-----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, Cbim+5vcC6poGcPz0v9KgbzmEdwrnlNz9qrdU386qQylQbZTbpbd/GsI8mb/dJnO HFXKNviymSN4fmLdzfTuSQ== 0000950109-01-503003.txt : 20010820 0000950109-01-503003.hdr.sgml : 20010820 ACCESSION NUMBER: 0000950109-01-503003 CONFORMED SUBMISSION TYPE: SC 13E3 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20010817 GROUP MEMBERS: EA ENGINERING HOLDINGS, LLC GROUP MEMBERS: ECOLAIR LLP. GROUP MEMBERS: LOREN D. JENSEN, PH.D GROUP MEMBERS: THE LOUIS BERGER GROUP, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EA ENGINEERING SCIENCE & TECHNOLOGY INC CENTRAL INDEX KEY: 0000802492 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 520991911 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13E3 SEC ACT: 1934 Act SEC FILE NUMBER: 005-38065 FILM NUMBER: 1717867 BUSINESS ADDRESS: STREET 1: 11019 MCCORMICK RD CITY: HUNT VALLEY STATE: MD ZIP: 21031 BUSINESS PHONE: 4105847000 MAIL ADDRESS: STREET 1: 11019 MCCORMICK RD CITY: HUNT VALLEY STATE: MD ZIP: 21031 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EA ENGINEERING ACQUISITION CORP CENTRAL INDEX KEY: 0001144406 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13E3 BUSINESS ADDRESS: STREET 1: 11019 MCCORMICK ROAD STREET 2: SUITE 250 CITY: HUNT VALLEY STATE: MD ZIP: 21031 BUSINESS PHONE: 4105273501 MAIL ADDRESS: STREET 1: 11019 MCCORMICK ROAD STREET 2: SUITE 250 CITY: HUNT VALLEY STATE: MD ZIP: 21031 SC 13E3 1 dsc13e3.txt EA ENGINEERING, SCIENCE AND TECHNOLOGY, INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) or 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. (Name of Subject Company (Issuer)) EA ENGINEERING ACQUISITION CORPORATION EA ENGINEERING HOLDINGS, LLC THE LOUIS BERGER GROUP, INC. ECOLAIR LLLP LOREN D. JENSEN, Ph.D. (Name of Filing Person) COMMON STOCK (Title of Class of Securities) 000267911105 (CUSIP Number of Class of Securities) LOREN D. JENSEN DERISH M. WOLFF EA ENGINEERING ACQUISITION CORPORATION THE LOUIS BERGER GROUP, INC. 11019 MCCORMICK ROAD 100 HALSTED STREET SUITE 250 EAST ORANGE, NEW JERSEY 07018 HUNT VALLEY, MD 21031 (973) 678-1960 (410) 527-3501 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) With a Copy to: WALTER G. LOHR, JR. HOGAN & HARTSON L.L.P. 111 SOUTH CALVERT STREET, SUITE 1600 BALTIMORE, MD 21202 (410) 659-2700 CALCULATION OF FILING FEE TRANSACTION VALUATION* AMOUNT OF FILING FEE --------------------- -------------------- $10,466,244.00 $2,094.00 * Based on the offer to purchase all of the outstanding shares of Common Stock of the Subject Company at $1.60 cash per share and 6,541,402 shares of Common Stock outstanding or represented by stock options, as of July 24, 2001. [_]Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: N/A Filing Party: N/A --- --- Form or Registration No.: N/A Date Filed: N/A --- --- [_]Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [X] third party tender offer subject to Rule 14d-1. [X] going-private transaction subject to Rule 13e-3. [_] issuer tender offer subject to Rule 13e-4. [_] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results of the tender offer.[_] This Tender Offer Statement on Schedule TO relates to the offer by EA Engineering Acquisition Corporation (the "Purchaser"), a Delaware corporation and a direct wholly owned subsidiary of EA Engineering Holdings, LLC (the "Parent"), a Delaware limited liability company, to purchase all of the issued and outstanding shares of common stock of EA Engineering, Science, and Technology, Inc. (the "Company"), a Delaware corporation, at a price of $1.60 per share of Common Stock, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 1, 2001( the "Offer to Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and in the related Letter of Transmittal, a copy of which is attached hereto as Exhibit (a)(2) (which, as they may be amended and supplemented from time to time, together constitute the "Offer"). ITEM 1. SUMMARY TERM SHEET. The information set forth in the Offer to Purchase under the caption "Summary Term Sheet" is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) Name and Address. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning EA Engineering" is incorporated herein by reference. (b) Securities. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning EA Engineering" is incorporated herein by reference. (c) Trading Market and Price. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Price Range of Shares; Dividends" is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a) Name and Address. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning Us, our Parent, Dr. Jensen, the Jensen Family Trusts, and The Louis Berger Group, Inc." and the information set forth on Schedule I to the Offer of Purchase is incorporated herein by reference. (b) Business and Background of Entities. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, and The Louis Berger Group, Inc." and on Schedule I is incorporated herein by reference. (c) Business and Background of Natural Persons. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, and The Louis Berger Group, Inc." and on Schedule I is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a) Material Terms. The information set forth in the Offer to Purchase under the captions "Introduction," "The Tender Offer--Terms of the Offer," "The Tender Offer--Procedures for Tendering Shares," "The Tender Offer-- Withdrawal Rights," "The Tender Offer--Purchase of Shares and Payment of Purchase Price," "The Tender Offer--Conditions of the Offer," and "Special Factors--Certain United States Federal Income Tax Consequences" is incorporated herein by reference. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. (a) Transactions. (1) Other than the transactions contemplated by the Offer to Purchase and other than as described in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, and The Louis Berger Group, Inc.," which is incorporated herein by reference, no transactions with an aggregate value of more than one percent of the Company's consolidated revenues, other than those described in paragraphs (b) and (c) of this Item 5, have occurred during the past two years between any of the filers, or to their knowledge any of their respective affiliates, on the one hand, and the Company or any of its affiliates that are not natural persons, on the other hand. (2) Other than as described in paragraphs (b) and (c) of this Item 5, no transactions or series of similar transactions with an aggregate value of more than $60,000 have occurred during the past two years between any of the filers, or to their knowledge any of their respective affiliates, on the one hand, and any executive officer, director or affiliate of the Company that is a natural person, on the other hand. (b) Significant Corporate Events. The information set forth in the Offer to Purchase under the caption "Special Factors--Background of the Offer" is incorporated herein by reference. ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS (a) Purposes. The information set forth in the Offer to Purchase under the caption "Special Factors--Purpose of the Offer; Plans for EA Engineering" is incorporated herein by reference. (c) Plans. The information set forth in the Offer to Purchase under the captions "Special Factors--Purpose of the Offer; Plans for EA Engineering," "Special Factors--Merger Agreement" and "Special Factors--Certain Effects of the Offer and the Merger" is incorporated herein by reference. -2- ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) Source of Funds. The information set forth in the Offer to Purchase under the captions "Special Factors--Financing of the Offer" and "The Tender Offer--Source and Amount of Funds" is incorporated herein by reference. (b) Conditions. The information set forth in the Offer to Purchase under the captions "Special Factors--Financing of the Offer" and "The Tender Offer--Source and Amount of Funds" is incorporated herein by reference. (d) Borrowed Funds. The information set forth in the Offer to Purchase under the captions "Special Factors--Financing of the Offer" and "The Tender Offer--Source and Amount of Funds" is incorporated herein by reference. ITEM 8. INTERESTS IN SECURITIES OF THE SUBJECT COMPANY. (a) Securities Ownership. The Information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, and The Louis Berger Group, Inc." and on Schedule II is incorporated herein by reference. (b) Securities Transactions. The Information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, and The Louis Berger Group, Inc." and on Schedule II is incorporated herein by reference. ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED COMPENSATED OR USED. (a) Solicitations or Recommendations. No person has been directly or indirectly employed, retained, or to be compensated to make solicitations or recommendations in connection with the transaction. ITEM 10. FINANCIAL STATEMENTS. (a) Financial Information. Pursuant to the Instructions to Item 10, financial information is not material. (b) Pro Forma Information. Pursuant to the Instructions to Item 10, pro forma information is not material. ITEM 11. ADDITIONAL INFORMATION. (a) Agreements, Regulatory Requirements and Legal Proceedings. The information set forth under the captions "Special Factors--Interests of Certain Persons in the Offer and the Merger," "Special Factors--Certain Effects of the Offer and the -3- Merger" and "The Tender Offer--Certain Legal Matters" is incorporated herein by reference. (b) Other Material Information. The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference. ITEM 12. EXHIBITS. (a)(1) Offer to Purchase, dated August 1, 2001. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Press Release of EA Engineering, Science, and Technology, Inc. dated July 24, 2001.* (a)(7) Press Release of EA Engineering Acquisition Corporation dated August 1, 2001. (c) Fairness Opinion, dated as of July 23, 2001, by Legg Mason Wood Walker, Incorporated. (d)(1) Agreement and Plan of Merger, dated July 24, 2001, by and among EA Engineering Acquisition Corporation, EA Engineering Holdings, LLC, and EA Engineering, Science, and Technology, Inc. (d)(2) Stockholders Agreement, dated July 24, 2001, by and among The Louis Berger Group, Inc., Ecolair LLLP, Loren D. Jensen, the Melanie Ann Jensen Irrevocable Trust, the Allison Ann Jensen Irrevocable Trust, the Aaron Keith Jensen Irrevocable Trust and EA Engineering, Science, and Technology, Inc. (d)(3) Stock Voting, Non-Tender and Contribution Agreement, dated July 24, 2001, by and among EA Engineering Holdings, LLC, EA Engineering Acquisition Corporation, The Louis Berger Group, Inc., Ecolair LLLP, Loren D. Jensen, the Melanie Ann Jensen Irrevocable Trust, the Allison Ann Jensen Irrevocable Trust and the Aaron Keith Jensen Irrevocable Trust. (f) Section 262 of the Delaware General Corporation Law regarding appraisal rights.** (g) None. (h) Not applicable. * Previously filed on Schedule TO-C with the Securities and Exchange Commission on July 24, 2001. ** Incorporated by reference to Annex A of the Offer to Purchase filed as Exhibit (a)(1) hereto. -4- ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. The Offer constitutes a "going-private" transaction within the meaning of Rule 13e-3. As such, the following sets forth that information required by Schedule 13E-3 that has not already been set forth above in Items 1-12 of this Schedule TO. The Louis Berger Group, Inc. does not concede as a result of providing such information or otherwise complying with Rule 13e-3 that it (or any of its affiliates) are affiliates of EA Engineering or subject to the requirements of such Rule. Item 2 of Schedule 13E-3 - Subject Company Information. (d) Dividends. The information set forth in "The Tender Offer--Price Range of Shares; Dividends" is incorporated herein by reference. (e) Prior Public Offering. The filing persons have not made an underwritten public offering of the subject securities for cash during the past three years that was registered under the Securities Act of 1933 or exempt from registration under Regulation A. (f) Prior Stock Purchases. The filing persons have not purchased any subject securities during the past two years. Item 4 of Schedule 13E-3 - Terms of the Transaction. (c) Different Terms. The information set forth in the Offer to Purchase under the caption "Special Factors--Interests of Certain Persons in the Offer and the Merger" are incorporated herein by reference. (d) Appraisal Rights. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Legal Matters" is incorporated herein by reference. (e) Provisions for Unaffiliated Security Holders. The information set forth in the Offer to Purchase under the caption "Special Factors-- Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" is incorporated herein by reference. (f) Eligibility for Listing or Trading. The transaction does not involve the offer of securities of any filing person in exchange for equity securities held by unaffiliated security holders of the subject company. Item 5 of Schedule 13E-3 - Past Contacts, Transactions, Negotiations and Agreements. (c) Negotiations or Contacts. The information set forth in the Offer to Purchase under the caption "Special Factors--Background of the Offer" is incorporated herein by reference. -5- (e) Agreements Involving the Subject Company's Securities. The information set forth in the Offer to Purchase under the caption "Special Factors--Interests of Certain Persons in the Offer and the Merger" is incorporated herein by reference. Item 6 of Schedule 13E-3 - Purposes of the Transactions and Plans or Proposals. (b) Use of Securities Acquired. The information set forth in the Offer to Purchase under the caption "Special Factors--Merger Agreement" is incorporated herein by reference. (c) Plans. (8) The information set forth in the Offer to Purchase under the caption "Special Factors--Certain Effects of the Offer and the Merger" is incorporated herein by reference. Item 7 of Schedule 13E-3 - Purposes, Alternatives, Reasons and Effects. (a) Purposes. The information set forth in the Offer to Purchase under the caption "Special Factors--Purposes of the Offer; Plans for EA Engineering" is incorporated herein by reference. (b) Alternatives. The information set forth in the Offer to Purchase under the caption "Special Factors--Background of the Merger" is incorporated herein by reference. (c) Reasons. The information set forth in the Offer to Purchase under the captions "Special Factors--Background" and "Special Factors-- Purposes of the Offer; Plans for EA Engineering" is incorporated herein by reference. (d) Effects. The information set forth in the Offer to Purchase under the captions "Special Factors--Purposes of the Offer; Plans for EA Engineering" and "Special Factors--Interests of Certain Persons in the Offer and the Merger" is incorporated herein by reference. Item 8 of Schedule 13E-3 - Fairness of the Transaction. (a) Fairness. The information set forth in the Offer to Purchase under the caption "Special Factors --Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" is incorporated herein by reference. (b) Factors Considered in Determining Fairness. The information set forth in the Offer to Purchase under the captions "Special Factors-- Background of the Offer," "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" and "Special Factors--Opinion of the Financial Advisor" is incorporated herein by reference. -6- (c) Approval of Security Holders. The information set forth in the Offer to Purchase under the caption "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" is incorporated herein by reference. (d) Unaffiliated Representative. The information set forth in the Offer to Purchase under the caption "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" is incorporated herein by reference. (e) Approval of Directors. The information set forth in the Offer to Purchase under the caption "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" is incorporated herein by reference. (f) Other Offers. The information set forth in the Offer to Purchase under the caption "Special Factors--Background of the Offer" is incorporated herein by reference. Item 9 of Schedule 13E-3 - Reports, Opinions, Appraisals and Negotiations. (a) Report, Opinion or Appraisal. The information set forth in the Offer to Purchase under the captions "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" and "Special Factors--Opinion of the Financial Advisor" is incorporated herein by reference. (b) Prepare and Summary of the Report, Opinion or Appraisal. The information set forth in the Offer to Purchase under the captions "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" and "Special Factors--Opinion of the Financial Advisor" is incorporated herein by reference. (c) Availability of Documents. The information set forth in the Offer to Purchase under the caption "Special Factors--Opinion of the Financial Advisor" is incorporated herein by reference. Item 10 of Schedule 13E-3 - Source and Amount of Funds or Other Consideration. (c) Expenses. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Fees and Expenses" is incorporated herein by reference. Item 12 of Schedule 13E-3 - The Solicitation or Recommendation. (d) Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the Offer to Purchase under the captions "Special Factors--Recommendation of the Special Committee and the Board of Directors; -7- Fairness of the Offer and the Merger" and "Special Factors-- Transactions and Arrangements Concerning the Common Stock" is incorporated herein by reference. (e) Approval of Directors. The information set forth in the Offer to Purchase under the caption "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger" is incorporated herein by reference. Item 13 of Schedule 13E-3 - Financial Statements. (a) Financial Information. The information set forth in the Offer to Purchase under the caption "The Tender Offer--Certain Information Concerning EA Engineering" is incorporated herein by reference. The audited financial statements of the Company as of and for the fiscal years ended August 31, 1999 and August 31, 2000 are hereby expressly incorporated herein by reference to Item 8 of the Company's Annual report on Form 10-K for the fiscal year ended August 31, 2000 filed with the Securities and Exchange Commission on November 20, 2000. The unaudited financial statements of the Company as of and for the quarter and nine months ended May 31, 2000 and May 31, 2001, are hereby expressly incorporated by reference herein by reference to part I, Item 2 of the Company's Quarterly Report on From 10-Q for the quarter and nine months ended May 31, 2001 filed with the Securities and Exchange Commission on July 24, 2001. (b) Pro forma Information. Pursuant to the Instructions to Item 13, pro forma information is not material. Item 14 of Schedule 13E-3 - Persons/Assets, Retained, Employed, Compensated or Used. (b) Employees and Corporate Assets. Other than Loren D. Jensen, Ph.D., in his capacity as a filing person, no officer, employee or corporate assets of the Company has been or will be used by any of the filing persons in connection with the transaction. Item 16 of Schedule 13E-3 - Exhibits. The response to this item is included in Item 12 of this Schedule TO. -8- SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2001 EA ENGINEERING HOLDINGS, LLC By: /s/ LOREN D. JENSEN ------------------------------------------- Name: Loren D. Jensen Title: President Dated: August 1, 2001 EA ENGINEERING ACQUISITION CORPORATION By: /s/ LOREN D. JENSEN ------------------------------------------- Name: Loren D. Jensen Title: President Dated: August 1, 2001 THE LOUIS BERGER GROUP, INC. By: /s/ LEON A. MARANTZ ------------------------------------------- Name: Leon A. Marantz Title: Chair of Finance Committee Dated: August 1, 2001 ECOLAIR LLLP By: /s/ LOREN D. JENSEN ------------------------------------------- Name: Loren D. Jensen General Partner Dated: August 1, 2001 /s/ LOREN D. JENSEN ---------------------------------------------- Loren D. Jensen, Ph.D. EX-99.A.1 3 dex99a1.txt OFFER TO PURCHASE EXHIBIT (a)(1) OFFER TO PURCHASE FOR CASH All of the Outstanding Shares of Common Stock of EA Engineering, Science, and Technology, Inc. at $1.60 Net Per Share of Common Stock by EA Engineering Acquisition Corporation A Direct Wholly Owned Subsidiary of EA Engineering Holdings, LLC THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, AUGUST 30, 2001, UNLESS THE OFFER IS