not in default or violation of any provision of its charter documents
or its by-laws. 
  
 3.9 Litigation and Audits. Except for
any claim, action, suit or proceeding set forth on Schedule 3.9 or 3.10 hereto, (a) to the Knowledge of the Company, there is no investigation by any Governmental Entity with respect to the Company pending or threatened, nor has any Governmental
Entity indicated to the Company an intention to conduct the same; (b) there is no claim, action, suit, arbitration or proceeding pending or, to the Knowledge of the Company, threatened against or involving the Company, or any of its assets or
properties, at law or in equity, or before any arbitrator or Governmental Entity, that, if adversely determined, either singly or in the aggregate, would have a Company Material Adverse Effect or prevent or materially delay the consummation of the
transactions contemplated hereby; and (c) there are no judgments, decrees, injunctions or orders of any Governmental Entity or arbitrator outstanding against the Company. 
  

 16 

 3.10 Tax Matters. Except as set forth on Schedule 3.10: 
  
 3.10.1 Filing of Returns. The Company has filed all material Tax
Returns that it was required to file and has paid all taxes shown thereon as owing. All such Tax Returns were correct and complete in all material respects. The Company is not currently the beneficiary of any extension of time within which to file
any Tax Return. No claim has been made in the past two (2) years by an authority in a jurisdiction where the Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Security Interests on any of
the assets of the Company that arose in connection with any failure (or alleged failure) to pay any Tax. 
  
 3.10.2 Payment of Taxes. The Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other third party. 
  
 3.10.3 Assessments or Disputes. There is no dispute or claim concerning any Tax Liability of the Company either (a) claimed or raised by any authority in writing or (b) as to which any of the directors and
officers (and employees responsible for Tax matters) of the Company has knowledge based upon personal contact with any agent of such authority. Schedule 3.10 lists all federal, state, local, and foreign income Tax Returns filed with respect to the
Company for taxable periods ended on or after March 31, 1997, indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit. The Company has delivered to or made available to Federal
correct and complete copies of all federal income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Company since March 31, 1997. 
  
 3.10.4 Waiver of Statute of Limitations. The Company has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency. 
  
 3.10.5 Collapsible Corporations, Golden Parachutes, Real Property Holding Corporations. The Company has not filed a consent under Code section 341(f) concerning collapsible corporations. The Company has not
made any payments, is not obligated to make any payments, and is not a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Code section 280G. The Company has not been a
United States real property holding corporation within the meaning of Code section 897(c)(2) during the applicable period specified in Code section 897(c)(1)(A)(ii). The Company is not a party to any Tax allocation or sharing agreement. The Company
(a) has not been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) and (b) has no Liability for the Taxes of any Person (other than the Company) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise. 
  
 3.10.6 No Changes in Accounting, Closing Agreement, Installment Sale. The Company will not be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as 

  

 17 

 
a result of any (a) change in method of accounting for a taxable period ending on or prior to the Closing Date under Code section 481(c) (or any
corresponding or similar provision of state, local or foreign income Tax law); (b) “closing agreement” as described in Code section 7121 (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date; (c) deferred intercompany gain or any excess loss account described in Treasury Regulations under Code section 1502 (or any corresponding or similar provision of state, local or foreign income Tax law); (d) installment
sale or open transaction disposition made on or prior to the Closing Date; or (e) prepaid amount received on or prior to the Closing Date. 
  
 3.11 Employee Benefit Plans. 
  
 3.11.1 List of Plans. Schedule 3.11 hereto contains a correct and complete list of all pension, profit sharing, retirement, deferred compensation,
welfare, legal services, medical, dental or other employee benefit or health insurance plans, life insurance or other death benefit plans, disability, stock option, stock purchase, stock compensation, bonus, vacation pay, severance pay and other
similar plans, programs or agreements, and every material written personnel policy, relating to any persons employed by the Company or in which any person employed by the Company is eligible to participate and which is currently maintained or, in
the case of such plans, programs or agreements that are subject to ERISA, that was maintained at any time in the last five calendar years by the Company (collectively, the “Company Plans”). The Company has made available to Parent complete
copies, as of the date hereof, of all of the Company Plans that have been reduced to writing, together with all documents establishing or constituting any related trust, annuity contract, insurance contract or other funding instrument, and summaries
of those that have not been reduced to writing. The Company has made available to Parent complete copies of current plan summaries, employee booklets, personnel manuals and other material documents or written materials concerning the Company Plans
that are in the possession of the Company as of the date hereof. The Company does not have any “defined benefit plans” as defined in Section 3(35) of ERISA. 
  
 3.11.2 ERISA. The Company has not incurred any “withdrawal liability” calculated under Section 4211 of
ERISA and there has been no event or circumstance which would cause them to incur any such liability. The Company has never maintained a Company Plan providing health or life insurance benefits to former employees, other than as required pursuant to
Section 4980B of the Code or Part 6 of ERISA or to any state law conversion rights. Except as set forth on Schedule 3.11, no plan previously maintained by the Company which was subject to ERISA has been terminated; no proceedings to terminate any
such plan have been instituted within the meaning of Subtitle C of Title IV of ERISA; and to the Knowledge of the Company, no reportable event within the meaning of Section 4043 of said Subtitle C of Title IV of ERISA with respect to which the
requirement to file a notice with the Pension Benefit Guaranty Corporation has not been waived has occurred with respect to any such Company Plan, and no liability to the Pension Benefit Guaranty Corporation has been incurred by the Company. Except
as set forth on Schedule 3.11, with respect to all the Company Plans, to the Knowledge of the Company, the Company is in material compliance with all requirements prescribed by all statutes, regulations, orders or rules currently in effect, and, to
the Knowledge of the Company, has in all material respects performed all obligations required to be performed by it. Neither the Company nor, to the Knowledge of the Company, any of its directors, officers, employees or agents, nor, to the Knowledge
of the Company, any trustee or administrator of any trust created 

  

 18 

 
under the Company Plans, has engaged in or been a party to any “prohibited transaction” as defined in Section 4975 of the Code and Section 406 of
ERISA which could subject the Company or its Affiliates, directors or employees or the Company Plans or the trusts relating thereto or any party dealing with any of the Company Plans or trusts to any tax or penalty on “prohibited
transactions” imposed by Section 4975 of the Code. Except as set forth on Schedule 3.11, neither the Company Plans nor the trusts created thereunder have incurred any “accumulated funding deficiency,” as such term is defined in
Section 412 of the Code and regulations issued thereunder, whether or not waived. The Company does not have, and did not previously have, an ERISA Affiliate. 
  
 3.11.3 Plan Determinations. Except as set forth on Schedule 3.11, each Company Plan intended to qualify under Section 401(a) of the Code has been
determined by the Internal Revenue Service to so qualify, and the trusts created thereunder have been determined to be exempt from tax under Section 501(a) of the Code; copies of all determination letters have been delivered to Parent, and, to the
Knowledge of the Company, nothing has occurred since the date of such determination letters which might cause the loss of such qualification or exemption. With respect to each Company Plan which is a qualified profit sharing plan, all employer
contributions accrued for plan years ending prior to the Closing under the Company Plan terms and applicable law have been made. 
  
 3.11.4 Funding. Except as set forth on Schedule 3.11: 
  
 (a) all contributions, premiums or other payments due or required to be made to the Company Plans as of the date hereof have been made as
of the date hereof or are properly reflected on the Company Balance Sheet or will be reflected in the Closing Balance Sheet; 
  
 (b) there are no actions, liens, suits or claims (other than routine claims for benefits) pending or, to the Knowledge of the Company,
threatened with respect to any Company Plan; 
  
 (c) to the Knowledge of the Company, no event has occurred which presents a material risk of a partial termination (within the meaning of Section 411(d)(3) of the Code) of any Company Plan; 
  
 (d) each Company Plan that is a “group health
plan” (as defined in Section 607(1) of ERISA) has been operated at all times in substantial compliance with the provisions of COBRA and any applicable, similar state law; and 
  
 (e) with respect to any Company Plan that is qualified under Section 401(k) of the Code, individually and in
the aggregate, to the Knowledge of the Company, no event has occurred which could subject the Company to any liability (except liability for benefits claims and funding obligations payable in the ordinary course) that is reasonably likely to have a
Company Material Adverse Effect under ERISA, the Code or any other applicable law. 
  

 19 

 3.12 Employment-Related Matters. 
  
 3.12.1 Labor Relations. Except to the extent set forth on Schedule 3.12 hereto: (a) the Company 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 of the Company; (b) there is no labor strike, dispute, slowdown, work stoppage or lockout that is pending or,
to the Knowledge of the Company, threatened against or otherwise affecting the Company, and the Company has not experienced the same; (c) the Company has not closed any plant or facility, or implemented any early retirement or separation program
within the last five (5) years, nor has the Company planned or announced any such action or program for the future with respect to which the Company has any material liability; and (d) all salaries, wages, vacation pay, bonuses, commissions and
other compensation due from the Company to the employees of the Company before the date hereof have been paid or accrued as of the date hereof. 
  
 3.12.2 Employee List. The Company has heretofore delivered to Parent a confidential list (the “Employee List”) dated as of August 2, 2002
and updated as of September 16, 2002 containing the name of each employee of the Company and each such employee’s position, starting employment date and annual salary. The Employee List is correct and complete as of the date of the Employee
List. No third party has asserted any claim in the past three (3) years against the Company that either the continued employment by, or association with, the Company of any of the present officers or employees of, or consultants to, the Company
contravenes any agreements or laws applicable to unfair competition, trade secrets or proprietary information. 
  
 3.13 Environmental. 
  
 3.13.1 Environmental Laws. Except for matters which, individually or in the aggregate, would not have a Company Material Adverse Effect, to the
Knowledge of the Company, (a) the Company is in compliance with all applicable Environmental Laws in effect on the date hereof; (b) the Company has not received any written communication that alleges that the Company is not in compliance in all
material respects with all applicable Environmental Laws in effect on the date hereof; (c) all material Permits and other governmental authorizations currently held by the Company pursuant to the Environmental Laws are in full force and effect, the
Company is in compliance with all of the terms of such Permits and authorizations, and no other Permits or authorizations are required by the Company for the conduct of its business on the date hereof; and (d) the management, handling, storage,
transportation, treatment, and disposal by the Company of all Materials of Environmental Concern has been in compliance with all applicable Environmental Laws. 
  

3.13.2 Environmental Claims. Except as set forth on Schedule 3.13 hereto, there is no Environmental Claim pending or, to the Knowledge of the
Company, threatened against or involving the Company or against any person or entity whose liability for any Environmental Claim the Company has expressly retained or assumed. 
  
 3.14 No Broker’s or Finder’s Fees. Except for the fees of the Broker which will be paid at Closing as
provided for in Sections 2.6.3 and 2.6.4, the Company has not paid or become 

  

 20 

 
obligated to pay any fee or commission to any broker, finder, financial advisor or intermediary in connection with the transactions contemplated by this
Agreement. 
  
 3.15 Assets Other Than Real Property.

  
 3.15.1 Title. The Company has good title to all of the
tangible assets shown on the Company Balance Sheet, in each case, free and clear of any mortgage, pledge, lien, security interest, lease or other encumbrance (collectively, “Encumbrances”), except for (a) assets disposed of since the date
of the Company Balance Sheet in the ordinary course of business and in a manner consistent with past practices, (b) liabilities, obligations and Encumbrances reflected in the Company Balance Sheet or otherwise in the Company Financial Statements,
(c) Permitted Encumbrances, and (d) liabilities, obligations and Encumbrances set forth on Schedule 3.15 hereto. 
  
 3.15.2 Accounts Receivable. Except as set forth on Schedule 3.15, all receivables shown on the Company Balance Sheet and all receivables accrued by
the Company since the date of the Company Balance Sheet, have been collected or are collectible in all material respects in the aggregate amount shown, less any allowances for doubtful accounts reflected therein, and, in the case of receivables
arising since the date of the Company Balance Sheet, any additional allowance in respect thereof calculated in a manner consistent with the allowance reflected in the Company Balance Sheet. 
  
 3.15.3 Pre-Closing Receivables. After the Closing Date, Parent and
Federal shall cause the Surviving Corporation to bill and pursue collection, in the ordinary course of business, all accounts receivable included on the Closing Date Balance Sheet (the “Pre-Closing Receivables”). In the absence of any
indication that a customer payment should be applied to a specific invoice or charge, customer payments shall be applied first to the oldest outstanding invoices. In the event that any receivable from a government entity, Parent and Federal shall
co-operate with the Stockholder’s Representative in seeking collection on such receivable. In the event that Parent or Federal collects an unrecoverable receivable after recovering such unrecoverable receivable from the Stockholders in
accordance with Section 6.3, Parent or Federal shall remit such collection amounts, to the Stockholders’ Representative. In the event that an uncollectable receivable is a commercial receivable, Parent and Federal shall assign such receivable
to the Stockholder’s Representative. 
  
 3.15.4
Condition. All material facilities, equipment and personal property owned by the Company and regularly used in its business are in good operating condition and repair, ordinary wear and tear excepted and wear and tear which, taken in the
aggregate, is not material to the Company and does not affect the Company’s obligations to perform under this Agreement. 
  
 3.15.5 Unclaimed Property. The Company does not have any assets that may constitute unclaimed property under applicable law. The Company has
complied in all material respects with all applicable unclaimed property laws. 
  
 3.16 Real Property. 
  
 3.16.1 Company Real Property. The Company does not own any real property. 
  

 21 

 3.16.2 Company Leases. Schedule 3.16 hereto lists all of the Company Leases. Complete copies of
the Company Leases, and all material amendments thereto (which are identified on Schedule 3.16), have been made available by the Company to Parent. The Company Leases grant leasehold estates free and clear of all Encumbrances (except Permitted
Encumbrances) granted by or caused by the actions of the Company. The Company Leases are in full force and effect and are binding and enforceable against the Company, and to the Knowledge of the Company, each of the other parties thereto in
accordance with their respective terms subject to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and (b) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at law). Except as set forth on Schedule 3.16, neither the Company nor, to the Knowledge of the Company, any other party to a Company Lease, has committed a material
breach or default under any Company Lease, nor, to the Knowledge of the Company, has there occurred any event that with the passage of time or the giving of notice or both would constitute such a breach or default. Schedule 3.16 correctly identifies
each Company Lease that requires the consent of any third party in connection with the transactions contemplated hereby. No material construction, alteration or other leasehold improvement work with respect to the real property covered by any of the
Company Leases remains to be paid for or to be performed by the Company. Except as set forth on Schedule 3.16, no Company Leases have an unexpired term which including any mandatory renewal or extensions of such term provided for in the Company
Lease could exceed ten years. 
  
 3.17 Agreements, Contracts
and Commitments. 
  
 3.17.1 Company Agreements. Except
as set forth on Schedule 3.17 hereto or any other Schedule hereto (the “Material Contracts”), the Company is not a party to: 
  
 (a) any bonus, deferred compensation, pension, severance, profit-sharing, stock option, employee stock purchase or retirement plan,
contract or arrangement or other employee benefit plan or arrangement; 
  
 (b) any employment agreement with any present employee, officer, director or consultant (or former employees, officers, directors and consultants to the extent there remain at the date hereof obligations to be
performed by the Company); 
  
 (c) any agreement
of guarantee or indemnification in an amount that is material to the Company taken as a whole; 
  
 (d) any agreement or commitment containing a covenant limiting or purporting to limit the freedom of the Company to compete with any
person in any geographic area or to engage in any line of business; 
  
 (e) any lease other than the Company Leases under which the Company is lessee that involves, in the aggregate, payments of $25,000 or more per annum; 
  
 (f) any joint venture or profit-sharing agreement (other than with employees); 
  

 22 

 (g) except for trade indebtedness incurred in the ordinary course of business and
equipment leases entered into in the ordinary course of business, any loan or credit agreements providing for the extension of credit to the Company or any instrument evidencing or related in any way to indebtedness incurred in the acquisition of
companies or other entities or indebtedness for borrowed money by way of direct loan, sale of debt securities, purchase money obligation, conditional sale, guarantee, or otherwise that individually is in the amount of $25,000 or more; 
  
 (h) any license agreement, either as licensor or licensee,
involving payments of $25,000 in the aggregate or more, or any distributor, dealer, reseller, franchise, manufacturer’s representative, or sales agency or any other similar material contract or commitment involving payments of $25,000 in the
aggregate or more; 
  
 (i) any agreement granting
exclusive rights to, or providing for the sale of, all or any portion of the Company Proprietary Rights; 
  
 (j) any agreement or arrangement providing for the payment of any commission based on sales other than to employees of the Company ;

  
 (k) any agreement for the sale by the Company
of materials, products, services or supplies that involves future payments to the Company of more than $100,000; 
  
 (l) any agreement for the purchase by the Company of any materials, equipment, services, or supplies, that either (i) involves a binding
commitment by the Company to make future payments in excess of $25,000 and cannot be terminated by it without penalty upon less than six months’ notice or (ii) was not entered into in the ordinary course of business; 
  
 (m) any agreement or arrangement with any third party for
such third party to develop any intellectual property expected to be used or currently used in the business of the Company; 
  
 (n) any agreement or commitment for the acquisition, construction or sale of fixed assets owned or to be owned by the Company that
involves future payments by it of more than $25,000; 
  
 (o) any agreement not described above (ignoring, solely for this purpose, any dollar amount thresholds in those descriptions) involving the payment or receipt by the Company of more than $100,000, other than the Company Leases; or

  
 (p) any agreement that provides continuing
representation or warranty and indemnification obligations, in connection with the disposition of any business or significant assets of the Company. 
  
 3.17.2 Validity. Except as set forth on Schedule 3.17, all contracts, leases, instruments, licenses and other agreements required to be set forth
on Schedule 3.17 are valid and in full force and effect; the Company has not, nor, to the Knowledge of the Company, has 

  

 23 

 
any other party thereto, breached any provision of, or defaulted under the terms of any such contract, lease, instrument, license or other agreement, except
for any breaches or defaults that, in the aggregate, would not be expected to have a Company Material Adverse Effect or have been cured or waived; and the Company has not received any “notice to cure” or a similar notice from any
Governmental Entity requesting performance under any contract, instrument or other agreement between the Company and such Governmental Entity. 
  
 3.17.3 Third-Party Consents. Schedule 3.17.3 identifies each contract and other document set forth on Schedule 3.17 that requires the consent of a
third party in connection with the transactions contemplated hereby. 
  
 3.18 Intellectual Property. 
  
 3.18.1 Right
to Intellectual Property. Except as set forth on Schedule 3.18 hereto, the Company owns, or has the right to use, all patents, trademarks, trade names, service marks, copyrights, and any applications therefore, maskworks, net lists, schematics,
technology, know-how, computer software programs or applications (in both source code and object code form), and tangible or intangible proprietary information or material (excluding Commercial Software) that are used in the business of the Company
as currently conducted (the “Company Proprietary Rights”). The Commercial Software used in the business of the Company has been acquired and used by the Company on the basis of and in accordance with a valid license from the manufacturer
or the dealer authorized to distribute such Commercial Software. A complete list of the Commercial Software used in the business of the Company is set forth on Schedule 3.18. The Company is not in breach of any of the material terms and conditions
of any such license and has not received notice that it is infringing upon any rights of any third parties in connection with its acquisition or use of the Commercial Software. 
  
 3.18.2 No Conflict. Set forth on Schedule 3.18 is a complete list of all patents, trademarks, registered copyrights,
trade names and service marks, and any applications therefore, included in the Company Proprietary Rights, specifying, where applicable, the jurisdictions in which each such Company Proprietary Right has been issued or registered or in which an
application for such issuance and registration has been filed, including the respective registration or application numbers and the names of all registered owners. Except as set forth on Schedule 3.18, none of the Company’s currently marketed
software products has been registered for copyright protection with the United States Copyright Office or any foreign offices nor has the Company been requested to make any such registration. Set forth on Schedule 3.18 is a complete list of all
domain names owned by the Company, which list includes all domain names used by the Company in its business. Set forth on Schedule 3.18 is a complete list of all material licenses, sublicenses and other agreements as to which the Company is a party
and pursuant to which the Company or any other person is authorized to use any Company Proprietary Right (excluding the Commercial Software) or other trade secret material to the business of the Company, and includes the identity of all parties
thereto, a description of the nature and subject matter thereof, the applicable royalty and the term thereof. The Company is not in violation of any license, sublicense or agreement described on such list except such violations as do not materially
impair the Company’s rights under such license, sublicense or agreement. Except as disclosed in this Article 3, the execution and delivery of this Agreement by the Company, and the consummation of the transactions contemplated hereby, will
neither cause the Company to be 

  

 24 

 
in violation or default under any such license, sublicense or agreement, nor entitle any other party to any such license, sublicense or agreement to
terminate or modify such license, sublicense or agreement. Except as set forth on Schedule 3.18, the Company is the sole and exclusive owner or licensee of, with all right, title and interest in and to (free and clear of any and all liens, claims
and encumbrances), the Company Proprietary Rights, and has sole and exclusive rights (and is not contractually obligated to pay any compensation to any third party in respect thereof) to the use thereof or the material covered thereby in connection
with the services or products in respect of which the Company Proprietary Rights are being used. No claims with respect to the Company Proprietary Rights have been asserted or, to the Knowledge of the Company, are threatened by any person to the
effect that the manufacture, sale, licensing or use of any of the products of the Company as now manufactured, sold or licensed or used by the Company infringes on any copyright, patent, trademark, service mark or trade secret, against the use by
the Company of any trademarks, service marks, trade names, trade secrets, copyrights, patents, technology, know-how or computer software programs and applications used in the Company’s business as currently conducted by the Company, or
challenging the ownership by the Company, or the validity or effectiveness of any of the Company Proprietary Rights. All material registered trademarks, service marks and copyrights held by the Company are valid and subsisting in the jurisdictions
in which they have been filed. To the Knowledge of the Company, there is no material unauthorized use, infringement or misappropriation of any of the Company Proprietary Rights by any third party, including any employee or former employee of the
Company. No Company Proprietary Right or product of the Company is subject to any outstanding decree, order, judgment, or stipulation restricting in any manner the licensing thereof by the Company. Except as set forth in Schedule 3.18, the Company
has not entered into any agreement under which the Company is restricted from selling, licensing or otherwise distributing any of its products to any class of customers, in any geographic area, during any period of time or in any segment of the
market. 
  
 3.18.3 Employee Agreements. Except as set forth
on Schedule 3.18, each employee, officer and consultant of the Company has executed confidentiality and non-competition agreement in substantially the form attached hereto as Schedule 3.18.3. To the Knowledge of the Company, no employee, officer or
consultant of the Company is in violation of any material term of any employment or consulting contract, proprietary information and inventions agreement or non-competition agreement with the Company. 
  
 3.19 Insurance Contracts. Schedule 3.19 hereto lists all contracts of
insurance and indemnity in force at the date hereof held by the Company (collectively, the “Company Insurance Contracts”). All premiums due and payable thereon have been paid, and the Company has not received written notice from any of its
insurance carriers that any insurance premiums will be materially increased in the future or that any insurance coverage provided under the Company Insurance Contracts will not be available in the future on substantially the same terms as now in
effect. The Company has not received or given a notice of cancellation with respect to any of the Company Insurance Contracts. 
  
 3.20 Banking Relationships. Schedule 3.20 hereto shows the names and locations of all banks and trust companies in which the Company has accounts,
lines of credit or safety deposit boxes and, with respect to each account, line of credit or safety deposit box, the names of all persons authorized to draw thereon or to have access thereto. 
  

 25 

 3.21 Absence of Certain Relationships. Except as set forth on Schedule 3.21, to the Knowledge of
the Company, none of (i) any executive officer of the Company, (ii) any of the Major Stockholders, and (iii) any member of the immediate family of the persons listed in (i) through (ii) of this sentence, has any financial or employment interest in
any subcontractor, supplier, or customer of the Company (other than holdings in publicly held companies of less than two percent (2%) of the outstanding capital stock of any such publicly held company). 
  
 Article 4 
 REPRESENTATIONS AND WARRANTIES OF PARENT, FEDERAL AND MERGER
SUB 
  
 Parent, Federal and Merger Sub, jointly
and severally, represent and warrant to the Company and the Stockholders as follows: 
  
 4.1 Corporate Status of Parent, Federal and Merger Sub. Each of Parent, Federal and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation, with the requisite corporate power to own, operate and lease its properties and to carry on its business as now being conducted. 
  
 4.2 Authorized Stock of Merger Sub. The authorized common stock of Merger Sub consists of 5,000,000 shares of Merger Sub Stock, of which 250 shares
are issued and outstanding. All of the outstanding shares of Merger Sub Stock have been duly authorized and validly issued, were not issued in violation of any person’s preemptive rights, and are fully paid and nonassessable. 
  
