-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KSD5Etv72kplOL3NSvZgOcmDgWJ+kmENz35EtdvYse/cPMFMs7HfdQ+h9hHtFE10 sWdPJtzk3pMRPQyVsxygRA== 0001021408-02-010954.txt : 20020814 0001021408-02-010954.hdr.sgml : 20020814 20020814151905 ACCESSION NUMBER: 0001021408-02-010954 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED RESEARCH CORP CENTRAL INDEX KEY: 0000003952 STANDARD INDUSTRIAL CLASSIFICATION: ORDNANCE & ACCESSORIES, (NO VEHICLES/GUIDED MISSILES) [3480] IRS NUMBER: 042281015 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11376 FILM NUMBER: 02735625 BUSINESS ADDRESS: STREET 1: 8000 TOWERS CRESCENT DR STREET 2: SUITE 260 CITY: VIENNA STATE: VA ZIP: 22182 BUSINESS PHONE: 7038475268 MAIL ADDRESS: STREET 1: 8000 TOWERS CRESCENT DRIVE STREET 2: STE 750 CITY: VIENNA STATE: VA ZIP: 22182 FORMER COMPANY: FORMER CONFORMED NAME: ALLIED RESEARCH ASSOCIATES INC DATE OF NAME CHANGE: 19880601 10-Q 1 d10q.htm FORM 10-Q Prepared by R.R. Donnelley Financial -- Form 10-Q
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
Mark one
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the period ended June 30, 2002
 
OR
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                      to                     
 
Commission File Number 0-2545
 
 
ALLIED RESEARCH CORPORATION
(Exact name of Registrant as specified in its charter)
 
Delaware
(State or other jurisdiction of
incorporation or organization)
  
04-2281015
(I.R.S. Employer Number)
 
8000 Towers Crescent Drive, Suite 260
Vienna, Virginia
(Address of principal executive offices)
  
22182
(Zip Code)
 
(703) 847-5268
Registrant’s telephone number, including area code:
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  ¨
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of June 30, 2002: 5,255,913.
 
 

Table of Contents
 
ALLIED RESEARCH CORPORATION
 
INDEX
 
 

Table of Contents
 
ALLIED RESEARCH CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
 
ASSETS
(Unaudited)
 
    
June 30, 2002
     
December 31, 2001
  
ASSETS
                  
CURRENT ASSETS
                  
Cash and equivalents
   
$
20,505
 
   
$
10,922
 
Restricted cash
   
 
7,609
 
   
 
6,212
 
Accounts and note receivable
   
 
17,316
 
   
 
19,656
 
Costs and accrued earnings on uncompleted contracts
   
 
29,523
 
   
 
20,338
 
Inventories
   
 
8,956
 
   
 
6,190
 
Prepaid and other current assets
   
 
4,300
 
   
 
2,903
 
    
  
Total current assets
   
 
88,209
 
   
 
66,221
 
PROPERTY, PLANT AND EQUIPMENT—net of accumulated depreciation
   
 
13,966
 
   
 
12,299
 
OTHER ASSETS
                  
Intangibles, net of accumulated amortization
   
 
9,058
 
   
 
7,144
 
Deferred taxes
   
 
908
 
   
 
935
 
Other assets
   
 
298
 
   
 
185
 
    
  
    
 
10,264
 
   
 
8,264
 
    
  
    
$
112,439
 
   
$
86,784
 
    
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                  
CURRENT LIABILITIES
                  
Notes payable
   
$
1,786
 
   
$
2,478
 
Current maturities of long-term debt
   
 
1,367
 
   
 
1,255
 
Convertible subordinated debenture, current
   
 
750
 
   
 
—  
 
Accounts payable
   
 
10,324
 
   
 
10,306
 
Accrued liabilities
   
 
5,484
 
   
 
6,784
 
Customer deposits
   
 
8,231
 
   
 
2,052
 
Income taxes
   
 
2,957
 
   
 
2,149
 
    
  
Total current liabilities
   
 
30,899
 
   
 
25,026
 
LONG-TERM OBLIGATIONS
                  
Convertible Subordinated Debenture, less current maturities and unamortized discount
   
 
6,610
 
   
 
—  
 
Long-Term Debt, less current maturities
   
 
3,080
 
   
 
3,110
 
    
  
    
 
9,690
 
   
 
3,110
 
STOCKHOLDERS’ EQUITY
                  
Preferred stock, no par value; authorized, 1,000,000 shares; none issued
   
 
—  
 
   
 
—  
 
Common stock, par value, $.10 per share; authorized 30,000,000 shares; issued and outstanding, 5,255,913 in 2002 and 5,129,179 in 2001
   
 
526
 
   
 
513
 
Additional paid-in capital
   
 
20,088
 
   
 
17,273
 
Retained earnings
   
 
53,996
 
   
 
50,672
 
Accumulated other comprehensive loss
   
 
(2,760
)
   
 
(9,810
)
    
  
    
 
71,850
 
   
 
58,648
 
    
  
    
$
112,439
 
   
$
86,784
 
    
  
 
The accompanying notes are an integral part of these consolidated financial statements.

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ALLIED RESEARCH CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands of Dollars)
(Unaudited)
 
    
Three months ended
June 30,
     
Six months ended
June 30,
  
    
2002
     
2001
     
2002
     
2001
  
Revenue
   
$
27,396
 
   
$
25,837
 
   
$
44,324
 
   
$
42,847
 
Cost and expenses
                                    
Cost of sales
   
 
19,018
 
   
 
18,427
 
   
 
30,716
 
   
 
30,449
 
Selling and administrative
   
 
4,406
 
   
 
2,899
 
   
 
6,961
 
   
 
5,601
 
Research and development
   
 
415
 
   
 
380
 
   
 
947
 
   
 
833
 
    
  
  
  
    
 
23,839
 
   
 
21,706
 
   
 
38,624
 
   
 
36,883
 
    
  
  
  
Operating income
   
 
3,557
 
   
 
4,131
 
   
 
5,700
 
   
 
5,964
 
Other income (deductions)
                                    
Interest income
   
 
256
 
   
 
139
 
   
 
336
 
   
 
274
 
Interest expense
   
 
(411
)
   
 
(405
)
   
 
(622
)
   
 
(800
)
Other
   
 
282
 
   
 
(211
)
   
 
360
 
   
 
230
 
    
  
  
  
    
 
127
 
   
 
(477
)
   
 
74
 
   
 
(296
)
    
  
  
  
Earnings before income taxes
   
 
3,684
 
   
 
3,654
 
   
 
5,774
 
   
 
5,668
 
Income tax expense
   
 
1,533
 
   
 
1,632
 
   
 
2,450
 
   
 
2,503
 
    
  
  
  
Net Earnings
   
$
2,151
 
   
$
2,022
 
   
$
3,324
 
   
$
3,165
 
    
  
  
  
Earnings per share
                                    
Basic
   
$
.41
 
   
$
.41
 
   
$
.64
 
   
$
.65
 
Diluted
   
$
.41
 
   
$
.41
 
   
$
.63
 
   
$
.65
 
Weighted average number of common shares:
                                    
Basic
   
 
5,192,615
 
   
 
4,906,717
 
   
 
5,170,288
 
   
 
4,888,716
 
Diluted
   
 
5,262,086
 
   
 
4,911,796
 
   
 
5,283,238
 
   
 
4,890,843
 
 
The accompanying notes are an integral part of these consolidated financial statements.

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ALLIED RESEARCH CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
 
    
Six months ended June 30
  
    
2002
     
2001
  
Cash flows from continuing operating activities
                  
Net earnings
   
$
3,324
 
   
$
3,165
 
Adjustments to reconcile net earnings to net cash provided by (used in) continuing operating activities
                  
Depreciation and amortization
   
 
794
 
   
 
729
 
Common stock award
   
 
515
 
   
 
533
 
Changes in assets and liabilities
                  
Accounts receivable
   
 
5,012
 
   
 
7,354
 
Costs and accrued earnings on uncompleted contracts
   
 
(6,110
)
   
 
(403
)
Inventories
   
 
(2,066
)
   
 
(214
)
Prepaid expenses and other assets
   
 
(1,385
)
   
 
687
 
Accounts payable, accrued liabilities and customer deposits
   
 
3,739
 
   
 
747
 
Income taxes
   
 
386
 
   
 
(77
)
    
  
Net cash provided by (used in) continuing operating activities
   
 
4,209
 
   
 
12,521
 
Cash flows (used in) investing activities
                  
Capital expenditures
   
 
(939
)
   
 
(1,368
)
Payment for acquisition, net of cash acquired
   
 
(125
)
   
 
—  
 
Proceeds from sale of fixed assets
   
 
—  
 
   
 
159
 
    
  
Net cash (used in) provided by investing activities
   
 
(1,064
)
   
 
(1,209
)
Cash flows from financing activities
                  
Proceeds from convertible subordinated debenture
   
 
7,500
 
   
 
359
 
Principal payments on long-term debt
   
 
(573
)
   
 
(714
)
Net decrease in short-term borrowings
   
 
(896
)
   
 
(506
)
Proceeds from employee stock purchases
   
 
90
 
   
 
209
 
Options exercised
   
 
62
 
   
 
—  
 
Restricted cash and restricted deposits
   
 
(1,397
)
   
 
(7,988
)
    
  
Net cash (used in) provided by financing activities
   
 
4,786
 
   
 
(8,640
)
    
  
Net increase in cash
   
 
7,931
 
   
 
2,672
 
Effects of exchange rate changes on cash
   
 
1,652
 
   
 
(944
)
    
  
Net Increase In Cash And Cash Equivalents
   
 
9,583
 
   
 
1,728
 
Cash and equivalents at beginning of year
   
 
10,922
 
   
 
7,570
 
Cash and equivalents at end of period
   
$
20,505
 
   
$
9,298
 
    
  
Supplemental Disclosures of Cash Flow Information
                  
Cash paid during the period for
                  
Interest
   
$
47
 
   
$
459
 
Taxes
   
 
1,745
 
   
 
762
 
Supplemental Disclosures of Non-Cash Investing and Financing Activities
                  
Non-cash (stock) consideration in connection with business acquisition
   
$
1,883
 
   
 
—  
 
Warrants issued in conjunction with convertible subordinated debenture
   
 
140
 
   
 
—  
 
Convertible subordinated debenture beneficial conversion feature
   
 
138
 
   
 
—  
 
 
The accompanying notes are an integral part of these consolidated financial statements.

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ALLIED RESEARCH CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Thousands of Dollars)
Unaudited
 

 
NOTE 1—CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
The condensed consolidated balance sheets as of June 30, 2002 and December 31, 2001, the condensed consolidated statements of earnings for the three and six month periods ended June 30, 2002 and 2001 and the condensed consolidated statements of cash flows for the six months ended June 30, 2002 and 2001, have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flow as of and for the periods ended June 30, 2002 and 2001 have been made.
 
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2001 Form 10-K filed with the Securities and Exchange Commission, Washington, D.C. 20549. The results of operations for the period ended June 30, 2002 and 2001 are not necessarily indicative of the operating results for the full year.
 
NOTE 2—PRINCIPLES OF CONSOLIDATION
 
The condensed consolidated financial statements include the accounts of Allied Research Corporation (“Allied Research” or the “Company”), a Delaware corporation, and its wholly-owned subsidiaries, ARC Europe, S.A. (“ARC Europe”), a Belgian company, News/Sports Microwave Rental, Inc. (“Microwave”), a California corporation, Titan Dynamics Systems, Inc. (“Titan Dynamics Systems”), a Texas corporation and Allied Research Corporation Limited (“Limited”), a United Kingdom company (which is inactive).
 
ARC Europe includes its wholly-owned subsidiaries Mecar S.A. (“MECAR”), Sedachim, S.I. and the VSK Group. The VSK Group is comprised of VSK Electronics N.V. and its wholly-owned subsidiaries, Tele Technique Generale, S.A., I.D.C.S., N.V., Belgian Automation Units, N.V. and Vigitec S.A.
 
The Company operates in three (3) principal segments. MECAR engages principally in the development and production of medium caliber tank ammunition and mortars (Ordnance & Manufacturing Segment, formerly the Product Sales Segment). The VSK Group and Microwave engage in the design, manufacture, distribution and service of industrial and law enforcement security products and systems (Electronic Security Segment, formerly the Security Systems & Services Segment). Titan Dynamic Systems engages in the design, manufacture and sale of battlefield effects simulators (Software, Training & Simulation Segment).
 
Significant intercompany transactions have been eliminated in consolidation.
 
NOTE 3—DERIVATIVE FINANCIAL INSTRUMENTS
 
In the second quarter of 2001, the Company adopted Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. SFAS 133 requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. The accounting for the changes in the fair value of the derivative depends on the intended use of the derivative and the resulting designation.

5

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ALLIED RESEARCH CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Thousands of Dollars)
Unaudited
 

 
NOTE 3—DERIVATIVE FINANCIAL INSTRUMENTS—Continued
 
The Company designates its derivatives based upon the criteria established by SFAS 133. For a derivative designated as a fair value hedge, the gain or loss is recognized in earnings in the period of change together with the offsetting loss or gain on the risk being hedged. For a derivative designated as a cash flow hedge, the effective portion of the derivative’s gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and is subsequently reclassified to earnings when the hedge exposure effects earnings. The ineffective portion of the hedge is reported in earnings immediately.
 
The Company uses derivatives to manage exposures to foreign currency exchange rate risks. The objective is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates.
 
The Company uses foreign currency future contracts to minimize the foreign currency exposures that arise from sales contracts with certain foreign customers and certain costs associated with these contracts. Under the terms of these sales contracts, the selling price and certain costs are payable in U.S. dollars rather than the Euro, which is MECAR’s functional currency. These futures contracts are designated as fair value hedges since they are designed to lock in the net Euros that will be realized when the amounts due under the sales agreement are received. As a matter of policy, the Company does not enter into speculative hedge contracts or use other derivative financial instruments.
 
As of June 30, 2002, futures contracts designated as fair value hedges with a $101 million notional amount were outstanding and the fair value of these contracts was $13,652.
 
The Company estimates the fair value of outstanding hedge contracts based on quotes obtained from the counterparties to the derivative contracts. The Company recognizes the fair value of hedge contracts that expire in less than one year as current assets or liabilities. Those that expire in more than one year are recognized as long-term assets or liabilities.
 
The adoption of SFAS 133 did not have a material impact on the Company’s operating results. Gains and losses from settlements of derivative contracts are reported as a component of other income. Net changes in the fair value of derivative contracts before settlement are also reported as a component of other income. There were no net gains or losses realized during the six months ended June 30, 2002 from hedge ineffectiveness, from firm commitments that no longer qualify as fair value hedges, nor were any amounts excluded from the assessment of hedge effectiveness.
 
The Company’s foreign exchange forward and option contracts expose the Company to credit risks to the extent that the counterparties may be unable to meet the terms of the agreement. The company minimizes such risk by using major financial institutions as its counterparties. Management does not expect any material loss as result of default by counterparties.

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ALLIED RESEARCH CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Thousands of Dollars)
Unaudited
 

 
NOTE 4—ACQUISITIONS
 
On June 6, 2002, the Company acquired all the common stock of Titan Dynamics Systems in a transaction accounted for as a purchase. This acquisition was undertaken to provide Allied Research with a strong position in a high-growth segment of the North America Simulation(s) and Training market.
 
The assets acquired in the acquisition of Titan Dynamics Systems are summarized below:
 
Current assets
   
$
92
Property and equipment
   
 
64
Intangibles
   
 
894
Goodwill
   
 
1,074
    
Assets acquired
   
$
2,124
    
 
The purchase price included cash and costs of approximately $386, assumption of $218 of liabilities, and shares of Allied Research Corporation common stock valued at $1,520, based on the market price of the shares. The results of Titan’s operations have been consolidated since its acquisition on June 6, 2002.
 
Goodwill arising from this transaction is related to the Software, Training & Simulation Segment and is not deductible for tax purposes. The purchase price is subject to adjustment in the event certain contractual provisions are breached.
 
NOTE 5—RESTRICTED CASH
 
MECAR is generally required under the terms of its contracts with foreign governments to provide performance bonds, advance payment guarantees and letters of credit. The credit facility agreements used to provide these financial guarantees place restrictions on cash deposits and other liens on MECAR’s assets. VSK has also pledged certain term deposits to secure outstanding bank guarantees.
 
Restricted cash of $7,609 and $6,212 included in current assets at June 30, 2002 and December 31, 2001, respectively, was restricted or pledged as collateral for these agreements and other obligations.
 
NOTE 6—CREDIT FACILITY
 
MECAR is obligated under a new agreement (the Agreement), executed March 2002, with its foreign banking syndicate that provides credit facilities primarily for letters of credit, bank guarantees, performance bonds and similar instruments required for specific sales contracts as well as a line-of-credit for tax prepayments and working capital. The Agreement provides for certain bank charges and fees as the facility is used, plus fees of 2% of guarantees issued and quarterly fees at an annual rate of 1.25% of letters of credit and guarantees outstanding. These fees are charged to interest expense. As of June 30, 2002 and December 31, 2001, guarantees and performance bonds of approximately $17,227 and $18,000, respectively, were outstanding.

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ALLIED RESEARCH CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Thousands of Dollars)
Unaudited
 

 
NOTE 6—CREDIT FACILITY—Continued
 
Advances under the Agreement are secured by restricted cash at June 30, 2002 and December 31, 2001 of $7,609 and $6,212, respectively. Amounts outstanding are also collateralized by the letters of credit received under the contracts financed, and a pledge of approximately $34 million of MECAR’s net assets. The Agreement requires that MECAR maintain net worth and working capital covenants.
 
NOTE 7—CONVERTIBLE DEBENTURE
 
On June 28, 2002 the Company sold to an accredited investor for $7,500 (i) an 8% subordinated debenture that is convertible into shares of the Company’s common stock at $25.00 per share and (ii) warrants to purchase 15,000 shares of the Company’s common stock at an exercise price of $28.75 per share.
 