EXTENDED. The offer is conditioned on, among other things, there being validly tendered and not properly withdrawn prior to the expiration of the offer a number of shares of common stock of EA Engineering, Science, and Technology, Inc., which, when added to the shares of common stock owned by EA Engineering Holdings, LLC, EA Engineering Acquisition Corporation, Loren D. Jensen, Ph.D., and trusts for the benefit of his children, constitutes at least ninety percent (90%) of the outstanding shares of common stock of EA Engineering, Science, and Technology, Inc. on a fully-diluted basis. This condition may be waived by EA Engineering Acquisition Corporation in its sole discretion provided that there shall have been validly tendered and not properly withdrawn prior to the expiration of the offer a number of shares which, when added to the shares owned by EA Engineering Holdings, LLC, EA Engineering Acquisition Corporation, Dr. Jensen, and the trusts for the benefit of his children, constitutes at least a majority of the outstanding shares of EA Engineering, Science, and Technology, Inc. on a fully-diluted basis. For purposes of the offer, "fully- diluted" is defined as the number of shares outstanding and shares which may be issued pursuant to outstanding stock options that are then exercisable at a price per share less then the purchase price in this offer. The offer is also subject to other terms and conditions described in "The Tender Offer-- Conditions of the Offer." The Board of Directors of EA Engineering, Science, and Technology, Inc., based on the unanimous recommendation of a special committee of independent directors, has unanimously approved the merger agreement (as described herein), this tender offer and the merger of EA Engineering Acquisition Corporation with and into EA Engineering, Science, and Technology, Inc., has determined that this tender offer and the merger are fair to, and in the best interests of, you and the other holders of shares of common stock (other than Loren D. Jensen and the trusts for the benefit of his children), and recommends that you accept the offer and tender your shares pursuant to the offer. Shares of EA Engineering, Science, and Technology, Inc.'s common stock are listed and traded on The Nasdaq SmallCap Market under the symbol "EACO." As of July 23, 2001, the last trading day prior to the public announcement of this tender offer, the closing price of the common stock, as reported on The Nasdaq SmallCap Market, was $1.06 per share. We urge you to obtain current market quotations for the common stock. See "The Tender Offer--Price Range of Shares; Dividends." A summary of the principal terms of the offer appears on pages 1-5 of this offer to purchase. You should direct questions or requests for assistance or for additional copies of this offer to purchase or the letter of transmittal to the Information Agent at its address and telephone number set forth on the back cover of this offer to purchase. August 1, 2001 IMPORTANT STOCKHOLDER INFORMATION If you wish to tender all or any part of your shares of common stock registered in your name, you should follow the instructions described in "The Tender Offer--Procedures for Tendering Shares" carefully, including completing and signing a letter of transmittal (or a facsimile thereof) in accordance with the instructions in the letter of transmittal and either mailing or delivering it with your share certificates and any other required documents to Mellon Investor Services LLC, the Depositary. If your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact the nominee if you desire to tender your shares and request that the nominee tender them for you. If you desire to tender shares of common stock and your certificates for the shares cannot be delivered to the Depositary or you cannot comply with the procedure for book-entry transfer or your other required documents cannot be delivered to the Depositary, in any case, by the expiration of the offer, you must tender your shares pursuant to the guaranteed delivery procedure set forth in "The Tender Offer--Procedures for Tendering Shares." To properly tender shares, you must validly complete the letter of transmittal. Copies of this offer to purchase, the letter of transmittal or any related documents must not be mailed to or otherwise distributed or sent in, into or from any country where such distribution or offering would require any additional measures to be taken or would be in conflict with any law or regulation of such a country or any political subdivision thereof. Persons into whose possession this document comes are required to inform themselves about and to observe any such laws or regulations. This offer to purchase may not be used for, or in connection with, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstances in which the offer or solicitation is not authorized or is unlawful. Questions and requests for assistance may be directed to Mellon Investor Services LLC, the Information Agent, at its address and telephone number set forth on the back cover of this offer to purchase. Additional copies of this offer to purchase, the letter of transmittal or other related tender offer materials may be obtained at no cost from the Information Agent or from brokers, dealers, commercial banks or trust companies. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE TRANSACTION; PASSED UPON THE FAIRNESS OR MERITS OF THE TRANSACTION; OR PASSED UPON THE ACCURACY OR ADEQUACY OF THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. SUMMARY TERM SHEET EA Engineering Acquisition Corporation is offering to purchase all of the outstanding shares of common stock of EA Engineering, Science, and Technology, Inc., for $1.60 net per share in cash, without any interest. Throughout this document, we refer to EA Engineering, Science, and Technology, Inc. as "EA Engineering," we refer to EA Engineering Acquisition Corporation as "us" or "we" and we refer to EA Engineering Holdings, LLC, as "our parent." The following are some of the questions you, as a stockholder of EA Engineering, may have and answers to those questions. This summary highlights the most material information from this offer to purchase, but you should realize it does not describe all of the details of the offer to purchase to the same extent as described in the rest of this document. We urge you to read carefully this entire offer to purchase and the related letter of transmittal to understand the offer fully and for a more complete description of the terms of the offer. We have included page references parenthetically to direct you to a more complete description of the topics in this summary. . Who is offering to buy my securities? Our name is EA Engineering Acquisition Corporation. We are a Delaware corporation formed for the purpose of making the offer. We are a direct wholly owned subsidiary of EA Engineering Holdings, LLC, a Delaware limited liability company. We and our parent are both newly-formed Delaware entities and have not conducted any business other than in connection with the offer and the merger agreement described below. The equity interests of our parent are held by Ecolair LLLP and The Louis Berger Group, Inc. Ecolair LLLP is a Maryland limited liability limited partnership of which Loren D. Jensen, Ph.D. is the general partner. Dr. Jensen is also the Chairman of the Board, Chief Executive Officer and President of EA Engineering. Dr. Jensen owns approximately 26.6% of the outstanding common stock of EA Engineering and trusts for the benefit of Dr. Jensen's children, referred to in this offer to purchase collectively as the "Jensen Family Trusts," collectively own approximately 12.0% of the outstanding common stock of EA Engineering. Collectively, Dr. Jensen and the Jensen Family Trusts own approximately 38.6% of the outstanding common stock of EA Engineering. Dr. Jensen and the Jensen Family Trusts have agreed not to tender their shares in the offer and, after the expiration of the offer to purchase and immediately prior to the purchase of the shares properly tendered and not withdrawn pursuant to this offer, will contribute their shares of common stock of EA Engineering to our parent in exchange for equity interests in our parent. The Louis Berger Group, Inc., a New Jersey corporation, is a professional services firm that provides civil, structural, mechanical, electrical and environmental engineering services. The Louis Berger Group, Inc. is headquartered in East Orange, New Jersey. We are making this offer pursuant to a merger agreement dated July 24, 2001, to which we, our parent, and EA Engineering each are parties. The offer is the first step in our plan to acquire EA Engineering. Neither we nor our parent are a subsidiary of EA Engineering. . What securities are you offering to purchase? We are offering to purchase all of the outstanding shares of common stock of EA Engineering or any lesser number of shares that stockholders properly tender in the offer, so long as the number of shares of EA Engineering's common stock have been tendered (and not validly withdrawn) to us that, when added to the shares of common stock owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least 90% of the outstanding common stock on a fully-diluted basis. This condition may be waived by us in our sole discretion provided that there shall have been validly tendered and not properly withdrawn prior to the expiration of the offer a number of shares which, when added to the shares owned by us, our parent, Dr. Jensen, and the Jensen Family Trusts, constitutes at least a majority of the outstanding shares of EA Engineering on a fully-diluted basis. For purposes of the offer, "fully-diluted" is defined as the number of shares outstanding and shares which may be issued pursuant to outstanding stock options that are then exercisable at a price per share less than the purchase price in this offer. (Page 44) 1 . How much will you pay me for my shares and in what form of payment? We will pay $1.60 in cash, without interest, for each share we purchase pursuant to the offer. All shares purchased will be purchased at this price. We will not offer, nor will we pay, different prices to different stockholders. Stockholders whose shares are purchased in the offer will be paid the purchase price, net in cash, without interest, as soon as practicable after the expiration of the offer period. Under no circumstances will we pay interest on the purchase price, including but not limited to, by reason of any delay in making payment. (Page 49) . Why are you making this offer? We are making this offer to enable our parent to acquire control of, and ultimately to acquire the entire equity interest in, EA Engineering. Our offer to buy your shares is the first step in our plans to take EA Engineering private. As soon as practicable following the closing of the tender offer, we will be merged into EA Engineering. After the merger, EA Engineering will be owned exclusively by our parent. (Page 24) . Do you have the financial resources to pay me for my shares? We will need approximately $6.1 million to purchase all the outstanding common stock of EA Engineering, excluding the common stock owned by Dr. Jensen and the Jensen Family Trusts, and to pay all the expenses involved in the offer. The funds necessary to complete the offer will be contributed to our parent by Ecolair LLLP and The Louis Berger Group, Inc. immediately prior to the purchase of the shares pursuant to the offer. The offer is not subject to our receipt of any additional financing. (Page 41) . Is your financial condition relevant to my decision to tender in the offer? We do not believe that our financial condition is relevant to your decision to tender in the offer because the form of payment that you will receive consists solely of cash and if you tender in the offer and receive payment in full for your shares, you will have no continuing equity interest in EA Engineering. Additionally, both we and our parent have been formed solely for the purpose of acquiring shares of common stock of EA Engineering and there is no relevant historical financial information available with respect to either us or our parent. Tendering your shares in the offer will end your ownership interest in EA Engineering, including the chance to receive any possible future dividends or other payments in respect of the common stock. Therefore, EA Engineering's financial condition may be relevant to your decision whether to tender your shares of common stock in the offer. We have provided certain historical financial information concerning EA Engineering later in this offer to purchase. (Page 53) . How long do I have to decide whether to tender in the offer? You have until 5:00 p.m., New York City time, on Thursday, August 30, 2001, to decide whether to tender your shares in the offer, unless the offer is extended pursuant to the terms of the merger agreement. If you cannot deliver everything that is required in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure, which is described later in this offer to purchase. (Page 46) . Can the offer be extended and under what circumstances? Subject to the terms of the merger agreement, we can extend the offer. We have agreed in the merger agreement that we may extend the offer from time to time until December 1, 2001 if certain conditions to the offer have not been satisfied. In particular, we may extend the offer for up to ten business days if there shall not 2 have been tendered a number of shares of common stock that, when added to the shares of common stock owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least 90% of the outstanding shares of common stock (calculated by including shares of common stock that are subject to stock options that are then exercisable at a price per share less than the purchase price in this offer). However, we cannot assure you that the offer will be extended or, if extended, for how long. . Will there be a subsequent offering period? We do not currently intend to include a subsequent offering period for the offer, although we may ultimately decide to do so. A subsequent offering period, if one is included, will be an additional period of time beginning after we have purchased shares tendered during the offer, during which stockholders may tender their shares and receive the offer consideration. . How will I be notified if the offer is extended or if there is a subsequent offering period? If we extend the offer or provide for a subsequent offering period, we will inform Mellon Investor Services LLC which is the Depositary for the offer, of that fact. We also will make a public announcement of the extension, no later than 9:00 a.m. New York City time, on the next business day following the previously scheduled expiration of the offer period. (Page 44) . What are the most significant conditions to the offer? We are not obligated to purchase any shares which are validly tendered unless the number of shares validly tendered and not properly withdrawn before the expiration of the offer, when added to the shares of common stock owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least 90% of the outstanding shares of common stock of EA Engineering (calculated by including shares of common stock that are subject to stock options that are then exercisable at a price per share less than the purchase price in this offer). We may, however, decide to purchase all shares tendered, even though the number may be less than 90% of the outstanding shares, without the prior written consent of EA Engineering, provided that there shall have been validly tendered and not withdrawn the number of shares that, together with the shares owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes a majority of the shares outstanding on a fully-diluted basis. The offer is subject to other conditions as well. (Page 58) . How do I tender my shares? To tender shares, you must deliver the certificates representing your shares, together with a completed letter of transmittal, to Mellon Investor Services LLC, the depositary for the offer, not later than the time the tender offer expires. If your shares are held in "street name," the shares can be tendered by your nominee through The Depository Trust Company. If you cannot get any document or instrument that is required to be delivered to the depositary by the expiration of the tender offer, you may get a little extra time to do so by having a broker, a bank or other fiduciary which is a member of the Securities Transfer Agents Medallion Program or other eligible institution guarantee that the missing items will be received by the depositary within three Nasdaq trading days. For the tender to be valid, however, the depositary must receive the missing items within that three trading day period. (Page 46) . How do I withdraw previously tendered shares? To withdraw shares, you must deliver a written notice of withdrawal with the required information to Mellon Investor Services LLC, the depositary for the offer, while you still have the right to withdraw the shares. (Page 48) 3 . Until what time can I withdraw previously tendered shares? You can withdraw shares at any time until the offer has expired and, if we have not by September 30, 2001 agreed to accept your shares for payment, you can withdraw them at any time after that date until we accept shares for payment. (Page 48) . When will I be paid for my shares purchased in the offer? We anticipate that the depositary will begin to mail checks for shares we purchase within five to ten business days after the expiration of the offer, but we do not know exactly when you will receive these checks. (Page 49) . Will I have to pay brokerage commissions or stock transfer taxes on my shares purchased in the offer? You will not be obligated to pay brokerage fees or commissions, or, except as set forth in Instruction 7 to the letter of transmittal, transfer taxes on the sale of shares pursuant to the offer. If you hold your shares with your broker or bank, we urge you to consult with your broker or bank to determine whether service charges or other fees are applicable. (Page 49) . Will I have to pay taxes if you purchase my shares in the offer? Generally, your sale of shares pursuant to the offer will be treated either as a sale or exchange eligible for capital gains treatment for federal income tax purposes and may also be a taxable transaction under applicable state, local and foreign tax laws. See "Special Factors--Certain United States Federal Income Tax Consequences." You are urged to consult with your own tax adviser to determine the tax consequences of participating in the offer. (Page 40) . What does EA Engineering's Board of Directors think of the offer? We are making the offer pursuant to a merger agreement among us, our parent and EA Engineering. The Board of Directors of EA Engineering, based on the unanimous recommendation of a special committee of independent directors, has unanimously approved the merger agreement, our tender offer and the proposed merger of us with and into EA Engineering, determined that our tender offer and the proposed merger are fair to, and in the best interests of, EA Engineering's stockholders (other than Dr. Jensen and the Jensen Family Trusts) and recommended that EA Engineering's stockholders accept our tender offer. Following the proposed merger, our separate corporate existence will cease and EA Engineering will continue as the surviving corporation and a direct wholly owned subsidiary of our parent. (Page 15) . Will the tender offer be followed by a merger if all of EA Engineering's shares are not tendered in the offer? The offer is the first step in our plan to acquire all of EA Engineering's common stock and for EA Engineering to become a private company. If we accept for payment and pay for outstanding shares of EA Engineering, we expect to be merged with and into EA Engineering. If that merger takes place our parent will directly own all of the shares of EA Engineering and all remaining stockholders of EA Engineering (other than our parent or its subsidiaries, including us, and Dr. Jensen and the Jensen Family Trusts) will receive $1.60 per share in cash. (Page 24) 4 . Will EA Engineering continue as a public company? No. If the merger takes place, EA Engineering will no longer be publicly owned. Even if the merger does not take place, if we purchase all of the tendered shares, there may be so few remaining stockholders and publicly-held shares that . EA Engineering shares will no longer meet the published guidelines of The Nasdaq SmallCap Market for continued listing and may be delisted from Nasdaq; . there may not be a public trading market for EA Engineering's shares; and . EA Engineering may cease making filings with the Securities and Exchange Commission or otherwise cease being required to comply with the Securities and Exchange Commission's rules relating to publicly-held companies. (Page 42) . What will happen in the merger? Following the merger, the shares of common stock which are held by any wholly owned subsidiary of EA Engineering, or which are held by us or our parent will be cancelled without payment. All remaining shares of common stock issued and outstanding immediately prior to the effective time of the merger will be converted into and represent the right to receive $1.60 per share. (Page 29) . Who will own EA Engineering after the merger? After the merger, EA Engineering will be a privately held company owned by our parent. Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP will collectively own 51% of the outstanding equity interests of our parent and The Louis Berger Group, Inc. will own 49% of the outstanding equity interests of our parent. (Page 42) . If I decide not to tender, how will the offer affect my shares? If the merger described above takes place, stockholders not tendering in the offer will receive the same amount of cash per share that they would have received had they tendered their shares in the offer. Therefore, if the merger takes place, the only difference to you between tendering your shares and not tendering your shares is that you will be paid earlier if you tender your shares. However, if the merger does not take place, the number of EA Engineering's stockholders and shares of EA Engineering which are still in the hands of the public may be so small that there may no longer be an active public trading market (or, possibly, there may not be any public trading market) for the shares. Also, as described above, EA Engineering may stop making filings with the Securities and Exchange Commission and/or may not be required to comply with the Securities and Exchange Commission's rules relating to publicly-held companies. (Page 42) . What is the market value of my shares as of a recent date? On July 23, 2001, the last trading day before EA Engineering announced the tender offer and the possible subsequent merger, the closing price of the shares of common stock reported on The Nasdaq SmallCap Market was $1.06 per share. We advise you to obtain a recent quotation for shares of common stock of EA Engineering in deciding whether to tender your shares. (Page 50) . Who can I talk to if I have questions about the tender offer? You can call Mellon Investor Services LLC at (800) 413-6134 (toll free). Mellon Investor Services LLC is acting as the Information Agent for our tender offer. See the back cover of this offer to purchase. 5 TABLE OF CONTENTS