 4.3 Authority for Agreement; Noncontravention. 
  
 4.3.1 Authority of Parent. Each of Parent, Federal and Merger Sub has
the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the boards of directors of Parent, Federal and Merger Sub and no other corporate proceedings on the part of Parent, Federal and Merger Sub are necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement and the other agreements contemplated hereby to be signed by Parent, Federal or Merger Sub have been duly executed and delivered by Parent, Federal and Merger Sub, as the case may
be, and constitute valid and binding obligations of Parent, Federal and Merger Sub, as the case may be, enforceable against Parent, Federal and Merger Sub in accordance with their terms, subject to the qualifications that enforcement of the rights
and remedies created hereby and thereby are subject to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and (b) general principles of
equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 
  
 4.3.2 No Conflict. Neither execution and delivery of this Agreement by Parent, Federal or Merger Sub, nor the performance by Parent, Federal or Merger Sub of its obligations hereunder, nor the consummation by
Parent, Federal or Merger Sub of the transactions contemplated hereby will (a) conflict with or result in a violation of any provision of the charter documents or by-laws of either Parent, Federal or Merger Sub, or (b) with or without the giving

  

 26 

 
of notice or the lapse of time, or both, conflict with, or result in any violation or breach of, or constitute a default under, or result in any right to
accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any note, mortgage, indenture, lease, instrument or other agreement, Permit, concession, grant, franchise, license,
judgment, order, decree, statute, ordinance, rule or regulation to which Parent, Federal, Merger Sub or any of Parent’s other Subsidiaries is a party or by which any of them or any of their assets or properties is bound or which is applicable
to any of them or any of their assets or properties. No authorization, consent or approval of, or filing with or notice to, any Governmental Entity is necessary for the execution and delivery of this Agreement by Parent, Federal or Merger Sub or the
consummation by Parent, Federal or Merger Sub of the transactions contemplated hereby, except for (i) the filing of the Articles of Merger with the State Corporation Commission of Virginia, and (ii) such other consents, authorizations, filings,
approvals and registrations which if not obtained or made would not have a Parent Material Adverse Effect. 
  
 4.4 SEC Statements, Reports and Documents. Parent has filed all required forms, reports, statements and documents with the SEC since July 1, 1998.
The documents so filed by Parent and available in the public records of the SEC include (a) its Annual Reports on Form 10-K for the fiscal years ended June 30, 2000 and June 30, 2001, respectively, (b) its Quarterly Reports on Forms 10-Q for the
fiscal quarters ended September 30, 2001, December 31, 2001 and March 31, 2002, (c) all other forms, reports, statements and documents filed or required to be filed by it with the SEC since July 1, 1998, and (d) all amendments and supplements to all
such reports and registration statements filed by Parent with the SEC (the documents referred to in clauses (a), (b), (c) and (d) being hereinafter referred to as the “Parent Reports”). None of the Parent Reports contained, and any
quarterly or other reports filed after the date hereof, will not contain, as of their respective dates, any untrue statement of a material fact required to be stated therein or any omission to state a fact necessary to make any statement of fact
contained therein not misleading in any material respect. The consolidated balance sheet of Parent and its Subsidiaries at March 31, 2002 including the notes thereto, is hereinafter referred to as the “Parent Balance Sheet.” Parent shall
continue to cause all required forms, reports, statements and documents to be filed with the SEC and to cause such filings to be true and complete in all material respects, to and through Closing and the date that the Second Payment is made.

  
 4.5 Absence of Material Adverse Changes. Since the date
of the Parent Balance Sheet, Parent has not suffered any Parent Material Adverse Effect, nor has there occurred or arisen any event, condition or state of facts of any character that would result in a Parent Material Adverse Effect. 
  
 4.6 Sophisticated Investor. Parent is a sophisticated investor,
represented by independent legal and investment counsel with experience in the acquisition and valuation of ongoing businesses and acknowledges that it has received, or has had access to, all information which it considers necessary or advisable to
enable it to make an informed investment decision concerning its purchase of the Company Common Stock. Parent is acquiring the Company Common Stock pursuant to the Merger for investment purposes only, and not with a view to, or for, any public
resale or other distribution thereof. Parent acknowledges that the Company Common Stock has not been registered under the Securities Act or any state or foreign securities laws and that the Company Common Stock may not be sold, transferred, offered
for sale, 

  

 27 

 
pledged, hypothecated or otherwise disposed of unless such transfer, sale, assignment, pledge, hypothecation or other disposition is pursuant to the terms of
an effective registration statement under the Securities Act and are registered under any applicable state or foreign securities laws or pursuant to an exemption from registration under the Securities Act and any applicable state or foreign
securities laws. 
  
 4.7 Brokers’, Finders’ Fees,
etc. None of Parent, Federal or Merger Sub has employed any broker, finder, investment banker or financial advisor as to whom any of them may have any obligation to pay any brokerage or finders’ fees, commissions or similar compensation in
connection with the transactions contemplated hereby. 
  
 4.8
No Knowledge of Misrepresentations or Omissions. As of the date hereof, none of Parent, Federal or Merger Sub has any actual knowledge that the representations and warranties of the Company in this Agreement and the Schedules hereto are not
true and correct in all material respects, and none has any actual knowledge of any material errors in, or material omissions from, the Schedules to this Agreement. 
  
 4.9 Litigation. There is no action, proceeding or investigation pending or threatened against Parent, Federal or
Merger Sub, which, if adversely determined, would have a Parent Material Adverse Effect. 
  
 Article 5 
 CONDUCT PRIOR TO THE
CLOSING DATE 
  
 5.1 Conduct
of Business of the Company. Except as set forth on Schedule 5.1 hereto, between the date of this Agreement and the Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, the Company shall, except
to the extent that Parent shall otherwise consent in writing (such consent not to be unreasonably withheld), (i) carry on its business in the ordinary course in substantially the same manner as heretofore conducted, pay its debts and taxes when due
subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, except when subject to good faith disputes over such obligations, and use all commercially reasonable efforts consistent with past practices
and policies to preserve intact the Company’s present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business relationships
with it, to the end that the Company’s goodwill and ongoing business be unimpaired at the Closing Date, and (ii) promptly notify Parent of any event or occurrence which will have or could reasonably be expected to have a Company Material
Adverse Effect. In addition, between the date of this Agreement and the Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, the Company shall not, except as set forth on Schedule 5.1 hereto or to
the extent that Parent shall otherwise consent in writing (such consent not to be unreasonably withheld): 
  
 (a) amend its charter documents or by-laws; 
  
 (b) declare or pay any dividends or distributions on the Company’s outstanding shares of capital stock nor purchase, redeem or
otherwise acquire for 

  

 28 

 
consideration any shares of the Company’s capital stock or other securities except in accordance with agreements existing as of the date hereof;

  
 (c) issue or sell any shares of its capital
stock, effect any stock split or otherwise change its capitalization as it exists on the date hereof, or issue, grant, or sell any options, stock appreciation or purchase rights, warrants, conversion rights or other rights, securities or commitments
obligating it to issue or sell any shares of its capital stock, or any securities or obligations convertible into, or exercisable or exchangeable for, any shares of its capital stock, other than the issuance of shares of Company Common Stock
pursuant to the conversion, exercise or exchange of securities therefore outstanding as of the date hereof in accordance with their terms; 
  
 (d) create, incur, assume or guaranty any indebtedness for borrowed money, except pursuant to credit agreements in existence on the date
of this Agreement; 
  
 (e) pay, discharge or
satisfy any claim, obligation or Liability in excess of $25,000 (in any one case) or $50,000 (in the aggregate), other than the payment, discharge or satisfaction in the ordinary course of business of obligations reflected on or reserved against in
the Company Balance Sheet, or incurred since the date of the Company Balance Sheet in the ordinary course of business consistent with past practices or in connection with this transaction; 
  
 (f) except as required by applicable law, adopt or amend in
any material respect, any agreement or plan (including severance arrangements) for the benefit of its employees; 
  
 (g) sell, mortgage, pledge or otherwise encumber or dispose of any of its assets which are material, individually or in the aggregate, to
the business of the Company, except in the ordinary course of business consistent with past practices; 
  
 (h) acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, any business
or any corporation, partnership interest, association or other business organization or division thereof, or otherwise acquire any assets which are material, individually or in the aggregate, to the business of the Company, except in the ordinary
course of business consistent with past practices; 
  
 (i) increase the following amounts payable or to become payable: (i) the salary of any of its directors or officers, other than increases in the ordinary course of business consistent with past practices and not exceeding, in any case, five
percent (5%) of the director’s or officer’s salary on the date hereof, (ii) any other compensation of its directors or officers, including any increase in benefits under any bonus, insurance, pension or other benefit plan made for or with
any of those persons, other than increases that are provided in the ordinary course of business consistent with past practices to broad categories of employees and do not discriminate in favor of the aforementioned persons, and (iii) the
compensation of any of its other employees, consultants or agents except in the ordinary course of business consistent with past practices; 
  

 29 

 (j) dispose of, permit to lapse, or otherwise fail to preserve the rights of the Company
to use the Company Proprietary Rights or enter into any settlement regarding the breach or infringement of, any Company Proprietary Rights, or modify any existing rights with respect thereto, other than in the ordinary course of business consistent
with past practices, and other than any such disposal, lapse, failure, settlement or modification that does not have and could not reasonably be expected to have a Company Material Adverse Effect; 
  
 (k) sell, or grant any right to exclusive use of, all or any
part of the Company Proprietary Rights; 
  
 (l)
enter into any contract or commitment or take any other action that is not in the ordinary course of its business or could reasonably be expected to have an adverse impact on the transactions contemplated hereunder or that would have or could
reasonably be expected to have a Company Material Adverse Effect; 
  
 (m) amend in any material respect any agreement to which the Company is a party the amendment of which will have or could reasonably be expected to have a Company Material Adverse Effect; 
  
 (n) waive, release, transfer or permit to lapse any claim or
right the waiver, release, transfer or lapse of which would have or could reasonably be expected to have a Company Material Adverse Effect; 
  
 (o) make any change in any method of accounting or accounting practice other than changes required to be made in order that the
Company’s financial statements comply with GAAP; or 
  
 (p) agree, whether in writing or otherwise, to take any action described in this Section 5.1. 
  
 5.2 Conduct of Business of Parent. Between the date of this Agreement and the Closing Date or the date, if any, on which this Agreement is earlier
terminated pursuant to its terms, Parent, Federal and Merger Sub shall not, except to the extent that the Company shall otherwise consent in writing (which consent is not to be unreasonably withheld), take any action that would impair Parent’s
and Federal’s ability to pay the aggregate Merger Price or otherwise materially impair their ability to perform any of their respective obligations under this Agreement. Further, between the date of this Agreement and the Closing Date or the
date, if any, on which this Agreement is earlier terminated pursuant to its terms, Parent, Federal and Merger Sub shall, except to the extent that the Company shall otherwise consent in writing (such consent not to be unreasonably withheld) promptly
notify the Company and the Stockholders’ Representative of any event or occurrence which will have or could reasonably be expected to have an adverse effect on the ability of Federal and Parent to pay the aggregate Merger Price and otherwise to
perform their respective obligations hereunder. 
  

 30 

 Article 6 
 ADDITIONAL AGREEMENTS 
  
 6.1 Exclusivity. From and after the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with Article 9 hereof, but in any event at least sixty (60)
days after the date of the Letter of Intent, neither the Company nor the Major Stockholders will, directly or indirectly, through its or their respective affiliates, agents, officers and directors, directly or indirectly, solicit, initiate, or
participate in discussions or negotiations or otherwise cooperate in any way with, or provide any information to, any corporation, partnership, person, or other entity or group concerning any tender offer, exchange offer, merger, business
combination, sale of substantial assets, sale of shares of capital stock, or similar transaction involving the Company (all such transactions being referred to herein as “Acquisition Proposals”). Notwithstanding the foregoing, in the event
that the Company at any time after the date of the Letter of Intent and before the earlier of the Closing Date or the termination of this Agreement in accordance with Article 9 hereof, accepts an Acquisition Proposal from any person or entity other
than Parent, Parent shall be entitled, providing that Parent is not in a material breach of any of its obligations hereunder, upon demand submitted in a form of a notice to the Company (the “Demand Notice”) to the payment of the sum of
$250,000. The Company shall make such payment within ten (10) days of the receipt of the Demand Notice. 
  
 6.2 Expenses. 
  
 6.2.1 General. Except as provided in this Section 6.2, each party hereto shall be responsible for its own costs and expenses in connection with the
Merger, including fees and disbursements of consultants, brokers, finders, investment bankers and other financial advisors, counsel and accountants (“Expenses”). 
  
 6.2.2 Broker Fees. At the Closing, Federal shall pay $300,000 to Broker which amount shall be deducted from the First
Payment due to the Stockholders at the Closing. Federal shall pay the remaining fees owed by the Company to Broker, in the amount designated by the Stockholders’ Representative, when Federal pays the Second Payment pursuant to Section 2.6.4.

  
 6.2.3 Uncovered Expenses. The Company and the
Stockholders shall ensure that either: (i) any Expenses incurred by the Company or Stockholders are paid at or before the Closing from the aggregate Merger Price so that such Expenses do not continue to be or do not become the liability of the
Company after the Closing or (ii) provision is made for any such Expenses on the Company’s books for payment after the Closing (it being understood that in such event the Net Assets on the Closing Balance Sheet shall be reduced by any such
Expenses). 
  
 6.3 Indemnification Provisions. 

 
 6.3.1 Indemnification. Subject to all of the terms of this Section
6.3, from and after the Closing Date, Parent, Federal, the Surviving Corporation and each of their respective directors, officers, employees, Affiliates, representatives, successors and assigns (collectively “Parent Indemnified Parties”)
shall be entitled to payment and reimbursement from the Stockholders, severally and not jointly, of the amount of Loss suffered, incurred or paid by any 
  

 31 

 
Parent Indemnified Party, by reason of any breach of any representation or warranty made by the Company in Article 3 of this Agreement or the certificate
delivered pursuant to Section 7.2.1 of this Agreement. Subject to all of the terms of this Section 6.3, from and after the Closing Date, the Stockholders and each of their respective legatees, heirs, and legal representatives (collectively the
“Stockholder Indemnified Parties”) shall be entitled to payment and reimbursement from Parent, Federal and the Surviving Corporation of the amount of Loss suffered, incurred or paid by any Stockholder Indemnified Party by reason of any
breach of any representation or warranty made by Parent or Federal in Article 4 of this Agreement or the certificate delivered pursuant to Section 7.3.1 of this Agreement, the breach or nonperformance of any covenant or obligation to be performed by
Parent, Federal or the Surviving Corporation hereunder or under any agreement executed in connection herewith, or any matter arising out of the business of the Surviving Corporation after the Closing. 
  
 6.3.2 Claims for Indemnification. Upon obtaining knowledge of any
facts, claim or demand which has given rise to, or could reasonably give rise to, a claim for indemnification hereunder (referred to herein as an “Indemnification Claim”), the party seeking indemnification (the “Indemnified
Party”) shall promptly give written notice of such facts, claim or demand (“Notice of Claim”) to the party from whom indemnification is sought (the “Indemnifying Party”). So long as the Notice of Claim is given by the
Indemnified Party in the Claims Period specified in Section 6.3.5, no failure or delay by the Indemnified Party in the giving of a Notice of Claim shall reduce or otherwise affect the Indemnified Party’s right to indemnification except to the
extent that the Indemnifying Party has been prejudiced thereby. 
  
 6.3.3 Defense by Indemnifying Party. In the event of a claim or demand asserted by a third party (a “Third Party Claim”), the Indemnifying Party shall have the right, but not the obligation, exercisable by written notice to
the Indemnified Party within 10 days of the date of the Notice of Claim concerning the commencement or assertion of any Third Party Claim, to jointly participate in the defense of such Third Party Claim, and, in the case of claims for which the
maximum liability under such Third Party Claim is reasonably expected to be less than the available indemnification amount for the Indemnifying Party (after taking into account the amount of all other claims then outstanding for which the
Indemnifying Party may be liable and any limitations contained in Section 6.3.4 hereof), to control the defense of such Third Party Claim. If the Indemnifying Party gives such notice of intent to defend, the Indemnifying Party shall assume the
defense thereof as follows: (i) the Indemnifying Party will defend the Indemnified Party against the matter with counsel compensated by and chosen by Indemnifying Party, which choice of counsel is subject to the reasonable satisfaction of the
Indemnified Party; (ii) the Indemnified Party may retain separate co-counsel at the sole cost and expense of Indemnified Party; (iii) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to
the matter without the written consent of the Indemnifying Party; and (iv) the Indemnifying Party will not consent to the entry of any judgment with respect to the matter, or enter into any settlement that does not include a provision whereby the
plaintiff or claimant in the matter releases the Indemnified Party from all liability with respect thereto, without the written consent of the Indemnified Party. If, however, no Indemnifying Party notifies the Indemnified Party within 10 days after
the Indemnified Party has given notice of the matter, that the Indemnifying Party is assuming the defense thereof, then the Indemnified Party shall defend against, or enter into any settlement with respect to the matter. 
  

 32 

 
The Indemnified Party shall not settle such Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. 
  
 6.3.4 Limitation on
Liability for Indemnity. The Parent Indemnified Parties shall not be entitled to indemnification pursuant to this Section 6.3 until the aggregate amount of Losses suffered by the Parent Indemnified Parties exceeds $250,000 (the “Indemnity
Deductible”) whereupon the Parent Indemnified Parties shall be entitled to indemnification hereunder for the aggregate amount of all of such Losses in excess of the Indemnity Deductible. The aggregate liability of the Stockholders for
indemnification under this Section 6.3 shall not exceed $3,250,000 (the “Indemnity Cap”); provided that the several liability of each Stockholder shall be in proportion to, and not exceed, such Stockholder’s pro rata share of the
Indemnity Cap based on the percentages listed in the Stockholder List. Subject to compliance with all of the provisions of Section 6.3, any claim for indemnification made by a Parent Indemnified Party within 12 months after the Closing Date which is
the subject of a Determination, shall be satisfied first from any amounts owing to the Stockholders pursuant to Section 2.6. 
  
 6.3.5 Claims Period. Any claim for indemnification by any Parent Indemnified Party under this Section 6.3 must be asserted by written notice on or
before the date that is 18 months after the Closing Date. 
  
 6.3.6 Losses Not to Include Amounts in Net Assets. No claims for indemnification shall be made by Parent, Federal or the Surviving Corporation with respect to any amounts that are reflected as liabilities or reserves on the Closing
Balance Sheet. 
  
 6.3.7 Exclusive Remedy. From and after
the Closing, except as provided in the Consulting Agreement, the sole recourse and exclusive remedy of Parent, Federal, Merger Sub, the Company and the Stockholders against each other arising out of this Agreement or any certificate delivered in
connection with this Agreement, or otherwise arising from the transactions contemplated hereby, shall be to assert a claim for indemnification under the indemnification provisions of Section 6.3. Except for claims against the Stockholders arising
under this Agreement, none of Parent, Federal or Merger Sub shall assert and shall cause the Surviving Corporation not to assert any claim against any Stockholder (in their capacity as a stockholder of the Company), for or with respect to any matter
relating to the Company arising prior to the Closing, it being understood that the foregoing limitation does not apply to claims against any Stockholder in his/her capacity as an employee of the Company or under any other agreements between the
Company and such Stockholder in his/her capacity as an employee of the Company (such as the agreements described in Section 3.18.3 above). 
  
 6.3.8 Express Waiver of Other Remedies. Without limiting the generality or effect of Section 6.3.7, as a material inducement to the other parties
hereto entering into this Agreement, each party to this Agreement, from and after the Closing and except as provided in the Consulting Agreement, hereby (i) waives, and forever releases and discharges the other parties and their respective
representatives from, by reason of or relating to the execution and delivery of this Agreement and the transactions contemplated hereby, any claim or cause of action arising under this Agreement or the transactions contemplated hereby which it
otherwise might assert (except for actual and willful fraud or as otherwise provided in Section 9.6 hereof), including without limitation under the common law or federal or state securities, trade 

  

 33 

 
regulation, environmental or other laws, except for claims or causes of action for which contractual indemnification may be sought under and subject to the
express terms and conditions of Section 6.3, (ii) agrees not to, and to cause its representatives controlled by it not to, directly or indirectly, institute, prosecute or aid in the prosecution of any claim, demand, cause of action, suit or other
proceeding against any other party or representative thereof, which is the subject of clause (i) of this Section 6.3.8, and (iii) agrees that, regardless of the foregoing provisions, no party will have any liability or obligation in respect of any
claim or cause of action arising under this Agreement or the transactions contemplated hereby that is or may be brought except in respect of Losses, and then only to the extent expressly provided in Section 6.3. 
  
 6.3.9 Insurance. Federal, Parent and the Surviving Corporation shall
seek full recovery under all insurance policies covering any Loss to the same extent as they would if such Loss were not subject to indemnification hereunder, and Federal, Parent and the Surviving Corporation shall not terminate or cancel any
insurance policies in effect for periods prior to the Closing. In the event that an insurance recovery is made by Federal, Parent, the Surviving Corporation or any of their Affiliates with respect to any Loss for which any such Person has been
indemnified hereunder, then a refund equal to the aggregate amount of the recovery (net of all direct collection expenses) shall be made promptly to the Stockholders’ Representative (on behalf of the Stockholders). 
  
 6.3.10 Subrogation. To the extent that an Indemnifying Party has
discharged any claim for indemnification hereunder, the Indemnifying Party shall be subrogated to all rights of the Indemnified Party against any Person to the extent of the Losses that relate to such claim. Any Indemnified Party shall, upon written
request by the Indemnifying Party following the discharge of such claim, execute an instrument reasonably necessary to evidence such subrogation rights. 
  
 6.3.11 Merger Price. Any payments made as indemnification under Section 6.3 shall be considered adjustments to the Merger Price. 
  
 6.3.12 Effect of Notice. Notwithstanding anything to the contrary in
Section 6.3, none of the Company, the Stockholders, Federal, Parent or the Merger Sub shall be deemed to have breached any representation, warranty, or covenant if (i) the Stockholders’ Representative shall have notified Federal, Parent or the
Merger Sub or Federal, Parent or the Merger Sub shall have notified the Stockholders’ Representative, as the case may be, in writing, on or prior to the Closing Date, of the breach of, or inaccuracy in, or of any facts or circumstances
constituting or resulting in the breach of, or inaccuracy in, such representation, warranty or covenant and (ii) the party or parties receiving such notice shall have waived in writing such breach or inaccuracy. 
  
 6.3.13 Overestimation of Loss. In the event an Indemnified Party
provides to the other party a Notice of Claim which estimates the damages grossly in excess of the damages actually settled, adjudicated or arbitrated, as the case may be, the Indemnifying Party may assert its expenses so incurred in a claim against
the Indemnified Party. 
  
 6.3.14 Certain Limitations. In
no event will Losses include claims for consequential, punitive or incidental damages, including consequential damages consisting of business interruption or lost profits. 
  

 34 

 6.4 Disclosure Generally. If and to the extent any information required to be furnished in any
Schedule or Updated Schedule is contained in this Agreement or in any other Schedule or Updated Schedule attached hereto, such information shall be deemed to be included in all Schedules or Updated Schedules, respectively, in which the information
is required to be included to the extent such disclosure is reasonably apparent on its face. The inclusion of any information in any Schedule or Updated Schedule attached hereto shall not be deemed to be an admission or acknowledgement by the
Company or the Stockholders, in and of itself, that such information is material to or outside the ordinary course of the business of the Company. 
  
 6.5 Disclaimer of Implied Warranties. It is the explicit intent and understanding of each party hereto that no party hereto or any of such
party’s Affiliates, representatives or agents is making any representation or warranty whatsoever, oral or written, express or implied, other than those set forth in this Agreement, and neither party hereto is relying on any statement,
representation or warranty, oral or written, express or implied, made by the other party hereto or such other party’s Affiliates, representatives or agents, except for the representations and warranties set forth in this Agreement. EXCEPT AS
OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE PARTIES EXPRESSLY DISCLAIM ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE EXPRESSED OR IMPLIED (INCLUDING, BUT NOT LIMITED TO, ANY RELATING TO THE FUTURE OR HISTORICAL FINANCIAL
CONDITION, RESULTS OF OPERATIONS, ASSETS OR LIABILITIES OF THE COMPANY). 
  
 6.6 Access and Information. Subject to existing confidentiality obligations and applicable law and privileges, the Company shall afford to Parent and to a reasonable number of its officers, employees,
accountants, counsel and other authorized representatives reasonable access, upon reasonable advance telephone notice, during regular business hours, throughout the period prior to the earlier of the Closing Date or the termination of this Agreement
pursuant to its terms, to its offices, properties, books and records, and shall use reasonable efforts to cause its representatives and independent public accountants to furnish to Parent such additional financial and operating data and other
information as to its business, customers, vendors and properties as Parent may from time to time reasonably request. Notwithstanding the foregoing, all visits to any Company office will be coordinated and conducted so as to not be disruptive to the
operations of the Company and to preserve the confidentiality of the transactions contemplated hereby. In addition, with the prior consent of the Company, Parent, Federal and Merger Sub shall be permitted to meet with the Company’s significant
customers. 
  
 6.7 Public Disclosure. Except as otherwise
required by law, any press release or other public disclosure of information regarding the proposed transaction (including the negotiations or the termination of such negotiations with respect to the Merger and the terms and existence of this
Agreement) shall be developed by Parent, subject to the Company’s review. Notwithstanding the provisions of Section 9.3, the Company, the Major Stockholders and Parent agree that each party’s non-disclosure obligations contained in Section
10 of the Letter of Intent shall remain in full force and effect in accordance with the terms thereof and hereof. 
  
 6.8 No Solicitation of Employees. Parent, Federal and Merger Sub agree that between the date of this Agreement and the Closing Date or the date two
years after the date, if any, on which this Agreement is earlier terminated pursuant to its terms, whichever period is longer, 

  

 35 

 
neither Parent, Federal, Merger Sub, nor any of their respective Affiliates shall solicit, induce or recruit any of the employees or consultants who provide
services to the Company on the date hereof and whose names appear on the Employee List or are otherwise provided to Federal in writing before the Closing Date, or within five (5) business days of any termination of this Agreement to leave their
employment, otherwise than in the course of engaging in general advertisements or solicitations not directed specially to such employees or consultants; provided, however, that nothing in this Section 6.8 shall prohibit Parent, Federal and
Merger Sub from making general employment solicitations in the media or over the internet and hiring any person who responds to such general solicitation. 
  