The debenture bears interest at the rate of 8% per year, payable semi-annually commencing January 1, 2003. The Company may elect to pay the interest in cash or in registered shares of its common stock. The debenture matures in ten (10) equal monthly principal installments of $750 commencing June 28, 2003. The holder of the debenture may choose to convert all or a portion of the principal amount outstanding into shares of the Company’s common stock at any time before maturity.
 
Warrants issued are exercisable for a total of 15,000 shares of the Company’s common stock at an exercise price of $28.75 payable in cash.
 
The Company agreed to file a registration statement no later than March 1, 2003 covering the resale of shares of common stock issuable upon conversion of the debenture and exercise of the warrants.
 
NOTE 8—LONG-TERM FINANCING
 
MECAR is obligated on a mortgage with a balance of approximately $1,001 on its manufacturing and administration facilities. The loan is payable in annual principal installments of approximately $500 and matures in 2004. The VSK Group is also obligated on several mortgages on its buildings, which have a balance of approximately $311 at June 30, 2002. These mortgages are payable in annual installments of approximately $43 plus interest.
 
The Company and its subsidiaries are also obligated on various vehicle, equipment, capital lease obligation and other loans. The notes and leases are generally secured by the assets acquired, bear interest at rate ranging from 3.5% to 8.0% and mature at various dates through 2007.

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ALLIED RESEARCH CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Thousands of Dollars)
Unaudited
 

 
Scheduled annual maturities of long-term obligations as of June 30, 2002 are approximately as follows:
 
Year
   
Amount
2003
   
1,367
2004
   
2,127
2005
   
483
2006
   
356
2007
   
114
 
NOTE 9—INCOME TAXES
 
As of December 31, 2001, the Company had unused foreign tax credit carryforwards of approximately $374 which expire through 2004 and domestic net operating loss carryforwards of approximately $2,400 which expire in 2020.
 
Deferred tax liabilities have not been recognized for basis differences related to investments in the Company’s Belgian and United Kingdom subsidiaries. These differences, which consist primarily of unremitted earnings intended to be indefinitely reinvested in the subsidiaries, aggregated approximately $52,561 at June 30, 2002. Determination of the amount of unrecognized deferred tax liabilities is not practical.
 
NOTE 10—EARNINGS PER SHARE
 
The computation of diluted earnings per share includes the effects of stock options, warrants and convertible debenture, if such effect is dilutive.
 
NOTE 11—RECENT ACCOUNTING PRONOUNCEMENTS
 
On July 20, 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) 141, Business Combinations, and SFAS 142, Goodwill and Intangible Assets. SFAS 141 is effective for all business combinations completed after June 30, 2001. SFAS 142 is effective for fiscal years beginning after December 15, 2001; however, certain provisions of this Statement apply to goodwill and other intangible assets acquired between July 1, 2001 and the effective date of SFAS 142. The provisions of SFAS 141 and 142 have been implemented by the Company. Accordingly, effective January 1, 2002, all previously recognized goodwill and intangible assets with indefinite lives are no longer being amortized. These assets will be tested for impairment annually and whenever there is an impairment indicator. Intangibles with definite lives are being amortized to operations over their estimated useful lives. The impact was not material to the Company’s operations.
 
In July 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This Statement applies to all entities. It applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and (or) the normal operation of a long-lived asset, except for certain obligations of lessees. This Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. There are no known retirement obligations related to financial assets or operations at this time.

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ALLIED RESEARCH CORPORATION
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002
(Thousands of Dollars)
Unaudited
 

 
NOTE 11—RECENT ACCOUNTING PRONOUNCEMENTS—Continued
 
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The provisions of the statement are effective for financial statements issued for fiscal years beginning after December 15, 2001. There are no known impairment issues related to financial assets or operations at this time.
 
In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements 4, 44, and 64, Amendment of FASB Statement 13, and Technical Corrections. SFAS 145 is effective May 15, 2002, except the rescission of SFAS 4 which is effective in fiscal years beginning after May 15, 2002. SFAS 145 rescinds SFAS 4, Reporting Gains and Losses from Extinguishment of Debt, and SFAS 64, Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements. Accordingly, a gain or loss from a debt extinguishment should not be classified as an extraordinary item unless it meets the criteria for extraordinary item classification in APB Opinion 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual, and Infrequently Occurring Events and Transactions. SFAS 145 also rescinds SFAS 44, Accounting for Intangible Assets of Motor Carriers, because transition to the Motor Carrier Act of 1980 is complete and intrastate operating rights have been deregulated. SFAS 145 amends SFAS 13, Accounting for Leases, to require a capital lease that is modified so that the new agreement is classified as an operating lease be accounted for under the sale-leaseback provisions of SFAS 98, Accounting for Leases: Sale-Leaseback Transactions Involving Real Estate; Sales-Type Leases of Real Estate; Definition of the Lease Term; Initial Direct Costs of Direct Financing Leases, if the lease involves real estate. If the lease does not involve real estate, SFAS 28, Accounting for Sales with Leasebacks, is applicable. The technical corrections amend SFAS 13, Accounting for Leases, SFAS 95, Statement of Cash Flows, and SFAS 102, Statement of Cash Flows—Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale, SFAS 141, Business Combinations, SFAS 142, Goodwill and Other Intangible Assets, among others. The adoption of the SFAS 145 did not impact the Company.
 
NOTE 12—SUBSEQUENT EVENT
 
On July 31, 2002, the Company acquired SeaSpace Corporation (“SeaSpace”), of Poway, California, in a cash and stock transaction. SeaSpace is a leading supplier of environmental satellite ground reception systems.

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ALLIED RESEARCH COMPANY
 
MANAGEMENT’S, DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
June 30, 2002
 

The following is intended to update the information contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 and its Quarterly Report on Form 10-Q for the period ended March 31, 2002 and presumes that readers have access to, and will have read, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in such Forms 10-K and 10-Q.
 
The Company conducts its business through its wholly-owned subsidiaries: Mecar S.A. (“MECAR”), a Belgian corporation; a group of Belgian corporations led by VSK Electronics, N.V., Tele Technique General, S.A., Vigitec S.A. and IDCS, S.A. (collectively, the “VSK Group”); and News/Sports Microwave Rental, Inc. (Microwave), a California corporation. The Company operates in three (3) principal segments—MECAR’s development and production of ammunition and weapon systems (Ordnance & Manufacturing); the manufacture, distribution and service of industrial security products conducted by the VSK Group and Microwave (Electronic Security), and Titan Dynamic Systems’ development and sale of Battlefield Effects Simulators (Software, Training & Simulation). This discussion refers to the financial condition and results of operations of the Company on a consolidated basis. All dollars are in thousands except per share amounts.
 
Forward-Looking Statements
 
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that are based on current expectations, estimates and projections about the Company and the industries in which it operates. In addition, other written or oral statements which constitute forward-looking statements may be made by or on behalf of the Company. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”) which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
 
Future Factors include substantial reliance on MECAR’s principal customers to continue to acquire MECAR’s products on a regular basis; the cyclical nature of the Company’s military business; rapid technological developments and changes and the Company’s ability to continue to introduce competitive new products and services on a timely, cost effective basis; the ability of the Company to successfully continue to expand its business base; the mix of products/services; domestic and foreign governmental fiscal affairs and public policy changes which may affect the level of purchases made by customers; changes in environmental and other domestic and foreign governmental regulations; continued availability of financing, financial instruments and financial resources in the amounts, at the times and on the terms required to support the Company’s future business. These are representative of the Future Factors that could affect the outcome of the forward-looking statements. In addition, such statements could be affected by general industry and market conditions and growth rates; general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; increasing competition by foreign and domestic competitors, including new entrants; and other Future Factors.

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ALLIED RESEARCH COMPANY
 
MANAGEMENT’S, DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
June 30, 2002
 

Critical Accounting Policies
 
Our significant accounting policies are described in Note A to the consolidated financial statements included in Item 8 of the Form 10-K for the year ended December 31, 2001. We believe our most critical accounting policies include revenue recognition and cost estimation on fixed price contracts for which we use the percentage of completion method of accounting. This method is used by MECAR for substantially all of its sales contracts. Approximately 80%, 81% and 65% of consolidated revenue was recognized under the percentage of completion method during the years ended December 31, 2001, 2000 and 1999, respectively. The value of contracts in process at June 30, 2002 and 2001 were $16,994 and $11,615 and the profits recognized on these contracts through June 30, 2002 and 2001 were approximately $4,986 and $2,684, respectively.
 
Under the percentage of completion method revenue is recognized on these contracts as work progresses during the period, based on the amount of actual cost incurred during the period compared to total estimated cost to be incurred for the total contract. Management reviews these estimates on a regular basis and the effect of any change in cost estimates are reflected in cost of sales in the period in which the change is identified. If the contract is projected to create a loss, the entire estimated loss is charged to operations in the period such loss first becomes known. A number of internal and external factors affect our cost of sales estimates, including labor rates and efficiency variances, material usage variances, delivery schedules and testing requirements. Additionally, as inventory items increase in age, obsolete and excess items are charged to cost of sales when such determination is made. While we believe that the systems and procedures used by MECAR, coupled with the experience of its management team, provide a sound basis for our estimates, actual results will differ from management’s estimates. The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent with the application of the percentage of completion method affect the amounts reported in our financial statements.
 
Revenue
 
Allied Research had revenue of $44,324 in the first six months of 2002, which was 3% higher than its revenue in the first six months of 2001 of $42,847.
 
    
Revenue by Segment
  
    
1st Six Months 2002
     
1st Six Months 2001
  
    
Amount
     
Percentage
of total
     
Amount
     
Percentage
of total
  
Ordnance & Manufacturing
   
$
30,229
     
68
%
   
$
32,885
     
77
%
Electronic Security
   
 
14,094
     
32
%
   
 
9,962
     
23
%
Software, Training & Simulation
   
 
1
     
—  
 
                
 
Allied Research had revenue of $27,396 in the second three months of 2002, which was 6% higher than its revenue in the second three months of 2001 of $25,837.
    
Revenue by Segment
  
    
2nd Three Months 2002
     
2nd Three Months 2001
  
    
Amount
     
Percentage
of total
     
Amount
     
Percentage of total
  
Ordnance & Manufacturing
   
$
19,396
     
71
%
   
$
21,084
     
82
%
Electronic Security
   
 
7,999
     
29
%
   
 
4,753
     
18
%
Software, Training & Simulation
   
 
1
     
—  
 
                

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ALLIED RESEARCH COMPANY
 
MANAGEMENT’S, DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
June 30, 2002
 

 
Revenue—Continued
 
Ordnance & Manufacturing Segment revenue in the first six months of 2002 decreased from the amount recognized in the comparable period of 2001 due to lower production during the period. Results for the first six months of 2002 would have been higher but for an unusual raw material defect that delayed some production of one item. Production and revenue recognition of the affected order is anticipated to shift to the third and fourth quarters of this year.
 
Electronic Security Segment revenue in the first six months of 2002 increased from the amount recognized in the comparable period of 2001 due primarily to higher export sales, the addition of Microwave, and the Euro currency’s improved parity with the US dollar.
 
Software, Training & Simulation Segment revenue were nominal and reflect the operations of Titan since June 6, 2002.
 
Revenue for the second three months of 2002 increased by 6% over the revenue for the comparable 2001 period. This increase was primarily attributable to the addition of Microwave and the Euro currency’s improved parity with the US dollar.
 
Backlog
 
As of June 30, 2002, the Company’s backlog was $210,540 compared to $56,000 at December 31, 2001 and $53,400 at June 30, 2001. The June 30, 2002 backlog consists of approximately $199,900, $10,180, and $460 for Ordnance & Manufacturing, Electronic Security, and Software Training & Simulation Segments, respectively.
 
Operating Costs
 
Cost of sales as a percentage of sales for the first six months and second three months of 2002 was approximately 69% compared with 71% for the same periods in 2001. The 2001 cost of sales related to higher costs incurred by MECAR on various contracts.
 
Selling and Administrative Expenses
 
Selling and administrative expenses as a percentage of sales for the first six months of 2002 was approximately 16% compared with 13% for the same period in 2001.
 
Selling and administrative expenses as a percentage of sales for the second three months of 2002 was approximately 16% compared with 11% for the same period in 2001.
 
The 2002 increase in selling and administrative expenses resulted principally from costs incurred in connection with the Company’s acquisition and financing activities.
 
Research and Development
 
Research and development costs increased in the first six months of 2002 by approximately 14% over 2001 levels. Research and development costs incurred in the second three months of 2002 increased slightly over comparable 2001 levels. The increase is primarily attributed to increased business activity at MECAR and the VSK Group.

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ALLIED RESEARCH COMPANY
 
MANAGEMENT’S, DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
June 30, 2002
 

 
Interest Income
 
Interest income increased in each of the first six months of 2002 and in the second three months of 2002 from 2001 levels principally due to increased amounts of cash invested.
 
Interest Expense
 
Interest expense decreased in the first six months of 2002 from 2001 levels, principally as a result of decreased borrowings at MECAR in 2002 and greater bank charges in 2001.
 
Interest expense in the second three months of 2002 was comparable to the amount incurred in the second quarter of 2001.
 
Other—Net
 
Other-net primarily represents currency gains/currency losses, resulting from foreign currency transactions at MECAR and the VSK Group for the periods ending June 30, 2002 and 2001.
 
Pre-Tax Profit
 
    
Pre-Tax Profit by Segment
  
    
1st Six Months
     
2nd Three Months
  
    
2002
     
2001
     
2002
     
2001
  
Ordnance & Manufacturing
   
4,390
 
   
$
4,600
 
   
$
2,932
 
   
$
3,250
 
Electronic Security
   
1,592
 
   
 
1,600
 
   
 
1,000
 
   
 
769
 
Software, Training & Simulation
   
(17
)
   
 
—  
 
   
 
(17
)
   
 
—  
 
Corporate and other
   
(191
)
   
 
(532
)
   
 
(231
)
   
 
(365
)
 
Ordnance & Manufacturing Segment pre-tax profit for the first six months and second three months of 2002 decreased from the comparable 2001 periods principally due to product mix at MECAR and to a delay in production due to an unusual raw material defect.
 
Electronic Security Segment pre-tax profit for the first six months of 2002 was comparable with the same 2001 period. Microwave contributed $131 of the 2002 pre-tax profit and the balance was contributed by VSK Group. Pre-tax profit for the second three months of 2002 increased from the amount recognized in the comparable period of 2001 due to higher export sales.
 
Income Taxes
 
The effective income tax expense in the first six months of 2002 was 42% compared to 44% in the same period of 2001. The decrease is related to the amount of permanent tax differences.
 
Net Earnings
 
The Company earned a $3,324 net profit in the first six months of 2002 compared with $3,165 net profit in the first half of 2001. During the second three months of 2002, the Company earned a $2,151 net profit compared to 2001’s second three months net profit of $2,022.

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Table of Contents

ALLIED RESEARCH COMPANY
 
MANAGEMENT’S, DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
June 30, 2002
 

 
Liquidity
 
Working capital, which includes restricted cash, was approximately $57,310 at June 30, 2002, which is $16,115 greater than the December 31, 2001 level. The increase in working capital is primarily attributable to the sale of the $7,500 convertible subordinated debenture and the Company’s profitable operations in the first six months of 2002. The Company’s current working capital is required for operations, to support credit facility agreements, to fulfill contractual obligations related to orders, and to continue to implement the Company’s growth plans. On July 31, 2002, the Company acquired SeaSpace.
 
During the first six months of 2002, the Company funded its operations principally with internally generated cash and a bank syndicate facility provided to MECAR. The bank syndicate agreement was amended in March 2002 and now provides MECAR (i) lines of credit aggregating $12,500 for tax prepayments and working capital and (ii) a $36,500 facility for bank guarantees/bonds needed to support certain customer contracts.
 
On June 28, 2002, the Company sold to an accredited investor $7,500 of an 8% subordinated debenture convertible into shares of the Company’s common stock at $25.00 per share. The investor also acquired warrants to purchase 15,000 shares of the Company’s common stock at an exercise price of $28.75 per share.
 
As of June 30, 2002, the Company had unrestricted cash (i.e., cash not required by the terms of the bank syndicate agreement to collateralize contracts) of approximately $20,505 compared with approximately $10,992 at December 31, 2001. Restricted cash increased by $1,397 during the first six months of 2002.
 
Stockholders’ equity as of June 30, 2002 was positively affected by the improvement of the value of the Euro verses the U.S. dollar during the first six months of 2002, resulting in a $7,050 adjustment to “Accumulated other comprehensive loss.”
 
Final testing of the ammunition supplied by MECAR pursuant to the supplemental FMS contract described in the Company’s Form 10-Q for the period ending March 31, 2002 has been delayed. It is now scheduled to be completed by the end of the third quarter of 2002. The Company continues to believe that its cost provision maintained by MECAR is sufficient to cover future costs for this contract.
 
Customer deposits increased by $6,179 in the first six months of 2002 in connection with new orders at MECAR.
 
The Company continues to explore alternate methods of securing the necessary financial capacity to implement its growth plans. Allied Research’s plans for future growth continues to be in and related to Ordnance & Manufacturing, Electronic Security, and Software, Training & Simulation.
 
The Company’s ability to cover its anticipated future operating and capital requirements is dependent upon its ability to generate positive cash flow from the operations of its subsidiaries, particularly the operations of MECAR and the VSK Group, and its ability to successfully integrate Microwave, Titan, SeaSpace and any future acquisitions.

15

Table of Contents
 
ALLIED RESEARCH CORPORATION
 
QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURE
June 30, 2002
 
There have been no material changes in the Company’s interest rate sensitivity and exchange rate sensitivity as reported in the Company’s Form 10-K for the period ended December 31, 2001.
 