SECTION Page - ------- ---- SUMMARY TERM SHEET........................................................ 1 TABLE OF CONTENTS......................................................... 6 INTRODUCTION.............................................................. 7 SPECIAL FACTORS........................................................... 10 Background of the Offer................................................. 10 Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger................................... 15 Opinion of the Financial Advisor........................................ 20 Purpose of the Offer; Plans for EA Engineering.......................... 24 Interests of Certain Persons in the Offer and the Merger................ 26 Merger Agreement........................................................ 29 Appraisal Rights........................................................ 38 Certain United States Federal Income Tax Consequences................... 40 Financing of the Offer.................................................. 41 Transactions and Arrangements Concerning the Common Stock............... 41 Certain Effects of the Offer and the Merger............................. 42 THE TENDER OFFER.......................................................... 44 Terms of the Offer...................................................... 44 Procedures for Tendering Shares......................................... 46 Withdrawal Rights....................................................... 48 Purchase of Shares and Payment of Purchase Price........................ 49 Price Range of Shares; Dividends........................................ 50 Source and Amount of Funds.............................................. 50 Effect of the Offer on the Market for the Shares of Common Stock; Exchange Act Registration.............................................. 51 Fees and Expenses....................................................... 51 Certain Information Concerning EA Engineering........................... 51 Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP and The Louis Berger Group, Inc............ 55 Conditions of the Offer................................................. 58 Certain Legal Matters................................................... 60 Miscellaneous........................................................... 61 Schedule I--Information Concerning the Directors and Executive Officers of EA Engineering Acquisition Corporation, EA Engineering Holdings, LLC, The Louis Berger Group, Inc. and Ecolair LLLP Schedule II--Information Concerning Transactions in the Common Stock of EA Engineering, Science, and Technology, Inc. Annex A--Section 262 of the Delaware General Corporation Law
6 INTRODUCTION EA Engineering Acquisition Corporation, a Delaware corporation and a direct wholly owned subsidiary of EA Engineering Holdings, LLC, a Delaware limited liability company, hereby offers to purchase all of the issued and outstanding shares of common stock of EA Engineering, Science, and Technology, Inc., a Delaware corporation ("EA Engineering"), at a price of $1.60 per share of common stock, net to the seller in cash, without interest, which we refer to as the "purchase price." Our offer is made on the terms and subject to the conditions set forth in this offer to purchase and in the related letter of transmittal. We refer to this offer to purchase and the related letter of transmittal, together with any amendments or supplements, as the "offer." Throughout this document we refer to EA Engineering Acquisition Corporation as "us" or "we" and refer to EA Engineering Holdings, LLC as "our parent." The offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of July 24, 2001, by and among us, our parent and EA Engineering, pursuant to which we will be merged with and into EA Engineering. You will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 7 to the letter of transmittal, transfer taxes on the sale of shares pursuant to the offer. If you hold your shares with your broker, you may be required by your broker to pay a service charge or other fee and, therefore, should consult with your broker. You will probably be subject to federal income tax on the receipt of cash for shares of common stock purchased by us pursuant to the offer. In addition, if you fail to complete, sign and return to the Depositary the IRS Substitute Form W-9 that is included with the letter of transmittal, you may be subject to required backup federal income tax withholding of 30.5% of the gross proceeds payable to you pursuant to the offer, and certain non-U.S. stockholders may be subject to a 30% income tax withholding. See "Special Factors--Certain United States Federal Income Tax Consequences." We will pay all fees and expenses of Mellon Investor Services LLC, the Depositary and the Information Agent, incurred in connection with the offer. The offer is conditioned on, among other things, there having been validly tendered and not properly withdrawn prior to the expiration of the offer a number of shares of common stock which, when added to the shares of common stock owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least 90% of the outstanding shares of common stock of EA Engineering on a fully- diluted basis. This condition may be waived by us in our sole discretion provided that there shall have been validly tendered and not properly withdrawn prior to the expiration of the offer a number of shares which, when added to the shares owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least a majority of the outstanding shares of EA Engineering on a fully-diluted basis. For purposes of the offer, "fully- diluted" is defined as the number of shares outstanding and shares which may be issued pursuant to outstanding stock options that are then exercisable at a price per share less than the purchase price in this offer. The offer is also subject to other terms and conditions. See "The Tender Offer--Conditions of the Offer." EA Engineering's Board of Directors, based upon the unanimous recommendation of a special committee of independent directors, has unanimously approved the Merger Agreement, the offer and the merger, determined that the offer and the merger are fair to, and in the best interests of, you and the other holders of common stock of EA Engineering (other than Dr. Jensen and the Jensen Family Trusts), and recommends that you and the other holders of common stock of EA Engineering accept the offer and tender your shares pursuant to the offer. EA Engineering has advised us that Legg Mason Wood Walker, Incorporated, the financial advisor to EA Engineering, has delivered to the special committee of EA Engineering's Board of Directors its opinion, dated July 23, 2001, that the consideration to be received by holders of common stock (other than Dr. Jensen and the Jensen Family Trusts) pursuant to the offer and the merger, is fair from a financial point of view to such holders, subject to the assumptions and qualifications set forth in the opinion. You are urged to read the opinion carefully, in its entirety, for the assumptions made, matters considered and limitations on the review undertaken 7 by Legg Mason Wood Walker, Incorporated. See "Special Factors--Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger." The Merger Agreement provides that, as soon as practicable after consummation of the offer and on the terms and subject to the conditions of the Merger Agreement and in accordance with Delaware law, we will be merged with and into EA Engineering. Following the effective time of the merger, EA Engineering will continue as the surviving corporation and become a wholly owned subsidiary of our parent and our separate corporate existence will cease. At the effective time of the merger, each share of common stock that is issued and outstanding immediately prior to the effective time (except those shares held by any wholly owned subsidiary of EA Engineering, or which are held by us or our parent) and all rights in the common stock will, by virtue of the merger and without any action on the part of the holder, cease to exist and be converted into and represent the right to receive an amount in cash equal to $1.60, without interest. The Merger Agreement is more fully described in "Special Factors--Merger Agreement." Under the Delaware General Corporation Law, if the number of shares we acquire pursuant to the offer, when added to the shares owned by us, constitutes at least 90% of the issued and outstanding shares of common stock, then we will be able to approve and effect the merger without a vote of EA Engineering's stockholders pursuant to Section 253 of the Delaware General Corporation Law. If, however, we do not acquire the number of shares that, when added to the shares owned by us, constitutes at least 90% of the issued and outstanding shares of common stock, a vote of a majority of EA Engineering's stockholders to effect the merger is required under the Delaware General Corporation Law and a longer period of time will be required to effect the merger. See "The Tender Offer--Conditions of the Offer." Both we and our parent are newly formed entities that have not conducted any business other than in connection with the offer and the Merger Agreement. The outstanding equity interests of our parent are currently owned by Ecolair LLLP, a Maryland limited liability limited partnership of which Dr. Jensen is the general partner, and The Louis Berger Group, Inc. After the expiration of the offer and immediately prior to the purchase of the shares in the offer, Dr. Jensen and the Jensen Family Trusts will contribute their shares of common stock of EA Engineering to our parent in exchange for equity interests in that entity. After that contribution, Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP will collectively own 51% of the equity interests of our parent and The Louis Berger Group, Inc. will own 49% of the equity interests of our parent. Dr. Jensen and the Jensen Family Trusts have entered into a Stock Voting, Non-Tender and Contribution Agreement, dated as of July 24, 2001, with us, our parent, The Louis Berger Group, Inc. and Ecolair LLLP pursuant to which they have agreed not to tender their shares of common stock in the offer, to contribute their shares to our parent after the expiration of the offer and immediately prior to the purchase of the shares properly tendered and not withdrawn pursuant to the offer, to vote their shares in favor of the Merger Agreement and the transactions contemplated by the Merger Agreement if stockholder approval is required and to vote against any competing offer. A copy of the Stock Voting, Non-Tender and Contribution Agreement is filed as an exhibit to the Tender Offer Statement on Schedule TO that we filed with the Securities and Exchange Commission. Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, The Louis Berger Group, Inc. and EA Engineering have entered into a Stockholders Agreement to become effective upon the purchase of shares pursuant to the offer which governs the rights of the parties as stockholders following the offer. In addition to standard voting and transfer restrictions which govern the parties, the Stockholders Agreement provides Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP the right to sell all or any portion of the shares of common stock owned by them at any time following the offer, and obligates The Louis Berger Group, Inc. to purchase these shares for the greater of (i) the purchase price paid for shares in the offer and (ii) the per share valuation of EA Engineering determined by multiplying EA Engineering's earnings before interest expense, taxes, depreciation and amortization (EBITDA) for the twelve months prior to the exercise of the right by six and subtracting therefrom outstanding debt and dividing the result by the number of shares outstanding. The EBITDA number is subject to certain adjustments if the EBITDA used in the calculation exceeds the EBITDA for the prior twelve month period by more than fifty percent. If Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP were to exercise the right to sell their shares immediately following the offer, the purchase price would be $1.60 per 8 share. A copy of the Stockholders Agreement is filed as an exhibit to the Tender Offer Statement on Schedule TO that we filed with the Securities and Exchange Commission. See "Special Factors--Interests of Certain Persons in the Offer and the Merger--The Stockholders Agreement." EA Engineering has informed us that, as of July 24, 2001 there were (i) 5,842,652 shares of common stock issued and outstanding and (ii) 104,337 shares of common stock were subject to issuance pursuant to outstanding stock options that were then exercisable at a price per share less than the purchase price in this offer. As a result, as of that date, 3,097,313 shares of common stock would need to be validly tendered and not properly withdrawn prior to Thursday, August 30, 2001 in order for us to purchase any shares tendered, unless we waive that condition. However, the actual minimum number of shares will depend on the facts as they exist on the date of purchase. EA Engineering has been advised, and has informed us, that each of its directors (other than Dr. Jensen) intends to tender pursuant to the offer all shares of common stock owned of record and beneficially by him or her, except to the extent that the tender would violate applicable securities laws. Except as otherwise set forth in this offer to purchase, the information concerning EA Engineering contained in this offer to purchase and in the attached schedules and annexes, including financial information, has been furnished by EA Engineering or has been taken from or based upon publicly available documents and records on file with the Securities and Exchange Commission and other public sources. We, our parent, The Louis Berger Group, Inc., Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP assume no responsibility for the accuracy or completeness of the information concerning EA Engineering furnished by EA Engineering or contained in the documents and records or for any failure by EA Engineering to disclose events that may have occurred or may affect the significance or accuracy of any such information but which are unknown to us. Similarly, EA Engineering does not assume any responsibility for the accuracy or completeness of the information concerning us, our parent, The Louis Berger Group, Inc., Dr. Jensen, the Jensen Family Trusts or Ecolair LLLP or any of their respective affiliates contained in this offer to purchase or the Schedule TO or for any failure by us, our parent, The Louis Berger Group, Inc., Dr. Jensen, the Jensen Family Trusts or Ecolair LLLP or any of their respective affiliates to disclose events that may have occurred or may affect the significance or accuracy of any such information but which are unknown to EA Engineering. The offer to purchase includes information required to be disclosed pursuant to Rule 13e-3 under the Securities Exchange Act of 1934, as amended, which rule governs so-called "going private" transactions by certain issuers or their affiliates. Neither The Louis Berger Group, Inc. nor the Jensen Family Trusts concedes as a result of providing information or otherwise complying with Rule 13e-3 that either of them (or any of their affiliates) are affiliates of EA Engineering or subject to the requirements of the rule. This offer to purchase and the letter of transmittal contain important information which should be read carefully before any decision is made with respect to the offer. The common stock is listed and traded on The Nasdaq SmallCap Market under the symbol "EACO." As of July 23, 2001, the last trading day prior to the announcement of the offer, the closing price of the common stock, as reported on The Nasdaq SmallCap Market, was $1.06 per share. See "The Tender Offer-- Price Range of Shares; Dividends." 