 6.9 Further Assurances. 
  
 6.9.1 Generally. Subject to terms and conditions herein provided and to the fiduciary duties of the board of directors and officers or
representatives of any party, each of the parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective this Agreement and the transactions contemplated hereby. In case at any time any further action, including, without limitation, the obtaining of waivers and consents under any agreements, material
contracts or leases and the execution and delivery of any licenses or sublicenses for any software, is necessary, proper or advisable to carry out the purposes of this Agreement, the proper officers and directors or representatives of each party to
this Agreement are hereby directed and authorized to use commercially reasonable efforts to effectuate all such required action. 
  
 6.9.2 Novation of the Material Contracts. For a reasonable period of time after Closing (not to exceed 9 months) each party agrees to use
commercially reasonable efforts to effect the novation of each Material Contract with a Governmental Entity that may require novation under its terms or under applicable laws or regulations, and further agrees to provide all documentation necessary
to effect each such novation, including, without limitation, all instruments, certifications, requests, legal opinions, audited financial statements, and other documents required by Part 42 of the Federal Acquisition Regulation to effect a novation
of any contract with the Government of the United States; provided however, that this Section 6.9.2 shall not obligate the company or any stockholder to incur any expense or liability. 
  
 6.10 Certain Tax Matters. 
  

6.10.1 Tax Periods Ending on or before the Closing Date. Federal shall prepare or cause to be prepared and file or cause to be filed all
Tax Returns for the Company for all periods ending on or prior to the Closing Date which are filed after the Closing Date. Federal shall permit the Stockholders’ Representative to review and comment on each such Tax Return described in the
preceding sentence prior to filing and shall make such revisions to such Tax Returns as are reasonably requested by the Stockholders’ Representative. Subject to all of the limitations set forth in Section 6.3, the Stockholders shall reimburse
Federal for any Taxes of the Company with respect to such periods within fifteen (15) days after payment by Federal or the Company of such Taxes to the extent such Taxes are not reflected in the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences between 

  

 36 

 
book and Tax income) shown on the face of the Closing Balance Sheet or the Final Closing Balance Sheet. 
  
 6.10.2 Tax Periods Beginning Before and Ending after the Closing
Date. Federal shall prepare or cause to be prepared and file or cause to be filed any separate Tax Returns of the Company for Tax periods which begin before the Closing Date and end after the Closing Date. Federal shall permit the
Stockholders’ Representative to review and comment on each such Tax Return and shall make such revisions to such Tax Returns as are reasonably requested by the Stockholders’ Representative. Subject to all of the limitations set forth in
Section 6.3, Sellers shall pay to Federal within fifteen (15) days after the date on which Taxes are paid with respect to such periods an amount equal to the portion of such Taxes which relates to the portion of such Taxable period ending on the
Closing Date to the extent such Taxes are not reflected in the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) shown on the face of the Closing Balance
Sheet or Final Closing Balance Sheet. For purposes of this Section, in the case of any Taxes that are imposed on a periodic basis and are payable for a Taxable period that includes (but does not end on) the Closing Date, the portion of such Tax
which relates to the portion of such Taxable period ending on the Closing Date shall (x) in the case of any Taxes other than Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire Taxable period
multiplied by a fraction the numerator of which is the number of days in the Taxable period ending on the Closing Date and the denominator of which is the number of days in the entire Taxable period, and (y) in the case of any Tax based upon or
related to income or receipts be deemed equal to the amount which would be payable if the relevant Taxable period ended on the Closing Date. Any credits relating to a Taxable period that begins before and ends after the Closing Date shall be taken
into account as though the relevant Taxable period ended on the Closing Date. All determinations necessary to give effect to the foregoing allocations shall be made in a manner consistent with prior practice of the Company. 
  
 6.10.3 Cooperation on Tax Matters. 
  
 (a) Federal, the Company and the Stockholders shall
cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this Section and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include
the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The Company and the Stockholders agree (A) to retain all books and records with respect to Tax matters pertinent to the Company relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Federal or the Stockholders, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority, and (B) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, the Company or the Stockholders, as the
case may be, shall allow the other party to take possession of such books and records. 
  

 37 

 (b) Federal and the Stockholders further agree, upon request, to use their best efforts
to obtain any certificate or other document from any governmental authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions
contemplated hereby). 
  
 (c) Federal and the
Stockholders further agree, upon request, to provide the other party with all information that either party may be required to report pursuant to section 6043 of the Code and all Treasury Department Regulations promulgated thereunder. 
  
 6.10.4 Tax Sharing Agreements. All tax sharing agreements or
similar agreements with respect to or involving the Company shall be terminated as of the Closing Date and, after the Closing Date, the Company shall not be bound thereby or have any liability thereunder. 
  
 6.10.5 Certain Taxes. All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with the consummation of the transactions contemplated by this Agreement (including any corporate-level transfer gains tax triggered by
the sale of the Company stock, and any transfer or similar tax imposed by any governmental authority), shall be borne equally by Federal and the Stockholders. The parties hereto will jointly file all necessary Tax Returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees. 
  
 6.10.6 Tax Treatment of the Merger. The parties to this Agreement acknowledge that the Merger is intended to be treated for United States
federal income tax purposes as the purchase by Federal, and the sale by each of the Stockholders, of all of the issued and outstanding shares of Company Common Stock. Each of the parties to this Agreement shall file all Tax Returns in a manner
consistent with such treatment. 
  
 6.10.7 Section 338
Election. Notwithstanding anything to the contrary in this Agreement, the Stockholders shall have no liability under any provision of this Section 6.10 in connection with any election made under Section 338 of the Code with respect to the
transactions contemplated under this Agreement. 
  
 6.11
Notification. From the date hereof until the Closing Date, the Company shall promptly disclose to Parent, Federal and Merger Sub in writing any material variances from the representations and warranties contained in Article 3 promptly upon
discovery thereof, in the form of “Updated Schedules” delivered to Parent, Federal and Merger Sub. From the date hereof until the Closing Date, Parent, Federal and Merger Sub shall promptly disclose to the Company and the
Stockholders’ Representative in writing any material variances from Parent, Federal and Merger Sub representations and warranties contained in Article 4, and Parent, Federal and Merger Sub shall promptly disclose to the Stockholders’
Representative if any of Parent, Federal and Merger Sub obtains actual knowledge that any of the representations and warranties of the 

  

 38 

 
Company in this Agreement and the Schedules hereto are not true and correct in all material respects, or if any of Parent, Federal and Merger Sub obtains
actual knowledge of any material errors in, or omissions from, the Exhibits or Schedules to this Agreement, except that Parent, Federal and Merger Sub shall not be required to disclose anything that the Company has disclosed on the Updated
Schedules. 
  
 6.12 Amendment of Charter Documents. For a
period of six (6) years after the Closing Date, neither Parent nor Federal shall (and shall cause the Surviving Corporation not to) amend the corporate charter or by-laws of the Surviving Corporation, if the effect of doing so would be to reduce or
narrow the scope of the Company’s obligations to indemnify its officers and directors who served in such capacities prior to the Closing Date or to reduce or narrow the scope of any exculpatory provision in favor of any such person. Parent
acknowledges that the intent of this provision is to give such persons the benefits of indemnity and exculpation to the fullest extent permitted by applicable law. 
  
 6.13 Employee Matters. For a period of at least one year following the Closing, the employees of the Surviving
Corporation shall be eligible to receive employee benefits that in the aggregate are substantially comparable to the employee benefits currently provided to them by the Company. 
  
 6.14 Payment of Bonuses to Company Employees. Parent acknowledges that the Company has accrued bonuses in the amount
of approximately $298,500 for certain employees of the Company designated in a list to be provided by the Company to Parent at Closing, and Parent agrees that it will cause the Surviving Corporation to pay out all such bonuses accrued on the Closing
Balance Sheet to such employees, to the extent not previously distributed, no later than one-hundred twenty (120) days following the Closing Date. In the event a listed employee is terminated by the Company (or an affiliate) without cause, Parent
will cause the Surviving Corporation to pay the applicable bonus to such employee on the date of termination. 
  
 6.15 Books and Records. The Parent agrees that it will cause the Surviving Corporation to preserve all books and records of the Company received
from the Stockholders, or held by the Surviving Corporation immediately after the Closing, and provide the Stockholders or their agents reasonable access to such books and records for a period of six (6) years following the Closing Date, or until
such later date as preservation of and access to those books and records is no longer required by any governmental or similar body. 
  
 6.16 Stockholders’ Meeting. In order to consummate the Merger, the Company, acting through its board of directors shall in accordance with its
charter and bylaws and applicable law: (i) duly call, give notice of and hold a meeting of its Stockholders as soon as practicable following the date hereof; and (ii) include in such notice the recommendation of its board of directors that the
Stockholders vote in favor of the Agreement. 
  
 Article 7

 CONDITIONS PRECEDENT 
  
 7.1 Conditions Precedent to the Obligations of Each Party. The obligations of the parties hereto to effect the Merger
shall be subject to the fulfillment at or prior to the Closing of 

  

 39 

 
the following conditions, any of which conditions may be waived in writing prior to Closing by the party for whose benefit such condition is imposed:

  
 7.1.1 No Illegality. There shall not have been any
action taken, and no statute, rule or regulation shall have been enacted, by any state, federal or other (including foreign) government agency since the date of this Agreement that would prohibit or materially restrict the Merger or any other
material transaction contemplated hereby. 
  
 7.1.2 Government
Consents. All filings with and notifications to, and all approvals and authorizations of, third parties (including, without limitation, Governmental Entities) required for the consummation of the Merger and the other material transactions
contemplated hereby 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. 
  
 7.1.3 No Injunction. No injunction or restraining or other order
issued by a court of competent jurisdiction that prohibits or materially restricts the consummation of the Merger contemplated hereby shall be in effect (each party agreeing to use all reasonable efforts to have any injunction or other order
immediately lifted), and no action or proceeding shall have been commenced or threatened in writing seeking any injunction or restraining or other order that seeks to prohibit, restrain, invalidate or set aside consummation of the transactions
contemplated hereby. 
  
 7.2 Conditions Precedent to Obligation
of Parent, Federal and Merger Sub to Consummate the Merger. The obligation of Parent, Federal and Merger Sub to consummate the Merger shall be subject to the fulfillment at or prior to the Closing of the following additional conditions, any of
which conditions may be waived by Parent, Federal or Merger Sub prior to Closing: 
  
 7.2.1 Representations and Warranties. The representations and warranties of the Company contained in Article 3 of this Agreement shall be true and correct in all material respects on and as of the Closing Date,
other than changes contemplated by this Agreement and other than those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made
on and as of the Closing Date, except, in all such cases, for such breaches, inaccuracies or omissions of such representations and warranties as have neither had nor reasonably would be expected to have a Company Material Adverse Effect (it being
understood that, for purposes of determining the accuracy of such representations and warranties, any update of or modification to the Schedules made or purported to have been made after execution of this Agreement, including the Updated Schedules,
shall be disregarded); and the Company and the Stockholders shall have delivered to Parent a certificate to that effect, dated the Closing Date and signed on behalf of the Company by the President and Chief Financial Officer of the Company and
signed on behalf of the Stockholders by the Stockholders’ Representative. 
  
 7.2.2 Agreements and Covenants. The Company shall have performed in all material respects all of its agreements and covenants set forth herein that are required to be performed at or prior to the Closing Date;
and the Company and the Stockholders shall have 

  

 40 

 
delivered to Parent a certificate to that effect, dated as of the Closing Date and signed on behalf of the Company by the President and Chief Financial
Officer of the Company and signed on behalf of the Stockholders by the Stockholders’ Representative. 
  
 7.2.3 Legal Opinion. Parent, Federal and Merger Sub shall have received an opinion from Dickstein Shapiro Morin & Oshinsky LLP, counsel to the
Company, in substantially the form attached hereto as Exhibit B. 
  
 7.2.4 Closing Documents. The Company and the Stockholders shall have delivered to Parent the Company closing certificate described hereafter in this paragraph and such closing documents as the Parent shall reasonably request (other
than additional opinions of counsel). The Company closing certificate, dated as of the Closing Date, duly executed by the Company’s secretary, shall certify as to (i) the signing authority, incumbency and specimen signature of the signatories
of this Agreement and other documents signed on behalf of the Company in connection herewith, (ii) the resolutions adopted by the board of directors of the Company authorizing and approving the execution, delivery and performance of this Agreement
and the other documents executed in connection herewith and the consummation of the transactions contemplated hereby and thereby and state that such resolutions have not been modified, amended, revoked or rescinded and remain in full force and
effect, and (iii) the certificate of incorporation and by-laws of the Company. 
  
 7.2.5 Third Party Consents. All third party consents or approvals listed in Schedule 7.2.5 hereto shall have been obtained by the Company and shall be effective and shall not have been suspended, revoked, or
stayed by action of any such third party. 
  
 7.2.6 Diligence
Review. Parent shall have conducted a diligence investigation of all matters related to the business of the Company set forth on Schedule 7.2.6 in the manner and scope set forth on Schedule 7.2.6, and the results of such diligence investigation
shall have been reasonably satisfactory to Parent. 
  
 7.2.7
Employment Agreements. The Company shall have entered into the Parent’s standard written employment agreement with substantially all of the previously identified employees of the Company, in the form attached hereto as Exhibit H.

  
 7.2.8 Consulting, Non-Compete, Non-Solicitation and
Non-Disturbance Agreement. The Company shall have entered into a written consulting, non-compete, non-solicitation and non-disturbance agreement with Stan Ecton substantially in the form attached hereto as Exhibit G (the “Consulting
Agreement”). 
  
 7.2.9 Material Adverse Effect. Since
the date of this Agreement, the Company shall not have suffered a Company Material Adverse Effect. 
  
 Notwithstanding the failure of any one or more of the foregoing conditions, Parent, Federal and Merger Sub may proceed with the Closing without satisfaction, in whole or in part, of any one or more of such conditions
and without written waiver. 
  
 7.3 Conditions to Obligations
of the Company and the Stockholders to Consummate the Merger. The obligation of the Company and the Stockholders to consummate the Merger 

  

 41 

 
shall be subject to the fulfillment at or prior to the Closing of the following additional conditions, any of which may be waived in writing by the Company
or the Stockholders’ Representative prior to Closing: 
  
 7.3.1 Representations and Warranties. The representations and warranties of Parent, Federal and Merger Sub contained in Article 4 of this Agreement shall be true and correct in all material respects on and as of the Closing Date,
except for changes contemplated by this Agreement and except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made
on and as of the Closing Date, except in all such cases, for such breaches, inaccuracies or omissions of such representations and warranties which have neither had nor reasonably would be expected to have a Parent Material Adverse Effect; and Parent
shall have delivered to the Company a certificate to that effect, dated the date of the Closing and signed on behalf of Parent by the Chief Executive Officer and Chief Financial Officer of Parent. 
  
 7.3.2 Agreements and Covenants. Parent, Federal and Merger Sub shall
have performed in all material respects all of their agreements and covenants set forth herein that are required to be performed at or prior to the Closing Date; and Parent shall have delivered to the Company a certificate to that effect, dated as
of the Closing Date and signed on behalf of Parent by the Chief Executive Officer and Chief Financial Officer of Parent. 
  
 7.3.3 Legal Opinion. The Company shall have received an opinion from Parent in substantially the form attached hereto as Exhibit C. 
  
 7.3.4 Closing Documents. Parent, Federal and Merger Sub shall have
delivered to the Company closing certificates of Parent, Federal and Merger Sub and such other closing documents as the Company shall reasonably request (other than additional opinions of counsel). Each of the closing certificates of Parent, Federal
and Merger Sub, dated as of the Closing Date, duly executed by the secretary of Parent, Federal and Merger Sub, respectively, shall certify as to (i) the signing authority, incumbency and specimen signature of the signatories of this Agreement and
other documents signed on behalf of Parent, Federal and Merger Sub in connection herewith, (ii) the resolutions adopted by the board of directors of Parent, Federal and Merger Sub authorizing and approving the execution, delivery and performance of
this Agreement and the other documents executed in connection herewith and the consummation of the transactions contemplated hereby and thereby and state that such resolutions have not been modified, amended, revoked or rescinded and remain in full
force and effect, and (iii) the Certificate of Incorporation and By-Laws of the Parent and Certificate of Incorporation and By-Laws of Federal. 
  
 7.3.5 Material Adverse Effect. Since the date of this Agreement, Parent shall not have suffered a Parent Material Adverse Effect. 
  
 7.3.6 Payment of Merger Price. The Parent shall have tendered the
aggregate First Payment and the Holdback Amount pursuant to the provisions of Section 2.6.3 hereof. 
  
 7.3.7 Written Waiver. To the extent that Parent, Federal and Merger Sub agree to proceed with the Closing without satisfaction, in whole or in
part, of any one or more of the 

  

 42 

 
conditions in Section 7.2, if the Company has requested that Parent, Federal and Merger Sub deliver to the Company a written waiver of any rights or remedies
any of them may have against the Company and the Stockholders by reason of the specific failure of any such conditions then it shall be a condition to the obligations of the Company and the Stockholders to consummate the Merger that, Parent, Federal
and Merger Sub shall have delivered such written waiver. 
  
 Notwithstanding the
failure of any one or more of the foregoing conditions, the Company and the Major Stockholders may proceed with the Closing without satisfaction, in whole or in part, of any one or more of such conditions and without written waiver. 
  
 Article 8 
 SURVIVAL OF REPRESENTATIONS 
  
 8.1 The Company’s Representations. All representations and warranties made by the Company in Article 3 of this Agreement or the certificate
delivered by the Company pursuant to Section 7.2.1 hereof shall survive the Closing and any investigation at any time made by or on behalf of Parent and shall terminate on the date which is 18 months after the Closing Date (except that Parent
Indemnified Party claims pending on such date continue until resolved). The covenants made by the Company or the Stockholders in this Agreement or any certificate or other writing delivered by the Company or any of its Affiliates pursuant hereto or
in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Parent. 
  
 8.2 Parent’s Representations. All representations and warranties made by Parent, Federal and Merger Sub in this Agreement or any certificate
or other writing delivered by Parent, Federal, Merger Sub or any of their respective Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of the Company and shall
terminate on the date when all amounts due pursuant to Section 2.6.4 are paid in full (except that Stockholder Indemnified Party claims pending on such date shall continue until resolved). 
  
 Article 9 
 OTHER PROVISIONS 
  
 9.1 Termination Events. This Agreement may be terminated and the Merger abandoned at any time prior to the Closing Date, provided however that upon
any such termination the surviving obligations of the Parties under the Letter of Intent, including the obligations of confidentiality and non-solicitation, shall continue in full force and effect in accordance with the terms of the Letter of
Intent: 
  
 (a) by mutual written consent of
Parent and the Company; 
  
 (b) by Parent if
there has been a breach of any representation, warranty, covenant or agreement contained in this Agreement on the part of the Company or the Major Stockholders and such breach has not been cured within ten business days after written notice to the
Company (provided, that neither Parent nor Federal is in material 

  

 43 

 
breach of the terms of this Agreement, and provided further, that no cure period shall be required for a breach which by its nature cannot be cured) such
that the conditions set forth in Section 7.2.1 or Section 7.2.2 hereof, as the case may be, will not be satisfied; 
  
 (c) by Parent, if the Company, its board of directors or the Major Stockholders shall have (i) withdrawn, modified or amended in
any material respect the approval of this Agreement or the transactions contemplated herein, or (ii) taken any public position inconsistent with its approval or recommendation, including, without limitation, having failed (without the consent
of Parent) after a reasonable period of time to reject or disapprove any Acquisition Proposal (or after a reasonable period of time to recommend to its shareholders such rejection or disapproval); 
  
 (d) by the Company if there has been a breach of any
representation, warranty, covenant or agreement contained in this Agreement on the part of Parent, Federal or Merger Sub and such breach has not been cured within ten business days after written notice to Parent (provided, that the Company is not in
material breach of the terms of this Agreement, and provided further, that no cure period shall be required for a breach which by its nature cannot be cured) such that the conditions set forth in Section 7.3.1 or Section 7.3.2 hereof, as the case
may be, will not be satisfied; 
  
 (e) by the
Company, if the Company accepts an Acquisition Proposal for any reason, including pursuant to a good-faith determination by its Board of Directors, after consulting with counsel, that not to accept the Acquisition Proposal would constitute a breach
of the Directors’ fiduciary duty under the CV; provided, however, that in that event the Company shall pay to Parent the amount pursuant to Section 6.1; 
  
 (f) by any party hereto if: (i) there shall be a final, non-appealable order of a federal or state court in
effect preventing consummation of the Merger; (ii) there shall be any final action taken, or any statute, rule, regulation or order enacted, promulgated or issued or deemed applicable to the Merger by any Governmental Entity which would make
consummation of the Merger illegal; or 
  
 (g) by
any party hereto if the Merger shall not have been consummated by November 16, 2002 , provided that the right to terminate this Agreement under this Section 9.1(f) shall not be available to any party whose failure to fulfill any material obligation
under this Agreement has been the cause of, or resulted in, the failure of the Closing Date to occur on or before such date. 
  
 9.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered by hand sent via a reputable
nationwide courier service or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice) and shall be deemed given on the
date on which so hand-delivered or on the third business day following the date on which so mailed or sent: 
  

 44 

 To Parent, Federal and Merger Sub: 
  
 CACI International Inc 
 1100 North Glebe Road 
 Arlington, VA 22201 
 Attention: Dr. J. P. London, Chairman 
  
 with copies to: 
  
 Jeffrey P. Elefante 
 Executive Vice President, General Counsel and Secretary 
 CACI International Inc 
 1100 North Glebe Road 
 Arlington, VA 22201 
  
 David W. Walker, Esq. 
 Foley Hoag LLP 
 155 Seaport Boulevard 
 Boston, MA 02210 
  
 To the Company: 
  
 Stan Ecton 
 Chief Executive Officer 
 Acton Burnell, Inc. 
 1500 N. Beauregard Street, Suite 210 
 Alexandria, VA 22311-1715 
  
 with
copies to: 
  
 Ira H. Polon, Esq. 
 Dickstein Shapiro Morin & Oshinsky LLP 
 2101 L Street NW 
 Washington, DC 20037-1526 
  
 To any of the Major Stockholders or the Stockholders’
Representative: at the addresses set forth in Schedule A. 
  
 with copies to: 
  
 Ira H. Polon, Esq.

 Dickstein Shapiro Morin & Oshinsky LLP 
 2101 L Street NW 
 Washington, DC 20037-1526 
  

 45 

 9.3 Entire Agreement. Unless otherwise herein specifically provided, this Agreement and the
documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the subject matter hereof, including the Letter of Intent. Each party hereto acknowledges that, in entering this Agreement and completing the transactions contemplated
hereby, such party is not relying on any representation, warranty, covenant or agreement not expressly stated in this Agreement or in the agreements among the parties contemplated by or referred to herein. 
  
 9.4 Assignability. This Agreement is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder, except as otherwise expressly provided herein. Neither this Agreement nor any of the rights and obligations of the parties hereunder shall be assigned or delegated, whether by
operation of law or otherwise, without the written consent of all parties hereto. 
  
 9.5 Validity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, each of which shall remain in full
force and effect. 
  
 9.6 Specific Performance. The parties
hereto acknowledge that damages alone may not adequately compensate a party for violation by another party of this Agreement. Accordingly, in addition to all other remedies that may be available hereunder or under applicable law, any party shall
have the right to any equitable relief that may be appropriate to remedy a breach or threatened breach by any other party hereunder, including the right to enforce specifically the terms of this Agreement by obtaining injunctive relief in respect of
any violation or non-performance hereof. 
  
 9.7 Governing
Law. This Agreement shall take effect and shall be construed as a contract under the laws of the Commonwealth of Virginia. 
  
 9.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which together shall constitute one and the same agreement.

  
 9.9 Jurisdiction. The parties hereto consent to
personal jurisdiction in the Commonwealth of Virginia and agree that the exclusive venue and place of trial for the resolution of any disputes arising in connection with the interpretation or enforcement of this Agreement shall be either the federal
or state court in the Commonwealth of Virginia. 
  
 9.10 Legal
Representation. It is understood and agreed that the firm of Dickstein Shapiro Morin & Oshinsky LLP (“DSMO”) has represented the Stockholders in connection with the negotiation and execution of this Agreement and has not
represented any interest of Parent, Federal, or Merger Sub. It is further understood that DSMO has represented and advised the Company in connection with this Agreement and in connection with other matters during the period before the Closing when
the Company’s interest has been consistent with the interests of the Stockholders. In any dispute or proceeding arising under or in connection with this Agreement, including without limitation under Article VI, the Stockholders shall have the
right, 

  

 46 

 
at their election, to retain DSMO to represent them in that matter, and each of Parent, Federal and Merger Sub, for itself, for the Surviving Corporation and
for their respective successors and assigns, hereby consents to any such representation in any such matter. Each of Parent, Federal, Merger Sub, for itself, for the Surviving Corporation and for their respective successors and assigns, hereby
acknowledges and agrees that all communications between the Stockholders and their counsel, including without limitation DSMO, made in connection with the negotiation, preparation, execution, delivery and closing under, or any dispute or proceeding
arising under or in connection with, this Agreement, or any matter relating to any of the foregoing, are privileged communications between the Stockholders and such counsel; and none of Parent, Federal or the Surviving Corporation, nor any Person
purporting to act on behalf of or through Parent, Federal or the Surviving Corporation, will seek to compel disclosure of the same by any process. Nothing in this section shall be construed as a waiver by or on behalf of the Company or the Surviving
Corporation of any right to confidentiality, including any attorney-client privilege, with respect to communications made by or on behalf of the Company to DSMO in connection with DSMO’s engagement as counsel to the Company with respect to
matters not related to this Agreement. 
  