 

16

Table of Contents

ALLIED RESEARCH COMPANY
 
June 30, 2002
 

 
PART II.    OTHER INFORMATION
 
Changes in Securities and Use of Proceeds
 
At the end of June 2002, the Company sold a convertible subordinated debenture and a common stock warrant to Riverview Group, LLC, an accredited institutional investor, for $7.5 million in a private placement exempt from the registration provisions of the Securities Act of 1933 pursuant to the provisions of Section 4(2) thereof and the rules and regulations thereunder. After payment of financial advisor/finder fees and other expense of the transaction, the net proceeds of the offering are expected to be $7.3 million. In connection with sale, the Company has agreed to register the shares issuable pursuant to conversion of the debenture and exercise of the warrant.
 
The debenture bears interest at the rate of 8% per year, payable semi-annually commencing January 1, 2003. The Company can elect to pay interest in cash or in registered shares of common stock. The debenture matures in ten (10) equal monthly principal installments of $750,000 commencing June 28, 2003.
 
The holder of the debenture can choose to convert all or a portion of the principal amount outstanding into shares of common stock at any time before maturity. The debenture is convertible into common stock at a fixed conversion price of $25 per share.
 
In the event that the Company sells any shares of common stock (or certain securities convertible into or exercisable for shares of common stock) at a price less than $25 per share, the fixed conversion price of the debenture generally shall be reduced based on a weighted average adjustment (subject to certain exceptions). The debenture also contains customary antidilution provisions for stock dividends, stock splits or combinations and reclassifications.
 
A debenture holder may not convert its debenture or exercise the warrant to the extent that, at the time of the conversion or exercise, the sum of (i) the number of shares of common stock beneficially owned by the holder plus (ii) the number of shares to be issued upon conversion or exercise would exceed 9.999% of the number of shares of common stock then issued and outstanding.
 
If an event of default occurs under the debenture, the holder has the right to require the Company to pay a mandatory redemption amount equal to 110% of the outstanding principal on the debenture, plus accrued interest.
 
The warrant is exercisable for a total of 15,000 shares of common stock at an exercise price of $28.75 payable in cash. The warrant is exercisable until June 28, 2006. The number of shares issuable upon exercise and the exercise price are subject to adjustment in the event of stock dividends, stock splits, combinations or reclassifications, as well as sales of Company shares at less than $25 per share (subject to exceptions).
 
Further information regarding the debenture, the warrant and this transaction is contained in our Report on Form 8-K filed with the Securities and Exchange Commission on July 8, 2002.

17

Table of Contents

ALLIED RESEARCH COMPANY
 
June 30, 2002
 

 
Submission of Matters to a Vote of Security Holders
 
On June 6, 2002, the Company held its annual meeting of shareholders.
 
The Company’s shareholders re-elected J. H. Binford Peay, III, J.R. Sculley, Clifford C. Christ, Harry H. Warner and Ronald H. Griffith as members of the Board of Directors of the Company.
 
The following votes were cast in connection with the election of directors:
 
Nominee
  
In Favor
  
Withheld
J. H. Binford Peay, III
  
3,626,099
  
817,303
Clifford C. Christ
  
3,628,099
  
818,303
Ronald H. Griffith
  
3,627,673
  
818,729
J. R. Sculley
  
3,627,549
  
818,853
Harry H. Warner
  
3,626,573
  
819,829
 
The Company’s shareholders approved an amendment to the 2001 Equity Incentive Plan of the Company. The following votes were cast in connection with such approval:
 
For
  
Against
  
Abstain
3,377,706
  
1,051,786
  
16,910
 
The Company’s shareholders approved an amendment to the Company’s Certificate of Incorporation, as amended. The following votes were cast in connection with such approval:
 
For
  
Against
  
Abstain
3,170,349
  
1,261,452
  
14,601
 
The Company’s shareholders ratified the appointment of Grant Thornton LLP as the Company’s independent auditors for 2002. The following votes were cast in connection with such ratification:
 
For
  
Against
  
Abstain
4,418,498
  
15,764
  
12,140
 
Immediately following the June 6, 2002 annual meeting of shareholders, the Board of Directors voted to increase the number of directors to six (6) and elected Gilbert F. Decker as a member of the Board of Directors to fill the resulting vacancy.
 
Reports of Form 8-K
 
On June 12, 2002, the Company filed a Form 8-K reporting its acquisition of Titan Dynamics Systems, Inc.
 
On June 12, 2002, the Company filed a Form 8-K reporting the results of its annual stockholders’ meeting and Gilbert F. Decker’s election to the Company’s Board of Directors.

18

Table of Contents

ALLIED RESEARCH COMPANY
 
June 30,2002
 

 
Exhibit No.
   
Description of Exhibits
  3.1.
   
Certificate of Incorporation, as amended
  3.2.
   
By-Laws
10.1.
   
Employment Agreement between Allied Research Corporation and J. H. Binford Peay, III (Incorporated by reference from Form 8-K filed in March, 2001 and Form 8-K filed in August, 2001.)
10.2.
   
Employment Agreement between Allied Research Corporation and John G. Meyer, Jr. (Incorporated by reference from Form 8-K filed in March, 2001 and Form 8-K filed in August, 2001.)
10.3.
   
Employment Agreement between Allied Research Corporation and Bruce W. Waddell (Incorporated by reference from Form 8-K filed in March, 2001 and Form 8-K filed in August, 2001.)
10.4.
   
Employment Agreement between Allied Research Corporation and Charles A. Hasper (Incorporated by reference from Form 8-K filed in August, 2001.)
10.5.
   
2001 Equity Incentive Plan, as amended (Incorporated by reference from Proxy Statements filed in April 2001 and April 2002.)
10.6.
   
8% Convertible Debenture, Series A and related documents (Incorporated by reference from Form 8-K filed in July, 2002.)
10.7.
   
Credit Agreement for MECAR S.A.
10.8.
   
Award/Contract dated as of March 1, 2002, by and between MECAR S.A. and U.S. Government. (Portions have been omitted pursuant to a request for confidential treatment)
99.1
   
Certificate Pursuant to 18 U.S.C. Section 1350
 
 