9 SPECIAL FACTORS Background of the Offer. EA Engineering's management and Board of Directors have, from time to time, discussed strategies to maximize stockholder value as a regular part of EA Engineering's strategic planning activities. In the spring of 2000, EA Engineering's Board of Directors discussed the need to examine strategic alternatives for EA Engineering. The Board of Directors expressed concern regarding the viability of EA Engineering to continue to operate as a public company in light of the following factors: . EA Engineering's financial condition had eroded significantly since January 1997 and its market capitalization of $5 million to $6 million was not practical as a base to attract continued interest from public investors; . The lack of liquidity in EA Engineering's stock was unattractive to institutional investors; . EA Engineering's financial irregularities which were publicly disclosed in February 2000 were likely to continue to adversely influence a recovery of the stock price, and the costs incurred by EA Engineering in audits and restatements of periodic filings with the Securities and Exchange Commission would likely adversely impact future earnings in a manner that did not make it probable that the stock price would recover; . If the stock price were to continue to decline below $1.00 per share it could lead to delisting of the stock on The Nasdaq SmallCap Market for failure to meet Nasdaq's continued listing requirements, and EA Engineering had previously received correspondence to that effect from Nasdaq; . There had been a significant amount of consolidation in the environmental technology industry which had created more formidable competitors who had significantly more resources than EA Engineering and who were more attractive to investors; and . There had been internal concern by employees for the future of EA Engineering, which had resulted in lower employee morale and created the significant risk of losing employees at a time when recruitment of replacements would be challenging. Taking into consideration the factors listed above, the Board of Directors resolved to undertake a review of EA Engineering's strategic alternatives, particularly exploring the possibility of identifying an acquirer who could purchase the entire company and take it private. In early May 2000, Dr. Jensen, in his capacity as Chairman of the Board of Directors, proposed to the Board of Directors that EA Engineering retain Legg Mason Wood Walker, Incorporated and TechKNOWLEDGEy Strategic Group to act as financial advisors and to assist EA Engineering in evaluating its strategic alternatives. The Board of Directors approved the engagement of those two firms to jointly serve as EA Engineering's financial advisors. On May 26, 2000, EA Engineering executed an agreement with those two firms to jointly serve as financial advisors to EA Engineering and to assist EA Engineering in exploring strategic alternatives, including the identification of parties who might be interested in acquiring EA Engineering. Between June and September of 2000, EA Engineering's management and the financial advisors prepared a confidential offering memorandum containing a discussion of EA Engineering's business, market opportunities and management team as well as EA Engineering's financial results. During this period, EA Engineering's management and the financial advisors identified a list of national and international firms that might be interested in exploring an acquisition of EA Engineering. The confidential offering memorandum was completed in September 2000. 10 In consultation with the financial advisors and EA Engineering's legal counsel, the Board of Directors determined that it was appropriate to publicly announce that EA Engineering was evaluating its strategic alternatives. On September 18, 2000, EA Engineering issued a press release indicating that the Board of Directors of EA Engineering had engaged the financial advisors to assist it in exploring EA Engineering's strategic alternatives in order to maximize stockholder value. These strategic alternatives included a possible sale of EA Engineering or a business combination with another company. In September 2000, the financial advisors compiled a list of 300 firms that might be interested in acquiring EA Engineering and presented that list to EA Engineering's management. From that list, management selected approximately 74 firms for the advisors to contact. The financial advisors contacted the 74 firms to determine their levels of interest. From that list, 15 firms expressed interest in exploring a possible transaction with EA Engineering. In early October 2000, the financial advisors obtained confidentiality agreements from the 15 potential candidates who had expressed interest in a possible transaction with EA Engineering and distributed to them the confidential offering memorandum. The financial advisors began discussions with the potential candidates who received the confidential offering memorandum and discussed with them their level of interest in exploring a transaction with EA Engineering. At a meeting in November 2000 between the financial advisors and EA Engineering's management, the list of interested parties was narrowed to six firms on the basis of their levels of interest and their preliminary indications of their valuation of EA Engineering. The financial advisors and EA Engineering's management determined that the appropriate next step was to schedule meetings with these firms to enable EA Engineering's management to make presentations and to provide to such firms the opportunity to conduct legal, financial and business due diligence. This process was scheduled for November and December of 2000. During November and December of 2000, EA Engineering's management conducted meetings with each of the six firms identified on the list of most interested parties and provided representatives of those firms access to documentation to conduct legal due diligence on EA Engineering. On December 15, 2000, the Board of Directors received an unsolicited inquiry from a firm who stated that it had an interest in evaluating EA Engineering in order to make a proposal with respect to an investment in EA Engineering or the purchase of EA Engineering. EA Engineering's legal counsel responded indicating that EA Engineering was well into the process of evaluating its strategic alternatives and that it would be difficult to add this firm to the process at that time. On January 11, 2001, the financial advisors made a presentation to the Board of Directors on the status of the discussions with the interested parties. Based on the report of the financial advisors concerning the level of interest among the six firms, as reflected in the preliminary indications of interest received by the financial advisors and in the course of individual meetings with each of the six firms in the fall of 2000, the Board of Directors further reduced the list to two firms. The Board of Directors authorized the financial advisors to contact both firms and to seek to clarify the preliminary indications of interest in order to provide the Board of Directors with offers containing terms and conditions so that the Board of Directors could compare and evaluate them. During the following week, the financial advisors contacted both of the remaining firms to seek clarification regarding their preliminary indications of interest. On February 2, 2001, the Board of Directors met to consider the acquisition offers submitted by the two firms during the prior week, one of which was The Louis Berger Group, Inc. After a presentation to the Board of Directors by the financial advisors, and following discussions held in an executive session, the Board of Directors determined that the other firm would be a better strategic fit with EA Engineering than The Louis Berger Group, Inc. The Board of Directors informed the financial advisors of this decision. As both firms were considered serious, financially qualified parties and had submitted nearly equivalent offers in the range of $2.40 to $2.70 per share, the Board of Directors suggested that The Louis Berger Group, Inc. be thanked for their 11 submission and efforts, and if possible, asked to remain open and available for further discussion if negotiations with the other firm did not result in a definitive agreement in a timely period. Following the meeting, representatives of Legg Mason Wood Walker, Incorporated informed both firms of the decision of EA Engineering's Board of Directors and, with respect to the firm selected, sought to move forward with a due diligence process and expedited negotiation. From February 6, 2001 to May 11, 2001, EA Engineering's management, financial advisors and legal counsel engaged in a series of meetings with the management of the firm selected. These alternatives did not result in a successful negotiation of a definitive purchase agreement, principally because of that firm's concerns over EA Engineering's financial irregularities that had previously been publicly disclosed. On May 11, 2001, EA Engineering's management terminated further discussions with that firm. On March 23, 2001, Dr. Jensen received an unsolicited proposal from the firm that had made the unsolicited inquiry on December 15, 2000 to acquire EA Engineering at a price of $1.75 per share. The Board of Directors rejected that proposal at the time on the basis that EA Engineering was in the process of negotiating a definitive purchase agreement with the firm selected that contemplated a cash price well in excess of that contemplated in the unsolicited proposal. In mid-May 2001, after the negotiations with the firm initially selected were terminated, EA Engineering's management and the financial advisors reopened discussions with The Louis Berger Group, Inc. On May 21, 2001, Dr. Jensen and a representative of TechKNOWLEDGEy Strategic Group met with representatives of The Louis Berger Group, Inc. to discuss a possible transaction involving the purchase of EA Engineering by The Louis Berger Group, Inc. At this meeting, Dr. Jensen discussed with the representatives of The Louis Berger Group, Inc, pursuant to the confidentiality agreement that The Louis Berger Group, Inc. had previously executed, EA Engineering's published second fiscal quarter results and projected third fiscal quarter and fiscal year-end results and the impact of such results on the valuation of EA Engineering. As a result, the representatives of The Louis Berger Group, Inc. proposed to acquire EA Engineering for a price that was substantially below their prior indication of interest that was submitted in January 2001. In addition, the representatives of The Louis Berger Group, Inc. indicated that their proposal was contingent upon Dr. Jensen remaining with EA Engineering for a minimum of three years in a leadership position and upon Dr. Jensen using his best efforts to secure the continued employment of certain other members of EA Engineering's management. On May 25, 2001, Dr. Jensen called a special meeting of the Board of Directors to discuss the recent meeting with representatives of The Louis Berger Group, Inc. Dr. Jensen briefed the Board of Directors on the revised proposal of The Louis Berger Group, Inc., including the reduced price of $1.60 per share for all of EA Engineering's common stock. At the conclusion of the Board of Directors' discussion of the revised valuation reflected in the proposal by The Louis Berger Group, Inc., Dr. Jensen informed the Board of Directors that he was not prepared to sell his stock at that price. Dr. Jensen further suggested that the Board of Directors might be able to preserve this proposal for the public stockholders of EA Engineering if The Louis Berger Group, Inc. would be willing to join him in an effort to purchase the shares held by the other stockholders, provided that The Louis Berger Group, Inc. enter into an agreement with him pursuant to which he could compel The Louis Berger Group, Inc. to purchase his stock when he so desired. After further discussion on this topic, Dr. Jensen excused himself from the meeting and the other members of the Board of Directors continued their discussions in an executive session. After that meeting concluded, Mr. Cleaveland Miller, a member of the Board of Directors and EA Engineering's legal counsel, reported to Dr. Jensen that the other members of the Board of Directors encouraged Dr. Jensen to proceed with the development of a joint proposal with The Louis Berger Group, Inc. Prior to the conclusion of the meeting on May 25, 2001, the Board of Directors appointed a Special Committee of independent directors, consisting of Mr. Miller and Rudolph Lamone, Ph.D., to evaluate the merits, and negotiate the terms, of any proposed transaction involving Dr. Jensen. The Special Committee 12 subsequently retained Ballard Spahr Andrews and Ingersoll LLP as its legal counsel. It also subsequently retained Forte Consulting, Inc. as its financial advisor. On June 25, 2001, Mr. Miller, who was the trustee of the Jensen Family Trusts, resigned his position as trustee of the Jensen Family Trusts in order to avoid the appearance of a conflict of interest. Mr. Miller is a partner in the law firm of Semmes, Bowen & Semmes, which serves as legal counsel to EA Engineering. On June 6, 2001, Dr. Jensen and his legal counsel, Hogan & Hartson L.L.P., met with representatives of The Louis Berger Group, Inc., to discuss a strategic business relationship, wherein Dr. Jensen and The Louis Berger Group, Inc. would jointly form an acquisition entity to acquire EA Engineering and to take it private. During that meeting, Dr. Jensen persuaded the Louis Berger Group, Inc. to increase the purchase price to $1.65 per share. At that meeting, Dr. Jensen and The Louis Berger Group, Inc. reached preliminary terms concerning the acquisition of the shares of common stock of EA Engineering not owned by Dr. Jensen or the Jensen Family Trusts and taking EA Engineering private. Between June 6, 2001 and June 27, 2001, Dr. Jensen and representatives of The Louis Berger Group, Inc. engaged in numerous telephone calls to discuss various aspects of the structure, terms and conditions of a possible joint proposal between Dr. Jensen and The Louis Berger Group, Inc. to acquire EA Engineering. These telephone calls often included the participation of Dr. Jensen's legal counsel. During this period, legal counsel for Dr. Jensen prepared drafts of various legal documents that would be necessary in connection with the joint acquisition proposal including the limited liability company operating agreement for EA Engineering Holdings, LLC, the Stockholders Agreement and the Stock Voting, Non-Tender and Contribution Agreement. The parties also reviewed and commented on several drafts of a proposed merger agreement that was prepared by EA Engineering's legal counsel and that was to be submitted for the consideration of EA Engineering's Board of Directors. During this period, Dr. Jensen periodically and informally updated members of EA Engineering's Board of Directors regarding the progress being made with respect to the possible transaction. On June 20, 2001, Dr. Jensen spoke to certain members of EA Engineering's Board of Directors to inform them that it was possible that there would soon be a proposal delivered to the Board of Directors for an acquisition of EA Engineering jointly by Dr. Jensen and The Louis Berger Group, Inc. On June 28, 2001, Dr. Jensen delivered to the Board of Directors a proposal for an acquisition of EA Engineering jointly by Dr. Jensen and The Louis Berger Group, Inc. at $1.65 per share. As part of the proposal, Dr. Jensen delivered a form of merger agreement to the Board of Directors setting forth the terms and conditions of the proposed acquisition. The proposal indicated that it expired at the close of business on July 9, 2001. Immediately after Dr. Jensen's presentation and Dr. Jensen's departure from the meeting, the Special Committee met with its legal counsel and EA Engineering's financial advisors to discuss Dr. Jensen's proposal, including the terms and conditions of the merger agreement. At that meeting, the Special Committee directed a representative of Legg Mason Wood Walker, Incorporated to contact the firm that had made the unsolicited proposal in March 2001 as well as several of the firms that had expressed the most interest in pursuing a transaction with EA Engineering in February 2001, including the firm with whom EA Engineering had engaged in protracted negotiations in the spring of 2001, to determine whether any of such firms had any further interest in seeking to acquire EA Engineering. The representative of Legg Mason Wood Walker, Incorporated contacted all of those firms on June 28, 2001. On July 5, 2001, the Special Committee met with its financial advisor, its legal counsel and the financial advisors for EA Engineering. The financial advisors for EA Engineering advised the Special Committee that the firms which had previously been solicited and had submitted indications of interest had been contacted and had expressed no further interest in seeking to acquire EA Engineering. The financial advisors of EA Engineering further advised the Special Committee that the firm which had made the unsolicited proposal in March, 2001 had been contacted and had expressed some further interest in seeking to acquire EA Engineering but had yet to submit any written proposal or indication of interest, although such firm had been advised that any such written proposal or indication of interest would need to be submitted by July 6, 2001. The financial advisors for EA Engineering then summarized for the Special Committee the efforts which they had made since September, 2000 with respect to the possible sale of EA Engineering, as well as the due diligence review that 13 they had conducted to validate the acquisition proposals received, including the proposal submitted by Dr. Jensen and The Louis Berger Group, Inc. Legg Mason Wood Walker, Incorporated, which had been requested to render an opinion with respect to the fairness of the proposal submitted by Dr. Jensen and The Louis Berger Group, Inc., reviewed in detail its financial analysis of such proposal, and responded to questions by members of the Special Committee, its legal counsel and its financial advisor. The members of the Special Committee then decided to adjourn the meeting and to reconvene on July 9, 2001 to further discuss, consider and vote upon the proposal made by Dr. Jensen and The Louis Berger Group, Inc. The representative of Legg Mason Wood Walker, Incorporated requested that the firm that continued to express interest sign a confidentiality agreement and indicated that upon receipt of a signed confidentiality agreement he would provide to the firm recent financial results of EA Engineering. The representative of Legg Mason Wood Walker, Incorporated also indicated that any proposal that the firm wished to submit for consideration was due at 12:00 noon on July 6, 2001, and that if any such proposal was attractive, the firm would be invited to conduct additional due diligence. The firm executed the confidentiality agreement and was provided with EA Engineering's fiscal third quarter financial results. On July 6, 2001, the firm submitted to Legg Mason Wood Walker, Incorporated a letter which reaffirmed its interest in acquiring EA Engineering for $1.75 per share, subject to numerous conditions. One of the conditions was that the firm be permitted additional time to conduct additional due diligence on EA Engineering. On July 7, 2001, the Special Committee met to consider the written indication of interest received from the firm which had made the unsolicited proposal in March, 2001. The Special Committee determined that in light of the preliminary terms set forth in the written indication of interest, such firm should be given the opportunity to complete its due diligence review and to make a proposal for an acquisition of EA Engineering. The Special Committee therefore requested, and received, from Dr. Jensen and The Louis Berger Group, Inc., an extension of the expiration date of the proposal submitted by Dr. Jensen and The Louis Berger Group, Inc. On July 9, 2001, the Special Committee met again to consider the written indication of interest submitted by the firm which had made the unsolicited proposal in March, 2001. The Special Committee decided to request that Legg Mason Wood Walker, Incorporated advise the firm which submitted the written indication of interest that such firm should commence its due diligence review beginning on July 10, 2001 and that if such firm desired to submit a proposal for an acquisition of EA Engineering, such proposal would need to be submitted, and definitive agreements with respect to such proposal entered into, by the close of business on July 13, 2001. The Special Committee also requested that Legg Mason Wood Walker, Incorporated advise such firm of the general terms and conditions which the Special Committee expected to be included in any definitive agreement for the acquisition of EA Engineering. Legg Mason Wood Walker, Incorporated so advised the firm which submitted the written indication of interest. On July 10, 2001, the firm which submitted the written indication of interest commenced its due diligence review by inspecting documents, books and records produced by EA Engineering and interviewing certain officers and employees of EA Engineering. The firm continued its due diligence review during July 11, 2001. On July 11, 2001, at the close of business, representatives of the firm which submitted the written indication of interest advised the Special Committee that such firm had completed its due diligence review and had decided not to submit a proposal to acquire EA Engineering. On July 16, 2001, EA Engineering filed a Form 12b-25 with the Securities and Exchange Commission requesting a five day extension of the due date for its Quarterly Report on Form 10-Q for