 9.11 Amendment.
Subject to Section 13.1-718(I) of the CV, the board of directors of each corporation party to the Merger may amend the Agreement at any time prior to issuance of the certificate of merger. Such amendment shall be made by written agreement.

  
 * * * * * 
  

 47 

 IN WITNESS WHEREOF, the parties have duly executed this Agreement and Plan of Merger under seal as of the
date first above written. 
  

	 CACI International Inc

		
	 By:
	 	  

	 	 	 Title:

	
	 CACI, Inc. - Federal

		
	 By:
	 	  

	 	 	 Title:

	
	 CACI Acquisition Corporation

		
	 By:
	 	  

	 	 	 Title:

	
	 Acton Burnell, Inc.

		
	 By:
	 	  

	 	 	 Title:

  

 48 

	 Major Stockholders:

	
	  

	 Stan Ecton

	
	  

	 Ronald Moreau

	
	  

	 Charles F. Olsick, Jr.

	
	  

	 James Clancy

	
	  

	 Bill Betzner

  

 49 

 List of Exhibits and Schedules 
  

	Exhibit

	  	 Description

	 A
	  	 Schedule of Liens

	 B
	  	 Form of Opinion of Company’s Counsel

	 C
	  	 Form of Opinion of Parent

	 D
	  	 Form of Closing Certificate

	 E
	  	 Paying Agent Agreement

	 F
	  	 Principles and Procedures

	 G
	  	 Form of Consulting, Non-Compete, Non-Solicitation and Non-Disturbance Agreement

	 H
	  	 Form of Parent’s Standard Employment Agreement

	 2.1
	  	 Articles of Merger

		
	Schedule

	  	 Description

	 A
	  	 List of Major Stockholders

	 3.1
	  	 Corporate Status of the Company

	 3.2
	  	 Capital Stock.

	 3.4
	  	 Authority for Agreement; Noncontravention.

	 3.6
	  	 Absence of Material Adverse Changes

	 3.7
	  	 Absence of Undisclosed Liabilities

	 3.8
	  	 Compliance with Applicable Law, Charter and By-Laws

	 3.9
	  	 Litigation and Audits

	 3.10
	  	 Tax Matters

	 3.11
	  	 Employee Benefit Plans.

	 3.12
	  	 Employment-Related Matters.

	 3.13
	  	 Environmental.

	 3.15
	  	 Assets Other Than Real Property.

	 3.16
	  	 Real Property.

	 3.17
	  	 Agreements, Contracts and Commitments.

	 3.18
	  	 Intellectual Property.

	 3.18.3
	  	 Employee Agreements

	 3.19
	  	 Insurance Contracts

	 3.20
	  	 Banking Relationships

	 3.21
	  	 Absence of Certain Relationships

	 5.1
	  	 Conduct of Business of the Company

	 7.2.5
	  	 Third Party Consents

	 7.2.6
	  	 Diligence ReviewExhibit 10.14

 Exhibit 10.14 
  
 CACI INTERNATIONAL INC 
 CACI, INC. – FEDERAL 
 APPLIED TECHNOLOGY
SOLUTIONS OF NORTHERN VA, INC. 
  
 STOCK PURCHASE AGREEMENT 
 TABLE OF CONTENTS 
  

	 Article 1 Definitions
	  	2
	 	  	1.1	  	 Certain Matters of Construction
	  	2
	 	  	1.2	  	 Cross References
	  	2
	 	  	1.3	  	 Certain Definitions
	  	3
		
	 Article 2 The Purchase and Sale of Shares
	  	7
	 	  	2.1	  	 Purchase of the Shares from the Stockholders
	  	7
	 	  	2.2	  	 Purchase Price.
	  	7
	 	  	 	  	2.2.1	  	 The Aggregate Purchase Price
	  	7
	 	  	 	  	2.2.2	  	 The Purchase Price Paid at the Closing
	  	7
	 	  	 	  	2.2.3	  	 The Escrowed Portion of the Purchase Price
	  	8
	 	  	2.3	  	 Additional Actions
	  	8
	 	  	2.4	  	 Stockholders’ Representative
	  	8
	 	  	2.5	  	 Adjustment to Purchase Price.
	  	9
	 	  	 	  	2.5.1	  	 Preparation of Closing Balance Sheet
	  	9
	 	  	 	  	2.5.2	  	 Review of Closing Balance Sheet
	  	10
	 	  	 	  	2.5.3	  	 Disputes
	  	10
	 	  	 	  	2.5.4	  	 Final Closing Balance Sheet
	  	10
	 	  	 	  	2.5.5	  	 Adjustments to the Purchase Price
	  	11
		
	 Article 3 Representations and Warranties of ATS and the Stockholders
	  	11
	 	  	3.1	  	 Corporate Status of ATS
	  	11
	 	  	3.2	  	 Capital Stock.
	  	11
	 	  	 	  	3.2.1	  	 Authorized Stock of ATS
	  	11
	 	  	 	  	3.2.2	  	 Options and Convertible Securities of ATS
	  	11
	 	  	3.3	  	 Subsidiaries
	  	12
	 	  	3.4	  	 Authority for Agreement; Noncontravention.
	  	12
	 	  	 	  	3.4.1	  	 Authority
	  	12
	 	  	 	  	3.4.2	  	 No Conflict
	  	12
	 	  	3.5	  	 Financial Statements
	  	12
	 	  	3.6	  	 Absence of Material Adverse Changes
	  	13
	 	  	3.7	  	 Absence of Undisclosed Liabilities
	  	13
	 	  	3.8	  	 Compliance with Applicable Law, Charter and By-Laws
	  	13
	 	  	3.9	  	 Litigation and Audits
	  	13
	 	  	3.10	  	 Tax Matters.
	  	14
	 	  	 	  	3.10.1	  	 Filing of Returns
	  	14
	 	  	 	  	3.10.2	  	 Payment of Taxes
	  	14
	 	  	 	  	3.10.3	  	 Assessments or Disputes
	  	14
	 	  	 	  	3.10.4	  	 Waiver of Statute of Limitations
	  	14

	 	  	 	  	3.10.5	  	 Tax Basis
	  	14
	 	  	 	  	3.10.6	  	 Unpaid Taxes
	  	15
	 	  	 	  	3.10.7	  	 Unclaimed Property
	  	15
	 	  	 	  	3.10.8	  	 No Changes in Accounting, Closing Agreement, Installment Sale
	  	15
	 	  	 	  	3.10.9	  	 S Corporation
	  	15
	 	  	3.11	  	 Employee Benefit Plans
	  	15
	 	  	 	  	3.11.1	  	 List of Plans
	  	15
	 	  	 	  	3.11.2	  	 ERISA
	  	16
	 	  	 	  	3.11.3	  	 Plan Determinations
	  	16
	 	  	 	  	3.11.4	  	 Funding
	  	17
	 	  	 	  	3.11.5	  	 Certain Other Matters
	  	17
	 	  	 	  	3.11.6	  	 Welfare Plans
	  	17
	 	  	3.12	  	 Employment-Related Matters
	  	18
	 	  	 	  	3.12.1	  	 Labor Relations
	  	18
	 	  	 	  	3.12.2	  	 Employee List
	  	18
	 	  	3.13	  	 Environmental
	  	18
	 	  	 	  	3.13.1	  	 Environmental Laws
	  	18
	 	  	 	  	3.13.2	  	 Environmental Claims
	  	19
	 	  	 	  	3.13.3	  	 No Basis for Claims
	  	19
	 	  	 	  	3.13.4	  	 Disclosure of Information
	  	19
	 	  	 	  	3.13.5	  	 Liens
	  	19
	 	  	3.14	  	 No Broker’s or Finder’s Fees
	  	19
	 	  	3.15	  	 Assets Other Than Real Property
	  	19
	 	  	 	  	3.15.1	  	 Title
	  	19
	 	  	 	  	3.15.2	  	 Accounts Receivable
	  	20
	 	  	 	  	3.15.3	  	 Condition
	  	20
	 	  	3.16	  	 Real Property
	  	20
	 	  	 	  	3.16.1	  	 ATS Real Property
	  	20
	 	  	 	  	3.16.2	  	 ATS Leases
	  	20
	 	  	 	  	3.16.3	  	 Condition
	  	20
	 	  	3.17	  	 Agreements, Contracts and Commitments
	  	21
	 	  	 	  	3.17.1	  	 ATS Agreements
	  	21
	 	  	 	  	3.17.2	  	 Validity
	  	22
	 	  	 	  	3.17.3	  	 Third-Party Consents
	  	22
	 	  	3.18	  	 Intellectual Property
	  	23
	 	  	 	  	3.18.1	  	 Right to Intellectual Property
	  	23
	 	  	 	  	3.18.2	  	 No Conflict
	  	23
	 	  	 	  	3.18.3	  	 Employee Agreements
	  	24
	 	  	3.19	  	 Insurance Contracts
	  	24
	 	  	3.20	  	 Banking Relationships
	  	24
	 	  	3.21	  	 No Contingent Liabilities
	  	24
	 	  	3.22	  	 Absence of Certain Relationships
	  	25
	 	  	3.23	  	 Foreign Corrupt Practices
	  	25
		
	 Article 4 Representations and Warranties of Parent and Federal
	  	25
	 	  	4.1	  	 Corporate Status of Parent and Federal
	  	25
	 	  	4.2	  	 Authority for Agreement; Noncontravention
	  	25

	 	  	 	  	4.2.1	  	Authority of Parent	  	25
	 	  	 	  	4.2.2	  	No Conflict	  	26
	 	  	4.3	  	SEC Statements, Reports and Documents	  	26
	 	  	4.4	  	Absence of Material Adverse Changes	  	26
		
	 Article 5 Conduct Prior to the Closing Date
	  	26
	 	  	5.1	  	Conduct of Business of ATS	  	26
	 	  	5.2	  	Conduct of Business of Parent	  	29
		
	 Article 6 Additional Agreements
	  	29
	 	  	6.1	  	Exclusivity and Failure to Complete Transaction	  	29
	 	  	 	  	6.1.1	  	Exclusivity	  	29
	 	  	 	  	6.1.2	  	ATS’s Failure to Complete Transaction	  	29
	 	  	 	  	6.1.3	  	Parent’s and Federal’s Failure to Complete Transaction	  	29
	 	  	6.2	  	Expenses	  	30
	 	  	 	  	6.2.1	  	General	  	30
	 	  	 	  	6.2.2	  	Broker Fees	  	30
	 	  	 	  	6.2.3	  	Attorney Fees	  	30
	 	  	 	  	6.2.4	  	Accountant Fees	  	30
	 	  	 	  	6.2.5	  	Uncovered Expenses	  	30
	 	  	6.3	  	Indemnification	  	30
	 	  	 	  	6.3.1	  	Claims for Indemnification	  	31
	 	  	 	  	6.3.2	  	Defense by Indemnifying Party	  	31
	 	  	 	  	6.3.3	  	Limitation on Liability for Indemnity.	  	32
	 	  	 	  	6.3.4	  	Claims Period	  	32
	 	  	6.4	  	Access and Information	  	32
	 	  	6.5	  	Public Disclosure	  	33
	 	  	6.6	  	Further Assurances	  	33
	 	  	 	  	6.6.1	  	Generally	  	33
	 	  	 	  	6.6.2	  	Novation of Contracts	  	33
	 	  	6.7	  	Certain Tax Matters	  	33
	 	  	 	  	6.7.1	  	338(h)(10) Election	  	33
	 	  	 	  	6.7.2	  	Allocation of Purchase Price	  	34
	 	  	 	  	6.7.3	  	S Corporation Status	  	34
	 	  	 	  	6.7.4	  	Tax Periods Ending on or before the Closing Date	  	34
	 	  	 	  	6.7.5	  	Cooperation on Tax Matters.	  	34
	 	  	 	  	6.7.6	  	Tax Sharing Agreements	  	35
	 	  	 	  	6.7.7	  	Certain Taxes	  	35
	 	  	6.8	  	Notification	  	35
	 	  	 	  	6.8.1	  	By ATS	  	35
	 	  	 	  	6.8.2	  	By Parent and Federal	  	35
	 	  	6.9	  	Exercise of Alligood and Walp Options	  	36
	 	  	 	  	6.9.1	  	Alligood Option	  	36
	 	  	 	  	6.9.2	  	Walp Option	  	36
		
	 Article 7 Conditions Precedent
	  	36
	 	  	7.1	  	Conditions Precedent to the Obligations of Each Party	  	36

	 	  	 	  	7.1.1	  	No Illegality	  	36
	 	  	 	  	7.1.2	  	Government Consents	  	36
	 	  	 	  	7.1.3	  	No Injunction	  	36
	 	  	 	  	7.1.4	  	Escrow Agreement	  	37
	 	  	 	  	7.1.5	  	Paying Agent Agreement	  	37
	 	  	7.2	  	Conditions Precedent to Obligation of Parent and Federal to Consummate the Transaction	  	37
	 	  	 	  	7.2.1	  	Representations and Warranties	  	37
	 	  	 	  	7.2.2	  	Agreements and Covenants	  	37
	 	  	 	  	7.2.3	  	Legal Opinion	  	37
	 	  	 	  	7.2.4	  	Closing Documents	  	37
	 	  	 	  	7.2.5	  	Third Party Consents	  	38
	 	  	 	  	7.2.6	  	Diligence Review	  	38
	 	  	 	  	7.2.7	  	Consulting, Non-Compete, Non-Solicitation, and Non-Disturbance Agreement	  	38
	 	  	 	  	7.2.8	  	Employment Agreements	  	38
	 	  	 	  	7.2.9	  	Updated Employee List	  	38
	 	  	 	  	7.2.10	  	Material Adverse Effect	  	38
	 	  	 	  	7.2.11	  	No Outstanding Options, Warrants, etc.	  	39
	 	  	 	  	7.2.12	  	Broker Agreement	  	39
	 	  	7.3	  	Conditions to Obligations of ATS and the Stockholders to Consummate the Transaction	  	39
	 	  	 	  	7.3.1	  	Representations and Warranties	  	39
	 	  	 	  	7.3.2	  	Agreements and Covenants	  	39
	 	  	 	  	7.3.3	  	Legal Opinion	  	39
	 	  	 	  	7.3.4	  	Closing Documents	  	39
	 	  	 	  	7.3.5	  	Material Adverse Effect	  	40
	 	  	 	  	7.3.6	  	Payment of Purchase Price	  	40
	 	  	 	  	7.3.7	  	Termination of 401(k) Plan	  	40
		
	 Article 8 Survival of Representations
	  	40
	 	  	8.1	  	ATS’s Representations	  	40
	 	  	8.2	  	Parent’s Representations	  	41
		
	 Article 9 Other Provisions
	  	41
	 	  	9.1	  	Termination Events	  	41
	 	  	9.2	  	Notices	  	42
	 	  	9.3	  	Entire Agreement	  	43
	 	  	9.4	  	Assignability	  	43
	 	  	9.5	  	Validity	  	44
	 	  	9.6	  	Specific Performance	  	44
	 	  	9.7	  	Governing Law	  	44
	 	  	9.8	  	Counterparts	  	44

 STOCK PURCHASE AGREEMENT 
  
 STOCK PURCHASE AGREEMENT, dated as of February 20, 2003 (the
“Agreement”), by and among CACI International Inc, a Delaware corporation (“Parent”), CACI, INC. – FEDERAL, a Delaware corporation and wholly-owned subsidiary of Parent
(“Federal”), Applied Technology Solutions of Northern VA, Inc., a Virginia corporation (“ATS”), Donna K. Alligood, a stockholder and Vice President and Director of Operations of ATS
(“Alligood”), Carol Carlson, a stockholder and the President, Treasurer, and Secretary of ATS (“Carlson”) and Robert D. Walp, a stockholder and Contracts and Finance Officer of ATS
(“Walp”) (Alligood, Carlson and Walp are sometimes hereinafter referred to individually a “Stockholder” and collectively, the “Stockholders”). 
  
 W I T N E S S E T H 
  
 WHEREAS, as of the date hereof, Carlson owns 630,000 shares of common stock,
$0.01 par value per share, of ATS (“ATS Common Stock”); 
  
 WHEREAS, as of the date hereof, Alligood owns 70,000 shares of ATS Common Stock and holds an option to purchase an additional 14,824 shares of ATS Common Stock for an exercise price of $1.10 per share (the
“Alligood Option”), which Alligood will exercise immediately prior to the closing of the transactions contemplated by this Agreement; 
  
 WHEREAS, as of the date hereof, Walp holds an option to purchase 26,356 shares of ATS Common Stock for an exercise price of $1.10 per share (the
“Walp Option”), which Walp will exercise immediately prior to the closing of the transactions contemplated by this Agreement; 
  
 WHEREAS, as of the date hereof, Carlson and Alligood own all of the issued and outstanding shares of ATS Common Stock, and as of the date of the closing
of the transactions contemplated by this Agreement, the Stockholders will own all of the issued and outstanding shares of ATS Common Stock; 
  
 WHEREAS, at the closing of the transactions contemplated by this Agreement, the Stockholders desire to sell all of their shares of ATS Common Stock (the
“Shares”) and Federal wishes to purchase all (but not less than all) of the Shares (the “Transaction”); and 
  
 WHEREAS, Parent, Federal, the Stockholders and ATS desire to make certain representations and warranties and other agreements in connection with the
Transaction; 
  
 NOW, THEREFORE, in consideration of the mutual
promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 

 Article 1 
 DEFINITIONS 
  
 1.1 Certain Matters of Construction. A reference to an article, section, exhibit or schedule shall mean an Article of, a Section in, or Exhibit or Schedule to, this Agreement unless otherwise expressly stated. The titles and headings
herein are for reference purposes only and shall not in any manner limit the construction of this Agreement, which shall be considered as a whole. The words “include,” “includes” and “including” when used herein shall
be deemed in each case to be followed by the words “without limitation.” All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Any agreement, instrument, law or
regulation defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or law or regulation as from time to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of laws and regulations) by succession of comparable successor laws or regulations and references to all attachments thereto and instruments incorporated therein. References to a Person are also
to its permitted successors and assigns. 
  
 1.2 Cross
References. The following terms defined elsewhere in this Agreement in the Sections set forth below shall have the respective meanings therein defined: 
  

	 Term

	  	Definition

	 338(h)(10) Amount
	  	Section 3.10.5
	 Acquisition Proposals
	  	Section 6.1
	 Agreement
	  	Preamble
	 Alligood
	  	Preamble
	 Alligood Option
	  	Recitals
	 Alligood Withholdings
	  	Section 6.9.1
	 ATS
	  	Preamble
	 ATS Balance Sheet
	  	Section 3.5
	 ATS Common Stock
	  	Recitals
	 ATS Demand Notice
	  	Section 6.1
	 ATS Financial Statements
	  	Section 3.5
	 ATS Insurance Contracts
	  	Section 3.19
	 ATS Plans
	  	Section 3.11.1
	 ATS Proprietary Rights
	  	Section 3.18.1
	 ATS
	  	Preamble
	 ATS’s Accountant
	  	Section 2.2.2
	 ATS’s Counsel
	  	Section 2.2.2
	 Auditor
	  	Section 2.5.3
	 Broker
	  	Section 2.2.2
	 Carlson
	  	Preamble
	 Closing Balance Sheet
	  	Section 2.5.1
	 Closing Date
	  	Section 2.1
	 Closing
	  	Section 2.1

  

 2 

	 Demand Notice
	  	Section 6.1
	 Direct Payment
	  	Section 2.2.2
	 Employee List
	  	Section 3.12.2
	 Encumbrances
	  	Section 3.15.1
	 Escrow Agent
	  	Section 2.2.3
	 Escrow Agreement
	  	Section 2.2.3
	 Escrow Payment
	  	Section 2.2.3
	 Escrow
	  	Section 2.2.3
	 Expenses
	  	Section 6.2.1
	 Federal
	  	Preamble
	 Final Closing Balance Sheet
	  	Section 2.5.4
	 First Payment
	  	Section 2.2.2
	 GAAP
	  	Section 2.5.1
	 Governmental Entity
	  	Section 3.4.2
	 Indemnification Claim
	  	Section 6.3.1
	 Indemnified Party
	  	Section 6.3.1
	 Indemnifying Party
	  	Section 6.3.1
	 Indemnity Deductible
	  	Section 6.3.3
	 Initial Balance Sheet
	  	Section 2.5.1
	 Notice of Claim
	  	Section 6.3.1
	 Objection
	  	Section 2.5.2
	 Parent Balance Sheet
	  	Section 4.3
	 Parent Indemnified Parties
	  	Section 6.3
	 Parent Indemnifying Parties
	  	Section 6.3.1
	 Parent Indemnity Deductible
	  	Section 6.3.3
	 Parent Reports
	  	Section 4.3
	 Parent
	  	Preamble
	 Permits
	  	Section 3.8
	 Purchase Price
	  	Section 2.2.1
	 Section 338(h)(10) Election
	  	Section 6.7.1
	 Shares
	  	Recitals
	 Stockholders
	  	Recitals
	 Stockholder Indemnified Parties
	  	Section 6.3
	 Stockholder Indemnifying Parties
	  	Section 6.3
	 Stockholder Indemnity Deductible
	  	Section 6.3.3
	 Third Party Claim
	  	Section 6.3.2
	 Transaction
	  	Recitals
	 Walp
	  	Preamble
	 Walp Option
	  	Recitals
	 Walp Withholdings
	  	Section 6.9.2
	 Welfare Plan
	  	Section 3.11.6

  
 1.3 Certain
Definitions. As used herein, the following terms shall have the following meanings: 
  
 Affiliate: with respect to any Person, any Person which, directly or indirectly, controls, is controlled by, or is under common control with, such Person. 
  

 3 

 Affiliated Group: any affiliated group within the meaning of Code section 1504(a).

  
 ATS Leases: each lease, sublease, license or other
agreement under which ATS uses, occupies or has the right to occupy any real property or interest therein. 
  
 ATS Material Adverse Effect: any materially adverse change in or effect on ATS’s financial condition, business, operations, assets,
properties, results of operations or prospects. 
  
 COBRA:
the provisions of Section 4980B of the Code and Part 6 of Title I of ERISA. 
  
 Code: the United States Internal Revenue Code of 1986, as amended from time to time. 
  
 Commercial Software: packaged commercial software programs generally available to the public through retail dealers in computer software or
directly from the manufacturer which have been licensed to ATS and which are used in ATS’s business but are in no way a component of or incorporated in or specifically required to develop any of ATS’s products and related trademarks and
technology. 
  
 Control: (including with correlative
meaning, controlled by and under common control with): as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. 
  
 Environmental Claim: any actual notice alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, response or remediation costs, natural resources damages, property
damages, personal injuries, fines or penalties) arising out of, based on or resulting from (a) the presence, or release of any Material of Environmental Concern at any location, or (b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. 
  
 Environmental
Laws: any and all Federal, state, local or foreign statutes, regulations and ordinances relating to the protection of public health, safety or the environment. 
  
 ERISA: the Employee Retirement Income Security Act of 1974, as amended. 
  
 ERISA Affiliate: with respect to a party, any member (other than that
party) of a controlled group of corporations, group of trades or businesses under common control or affiliated service group that includes that party (as defined for purposes of Section 414(b), (c) and (m) of the Code). 
  
 Exchange Act: the Securities Exchange Act of 1934, as amended.

  
 Knowledge of ATS: shall mean the actual knowledge of
Carlson, Alligood and Walp.  
  
 Letter of Intent:
the letter dated January 22, 2003 from J.P. London, Chairman of the Board, President and Chief Executive Officer of Parent, to Carlson, President of ATS, 
  

 4 

 expressing the companies’ intention to effect the stock purchase and related transactions, subject
to execution of this Agreement and other matters. 
  
 Liability: any liability or obligation, known or unknown, asserted or unasserted, accrued or unaccrued, absolute or contingent, liquidated or unliquidated, or otherwise, and whether due or to become due, including any liability for
Taxes. 
  
 Losses: the amount of any actual
damages, liabilities, obligations, deficiencies, losses (including without limitation any actual diminution in value), expenditures, costs or expenses (including without limitation reasonable attorneys’ fees and disbursements). For purposes of
determining the amount of any Loss, the amount of any Loss shall be reduced by any insurance proceeds received or receivable in respect thereof (in each case net of costs of recovery). For purposes of determining the amount of any Loss incurred by
reason of any breach of any representation or warranty made by ATS under this Agreement, each such representation or warranty would read as if all qualifications as to materiality and knowledge were deleted therefrom. 
  
 Materials of Environmental Concern: petroleum and its by-products and
any and all other substances or constituents to the extent that they are regulated by, or form the basis of liability under, any Environmental Law. 
  
 Net Worth: ATS’s total assets less total liabilities as of the Closing Date determined in accordance with GAAP. 
  
 Parent Material Adverse Effect: any change in or effect on the
financial condition, business, operations, assets, properties, results of operations of Parent and Federal considered on a consolidated basis that might reasonably be expected to impair the ability of Parent to provide funds for payment of the
entire Purchase Price in accordance with the terms of this Agreement. 
  
 Paying Agent Agreement: the paying agent agreement, substantially in the form attached hereto as Exhibit H. 
  