19

Table of Contents
 
ALLIED RESEARCH CORPORATION
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
ALLIED RESEARCH CORPORATION
 
/S/ CHARLES A. HASPER
Charles A. Hasper,
Chief Financial Officer and
Treasurer
 
Date: August 14, 2002

20
EX-3.1 3 dex31.txt EXHIBIT 3.1 Exhibit 3.1 CERTIFICATE OF AMENDMENT ALLIED RESEARCH CORPORATION Allied Research Corporation, a corporation organized and existing under the Delaware General Corporation Law (the "Corporation"), by virtue of a Certificate of Incorporation filed with the Secretary of State of Delaware on July 20, 1961, which Certificate has been subsequently amended from time to time, does hereby certify that: FIRST: The charter of the Corporation is hereby amended by deleting the first paragraph in Article FOURTH in its entirety and by substituting in lieu thereof the following: The total number of shares of stock which the Corporation has authority to issue is thirty-one million (31,000,000) shares, thirty million (30,000,000) of which shall be Common Stock of the par value of ten cents ($0.10) per share, and one million (1,000,000) of which shall be Preferred Stock without par value. SECOND: The foregoing amendment of the Corporation's charter was duly adopted by the Corporation's board of directors and stockholders pursuant to the requirements of Section 242 of the Delaware General Corporation Law. IN WITNESS WHEREOF, ALLIED RESEARCH CORPORATION has caused these presents to be signed in its name and on its behalf by its President and its corporate seal to be hereunder affixed and attested by its Secretary on this 6/th/ day of June, 2002. ATTEST: ALLIED RESEARCH CORPORATION _____________________________ By: _____________________________________ John G. Meyer, Jr., Secretary J. H. Binford Peay, III Chairman of the Board, President and Chief Executive Officer CERTIFICATE OF AMENDMENT ALLIED RESEARCH ASSOCIATES, INC. Allied Research Associates, Inc., a corporation organized and existing under the Delaware General Corporation Law (the "Corporation"), by virtue of a Certificate of Incorporation filed with the Secretary of State of Delaware on July 20, 1961, which Certificate has been subsequently amended from time to time (most recently by a Restated Certificate of Incorporation filed with the Secretary of State of Delaware on June 29, 1984, and a Certificate of Amendment filed with the Secretary of State of Delaware on June 3, 1987), does hereby certify that: FIRST: The charter of the Corporation is hereby amended by deleting Article FIRST in its entirety and by substituting in lieu thereof the following: FIRST: The name of the Corporation is Allied Research Corporation. SECOND: The foregoing amendment to the Corporation's charter was duly adopted by the Corporation's board of directors and stockholders pursuant to the requirements of Section 242 of the Delaware General Corporation law. IN WITNESS WHEREOF, ALLIED RESEARCH ASSOCIATES, INC. has caused these presents to be signed in its name and on its behalf of its President and its corporate seal to be hereunder affixed and attested by its secretary on this 24/th/ day of May, 1988. ATTEST: ALLIED RESEARCH ASSOCIATES, INC. _________________________________(SEAL) By: _______________________________ Reinald W. Carter, M. B. Ruffin, President Secretary CERTIFICATE OF AMENDMENT ALLIED RESEARCH ASSOCIATES, INC. Allied Research Associates, Inc., a corporation organized and existing under the Delaware General Corporation Law (the "Corporation"), by virtue of a Certificate of Incorporation filed with the Secretary of State of Delaware on July 20, 1961, which Certificate has been subsequently amended from time to time (most recently by a Restated Certificate of Incorporation filed with the Secretary of State of Delaware on June 29, 1984), does hereby certify that: FIRST: The charter of the Corporation is hereby amended by adding the following as Article SIXTEENTH thereof: SIXTEENTH: A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law as the same exists or may hereafter be amended from time to time. Any repeal or modification of the foregoing by the stockholders of the Corporation shall not adversely affect any right or protection of a director existing at the time of such repeal or modification. SECOND: The foregoing amendment to the Corporation's charter was duly adopted by the Corporation's board of directors and stockholders pursuant to the requirements of Section 242 of the Delaware General Corporation Law. IN WITNESS WHEREOF, ALLIED RESEARCH ASSOCIATES, INC. has caused these presents to be signed in its name and on its behalf by its President and its corporate seal to be hereunder affixed and attested by its Secretary on this 28th day of May, 1987. ATTEST: ALLIED RESEARCH ASSOCIATES, INC. ______________________________(SEAL) By: _______________________________ Reinald W. Carter, M. B. Ruffin, President Secretary RESTATED CERTIFICATE OF INCORPORATION ALLIED RESEARCH ASSOCIATES, INC. ALLIED RESEARCH ASSOCIATES, INC., a corporation organized and existing under the Delaware General Corporation Law (the "Corporation"), by virtue of a Certificate of Incorporation filed with the Secretary of State of Delaware on July 20, 1961, which Certificate has been subsequently amended from time to time, does hereby certify that: FIRST: The Corporation desires to restate its charter as currently in effect. The following provisions are all of the provisions of the charter of the Corporation currently in effect: "FIRST: The name of the Corporation is ALLIED RESEARCH ASSOCIATES, INC. SECOND: Its principal office in the State of Delaware is located at 129 South State Street, in the City of Dover, County of Kent. The name and address of its resident agent is United States Corporation Company, 129 South State Street, Dover, Delaware. THIRD: The nature of the business, or objects or purposes to be transacted, promoted or carried on are: To engage in research, development, analysis, design, engineering, investigation and consultation in any and all scientific or technological fields, including but not limited to the fields of aeronautics, applied mathematics, applied mechanics, astronautics, chemistry, electronics, instrumentation, geophysics, materials, mechanical design, physics, production, propulsion, shock, vibration and systems. To manufacture, create, construct, assemble or otherwise produce, design, prepare, engineer, use, test, develop, experiment with, remodel, install, operate, purchase or otherwise acquire, invest in, own, mortgage, sell, lease, assign or otherwise dispose of, trade or deal in or with, instruments, controls, materials, equipment and property of every character in any and all scientific or technological fields, including but not limited to the fields of aeronautics, applied mathematics, applied mechanics, astronautics, chemistry, electronics, instrumentation, geophysics, materials, mechanical design, physics, production, propulsion, shock, vibration and systems. To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and deal with equipment, machinery, appliances, materials, goods, wares and merchandise and personal property of every class and description. To buy, exchange, contract for, lease, and in any and all other ways, acquire, take, hold and own, and to deal in, sell, mortgage, lease or otherwise dispose of real property, and rights and interests in and to real property, and to manage, operate, maintain, improve and develop the same. To acquire, and pay for in cash, stock, or bonds of the Corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation. To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trade marks and trade names, relating to or useful in connection with any business of this Corporation. To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in or with any of the shares of capital stock, or any voting trust certificates in respect of shares of capital stock, or any script, warrants, rights, bonds, debentures, notes, trust receipts, obligations, evidences of indebtedness or interest or other securities or choses in action, issued or created by any corporations, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all the rights, powers, and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof. To enter into, make and perform contracts of every kind and description with any person, firm, association, corporation, municipality, county, state, body politic or government or colony or dependency thereof. To borrow or raise moneys for any of the purposes of the Corporation and, from time to time, without limit as to amount, to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the Corporation, whether at the time owned or thereafter acquired, or by assignment of the proceeds, applicable to the Corporation's interest, in any, and all oil, gas and other hydrocarbons or minerals produced from any properties in which the Corporation may own any interest or by assignment of any moneys owing or to be owing to the Corporation, or otherwise and to sell, pledge or otherwise dispose of such bonds or other obligations of the Corporation for its corporate purposes. To buy, sell or otherwise deal in notes, open accounts, and other similar evidences of debt; to loan and advance money or give credit, upon or without interest, and with or without security for the repayment thereof, and on such terms as may seem expedient; to form, promote and subsidize companies, syndicates and partnerships of all kinds; to give any guarantee for the payment of money or the performance of any obligation or undertaking, and to become surety for any person, firm or corporation. To purchase, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly. To have one or more offices, to carry on all or any of its operations and business and, without restriction or limit as to amount, to purchase or otherwise acquire, hold, own, mortgage, sell, convey or otherwise dispose of real and personal property of every class and description in any of the States, districts, territories or colonies of the United States, and in any and all foreign countries, subject to the laws of such State, district, territory, colony or country. In general, to carry on any other business in connection with the foregoing, and to have and exercise all the powers conferred by the laws of Delaware upon corporations formed under the act hereinafter referred to, and to do any or all of the things hereinafter referred to, and to do any or all of the things hereinbefore set forth to the same extent as natural persons might or could do; provided, however, that nothing herein contained shall be deemed to authorize this Corporation to carry on within the State of Delaware any public utility business. The objects and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or influence from, the terms of any other clause in this certificate of incorporation, but the objects and purposes specified in each of the foregoing clauses of this article shall be regarded as independent objects and purposes. FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is Eleven Million (11,000,000) shares of all classes of stock; of which Ten Million (10,000,000) shares shall be Common Stock and have a par value of ten cents ($0.10) per share and One Million (1,000,000) shares shall be Preferred Stock and be without par value. The Preferred Stock may from time to time be divided into and issued for one or more series. The different series shall be established and designated, and the variations in the relative rights and preferences as between the different series shall be fixed and determined, by the Board of Directors as herein provided. In all other respects all shares of Preferred Stock shall be identical. The Preferred Stock may be issued from time to time by authority of the Board of Directors for such consideration as from time to time may be fixed by resolution or resolutions of the Board of Directors providing for the issue of such stock. The Board of Directors is hereby expressly authorized, subject to the provisions of this Certificate of Incorporation, to establish one or more series of Preferred Stock and, with respect to each series, to fix and determine by resolution or resolutions providing for the issue of such stock. (a) the number of shares to constitute such series and the distinctive designation thereof; (b) the dividend rate, if any, on the shares of such series, the dividend payment dates, and whether or not the dividends are cumulative; (c) whether or not the shares of such series shall be redeemable and, if redeemable, the redemption prices which the shares of such series shall be entitled to receive and the terms and manner of redemption; (d) the preferences, if any, and the amounts which the shares of such series shall be entitled to receive and all other special or relative rights of the shares of such series, upon the voluntary and involuntary liquidation of, or upon any distribution of the assets of, the Corporation; (e) whether or not the shares of such series shall be subject to the operation of retirement or sinking funds to be applied for redemption of such shares and, if such retirement or sinking fund or funds be established, the annual amount thereof and the terms and provisions relative to the operation thereof; (f) whether or not the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same or any other class or classes of stock of the corporation and the conversion price or prices or ratio or ratios or the rate or rates at which such exchange may be made, with such adjustments, if any, as shall be stated in such resolution; (g) whether or not the shares of such series shall have voting rights, full or limited or no voting rights, and if any voting rights, the conditions under which the shares of such series shall vote as a separate class; and (h) such other designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions of such series to the full extent now or hereafter permitted by the laws of the State of Delaware. Notwithstanding the fixing of the number of shares constituting a particular series, the Board of Directors may at any time thereafter authorize the issuance of additional shares of the same series. No holder of any shares of any class of stock of the Corporation now or hereafter authorized shall have any preferential or pre-emptive right to subscribe for, purchase or receive stock, obligations, warrants, rights to subscribe to stock or other securities of the Corporation of any class whether now or hereafter authorized. FIFTH: The minimum amount of capital with which the Corporation will commence business is $1,000. SIXTH: The Corporation is to have perpetual existence. SEVENTH: The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever. EIGHTH: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized: To make, alter or repeal the by-laws of the Corporation. To authorize and cause to be executed mortgages and liens upon the real and personal property of the Corporation. To set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created. By resolution or resolutions passed by a majority of the whole Board to designate one or more committees, each committee to consist of two or more of the directors of the Corporation, which, to the extent provided in said resolution or resolutions or in the by-laws of the Corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation and may have power to authorize the seal of the Corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the by-laws of the Corporation or as may be determined from time to time by resolution adopted by the Board of Directors. When and as authorized by the affirming vote of the holders of a majority of the stock issued and outstanding having voting power given at a stockholders' meeting duly called for that purpose, or when authorized by the written consent of the holders of a majority of the voting stock issued and outstanding, to sell, lease or exchange all of the property and assets of the Corporation, including its good will and its corporate franchises, upon such terms and conditions and for such consideration, which may be in whole or in part shares of stock in, and/or other securities of, any other corporation or corporations, as its Board of Directors shall deem expedient and for the best interests of the Corporation. NINTH: Each director and each officer of the Corporation and each person who shall serve at the request of the Corporation as a director or officer of another corporation in which the Corporation owns shares of capital stock or of which it is a creditor, including, in each instance, a former director or officer and the heirs, legatees, devisees and personal representatives of a deceased director or officer, shall be indemnified by the Corporation against expenses (including attorneys' fees and, to the extent permitted by law, any amount paid in settlement) actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding (including any appeal therein) in which they or any of them are made parties or a party by reason of being or having been directors or officers or a director or officer of the Corporation or of any such other corporation, except in relation to matters as to which any such director or officer or former director or officer shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties as such director or officer. The foregoing right of indemnification shall not be deemed to be exclusive of any other rights to which those indemnified may be entitled as a matter of law or under any by-law, agreement, vote of stockholders, or otherwise, and shall be in addition to such compensation for services rendered and reimbursed for expenses incurred as shall be determined from time to time by the Board of Directors of the Corporation. TENTH: No contract or other transaction between the Corporation and any other corporation shall be affected or invalidated by the fact that any one or more of the directors of this Corporation is or are interested in or is or are a director or directors or officer or officers of such other corporation, and no contract or other transaction between the Corporation and any other person or firm shall be affected or invalidated by the fact that any one or more directors of this Corporation is a party to, or are parties to, or interested in, such contract or transaction; provided that in each such case the nature and extent of the interest of such director or directors in such contract or other transaction and/or the fact that such director or directors is or are a director or directors or officer or officers of such other corporation is disclosed at the meeting of the Board of Directors at which such contract or other transaction is authorized. ELEVENTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditors or stockholders thereof, or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver appointed for this Corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all creditors or class of creditors, and/or on all stockholders or class of stockholders, of this Corporation as the case may be, and also on this Corporation. TWELFTH: Except as otherwise provided herein or by law, each stockholder shall be entitled to one vote for each share of the capital stock of the Corporation having voting power held by such stockholder. THIRTEENTH: Meetings of stockholders and the Board of Directors may be held without the State of Delaware, if the by-laws so provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be from time to time designated by the Board of Directors or in the by-laws of the corporation. FOURTEENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. FIFTEENTH: A. As used in this Article FIFTEENTH: (1) "Affiliate" means a Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. (2) "Associate" when used to indicate a relationship with any Person, means (i) any corporation or organization (other than the Corporation or a majority-owned subsidiary of the Corporation) of which such Person is an officer, director or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities; (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a director or officer of the Corporation or any of its parents or subsidiaries. (3) "Beneficial Owner" shall mean: (i) Any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares (a) voting power which includes the power to vote, or to direct the voting of, such security and/or (b) investment power which includes the power to dispose, or to direct the disposition, of such security; (ii) Any Person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement, or device with the purpose or effect of divesting such Person of beneficial ownership of a security or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the reporting requirements of the Federal securities acts shall be deemed to be the Beneficial Owner of such security; and (iii) A Person is also deemed to be the Beneficial Owner of a security if that Person has the right to acquire beneficial ownership of such security within sixty days, including but not limited to any right to acquire (a) through the exercise of any option, warrant or right; .