the period ended May 31, 2001. The Form 12b- 25 indicated that recent developments caused EA Engineering to review the level of reserves applicable to the current reporting period and that additional time was necessary to complete its investigation of certain factual matters. As a result, Dr. Jensen and The Louis Berger Group, Inc. agreed to 14 extend their proposal until July 23, 2001 and made such proposal subject to the filing of EA Engineering's Quarterly Report on Form 10-Q for the period ended May 31, 2001. On July 23, 2001, EA Engineering provided to The Louis Berger Group, Inc. the preliminary results for the fiscal quarter ended May 31, 2001. As a result of those financial results, The Louis Berger Group, Inc. indicated that it was necessary to revise its proposal to reflect an acquisition price of $1.60 per share. On July 23, 2001, Dr. Jensen submitted to the Board of Directors a revised proposal on behalf of himself and The Louis Berger Group, Inc. that reflected a purchase price of $1.60 per share and that indicated that such proposal expired at the close of business on July 24, 2001. On July 23, 2001, the Special Committee discussed the revised proposal with its financial advisor, legal counsel and the financial advisors for EA Engineering. Legg Mason Wood Walker, Incorporated advised the Special Committee that, in its opinion, and based upon the assumptions made and the matters considered in connection with its opinion, the revised proposal of $1.60 per share was fair from a financial point of view to the stockholders of EA Engineering (other than Dr. Jensen and the Jensen Family Trusts). Legg Mason Wood Walker, Incorporated further advised the Special Committee that it would confirm its opinion in writing, and it delivered its written opinion dated July 23, 2001 to the Special Committee. After these discussions, the Special Committee approved the proposal of Dr. Jensen and The Louis Berger Group, Inc. and determined to recommend to the full Board of Directors that the Board of Directors approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the offer and the merger. Later that day, the Board of Directors met and approved the Merger Agreement and the transactions contemplated by the Merger Agreement. Subsequently, on July 24, 2001, the negotiations with respect to the Merger Agreement were concluded and the Merger Agreement was signed. EA Engineering issued a press release that morning, prior to the commencement of trading of EA Engineering's stock, announcing the transaction. Recommendation of the Special Committee and the Board of Directors; Fairness of the Offer and the Merger. Special Committee The Special Committee determined that the offer and the merger, taken together, are fair to, and in the best interests of, EA Engineering and the holders of EA Engineering's common stock (other than Dr. Jensen and the Jensen Family Trusts). In making this determination and in recommending that EA Engineering's Board of Directors approve the Merger Agreement and the transactions contemplated by the Merger Agreement, the Special Committee considered a number of factors, including, but not limited to, the following: . the terms and conditions of the Merger Agreement, including the parties' representations, warranties and covenants, the conditions to their respective obligations, the circumstances under which our parent and we may terminate the offer or the Merger Agreement and the provision for payment of the purchase price and the offering consideration in cash and without a financing condition; . the financial condition, results of operations and cash flows of EA Engineering; . the prospects of EA Engineering if EA Engineering were to remain independent and the risks inherent in remaining independent, including competitive risks, in a rapidly consolidating industry; . the current status of the environmental services industry and the financial, managerial and other resources available to competitors of EA Engineering; . the fact that the Board of Directors, with the assistance of its financial advisors, engaged in a lengthy process to explore EA Engineering's strategic alternatives, including the possible sale of EA Engineering, and that the process did not result in a consummated transaction; . the relatively thin trading market and the lack of liquidity of the shares and the lack of success, due to the relatively small market capitalization, in attracting institutional investors to invest in, or research analysts to report on, EA Engineering; 15 . the risk that, if EA Engineering's stock price declined to below $1.00 per share, it could lead to delisting of the stock on The Nasdaq SmallCap Market for failure to meet Nasdaq's continued listing requirements, and EA Engineering having previously received correspondence to that effect from Nasdaq; . the historical market prices, price to earnings ratios, EBIT and EBITDA multiples, recent trading activity and trading range of the shares of common stock of EA Engineering, including the fact that the $1.60 per share to be paid in the offer and the merger represents a premium of approximately 51% over the $1.06 closing sale price for the common stock on The Nasdaq SmallCap Market on July 23, 2001 (the last trading day prior to announcement of the offer); . the fact that $1.60 per share is near the highest closing sale price of EA Engineering's stock in the previous twelve months of $1.63 per share; . the facts that EA Engineering's financial irregularities which were publicly disclosed in February 2000 were likely to continue to adversely influence a recovery of the stock price, and the costs incurred by EA Engineering in audits and restatements of periodic filings with the Securities and Exchange Commission would likely adversely impact future earnings in a manner that did not make it probable that the stock price would recover; . the fact that there existed internal concern by employees for the future of EA Engineering, which resulted in lower employee morale and created the significant risk of losing key employees at a time when the recruitment of replacements would be challenging; . the views expressed by EA Engineering's financial advisors regarding, among other things: (i) the financial condition, results of operations, cash flows, business and prospects of EA Engineering, including the prospects of, and uncertainties facing, EA Engineering if it were to remain independent; (ii) the continued viability of EA Engineering's current strategies; (iii) the likelihood of achieving maximum long-term value as a public company; (iv) the strategic alternatives available to EA Engineering and the associated advantages and disadvantages; and (v) the likelihood that any other party would propose an acquisition or strategic business combination that would be more favorable to EA Engineering and its stockholders than the offer and the merger, particularly in light of the recently completed evaluation of EA Engineering's strategic alternatives; . the presentation Legg Mason Wood Walker, Incorporated made to the Special Committee on July 23, 2001 and the Fairness Opinion delivered to the Special Committee prior to the July 23, 2001 meeting of the Special Committee (without expressly adopting the analyses reflected in the presentations) to the effect that, as of such date and based upon the terms and conditions of the Merger Agreement and subject to certain matters stated in the opinion, the cash consideration of $1.60 per share to be received by holders of shares of the common stock in the offer and the merger was fair, from a financial point of view, to EA Engineering's stockholders. Stockholders are urged to read the fairness opinion in its entirety; . the arms-length negotiations between the Special Committee, none of whose members were employed by or affiliated with EA Engineering (except in their capacities as directors and except that Mr. Miller and the law firm of which he is a partner serve as legal counsel to EA Engineering), and us, our parent, Dr. Jensen, the Jensen Family Trusts, Eclair LLLP and The Louis Berger Group, Inc. that resulted in the $1.60 per share price; . the Special Committee's belief that the offer and the merger provide for a prompt cash tender offer for all outstanding shares of common stock to be followed by a merger for the same consideration, thereby enabling you to obtain the benefits of the transaction at the earliest possible time; . the fact that, although the Merger Agreement does not permit EA Engineering to solicit competing proposals, the Merger Agreement permits the Special Committee of EA Engineering's Board of Directors, in the exercise of its fiduciary duties, and subject to certain other conditions, to take a variety 16 of actions to respond to competing proposals, including withdrawing its recommendation of the merger, and terminating the Merger Agreement in favor of a superior proposal; . the possibility that if a transaction with us and our parent were not negotiated and EA Engineering were to remain a publicly owned company, a decline in the market price of the shares or the stock market in general could occur and the price ultimately received by you in the open market or in a future transaction might be less than the $1.60 per share included in the offer and the merger; and . the business reputation of The Louis Berger Group, Inc. and its management and financial condition. As part of its analysis, the Special Committee also considered the alternative of causing EA Engineering to remain as a public company. The Special Committee considered EA Engineering's limitations as a public company as discussed above, including its limited financial resources. The Special Committee believed that an improvement in those factors that affect EA Engineering's prospects was not likely in the immediate future. Although the merger will allow only Dr. Jensen and the Jensen Family Trusts to participate in EA Engineering's future growth, if any, the Special Committee concluded that the potential benefit to you and the other stockholders of remaining public was outweighed by the risks and uncertainties associated with EA Engineering's future prospects. The Special Committee also concluded that obtaining a substantial cash premium for the shares now was preferable to preserving for you an opportunity to have a speculative future return. The Special Committee recognized that, although the consummation of the offer gives you the opportunity to realize a substantial premium over the price at which the shares were traded before the public announcement of the offer, tendering in the offer would eliminate the opportunity for you to participate in the future growth and profits of EA Engineering, if any. The Special Committee believed that the loss of the opportunity to participate in the growth and profits of EA Engineering, if any, was adequately reflected in the offer price of $1.60 per share. The Special Committee also recognized that there can be no assurance as to the level of growth or profits to be attained by EA Engineering in the future. EA Engineering's Board of Directors In reaching its determination referred to above, EA Engineering's Board of Directors considered and relied upon the conclusions and the unanimous recommendation of the Special Committee that EA Engineering's Board of Directors approve the Merger Agreement and the transactions contemplated by the Merger Agreement, including the offer and the merger, and they reviewed the considerations referred to above as having been taken into account by the Special Committee, as well as the Board of Directors' own familiarity with EA Engineering's business, financial condition, results of operations and prospects and the nature of the industry in which EA Engineering operates. In light of the number and variety of factors that the Special Committee and EA Engineering's Board of Directors considered in connection with their evaluation of the offer and the merger, neither the Special Committee nor EA Engineering's Board of Directors found it practicable to quantify or otherwise assign relative weights to those factors, and, accordingly, neither the Special Committee nor EA Engineering's Board of Directors did so. In addition, individual members of the Special Committee and EA Engineering's Board of Directors may have given different weights to different factors. Rather, each of the Special Committee and EA Engineering's Board of Directors viewed their positions and recommendations as being based on the totality of the information presented to and considered by it. EA Engineering's Board of Directors believes that the offer and the merger are procedurally fair because, among other things: . the Special Committee consisted of independent directors appointed by the Board of Directors to represent solely your interests and the interests of other holders of common stock of EA Engineering (other than Dr. Jensen and the Jensen Family Trusts); 17 . the Special Committee retained and was advised by its own independent legal counsel and financial advisor; . EA Engineering's financial advisor, Legg Mason Wood Walker, Incorporated, assisted the Special Committee in evaluating the proposed transaction and provided other financial advice; . the Special Committee evaluated and negotiated the terms of the offer and the merger; and . the $1.60 per share cash purchase price and the other terms and conditions of the Merger Agreement resulted from active arm's-length bargaining with the Special Committee and its advisors. EA Engineering's Board of Directors believes that sufficient procedural safeguards to ensure fairness of the transaction and to permit the Special Committee to represent your interests effectively were present, and therefore, there was no need to retain any additional unaffiliated representative to act on your behalf in view of: . the unaffiliated status of the members of the Special Committee, whose sole purpose was to represent your interests and the interests of other holders of EA Engineering common stock (other than Dr. Jensen and the Jensen Family Trusts); . the retention by the Special Committee of its own independent legal counsel and financial advisor; and . the fact that the Special Committee, even though consisting of directors of EA Engineering (none of whom will hold any position as an officer, director or employee of us, our parent, The Louis Berger Group, Inc. or EA Engineering or any of their affiliates after the merger), is a mechanism well recognized under established corporate law to ensure fairness in transactions of this type. EA Engineering Acquisition Corporation, EA Engineering Holdings, LLC, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts Neither we nor our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen nor the Jensen Family Trusts, as the parties proposing to gain control of EA Engineering, participated in the deliberations of the Special Committee or the Board of Directors regarding the fairness to you of the offer and the merger. The rules of the Securities and Exchange Commission require each of us, our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts to express its belief as to the fairness of the offer and the merger to you, the unaffiliated holders of EA Engineering common stock. We and each of these other parties regard the acquisition of EA Engineering as an attractive investment opportunity because EA Engineering's future business prospects, with The Louis Berger Group, Inc. as an equity investor and EA Engineering's new capital structure, appear stronger with significant growth opportunities. Although the investment will involve a substantial risk to the entities that hold the common stock of EA Engineering after the merger, we and each of our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts believe that the long-term value of the equity investment could appreciate significantly. With respect to determining our belief as to the fairness of the consideration to be paid to you in the offer or the merger, we and each of our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts have considered the factors considered by the Special Committee and the Board of Directors referred to above. Additionally, we and each of our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts considered the following material factors: . EA Engineering's inability to find a third party buyer and that EA Engineering's financial advisors had been trying to identify a third party buyer since September 2000; . the relatively low volume trading in the shares and that the offer and the merger would result in immediate, enhanced liquidity for the stockholders of EA Engineering at a premium to recent trading prices; 18 . the fact that the Board of Directors, based on the unanimous recommendation of the Special Committee, determined that the offer and the merger are fair to, and in the best interests of, you and the other stockholders (other than Dr. Jensen and the Jensen Family Trusts); . recent and historical trading prices for the common stock, particularly, the fact that the offer price represents a 51% premium to the closing sale price of the common stock ($1.06 per share) on the last trading day prior to public announcement of the offer; . the arm's length nature of the negotiations with the Special Committee with respect to the Merger Agreement; . the terms and conditions of the Merger Agreement, including the amount and form of consideration to be paid, the parties' mutual representations, warranties and covenants and the conditions to their respective obligations and the absence of any future obligations on the part of the unaffiliated stockholders of EA Engineering; and . the opinion, without adopting it, of Legg Mason Wood Walker, Incorporated that the consideration to be paid to you in either the offer or the merger is fair to you from a financial point of view. After considering the foregoing, we and each of our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts has determined that it reasonably believes that the consideration to be paid to you in either the offer or the merger is fair to you from a financial point of view. In reaching this determination as to fairness, neither we nor our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen or the Jensen Family Trusts assigned specific weights to particular factors, but rather considered all factors as a whole. In reaching this determination, we, our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts recognized that the offer price approximates EA Engineering's net book value on a per share basis. Neither we nor our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen or the Jensen Family Trusts undertook a liquidation valuation or going concern valuation of EA Engineering. Neither we nor our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen or the Jensen Family Trusts relied on any report, opinion or appraisal in determining the fairness of the transaction to you and other holders of the common stock, but they and we do not disagree with the conclusions expressed by Legg Mason Wood Walker, Incorporated in its opinion to the Special Committee of the Board of Directors of EA Engineering. We, our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts believe that the offer and the merger are procedurally fair because, among other things: . the Board of Directors appointed the Special Committee consisting only of directors that are not officers or employees of EA Engineering and Dr. Jensen was not a member of the Special Committee; . the Special Committee was advised by its own independent legal counsel and negotiated the Merger Agreement on an arm's length basis; . the Special Committee retained its own independent financial advisor and utilized the services of the financial advisors retained by the Board of Directors to assist it in evaluating the proposal and who provided it with a fairness opinion with respect to the fairness, from a financial point of view, to you and the other holders of EA Engineering's common stock, other than Dr. Jensen and the Jensen Family Trusts; . the terms and conditions of the Merger Agreement resulted from active, arm's length negotiation with the Special Committee; . the Merger Agreement permits EA Engineering to furnish non-public information with respect to itself and to participate in negotiations in response to an unsolicited proposal, if the Special Committee determines in good faith that failure to do so would constitute a breach of