 Permitted Encumbrances: (a) liens for current taxes and other statutory liens and trusts not yet due and payable or that are being contested in
good faith, (b) liens incurred in the ordinary course of business, such as carriers’, warehousemen’s, landlords’ and mechanics’ liens and other similar liens arising in the ordinary course of business, (c) liens on personal
property leased under operating leases, (d) liens, pledges or deposits incurred or made in connection with workmen’s compensation, unemployment insurance and other social security benefits, or securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory obligations, progress payments, surety and appeal bonds and other obligations of like nature, in each case incurred in the ordinary course of business, (e) pledges of or liens on
manufactured products as security for any drafts or bills of exchange drawn in connection with the importation of such manufactured products in the ordinary course of business, (f) liens under Article 2 of the Uniform Commercial Code that are
special property interests in goods identified as goods to which a contract refers, (g) liens under Article 9 of the 

  

 5 

 Uniform Commercial Code that are purchase money security interests, (h) those liens disclosed on
Exhibit I hereto, and (i) such imperfections or minor defects of title, easements, rights-of-way and other similar restrictions (if any) as are insubstantial in character, amount or extent, do not materially detract from the value or
interfere with the present or proposed use of the properties or assets of the party subject thereto or affected thereby, and do not otherwise adversely affect or impair the business or operations of such party. Permitted liens do not in any event
include any security interests granted by ATS to Millennium Bank or United Bank. 
  
 Person: an individual, a corporation, an association, a partnership, an estate, a trust or any other entity or organization. 
  
 SEC: the United States Securities and Exchange Commission, or any Governmental Entity succeeding to its functions.

  
 Securities Act: the Securities Act of 1933, as
amended. 
  
 Security Interest: any mortgage,
pledge, lien, encumbrance, charge, or other security interest, other than (a) mechanic’s, materialman’s, and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency) and not incurred in connection with the borrowing of money.

  
 Subsidiary: any corporation, association, or other
business entity a majority (by number of votes on the election of directors or persons holding positions with similar responsibilities) of the shares of capital stock (or other voting interests) of which is owned directly or indirectly by
ATS. 
  
 Tax: any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code section 59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not. 
  
 Tax
Return: any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. 
  
 Treasury Regulation: a regulation promulgated by the United States
Treasury Department under one or more provisions of the Code. 
  

 6 

 Article 2 
 THE PURCHASE AND SALE OF SHARES 
  

2.1 Purchase of the Shares from the Stockholders. Subject to and upon the terms and conditions of this Agreement, and on the basis of the
representations, warranties, covenants, and agreements herein contained, at the closing of the transactions contemplated by this Agreement (the “Closing”), the Stockholders shall sell, transfer, convey or assign and deliver to
Federal, and Federal shall purchase, acquire and accept from the Stockholders, the Shares, free and clear of any and all liens, claims, encumbrances or rights of any third party. At the Closing, the Stockholders shall deliver to Federal certificates
evidencing the Shares duly endorsed in blank or with stock powers or other appropriate instruments of transfer duly executed, with signatures guaranteed. The Closing shall take place at the offices of Parent in Arlington, Virginia, commencing at 2
p.m. local time on February 28, 2003 or on such other date as the parties may agree after the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions contemplated hereby, but shall be effective as of
February 28, 2003 at 11:59pm. (the “Closing Date”). 
  
 2.2 Purchase Price. 
  
 2.2.1 The Aggregate
Purchase Price. The aggregate purchase price (the “Purchase Price”) to be paid by Federal for the Shares shall be [$12,500,000 (Twelve Million Five Hundred Thousand Dollars), subject to adjustment as provided below in Section
2.5. Notwithstanding the number of Shares owned by the Stockholders at Closing, the Purchase Price shall be allocated among the Stockholders in accordance with the allocations set forth on Schedule 2.2.1 hereto, which schedule also indicates
the following share prices negotiated with each of the Shareholders: (1) $15.91 per Share for Carlson, (2) $22.76 per Share for Alligood, and (c) $20.66 per Share for Walp. The Stockholders agree to accept the respective amounts set forth in
Schedule 2.2.1 (subject to adjustment as provided below in Section 2.5) in full payment for their Share interests, notwithstanding any provision of any existing agreement among them or between any of them and ATS. All payments of the Purchase Price
under this Section 2.2 shall be made in immediately available funds wired to one or more accounts designated by the Stockholders’ Representative, by a certified check or by such other method as may be agreed by the Stockholders’
Representative and Federal. 
  
 2.2.2 The Purchase Price Paid at
the Closing. The Purchase Price, less the Escrow Payment (the “Direct Payment”), less 
  
 (a) the amount of the fees owed by ATS or the Stockholders (or any of them) to The McLean Group, LLC (“Broker”) which will be paid by
Federal directly to Broker pursuant to Section 6.2.2, 
 (b) the amount of the fees owed by ATS or the Stockholders (or any of them) to
Squire, Sanders & Dempsey L.L.P. (“ATS’s Counsel”) which will be paid by Federal directly to ATS’s Counsel pursuant to Section 6.2.3 
 (c) the amount of the fees owed by ATS or the Stockholders (or any of them) to Aronson & Company (“ATS’s Accountant”) which will be paid by Federal directly to ATS’s Accountant pursuant
to Section 6.3.4, and 
 (d) the Alligood Withholdings and the Walp Withholdings, pursuant to Section 6.9, 

  

 7 

 shall be paid to the Stockholders by Federal on the Closing Date on the basis of the allocations set forth on Schedule
2.2.1 hereto. 
  
 2.2.3 The Escrowed Portion of the
Purchase Price. For the purpose of securing the Stockholders’ obligations pursuant to Section 6.3, $1,500,000 (One Million Five Hundred Thousand Dollars) of the total Purchase Price (the “Escrow Payment”) shall be delivered to
an account (the “Escrow”) to be administered by Riggs Bank NA (the “Escrow Agent”) pursuant to an escrow agreement substantially in the form of Exhibit A (the “Escrow Agreement”). 

 
 2.3 Additional Actions. If, at any time after the Closing Date, any
further action is necessary or desirable to carry out the purposes of this Agreement or to vest, perfect or confirm in Federal title to or ownership or possession of the Shares acquired pursuant to this Agreement, the Stockholders, as well as the
officers and directors of ATS and Federal, are fully authorized in their name and in the name of their respective corporations or otherwise to take, and will take, all such lawful and necessary action to so vest, perfect or confirm in Federal title
to or ownership of the Shares, so long as such action is consistent with this Agreement. 
  
 2.4 Stockholders’ Representative. The Stockholders hereby appoint Carlson as the true and lawful agent and attorney-in-fact (the “Stockholders’ Representative”) of the Stockholders
with full power of substitution to act in the name, place and stead of the Stockholders with respect to the surrender of the stock certificates owned by the Stockholders to Federal in accordance with the terms and provisions of this Agreement, and
to act on behalf of the Stockholders in any litigation or arbitration involving this Agreement, act as the paying agent on behalf of the Stockholders, do or refrain from doing all such further acts and things, and execute all such documents as the
Stockholders’ Representative shall deem necessary or appropriate in connection with the transactions contemplated by this Agreement, including, without limitation, the power: 
  
 2.4.1 to act for the Stockholders with regard to matters pertaining to indemnification referred to in this Agreement,
including the power to compromise any indemnity claim on behalf of the Stockholders and to transact matters of litigation; 
  
 2.4.2 to execute and deliver all ancillary agreements, certificates and documents that the Stockholders’ Representative deems necessary or
appropriate in connection with the consummation of the transactions contemplated by this Agreement; 
  
 2.4.3 to act as the paying agent and to receive funds and give receipts for funds, including in respect of any adjustments to the Purchase Price, and to
do or refrain from doing the actions further described in the Paying Agent Agreement; 
  
 2.4.4 to do or refrain from doing any further act or deed on behalf of the Stockholders that the Stockholders’ Representative deems necessary or appropriate in her sole discretion relating to the subject matter
of this Agreement and the Paying Agent Agreement as fully and completely as the Stockholders could do if personally present; and 
  
 2.4.5 to receive service of process in connection with any claims under this Agreement. 
  

 8 

 The appointment of the Stockholders’ Representative shall be deemed coupled with an interest and
shall be irrevocable, and Parent, Federal and ATS may conclusively and absolutely rely, without inquiry, upon any action of the Stockholders’ Representative in all matters referred to herein. 
  
 If Carlson resigns, dies or is otherwise unable to serve as the
Stockholders’ Representative, the successor Stockholders’ Representative shall be designated in writing by the Stockholders who held a majority of the ATS Common Stock immediately prior to the Closing. 
  
 If any individual Stockholders should die or become incapacitated, if any
trust or estate should terminate or if any other such event should occur, any action taken by the Stockholders’ Representative pursuant to this Section 2.4 shall be as valid as if such death or incapacity, termination or other event had not
occurred, regardless of whether or not the Stockholders’ Representative or the Surviving Corporation shall have received notice of such death, incapacity, termination or other event. 
  
 All notices required to be made or delivered by Parent, Federal or ATS to the Stockholders shall be made to the
Stockholders’ Representative for the benefit of the Stockholders and shall discharge in full all notice requirements of Parent, Federal or the Surviving Corporation to the Stockholders with respect thereto. The Stockholders hereby confirm all
that the Stockholders’ Representative shall do or cause to be done by virtue of her appointment as the Stockholders’ Representative of the Stockholders. 
  
 The Stockholders’ Representative shall act for the Stockholders on all of the matters set forth in this Agreement in
the manner the Stockholders’ Representative believes to be in the best interest of the Stockholders and consistent with the obligations under this Agreement, but the Stockholders’ Representative shall not be responsible to the Stockholders
for any loss or damages the Stockholders may suffer by the performance by the Stockholders’ Representative of her duties under this Agreement, other than loss or damage arising from willful violation of the law by the Stockholders’
Representative of her duties under this Agreement. The Stockholders’ Representative and her heirs and personal or legal representatives shall be held harmless by the Stockholders from, and indemnified against any loss or damages arising out of
or in connection with the performance of her obligations in accordance with the provisions of this Agreement, except for any of the foregoing arising out of the willful violation of the law by the Stockholders’ Representative of her duties
hereunder. The foregoing indemnity shall survive the resignation or substitution of the Stockholders’ Representative. 
  
 Notwithstanding anything to the contrary herein, the Stockholders’ Representative shall have no liability or obligation to any Parent Indemnified
Party otherwise than, and only to the extent of, her individual liability as a Stockholder as set forth in Section 6.3. 
  
 2.5 Adjustment to Purchase Price. 
  
 2.5.1 Preparation of Closing Balance Sheet. As soon as reasonably possible after the Closing Date (but not later than 60 days thereafter), Federal
shall prepare or cause to be prepared and shall deliver to the Stockholders’ Representative a Closing Balance Sheet for ATS as of the opening of business on the Closing Date (the “Closing Balance Sheet”). The Closing 

  

 9 

 Balance Sheet shall be prepared in accordance with United States generally accepted accounting principles
(“GAAP”). 
  
 2.5.2 Review of Closing Balance
Sheet. The Stockholders’ Representative, upon receipt of the Closing Balance Sheet, shall (a) review the Closing Balance Sheet and (b) to the extent she may deem necessary, make reasonable inquiry of ATS, Federal and its accountants (if any
are used), relating to the preparation of the Closing Balance Sheet. The Stockholders’ Representative and her employees and advisors shall have full access upon prior written notice and during normal business hours to the books, papers and
records of ATS and its accountants (if any are used), relating to the preparation of the Closing Balance Sheet in connection with such inquiry and the preparation of the Objection thereto. The Closing Balance Sheet shall be binding and conclusive
upon, and deemed accepted by, the Stockholders’ Representative on behalf of the Stockholders unless the Stockholders’ Representative shall have notified Federal in writing of any objections thereto (the “Objection”) within
30 days after receipt of the Closing Balance Sheet. 
  
 2.5.3
Disputes. In the event of the Objection, Federal shall have 20 days to review and respond to the Objection, and Federal and the Stockholders’ Representative shall attempt to resolve the differences underlying the Objection within 20 days
following completion of Federal’s review of the Objection. Disputes between Federal and the Stockholders’ Representative which cannot be resolved by them within such 20-day period shall be referred no later than such 20th day for decision
to a nationally-recognized independent public accounting firm mutually selected by the Stockholders’ Representative and Federal (which firm shall not be either of (a) the independent public accountants of Federal or (b) the independent public
accountants used by ATS prior to the Closing Date) (the “Auditor”) who shall act as arbitrator and determine, based solely on presentations by the Stockholders’ Representative and Federal and only with respect to the remaining
differences so submitted, whether and to what extent, if any, the Closing Balance Sheet requires adjustment. The Auditor shall deliver its written determination to Federal and the Stockholders’ Representative no later than the 30th day after
the remaining differences underlying the Objection are referred to the Auditor, or such longer period of time as the Auditor determines is necessary. The Auditor’s determination shall be conclusive and binding upon the parties. The fees and
disbursements of the Auditor shall be allocated equally between Federal and the Stockholders. Federal and the Stockholders shall make readily available to the Auditor all relevant information, books and records and any work papers relating to the
Closing Balance Sheet and all other items reasonably requested by the Auditor. In no event may the Auditor’s resolution of any difference be for an amount which is outside the range of Federal’s and the Stockholders’
Representative’s disagreement. 
  
 2.5.4 Final Closing
Balance Sheet. The Closing Balance Sheet shall become final and binding upon the parties upon the earlier of (a) the Stockholders’ Representative’s failure to object thereto within the period permitted under Section 2.5.2, (b) the
agreement between Federal and the Stockholders’ Representative with respect thereto and (c) the decision by the Auditor with respect to any disputes under Section 2.5.3. The Closing Balance Sheet, as adjusted pursuant to the agreement of the
parties or decision of the Auditor, when final and binding is referred to herein as the “Final Closing Balance Sheet.” 
  

 10 

 2.5.5 Adjustments to the Purchase Price. As soon as practicable (but not more than five business
days) after the date on which the Final Closing Balance Sheet shall have been determined in accordance with this Section 2.4, (a) the Stockholders’ Representative, as paying agent, shall pay to Federal in immediately available funds in United
States dollars the amount, if any, by which the Net Worth in the Final Closing Balance Sheet is less than $845,000, which shall constitute an immediate adjustment of the Purchase Price in such amount or (b) Federal shall pay to the
Stockholders’ Representative, as paying agent, in immediately available funds in United States Dollars the amount, if any, by which the Net Worth in the Final Closing Balance Sheet is greater than $845,000, which shall constitute an immediate
adjustment of the Purchase Price in such amount. Any payment to the Stockholders’ Representative pursuant to this section shall be reduced by an amount equal to 3%, which amount shall be paid by Federal to Broker. 
  
 Article 3 
 REPRESENTATIONS AND WARRANTIES OF ATS AND THE STOCKHOLDERS 
  
 ATS and each of the Stockholders jointly and severally represent and warrant
to Parent and Federal as follows: 
  
 3.1 Corporate
Status of ATS. Except as set forth on Schedule 3.1 hereto, ATS is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia, with the requisite corporate power to own, operate and
lease its properties and to carry on its business as now being conducted. Except as set forth on Schedule 3.1 hereto, ATS is duly qualified or licensed to do business as a foreign corporation and is in good standing in all jurisdictions in
which the character of the properties owned or held under lease by it or the nature of the business transacted by it makes qualification necessary, except where failure to be so qualified would not have an ATS Material Adverse Effect. All
jurisdictions in which ATS is qualified to do business are set forth on Schedule 3.1 hereto. 
  
 3.2 Capital Stock. 
  
 3.2.1 Authorized Stock of ATS. The authorized capital stock of ATS consists of 1,000,000 shares of ATS Common Stock, of which 700,000 shares are
issued and outstanding. All of the outstanding shares of ATS Common Stock have been duly authorized and validly issued, were not issued in violation of any Person’s preemptive rights, and are fully paid and nonassessable. The Stockholders
together own of record and beneficially all the outstanding shares of ATS Common Stock. 
  
 3.2.2 Options and Convertible Securities of ATS. Except as set forth on Schedule 3.2, there are no outstanding subscriptions, options, warrants, conversion rights or other rights, securities, agreements
or commitments obligating ATS to issue, sell or otherwise dispose of shares of its capital stock, or any securities or obligations convertible into, or exercisable or exchangeable for, any shares of its capital stock. There are no voting trusts or
other agreements or understandings to which ATS or any Stockholder is a party with respect to the voting of the shares of ATS Common Stock, and ATS is neither a party to, nor bound by, any outstanding restrictions, options or other obligations,
agreements or commitments to sell, 

  

 11 

 repurchase, redeem or acquire any outstanding shares of ATS Common Stock or any other securities of ATS. 
  
 3.3 Subsidiaries. ATS has no Subsidiaries. ATS has not
acquired, sold, divested or liquidated any corporate entity or line of business. 
  
 3.4 Authority for Agreement; Noncontravention. 
  
 3.4.1 Authority. ATS has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby to the extent of its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated hereby, to the extent of ATS’s obligations hereunder, have been duly and validly authorized by the board of directors of ATS and no other corporate proceedings on
the part of ATS are necessary to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, to the extent of ATS’s obligations hereunder. This Agreement and the other agreements
contemplated hereby to be signed by ATS have been duly executed and delivered by ATS and constitute valid and binding obligations of ATS, enforceable against ATS in accordance with their terms, subject to the qualifications that enforcement of the
rights and remedies created hereby and thereby is subject to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and (b) general
principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 
  
 3.4.2 No Conflict. Except as set forth on Schedule 3.4 hereto, none of the execution, delivery or performance of this Agreement and the
agreements referenced herein, nor the consummation of the transactions contemplated hereby or thereby will (a) conflict with or result in a violation of any provision of ATS’s charter documents or by-laws or (b) with or without the giving of
notice or the lapse of time, or both, conflict with, or result in any violation or breach of, or constitute a default under, or result in any right to accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of
termination under, any provision of any note, mortgage, indenture, lease, instrument or other agreement, permit, concession, grant, franchise, license, judgment, order, decree, statute, ordinance, rule or regulation to which ATS is a party or by
which ATS or any of its assets or properties are bound or which is applicable to ATS or any of its assets or properties. Except to the extent that novation is required as further described in Section 6.6.2 below, no authorization, consent or
approval of, or filing with or notice to, any United States or foreign governmental or public body or authority (each a “Governmental Entity”) is necessary for the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for such consents, authorizations, filings, approvals and registrations which if not obtained or made would not have an ATS Material Adverse Effect. 
  
 3.5 Financial Statements. ATS has previously furnished Parent with a
copy of ATS’s balance sheet as of December 31, 2002 and ATS’s statements of operations, cash flows and changes in the stockholders’ equity for the year then ended. Such financial statements were reviewed by ATS’s Accountant.
Collectively, the financial statements referred to in the first sentence of this Section 3.5 are sometimes referred to herein as the “ATS Financial Statements” and ATS’s balance sheet as of December 31, 2002 is referred to
herein as the “ATS Balance 

  

 12 

 Sheet.” The balance sheet included in the ATS Financial Statements (including any related notes) fairly
presents in all material respects the financial position of ATS as of its date, and the other statements included in ATS Financial Statements (including any related notes) fairly present in all material respects the results of operations, cash flows
and the stockholders’ equity, as the case may be, of ATS for the periods therein set forth, in each case in accordance with GAAP consistently applied (all except as otherwise stated therein). 
  
 3.6 Absence of Material Adverse Changes. Except as set forth on
Schedule 3.6 hereto, since the date of the Letter of Intent, ATS has not suffered any ATS Material Adverse Effect, and there has not occurred or arisen any event, condition or state of facts of any character that could reasonably be expected
to result in an ATS Material Adverse Effect. Since the date of the Letter of Intent, there have been no dividends or other distributions declared or paid in respect of, or any repurchase or redemption by ATS of, any of the shares of capital stock of
ATS, or any commitment relating to any of the foregoing. 
  
 3.7 Absence of Undisclosed Liabilities. Except as set forth on Schedule 3.7, ATS has no Liabilities that are not fully reflected or provided for on, or disclosed in the notes to, the balance sheets included in the ATS
Financial Statements, except (a) Liabilities incurred in the ordinary course of business since the date of the ATS Balance Sheet, none of which individually or in the aggregate has had or could reasonably be expected to have an ATS Material Adverse
Effect, (b) Liabilities permitted or contemplated by this Agreement, and (c) Liabilities expressly disclosed on the Schedules delivered hereunder. 
  
 3.8 Compliance with Applicable Law, Charter and By-Laws. ATS has all requisite licenses, permits and certificates from all Governmental Entities
necessary to conduct its business as currently conducted, and to own, lease and operate its properties in the manner currently held and operated (collectively, “Permits”), except as set forth on Schedule 3.8 hereto and except
for any Permits the absence of which, in the aggregate, do not and could not reasonably be expected to have an ATS Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby. All of such Permits
are in full force and effect. ATS is in compliance in all material respects with all the terms and conditions related to such Permits. There are no proceedings in progress, pending or, to the Knowledge of ATS, threatened, which may result in
revocation, cancellation, suspension, or any materially adverse modification of any of such Permits. To the Knowledge of ATS, the business of ATS is not being conducted in violation of any applicable law, statute, ordinance, regulation, rule,
judgment, decree, order, Permit, concession, grant or other authorization of any Governmental Entity. ATS is not in default or violation of any provision of its charter documents or its by-laws. 
  
 3.9 Litigation and Audits. Except for any claim, action, suit or
proceeding set forth on Schedule 3.9 or Schedule 3.10 hereto, (a) there is no investigation by any Governmental Entity with respect to ATS pending or, to the Knowledge of ATS, threatened, nor has any Governmental Entity indicated to
ATS an intention to conduct the same; (b) there is no claim, action, suit, arbitration or proceeding pending or, to the Knowledge of ATS, threatened against or involving ATS or any of its assets or properties, at law or in equity, or before any
arbitrator or Governmental Entity, that, if adversely determined, either singly or in the aggregate, would have an ATS Material Adverse Effect or prevent or materially delay the consummation of the 

  

 13 

 transactions contemplated hereby; and (c) there are no judgments, decrees, injunctions or orders of any Governmental
Entity or arbitrator outstanding against ATS. 
  
 3.10 Tax
Matters. 
  
 3.10.1 Filing of Returns. ATS has filed
all Tax Returns that it was required to file. All such Tax Returns were correct and complete in all respects. All Taxes owed by ATS (whether or not shown on any Tax Return) have been paid. Excluding any built-in gains tax, ATS is not currently the
beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where ATS does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no
Security Interests on any of the assets of ATS that arose in connection with any failure (or alleged failure) to pay any Tax. 
  
 3.10.2 Payment of Taxes. ATS has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to
any employee, independent contractor, creditor, stockholder or other third party. 
  
 3.10.3 Assessments or Disputes. Neither Carlson nor any director or officer (or employee responsible for Tax matters) of ATS expects any authority to assess any additional Taxes for any period for which Tax
Returns have been filed. There is no dispute or claim concerning any Tax Liability of ATS either (a) claimed or raised by any authority or (b) as to which Carlson or any of the directors and officers (and employees responsible for Tax matters) of
ATS has knowledge based upon personal contact with any agent of such authority. Schedule 3.10 lists all federal, state, local, and foreign income Tax Returns filed with respect to ATS for taxable periods ended on or after April 30, 2000,
indicates those Tax Returns that have been audited and indicates those Tax Returns that currently are the subject of audit. ATS has delivered or made available to Federal correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by ATS. 
  
 3.10.4 Waiver of Statute of Limitations. ATS has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. 
  
 3.10.5 Tax Basis. Schedule 3.10.5 sets forth (a) the basis of ATS in
its assets, (b) the value of each of ATS’s assets on the day it became an S corporation, (c) ATS’s adjusted tax basis in each such asset on the day it became an S corporation, and (d) the amount of Tax that will be imposed on ATS as a
result of the Section 338(h)(10) Election (the “338(h)(10) Amount”). 
  

 14 

 3.10.6 Unpaid Taxes. ATS’s unpaid taxes (a) did not, as of the date of the ATS Balance Sheet,
exceed the amount accrued for Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the ATS Balance Sheet (rather than in any notes thereto) and (c) do not
exceed that amount accrued as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of ATS in filing its Tax Returns. 
  
 3.10.7 Unclaimed Property. ATS has no assets that may constitute unclaimed property under applicable law. ATS has
complied in all material respects with all applicable unclaimed property laws. Without limiting the generality of the foregoing, ATS has established and followed procedures to identify any unclaimed property and, to the extent required by applicable
law, remit such unclaimed property to the applicable governmental authority. ATS’s records are adequate to permit a governmental agency or authority or other outside auditor to confirm the foregoing representations. 
  
 3.10.8 No Changes in Accounting, Closing Agreement, Installment Sale.
ATS will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (a) change in method of accounting for a
taxable period ending on or prior to the Closing Date under Code section 481(c) (or any corresponding or similar provision of state, local or foreign income Tax law); (b) ”closing agreement” as described in Code section 7121 (or any
corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (c) deferred intercompany gain or any excess loss account described in Treasury Regulations under Code section 1502 (or any
corresponding or similar provision of state, local or foreign income Tax law); (d) installment sale or open transaction disposition made on or prior to the Closing Date; or (e) prepaid amount received on or prior to the Closing Date. 
  
 3.10.9 S Corporation. ATS (and any predecessor of ATS) has been a
validly electing S corporation within the meaning of Code sections 1361 and 1362 at all times since May 1, 2001, and ATS will be an S corporation up to and including the Closing Date. Since May 1, 2001, ATS has had only one class of stock within the
meaning of section 1361(b)(1)(D) of the Code and the Treasury Regulations thereunder, and each outstanding share of ATS Common Stock confers identical rights to distributions and liquidation proceeds, taking into account the corporate charter,
articles of incorporation, bylaws, applicable state law, and binding agreements relating to distribution and liquidation proceeds. 
  