(b) through a conversion of a security; (c) pursuant to the power to revoke a trust, discretionary account, or similar arrangement; or (d) pursuant to the automatic termination of a trust, discretionary account or similar arrangement; provided, however, any Person who acquires a security or power specified in paragraphs (a), (b) or (c) of this subparagraph, with the purpose or effect of changing or influencing the control of the Corporation, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the Beneficial Owner of the security which may be acquired through the exercise or conversion of such security or power. (4) "Business Combination" shall include: (i) Any merger or consolidation of the Corporation with or into any Dominant Stockholder; (ii) The sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Dominant Stockholder of any assets of the Corporation or any subsidiary thereof which assets have an aggregate fair market value of 10% or more of the Corporation's net worth as of the end of its most recently ended fiscal quarter as determined by its independent auditors; (iii) The issuance or transfer by the Corporation or any subsidiary thereof (in one transaction or a series of transactions) of any securities of the Corporation or any subsidiary thereof to any Dominant Stockholder which securities have immediately prior to such transaction an aggregate fair market value of 5% or more of the total fair market value of the Corporation's outstanding capital stock; (iv) The adoption of any plan or proposal for the liquidation or dissolution of the Corporation either voted for, proposed by or on behalf of, or by which any consideration other than cash will be received by, any Dominant Stockholder; (v) Any reclassification or recapitalization of securities of the Corporation if the effect, directly or indirectly, of such transaction is to increase the relative voting power of any Dominant Stockholder; or (vi) Any proposed transaction which fails to qualify as a Business Combination under the preceding clauses (i) thru (v) solely because the proposed transaction does not involve any Person who is a Dominant Stockholder, if any Person so involved was a Dominant Stockholder either (a) at the time the definitive agreement or other arrangements relating to such proposed transaction were entered into or (b) at the record date for the determination of stockholders entitled to notice of and to vote on such proposed transaction. (5) "Dominant Stockholder" shall mean (i) any Person who, individually or together with any Affiliate or Associate of such Person, is the Beneficial Owner, directly or indirectly, of shares of stock of the Corporation representing ten percent (10%) or more of all votes entitled to be cast in elections of directors (considered for the purposes hereof as one class) and (ii) any Affiliate or Associate of any Person classified as a Dominant Stockholder by the preceding clause 5(i); but excluding any Person who, on the effective date this Article FIFTEENTH becomes a part of this Certificate of Incorporation, as amended, would be a Dominant Stockholder under the preceding definition. (6) "Non-Affiliated Shares" means all shares of capital stock of the Corporation entitled to be cast in elections of directors, considered for purposes hereof as one class, which are not beneficially owned-by a Dominant Stockholder. (7) "Person" shall include any individual, corporation, partnership, person or other entity. (8) The terms "Affiliate", "Associate" and "Beneficial Owner" shall be interpreted and construed consistent with the definitions of those terms stated in the regulations adopted pursuant to the Securities Exchange Act of 1934, as amended, in effect on March 31, 1984. B. In addition to any voting and other requirements under applicable law, and notwithstanding anything contained in this Certificate of Incorporation, as amended, unless the conditions set forth in paragraph C are satisfied, the affirmative vote of either (i) not less than seventy-five percent (75%) of the outstanding shares of stock of the Corporation entitled to be cast in elections of directors or (ii) not less than sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of stock of the Corporation entitled to be cast in elections of directors and not less than a majority of the Non-Affiliated Shares, shall be required for the adoption or authorization of a Business Combination. For the purposes hereof, all voting stock shall be considered as being of one class. C. The affirmative vote requirements of paragraph B shall not be applicable if all of the following conditions are satisfied: (1) The cash and fair market value of the property, securities or other consideration (including, without limitation, capital stock of the Corporation retained by its existing public stockholders in the event of a Business Combination in which the Corporation is the surviving corporation) to be received per share by the holders of each class or series of stock of the Corporation in a Business Combination, is not less than the highest per share price (including any brokerage commissions, transfer taxes or soliciting dealers' fees) paid by such Dominant Stockholder in acquiring any shares of such class or series during the three year period immediately prior to the effective date of the Business Combination; (2) The consideration to be received by holders of each class or series of stock shall be in cash or in the same form as the Dominant Stockholder has previously paid for shares of such class or series of stock. If the Dominant Stockholder has paid for shares of any class or series of stock with varying forms of consideration, the form of consideration for such class or series of stock shall be either in cash or in the form used to acquire the largest number of shares of such class or series of stock previously acquired by the Dominant Stockholder; (3) After a Person has become a Dominant Stockholder and prior to the consummation of a Business Combination, there shall have been no reduction in the annual rate of dividends paid on shares of stock of the Corporation (except as necessary to reflect any subdivision of such shares); and (4) Prior to the consummation of the Business Combination, the Dominant Stockholder shall not have (i) received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or tax credits provided by the Corporation or (ii) made or caused to have been made any material change in the Corporation's business or equity capital structure. D. No amendment to this Certificate of Incorporation, as amended, shall amend, alter, change or repeal any of the provisions of this Article FIFTEENTH, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote of either (i) not less than seventy-five percent (75%) of the outstanding shares of stock of the Corporation entitled to be cast in elections of directors or (ii) not less than sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of stock of the Corporation entitled to be cast in elections of directors and not less than a majority of the Non-Affiliated Shares. For the purposes hereof, all voting stock shall be considered as being of one class." SECOND: This Restated Certificate of Incorporation (i) has been duly adopted by the board of directors of the Corporation in accordance with Section 245 of the Delaware General Corporation Law and (ii) only restates and integrates and does not further amend the provisions of the Corporation's charter and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation. IN WITNESS WHEREOF, ALLIED RESEARCH ASSOCIATES, INC. has caused these presents to be signed in its name and on its behalf by its President and its corporate seal to be hereunder affixed and attested by its Secretary on this 28th day of June, 1984. ATTEST: ALLIED RESEARCH ASSOCIATES, INC. __________________________________ _____________________________________ Linda C. Carter M. B. Ruffin, President Secretary STATE OF MARYLAND ) ss: CITY OF BALTIMORE ) I HEREBY CERTIFY that on this 28th day of June, 1984, personally came before me, a Notary Public for the State of Maryland, M.B. RUFFIN and LINDA C. CARTER, known to me personally to be the President and Secretary of Allied Research Associates, Inc., respectively, and severally acknowledged the said Restated Certificate to be the act and deed of Allied Research Associates, Inc. and that the facts therein stated are truly set forth. GIVEN under my hand and seal of office the day and year aforesaid. ___________________________________ Notary Public My Commission Expires: ____________________ EX-3.2 4 dex32.txt EXHIBIT 3.2 Exhibit 3.2 Amended and Restated as of July 27, 1999 RESTATED BY-LAWS OF ALLIED RESEARCH CORPORATION ARTICLE I Offices SECTION 1. Registered Office and Registered Agent. The registered office of Allied Research Corporation (the "Corporation") shall be located in the City of Dover, County of Kent, State of Delaware and the name and address of the resident agent of the Corporation shall be United States Corporation Company, 306 South State Street, Dover, Delaware 19901, unless otherwise provided by the Board of Directors of the Corporation (the "Board of Directors" or the "Board") . SECTION 2. Other Offices. The Corporation may also have offices at such other places, within or without the State of Delaware, as the Board of Directors may from time to time designate. ARTICLE II Seal The corporate seal shall be circular in form and shall contain the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." ARTICLE III Meetings of Stockholders SECTION 1. Place of Meeting. All meetings of the stockholders for the election of directors shall be held at such place, within or without the State of Delaware, as shall be designated by the Board of Directors and stated in the notice of the meeting. Meetings of the stockholders for any other purpose may be held at such place, within or without the State of Delaware, as shall be designated by the person calling such meeting and stated in the notice of the meeting. SECTION 2. Annual Meetings. The annual meeting of stockholders shall be held on a date and at a time set by the Board of Directors, at which meeting the stockholders shall elect directors by plurality vote and shall transact such other business as may properly be brought before the meeting. SECTION 3. Special Meetings. Special meetings of the stockholders for any purpose or purposes may be called by the President, or by the directors (either by written instrument signed by a majority or by resolution adopted by a vote of the majority), and special meetings shall be called by the President or the Secretary whenever stockholders owning a majority of the capital stock issued, outstanding and entitled to vote so request in writing. Such request shall state the purpose or purposes of the proposed meeting. SECTION 4. Notice. Written or printed notice of every meeting of stockholders, annual or special, stating the time and place thereof, and if a special meeting, the purpose or purposes in general terms for which the meeting is called, shall not less than ten (10) nor more than sixty (60) days before such meeting, be served upon or mailed to each stockholder entitled to vote thereat, at his address as it appears upon the stock records of the Corporation or, if such stockholder shall have filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address, then the address designated in such request. Notice of the time, place and/or purpose of any meeting of stockholders may be dispensed with if every stockholder entitled to vote thereat shall attend either in person or by proxy, or if every absent stockholder entitled to such notice shall in writing filed with the records of the meeting, either before or after the holding thereof, waive such notice. SECTION 5. Stock List. At least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, with the residence of each and the number of voting shares held by each, shall be prepared by the Secretary. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 2 SECTION 6. Quorum. Except as otherwise provided by law or by the Certificate of Incorporation, as amended, the presence in person or by proxy at any meeting of stockholders of the holders of a majority of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote thereat, shall be requisite and shall constitute a quorum. If, however, such majority shall not be represented at any meeting of the stockholders regularly called, the holders of a majority of the shares present or represented and entitled to vote thereat shall have power to adjourn the meeting to another time, or to another time and place, without notice other than announcement of adjournment at the meeting, and there may be successive adjournments for like cause and in like manner until the requisite amount of shares entitled to vote at such meeting shall be represented. At such adjourned meeting at which the requisite amount of shares entitled to vote thereat shall be represented, any business may be transacted which might have been transacted at the meeting as originally notified. SECTION 7. Votes, Proxies. Except as otherwise provided by the Certificate of Incorporation, as amended, or by law, each stockholder as of the date set by the Board of Directors for the determination of stockholders entitled to vote at such meeting, shall be entitled to one vote on each matter for each share of the capital stock having voting power held by such stockholder. At each such meeting every stockholder shall be entitled to vote in person, or by proxy appointed either (i) by an instrument in writing executed by such stockholder or (ii) by a telegram, or other means of electronic transmission setting forth or submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder and, in either case, bearing a date not more than three (3) years prior to the meeting in question, unless said instrument or transmission provides for a longer period during which it is to remain in force. All elections of directors shall be held by written ballot. If the presiding officer of the meeting shall so determine, a vote may be taken upon any other matter by ballot and shall be so taken upon the request of any stockholder entitled to vote on such matter. At elections of directors, the presiding officer of the meeting shall appoint an odd number of inspectors of election, who shall first take and sign an oath or affirmation faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of their ability and who shall take charge of the polls and, after the balloting, shall certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. No director or candidate for the office of director shall be appointed as such inspector. SECTION 8. Organization. The Chairman of the Board, if there be one, or in his absence the President, or in the absence of both the Chairman of the Board and the President, a Vice-President shall call meetings of the stockholders to order and shall act as chairman thereof. The Secretary of the 3 Corporation, if present, shall act as secretary of all meetings of stockholders and, in his absence, the presiding officer may appoint an acting secretary. SECTION 9. Record Date for Action by Written Consent. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date (unless a record date has previously been fixed by the Board of Directors pursuant to the first sentence of this Section 9). If no record date has been fixed by the Board of Directors pursuant to the first sentence of this Section 9 or otherwise within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business, or to any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. SECTION 10. Inspectors of Written Consent. In the event of the delivery, in the manner provided by Section 9, to the Corporation of the requisite written consent or consents to take corporate action and/or any related revocation or revocations, the Corporation shall engage independent inspectors of elections for the purpose of performing promptly a ministerial review of the validity of the consents and revocations. For the purpose of permitting the inspectors to perform such review, no action by written consent without a meeting shall be effective until such date as the independent inspectors certify to the Corporation that the consents delivered to the Corporation in accordance with Section 9 represent at least the minimum number of votes that would be necessary to take the corporate action. Nothing contained in this Section 10 shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after such certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution, or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation). 4 SECTION 11. Effectiveness of Written Consent. Every written consent shall bear the signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated written consent received in accordance with Section 9, a written consent or consents signed by a sufficient number of holders to take such action are delivered to the Corporation in the manner prescribed in Section 9. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall deliver the initial written consent received by it to the Corporation in the manner prescribed by Section 9 as soon as received by such stockholder. ARTICLE IV Directors SECTION 1. Qualification of Directors. (a) Directors need not be stockholders of the Corporation. (b) Nominations for election of directors may be made by any stockholder entitled to vote for the election of directors if written notice (the "Notice") of the stockholder's intent to nominate a director at the meeting is given by the stockholder and received by the Secretary of the Corporation in the manner and within the time specified in this Section 1. The Notice shall be delivered to the Secretary of the Corporation not less than fourteen (14) days nor more than fifty (50) days prior to any meeting of the stockholders called for the election of directors; except that if less than twenty-one (21) days' notice of the meeting is given to stockholders, the Notice shall be delivered to the Secretary of the Corporation not later than the earlier of the seventh day following the day on which notice of the meeting was first mailed to stockholders or the fourth day prior to the meeting. In lieu of delivery to the Secretary, the Notice may be mailed to the Secretary by certified mail, return receipt requested, but shall be deemed to have been given only upon actual receipt by the Secretary. The requirements of this Section shall not apply to a nomination for directors made to th stockholders by the Board of Directors. (c) The Notice shall be in writing and shall contain or be accompanied by: (1) the name and residence address of the nominating stockholder; (2) a representation that the stockholder is a holder of record of voting stock of the Corporation and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the Notice; (3) such information regarding each nominee as would have been required to be included in a proxy statement filed pursuant to Regulation 14A of the rules and regulations established by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (or pursuant to any successor act or regulation) had proxies been solicited with respect to such nominee by the management or Board of Directors of the Corporation; 5 (4) a description of all arrangements or understandings among the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (5) the consent of each nominee to serve as a director of the Corporation if so elected. SECTION 2. Number. The business and affairs of the Corporation shall be conducted and managed by a Board of Directors, none of whom need be a stockholder. The number of directors of the Corporation shall not be less than three (3) nor more than fifteen (15), the exact number of directors to be determined from time to time by resolution of the Board of Directors. Vacancies resulting from any increase in the number of directors shall be filled as provided in Section 4 of this Article IV. SECTION 3. Term of Office. Each director shall hold office until the next annual meeting of stockholders and until his successor is duly elected and qualified or until his earlier death or resignation, subject to the right of the stockholders at any time to remove any director as provided in Section 5 of this Article. SECTION 4. Vacancies. If any vacancy shall occur among the directors, or if the number of directors shall at any time be increased, the directors in office, although less than a quorum, may fill by a majority vote the vacancies or newly created directorships, or any such vacancies or newly created directorships may be filled by the stockholders at any meeting. SECTION 5. Removal by Stockholders. The stockholders of the Corporation entitled to vote for the election of directors may in their discretion, at any meeting duly called for the purpose, by a majority vote, remove any director or directors, with or without cause, and elect a new director or directors in place thereof. SECTION 6. Meetings. Meetings of the Board of Directors shall be held at such place, within or without the State of Delaware, as may from time to time be fixed by resolution of the Board of Directors or by the President, and as shall be specified in the notice or waiver of notice or any meeting. Meetings may be held at any time upon the call of the President or of the Secretary or any two (2) of the directors in office by telegraphic or written notice, duly delivered by hand or mailed to each director at his usual place of business not less than two (2) days before such meeting. Meetings may be held at any time and place without notice if all the directors are present or if those not present shall, in writing or by telegram, before or after the meeting, waive notice thereof. A 6 regular meeting of the Board may be held without notice immediately following the annual meeting of stockholders at the place where such annual meeting is held. Regular meetings of the Board may also be held without notice at such time and place as shall from time to time be determined by resolution of the Board. SECTION 7. Quorum. A majority, but not less than two (2) of the directors, shall constitute a quorum for the transaction of business. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time without notice other than announcement of the adjournment at the meeting, and at such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally notified. SECTION 8. Compensation. Directors, as such, shall be entitled to receive such stated compensation for their services as may be established from time to time by resolution of the Board of Directors, and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting thereof. Nothing in this Section shall be construed to preclude a director from serving the Corporation in any other capacity and receiving compensation therefor. ARTICLE V Executive Committee SECTION 1. Executive Committee. The Board of Directors may appoint an Executive Committee of two (2) or more members, to serve during the pleasure of the Board, to consist of such directors as the Board may from time to time designate. The Chairman of the Executive Committee shall be designated by the Board of Directors. SECTION 2. Procedure. The Executive Committee, by a vote of a majority of its members, shall fix its own times and places of meetings, shall determine the number of its members constituting a quorum for the transaction of business, and shall prescribe its own rules of procedure. SECTION 3. Powers. During the intervals between the meetings of the Board of Directors, the Executive Committee shall posses and may exercise all the powers of the Board in the management and direction of the business and affairs of the Corporation, subject to such restrictions as are imposed by the laws of the State of Delaware. 7 SECTION 4. Reports. The Executive Committee shall keep regular minutes of its proceedings and all action by the Executive Committee shall be reported promptly to the Board of Directors. Such action shall be subject to review by the Board, provided that no rights of third parties shall be affected by such review. SECTION 5. Compensation of Members of Executive Committee. The Board of Directors by resolution may fix the compensation of the Executive Committee for their services as such, but unless so fixed the members of the Executive Committee shall not be entitled to any compensation for their services as such. SECTION 6. Additional Committees. The Board of Directors may appoint such other committee or committees of two (2) or more members, to serve during the pleasure of the Board, to consist of such directors as the Board may from time to time designate, and to possess and exercise such powers and to perform such duties as the Board time designate. The Chairman of any such committee shall be designated by the Board of Directors. ARTICLE VI Officers SECTION 1. Officers. The Board of Directors shall elect, as executive officers, a President, a Secretary and a Treasurer, and in its discretion a Chairman of the Board, one (1) or more Vice-Presidents and one (1) or more Assistant Secretaries and Assistant Treasurers. Such officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders, and each shall hold office until the corresponding meeting of the Board in the next year and until his successor shall have been duly elected and qualified, or until he shall have died or resigned or shall have been removed, in the manner provided herein. Any two (2) offices (except those of the President and Secretary) may be held by the same person and the powers and duties of Secretary and Treasurer may be exercised and performed by the same person. The Board of Directors shall designate either the Chairman of the Board or the President as the Chief Executive Officer of the Corporation. In the event the Chairman of the Board is designated as the Chief Executive Officer of the Corporation, the President may be designated as the Chief Operating Officer of the Corporation, reporting directly to the Chairman of the Board/Chief Executive Officer. 8 SECTION 2. Vacancies. Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting. SECTION 3. Chief Executive Officer. The Chief Executive Officer shall be a member of the Board of Directors of the Corporation. Subject to the direction of the Board of Directors, the Chief Executive Officer shall have and exercise direct charge of and general supervision over the business and affairs of the Corporation and shall perform all duties incident to the office of a Chief Executive Officer of a corporation, and such other duties as from time to time may be assigned to him by the Board of Directors. SECTION 4. Chairman of the Board. The Chairman of the Board, if elected, shall be a member of the Board of Directors and shall preside at its meetings. He shall advise and counsel with the President, and in his absence, with other executives of the Corporation, and shall perform such other duties as may from time to time be assigned to him by the Board of Directors. SECTION 5. Vice-Presidents. Each Vice-President, if elected, shall have and exercise such powers and shall perform such duties as from time to time may be conferred upon or assigned to him the Board of Directors or as may be delegated to him by the President. SECTION 6. Secretary. The Secretary: (i) shall keep the minutes of all meetings of the stockholders and of the Board of Directors in books provided for the purpose; (ii) shall see that all notices are duly given in accordance with the provisions of law and these by-laws; (iii) shall be custodian of the records and of the corporate seal or seals of the Corporation; (iv) shall see that the corporate seal is affixed to all documents, the execution of which, on behalf of the Corporation, under its seal, is duly authorized and when the seal is so affixed may attest the same; (v) may sign, with the Chairman of the Board, the President or a Vice-President, certificates of stock of the Corporation; and, (vi) in general, shall perform all duties incident to the office of a secretary of a corporation, and such other duties as from time to time may be assigned by the Board of Directors. SECTION 7. Assistant Secretaries. The Assistant Secretaries in order of I their seniority shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall prescribe. 