its fiduciary duties to EA Engineering's stockholders; . the termination provisions of the Merger Agreement allow the Special Committee to terminate the agreement upon receipt of a superior proposal; and 19 . EA Engineering's stockholders who believe the terms of the offer and the merger are not fair can pursue appraisal rights in the merger under the Delaware General Corporation Law. The Special Committee's legal counsel and financial advisor reported directly to the Special Committee and took direction from the Special Committee and not from Dr. Jensen. EA Engineering's financial advisors reported directly to the Special Committee and the Board of Directors and took direction from the Special Committee in their delivery of the fairness opinion. Dr. Jensen engaged his own legal counsel. The Board of Directors acted upon the recommendation of the Special Committee and at all times the Special Committee was aware of the interests of Dr. Jensen and the Jensen Family Trusts in the proposed transaction. We, our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen and the Jensen Family Trusts recognize that the offer and the merger are not structured specifically to require the approval of a majority of disinterested stockholders. Consummation of the offer is conditioned upon, among other things, achieving the 90% threshold, which may be waived by us without the written consent of EA Engineering provided that there shall have been validly tendered and not withdrawn a number of shares that when added to the shares owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes a majority of the shares outstanding on a fully-diluted basis. Accordingly, if we purchase all shares of common stock tendered in the offer, we will be able to approve the merger even if all of the remaining holders vote against the merger. Pursuant to the Merger Agreement, consummation of the offer is a condition to the merger. Neither we nor our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen or the Jensen Family Trusts have made any provisions in connection with the offer and the merger to grant any unaffiliated stockholders access to EA Engineering's corporate records, or to obtain counsel or appraisal services at the expense of EA Engineering, us, our parent, The Louis Berger Group, Inc., Ecolair LLLP, Dr. Jensen or the Jensen Family Trusts. Opinion of the Financial Advisor. On July 23, 2001, Legg Mason Wood Walker, Incorporated rendered its opinion to the Special Committee that, as of that date, the consideration to be received by you and the other holders of the common stock of EA Engineering (other than Dr. Jensen and the Jensen Family Trusts) in the proposed offer and subsequent merger was fair from a financial point of view to you and the other holders of common stock. No limitations were imposed by the Special Committee upon Legg Mason Wood Walker, Incorporated with respect to the investigations made or procedures followed by it in rendering its opinion. The full text of the written opinion of Legg Mason Wood Walker, Incorporated, dated July 23, 2001, which summarizes the assumptions made in the opinion, is attached as Annex A to EA Engineering's Solicitation/Recommendation Statement on Schedule 14D-9 which has been mailed to stockholders together with this offer to purchase. You and the other holders of common stock are urged to read the opinion in its entirety. The full text of the written opinion is also available for inspection and copying during normal business hours by you, a representative you designate in writing, any interested stockholder or a representative they designate in writing, at the office of EA Engineering at 11019 McCormick Road, Hunt Valley, MD 21031. The opinion of Legg Mason Wood Walker, Incorporated is addressed to the Special Committee and does not constitute a recommendation to you or any other holder of common stock as to whether you should tender your shares of common stock in the offer or how you should vote at any stockholders meeting in connection with the merger. The summary of the opinion of Legg Mason Wood Walker, Incorporated in this offer to purchase is qualified in its entirety by reference to the full text of the opinion. In connection with its opinion, Legg Mason Wood Walker, Incorporated reviewed, among other things, (a) the Merger Agreement and certain related documents, (b) EA Engineering's Annual Reports, Forms 10-K and related financial statements and other relevant financial and operating information for the fiscal years ended August 31, 1997, 1998, 1999 and 2000, (c) EA Engineering's draft financial statements and other relevant financial and operating information for the quarter and nine-month period ended May 31, 2001 and 20 (d) information, including financial forecasts, provided to Legg Mason Wood Walker, Incorporated by the management of EA Engineering relating to the business, earnings, cash flow, assets and prospects of EA Engineering. Legg Mason Wood Walker, Incorporated also had discussions with members of the senior management of EA Engineering regarding the past and current business operations, financial condition and future prospects of EA Engineering. In addition, Legg Mason Wood Walker, Incorporated reviewed the reported price and trading activity for the shares of EA Engineering common stock, compared certain financial and stock market data for EA Engineering with similar information for certain other publicly traded companies, analyzed publicly available information concerning the terms of certain selected business combinations in the environmental engineering industry and performed other studies and analyses as Legg Mason Wood Walker, Incorporated considered necessary or appropriate. Legg Mason Wood Walker, Incorporated relied upon and assumed, without independent verification, the accuracy and completeness of information that was publicly available or that was furnished to it by or on behalf of EA Engineering, and it has not assumed any responsibility or liability for that information. Legg Mason Wood Walker, Incorporated did not prepare or obtain any independent evaluation or appraisal of any of the assets or liabilities of EA Engineering, nor were any valuations or appraisals provided to Legg Mason Wood Walker, Incorporated. Legg Mason Wood Walker, Incorporated further assumed that the financial forecasts provided to it by EA Engineering were reasonably prepared on a basis reflecting the best judgment and currently available estimates of management and that such forecasts will be realized in the amounts and at the times contemplated. Legg Mason Wood Walker, Incorporated took into account its assessment of general economic, financial, market and industry conditions as they existed and could be evaluated as of the date of the opinion, as well as their experience in business valuations in general. The opinion of Legg Mason Wood Walker, Incorporated, is based on economic, market and other considerations as in effect on, and the information made available to Legg Mason Wood Walker, Incorporated as of, July 23, 2001, the date of the opinion. Subsequent developments may affect the opinion; however, Legg Mason Wood Walker, Incorporated does not have any obligation to update, revise or reaffirm such opinion. 21 The following is a summary of the material financial analyses utilized by Legg Mason Wood Walker, Incorporated in connection with providing its opinion: Public Trading Multiples. Using publicly available information, Legg Mason Wood Walker, Incorporated compared financial data of EA Engineering with similar data for a group of publicly traded companies engaged in businesses which Legg Mason Wood Walker, Incorporated judged to be comparable to that of EA Engineering. The group of companies consisted of Ecology and Environment, Inc., The IT Group, Inc., Michael Baker Corp., Tetra Tech, Inc., URS Corp. and Versar, Inc. For each comparable company, Legg Mason Wood Walker, Incorporated calculated multiples based on publicly available financial data for the latest twelve months ("LTM"), specifically multiples of enterprise value to LTM net revenues, enterprise value to LTM earnings before interest, taxes, depreciation and amortization ("EBITDA"), stock price to LTM actual and 2001 and 2002 projected earnings per share ("EPS") and equity value to tangible book value. Projected earnings per share data for the selected publicly traded companies was provided by First Call Analysts' Research and FactSet Data Systems. These multiples were then applied to EA Engineering's LTM revenues, LTM EBITDA, LTM EPS, projected 2000 and 2001 EPS and tangible book value, respectively. The chart below details the range and means of multiples as compared to the related multiple for the contemplated transaction:
Contemplated Metric Range Mean Transaction ------ ------------- ----- -------------- Enterprise Value/LTM Net Revenue.......... 0.3 -- 0.6x 0.5x 0.3x Enterprise Value/LTM EBITDA............... 5.3 -- 9.5x 6.9x 123.4x Stock Price/LTM EPS....................... 10.7 -- 27.2x 20.2x Not Meaningful Stock Price/2001P EPS..................... 8.9 -- 10.9x 10.0x Not Meaningful Stock Price/2002P EPS..................... 7.2 -- 9.2x 8.5x 20.0x Equity Value/Tangible Book Value.......... 0.8 -- 3.5x 2.4x 1.3x
Selected Transaction Analysis. Using publicly available information, Legg Mason Wood Walker, Incorporated examined selected transactions with respect to environmental engineering industry acquisitions. The selected transactions were: . American Capital Strategies' acquisition of Roy F. Weston, Inc. . Futureco Environmental's acquisition of GZA Geoenvironmental Technologies . Mactec, Inc.'s acquisition of Harding Lawson Associates . The IT Group, Inc.'s acquisition of Emcon . URS Corp.'s acquisition of Dames & Moore, Inc. For each of these transactions where the consideration has been disclosed and there are publicly available financial results for the company acquired, Legg Mason Wood Walker, Incorporated calculated enterprise value as a multiple of LTM net revenues and as a multiple of LTM EBITDA. Legg Mason Wood Walker, Incorporated also calculated equity value as a multiple of LTM net income and as a multiple of tangible book value. These multiples were then applied to EA Engineering's LTM net revenues, LTM EBITDA, LTM net income and tangible book value, respectively. The chart below details the range and means of multiples as compared to the related multiple for the contemplated transaction:
Contemplated Metric Range Mean Transaction ------ ------------ ----- -------------- Enterprise Value/LTM Net Revenue........... 0.4 -- 0.9x 0.5x 0.3x Enterprise Value/LTM EBITDA................ 5.7 -- 9.0x 7.5x 123.4x Equity Value/LTM Net Income................ 8.3 -- 45.8x 28.3x Not Meaningful Equity Value/Tangible Book Value........... 1.0 -- 1.4x 1.2x 1.3x
22 No company, transaction or business used in the comparison with comparable companies or selected transactions analysis is identical to EA Engineering. Accordingly, an analysis of the above calculations is not entirely mathematical. Instead, it involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the comparable companies, selected transactions or the company or transaction to which they are being compared. Discounted Cash Flow Analysis. Legg Mason Wood Walker, Incorporated performed a discounted cash flow analysis of EA Engineering. Legg Mason Wood Walker, Incorporated calculated a net present value of estimated cash flow for the fiscal years 2002 through 2005 using discount rates ranging from 15.0% to 17.0%. Legg Mason Wood Walker, Incorporated calculated EA Engineering's terminal value in the year 2005 based on multiples ranging from 4.0x EBITDA to 6.0x EBITDA. These terminal values were then discounted to present value using discount rates ranging from 15.0% to 17.0%. Using the foregoing terminal values and discounted cash flow, the enterprise value ranged from $10.2 million to $15.0 million, as compared to the enterprise value of the contemplated transaction of $10.5 million. Discounted cash flow analysis is a widely used valuation methodology, but it relies on numerous assumptions, including assets and earnings growth rates, terminal values and discount rates. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to practical analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Legg Mason Wood Walker, Incorporated's opinion. In arriving at its fairness determination, Legg Mason Wood Walker, Incorporated considered the results of all such analyses. The analyses were prepared solely for the purpose of Legg Mason Wood Walker, Incorporated providing its opinion to the Special Committee as to the fairness of the consideration to be received by you and the other holders of EA Engineering common stock in the proposed offer and subsequent merger and do not purport to be appraisals that necessarily reflect the prices at which assets, businesses or securities may actually be sold. Analyses based on forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by such analyses. Because such analyses are inherently subject to uncertainty as a result of being based upon numerous factors or events beyond the control of EA Engineering, neither EA Engineering nor Legg Mason Wood Walker, Incorporated nor any other person assumes responsibility if future results are materially different from those forecasts. As described above, Legg Mason Wood Walker, Incorporated's opinion to the Special Committee was one of the many factors taken into consideration by the Special Committee in making its determination to approve the transaction. The foregoing summary does not purport to be a complete description of the analyses performed by Legg Mason Wood Walker, Incorporated and is qualified by the written opinion of Legg Mason Wood Walker, Incorporated. As a part of its investment banking business, Legg Mason Wood Walker, Incorporated is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. We have been advised that Legg Mason Wood Walker, Incorporated was selected to advise EA Engineering and deliver a fairness opinion with respect to the offer and the merger on the basis of such experience and its particular knowledge of and experience with small, publicly- traded companies. In the ordinary course of business, Legg Mason Wood Walker, Incorporated makes a market in the equity securities of EA Engineering and may from time to time hold a long or short position in such securities. In addition, Edmund J. Cashman, a member of the Board of Directors of EA Engineering, is a Senior Executive Vice President of Legg Mason Wood Walker, Incorporated, and Legg Mason, Inc. Pursuant to an engagement letter dated May 26, 2000, EA Engineering engaged Legg Mason Wood Walker, Incorporated and TechKNOWLEDGEy Strategic Group to act as its financial advisors in connection 23 with the possible sale of EA Engineering. Pursuant to the terms of the engagement letter, EA Engineering has agreed to pay Legg Mason Wood Walker, Incorporated and TechKNOWLEDGEy Strategic Group $440,100 upon the successful consummation of the transaction. EA Engineering has agreed to reimburse Legg Mason Wood Walker, Incorporated and TechKNOWLEDGEy Strategic Group for their reasonable out-of-pocket expenses, including attorney's fees, and to indemnify Legg Mason Wood Walker, Incorporated and TechKNOWLEDGEy Strategic Group against certain liabilities, including certain liabilities under federal securities laws. Purpose of the Offer; Plans for EA Engineering. Purpose of the Offer. The purpose of the offer is to enable us to acquire as many outstanding shares of common stock of EA Engineering as possible as a first step in acquiring the entire equity interest of EA Engineering. The purpose of the merger is for our parent to acquire all of the shares of common stock not purchased pursuant to the offer and which we, our parent, Dr. Jensen and the Jensen Family Trusts do not hold at that time. Upon consummation of the merger, EA Engineering will become a direct wholly owned subsidiary of our parent. The offer is being made pursuant to the Merger Agreement. In determining whether to make the offer and thereafter effect the merger, we and our parent considered several factors, including the potential future financial performance of EA Engineering and historical and recent trading prices for the shares of EA Engineering common stock. We and our parent also considered the following factors: . EA Engineering's inability to find a third party buyer; . the relatively low volume of trading in the shares of EA Engineering and that the offer and the merger would result in immediate, enhanced liquidity for the stockholders of EA Engineering at a premium to recent trading prices; . the greater flexibility that EA Engineering's management would have to focus on long-term business goals, as opposed to the more short-term focus that can result from the quarterly filing requirements of the Securities and Exchange Commission; . the decrease in costs associated with being a public company (for example, as a privately-held entity, EA Engineering would no longer be required to file quarterly, annual or other periodic reports with the Securities and Exchange Commission or publish and distribute to its stockholders annual reports and proxy statements); and . the reduction in the amount of public information available to competitors about EA Engineering's business that would result from the termination of EA Engineering's obligations under the reporting requirements of the Securities and Exchange Commission. Under the Delaware General Corporation Law, the approval of EA Engineering's Board of Directors and the affirmative vote of the holders of a majority of the outstanding shares of common stock is required to approve and adopt the Merger Agreement and the transactions contemplated by the Merger Agreement, including the merger. The Board of Directors, based upon the unanimous recommendation of the Special Committee, has unanimously approved the Merger Agreement, the offer and the merger, determined that the offer and merger are fair to, and in your best interests and recommends that you accept the offer and tender your shares pursuant to the offer. Unless the merger is consummated pursuant to the "short- form" merger provisions under Section 253 of the Delaware General Corporation Law described below (in which case your vote is not required), the only remaining required corporate action of EA Engineering is the approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement by the affirmative vote of the holders of a majority of the shares of common stock. 