 3.11 Employee Benefit Plans. 
  
 3.11.1 List of Plans. Schedule 3.11 hereto contains a correct and complete list of all pension, profit sharing, retirement, deferred
compensation, welfare, legal services, medical, dental or other employee benefit or health insurance plans, life insurance or other death benefit plans, disability, stock option, stock purchase, stock compensation, bonus, vacation pay, severance pay
and other similar plans, programs or agreements, and every material written personnel policy, relating to any persons employed by ATS or in which any person employed by ATS is eligible to participate and which is currently maintained or that was
maintained at any time by ATS or any ERISA Affiliate of ATS (collectively, the “ATS Plans”). ATS has delivered to Parent (a) accurate and complete copies of all ATS Plan documents and all other material 

  

 15 

 documents relating thereto, including (if applicable) all documents establishing or constituting any related trust,
annuity contract, insurance contract or other funding instruments, and summary plan descriptions relating to said ATS Plans, (b) accurate and complete copies of the most recent financial statements and actuarial reports with respect to all ATS Plans
for which financial statements or actuarial reports are required or have been prepared, and (c) accurate and complete copies of all annual reports and summary annual reports for all ATS Plans (for which annual reports are required). ATS has also
delivered to Parent complete copies of other current plan summaries, employee booklets, personnel manuals and other material documents or written materials concerning the ATS Plans that are in possession of ATS as of the date hereof. ATS has no
“defined benefit plans” as defined in Section 3(35) of ERISA. ATS has no current or contingent obligation to contribute to any multiemployer plan (as defined in Section 3(37) of ERISA). 
  
 3.11.2 ERISA. Neither ATS nor any ERISA Affiliate of ATS has incurred
any “withdrawal liability” calculated under Section 4211 of ERISA and there has been no event or circumstance which would cause any of them to incur any such liability. No ERISA Title IV plan previously maintained by ATS or any ERISA
Affiliate of ATS which was subject to ERISA has been terminated; no proceedings to terminate any such plan have been instituted within the meaning of Subtitle C of Title IV of ERISA; and no reportable event within the meaning of Section 4043 of said
Subtitle C of Title IV of ERISA with respect to which the requirement to file a notice with the Pension Benefit Guaranty Corporation has not been waived has occurred with respect to any such ATS Plan, and no liability to the Pension Benefit Guaranty
Corporation has been incurred by ATS or any ERISA Affiliate of ATS. Except as set forth on Schedule 3.11, with respect to all ATS Plans, ATS and ATS’s ERISA Affiliates are in material compliance with all requirements prescribed by all
statutes, regulations, orders or rules currently in effect, and have in all material respects performed all obligations required to be performed by them. All returns, reports and disclosure statements required to be made under ERISA and the Code
with respect to all ATS Plans have been timely filed or delivered. Neither ATS nor any ERISA Affiliate of ATS, nor any of their directors, officers, employees or agents, nor any trustee or administrator of any trust created under the ATS Plans, has
engaged in or been a party to any “prohibited transaction” as defined in Section 4975 of the Code or Section 406 of ERISA which could subject ATS or any Affiliate of ATS, or any director or employee of any ATS Plan or any trust relating to
any ATS Plan, or any party dealing with any ATS Plan or trust relating thereto to any tax or penalty on “prohibited transactions” imposed by Section 4975 of the Code. Except as set forth on Schedule 3.11, neither the ATS Plans nor
any of the trusts created thereunder have incurred any “accumulated funding deficiency,” as such term is defined in Section 412 of the Code and regulations issued thereunder, whether or not waived. ATS has not at any time had an ERISA
Affiliate. 
  
 3.11.3 Plan Determinations. Each ATS Plan
intended to qualify under Section 401(a) of the Code has been determined by the Internal Revenue Service to so qualify, and the trusts created thereunder have been determined to be exempt from tax under Section 501(a) of the Code; copies of all
determination letters have been delivered to Parent, and, to the Knowledge of ATS, nothing has occurred since the date of such determination letters which might cause the loss of such qualification or exemption, or result in the imposition of any
excise tax or income tax on unrelated business income under the Code or ERISA with respect to any ATS Plan. 
  

 16 

 3.11.4 Funding. Except as set forth on Schedule 3.11: 
  
 (a) all contributions, premiums or other payments due or
required to be made to ATS Plans as of the date hereof have been made as of the date hereof or are properly reflected on ATS Balance Sheet; 
  
 (b) there are no actions, liens, suits or claims (other than routine claims for benefits) pending or, to the Knowledge of ATS, threatened,
with respect to any ATS Plan, nor is any ATS Plan the subject of any pending (or to the Knowledge of ATS, any threatened) investigation or audit by the Internal Revenue Service, Department of Labor or the Pension Benefit Guaranty Corporation;

  
 (c) no event has occurred, and there exists
no condition or set of circumstances, which presents a material risk of a partial termination (within the meaning of Section 411(d)(3) of the Code) of any ATS Plan; and 
  
 (d) with respect to any ATS Plan that is qualified under Section 401(k) of the Code, individually and in the
aggregate, no event has occurred, and there exists no condition or set of circumstances in connection with which ATS could be subject to any liability (except liability for benefits claims and funding obligations payable in the ordinary course) that
is reasonably likely to have an ATS Material Adverse Effect under ERISA, the Code or any other applicable law. 
  
 3.11.5 Certain Other Matters. Except as reserved for on the Closing Balance Sheet or the Final Closing Balance Sheet, ATS has no liability or
potential liability in any form whatsoever, and ATS will not have liability or potential liability in any form whatsoever, with regard to any ATS Plan, as a result of the any failure to perform non-discrimination testing on an ATS Plan or any
failure to amend an ATS Plan pursuant to the legislation commonly known as “GUST” or the legislation commonly known as “EGTRRA.” All employee contributions, including elective deferrals, to ATS’s 401(k) plan(s) have been
segregated from ATS’s general assets and deposited into the trust(s) established pursuant to such 401(k) plan(s) in a timely manner in accordance with the “plan asset” regulations of the Department of Labor. 
  
 3.11.6 Welfare Plans. With respect to any ATS Plan that is an employee
welfare benefit plan (within the meaning of Section 3(1) of ERISA) (a “Welfare Plan”) and except as set forth on Schedule 3.11, (a) each Welfare Plan for which contributions are claimed by ATS as deductions under any
provision of the Code is in material compliance with all applicable requirements pertaining to such deduction, (b) with respect to any welfare benefit fund (within the meaning of Section 419 of the Code) related to a Welfare Plan, there is no
disqualified benefit (within the meaning of Section 4976(b) of the Code) that would result in the imposition of a tax under Section 4976(a) of the Code, (c) any ATS Plan that is a group health plan (within the meaning of Section 4980B(g)(2) of the
Code) complies, and in each and every case has complied, with all of the applicable material requirements of COBRA, the Family Medical Leave Act of 1993, the Health Insurance and Portability and Accountability Act of 1996, the Women’s Health
and Cancer Rights Act of 1996, the Newborns’ and Mothers’ Health Protection Act of 1996, and any similar provisions of state law or foreign law applicable to employees of ATS or any ERISA Affiliate of ATS. None of the ATS Plans promises or
provides retiree medical or 

  

 17 

 other retiree welfare benefits to any person except as required by applicable law, and neither ATS nor any ERISA
Affiliate of ATS has represented, promised or contracted (whether in oral or written form) to provide such retiree benefits to any employee, former employee, director, consultant or other person, except to the extent required by statute. Except with
respect to Health Maintenance Organizations, no ATS Plan or employment agreement provides health benefits that are not insured through an insurance contract. Each ATS Plan is amendable and terminable unilaterally by ATS at any time without liability
to ATS as a result thereof and no ATS Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits ATS from amending or terminating any such ATS Plan.

  
 3.12 Employment-Related Matters. 
  
 3.12.1 Labor Relations. Except to the extent set forth on Schedule
3.13 hereto: (a) ATS is not a party to any collective bargaining agreement or other contract or agreement with any labor organization or other representative of employees of ATS; (b) there is no labor strike, dispute, slowdown, work stoppage or
lockout that is pending or, to the Knowledge of ATS, threatened against or otherwise affecting ATS, and ATS has not experienced the same; (c) ATS has not closed any plant or facility, effectuated any layoffs of employees or implemented any early
retirement or separation program at any time, nor has ATS planned or announced any such action or program for the future with respect to which ATS has any material liability; and (d) all salaries, wages, vacation pay, bonuses, commissions and other
compensation due from ATS before the date hereof have been paid or accrued as of the date hereof. 
  
 3.12.2 Employee List. ATS has heretofore delivered to Parent a list (the “Employee List”) dated as of the date of this Agreement
containing the name of each person employed by ATS and each such employee’s position, starting employment date and annual salary. The Employee List is correct and complete as of the date of the Employee List. No third party has asserted any
claim or has any reasonable basis to assert any claim against ATS that either the continued employment by, or association with, ATS of any of the present officers or employees of, or consultants to, ATS contravenes any agreements or laws applicable
to unfair competition, trade secrets or proprietary information. 
  
 3.13 Environmental. 
  
 3.13.1 Environmental
Laws. Except as set forth on Schedule 3.13 hereto, (a) ATS is and has been in compliance with all applicable Environmental Laws in effect on the date hereof; (b) ATS has not received any written communication that alleges that it is or
was not in compliance with all applicable Environmental Laws in effect on the date hereof; (c) there are no circumstances that may prevent or interfere with compliance in the future with all applicable Environmental Laws; (d) all Permits and other
governmental authorizations currently held by ATS pursuant to the Environmental Laws are in full force and effect, ATS is in compliance with all of the terms of such Permits and authorizations, and no other Permits or authorizations are required by
ATS for the conduct of its business on the date hereof; (e) such Permits will not be terminated or impaired or become terminable, in whole or in part, solely as a result of the transactions contemplated hereby; and (f) the management, handling,
storage, transportation, 

  

 18 

 treatment, and disposal by ATS of all Materials of Environmental Concern is and has been in compliance with all
applicable Environmental Laws. 
  
 3.13.2 Environmental
Claims. Except as set forth on Schedule 3.13 hereto, there is no Environmental Claim pending or, to the Knowledge of ATS, threatened, against or involving ATS or against any Person whose liability for any Environmental Claim ATS has or
may have retained or assumed either contractually or by operation of law. 
  
 3.13.3 No Basis for Claims. Except as set forth on Schedule 3.13 hereto, there are no past or present actions or activities by ATS, or any circumstances, conditions, events or incidents, including the
storage, treatment, release, emission, discharge, disposal or arrangement for disposal of any Material of Environmental Concern, whether or not by ATS, that could reasonably form the basis of any Environmental Claim against ATS or against any Person
whose liability for any Environmental Claim ATS may have retained or assumed either contractually or by operation of law, including, without limitation, the storage, treatment, release, emission, discharge, disposal or arrangement for disposal of
any Material of Environmental Concern or any other contamination or other hazardous condition, related to the premises at any time occupied by ATS. Without limiting the generality of the foregoing, except as set forth on Schedule 3.13 hereto,
ATS has not received any notices, demands, requests for information, investigations pertaining to compliance with or liability under Environmental Law or Materials of Environmental Concern, nor, to the Knowledge of ATS, are any such notices,
demands, requests for information or investigations threatened. 
  
 3.13.4 Disclosure of Information. ATS has made, and during the period between the date of this Agreement and the Closing Date will continue to make, available to Parent and Federal all environmental investigations, studies, audits,
tests, reviews and other analyses conducted in relation to Environmental Laws or Materials of Environmental Concern pertaining to ATS or any property or facility now or previously owned, leased or operated by ATS that are in the possession, custody,
or control of ATS. 
  
 3.13.5 Liens. To the Knowledge of
ATS, no lien imposed relating to or in connection with any Environmental Claim, Environmental Law, or Materials of Environmental concern has been filed or has been attached to any of the property or assets which are owned, leased or operated by ATS.

  
 3.14 No Broker’s or Finder’s Fees.
Except as provided for in Section 2.2.2, ATS has neither paid nor become obligated to pay any fee or commission to any broker, finder, financial advisor or intermediary in connection with the transactions contemplated by this Agreement. 

 
 3.15 Assets Other Than Real Property. 
  
 3.15.1 Title. ATS has good and marketable title to all of the
tangible assets shown on the ATS Balance Sheet, and such title is in each case free and clear of any mortgage, pledge, lien, security interest, lease or other encumbrance (collectively, “Encumbrances”), except for (a) assets
disposed of since the date of the ATS Balance Sheet in the ordinary course of business and in a manner consistent with past practices, (b) liabilities, obligations and Encumbrances reflected in the ATS Balance Sheet or otherwise in the ATS Financial
Statements, 

  

 19 

 (c) Permitted Encumbrances, and (d) liabilities, obligations and Encumbrances set forth on Schedule 3.15 hereto.
Each tangible asset of ATS that has a present value of $1,000.00 or more or that is otherwise material to the business of ATS is listed on Schedule 3.15. 
  

3.15.2 Accounts Receivable. Except as set forth on Schedule 3.15 all receivables shown on the ATS Balance Sheet and all receivables
accrued by ATS since the date of the ATS Balance Sheet, have been collected or are collectible in all material respects in the aggregate amount shown, less any allowances for doubtful accounts reflected therein, and, in the case of receivables
arising since the date of the ATS Balance Sheet, any additional allowance in respect thereof is consistent with the allowance reflected in the ATS Balance Sheet. 
  
 3.15.3 Condition. All material facilities, equipment and personal property owned by ATS and regularly used in its
business are in good operating condition and repair, ordinary wear and tear excepted, and all such wear and tear taken in the aggregate is not material to ATS and does not affect ATS’s obligations to perform under this Agreement. 
  
 3.16 Real Property. 
  
 3.16.1 ATS Real Property. ATS neither owns nor has owned any real
property. 
  
 3.16.2 ATS Leases. Schedule 3.16
hereto lists all ATS Leases. Complete copies of the ATS Leases, and all material amendments thereto (which are identified on Schedule 3.16), have been made available by ATS to Parent. The ATS Leases grant leasehold estates free and clear of
all Encumbrances (except Permitted Encumbrances) and no Encumbrances (except permitted Encumbrances) have been granted by or caused by the actions of ATS. The ATS Leases are in full force and effect and are binding and enforceable against each of
the parties thereto in accordance with their respective terms subject to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and (b)
general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). Except as set forth on Schedule 3.16, neither ATS nor, to the Knowledge of ATS, any other party to an ATS Lease, has committed
a material breach or default under any ATS Lease, nor, to the Knowledge of ATS, has there occurred any event that with the passage of time or the giving of notice or both would constitute such a breach or default, nor, to the Knowledge of ATS, are
there any facts or circumstances that would reasonably indicate that ATS is likely to be in material breach or default under any ATS Lease. Schedule 3.16 correctly identifies each ATS Lease the provisions of which would be materially and
adversely affected by the transactions contemplated hereby and each ATS Lease that requires the consent of any third party in connection with the transactions contemplated hereby. No material construction, alteration or other leasehold improvement
work with respect to the real property covered by any ATS Lease remains to be paid for or to be performed by ATS. Except as set forth on Schedule 3.16, no ATS Lease has an unexpired term which including any renewal or extensions of such term
provided for in such ATS Lease could exceed ten years. 
  
 3.16.3
Condition. All buildings, structures, leasehold improvements and fixtures, or parts thereof, used by ATS in the conduct of its business are in good operating condition and repair, ordinary wear and tear excepted. 
  

 20 

 3.17 Agreements, Contracts and Commitments. 
  
 3.17.1 ATS Agreements. Except as set forth on Schedule 3.17
hereto or any other Schedule hereto, ATS is not a party to: 
  
 (a) any bonus, deferred compensation, pension, severance, profit-sharing, stock option, employee stock purchase or retirement plan, contract or arrangement or other employee benefit plan or arrangement; 
  
 (b) any employment agreement with any present employee,
officer, director or consultant (or former employees, officers, directors and consultants to the extent there remain at the date hereof obligations to be performed by ATS); 
  
 (c) any agreement for personal services or employment with a term of service or employment specified in the
agreement or any agreement for personal services; 
  
 (d) any agreement of guarantee or indemnification in an amount that is material to ATS taken as a whole; 
  
 (e) any agreement or commitment containing a covenant limiting or purporting to limit the freedom of ATS to compete with any Person in any
geographic area or to engage in any line of business; 
  
 (f) any lease other than the ATS Leases under which ATS is lessee; 
  
 (g) any joint venture or profit-sharing agreement (other than with employees); 
  
 (h) except for trade indebtedness incurred in the ordinary course of business and equipment leases entered into in the ordinary course of
business, any loan or credit agreements providing for the extension of credit to ATS or any instrument evidencing or related in any way to indebtedness incurred in the acquisition of companies or other entities or indebtedness for borrowed money by
way of direct loan, sale of debt securities, purchase money obligation, conditional sale, guarantee, or otherwise that individually is in the amount of $25,000 or more; 
  
 (i) any license agreement, either as licensor or licensee, involving payments (including past payments) of
$25,000 in the aggregate or more, or any distributor, dealer, reseller, franchise, manufacturer’s representative, or sales agency or any other similar material contract or commitment; 
  
 (j) any agreement granting exclusive rights to, or providing
for the sale of, all or any portion of the ATS Proprietary Rights; 
  
 (k) any agreement or arrangement providing for the payment of any commission based on sales other than to employees of ATS; 
  

 21 

 (l) any agreement for the sale by ATS of materials, products, services or supplies that
involves future payments to ATS of more than $25,000; 
  
 (m) any agreement for the purchase by ATS of any materials, equipment, services, or supplies, that either (i) involves a binding commitment by ATS to make future payments in excess of $25,000 and cannot be terminated by it without penalty
upon less than three months’ notice or (ii) was not entered into in the ordinary course of business; 
  
 (n) any agreement or arrangement with any third party for such third party to develop any intellectual property or other asset expected to
be used or currently used or useful in the business of ATS; 
  
 (o) any agreement or commitment for the acquisition, construction or sale of fixed assets owned or to be owned by ATS that involves future payments by ATS of more than $25,000; 
  
 (p) any agreement or commitment to which present or former
directors, officers or Affiliates of ATS, or directors or officers of any Affiliate of any of the foregoing, are also parties; 
  
 (q) any agreement not described above (ignoring, solely for this purpose, any dollar amount thresholds in those descriptions) involving
the payment or receipt by ATS of more than $25,000, other than the ATS Leases; 
  
 (r) any agreement not described above that was not made in the ordinary course of business and that is material to the financial
condition, business, operations, assets, results of operations or prospects of ATS; or 
  
 (s) any agreement that provides for any continuing or future obligation of ATS, actual or contingent, including but not limited to any
continuing representation or warranty or any indemnification obligation that arose in connection with the disposition of any business or assets of ATS. 
  
 3.17.2 Validity. Except as set forth on Schedule 3.17, all contracts, leases, instruments, licenses and other agreements required to be set
forth on Schedule 3.17 are valid and in full force and effect; neither ATS nor, to the Knowledge of ATS, any other party thereto, has breached any provision of, or defaulted under the terms of any such contract, lease, instrument, license or
other agreement, except for any breaches or defaults that, in the aggregate, would not be expected to have an ATS Material Adverse Effect or have been cured or waived; and ATS has not received any “notice to cure” or a similar notice from
any Governmental Entity requesting performance under any contract, instrument or other agreement between ATS and such Governmental Entity. 
  
 3.17.3 Third-Party Consents. Schedule 3.17 identifies each contract and other document set forth on Schedule 3.17 that requires the
consent of a third party in connection with the transactions contemplated hereby. 
  

 22 

 3.18 Intellectual Property. 
  
 3.18.1 Right to Intellectual Property. Except as set forth on Schedule 3.18 hereto, ATS owns, or has
perpetual, fully paid, worldwide rights to use, all patents, trademarks, trade names, service marks, copyrights, and any applications therefor, maskworks, net lists, schematics, technology, know-how, computer software programs or applications (in
both source code and object code form), and tangible or intangible proprietary information or material (excluding Commercial Software) that are used in the business of ATS as currently conducted (the “ATS Proprietary Rights”). The
Commercial Software used in the business of ATS in each case has been acquired and used by ATS on the basis of and in accordance with a valid license from the manufacturer or a dealer authorized to distribute such Commercial Software. A complete
list of the Commercial Software used in the business of ATS is set forth on Schedule 3.18. ATS is not in breach of any of the terms and conditions of any such license, and to the Knowledge of ATS, ATS has not been infringing upon any rights
of any third parties in connection with its acquisition or use of the Commercial Software. 
  
 3.18.2 No Conflict. Set forth on Schedule 3.18 is a complete list of all patents, trademarks, registered copyrights, trade names and service marks, and any applications therefor, included in ATS
Proprietary Rights, specifying, where applicable, the jurisdictions in which each such ATS Proprietary Right has been issued or registered or in which an application for such issuance and registration has been filed, including the respective
registration or application numbers and the names of all registered owners. Except as set forth on Schedule 3.18, no software product currently marketed by ATS has been registered for copyright protection with the United States Copyright
Office or any foreign offices nor has ATS been requested to make any such registration. Set forth on Schedule 3.18 is a complete list of all domain names, Secure Socket Layer (SSL) certificates and other World Wide Web certificates owned by
ATS, which list includes all domain names used by ATS in its business and respective registrars. Set forth on Schedule 3.18 is a complete list of all material licenses, sublicenses and other agreements as to which ATS is a party and pursuant
to which ATS or any other Person is authorized to use any ATS Proprietary Right or trade secrets material to the business of ATS; such schedule includes the identity of all parties to such licenses, sublicenses and other agreements, a description of
the nature and subject matter thereof, the applicable royalty and the term thereof. ATS is not in violation of any license, sublicense or agreement described on such list except such violations as do not materially impair ATS’s rights under
such license, sublicense or agreement. Except as disclosed in this Article 3, the execution and delivery of this Agreement by ATS, and the consummation of the transactions contemplated hereby, will neither cause ATS to be in violation or default
under any such license, sublicense or agreement, nor entitle any other party to any such license, sublicense or agreement to terminate or modify such license, sublicense or agreement. Except as set forth on Schedule 3.18, ATS is the sole and
exclusive owner or licensee of, with all right, title and interest in and to (free and clear of any and all liens, claims and encumbrances), all rights included among the ATS Proprietary Rights, and ATS has sole and exclusive rights (and is not
contractually obligated to pay any compensation to any third party in respect thereof) to the use thereof or the material covered thereby in connection with the services or products in respect of which ATS Proprietary Rights are being used or might
reasonably be used. No claims with respect to ATS Proprietary Rights have been asserted or, to the Knowledge of ATS, are threatened by any Person nor are there any valid grounds for any bona fide claims (a) to the effect that the manufacture, sale,
licensing or use of any of the products of ATS as now 

  

 23 

 manufactured, sold or licensed or used or proposed for manufacture, use, sale or licensing by ATS infringes on any
copyright, patent, trademark, service mark, trade secret or other proprietary right, (b) against the use by ATS of any trademarks, service marks, trade names, trade secrets, copyrights, patents, technology, know-how or computer software programs and
applications used in ATS’s business as currently conducted or as proposed to be conducted, or (c) challenging the ownership by ATS, or the validity or effectiveness, of any of ATS Proprietary Rights. All material registered trademarks, service
marks and copyrights held by ATS are valid and subsisting in the jurisdictions in which they have been filed. There is no material unauthorized use, infringement or misappropriation of any of ATS Proprietary Rights by any third party, including any
employee or former employee of ATS. No ATS Proprietary Right or product of ATS is subject to any outstanding decree, order, judgment, or stipulation restricting in any manner the use, licensing or transfer thereof by ATS. Except as set forth in
Schedule 3.18, ATS has not entered into any agreement under which ATS is restricted from selling, licensing or otherwise distributing any of its products to any class of customers, in any geographic area, during any period of time or in any
segment of the market. ATS’s products, packaging and documentation contain copyright notices sufficient to maintain copyright protection on the copyrighted portions of the ATS Proprietary Rights. 
  
 3.18.3 Employee Agreements. Except as set forth on Schedule
3.18, each employee, officer and consultant of ATS has executed a document entitled “Non-Disclosure of Applied Technology Solutions Confidential Information” in substantially the form attached hereto as Exhibit 3.18. No
employee, officer or consultant of ATS is in violation of any term of any employment or consulting contract, proprietary information and inventions agreement, non-competition agreement, or any other contract or agreement relating to the relationship
of any such employee, officer or consultant with ATS or any previous employer. 
  
 3.19 Insurance Contracts. Schedule 3.19 hereto lists all contracts of insurance and indemnity in force at the date hereof with respect to ATS. Such contracts of insurance and indemnity and those
shown in other Schedules to this Agreement (collectively, the “ATS Insurance Contracts”) insure against such risks, and are in such amounts, as are appropriate and reasonable considering ATS’s property, business and operations.
All of the ATS Insurance Contracts are in full force and effect, with no default thereunder by ATS which could permit the insurer to deny payment of claims thereunder. All premiums due and payable thereon have been paid and ATS has not received
notice from any of its insurance carriers that any insurance premiums will be materially increased in the future or that any insurance coverage provided under any of the ATS Insurance Contracts will not be available in the future on substantially
the same terms as now in effect. ATS has not received or given a notice of cancellation with respect to any of the ATS Insurance Contracts. 
  
 3.20 Banking Relationships. Schedule 3.20 hereto shows the name, location and respective account number of each account, line of
credit, or safe deposit box that ATS has with any bank or trust company and the names of all Persons authorized to draw thereon or to have access thereto. 
  
 3.21 No Contingent Liabilities. ATS has no contingent or conditional liabilities or obligations of any kind arising from or relating to any
acquisition of a Subsidiary or line of business. 
  