9 SECTION 8. Treasurer. The Treasurer: (i) shall have charge of and be responsible for all funds, securities, receipt and disbursements of the Corporation; (ii) shall deposit, or cause to be deposited, in the name of the Corporation, all monies or other valuable effects in such banks, trust companies or other depositaries as shall from time to time, be selected by the Board of Directors; (iii) may endorse for collection on behalf of the Corporation, checks, notes and other obligations; (iv) may sign receipts and vouchers for payments made to the Corporation; (v) singly or jointly with another person as the Board of Directors may authorize, may sign checks of the Corporation and pay out and dispose of the proceeds under the direction of the Board; (vi) shall render to the President and to the Board of Directors, whenever requested, an account of the financial condition of the Corporation; (vii) may sign, with the Chairman of the Board, the President or a Vice-President, certificates of stock of the Corporation; and, (viii) in general, shall perform all the duties incident to the office of a treasurer of a corporation, and such other duties as from time to time may be assigned to him by the Board of Directors. SECTION 9. Assistant Treasurers. The Assistant Treasurers in order of their seniority shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors shall prescribe. SECTION 10. Subordinate Officers. The Board of Directors may appoint subordinate officers as it may deem desirable. Each such officer shall hold office for such period, have such authority and perform such duties as the Board of Directors may prescribe. The Board of Directors may, from time to time, authorize any officer to appoint and remove subordinate officers and to prescribe the powers and duties thereof. SECTION 11. Compensation. The Board of Directors shall have power to fix the compensation of all officers of the Corporation. It may authorize any officer, upon whom the power of appointing subordinate officers may have been conferred, to fix the compensation of such subordinate officers. SECTION 12. Removal. Any officer of the Corporation may be removed, with or without cause, by a majority vote of the Board of Directors at a meeting called for that purpose. SECTION 13. Bonds. The Board of Directors may require any officer of the Corporation to give a bond to the Corporation conditional upon the faithful performance of his duties, with one or more sureties and in such amount as may be satisfactory to the Board of Directors. 10 ARTICLE VII Certificates of Stock SECTION 1. Form and Execution of Certificates. The interest of each stockholder of the Corporation shall be evidenced by a certificate or certificates for shares of stock in such form as the Board of Directors may from time to time prescribe. The certificates of stock of each class and series now authorized or which may hereafter be authorized by the Certificate of Incorporation, as amended, shall be consecutively numbered and signed by the Chairman of the Board, the President or a Vice-President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the Corporation, and may be countersigned and registered in such manner as the Board of Directors may by resolution prescribe, and shall bear the corporate seal or a printed or engraved facsimile thereof. Where any such certificate is signed by a transfer agent or transfer clerk acting on behalf of the Corporation and by a registrar, the signatures of any such Chairman of the Board, President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be facsimiles, engraved or printed. In case any officer or officers, who shall have signed or whose facsimile signature or signatures shall have been used on any such certificate or certificates, shall cease to be such officer or officers, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered by the Corporation as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers. SECTION 2. Transfer of Shares. Subject to any applicable restrictions contained in the Certificate of Incorporation, as amended, or referred to on the face of the particular stock certificate, the shares of the stock of the Corporation shall be transferable on the books of the Corporation by the holder thereof in person or by his attorney lawfully constituted, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof or guaranty of the authenticity of the signature as the Corporation or its agents may reasonably require. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, save as expressly provided by law or by the Certificate of Incorporation, as amended. SECTION 3. Closing of Transfer Books. The stock transfer books of the Corporation may, if deemed expedient by the Board of Directors, be closed for such length of time not exceeding sixty (60) days as the Board may determine, preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any issuance, change, 11 conversion or exchange of capital stock shall go into effect, or the date of any other lawful action, during which time no transfer of stock on the books of the Corporation may be made. SECTION 4. Dates of Record. If deemed expedient, the Board of Directors may fix in advance a date not less than ten (10) nor more than sixty (60) days preceding the date of any meeting of stockholders, or the date for the payment of any dividend, or the date of the allotment of rights, or the date when any issuance, change, conversion or exchange of capital stock shall go into effect, or the date of any other lawful action, as a record for the determination of the stockholders entitled to notice of, and to vote at any such meeting, or entitled to receive payment of any such dividend or to any such allotment of rights, or to exercise the rights in respect of any such issuance, change, conversion or exchange of capital stock, or to take any other lawful action, as the case may be, and in such case only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at such meeting, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such right or take such actions as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any record date fixed aforesaid. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten (10) days of the receipt of the request for a resolution fixing the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, and no prior action by the Board of Directors is required by applicable law, the record date shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Secretary of the Corporation. Delivery shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. SECTION 5. Lost or Destroyed Certificates. In case of the loss or destruction of any certificate of stock, a new certificate may be issued in its place upon proof of such loss, destruction or mutilation and, if required by the Corporation, upon the giving of a satisfactory bond of indemnity to the Corporation, in such sum as the Board of Directors may provide. 12 SECTION 6. Rights Agreement. Rights issued pursuant to the Rights Agreement, dated as of June 8, 1991, between the Corporation and Security Trust Company, N.A. (the "Rights Agreement") may be transferred by an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as such terms are defined in the Rights Agreement) only in accordance with the terms of, and subject to the restrictions contained in, the Rights Agreement. ARTICLE VIII Checks, Notes, Etc. SECTION 1. Execution of Checks, Notes, Etc All checks and drafts on the Corporation's bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers, agent or agents, as shall be thereunto authorized from time to time by the Board of Directors. SECTION 2. Execution of Contracts, Assignments, Etc. All contracts, agreements, endorsements, assignments, transfers, stock powers or other instruments, authorized by the Board of Directors, shall be signed by the President or any Vice- President or by such other officer or officers, agent or agents, as shall be thereunto authorized by the Board o Directors. Any authorization by the Board of Directors may be general or confined to specific instances. SECTION 3. Execution of Proxies. Unless otherwise provided by resolution of the Board of Directors, the President or in his absence or disability a Vice-President, may authorize from time to time the signature and issuance of proxies to vote upon shares of stock of other companies standing in the name of the Corporation. All such proxies shall be signed in the name of the Corporation by the President or a Vice-President and by the Secretary or an Assistant Secretary. ARTICLE IX Waivers and Consents Whenever any notice is required to be given by law, or under the provisions of the Certificate of Incorporation, as amended, or of these by-laws, such notice may be waived, in writing, signed by the person or persons entitled to such notice, or by his attorney or attorneys thereunto authorized, whether before or after the event or action to which such notice relates. 13 Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken in connection with any corporate action by any provision of law or of the Certificate of Incorporation, as amended, or of these by-laws, the meeting and vote of stockholders may be dispensed with if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Any action required or permitted to be taken at any meeting of the Board of Directors or of any Committee of the Board of Directors may be taken without a meeting, if prior to such action a written consent thereto is signed by all members of the Board of Directors or of such Committee as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or of such Committee. ARTICLE X Dividends Except as otherwise provided by law or by the Certificate of Incorporation, as amended, the Board of Directors may declare dividends out of the surplus of the Corporation at such times and in such amounts as it may from time to time designate. Before crediting net profits to surplus in any year, there may be set aside out of the net profits of the Corporation for that year such sum or sums as the Board of Directors from time to time in its absolute discretion may deem proper as a reserve fund or funds to meet contingencies or for equalizing dividends or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall deem conducive to the interests of the Corporation. ARTICLE XI Indemnification The Corporation shall indemnify all of its officers and directors to the fullest extent permitted by applicable Delaware law as it now exists or as it may be amended from time to time. ARTICLE XII Inspection of Books The Board of Directors shall determine from time to time whether, and if allowed, when and under what conditions and regulations, the accounts and books of the Corporation (except 14 such as may by statute be specifically open to inspection) or any of them, shall be open to the inspection of the stockholders and the stockholders' rights in this respect are and shall be restricted and limited accordingly. ARTICLE XIII Fiscal Year The fiscal year of the Corporation shall end on such date as the Board of Directors may by resolution specify and the Board of Directors may by resolution change such date for future fiscal years at any time or from time to time. ARTICLE XIV Amendments These by-laws may be altered, amended or repealed and new by-laws adopted by the stockholders or by the Board of Directors by a majority vote at any meeting called for that purpose. 15 EX-10.7 5 dex107.txt EXHIBIT 10.7 Exhibit 10.7 ----------------------------------- CREDIT AGREEMENT ----------------------------------- BY AND BETWEEN: The Parties of the first part: 1. "WAFABANK", a Moroccan societe anonyme (public corporation), with capital of MAD 602,430,000.00 and corporate offices at 163 avenue Hassan II, Casablanca, acting through its Branch in Brussels, 13A, boulevard du Jardin Botanique, formed on January 30, 1987 under an authorization of the Banking Commission dated April 16, 1987, registered in the Brussels Register of Commerce under No. 487.961 and with the V.A.T. under No. 430.269.135, the bylaws of which, originally published in the Annexes du Moniteur Belge on January 30, 1987 under No. 870130-198, were amended for the last time on June 1, 1999 and published in the Annexes du Moniteur Belge No. 990601-302; represented for the purposes herein by: 2. "DEUTSCHE BANK" (formerly Credit Lyonnais Belgium), a Belgian societe anonyme (public corporation), with corporate offices at 9, Lange Gasthuisstraat, 2000 Antwerp (Antwerp Register of Commerce No. 36.922), formed pursuant to legal instrument recorded by Antoine Cols, Notary, in Antwerp on December 31, 1934 and published in the Annexes du Moniteur Belge on January 14 and 15, 1935 under No. 489, the bylaws of which have been successively amended, most recently in accordance with minutes recorded by Johan Kiebooms, Notary, in Antwerp on February 11, 1999, filed on February 12, 1999 with the Clerk of the Commercial Court, and published on February 23, 1999 in the Annexes du Moniteur Belge; represented for the purposes herein by: 3. "COMMERZBANK AG", a German company, with corporate offices in Frankfurt am Main, Federal Republic of Germany, acting through its Brussels Branch, 87, boulevard Louis Schmidt, 1040 Brussels, and registered in the Brussels Register of Commerce under No. 400.243; represented for the purposes herein by: 1 4. "CBC Banque", a societe anonyme (public corporation), with corporate offices at Grand Place 5, 1000 Brussels, registered in the Brussels Register of Commerce under No. 278.041 and subject to value added tax under No. 403.211.380; formed under the name "Credit General de Belgique" pursuant to the terms of a legal instrument recorded by Theodore Taymans and Jean-Pierre Jacobs, Notaries in Brussels, on the Ninth day of January in the year Nineteen Hundred and Fifty-Eight, and published in the Annexes du Moniteur Belge on the Thirty-First day of January, in the year Nineteen Hundred and Fifty-Eight under No. 2106 and on the Ninth day of February in the year Nineteen Hundred and Fifty-Eight under No. 2755bis, and the bylaws of which were last amended pursuant to a legal instrument recorded by Benedikt van der Vorst, Notary of Ixelles, Eric Spruyt and Hans Berquin, Notaries of Brussels, with the assistance of Jan Van Bael, Notary of Antwerp, and Luc Talloen, Notary of Leuven, on the third of June in the year Nineteen Hundred and Ninety-Eight, published in the Annexes du Moniteur Belge of June 25, 1998 under No. 980265-283, said instrument amending the corporate name of Credit General S.A. de Banque to CBC Banque; Acting through its corporate headquarters in Brussels and represented for the purposes herein by: 5. "FORTIS BANQUE", a societe anonyme (public corporation), formed on December 5, 1934 in accordance with a legal instrument published in the Annexes du Moniteur Belge of December 14 under No. 15.109, the bylaws of which were last amended in accordance with a legal instrument dated June 23, 1999 and published in the Annexes du Moniteur Belge on July 21, 1999 under No. 990721-1 and 3, with corporate offices at 3 Montagne du Parc, 1000 Brussels, registered in the Brussels Register of Commerce under No. 76034 and registered with the V.A.T. authority under No. BE 403.199.702, assuming the rights and obligations of the societe anonyme C.G.E.R- Banque pursuant to a merger by consolidation on June 23, 1999, in accordance with instruments recorded and notarized by Bernard Willocx and Gilberte Raucq in Brussels and published in the Annexes du Moniteur Belge on July 21, 1999 under No. 930721-1 and 3, which company did itself assume the rights and obligations of the societe anonyme. Societe Nationale de Credit a l'Industrie , following the merger by consolidation on October 29, 1997, pursuant to a legal instrument recorded by Gilberte Raucq, Notary, in Brussels and published in the Annexes du Moniteur Belge on November 25, 1997 under No. 971125-62; represented for the purposes herein by: And referred to collectively hereinafter as the "Banks"; And the Party of the second part: MECAR S.A., formed under the name "SA NEW MECAR", in accordance with a legal instrument recorded on August 18, 1999 by Jean-Philippe Lagae, Notary of Brussels, and published in the Annexes du Moniteur Belge on August 31, 1999 under No. 990831-371, having its corporate headquarters at rue Grinfaux, 50, 7181 Seneffe (Petit-Roeulx-Lez-Nivelles), registered in the Charleroi Register of Commerce under No. 196469 and with the V.A.T. under No. 466.712.134. S.A. NEW MECAR became S.A. MECAR in accordance with a legal instrument recorded by Notary Lagae, on August 18, 1999 and published in the Annexes du Moniteur Belge on August 31, 1999 under No. 990831-372; represented for the purposes herein by: 2 referred to hereinafter as the "Borrower"; The purpose of this agreement is to define the new terms and conditions of the previous agreements, notably the agreements of January 14, 1998, June 21, 1999, February 9, 2000 and November 26, 2001. The withdrawal of BNP-PARIBAS from the Bank pool and the participation in this pool of FORTIS BANQUE is hereby noted. Now, therefore, it has been agreed as follows: Article 1: Creditors: The Banks, without joint liability Article 2: Borrower: S.A. MECAR Article 3: Amount of the credit line: EUR 49,400,000.00 Article 4: Bank Percentages A. In the form of bank guarantees with pledged deposits: EUR 26,800,000 distributed as follows: - WAFABANK: EUR 5,000,000 - DEUTSCHE BANK: EUR 5,450,000 - COMMERZBANK: EUR 5,450,000 - CBC BANQUE: EUR 5,450,000 - FORTIS BANQUE: EUR 5,450,000 B. In the form of bank guarantees without pledged deposits: EUR 10,000,000 distributed as follows: - DEUTSCHE Bank: EUR 2,500.000 - Commerzbank: EUR 2,500,000 - CBC-Banque: EUR 2,500,000 - FORTIS Banque: EUR 2,500,000 C. In the form of current account advances and/or straight loans and/or letters of credit: EUR 3,600,000 distributed as follows: - DEUTSCHE Bank: EUR 900,000 - Commerzbank: EUR 900,000 - CBC-Banque: EUR 900,000 - FORTIS Banque: EUR 900,000 D. In the form of advances intended for the payment of installments of estimated corporate taxes: EUR 9,000,000 distributed as follows: - WAFABANK: EUR 1,800,000 - DEUTSCHE Bank: EUR 1,800,000 - Commerzbank: EUR 1,800,000 - CBC-Banque: EUR 1,800,000 - FORTIS Banque: EUR 1,800,000 3 Article 5: Operations of the Bank Pool The interbank agreement signed on this date shall govern the relations among the banks with respect to this credit line. The Banks have designated CBC-Banque as Pool Coordinator. Article 6: Purpose The credit line, in its current forms, is intended to cover the Borrower's financial needs arising from the execution of its corporate purpose. Article 7: Accounts This credit line operates in one or more accounts (current or non-current) with each of the Banks. These accounts are only the elements of the sole and indivisible "credit account" which the Borrower has with each Bank. Therefore, each Bank may make transfers from one element of the "credit account" to another on its books, merge the accounts and offset the debit balances in some accounts with the credit balances of other accounts. When the transfer requires conversion of foreign currencies, the conversion rate shall be determined by the Banks. These accounts are governed at each of the Banks by the Bank's general conditions governing this type of account, with which the Borrower hereby expressly stipulates that it is familiar. All sums due may be recorded in an account as of the due date. Article 8: Forms of use The credit line may be used in all forms and under all conditions stipulated to or to be stipulated to by the parties, without resulting in novation. Until otherwise established, the credit line may be used in the forms and under the conditions defined hereinafter: A. EUR 26,800,000.00 in the form of bank guarantees issued with pledged deposits and EUR 10,000,000.00 in the form of bank guarantees without pledged deposits. The EUR 10,000,000.00 line shall be used only after the limit on the EUR 26,800,000.00 line of credit has been reached. The issue of bank guarantees and all terms thereof, as well as any extensions of such guarantees, shall be subject, on a case by case basis, to the prior agreement of the Banks, without prejudice to the limits set by each Bank based on the current and future commitments of the Borrower resulting from agreements other than this agreement. Their use in the form of bank guarantees shall be recorded in the books of the Pool Coordinator. B. EUR 3,600,000 in the form of advances on current accounts and/or straight loans and/or letters of credit and EUR 9,000,000 in the form of an advance intended for the payment of installments of estimated corporate taxes. In addition to being governed by this agreement, these credit lines shall be governed by specific agreements to be established by each of the banks concerned within the Bank Pool. Their use shall be recorded in the books of the Lending Banks. The parties reserve the right to agree on new forms of use. In the event of termination pursuant to Article 17 (immediate payment), the credit account with each of the Banks shall be closed on the effective date of the termination. The existence and the amount of the claim of each of the Banks, as well as the position of the Borrower's "credit account" with each Bank, are verified by the account statement or by any other 4 accounting document prepared by the Banks; said documents shall constitute sufficient proof, without requiring presentation of any other instrument, whether recorded by notary or not, to be presented. Article 9: Compliance with legal and regulatory provisions The Borrower undertakes to comply with the regulations of the competent monetary authorities, in particular the Institut Belgo-Luxembourgeois du Change (IBLC) and to provide the Banks with any document or proof required by said authorities. The Borrower shall ensure, at any time, that it is performing its activities in strict compliance with the current and future regulations governing the import, export and transit of arms, munitions, military materiel and related technologies. Article 10: Terms and conditions of the lines that may be used in the form of bank guarantees a) Terms and conditions The Banks shall establish, to the order and on behalf of the Borrower, guarantees to return advances and performance guarantees, in EURO or in currencies, under the Borrower's entire and exclusive responsibility. The issuance of these guarantees shall be governed by the General Conditions governing the issuance of guarantees. Any request for the issuance of bank guarantees shall be subject to the prior written approval of the Banks. b) Chronology The Borrower undertakes to comply with the following chronology, contract by contract: - receipt by the Pool Coordinator of the written request to issue a guarantee; - request for approval from the Banks; - receipt by the Banks of export credit letters; - receipt by the Banks of a copy of the specific OND policy, possibly a definitive undertaking subject to the condition precedent that export licenses are obtained; - receipt of export licenses; - issue of the guarantees; - receipt and freezing of the pledge advances in accordance with the terms and conditions stipulated in Articles 8 and 18A. The banks agree that the performance guarantees shall be issued before export licenses are obtained. This chronology may be modified with the prior written consent of the Banks. 