24 In the Merger Agreement, EA Engineering has agreed to take all action necessary to convene a meeting of its stockholders as soon as practicable after the consummation of the offer for the purpose of considering and taking action on the Merger Agreement and the transactions contemplated by the Merger Agreement if action is required by the Delaware General Corporation Law. However, under the Delaware General Corporation Law, if we own, pursuant to the offer and including the shares currently owned by Dr. Jensen and the Jensen Family Trusts, at least 90% of the outstanding shares of common stock, we will be able to approve the merger without a vote of EA Engineering's stockholders. Accordingly, if we own at least 90% of the outstanding shares of common stock, including the shares currently owned by Dr. Jensen and the Jensen Family Trusts, we will have sufficient voting power to cause the approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement without a vote of EA Engineering's stockholders. In that event, we, our parent, and EA Engineering have agreed in the Merger Agreement to take, at our request, all necessary and appropriate action to cause the merger to become effective without a meeting of EA Engineering's stockholders. If, however, we do not own at least 90% of the outstanding shares pursuant to the offer or otherwise and a vote of EA Engineering's stockholders is required under the Delaware General Corporation Law, a significantly longer period of time will be required to effect the merger. If we purchase shares of common stock pursuant to the offer, the Merger Agreement provides that we will be entitled to designate representatives to serve on EA Engineering's Board of Directors in proportion to our ownership of shares of common stock following the purchase. We expect that this representation will permit us to exert substantial influence over the conduct of EA Engineering's business and operations. Other than as set forth in "Special Factors--Background of the Offer," neither we, our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP nor The Louis Berger Group, Inc. considered any alternative means of acquiring EA Engineering other than by the offer and the merger. Plans for EA Engineering. Subject to certain matters described below, our parent expects that, immediately following the merger, it will dissolve and distribute all shares of the common stock of EA Engineering which it holds to its members. As a result, Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP, the limited liability limited partnership controlled by Dr. Jensen, would own 26.6%, 12.0% and 12.4%, respectively, or an aggregate of 51% of the common stock of EA Engineering, and The Louis Berger Group, Inc. would own 49% of the common stock of EA Engineering. We expect that the business and operations of EA Engineering will generally continue as they are currently being conducted. Dr. Jensen and The Louis Berger Group, Inc. currently intend to cause EA Engineering's operations to continue to be run and managed by, among others, EA Engineering's existing management. Dr. Jensen and The Louis Berger Group, Inc. will continue to evaluate all aspects of the business, operations, capitalization and management of EA Engineering during the pendency of the offer and after the consummation of the offer and the merger and will take any further actions as they deem appropriate under the circumstances then existing. The offer and the merger are being undertaken at this time for the reasons set forth in "Special Factors-- Background of the Offer." As a result of the offer and after consummation of the merger and the expected dissolution of our parent, the interest of Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP and The Louis Berger Group, Inc. in EA Engineering's net book value and net earnings will be in proportion to the number of shares of common stock owned by each. They will be entitled to all the benefits resulting from their respective ownership interests, including all income generated by EA Engineering's operations and any future increase in EA Engineering's value. Similarly, they will also bear the risk of losses generated by EA Engineering's operations and any future decrease in the value of EA Engineering after the merger. Subsequent to the merger, you and the other current holders of EA Engineering's common stock (other than Dr. Jensen and the Jensen Family Trusts) will cease to have any equity interest in EA Engineering, will not have the opportunity to participate in the earnings and growth of EA Engineering after the merger and will not have any right to vote on corporate matters. Similarly, you and other current holders of EA Engineering's common stock (other than Dr. Jensen and the Jensen Family 25 Trusts) will not face the risk of losses generated by EA Engineering's operations or decline in the value of EA Engineering after the merger. EA Engineering's common stock is currently traded on The Nasdaq SmallCap Market. Following the consummation of the merger, the shares of common stock will no longer be quoted on The Nasdaq SmallCap Market and the registration of the shares of common stock under the Securities Exchange Act of 1934, as amended, will be terminated. Accordingly, after the merger there will be no publicly-traded equity securities of EA Engineering outstanding and EA Engineering will no longer be required to file periodic reports with the Securities and Exchange Commission. See "Special Factors--Certain Effects of the Offer and the Merger." It is expected that, if shares of common stock are not accepted for payment by us pursuant to the offer and the merger is not consummated, EA Engineering's current management, under the general direction of the Board of Directors, will continue to manage EA Engineering as an ongoing business. Except as otherwise discussed in this offer to purchase, neither we nor our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, The Louis Berger Group, Inc., or any of our or their respective directors, executive officers, general partners, members, or controlling affiliates has any present plans or proposals that would result in any extraordinary corporate transaction, such as a merger, reorganization, or liquidation involving EA Engineering or any of its subsidiaries, or sale or transfer of a material amount of assets of EA Engineering or any of its subsidiaries or in any other material changes to EA Engineering's capitalization, dividend policy, corporate structure, business or composition of management of EA Engineering. Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP and The Louis Berger Group, Inc. have, however, entered into the Stockholders Agreement, as further described below, which permits them to cause the election to the Board of Directors of certain of their representatives. However, the effectiveness of that agreement is conditioned upon the consummation of the offer. See "Special Factors--Interests of Certain Persons in the Offer and the Merger--The Stockholders Agreement." Interests of Certain Persons in the Offer and the Merger. In considering the determination of us, our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP and The Louis Berger Group, Inc. that the consideration to be paid to you in either the offer or the merger is fair to you from a financial point of view, you should be aware that, in addition to the matters discussed above, Dr. Jensen and the Jensen Family Trusts have various interests in the merger described in this section that are in addition to and different from your interests and may create potential conflicts of interest. Dr. Jensen and the Jensen Family Trusts currently own, before giving effect to the offer, the merger and the transactions contemplated by the Merger Agreement, 26.6% and 12.0%, respectively, of the outstanding shares of common stock of EA Engineering. Ecolair LLLP, a limited liability limited partnership controlled by Dr. Jensen, and The Louis Berger Group, Inc. have jointly formed our parent in order to effect the offer, the merger and the transactions contemplated by the Merger Agreement. Ecolair LLLP has agreed to contribute $1.2 million to our parent and The Louis Berger Group, Inc. has agreed to contribute $4.9 million to our parent in order to pay for the shares in the offer and the merger and to pay the related transaction expenses. We are a wholly owned subsidiary of our parent formed for the purposes of effecting the offer and the merger. Stock Voting, Non-Tender and Contribution Agreement The following is a summary of the Stock Voting, Non-Tender and Contribution Agreement. This summary is qualified in its entirety by reference to the Stock Voting, Non-Tender and Contribution Agreement, a copy of which has been filed as an exhibit to the Tender Offer Statement on Schedule TO that we filed with the Securities and Exchange Commission. The Stock Voting, Non-Tender and Contribution Agreement can be inspected at, and copies may be obtained from, the same places and in the manner set forth in "The Tender Offer--Certain Information Concerning EA Engineering." Dr. Jensen and the Jensen Family Trust have entered into a Stock Voting, Non-Tender and Contribution Agreement dated as of July 24, 2001 by and among us, our parent, Dr. Jensen, the Jensen Family Trusts, 26 Ecolair LLLP and The Louis Berger Group, Inc. pursuant to which the parties to the agreement have agreed not to tender their shares of common stock in the offer, to contribute their shares to our parent after the expiration of the offer and immediately prior to the purchase of the shares properly tendered and not withdrawn pursuant to the offer, to vote their shares in favor of the Merger Agreement and the transactions contemplated by the Merger Agreement if stockholder approval is required and to vote against any competing offer. Upon the contribution of the shares of common stock of EA Engineering to our parent in exchange for equity interests in our parent, Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP will own 51% of the equity interests of our parent and The Louis Berger Group, Inc. will own 49%. The Stockholders Agreement. The following is a summary of the Stockholders Agreement. The summary is qualified in its entirety by reference to the Stockholders Agreement, a copy of which has been filed as an exhibit to the Tender Offer Statement on Schedule TO that we filed with the Securities and Exchange Commission. The Stockholders Agreement can be inspected at, and copies may be obtained from, the same places and in the manner set forth in "The Tender Offer--Certain Information Concerning EA Engineering." Concurrently with the execution of the Merger Agreement, EA Engineering, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP and The Louis Berger Group, Inc. entered into the Stockholders Agreement pertaining to the shares of common stock of EA Engineering that will be held by them following the offer and the merger. The Stockholders Agreement becomes effective upon the purchase of shares pursuant to the offer and is intended to govern the rights of the parties as stockholders following the offer. Pursuant to the Stockholders Agreement, at any time following the closing of the offer, Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP have the right to sell, and The Louis Berger Group, Inc. has the obligation to purchase, all or any portion of the shares of common stock owned by them. We refer to this right to sell by Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP and the corresponding obligation of The Louis Berger Group, Inc. to purchase as the "put option." The purchase price per share for the put option is the greater of (i) the price paid by us in the offer and (ii) the per share valuation of EA Engineering determined by multiplying EA Engineering's earnings before interest expense, taxes, depreciation and amortization (EBITDA) for the twelve months prior to the exercise of the put option, which are referred to as the "calculation months," by six and subtracting from the product any outstanding debt and dividing the result by the number of shares outstanding. In calculating EBITDA, Dr. Jensen's annual compensation is assumed to be $250,000, regardless of what his actual compensation is during the calculation period. In the event that the EBITDA for the calculation months exceeds by more than 50% the EBITDA for the twelve months preceding the calculation months, the calculation shall be based upon the sum of 150% of the EBITDA for the twelve months preceding the calculation months and one-half of the excess of the EBITDA for the calculation months over 150% of the EBITDA for the twelve months preceding the calculation months. If, however, the purchase price is calculated using the EBITDA for the twelve months preceding the calculation months, as described in the previous sentence, and the EBITDA for the twelve months following the calculation months is at least equal to the EBITDA for the calculation months, the purchase price shall be recalculated on the basis of the EBITDA for the calculation months, and The Louis Berger Group, Inc. shall pay the additional purchase price to the party who exercised the put option. If Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP were to exercise the put option immediately following the offer, the purchase price would be $1.60 per share. Pursuant to the Stockholders Agreement, The Louis Berger Group, Inc. has agreed to set aside, after the merger, a number of shares of EA Engineering common stock equal to five percent (5%) of the then outstanding common stock of EA Engineering for purchase by employees of EA Engineering as a form of incentive compensation arrangement. The total number of shares set aside, the terms and conditions of the purchase transactions and the employees eligible to participate will be determined after the merger. 27 The Stockholders Agreement also contains customary restrictions on transfer, "rights of first refusal," "tag-along" rights and "drag-along" rights. Pursuant to the "right of first refusal" provisions, in the event that a party to the agreement wishes to sell its common stock of EA Engineering to a third party, the other parties to the Stockholders Agreement have the right to purchase the stock from the selling party on the same terms as the offer to the third party. Alternatively, pursuant to the "tag-along" rights provision, in the event that the non-offering parties want to sell their common stock, as well, they have the right to participate in the sale of the stock to the third party on a proportional basis. Pursuant to the "drag-along" rights provision, if EA Engineering has received a bona fide proposal from a third party to acquire EA Engineering, and the holders of two-thirds of the shares of EA Engineering have approved the proposal, then all stockholders will be required to transfer their shares in connection with the transaction and to vote in favor of the transaction if stockholder approval is required. The "drag-along" rights provision of the Stockholders Agreement only applies in the event that the proposal is for a price in excess of three times the price in this offer and the consideration is either cash, securities listed on a national securities exchange or automated quotation system or a combination of both. The Stockholders Agreement also contains provisions regarding the composition of the Board of Directors of EA Engineering. The parties to the Stockholders Agreement have agreed to establish and maintain the authorized size of the Board of Directors of EA Engineering at five directors, three of whom are to be designated by Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP and two of whom are to be designated by The Louis Berger Group, Inc.; to maintain the quorum requirements for actions of the Board of Directors at a majority of the entire number of directors (which must include at least one director designated by The Louis Berger Group, Inc.); and to maintain the voting requirements for actions of the Board of Directors at a majority of directors present at a meeting at which there is a quorum, except in the case of matters where the Stockholders Agreement, the certificate of incorporation or the bylaws may impose a greater voting requirement. Indemnification and Insurance The Merger Agreement provides that the provisions of the certificate of incorporation and the bylaws of EA Engineering as the surviving corporation in the merger relating to indemnification and exculpation from liability and advancement of expenses cannot be amended, repealed or otherwise modified for a period of six years from the effective time of the merger in any manner that would adversely affect the rights of individuals who at or prior to the effective time of the merger were directors or officers of EA Engineering, unless the modification is required by law. The Merger Agreement further provides that, for a period of six years from the effective time of the merger, EA Engineering, as the surviving corporation in the merger, will maintain in effect directors' and officers' liability insurance policies, for the benefit of those persons who are covered by EA Engineering's directors' and officers' liability insurance policies at the effective time of the merger, which provides coverage with respect to matters occurring prior to the effective time of the merger that is at least equal to the coverage provided under EA Engineering's current officers' and directors' liability insurance policies. If the insurance, however, cannot be maintained at a cost equal to 150% of the annual premiums currently paid by EA Engineering for such insurance, EA Engineering will maintain as much of the insurance as can be so maintained at a cost equal to 150% of the current annual premiums of EA Engineering for such insurance. Stock Options In the merger, all outstanding employee stock options, whether or not then fully exercisable or vested, to purchase shares of common stock of EA Engineering, granted under any plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of EA Engineering or any of its subsidiaries whether or not then fully exercisable or vested, will become fully exercisable and vested, and the stock options shall be canceled by EA Engineering, and each holder will receive a cash payment from 28 EA Engineering in an amount (if any), equal to the product of the number of shares subject to the stock option and the difference (if positive) between $1.60 and the exercise price per share of the stock option. Merger Agreement. The following is a summary of the material terms of the Merger Agreement. The summary is qualified in its entirety by reference to the Merger Agreement, a copy of which has been filed with the Securities and Exchange Commission as an exhibit to the Schedule TO. The Merger Agreement may be inspected at, and copies may be obtained from, the same places and in the manner set forth in "The Tender Offer--Certain Information Concerning EA Engineering." The Offer. The Merger Agreement provides that we will commence the offer and that our obligation to consummate the offer and to accept for payment and to pay for any shares of common stock tendered pursuant to the offer shall be subject to only those conditions set forth in the Merger Agreement. Subject to the terms of the Merger Agreement, we and our parent may modify the terms of the offer, including, without limitation, to extend the offer beyond the expiration date (as defined below) or waive any of the conditions set forth in "The Tender Offer--Conditions of the Offer" in our sole discretion. We cannot, however, without the prior written consent of EA Engineering, take any of the following actions: . change the form of consideration to be paid in the offer; . decrease the offer price; . decrease the number of shares of common stock subject to the offer; . extend the expiration date of the offer beyond twenty-one (21) business days after the commencement of the offer, except (i) as required by applicable law or by any rule or regulation of the Securities and Exchange Commission, (ii) that if, immediately prior to the expiration date of the offer (as it may be extended), the shares tendered and not withdrawn pursuant to the offer, when added to the shares then owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, do not constitute at least 90% of the outstanding shares of common stock on a fully diluted basis, we may, in our sole discretion, extend the offer for one or more periods not to exceed an aggregate of ten (10) business days after the expiration date of the offer, notwithstanding that all other conditions to the offer are satisfied as of the expiration date of the offer, or (iii) that if any condition to the offer has not been satisfied or waived, we may, in our sole discretion, extend the expiration date of the offer for one or more periods (not in excess of twenty (20) business days each) but in no event later than December 1, 2001; . waive the condition that there shall have been validly tendered and not withdrawn immediately prior to the expiration of the offer the number of shares which, when added to the shares then owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, would constitute at least 90% of the outstanding shares of common stock on a fully-diluted basis, except that we may waive this condition in our sole discretion if there shall have been validly tendered and not withdrawn such number of shares that, when added to the shares owned by us, our parent, Dr. Jensen and the Jensen Family trusts, would constitute at least a majority of the shares outstanding on a fully diluted basis (for purposes of the offer, "fully- diluted" is defined as the number of shares outstanding and shares which may be issued pursuant to outstanding stock options that are then exercisable at a price per share less than the purchase price in this offer); . waive the condition relating to the non-termination of the Merger Agreement; . amend any term or any condition of the offer in any manner adverse to the holders of common stock in any material respect; or . impose any additional condition to the offer. Under the Merger Agreement, EA Engineering may, on the expiration date of the offer, request that we extend the offer if it would have expired without any shares of common stock being purchased because the 29 conditions set forth in "The Tender