 24 

 3.22 Absence of Certain Relationships. Except as set forth on Schedule 3.22, none of
(a) ATS, (b) any executive officer of ATS, (c) any Stockholder, or (d) any member of the immediate family of the Persons listed in (a) through (c) of this sentence, has any financial or employment interest in any subcontractor, supplier, or customer
of ATS (other than holdings in publicly held companies of less than two percent (2%) of the outstanding capital stock of any such publicly held company). 
  
 3.23 Foreign Corrupt Practices. Neither ATS, nor any Affiliate of ATS, nor any other Person associated with or acting for or on behalf of
the any of the foregoing, has directly or indirectly taken any action which would cause ATS to be in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, or any rules and regulations thereunder. Neither ATS, nor any
Affiliate of ATS, nor, to the Knowledge of ATS, any other Person associated with or acting for or on behalf of any of the foregoing, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kick-back, or
other payment to any Person, private or public, regardless of form, whether in money, property or services (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured, (iii) to obtain special
concessions or for special concessions already obtained, for or in respect of ATS or any Affiliate of ATS, or (iv) in violation of any law or regulation, or (b) established or maintained any fund or asset that has not been recorded in the books and
records of ATS. 
  
 Article 4 
 REPRESENTATIONS AND WARRANTIES OF PARENT AND
FEDERAL 
  
 Parent and Federal, jointly and
severally, represent and warrant to ATS as follows: 
  
 4.1
Corporate Status of Parent and Federal. Each of Parent and Federal is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with the requisite corporate power to own, operate and
lease its properties and to carry on its business as now being conducted. 
  
 4.2 Authority for Agreement; Noncontravention. 
  
 4.2.1 Authority of Parent. Each of Parent and Federal has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the boards of directors of Parent and Federal and no other corporate proceedings on the part of Parent or Federal are necessary to
authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. This Agreement and the other agreements contemplated hereby to be signed by Parent or Federal have been duly executed and delivered
by Parent and/or Federal, as the case may be, and constitute valid and binding obligations of Parent and/or Federal, as the case may be, enforceable against Parent and/or Federal in accordance with their terms, subject to the qualifications that
enforcement of the rights and remedies created hereby and thereby are subject to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws of general application affecting the rights and remedies of creditors and
(b) general 

  

 25 

 principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). 

 
 4.2.2 No Conflict. Neither the execution and delivery of this
Agreement by Parent or Federal, nor the performance by Parent or Federal of its obligations hereunder, nor the consummation by Parent or Federal of the transactions contemplated hereby will (a) conflict with or result in a violation of any provision
of the Certificate of Incorporation or by-laws of either Parent or Federal, or (b) with or without the giving of notice or the lapse of time, or both, conflict with, or result in any violation or breach of, or constitute a default under, or result
in any right to accelerate or result in the creation of any lien, charge or encumbrance pursuant to, or right of termination under, any provision of any note, mortgage, indenture, lease, instrument or other agreement, Permit, concession, grant,
franchise, license, judgment, order, decree, statute, ordinance, rule or regulation to which Parent, Federal or any of Parent’s other Subsidiaries is a party or by which any of them or any of their assets or properties is bound or which is
applicable to any of them or any of their assets or properties. No authorization, consent or approval of, or filing with or notice to, any Governmental Entity is necessary for the execution and delivery of this Agreement by Parent or Federal or the
consummation by Parent or Federal of the transactions contemplated hereby, except for such consents, authorizations, filings, approvals and registrations which if not obtained or made would not have a Parent Material Adverse Effect. 
  
 4.3 SEC Statements, Reports and Documents. Parent has filed all
required forms, reports, statements and documents with the SEC since July 1, 1999. The documents so filed by Parent and available in the public records of the SEC include (a) its Annual Reports on Form 10-K for its fiscal years ended June 31, 2001
and June 31, 2002, respectively, (b) its Quarterly Report on Forms 10-Q for its fiscal quarter ended September 30, 2002, (c) all other forms, reports, statements and documents filed or required to be filed by it with the SEC since July 1, 1999, and
(d) all amendments and supplements to all such reports and registration statements filed by Parent with the SEC (the documents referred to in clauses (a), (b), (c) and (d) being hereinafter referred to as the “Parent Reports”). The
consolidated balance sheet of Parent and its subsidiaries at September 30, 2002 including the notes thereto is hereinafter referred to as the “Parent Balance Sheet.” Parent shall continue to cause all required forms, reports,
statements and documents to be filed with the SEC and to cause such filings to be true and complete in all material respects, to and through the Closing. 
  
 4.4 Absence of Material Adverse Changes. Since the date of the Parent Balance Sheet, Parent has not suffered any Parent Material Adverse
Effect, nor has there occurred or arisen any event, condition or state of facts of any character that would result in a Parent Material Adverse Effect. 
  
 Article 5 
 CONDUCT
PRIOR TO THE CLOSING DATE 
  
 5.1 Conduct of Business of ATS. Except as set forth on Schedule 5.1 hereto, between the date of this Agreement and the Closing Date or the
date, if any, on which this Agreement is earlier terminated pursuant to its terms, ATS shall, except to the extent that Parent shall otherwise consent in writing (such consent not to be unreasonably withheld), (a) carry on its 

  

 26 

 business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, pay its
debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, except when subject to good faith disputes over such obligations, and use all commercially reasonable efforts
consistent with past practices and policies to preserve intact its present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business
relationships with it, to the end that ATS’s goodwill and ongoing business shall be unimpaired at the Closing Date, and (b) promptly notify Parent of any event or occurrence which will have or could reasonably be expected to have an ATS
Material Adverse Effect. In addition, between the date of this Agreement and the Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, ATS shall not, except as set forth on Schedule 5.1 hereto
or to the extent that Parent shall otherwise consent in writing (such consent not to be unreasonably withheld): 
  
 (a) amend its charter documents or by-laws; 
  
 (b) declare or pay any dividends or distributions (except for a $278,435.70 distribution to Shareholders to cover the built-in gains tax
from the Subchapter S election which ATS will make prior to the Closing) on its outstanding shares of capital stock or purchase, redeem or otherwise acquire for consideration any shares of its capital stock or other securities except in accordance
with agreements existing as of the date hereof; 
  
 (c) issue or sell any shares of its capital stock (except pursuant to the exercise of the Alligood Option and the Walp Option), effect any stock split or otherwise change its capitalization as it exists on the date hereof, or issue, grant,
or sell any options, stock appreciation or purchase rights, warrants, conversion rights or other rights, securities or commitments obligating it to issue or sell any shares of its capital stock, or any securities or obligations convertible into, or
exercisable or exchangeable for, any shares of its capital stock; 
  
 (d) borrow or agree to borrow any funds or voluntarily incur, or assume or become subject to, whether directly or by way of guaranty or otherwise, any obligation or Liability, except obligations incurred in the
ordinary course of business consistent with past practices; 
  
 (e) pay, discharge or satisfy any claim, obligation or Liability in excess of $25,000 (in any one case) or $50,000 (in the aggregate), other than the payment, discharge or satisfaction in the ordinary course of
business of obligations reflected on or reserved against in the ATS Balance Sheet, or incurred since the date of the ATS Balance Sheet in the ordinary course of business consistent with past practices or in connection with this transaction;

  
 (f) except as required by applicable law,
adopt or amend in any material respect, any agreement or plan (including severance arrangements) for the benefit of its employees; 
  

 27 

 (g) sell, mortgage, pledge or otherwise encumber or dispose of any of its assets which
are material, individually or in the aggregate, to the business of ATS, except in the ordinary course of business consistent with past practices; 
  
 (h) acquire by merging or consolidating with, or by purchasing any equity interest in or a material portion of the assets of, any business
or any corporation, partnership interest, association or other business organization or division thereof, or otherwise acquire any assets which are material, individually or in the aggregate, to the business of ATS, except in the ordinary course of
business consistent with past practices; 
  
 (i)
increase the following amounts payable or to become payable: (i) the salary of any of its directors or officers, other than increases in the ordinary course of business consistent with past practices and not exceeding, in any case, five percent (5%)
of the director’s or officer’s salary on the date hereof, (ii) any other compensation of its directors or officers, including any increase in benefits under any bonus, insurance, pension or other benefit plan made for or with any of those
persons, other than increases that are provided in the ordinary course of business consistent with past practices to broad categories of employees and do not discriminate in favor of the aforementioned persons, and (iii) the compensation of any of
its other employees, consultants or agents except in the ordinary course of business consistent with past practices; 
  
 (j) dispose of, permit to lapse, or otherwise fail to preserve its rights to use the ATS Proprietary Rights or enter into any settlement
regarding the breach or infringement of, all or any part of the ATS Proprietary Rights, or modify any existing rights with respect thereto, other than in the ordinary course of business consistent with past practices, and other than any such
disposal, lapse, failure, settlement or modification that does not have and could not reasonably be expected to have an ATS Material Adverse Effect; 
  
 (k) sell, or grant any right to exclusive use of, all or any part of the ATS Proprietary Rights; 
  
 (l) enter into any contract or commitment or take any other
action that is not in the ordinary course of its business or could reasonably be expected to have an adverse impact on the transactions contemplated hereunder or that would have or could reasonably be expected to have an ATS Material Adverse Effect;

  
 (m) amend in any material respect any
agreement to which it is a party, the amendment of which will have or could reasonably be expected to have an ATS Material Adverse Effect; 
  
 (n) waive, release, transfer or permit to lapse any claim or right (i) that has a value, or involves payment or receipt by it, of more
than $25,000 or (ii) the waiver, release, transfer or lapse of which would have or could reasonably be expected to have an ATS Material Adverse Effect; 
  
 (o) take any action that would materially decrease ATS’s Net Worth; 
  

 28 

 (p) make any change in any method of accounting or accounting practice other than changes
required to be made in order that ATS’s financial statements comply with GAAP; or 
  
 (q) agree, whether in writing or otherwise, to take any action described in this Section 5.1. 
  
 5.2 Conduct of Business of Parent. Between the date of this
Agreement and the Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, Parent and Federal shall not, except to the extent that ATS shall otherwise consent in writing (such consent not to be
unreasonably withheld), take any action that would materially impair Federal’s ability to pay the aggregate Purchase Price or otherwise to perform its obligations under this Agreement. Further, between the date of this Agreement and the Closing
Date or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, Parent and Federal shall, except to the extent that ATS shall otherwise consent in writing (such consent not to be unreasonably withheld) promptly notify
ATS and the Stockholders’ Representative of any event or occurrence which will have or could reasonably be expected to have an adverse effect on the ability of Federal and Parent to pay the aggregate Purchase Price and otherwise to perform
their respective obligations hereunder. 
  
 Article 6

 ADDITIONAL AGREEMENTS 
  
 6.1 Exclusivity and Failure to Complete Transaction 
  
 6.1.1 Exclusivity. From and after the date of this Agreement until the earlier of the Closing Date or the termination
of this Agreement in accordance with Article 9 hereof, neither of ATS nor any Stockholder will, directly or indirectly, through their respective affiliates, agents, officers and directors, directly or indirectly, solicit, initiate, or participate in
discussions or negotiations or otherwise cooperate in any way with, or provide any information to, any Person or group concerning any tender offer, exchange offer, merger, business combination, sale of substantial assets, sale of shares of capital
stock, or similar transaction involving ATS (all such transactions being referred to herein as “Acquisition Proposals”). 
  
 6.1.2 ATS’s Failure to Complete Transaction. Notwithstanding Section 6.1.1 in the event that ATS at any time after the date of the Letter of
Intent and before the earlier of the Closing Date or the termination of this Agreement in accordance with Article 9 hereof, accepts an Acquisition Proposal from any Person other than Parent, or the board of directors of ATS fails, for any reason, to
authorize the entering into this Agreement and the consummation of the transactions contemplated hereby, or the board of directors of ATS withdraws or modifies such authorization, Parent shall be entitled, providing that Parent is not in a material
breach of any of its obligations hereunder, upon demand submitted in a form of a notice to ATS (the “Demand Notice”) to the payment of the sum of $150,000. ATS shall make such payment within ten (10) days of the receipt of the
Demand Notice. 
  
 6.1.3 Parent’s and Federal’s
Failure to Complete Transaction. In the event that Parent and Federal shall refuse to complete the transactions contemplated hereby on or 

  

 29 

 before the Closing Date and, provided, that (a) this Agreement shall not have been sooner terminated pursuant to
Section 9.1, (b) all of the closing conditions set forth in Sections 7.1 and 7.2 shall have been satisfied and (c) neither ATS nor the Stockholders shall be in material breach of any of their respective obligations hereunder, then upon a demand
submitted in a form of a notice to Parent and Federal (the “ATS Demand Notice”), Federal shall pay to ATS the sum of $150,000. Federal shall make such payment within ten (10) days of the receipt of the ATS Demand Notice. 

 
 6.2 Expenses. 
  
 6.2.1 General. Except as provided in this Section 6.2, each party
hereto shall be responsible for its own costs and expenses in connection with the Transaction, including fees and disbursements of consultants, brokers, finders, investment bankers and other financial advisors, counsel and accountants
(“Expenses”). 
  
 6.2.2 Broker Fees. At
the Closing, Federal shall pay $410,000, plus unpaid reimbursable expenses pursuant to the Financial Advisory Services Agreement between ATS and Broker to Broker, which amount shall be deducted from the Direct Payment due to the Stockholders at the
Closing. 
  
 6.2.3 Attorney Fees. At the Closing, Federal
shall pay $90,000 to ATS’s Counsel, which amount shall be deducted from the Direct Payment due the Stockholders at the Closing. 
  
 6.2.4 Accountant Fees. At the Closing, Federal shall pay $34,000 to ATS’s Accountant, which amount shall be deducted from the Direct Payment
due the Stockholders at the Closing. 
  
 6.2.5 Uncovered
Expenses. ATS and the Stockholders shall ensure that either: (a) any Expenses incurred by ATS or the Stockholders are paid at or before the Closing from the aggregate Purchase Price so that such Expenses do not continue to be or do not become
the liability of ATS after the Closing or (b) provision is made for any such Expenses on ATS’s books for payment after the Closing (it being understood that in such event the Net Worth on the Closing Balance Sheet shall be reduced by any such
Expenses). 
  
 6.3 Indemnification. Subject to the
terms of this Section 6.3, from and after the Closing Date, Parent, Federal, ATS, each of their respective Subsidiaries and Affiliates and their respective directors, officers, employees, Affiliates, representatives, successor and assigns
(collectively “Parent Indemnified Parties”) shall be entitled to payment and reimbursement from the Stockholders and their respective successors (the “Parent Indemnifying Parties”), jointly and severally, of the
amount of any Loss suffered, incurred or paid by any Parent Indemnified Party (subject to subsection 6.3.3), by reason of, in whole or in part, (i) any misrepresentation or inaccuracy in, or breach of, any representation or warranty made by ATS in
this Agreement or any Exhibits or Schedules hereto or the certificates delivered pursuant to this Agreement or (ii) any claim relating to a violation of obligations regarding non-competition, non-solicitation, confidentiality or the like in any
agreement entered into prior to Closing by any person named on the Employee List that might arise out of the employment of any such person by any of ATS, 

  

 30 

 Parent, Federal or any of their respective Subsidiaries. Subject to the terms of this Section 6.3, from and after the
Closing Date, the Stockholders and each of their respective successors (collectively the “Stockholder Indemnified Parties”) shall be entitled to payment and reimbursement from Parent, Federal and ATS (the “Stockholder
Indemnifying Parties”) of the amount of Loss suffered, incurred or paid by any Stockholder Indemnified Party by reason of any breach of any representation or warranty made by Parent or Federal in this Agreement, the breach or nonperformance
of any covenant or obligation to be performed by Parent, Federal hereunder (or ATS hereunder after the Closing Date) or under any agreement executed in connection herewith, or any matter arising out of the business of ATS after the Closing.

  
 6.3.1 Claims for Indemnification. Upon obtaining
knowledge of any facts, claim or demand which has given rise to, or could reasonably give rise to, a claim for indemnification hereunder (referred to herein as an “Indemnification Claim”), the party seeking indemnification
hereunder, the Parent Indemnified Party or the Stockholder Indemnified Party, as the case may be (the “Indemnified Party”), shall promptly give written notice of such facts, claim or demand (“Notice of Claim”) to
the party from whom indemnification is sought, the Parent Indemnifying Party or the Stockholder Indemnified Party, as the case may be (the “Indemnifying Party”). So long as the Notice of Claim is given by the Indemnified Party in
the Claims Period specified in Section 6.3.4, no failure or delay by the Indemnified Party in the giving of a Notice of Claim shall reduce or otherwise affect the Indemnified Party’s right to indemnification except to the extent that the
Indemnifying Party has been prejudiced thereby. 
  
 6.3.2
Defense by Indemnifying Party. In the event of a claim or demand asserted by a third party (a “Third Party Claim”), the Indemnifying Party shall have the right, but not the obligation, exercisable by written notice to the
Indemnified Party within 10 days of the date of the Notice of Claim concerning the commencement or assertion of any Third Party Claim, to participate in the defense of such Third Party Claim. If the Indemnifying Party gives such notice of intent to
defend, the Indemnifying Party shall assume the defense thereof as follows: (a) the Indemnifying Party will defend the Indemnified Party against the matter with counsel compensated by and chosen by the Indemnifying Party, which choice of counsel
shall be subject to the reasonable satisfaction of the Indemnified Party; (b) the Indemnified Party may retain separate co-counsel at the sole cost and expense of Indemnified Party; (c) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the written consent of the Indemnifying Party; and (d) the Indemnifying Party will not consent to the entry of any judgment with respect to the matter, or enter into any
settlement that does not include a provision whereby the plaintiff or claimant in the matter releases the Indemnified Party from all liability with respect thereto, without the written consent of the Indemnified Party. If, however, (y) no
Indemnifying Party notifies the Indemnified Party within 10 days after the Indemnified Party has given notice of the matter, that the Indemnifying Party is assuming the defense thereof, or (z) , the maximum liability under such Third Party Claim is
greater than the available indemnification amount for the Indemnifying Party (after taking into account the amount of all other claims for which the Indemnifying Party may be or may be claimed to be liable and any limitations contained in Section
6.3.3 hereof), then the Indemnified Party shall defend against, or enter into any settlement with respect to the matter. The Indemnified Party shall not settle such Third Party Claim without the prior written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. 
  

 31 

 6.3.3 Limitation on Liability for Indemnity. The Parent Indemnified Parties shall
not be entitled to indemnification pursuant to this Section 6.3 until the aggregate amount of all Losses suffered by the Parent Indemnified Parties exceed $150,000 (the “Parent Indemnity Deductible”) whereupon the Parent Indemnified
Parties shall be entitled to indemnification hereunder for the aggregate amount of all of such Losses. The Parent Indemnity Deductible shall be determined without regard to any materiality qualification contained in any representation or warranty.

  
 (b) The Stockholder Indemnified Parties shall
not be entitled to indemnification pursuant to this Section 6.3 until the aggregate amount of all Losses, suffered by the Stockholder Indemnified Parties exceeds $150,000 (the “Stockholder Indemnity Deductible”) whereupon the
Stockholder Indemnified Parties shall be entitled to indemnification hereunder for the aggregate amount of all of such Losses. The Stockholder Indemnity Deductible shall be determined without regard to any materiality qualification contained in any
representation or warranty. 
  
 (c) The aggregate
liability of the Seller Indemnifying Parties for indemnification under this Section 6.3 shall not exceed $1,500,000. The aggregate liability of the Parent Indemnifying Parties for indemnification under this Section 6.3 shall not exceed $1,500,000.
Provided that Parent and Federal are not otherwise in default of their obligations under Section 2.2 above, then to the extent that the amount then held in the Escrow is sufficient, the amount that a Parent Indemnified Party is entitled receive in
indemnification hereunder, or such lesser amount as is then held in the Escrow, shall be released from the Escrow and paid to such Parent Indemnified Party in partial (if the amount then held in the Escrow is less than the amount such Parent
Indemnified Party is entitled receive in indemnification hereunder ) or full satisfaction of the Parent Indemnifying Parties’ obligation hereunder, as the case may be. 
  
 6.3.4 Claims Period. Any claim for indemnification under this Section 6.3 must be asserted by written notice on or
before the date that is 24 months after the Closing Date. 
  
 6.4 Access and Information. ATS shall afford to Parent, Federal, and to a reasonable number of their respective officers, employees, accountants, counsel and other authorized representatives full and complete access, upon
reasonable advance telephone notice, during regular business hours, throughout the period prior to the earlier of the Closing Date or the termination of this Agreement pursuant to its terms, to ATS’s offices, properties, books and records, and
ATS shall use reasonable efforts to cause its representatives and independent public accountants to furnish to Parent such additional financial and operating data and other information as to its business, customers, vendors and properties as Parent
may from time to time reasonably request. Notwithstanding the foregoing, all visits to any office of ATS will be coordinated and conducted so as to not be disruptive to the operations of ATS and to preserve the confidentiality of the transactions
contemplated hereby. In connection with the diligence investigation contemplated by Section 7.2.6, Parent and Federal may employ the services of a third party to provide document management and database services. As one of the last matters of the
diligence investigation contemplated by Section 7.2.6, Parent and Federal shall be permitted to meet with ATS’s significant customers, provided however, that Parent and Federal agree that no such customer meetings shall be held without
Carlson’s advance written approval of the 

  

 32 

 meeting format, discussion items and timing, which approval shall not be unreasonably withheld. Parent and Federal also
agree that the timing of access by Parent and Federal to ATS’s employees, in addition to Alligood, Carlson and Walp, shall be subject to Carlson’s prior written approval, which approval shall not be unreasonably withheld. 
  
 6.5 Public Disclosure. Except as otherwise required by law, the
content and timing of any press release or other public disclosure of information regarding the proposed transaction (including the negotiations with respect to the Transaction and the terms and existence of this Agreement) shall be subject to the
mutual approval of Carlson and Parent, which approval shall not be unreasonably withheld. ATS, the Stockholders and Parent agree that the non-disclosure obligations contained in Section 12 of the Letter of Intent shall remain in full force and
effect in accordance with the terms thereof and hereof. 
  
 6.6
Further Assurances. 
  
 6.6.1 Generally. Subject to
terms and conditions herein provided and to the fiduciary duties of the board of directors and officers or representatives of any party, each of the parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated hereby. In case at any time any further action,
including, without limitation, the obtaining of waivers and consents under any agreements, material contracts or leases and the execution and delivery of any licenses or sublicenses for any software, is necessary, proper or advisable to carry out
the purposes of this Agreement, the proper officers and directors or representatives of each party to this Agreement are hereby directed and authorized to use commercially reasonable efforts to effectuate all required action. 
  
 6.6.2 Novation of Contracts. Each party agrees to use commercially
reasonable efforts to effect the novation of each contract with a Governmental Entity that may require novation under its terms or under applicable laws or regulations, and further agrees to provide all documentation necessary to effect each such
novation, including, without limitation, all instruments, certifications, requests, legal opinions, audited financial statements, and other documents required by Part 42 of the Federal Acquisition Regulation to effect a novation of any contract with
the Government of the United States. In particular and without limiting the generality of the foregoing, ATS shall continue to communicate with responsible officers of the Government of the United States from time to time as may be appropriate and
permissible, to request speedy action on any and all requests for consent to novation. 
  
 6.7 Certain Tax Matters. 
  
 6.7.1 338(h)(10) Election. ATS and the Stockholders will join with Federal in making an election under Section 338(h)(10) of the Code (and any corresponding election under state, local, and foreign tax law) with respect to the
purchase and sale of the Shares hereunder (a “Section 338(h)(10) Election”). Each Stockholder will include any income, gain, loss, deduction, or other tax item resulting from the Section 338(h)(10) Election on his or her Tax Returns to the
extent required by applicable law. Stockholders shall also pay any Tax imposed on ATS attributable to the making of the 338(h)(10) Election, including (i) any Tax imposed 

  

 33 

 under Code section 1374, (ii) any Tax imposed under Treas. Reg. section 1.338(h)(10)-1(e)(5), or (iii) any state, local
or foreign Tax imposed on ATS’s gain, and Stockholders shall indemnify Federal against any Losses arising out of any failure to pay any such Taxes. 
  
 6.7.2 Allocation of Purchase Price. Federal, the Stockholders and ATS agree that the Purchase Price and the liabilities of ATS (plus other relevant
items) will be allocated to the assets of ATS for all purposes (including Tax and financial accounting purposes) in a manner consistent with an allocation schedule to be prepared by Parent after the Closing. Federal shall prepare such allocation
schedule in accordance with Temporary Treasury Regulation section 1.338(b)-2T(b) (T.cdD. 8711, January 9, 1997). Such allocation schedule shall be subject to approval by the Stockholders’ Representative, which approval shall not be unreasonably
withheld. Federal, ATS and the Stockholders will file all Tax Returns (including amended returns and claims for refund) and information reports in a manner consistent with the approved allocation schedule. 
  
 6.7.3 S Corporation Status. ATS and the Stockholders will not revoke
ATS’s election to be taxed as an S corporation within the meaning of Code sections 1361 and 1362. ATS and the Stockholders will not take or allow any action other than the sale of ATS’s stock pursuant to this Agreement that would result in
the termination of ATS’s status as a validly electing S corporation within the meaning of Code sections 1361 and 1362. 
  
 6.7.4 Tax Periods Ending on or before the Closing Date. The Stockholders shall at their expense prepare or cause to be prepared and file or cause
to be filed (and Federal shall cooperate to the extent necessary in such preparation and filing) all income Tax Returns (including any amended Tax Returns) for ATS for all periods ending on or prior to the Closing Date that are filed after the
Closing Date. All such Tax Returns shall be prepared in a manner consistent with the past practice of ATS. Such Tax Returns shall be subject to the approval of Federal, not to be unreasonably withheld. To the extent permitted by applicable law, each
Stockholder shall include any income, gain, loss, deduction or other tax items for such periods on the Stockholder’s Tax Return in a manner consistent with the Schedule K-1s furnished by ATS to the Stockholder for such periods. The Stockholders
shall pay Federal for all Taxes of ATS with respect to such periods within fifteen (15) days after payment by Federal of such Taxes. 
  