5 c) Commission and fees The issuance of guarantees shall result in the payment of a commission of 1.25% per year, payable quarterly in advance, and every quarter started requiring full payment. It shall be calculated on the amount guaranteed at the beginning of the quarter and shall be due until the full and definitive discharge of the Banks' commitments. Moreover, the Borrower shall be responsible for commissions claimed by the Banks' correspondents, the final issuers of the guarantees. All other fees (telex, port, etc.) and costs incurred by the Banks in issuing the guarantees shall also be paid by the Borrower. The Borrower shall also be responsible for fees claims by the Banks' correspondents. Article 11: Terms and conditions for computing interest and commissions The debt interest and commissions shall be calculated on the basis of the actual number of days elapsed and a debt rate established on the basis of a commercial 360-day year (365 days for the pound sterling), except where otherwise stipulated herein. Article 12: Commissions on bank guarantees For each guarantee that the Banks agree to issue, two commissions of 1% shall be recorded. The first commission is due upon issuance by the Banks and shall be payable in one payment no later than the receipt of the first installment payment. The second commission is due on a prorated basis as the Borrower's receipts for its deliveries are received. However, for simplification purposes and until otherwise established, this second commission shall be deducted when the receipts for the last delivery of each contract are received. The Bank that has issued the guarantee on behalf of the Banks in the Bank Pool which have agreed to participate shall collect the Bank Pool's commissions from the Borrower, which so agrees, and shall repay to each of the other participating Banks the percentage to which it is entitled. Article 13: Charging the sums due to the "credit account" of each Bank The amount due on the Banks' claim results from the debit balance of the "credit account" on the day of the statement. At any time, even after this statement, the accounts may be debited for the amount that the Borrower owes or will owe all the Banks under this credit line. Article 14: Payments / Fees a) The Borrower hereby declares that it waives the benefit of Articles 1253, 1255, and 1256 of the Civil Code and, therefore, grants the Banks the right to charge payments received, from any source, against the portion of the debt which the Banks intend to discharge. 6 b) Any payment due on a date other than a bank business day must be made on the preceding bank business day. For the purpose of this agreement, a bank business day is a day when the Banks and the Clearing Chamber are open in Brussels (or, with respect to currencies, a day when the banks are operating simultaneously in Brussels, London and in the country of the currency). c) All costs, taxes, stamp taxes, recording fees, attorneys' fees, notification fees, renewal fees, discharge fees and, generally, all costs deemed necessary to create the securities or liquidate said securities or for the forced execution of the Borrower's obligations shall be paid by the Borrower. This is also true for all other sums due by the Borrower, for any reason, such as, for example, insurance premiums, if they have been advanced by the Banks. d) The Borrower shall be liable for the additional amount of EUR 12,500.00 to CBC Banque for its participation in the costs to establish this agreement and the related agreements; this sum shall be payable at the time this agreement is signed. Article 15: Commitments The Borrower makes the following commitments as of the date of this agreement and until the payment in full of all sums due to the Banks hereunder: a) The Borrower shall allow persons delegated by the Banks to review on site the originals of the contracts that are the origin of the guarantees issued or to be issued, referred to hereinafter as the "export contracts". b) The Borrower shall act to ensure the receipt of all authorizations and approvals, the filing of all declarations, and the performance of all formalities that may be required with respect to Borrower after the date of this agreement in order to ensure its complete performance under this agreement. c) Upon receipt, the Borrower shall provide to the Banks the export licenses for the export contracts. It shall do the same with respect to license renewals. d) It shall provide the Banks, as soon as they are issued, with the OND policies described in Article 18 A 3 hereinafter; moreover, any review by the Banks of an export contract for which it is seeking financing shall be subject to the production of an OND commitment for said contract. e) Borrower shall ensure the legality of the transactions financed by this credit line with respect to Belgian, international or foreign legislation. f) Within 15 days after publication, the Borrower and its parent company shall remit to the Banks a copy of their annual report, including balance sheet, statement of income and notes as certified by the auditors. g) The quarterly positions of the Borrower must be presented to the Banks within 30 days after they are established; the Borrower shall also present quarterly a statement of the progress of the export contracts and the latest provisional statement of the results for the year in progress. 7 h) Borrower shall reply, promptly and specifically, to any request for information made by the Banks which could affect the execution of this agreement. It shall also allow the Banks to exercise any and all means of monitoring and control, at their expense (except in the event Borrowers fails in the obligations defined in the first paragraph of this point "h", in which case, the fees shall be paid by the Borrower). i) The Borrower shall inform the Banks of any circumstance and any act as defined in Article 17 (immediate payment) hereinafter, including all documents related to bylaw changes. j) As of this date, the Borrower shall not secure any loan, debt, guaranty or any commitment that constitutes a debt, by mortgage, lien, pledge, assignment or claim or any other security interest, or by authorization or undertaking to create a security interest of this type on all or part of its current and future assets, without the prior written agreement of the Banks. In such cases, the Banks shall have the right to demand that the Borrower provide the Banks with the same securities to guarantee this credit line, in the same proportion and with the same rank. k) The Borrower undertakes, as long as this credit line is utilized in its current forms, to consult the Banks at the time of any request for credit not described in this agreement. If the Banks' conditions are at least as favorable as those offered by the competition, the Borrower undertakes to give the Banks priority in extending it such additional credit. l) Each Bank shall receive from the Borrower a portion of the financial service in proportion to the percentage of its participation in this credit line. m) The Borrower undertakes, by signing this agreement, to maintain its equity capital (Items 10/15 - 20 - 21 - 50) at a minimum amount of EUR 40,000,000.00 and its working capital (Items 10/15 + 16 + 17 - 20/28) at a minimum amount of EUR 30,000,000.00. n) The Borrower is prohibited from granting advances to companies that are part of the ALLIED RESEARCH CORPORATION Inc. group. o) The Borrower undertakes to advise the Banks of any material deterioration in the position of its parent company which could negatively impact its financial position. p) The Borrower undertakes to transfer all its proceeds to its accounts with the Banks. q) The Borrower undertakes to pledge in favor of the Banks, at their first request, the claims resulting from the delivery of letters of credit issued in its favor under the export contracts. Article 16: Merger In the event the Borrower is acquired by another company, in the event of merger by the formation of a new company, or in the event of consolidation of another company, the credit agreement shall continue with the new entity, except in a case governed by Article 17 (immediate payment) hereinafter. Article 17: Immediate payment The Banks have the option to suspend, close or terminate the credit line, in whole or in part, and to require the immediate repayment of all or part of their claim, without advance or formal notice: 8 a) in all cases of early repayment determined now or in the future by law; b) in the event the Borrower fails to meet any obligations arising under law or this agreement, or in the event the company ALLIED RESEARCH CORPORATION Inc fails to meet the terms of its commitment as defined in Article 18 ss. B4 hereinafter; c) in the event it appears that the Borrower has deliberately or negligently provided inaccurate or incomplete information; d) in the event that a commercial bill, check or other commercial paper bearing Borrower's signature is protested; e) in the event the Borrowers ceases its business or activities; f) in the event of non-payment of preferred creditors by the Borrower; g) in the event of bankruptcy, cessation of payment, petition for composition, suspension or accelerated repayment of credit made by other lenders, or any similar event that reveals financial difficulties or would result in late payments; h) in the event of formal notice to pay, seizure, action to establish title, eviction or any de facto or de jure issue related to real or personal property that is part of the Borrower's assets; i) in the event of sale, contribution, donation, assignment, destruction, or substantial reduction in the value of the assets pledged or mortgaged in favor of the Banks; j) in the event of loss of a security interest created for the benefit of the Banks; k) in the event the assets pledge or mortgage in favor of the Banks to secure the credit are not sufficiently insured against fire and theft, and in the event of termination, cancellation or suspension of the insurance; l) in the event the Borrower creates a personal surety or real security interest in favor of a third party, without the prior authorization of the Banks; m) in the event that an analysis of the Borrower's accounting reveals that substantial losses have been suffered which threaten the Borrower's financial position and solvency, or if a comparison of the balance sheets and/or accounting audits performed by, or on the order of, the Banks, reveals that its equity capital and/or working capital are less than the amount set forth in Article 15 m or have decreased by more than one-fourth from one year to the next; n) in the event of assignment or seizure of the rents, indemnities, subsidies, bank accounts or any claim belonging to Borrower; 9 o) if the following circumstances occur with respect to the Borrower: dissolution, liquidation, change in legal form, merger, consolidation, spin-off; p) in the event the Borrower does not meet its obligations under the law and regulations, particularly with respect to corporate law, accounting law, and the law governing the performance of its operations; q) in the event one of the early repayment clauses of cited above is triggered with respect to the companies holding more than 50% of the capital of the Borrower or with respect to the companies in which the Borrower holds more than 50%; r) in the case that any event occurs that would make all or part of Borrower's business illegal under Belgian, foreign and international law; s) in the event of Borrower's failure to fulfill its obligations under other agreements with the Banks or with some of the Banks; t) in the event of failure by the Borrower to meet its obligations under agreements other than those described in "s" above, a failure that could mean, in the opinion of the Banks, that the Borrower is no longer in a position to meet its current and future obligations arising from this agreement. Article 18: Securities All Borrower's commitments remain secured by the securities currently constituted and detailed under point A and shall be secured by the additional securities to be created as described under point B. 10 A. Existing securities: 1. Pledge of the current and future claims which the Borrower owns or shall own to CBC Banque for its accounts No. 192-2096600-84 and its sub-accounts in accordance with a private agreement dated February 9, 2000. It is noted, with respect to the credit line defined in point A of Article 4, that: . the minimum amount pledged is set at 40% of the amount of the guarantees issued by the Banks and not yet released; . the minimum amount pledged may never, however, be less than the outstanding amount of the performance guarantees. This account shall bear interest at the borrowing rate of CBC-Banque in the relevant currency for the amounts and term to be agreed on, minus 0.25% per year. 2. Pledge of the Borrower's business assets as follows: BEF 517,000,000 in principal and BEF 25,850,000 in costs in favor of Banque Indosuez Belgium (currently KBC), Banque Nationale de Paris, Monte Paschi Belgio, S.N.C.I. (currently Fortis Banque) and Wafabank by instrument dated 2/9/2000 recorded in Charleroi V on June 27, 2000, volume 52, folio 79, case 13, roll 4, and recorded in the 1/st/ Mortgage Registry of Charleroi on November 28, 2000 volume 6337-17. BEF 168,868,000 in principal and 16,887,000 in costs in favor of CERA Investment Bank (currently KBC), Banque Nationale de Paris, Monte Paschi Belgio, S.N.C.I. (currently Fortis Banque) and Wafabank by instrument dated 2/9/2000, recorded in Charleroi V on June 27, 2000, volume 52, folio 79, case 13, roll 4, and recorded in the 1/st/ Mortgage Registry of Charleroi on November 28, 2000, volume 6337-18. BEF 407,974,000 in principal and 21,000,000 in costs in favor of CERA Investment Bank (currently KBC), Banque Nationale de Paris, Monte Paschi Belgio, CGER Banque (currently Fortis Banque), Wafabank, Credit Lyonnais Belgium (currently Deutsche Bank) and Commerzbank AG by instrument dated 2/9/2000, recorded in Charleroi V on June 27, 2000, volume 52, folio 79, case 13, roll 4, and recorded in the 1/st/ Mortgage Registry of Charleroi on November 28, 2000, volume 6337-19. BEF 100,000,000.00 in principal plus 3 years of interest and costs in favor of CBC-Banque by instrument dated 2/9/2000, recorded in Brussels, the 6/th/ Bureau, on 2/21/2000, volume 268, folio 9, case 20, and recorded in the 1/st/ Mortgage Registry of Charleroi on 2/22/2000, volume 6229-21. BEF 100,000,000 in principal plus 3 years of interest and costs in favor of CBC-Banque by instrument dated 9/12/2000, recorded in Brussels, the 6/th/ Bureau, on 9/12/2000, volume 269, folio 72, case 23, and recorded in the 1st Mortgage Registry of Charleroi on 9/19/2000, volume 6311-24. EUR 2,370,155.00 in principal plus 3 years of interest and costs in favor of CBC-Banque, Commerzbank, Deutsche Bank and Wafabank, by instrument dated 11/26/2001, recorded in Brussels, 6/th/ Bureau, on 11/27/2001, volume 271, folio 91, case 5 and recorded in the 1/st/ Mortgage Registry of Charleroi on December 4, 2001, volume 43-I-04/12/2001 nr 15219. 11 The liens listed above continue with equal rank for: - EUR 5,000,000.00 in favor of WAFABANK - EUR 5,600,000.00 in favor of Deutsche Bank - EUR 5,600,000.00 in favor of Commerzbank - EUR 5,600,000.00 in favor of CBC Banque and are without effect on the rest. 3. Assignment of the OND policy The Borrower has assigned as security in favor of the Banks its claims against OND resulting from the benefit of the insurance policies subscribed with OND in the framework of the transactions financed by this credit line and covering, in particular, the risks of termination, non-payment and arbitrary seizure of the bank guarantees due to the insolvency of the public debtor and the public guarantor and political risks; any change made in the global expanded policy No. 93.655 shall be subject to the prior agreement of the Banks. B. New securities to be created 1. Extension to FORTIS-Banque of the benefit of the private agreement dated February 9, 2000 concerning the pledge of the current and future claims held or to be held by the Borrower against CBC Banque for its account No. 192-2096600-84 and sub-accounts. 2. Pledge of the business assets for EUR 15,000,000.00 in principal plus 3 years interest and costs to: - Deutsche Bank for EUR 2.350,000.00 in principal - Commerzbank for EUR 2.350,000.00 in principal - CBC-Banque for EUR 2.350,000.00 in principal - FORTIS Banque for EUR 7,950,000.00 in principal These security interests are recorded with equal priority with the existing liens described in subparagraph A point 2 for a total of EUR 21,800,000.00. 3. Extension to FORTIS Banque of the assignment of the benefits of OND policy nr 93.655 described in subparagraph A point 3. 4. Signature by ALLIED RESEARCH Corporation Inc of a letter of commitment following the model attached hereto plus the documents authenticating the signatures. 5. Mortgage in the amount in principal of EUR 12,600,000.00 to be recorded on all of the Borrower's property located in Petit-Roeulx-Lez-Nivelles and Marche-en-Famenne and more fully described in the legal instrument incorporating the Borrower and recorded by Mr. Lagae, Notary, on August 18, 1999. These assets are free and clear of encumbrances, with the exception of the following liens in favor of FORTIS Banque: - BEF 30,000,000 recorded June 20, 1991 in the Mortgage Registry of Marche, volume 1618-25 - BEF 190,000,000 recorded March 27, 1986 in the second Mortgage Registry of Charleroi, volume 3741-25. This security shall be recorded in favor of: 12 - WAFABANK for EUR 1,800,000.00 - Deutsche Bank for EUR 2,700,000.00 - Commerzbank for EUR 2,700,000.00 - CBC Banque for EUR 2,700,000.00 - FORTIS Banque for EUR 2,700,000.00 6. The irrevocable commitment of FORTIS Banque, by its signature hereto, not to grant assignment of claims on the outstanding amounts of the credits guaranteed by the mortgages of March 27, 1986 and June 20, 1991 cited hereinabove, the outstanding amounts of which are, on this date, as follows: - Bank guarantee of EUR 123,946.76 (BEF 5,000,000) deposited in favor of the VAT authority and related to the mortgage recorded on June 20, 1991. - Balance remaining due on a term loan, for which 2 payments of EUR 470,997.70 (BEF 19,000,000) remain due on January 15 of the years 2003 and 2004. 7. The undertaking from BNP-Paribas not to assert the liens created in its favor on the Borrower's business assets and the Borrower's undertaking not to seek or accept assignment of claims with said bank. Upon the creation of the new securities described hereinabove, the Banks shall discharge the surety of SA ARC Europe as well as the pledge of the shares representing the capital of the companies VSK SA and SEDACHIM SA. Article 19: Distribution of the proceeds from the liquidation of the security interests of the Banks The proceeds from the liquidation of the security interests of the Banks shall be distributed in accordance with the terms and conditions of the interbank agreement signed on this date. Article 20: Property insurance The personal and real property that shall be pledged or mortgaged in favor of the Banks must be insured for a sufficient amount by a leading company approved by the Banks against the risks of fire, storm, water damage, lightning, explosions, broken glass and civil liability. If not, the Banks shall have the option of subscribing to such insurance themselves and charging the premiums paid therefor to the Borrower, without any assumption of liability by the Banks. The Borrower shall remit to the "Pool Coordinator" an amendment by which the company undertakes to amend, terminate, cause invalidation or, generally, to terminate the insurance only with prior notice of fifteen days sent to the "Pool Coordinator". The Borrower shall obtain the Banks' agreement on the terms and conditions for the payment of any claims. 13 Article 21: Transfer of the credit The Banks shall have the option to assign or transfer, at any time, with the prior written consent of the Borrower, all or part of this credit to one or more third parties as it shall determine, maintaining the same conditions and sureties. Article 22: Law and jurisdiction This agreement shall be governed by Belgian law. The Brussels courts shall have exclusive jurisdiction to settle disputes arising from this agreement. Executed in Brussels on [date] 2002 in 6 originals. Borrower Wafabank CBC Banque Commerzbank Deutsche Bank Fortis Banque 14 EX-10.8 6 dex108.txt EXHIBIT 10.8 Exhibit 10.8
- ------------------------------------------------------------------------------------------------------------------------------------ AWARD/CONTRACT 1. This Contract Is A Rated Order Rating DOA6 Page 1 Of 17 Under DPAS (15 CFR 700) --> - ------------------------------------------------------------------------------------------------------------------------------------ 2. Contract (Proc. Inst. Ident) No. 3. Effective Date 4. Requisition/Purchase Request/Project No. DAAA09-02-C-0015 SEE SCHEDULE - ------------------------------------------------------------------------------------------------------------------------------------ 5. Issued By Code W52P1J 6. Administered By (If Other Than Item 5) Code SUK12A HQ OSC ------------- DCMC NORTHERN EUROPE ---------- AMSOS-CCM-L PCS 821, BOX 55 CHRIS THOMPSON (309)782-4345 FPO, AE 09421-0055 ROCK ISLAND, IL 61299-6000 BLDG 350 e-mail address: THOMPSONC2@OSC.ARMY.MIL SCD C PAS NONE ADP PT FB5612 - ------------------------------------------------------------------------------------------------------------------------------------ 7. Name And Address Of Contractor (No. Street, City, County, State, And Zip Code) 8. Delivery MECAR SA [X] FOB Origin [_] Other (See Below) RUE GRINFAUX 50 ------------------------------------------------- PETIT-ROEULX-LEZ-NIVELLES 7181 BELGIUM 9. Discount For Prompt Payment ------------------------------------------------- 10. Submit Invoices Item TYPE BUSINESS: Foreign Concern/Entity (4 Copies Unless Otherwise Specified) 12 To The Address Shown In: - -------------------------------------------------------------------------------- Code B1094 Facility Code - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 11. Ship To/Mark For Code ______ 12. Payment Will Be Made By Code HQ0349 SEE SCHEDULE DFAS- KLEBER KASERNE EU/RFPT ------- DCMA SECTION GEGE 3211, BLDG ZIMMER, RM 218-219 MANNHEIM STRASSE 67657 KAISERSLAUTERN, GERMANY - ------------------------------------------------------------------------------------------------------------------------------------ 13. Authority For Using Other Than Full And Open Competition: 14. Accounting And Appropriation Data [X]10 U.S.C. 2304(c)(4 ) [_] 41 U.S.C. 253(c)( ) ACRN: AA 9711 X8242SIO1X658251WGQ 00126EBSIS11173 W52P1J - ------------------------------------------------------------------------------------------------------------------------------------ 15A. Item No. 15B. Schedule Of Supplies/Services 15C. Quantity 15D. Unit 15E. Unit Price 15F. Amount - ------------------------------------------------------------------------------------------------------------------------------------ SEE SCHEDULE CONTRACT TYPE: KIND OF CONTRACT: Firm-Fixed-Price Supply Contracts and Priced Orders FMS REQUIREMENT - ------------------------------------------------------------------------------------------------------------------------------------ 15G. Total Amount Of Contract $129,399,196.80 - ------------------------------------------------------------------------------------------------------------------------------------ 16. Table Of Contents - ------------------------------------------------------------------------------------------------------------------------------------ (X) Section Description Page(s) (X) Section Description Page(s) - ------------------------------------------------------------------------------------------------------------------------------------ Part I - The Schedule Part II - Contract Clauses - ------------------------------------------------------------------------------------------------------------------------------------ X A Solicitation/Contract Form 1 X I Contract Clauses 13 - ------------------------------------------------------------------------------------------------------------------------------------ X B Supplies or Services and Prices/Costs 4 Part III - List Of Documents, Exhibits, And Other Attachments - ------------------------------------------------------------------------------------------------------------------------------------ X C Description/Specs./Work Statement 7 X J List of Attachments 14 - ------------------------------------------------------------------------------------------------------------------------------------ X D Packaging and Marking 8 Part IV - Representations And Instructions - ------------------------------------------------------------------------------------------------------------------------------------ X E Inspection and Acceptance 9 K Representations, Certifications, and - ---------------------------------------------------------- X F Deliveries or Performance 10 X Other Statements of Offerors 15 - ------------------------------------------------------------------------------------------------------------------------------------ X G Contract Administration Data 11 X L Instrs., Conds., and Notices to Offerors 16 - ------------------------------------------------------------------------------------------------------------------------------------ X H Special Contract Requirements 12 X M Evaluation Factors for Award 17 - ------------------------------------------------------------------------------------------------------------------------------------ Contracting Officer Will Complete Item 17 Or 18 As Applicable - ------------------------------------------------------------------------------------------------------------------------------------ 17.[_] Contractor's Negotiated Agreement (Contractor is 18.[X] Award (Contractor is not required to sign this required to sign this document and return _________ copies document.) Your offer on Solicitation Number _______________ to issuing office.) Contractor agrees to furnish and including the additions or changes made by you which deliver all items or perform all the services set forth or additions or changes are set forth in full above, is hereby otherwise identified above and on any continuation sheets accepted as to the items listed above and on any for the consideration stated herein. The rights and continuation sheets. This award consummates the contract obligations of the parties to this contract shall be which consists of the following documents: (a) the subject to and governed by the following documents: Government's solicitation and your offer, and (b) this (a) this award/contract, (b) the solicitation, if any, award/contract. No further contractual document is and (c) such provisions, representations, certifications, necessary. and specifications, as are attached or incorporated by reference herein. (Attachments are listed herein.) - ------------------------------------------------------------------------------------------------------------------------------------ 19A. Name And Title Of Signer (Type Or Print) 20A. Name Of Contracting Officer GARY L. MEYER MEYERG@OSC.ARMY.MIL (309)782-4942 - ------------------------------------------------------------------------------------------------------------------------------------ 19B. Name of Contractor 19c. Date Signed 20B. United States Of America 20C. Date Signed By ________________________________________ By _____________________________________ (Signature of person authorized to sign) (Signature of Contracting Officer) - ------------------------------------------------------------------------------------------------------------------------------------ NSN 7540-01-152-8069 25-106 Standard Form 26 (Rev. 4-85) PREVIOUS EDITIONS UNUSABLE GPO : 1985 0 - 478-632 Prescribed By GSA-FAR (4.8 CFR) 53.214(a)
CONTINUATION SHEET Reference No. of Document Being Continued Page 2 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION A - SUPPLEMENTAL INFORMATION For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm Regulatory Cite Title Date A-1 AMC AMC-LEVEL PROTEST PROGRAM OCT/1996 *** (End of clause) (AM7010) A-2 52.222-1100 10 U.S.C. 4543 PILOT PROGRAM JAN/2000 OSC Congressional language in Section 141 of the 1998 Defense Authorization Act (10 U.S.C. 4543 Pilot Program) allows "not more than three Army industrial facilities" to sell manufactured articles and services in support of DoD weapon systems without regard to availability from domestic sources. The three Army industrial facilities in this program are McAlester Army Ammunition Plant, McAlester, OK, Rock Island Arsenal, Rock Island, IL, and Watervliet Arsenal, Watervliet, NY. These facilities cannot submit offers as the prime contractor on this solicitation, but in accordance with the above-described pilot program can act as a subcontractor to potential prime contractors when the statutory requirements (10 U.S.C. 4543) are met. If you are interested in obtaining information about their capabilities, please contact the following: McAlester Army Ammunition Plant Mr. Paul McDaniel, Attn: SOSMC-MO McAlester, Oklahoma 74501-9002 (918) 420-6452 mcdanpd@mcalestr-emh3.army.mil Rock Island Arsenal Mr. Earl Fox, Attn: SIORI-AP Rock Island, Illinois 61299-5000 (309) 782-7625 siori-co-bd@ria.army.mil Watervliet Arsenal Mr. Michael Flaherty, Attn: SOSWV-ODP Waterlviet, New York 12189-4050 (518) 266-3918 flaherty@wva.army.mil (End of Clause) (AS7010) A-3 52.246-4501 CONTRACTOR PERFORMANCE CERTIFICATION PROGRAM APR/1997 OSC *** (End of clause) (AS7000) A-4 52.252-4500 FULL TEXT CLAUSES SEP/1997
CONTINUATION SHEET Reference No. of Document Being Continued Page 3 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA
1. The entire body of full text regulatory and command unique clauses and provisions will no longer be included in solicitations or contracts. These clauses and provisions have the same force and effect as if the entire full text was included in the solicitation/contract. Where text has been removed three astericks are put in its place (***). 2. You can view or obtain a copy of the clauses and provisions on the internet at: www.osc.army.mil/ac/aais/osc/clauses/index.htm. Click on command unique first to locate the clause. If it is not located under command unique click on regulatory to find. 3. All full text clauses have a 6 or 7 as the third digit of the clause number (i.e. AS7000). (End of clause) (AS7001) 1. The purpose of this contract is to satisfy the following 90mm Ammunition: [CONFIDENTIAL TREATMENT REQUESTED]* *These rounds shall be used for pilot lot acceptance in Belgium 2. The above requirements will be produced by: MECAR RUE Grinfaux, 50 B-7181 Petit-Roeulx-lez-Nivelles Seneffe, Belgium 3. The following terms and conditions apply to this order: (1) The contractor certifies that the contract price (including any subcontracts awarded hereunder) does not include any direct or indirect costs of sales commissions or fees for contractor sales representative for the solicitation or promotion or otherwise to secure the conclusion of the sale of any of the supplies or services called for by this contract to the Government of Saudi Arabia. (2) Initial support, associated equipment, parts and training, will be 100 percent contractor furnished. (3) The U.S. Government is not liable for any reports of discrepancies for these items. (4) The designed payment office for this effort is DFAS Europe. Payments shall be accomplished by check versus electronic payment. *** END OF NARRATIVE A 001 *** CONTINUATION SHEET Reference No. of Document Being Continued Page 4 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA
ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT MOD/AMD SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS 0001 Supplies or Services and Prices/Costs 0001AA PRODUCTION QUANTITY EA [CONFIDENTIAL TREATMENT REQUESTED]* NSN: 0000-00-000-0000 NOUN: [CONFIDENTIAL TREATMENT REQUESTED]* SECURITY CLASS: Unclassified PRON: J5252D18M2 PRON AMD: 01 ACRN: AA AMS CD: WGQ001 FMS CASE IDENTIFIER: SI WGQ Packaging and Marking Inspection and Acceptance INSPECTION: Origin ACCEPTANCE: Origin Deliveries or Performance DOC SUPPL REL CD MILSTRIP ADDR SIG CD MARK FOR TP CD 001 BSIA4520529003 BZ2WGQ L BSIA00 3 PROJ CD BRK BLK PT BSI002 DEL REL CD QUANTITY DEL DATE 001 [CONFIDENTIAL TREATMENT REQUESTED]*31-MAR-2003 002 [CONFIDENTIAL TREATMENT REQUESTED]*30-OCT-2003 FOB POINT: Origin [CONFIDENTIAL TREATMENT REQUESTED]* SHIP TO: Contact DCMA for shipping instructions MARK FOR: US ARMY PROGRAM MANAGER FOR SANG MODERNIZATION DAMMAN SAUDI ARABIA 0002 Supplies or Services and Prices/Costs 0002AA PRODUCTION QUANTITY EA [CONFIDENTIAL TREATMENT REQUESTED]* NSN: 0000-00-000-0000 NOUN: [CONFIDENTIAL TREATMENT REQUESTED]* SECURITY CLASS: Unclassified PRON: J5253D19M2 PRON AMD: 01 ACRN: AA AMS CD: WGQ001 FMS CASE IDENTIFIER: SI WGQ Packaging and Marking Inspection and Acceptance INSPECTION: Origin ACCEPTANCE: Origin Deliveries or Performance DOC SUPPL REL CD MILSTRIP ADDR SIG CD MARK FOR TP CD 001 BSIA4520529004 BZ2WGQ L BSIA00 3 CONTINUATION SHEET Reference No. of Document Being Continued Page 5 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA
ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT PROJ CD BRK BLK PT BSI002 DEL REL CD QUANTITY DEL DATE 001 [CONFIDENTIAL TREATMENT REQUESTED]* 31-MAR-2003 002 [CONFIDENTIAL TREATMENT REQUESTED]* 31-DEC-2003 FOB POINT: Origin SHIP TO: Contact DCMA for shipping instructions MARK FOR: US ARMY PROGRAM MANAGER FOR SANG MODERNIZATION DAMMAN SAUDI ARABIA 0003 Supplies or Services and Prices/Costs 0003AA PRODUCTION QUANTITY EA [CONFIDENTIAL TREATMENT REQUESTED]* NSN: 0000-00-000-0000 NOUN: [CONFIDENTIAL TREATMENT REQUESTED]* SECURITY CLASS: Unclassified PRON: J5250D16M2 PRON AMD: 01 ACRN: AA AMS CD: WGQ001 FMS CASE IDENTIFIER: SI WGQ Packaging and Marking Inspection and Acceptance INSPECTION: Origin ACCEPTANCE: Origin Deliveries or Performance DOC SUPPL REL CD MILSTRIP ADDR SIG CD MARK FOR TP CD 001 BSIA4520529001 BZ2WGQ L BSIA00 3 PROJ CD BRK BLK PT BSI002 DEL REL CD QUANTITY DEL DATE 001 [CONFIDENTIAL TREATMENT REQUESTED]* 30-JUN-2004 FOB POINT: Origin SHIP TO: Contact DCMA for shipping instructions MARK FOR: US ARMY PROGRAM MANAGER FOR SANG MODERNIZATION DAMMAN SAUDI ARABIA 0004 Supplies or Services and Prices/Costs 0004AA PRODUCTION QUANTITY EA [CONFIDENTIAL TREATMENT REQUESTED]* NSN: 0000-00-000-0000 CONTINUATION SHEET Reference No. of Document Being Continued Page 6 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA
ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT NOUN: [CONFIDENTIAL TREATMENT REQUESTED]* SECURITY CLASS: Unclassified PRON: J5251D17M2 PRON AMD: 01 ACRN: AA AMS CD: WGQ001 FMS CASE IDENTIFIER: SI WGQ Packaging and Marking Inspection and Acceptance INSPECTION: Origin ACCEPTANCE: Origin Deliveries or Performance DOC SUPPL REL CD MILSTRIP ADDR SIG CD MARK FOR TP CD 001 BSIA4520529002 BZ2WGQ L BSIA00 3 PROJ CD BRK BLK PT BSI002 DEL REL CD QUANTITY DEL DATE 001 [CONFIDENTIAL TREATMENT REQUESTED]* 31-JAN-2005 FOB POINT: Origin SHIP TO: Contact DCMA for shipping instructions MARK FOR: US ARMY PROGRAM MANAGER FOR SANG MODERNIZATION DAMMAN SAUDI ARABIA CONTINUATION SHEET Reference No. of Document Being Continued Page 7 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA
SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm Regulatory Cite Title Date C-1 52.210-4501 DRAWINGS/SPECIFICATION MAR/1988 OSC In addition to the drawing(s) and/or specifications listed below, other documents which are part of this procurement and which apply to Preservation/Packaging/Packing and Inspection and Acceptance are contained elsewhere. The following drawing(s) and specifications are applicable to this procurement. Specification - [CONFIDENTIAL TREATMENT REQUESTED]* Specification - [CONFIDENTIAL TREATMENT REQUESTED]* Specification - [CONFIDENTIAL TREATMENT REQUESTED]* Specification - [CONFIDENTIAL TREATMENT REQUESTED]* (CS6100) C-2 52.247-4504 TRANSPORTATION SECURITY REQUIREMENTS FOR CONTRACTOR-TO-CONTRACTOR MAY/1993 OSC SHIPMENTS *** (End of statement of work) (CS7115) CONTINUATION SHEET Reference No. of Document Being Continued Page 8 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION D - PACKAGING AND MARKING The contractor is responsible to ensure packaging of hazardous material is in compliance with the Performance Oriented Packaging requirement of CFR Title 49. The international Civil Aviation Organization (ICAO) technical instructions, or the International Maritime Dangerous Goods code (IMDG), all of which comply with the United Nations (UN) Recommendations on the Transport of Dangerous Goods. All exterior containers shall be marked and labeled in accordance with the above applicable requirements for the modes of transportation this material will be shipped enroute to its final destination. The contractor is responsible for the applicable Performance Oriented Packaging test requirements and shall retain the documentation attesting to the data resulting from these tests. Packaging and Marking Requirements are contained in Attachment 003 (See Section J). AMSTA-AR Form 377, Preservation, Packaging and Packing Instructions M690A1, M691A2, M692A2 and M697 cartridges are contained in Attachment 004 (See Section J) *** END OF NARRATIVE D 001 ***
CONTINUATION SHEET Reference No. of Document Being Continued Page 9 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION E - INSPECTION AND ACCEPTANCE For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm The following Federal Acquisition Regulation (FAR), DoD FAR Supplement clauses and provisions, the full text of which will be made available upon request, are incorporated herein by reference with the same force and effect as if set forth in full text. The text of the clauses incorporated by reference herein are available from the contract specialist indicated in block 7 of the Standard Form 33 or (as applicable) the contracting officer and will be furnished upon request. Other documents are available as indicated in the schedule. Any company/individual wishing to purchase a copy of the Federal Acquisition Regulation (FAR), the Army FAR Supplement or the DOD FAR Supplement, may do so from the Superintendent of Documents, US Government Printing Office, Washington DC 20402 (EA7001) Acceptance will be at the Contractor's plant. Government Procurement Quality Assurance (PQA) actions will be accomplished by the Government's authorized Quality Assurance Representative (QAR) at: Contractor's plant. *** END OF NARRATIVE E 001 ***
CONTINUATION SHEET Reference No. of Document Being Continued Page 10 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION F - DELIVERIES OR PERFORMANCE For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm The following Federal Acquisition Regulation (FAR), DoD FAR Supplement clauses and provisions, the full text of which will be made available upon request, are incorporated herein by reference with the same force and effect as if set forth in full text. The text of the clauses incorporated by reference herein are available from the contract specialist indicated in block 7 of the Standard Form 33 or (as applicable) the contracting officer and will be furnished upon request. Other documents are available as indicated in the schedule. Any company/individual wishing to purchase a copy of the Federal Acquisition Regulation (FAR), the Army FAR Supplement or the DOD FAR Supplement, may do so from the Superintendent of Documents, US Government Printing Office, Washington DC 20402. (FA7001) Regulatory Cite Title Date F-1 52.242-15 STOP-WORK ORDER AUG/1989 F-2 52.242-17 GOVERNMENT DELAY OF WORK APR/1984 F-3 52.247-30 F.O.B. ORIGIN, CONTRACTOR'S FACILITY APR/1984 Ship the contracted quantity of 90mm Ammunition from Belgium to the Kingdom of Saudi Arabia. 1. a. Logistics and Transportation Services Incorporated (LTSI) is the freight forwarder designated by the FMS customer. b. MECAR shall provide LTSI status reports of production in accordance with the established production schedule. Prior to production of materiel, MECAR shall provide LTSI a Specification Data Sheet - 90mm Ammunition detailing each CLIN/production-lot. MECAR shall also provide LTSI a view and packaging specification data sheet - 90mm Ammunition detailing the manner in which the materiel is packaged in accordance with International Standards for export and surface shipment. c. Ten (10) days prior to materiel being offered, MECAR will advise the DCMC (UK) Transportation Officer (TO) that materiel is ready for shipment. d. The TO will issue a Notice of Availability/Shipment (NOA), DD Form 1348-5, to LTSI. Following USG acceptance of the materiel, the TO will provide LTSI a copy of the signed Material Inspection and Receiving Report, DD Form 250. e. Upon receipt of the NOA, LTSI will coordinate transportation and or storage directly with the contractor. LTSI will provide the TO a copy of shipping instructions and transit documents, including identification of the carrier(s), the part of debarkation, the port of embaration, the receiving activity, and the ultimate destination. Material will be delivered EX WORKS Contractor's facility, Seneffe, Belgium. *** END OF NARRATIVE F 001 ***
CONTINUATION SHEET Reference No. of Document Being Continued Page 11 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA
SECTION G - CONTRACT ADMINISTRATION DATA JOB LINE PRON/ OBLG ORDER ACCOUNTING OBLIGATED ITEM AMS CD ACRN STAT ACCOUNTING CLASSIFICATION NUMBER STATION AMOUNT 0001AA J5252D18M2 AA 2 9711 X8242SIO1X658251WGQ 00126EBSIS11173 2BPD18 W52P1J $ [CONFIDENTIAL TREATMENT REQUESTED]* WGQ001 0002AA J5253D19M2 AA 2 9711 X8242SIO1X658251WGQ 00126EBSIS11173 2BPD19 W52P1J $ [CONFIDENTIAL TREATMENT REQUESTED]* WGQ001 0003AA J5250D16M2 AA 2 9711 X8242SIO1X658251WGQ 00126EBSIS11173 2BPD16 W52P1J $ [CONFIDENTIAL TREATMENT REQUESTED]* WGQ001 0004AA J5251D17M2 AA 2 9711 X8242SIO1X658251WGQ 00126EBSIS11173 2BPD17 W52P1J $ [CONFIDENTIAL TREATMENT REQUESTED]* WGQ001
TOTAL $ 129,399,196.80 SERVICE ACCOUNTING OBLIGATED NAME TOTAL BY ACRN ACCOUNTING CLASSIFICATION STATION AMOUNT Army AA 9711 X8242SIO1X658251WGQ 00126EBSIS11173 W52P1J $ 129,399,196.80 TOTAL $ 129,399,196.80 G.1. CONTRACTOR'S REMIT-TO ADDRESS FOR PAYMENT OF INVOICES Payment shall be made to the remit-to address shown on the invoice as authorized by the contractor. G.2. CONTRACTOR'S INVOICES Request for payment: Submit public vouchers to the Finance Officer found in Block 12 of Standard Form 26 (Contract Award Document). *** END OF NARRATIVE G 001 *** CONTINUATION SHEET Reference No. of Document Being Continued Page 12 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION H - SPECIAL CONTRACT REQUIREMENTS For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm The following Federal Acquisition Regulation (FAR), DoD FAR Supplement clauses and provisions, the full text of which will be made available upon request, are incorporated herein by reference with the same force and effect as if set forth in full text. The text of the clauses incorporated by reference herein are available from the contract specialist indicated in block 7 of the Standard Form 33 or (as applicable) the contracting officer and will be furnished upon request. Other documents are available as indicated in the schedule. Any company/individual wishing to purchase a copy of the Federal Acquisition Regulation (FAR), the Army FAR Supplement or the DOD FAR Supplement, may do so from the Superintendent of Documents, US Government Printing Office, Washington DC 20402. (HA7001) Regulatory Cite Title Date H-1 246.671 DFARS MATERIAL INSPECTION AND RECEIVING REPORTS (DD FORM 250) JAN/1995 Material Inspection and Receiving Report (DD Form 250), required to be prepared and furnished to the Government under the clause of this contract entitled `Material Inspection and Receiving Report', will be distributed by the Contractor in accordance with DOD FAR Supplement Appendix F, Part 4. Send copies to: 1. Purchasing Office SEE BLOCK 6 OF THE AWARD FORM 2. Contract Administration Office SEE BLOCK 7 OF THE AWARD FORM 3. Send additional copies to: U.S. Army Security Assistance Command ATTN: AMCPM-NGW (Room 201) 5870 21st Street, Building 216 Ft. Belvoir, VA 22060 Logistics & Transportation Service Inc 1119 Wilso Drive, Desoto Business Park Baltimore, MD 21223-3230 (End of clause) (HA6025)
CONTINUATION SHEET Reference No. of Document Being Continued Page 13 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION I - CONTRACT CLAUSES For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm Regulatory Cite Title Date I-1 52.202-1 DEFINITIONS DEC/2001 I-2 52.203-3 GRATUITIES APR/1984 I-3 52.203-5 COVENANT AGAINST CONTINGENT FEES APR/1984 I-4 52.203-7 ANTI-KICKBACK PROCEDURES JUL/1995 I-5 52.211-5 MATERIAL REQUIREMENTS AUG/2000 I-6 52.232-1 PAYMENTS APR/1984 I-7 52.232-17 INTEREST JUN/1996 I-8 52.232-25 PROMPT PAYMENT MAY/2001 I-9 52.233-1 DISPUTES DEC/1998 I-10 52.242-2 PRODUCTION PROGRESS REPORTS APR/1991 I-11 52.242-13 BANKRUPTCY JUL/1995 I-12 52.243-1 CHANGES - FIXED PRICE AUG/1987 I-13 52.243-7 NOTIFICATION OF CHANGES APR/1984 I-14 52.249-2 TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) SEP/1996 I-15 52.249-8 DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) APR/1984 I-16 252.223-7002 SAFETY PRECAUTIONS FOR AMMUNITION AND EXPLOSIVES MAY/1994 DFARS I-17 252.223-7003 CHANGE IN PLACE OF PERFORMANCE - AMMUNITION AND EXPLOSIVES DEC/1991 DFARS I-18 252.242-7000 POSTAWARD CONFERENCE DEC/1991 DFARS I-19 252.246-7000 MATERIAL INSPECTION AND RECEIVING REPORT DEC/1991 DFARS
CONTINUATION SHEET Reference No. of Document Being Continued Page 14 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION J - LIST OF ATTACHMENTS List of Number Addenda Title Date of Pages Transmitted By Exhibit A DD 1423 011 Exhibit B GUIDANCE SHEET INCLUDING DOCUMENT SUMMARY LIST 003 Attachment 001 SCOPE OF WORK 013 Attachment 002 MECAR LETTER- TERMINATION FOR CONVENIENCE 25-FEB-02 001 Attachment 003 SECTION D - PRESERVATION, PACKAGING AND INSTRUCTIONS FOR 002 M690A1, M691A2, M69A2 AND M697 CARTRIDGES Attachment 004 AMSTA-AR FORM 377, PRESERVATION, PACKAGING AND PACKING 018 INSTRUCTIONS M690A1, M691A2, M692A2 AND M697 CARTRIDGES (TBD)
CONTINUATION SHEET Reference No. of Document Being Continued Page 15 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS OF OFFERORS For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm Regulatory Cite Title Date K-1 52.215-6 PLACE OF PERFORMANCE OCT/1997 (a) The offeror or respondent, in the performance of any contract resulting from this solicitation, intends, does not intend to use one or more plants or facilities located at a different address from the address of the offeror or respondent as indicated in this proposal or response to request for information. (b) If the offeror or respondent check "intends" in paragraph (a) of this provision, it shall insert in the following spaces the required information: PLACE OF PERFORMANCE NAME AND ADDRESS OF OWNER (STREET ADDRESS, CITY AND OPERATOR OF THE PLANT STATE, COUNTY, ZIP-CODE) OR FACILITY IF OTHER THAN OFFEROR OR RESPONDENT (End of provision) (KF7035)
CONTINUATION SHEET Reference No. of Document Being Continued Page 16 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION L - INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm Regulatory Cite Title Date L-1 52.204-6 DATA UNIVERSAL NUMBERING SYSTEM (DUNS) NUMBER JUN/1999 L-2 52.211-14 NOTICE OF PRIORITY RATING FOR NATIONAL DEFENSE USE SEP/1990 Any contract awarded as a result of this solicitation will be a DO rated order certified for national defense use under the Defense Priorities and Allocations System (DPAS)(15 CFR 700), and the Contractor will be required to follow all of the requirements of this regulation. (End of Provision) (LF6019) L-3 52.216-1 TYPE OF CONTRACT APR/1984 The Government contemplates award of a firm fixed price contract resulting from this solicitation. (End of Provision) (LF6008)
CONTINUATION SHEET Reference No. of Document Being Continued Page 17 of 17 PIIN/SIIN DAAA09-02-C-0015 MOD/AMD Name of Offeror or Contractor: MECAR SA SECTION M - EVALUATION FACTORS FOR AWARD For Local Clauses See: http://www.osc.army.mil/ac/aais/ioc/clauses/index.htm The following Federal Acquisition Regulation (FAR), DoD FAR Supplement clauses and provisions, the full text of which will be made available upon request, are incorporated herein by reference with the same force and effect as if set forth in full text. The text of the clauses incorporated by reference herein are available from the contract specialist indicated in block 7 of the Standard Form 33 or (as applicable) the contracting officer and will be furnished upon request. Other documents are available as indicated in the schedule. Any company/individual wishing to purchase a copy of the Federal Acquisition Regulation (FAR), the Army FAR Supplement or the DOD FAR Supplement, may do so from the Superintendent of Documents, US Government Printing Office, Washington DC 20402. MA7001 * [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24 B-2. EX-99.1 7 dex991.txt CERTIFICATION LETTER Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT In connection with the Quarterly Report of Allied Research Corporation ("Allied") on Form 10-Q of the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, the undersigned, J. H. Binford Peay, III as President and Charles A. Hasper as Chief Financial Officer of Allied, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and result of operations of Allied. /s/ /s/ - ------------------------------------- ------------------------------------- Charles A. Hasper J. H. Binford Peay, III Chief Financial Officer President August 14, 2002 August 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----