 6.7.5 Cooperation on Tax Matters. 
  
 (a) Parent, Federal, ATS and the Stockholders shall cooperate fully, as and to the extent reasonably requested by any party, in connection
with the filing of Tax Returns pursuant to this Section and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. ATS and
the Stockholders agree (i) to retain all books and records with respect to Tax matters pertinent to ATS relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified
by Federal or the Stockholders’ Representative, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into 

  

 34 

 
with any taxing authority, and (ii) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and
records and, if the other so requests, ATS or the Stockholders, as the case may be, shall allow the other to take possession of such books and records. 
  
 (b) Federal and the Stockholders further agree, upon request, to use their best efforts to obtain any certificate or other document from
any governmental authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby). 
  
 (c) Federal and the Stockholders further agree, upon
request, to provide the other party with all information that either party may be required to report pursuant to section 6043 of the Code and all Treasury Department Regulations promulgated thereunder. 
  
 6.7.6 Tax Sharing Agreements. All tax sharing agreements or similar
agreements with respect to or involving ATS shall be terminated as of the Closing Date and, after the Closing Date, ATS shall not be bound thereby or have any liability thereunder. 
  
 6.7.7 Certain Taxes. All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees
(including any penalties and interest) incurred in connection with this Agreement (including any corporate-level gains tax triggered by the sale of ATS Common Stock, and any transfer or similar tax imposed by any governmental authority), shall be
paid by the Stockholders when due, and each Stockholder will, at his or her own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees,
and, if required by applicable law, Federal will, and will cause its affiliates to, join in the execution of any such Tax Returns and other documentation. 
  
 6.8 Notification 
  
 6.8.1 By ATS. From the date hereof until the Closing Date, ATS shall promptly disclose to Parent and Federal in writing any material variances from
the representations and warranties contained in Article 3 promptly upon discovery thereof, in the form of “Updated Schedules” delivered to Parent and Federal. 
  
 6.8.2 By Parent and Federal. From the date hereof until the Closing Date, Parent and Federal shall promptly disclose
to ATS in writing any material variances from Parent and Federal representations and warranties contained in Article 4. In addition, Parent agrees to notify ATS promptly if Parent decides, based upon the results of the diligence investigation
contemplated by Section 7.2.6, that Parent and Federal are no longer interested in purchasing all of the Shares upon the terms and conditions set forth in this Agreement. Parent further agrees that from time to time and at any time from the date
hereof until the Closing Date, ATS may request in writing that Parent confirm in writing, within the earlier of (i) 3 business days after receipt by Parent’s CEO of such request or (ii) 6 business days after Parent’s receipt of such

  

 35 

 request, that Parent then has no reason to conclude that the condition to Closing set forth in Section 7.2.6 will not be
fulfilled at or prior to the Closing. 
  
 6.9 Exercise of
Alligood and Walp Options 
  
 6.9.1 Alligood Option.
Alligood hereby agrees to exercise fully the Alligood Option at Closing and authorizes Federal (i) to withhold from the amounts payable to Alligood pursuant to this Agreement the total exercise price payable upon exercise of the Alligood Option and
any and all sums required to satisfy the federal, state, local and foreign tax withholding obligations of ATS, if any, which arise in connection with the Alligood Option, including, without limitation, obligations arising upon the exercise of the
Alligood Option (together, the “Alligood Withholdings”) and (ii) to pay on her behalf such Alligood Withholdings over to ATS to satisfy her obligation to pay to ATS such exercise price and to satisfy ATS’s tax withholding
obligations, which amount ATS shall pay to the appropriate tax authority. 
  
 6.9.2 Walp Option. Walp hereby agrees to exercise fully the Walp Option at Closing and authorizes Federal (i) to withhold from the amounts otherwise payable to Walp pursuant to this Agreement the total exercise
price payable upon exercise of the Walp Option and any and all sums required to satisfy the federal, state, local and foreign tax withholding obligations of ATS, if any, which arise in connection with the Walp Option, including, without limitation,
obligations arising upon the exercise of the Walp Option (together, the “Walp Withholdings”) and (ii) to pay on his behalf such Walp Withholdings over to ATS to satisfy his obligation to pay to ATS such exercise price and to satisfy
ATS’s tax withholding obligations, which amount ATS shall pay to the appropriate tax authority. 
  
 Article 7 
 CONDITIONS PRECEDENT 

 
 7.1 Conditions Precedent to the Obligations of Each Party. The
obligations of the parties hereto to effect the Transaction shall be subject to the fulfillment at or prior to the Closing of the following conditions, any of which conditions may be waived in writing prior to Closing by the party for whose benefit
such condition is imposed: 
  
 7.1.1 No Illegality. There
shall not have been any action taken, and no statute, rule or regulation shall have been enacted, by any state, federal or other (including foreign) government agency since the date of this Agreement that would prohibit or materially restrict the
Transaction or any other material transaction contemplated hereby. 
  
 7.1.2 Government Consents. Other than contract novations referenced in Section 6.6.2 hereof, all filings with and notifications to, and all approvals and authorizations of, third parties (including, without limitation, Governmental
Entities) required for the consummation of the Transaction and the other material transactions contemplated hereby 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. 
  
 7.1.3 No Injunction. No injunction or restraining or other order issued by a court of competent jurisdiction that prohibits or materially restricts the consummation of the 

  

 36 

 Transaction contemplated hereby shall be in effect (each party agreeing to use all reasonable efforts to have any
injunction or other order immediately lifted), and no action or proceeding shall have been commenced or threatened in writing seeking any injunction or restraining or other order that seeks to prohibit, restrain, invalidate or set aside consummation
of the transactions contemplated hereby. 
  
 7.1.4 Escrow
Agreement. Each of the parties hereto, together with the Escrow Agent, shall have entered into the Escrow Agreement. 
  
 7.1.5 Paying Agent Agreement. Each of the parties thereto shall have entered into the Paying Agent Agreement. 
  
 7.2 Conditions Precedent to Obligation of Parent and Federal to
Consummate the Transaction. The obligation of Parent and Federal to consummate the Transaction shall be subject to the fulfillment at or prior to the Closing of the following additional conditions, any of which conditions may be waived in
writing by Parent or Federal prior to Closing: 
  
 7.2.1
Representations and Warranties. The representations and warranties of ATS contained in this Agreement shall be true and correct in all material respects on and as of the Closing Date, except for changes contemplated by this Agreement and
except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made on and as of the Closing Date, except, in all such
cases, for such breaches, inaccuracies or omissions of such representations and warranties which have neither had, nor reasonably would be expected to have, an ATS Material Adverse Effect (it being understood that, for purposes of determining the
accuracy of such representations and warranties, any update of or modification to the Schedules made or purported to have been made after execution of this Agreement, including the Updated Schedules, shall be disregarded); and ATS and the
Stockholders shall have delivered to Parent a certificate to that effect, dated the Closing Date and signed on behalf of ATS by the President, Treasurer, and Secretary of ATS as well as by Stockholders in their respective individual capacities.

  
 7.2.2 Agreements and Covenants. ATS shall have
performed in all material respects all of its agreements and covenants set forth herein that are required to be performed at or prior to the Closing Date; and ATS and the Stockholders shall have delivered to Parent a certificate to that effect,
dated as of the Closing Date and signed on behalf of ATS by the President, Treasurer, and Secretary of ATS as well as by Stockholders in their respective individual capacities. 
  
 7.2.3 Legal Opinion. Parent and Federal shall have received an opinion from Squire, Sanders & Dempsey LLP,
counsel to ATS, in substantially the form attached hereto as Exhibit B. 
  
 7.2.4 Closing Documents. ATS and the Stockholders shall have delivered to Parent the closing certificate described hereafter in this paragraph and such closing documents as the Parent shall reasonably request
(other than additional opinions of counsel), including a good standing certificate from Virginia with respect to ATS. The closing certificate, dated as of the 

  

 37 

 Closing Date, duly executed by ATS’s President, Treasurer, and Secretary, shall certify as to (a) the signing
authority, incumbency and specimen signature of the signatories of this Agreement and other documents signed on behalf of ATS in connection herewith, (b) the resolutions adopted by the board of directors of ATS authorizing and approving the
execution, delivery and performance of this Agreement and the other documents executed in connection herewith and the consummation of the transactions contemplated hereby and thereby and state that such resolutions have not been modified, amended,
revoked or rescinded and remain in full force and effect, and (c) the charter documents and by-laws of ATS. 
  
 7.2.5 Third Party Consents. All third party consents or approvals listed in Schedule 7.2.5 hereto shall have been obtained by ATS and shall be
effective and shall not have been suspended, revoked, or stayed by action of any such third party. 
  
 7.2.6 Diligence Review. Parent and its accountants and attorneys shall have conducted a diligence investigation of all matters related to the
business of ATS deemed relevant by Parent or its accountants and attorneys to such diligence investigation, and the results of such diligence investigation shall have been satisfactory to Parent in its sole discretion. 
  
 7.2.7 Consulting, Non-Compete, Non-Solicitation, and Non-Disturbance
Agreement. Federal shall have entered into a Consulting, Non-Compete, Non-Solicitation, and Non-Disturbance Agreement with Carlson in substantially the form of Exhibit C. 
  
 7.2.8 Employment Agreements. Federal shall have entered into an employment agreement with Alligood in substantially
the Form of Exhibit D and, with Walp in substantially the form of Exhibit E; as well as Employment Agreements in substantially the form of Exhibit F with Shanta Sims, Tony Jones and at least 95% of the other direct billable,
full and part time, persons listed on the Employee List, excluding such persons who are on LWOP or are corporate administrative staff. 
  
 7.2.9 Updated Employee List. ATS shall have delivered to Federal a list dated as of the Closing Date containing the name of each person then
employed by ATS and each such employee’s position and annual salary. 
  
 7.2.10 Material Adverse Effect. Since the date of this Agreement, ATS shall not have suffered an ATS Material Adverse Effect, it being understood for the purpose of this Section 7.2.10 that conditions that
generally affect the industries in which ATS participates or the economy of the United States as a whole resulting from the initiation of hostilities between Iraq and the United States (including without limitation a correction in the public stock
markets or a general loss of consumer confidence) shall neither constitute nor be taken into account in determining whether there has occurred an ATS Material Adverse Effect, provided, however, that an adverse change in the financial or legal
condition, business or prospects of ATS that results from the initiation of hostilities between Iraq and the United States and is specific to ATS (including without limitation the actual or threatened cancellation or reduction of a program) may be
taken into account in determining whether there has occurred an ATS Material Adverse Effect. 
  

 38 

 7.2.11 No Outstanding Options, Warrants, etc.. There shall be no outstanding subscriptions,
options, warrants, conversion rights or other rights, securities, agreements or commitments obligating ATS to issue, sell or otherwise dispose of shares of its capital stock, or any securities or obligations convertible into, or exercisable or
exchangeable for, any shares of its capital stock. 
  
 7.2.12
Broker Agreement. The Stockholders will, prior to Closing, cause the Financial Advisory Services Agreement dated August 28, 2002, between ATS and Broker to be modified to provide that: (1) the Stockholders will assume all rights and
obligations of ATS under the Financial Advisory Services Agreement in the form of a novation, and (2) Broker shall release ATS from any and all liability of any kind associated with the Financial Advisory Services Agreement. Said modification shall
be in a form satisfactory to Parent in its sole discretion. 
  
 7.3 Conditions to Obligations of ATS and the Stockholders to Consummate the Transaction . The obligation of ATS and the Stockholders to consummate the Transaction shall be subject to the fulfillment at or prior to the Closing
of the following additional conditions, any of which may be waived in writing by ATS or the Stockholders’ Representative prior to Closing: 
  
 7.3.1 Representations and Warranties. The representations and warranties of Parent and Federal contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date, except for changes contemplated by this Agreement and except for those representations and warranties which address matters only as of a particular date (which shall remain true and
correct as of such date), with the same force and effect as if made on and as of the Closing Date, except in all such cases, for such breaches, inaccuracies or omissions of such representations and warranties which have neither had nor reasonably
would be expected to have a Parent Material Adverse Effect; and Parent shall have delivered to ATS a certificate to that effect, dated the date of the Closing and signed on behalf of Parent by the President and Chief Financial Officer of Parent.

  
 7.3.2 Agreements and Covenants. Parent and Federal
shall have performed in all material respects all of their agreements and covenants set forth herein that are required to be performed at or prior to the Closing Date; and Parent shall have delivered to ATS a certificate to that effect, dated as of
the Closing Date and signed on behalf of Parent by the Chief Executive Officer and Chief Financial Officer of Parent. 
  
 7.3.3 Legal Opinion. ATS shall have received an opinion from Parent in substantially the form attached hereto as Exhibit G. 
  
 7.3.4 Closing Documents. Parent and Federal shall have delivered to
ATS closing certificates of Parent and Federal and such other closing documents as ATS shall reasonably request (other than additional opinions of counsel). Each of the closing certificates of Parent and Federal, dated as of the Closing Date, duly
executed by the secretary of Parent and Federal, respectively, shall certify as to (a) the signing authority, incumbency and specimen signature of the signatories of this Agreement and other documents signed on behalf of Parent and Federal in
connection herewith, (b) the resolutions adopted by the board of directors of Parent and Federal authorizing and approving the execution, delivery and performance of this 

  

 39 

 Agreement and the other documents executed in connection herewith and the consummation of the transactions contemplated
hereby and thereby and state that such resolutions have not been modified, amended, revoked or rescinded and remain in full force and effect, and (c) the Certificate of Incorporation and By-Laws of Parent and Certificate of Incorporation and By-Laws
of Federal as currently in effect. 
  
 7.3.5 Material Adverse
Effect. Since the date of this Agreement, Parent shall not have suffered a Parent Material Adverse Effect, it being understood for the purpose of this Section 7.3.5 that conditions that generally affect the industries in which Parent
participates or the economy of the United States as a whole resulting from the initiation of hostilities between Iraq and the United States (including without limitation a correction in the public stock markets or a general loss of consumer
confidence) shall neither constitute nor be taken into account in determining whether there has occurred an Parent Material Adverse Effect, provided, however, that an adverse change in the financial or legal condition, business or prospects
of Parent that results from the initiation of hostilities between Iraq and the United States and is specific to Parent (including without limitation the actual or threatened cancellation or reduction of a program) may be taken into account in
determining whether there has occurred an Parent Material Adverse Effect. 
  
 7.3.6 Payment of Purchase Price. Parent shall have tendered the aggregate Purchase Price to the Stockholders pursuant to the provisions of Section 2.2.2 hereof and shall have delivered the Escrow Payment to the
Escrow Agent pursuant to the provisions of Section 2.2.3 hereof. 
  
 7.3.7 Termination of 401(k) Plan ATS shall, at its expense, terminate the Applied Technology Solutions of Virginia 401(k) Plan (the “ATS 401(k) Plan”) prior to the Closing Date, by resolution adopted by the Board of
Directors of ATS, on terms acceptable to Parent; and shall simultaneously amend the ATS 401(k) Plan to the extent necessary to comply with all applicable laws, including the so-called “GUST” and “EGTRRA” legislation, to the
extent not previously amended. Said termination shall provide that all participants in the ATS 401(k) Plan shall be fully vested in their account balances under said Plan. ATS shall further notify participants in the ATS 401(k) of its termination
prior to the Closing Date. 
  
 Article 8 
 SURVIVAL OF REPRESENTATIONS 
  
 8.1 ATS’s Representations. All representations and warranties made by ATS and the Stockholders in this
Agreement, or any certificate or other writing delivered by ATS or any of its Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Parent and shall terminate on the
date which is 24 months after the Closing Date (except that Indemnified Party claims pending on such date continue until resolved). The covenants made by ATS or the Stockholders in this Agreement or any certificate or other writing delivered by ATS
or any of its Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of Parent. 
  

 40 

 8.2 Parent’s Representations. All representations and warranties made by Parent and
Federal in this Agreement or any certificate or other writing delivered by Parent, Federal or any of their respective Affiliates pursuant hereto or in connection herewith shall terminate at the Closing. The covenants made by Parent or Federal in
this Agreement or any certificate or other writing delivered by Parent or Federal or any of their respective Affiliates pursuant hereto or in connection herewith shall survive the Closing and any investigation at any time made by or on behalf of ATS
or the Stockholders. 
  
 Article 9 
 OTHER PROVISIONS 
  
 9.1 Termination Events. This Agreement may be terminated and the Transaction abandoned at any time prior to the Closing Date, provided however that
upon any such termination the obligations of the Parties under the Non-Disclosure Agreement dated January 31, 2003, shall continue in full force and effect in accordance with the terms of the Letter of Intent and Non-Disclosure Agreement, as if set
forth in full in this Agreement: 
  
 (a) by
mutual written consent of Parent and ATS; 
  
 (b)
by Parent if there has been a breach of any representation, warranty, covenant or agreement contained in this Agreement on the part of ATS or any Stockholder and such breach has not been cured within ten business days after written notice to ATS
(provided, that neither Parent nor Federal is in material breach of the terms of this Agreement, and provided further, that no cure period shall be required for a breach which by its nature cannot be cured) such that the conditions set forth in
Section 7.2.1 or Section 7.2.2 hereof, as the case may be, will not be satisfied; 
  
 (c) by Parent, if ATS, its board of directors or any Stockholder shall have (i) withdrawn, modified or amended in any material respect the
approval of this Agreement or the transactions contemplated herein, or (ii) taken any public position inconsistent with its approval or recommendation, including, without limitation, having failed (without the consent of Parent) after a reasonable
period of time to reject or disapprove any Acquisition Proposal (or after a reasonable period of time to recommend to its shareholders such rejection or disapproval), and in that event ATS shall pay to Parent the amount specified in Section 6.1.2,
provided that neither Parent nor Federal is in material breach of the terms of this Agreement; 
  
 (d) by ATS, if there has been a breach of any representation, warranty, covenant or agreement contained in this Agreement on the part of
Parent or Federal and such breach has not been cured within ten business days after written notice to Parent (provided, that ATS is not in material breach of the terms of this Agreement, and provided further, that no cure period shall be required
for a breach which by its nature cannot be cured) such that the conditions set forth in Section 7.3.1 or Section 7.3.2 hereof, as the case may be, will not be satisfied, and in that event Parent shall pay to ATS the amount specified in Section
6.1.3, provided that neither ATS nor any Stockholder is in material breach of the terms of this Agreement; 
  

 41 

 (e) by ATS, if ATS accepts an Acquisition Proposal for any reason, including pursuant to
a good-faith determination by its board of directors, after consulting with counsel, that not to accept the Acquisition Proposal would constitute a breach of the directors’ fiduciary duty under the law of the Commonwealth of Virginia;
provided, however, that in that event ATS shall, providing that neither Parent nor Federal is in material breach of the terms of this Agreement, pay to Parent the amount pursuant to Section 6.1.2; 
  
 (f) by ATS, if Parent (i) notifies ATS pursuant to Section
6.8.2 that Parent and Federal are no longer interested in purchasing all of the Shares upon the terms and conditions set forth in this Agreement or (ii) fails to confirm in writing pursuant to Section 6.8.2 that Parent then has no reason to conclude
that the condition to Closing set forth in Section 7.2.6 will not be fulfilled at or prior to the Closing; 
  
 (g) by any party hereto if: (i) there shall be a final, non-appealable order of a federal or state court in effect preventing consummation
of the Transaction; or (ii) there shall be any final action taken, or any statute, rule, regulation or order enacted, promulgated or issued or deemed applicable to the Transaction by any Governmental Entity which would make consummation of the
Transaction illegal or which would prohibit Parent’s or Federal’s ownership or operation of all or a material portion of the stock or assets of ATS, or compel Parent or Federal to dispose of or hold separate all or a material portion of
the business or assets of ATS or Parent or Federal as a result of the Transaction; or 
  
 (h) by any party hereto if the Transaction shall not have been consummated by March 31, 2003 , provided that the right to terminate this
Agreement under this Section 9.1(h) shall not be available to any party whose failure to fulfill any material obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing Date to occur on or before such date.

  
 9.2 Notices. All notices and other
communications hereunder shall be in writing and shall be deemed given if delivered by hand sent via a reputable nationwide courier service or mailed by registered or certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like notice) and shall be deemed given on the date on which so hand-delivered or on the third business day following the date on which so mailed or sent: 
  
 To Parent and Federal: 
  
 CACI International Inc 
 1100 North Glebe Road 
 Arlington, VA 22201 
 Attention: Dr. J. P. London, Chairman 
  

 42 

 with copies to: 
  
 Jeffrey P. Elefante 
 Executive Vice President, General Counsel and Secretary 
 CACI International Inc 
 1100 North Glebe Road 
 Arlington, VA 22201 
  
 and 
  
 David W. Walker 
 Foley Hoag LLP 
 155 Seaport Boulevard 
 Boston, MA 02210 
  
 To ATS: 
  
 Carol Carlson 
 President 
 Applied Technology Solutions of Northern VA, Inc. 
 1452 Dolley Madison Boulevard, Suite 310 
 McLean, VA 22101 
  
 with a copy
to: 
  
 Robert E. Gregg 
 Squire, Sanders & Dempsey LLP 
 8000 Towers Crescent Drive, 14th Floor 
 Tysons Corner, VA 22182 
  
 To any Stockholder or the Stockholders’ Representative: at the
addresses set forth on Schedule 9.2. 
  
 9.3
Entire Agreement. Unless otherwise herein specifically provided, this Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, including the Letter of Intent but excluding the
Non-Disclosure Agreement dated January 31, 2003. Each party hereto acknowledges that, in entering this Agreement and completing the transactions contemplated hereby, such party is not relying on any representation, warranty, covenant or agreement
not expressly stated in this Agreement or in the agreements among the parties contemplated by or referred to herein. 
  
 9.4 Assignability. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder, except
as otherwise expressly provided herein. Neither this Agreement nor any of the rights and obligations of the parties hereunder 

  

 43 

 shall be assigned or delegated, whether by operation of law or otherwise, without the written consent of all parties
hereto. 
  
 9.5 Validity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, each of which shall remain in full force and effect. 
  
 9.6 Specific Performance. The parties hereto acknowledge that
damages alone may not adequately compensate a party for violation by another party of this Agreement. Accordingly, in addition to all other remedies that may be available hereunder or under applicable law, any party shall have the right to any
equitable relief that may be appropriate to remedy a breach or threatened breach by any other party hereunder, including the right to enforce specifically the terms of this Agreement by obtaining injunctive relief in respect of any violation or
non-performance hereof. 
  
 9.7 Governing Law This
Agreement shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Virginia, without regard to its principles of conflicts of laws. 
  
 9.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which together shall
constitute one and the same agreement. 
  
 * * * * * 
  

 44 

 IN WITNESS WHEREOF, the parties have duly executed this Stock Purchase Agreement under seal as of the date first above
written. 
  

	CACI International Inc
		
	 By:
	 	 
	 	

	 	 	 Title:

	
	CACI, INC.-FEDERAL
		
	 By:
	 	  

	 	 	 Title:

	
	 Applied Technology Solutions of Northern VA, Inc.

		
	 By:
  
	 	

	 	 	 Carol Carlson, President

	
	

	Carol Carlson, as the Stockholders’ Representative
	
	

	 Carol Carlson (individually)

	
	

	 Donna K. Alligood

	
	

	 Robert D. Walp

  

 45 

 List of Exhibits and Schedules 
  

	Exhibit

	  	 Description

	 A
	  	 Escrow Agreement

	 B
	  	 Form of Opinion of ATS’s Counsel

	 C
	  	 Form of Non-Compete, Non-Solicitation, and Non-Disturbance Agreements

	 D
	  	 Form of Employment Agreement (Alligood)

	 E
	  	 Form of Employment Agreement (Walp)

	 F
	  	 Form of Parent Employment Agreements

	 G
	  	 Form of Opinion of Counsel to CACI International Inc

	 H
	  	 Form of Paying Agent Agreement

	 I
	  	 Schedule of Liens

	 3.18
	  	 Form of Confidentiality and Non-Competition Agreement

  

	Schedule

	  	 Description

		
	 2.2.1
	  	 Allocation of Purchase Price

	 3.1
	  	 Corporate Status of ATS

	 3.2
	  	 Options and Convertible Securities of ATS

	 3.4
	  	 No Conflict

	 3.6
	  	 Absence of Material Adverse Changes

	 3.7
	  	 Absence of Undisclosed Liabilities

	 3.8
	  	 Compliance with Applicable Law, Charter and By-Laws

	 3.9
	  	 Litigation and Audits

	 3.10
	  	 Tax Returns; Basis of Assets

	 3.10.5
	  	 Tax Basis

	 3.11
	  	 Employee Benefit Plans.

	 3.12
	  	 Labor Relations

	 3.13
	  	 Environmental.

	 3.15
	  	 Assets Other Than Real Property.

	 3.16
	  	 Real Property Leases

	 3.17
	  	 Agreements, Contracts and Commitments.

	 3.18
	  	 Intellectual Property.

	 3.19
	  	 Insurance Contracts

	 3.20
	  	 Banking Relationships

	 3.22
	  	 Absence of Certain Relationships

	 5.1
	  	 Conduct of Business of ATS

	 7.2.5
	  	 Third Party Consents

	 9.2
	  	 List of ATS Stockholders and Allocations

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}]]