Offer--Conditions of the Offer" have not been met, for one or more periods not exceeding, in each case, ten (10) business days (but in no event later than December 1, 2001) unless our parent reasonably believes at the time that the conditions are not capable of being satisfied. Subject to the terms and conditions of the offer set forth in "The Tender Offer--Conditions of the Offer," we shall pay for all shares of common stock validly tendered and not withdrawn pursuant to the offer as soon after the expiration of the offer as it is legally permissible to do so under applicable law. Pursuant to the terms of the Merger Agreement, EA Engineering has approved of and consented to the offer and has represented that its Board of Directors and the Special Committee has unanimously (i) adopted resolutions approving the Merger Agreement, the offer and the merger, (ii) determined that the offer and the merger are fair to you and in your best interests, (iii) recommended that you accept the offer and approve and adopt the Merger Agreement and approve the merger, and (iv) taken all action necessary to render Section 203 of the Delaware General Corporation Law inapplicable to the offer and the merger. The term "expiration date" means 5:00 p.m., New York City time, on Thursday, August 30, 2001, unless and until we, in our sole discretion, extend the period of time during which the offer will remain open, in which event the term "expiration date" will refer to the latest time and date at which the offer, as so extended by us, will expire. Composition of the Board Following Consummation of the Offer. The Merger Agreement provides that, promptly upon consummation of the offer, we may elect the number of directors, rounded up to the next whole number, of the Board of Directors of EA Engineering as is equal to the product of the total number of directors on the Board of Directors (determined after giving effect to the directors elected pursuant to this provision) multiplied by the percentage that the number of shares of common stock beneficially owned by us, our parent or our affiliates at such time bears to the total number of shares of common stock then outstanding. EA Engineering agrees to take all action requested by our parent which is reasonably necessary to effect any election, including, without limitation, increasing the size of the Board of Directors of EA Engineering and/or using its reasonable best efforts to secure the resignation of directors. The Merger. The Merger Agreement provides that we will be merged with and into EA Engineering in accordance with the Delaware General Corporation Law and, following the merger, our separate corporate existence will cease and EA Engineering will continue as the surviving corporation. At the effective time of the merger and without any action on the part of any stockholder of EA Engineering, . each share of common stock of us that is issued and outstanding immediately prior to the effective time of the merger shall be converted into and become one share of common stock of the surviving corporation; . each share of common stock of EA Engineering that is issued and outstanding immediately prior to the effective time of the merger that is owned by EA Engineering or any subsidiary of EA Engineering or by us, our parent or any other subsidiary of our parent shall automatically be canceled and shall cease to exist; and . each share of common stock of EA Engineering that is issued and outstanding immediately prior to the effective time of the merger shall be converted into the right to receive $1.60 per share from the surviving corporation in cash, without interest, and all the shares of common stock, when so converted, will no longer be outstanding and will automatically be canceled and retired and each holder of a certificate representing any shares shall cease to have any rights, except the right to receive $1.60 per share in cash. 30 However, notwithstanding the above, a stockholder has the right to demand appraisal of its shares under Section 262 of the Delaware General Corporation Law. See "Special Factors--Appraisal Rights" for further information regarding your right to demand an appraisal of your shares. The Merger Agreement provides that in the event that we acquire at least 90% of the outstanding shares of common stock, we, our parent and EA Engineering will take all necessary and appropriate action to cause the merger to become effective as soon as practicable after the expiration of the offer without a meeting of the stockholders of EA Engineering, in accordance with Section 253 of the Delaware General Corporation Law. The Merger Agreement provides that the respective obligations of us and our parent, on the one hand, and EA Engineering, on the other hand, to effect the merger are subject to the fulfillment, at or prior to the effective time, of each of the following conditions: . we shall have accepted for payment and paid for all shares of common stock validly tendered pursuant to the offer and not withdrawn in an amount equal to that number of shares which, taken together with the shares owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, would constitute at least 90% of the shares of common stock of EA Engineering outstanding on a fully-diluted basis, unless the condition is waived by us; this condition, however, will be deemed to have been satisfied with respect to our obligations to effect the merger if we fail to accept for payment and pay for any shares of common stock validly tendered pursuant to the offer in violation of the terms of the Merger Agreement; . the Merger Agreement will have been adopted by the stockholders of EA Engineering, if approval of the Merger Agreement by a stockholder vote is required pursuant to EA Engineering's certificate of incorporation, the Delaware General Corporation Law or other applicable law; and . no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger will be in effect and the party asserting this condition shall have used its reasonable best efforts to lift or remove any order, injunction, restraint or prohibition. Options. Pursuant to the Merger Agreement, EA Engineering will (i) terminate its stock option plan, its employee stock purchase plan, its stock incentive plan and the two non-employee director stock option plans, and any other stock incentive plans, immediately prior to the effective time of the merger, (ii) grant no additional stock options, restricted stock awards, stock appreciation rights or other interests in respect of any shares of common stock of EA Engineering under any stock incentive plan and (iii) amend, immediately prior to the effective time of the merger, the provisions of any other employee benefit plan, program, arrangement or agreement providing for the issuance, transfer or grant of any shares of common stock, or any interest in respect of any shares of common stock, to provide no continuing rights to acquire, hold, transfer, or grant any shares of common stock or any interest in any shares of common stock. In addition, the Merger Agreement provides that each outstanding stock option which immediately prior to the effective time of the merger is not vested will accelerate and become fully vested and exercisable upon the effective time of the merger in accordance with the terms of the applicable stock option plan of EA Engineering. At the effective time, each stock option will be canceled by EA Engineering and in consideration of the cancellation, EA Engineering will pay to each holder of a canceled stock option an amount equal to the product of (A) the excess, if any, of (i) the consideration paid for the shares in the merger over (ii) the exercise price per share of the stock option multiplied by (B) the number of shares subject to the stock option immediately prior to its cancellation. Prior to the effective time, EA Engineering will have taken all actions necessary, including obtaining all required consents, so that all amounts, if any, deducted by EA Engineering prior to the effective time from the payroll of a participant under the employee stock purchase plan will be paid to a participant immediately prior to the effective time. Further, all contributions by EA Engineering, if any, attributable to such amounts and accrued under the employee stock purchase plan will also be paid to the participant immediately prior to the effective time. 31 Directors and Officers of the Surviving Corporation. The Merger Agreement provides that our directors immediately prior to the effective time of the merger shall become the directors of EA Engineering as the surviving corporation in the merger, and the officers of EA Engineering immediately prior to the effective time shall remain the officers after the effective time of the merger. EA Engineering Stockholders' Meeting. Pursuant to the Merger Agreement, promptly following the purchase of shares of common stock of EA Engineering pursuant to the offer, if approval of the merger by the stockholders of EA Engineering is required by applicable law, EA Engineering will, with the cooperation of our parent, take all action necessary to convene and hold a special meeting of EA Engineering's stockholders for the purpose of considering and voting upon the adoption of the Merger Agreement and to approve the merger. At the stockholders meeting, EA Engineering will submit the Merger Agreement and the merger to the stockholders for their approval. EA Engineering's Board of Directors shall recommend that the stockholders vote in favor of the adoption of the Merger Agreement and to approve the merger at the stockholders meeting and to cause that recommendation to be included in any required proxy statement. The record date for the stockholders meeting will be a date subsequent to the date we become a record holder of shares of common stock purchased pursuant to the offer. EA Engineering has agreed that, if stockholder approval of the merger is required by applicable law, it will promptly prepare and file a proxy statement with the Securities and Exchange Commission relating to the stockholders meeting. Moreover, EA Engineering will use its best efforts to respond to any comments of the Securities and Exchange Commission or its staff and to cause the proxy statement to be cleared by the Securities and Exchange Commission and mailed to EA Engineering's stockholders at the earliest practicable date. We, Dr. Jensen and the Jensen Family Trusts have agreed to cause all shares of common stock purchased pursuant to the offer and all other shares of common stock owned by us or them, respectively, to be voted in favor of the adoption of the Merger Agreement and the approval of the merger. Interim Operations. The Merger Agreement provides that except as otherwise expressly permitted or required by the Merger Agreement, as disclosed by EA Engineering or as consented to in writing by our parent, during the period from the date of the Merger Agreement through the effective time of the merger, EA Engineering will, and will cause its subsidiaries to: . carry on their respective businesses in the usual, regular and ordinary course, in all material respects, in substantially the same manner as conducted prior to the date of the Merger Agreement, and shall use all reasonable efforts to preserve intact their present lines of business, business organizations and reputations, maintain their rights, franchises and permits, keep available the services of their officers and key employees, maintain their assets and properties in good working order and condition, ordinary wear and tear excepted, and preserve their relationships with customers, suppliers and others having business dealings with them to the end that their ongoing businesses shall not be impaired in any material respect; . not enter into any new material line of business or incur or commit to any capital expenditures other than capital expenditures contemplated in EA Engineering's capital budget, reasonable amounts required to meet emergencies, and any additional amounts as may be required to comply with applicable laws and orders; . not (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, (ii) split, combine, subdivide or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its capital stock, except for a transaction by a wholly owned subsidiary of EA Engineering which remains a wholly owned subsidiary of EA Engineering after consummation of that transaction, (iii) 32 adopt a plan of complete or partial liquidation or resolutions providing for or authorizing the liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or (iv) directly or indirectly repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock; . not issue, deliver or sell, pledge, encumber, or authorize or propose the issuance, delivery or sale, pledge or encumbrance of, any shares of its capital stock, or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire any such shares, or enter into any agreement to do so; . not amend or propose to amend its charter or bylaws or other governing documents; . not acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any business organization, or otherwise acquire or agree to acquire any assets other than the acquisition of assets as are used in the operation of the business of EA Engineering and its subsidiaries in the ordinary course, consistent with past practice; . not sell, lease, transfer, encumber or otherwise dispose of, or agree to sell, lease, transfer, encumber or otherwise dispose of, any of its assets (including capital stock of its subsidiaries) which are material to EA Engineering, except for transfers between EA Engineering and its wholly owned subsidiaries and between wholly owned subsidiaries of EA Engineering; . not (i) make any loans, advances or capital contributions to, or investments in, any other entity, other than loans, advances, capital contributions and investments by EA Engineering or one of its subsidiaries to or in EA Engineering of any of its wholly owned subsidiaries, (ii) pay, discharge, settle or satisfy any claims, liabilities or obligations, other than payments, discharges, settlements or satisfactions incurred or committed to in the ordinary course of business consistent with past practice or reflected in the most recent consolidated financial statements of EA Engineering or (iii) create, incur assume or suffer to exist any indebtedness, guarantees, loans or advances or any debt securities or any warrants or rights to acquire any debt securities not in existence as of the date of the Merger Agreement, except for short-term indebtedness incurred under EA Engineering's current short-term facilities in the ordinary course of business; . not (i) materially increase the amount of compensation of any executive officer, director or employee, (ii) make any material increase in or commitment to increase any employee benefits, (iii) issue any equity- based awards or shares of EA Engineering common stock pursuant to any employee benefit plan, adopt or make any commitment to enter into, adopt, amend in any material manner or terminate any employee benefit plan, or any other agreement, arrangement, plan or policy between EA Engineering or one of its subsidiaries and one or more of its directors, officers or employees, (iv) make any contribution, other than regularly scheduled contributions, to any employee benefit plan, (v) grant any severance or termination pay not currently required to be paid under existing severance plans or enter into or adopt, or amend any existing severance plan, agreement or arrangement, (vi) enter into or amend any employee benefit plan except as required by applicable law or (vii) enter into or amend any employment or consulting agreement; . not take any action that would, or fail to take any action which failure would, or that could reasonably be expected to result in a material breach of any provision of the Merger Agreement or any of the conditions to the merger; . except as disclosed in EA Engineering's reports filed with the Securities and Exchange Commission prior to the date of the Merger Agreement, or as required by a governmental entity, not (i) change its methods of accounting or accounting practices in effect at August 31, 2000, except as required by generally accepted accounting principles, (ii) change its fiscal year, (iii) make or rescind any material tax election, (iv) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy in respect of any taxes for any amount in excess of the amount 33 reserved and reflected in the most recent report of EA Engineering filed with the Securities and Exchange Commission, (v) change in any material respect any of its methods of reporting income, deductions or accounting for federal income tax purposes from those employed in the preparation of EA Engineering's federal income tax return for the taxable year ending August 31, 2000; . not modify, amend, terminate or fail to use commercially reasonable efforts to renew any material contract or waive, release or assign any material rights or claims under a contract to which EA Engineering or any of its subsidiaries is a party or enter into any new material contracts; and . not settle or compromise any pending or threatened claims or arbitrations (other than claims or arbitrations relating to matters disclosed in EA Engineering's reports filed with the Securities and Exchange Commission), other than settlements which involve solely the payment of money (without admission of liability) that would not result in an uninsured payment by or liability of EA Engineering in excess of $100,000 in the aggregate above the reserves established for it on the books of EA Engineering as of the date of the Merger Agreement. No Solicitation. The Merger Agreement provides that from the date of the Merger Agreement, EA Engineering shall not (whether directly or indirectly through advisors, agents or other intermediaries), and EA Engineering shall use its reasonable best efforts to cause its subsidiaries and its and their respective officers, directors, advisors, representatives and other agents not to, directly or indirectly: . solicit, initiate, facilitate or knowingly encourage any inquiries relating to, or the submission of, any "Acquisition Proposal" (as that term is defined below); . participate in any discussions or negotiations regarding any Acquisition Proposal, or, in connection with any Acquisition Proposal, furnish to any person any information or data with respect to or access to the properties of EA Engineering or any of its subsidiaries, or take any other action to facilitate the making of any proposal that constitutes or may reasonably be expected to lead to, any Acquisition Proposal; or . enter into any agreement, arrangement or understanding with respect to any Acquisition Proposal or approve or resolve to approve any Acquisition Proposal. Prior to consummation of the offer, if the Board of Directors of EA Engineering or the Special Committee, after receiving advice from outside counsel, has concluded in good faith that such action is reasonably necessary for the Board of Directors or the Special Committee to act in a manner consistent with its fiduciary duties under applicable law, then EA Engineering may furnish information with respect to it and its subsidiaries and participate in discussions or negotiations regarding the Acquisition Proposal, in which case EA Engineering will not disclose any information to any person without entering into a confidentiality agreement substantially identical to the confidentiality agreement between EA Engineering and The Louis Berger Group, Inc. (it being understood that EA Engineering may enter into a confidentiality agreement without a standstill or with a standstill provision less favorable to EA Engineering if they waive or similarly modify the standstill provision in the confidentiality agreement with The Louis Berger Group, Inc.). Under the Merger Agreement, EA Engineering and its Board of Directors or the Special Committee are permitted to take and disclose to EA Engineering's stockholders a position contemplated by Rule 14d-9 and Rule 14e-2(a) under the Securities Exchange Act of 1934, as amended, or any similar communications in connection with the making or amendment of a tender offer or exchange offer, or from making any disclosure required by applicable law or, prior to the consummation of the offer, from terminating the Merger Agreement pursuant to the terms of the Merger Agreement, including having the Board of Directors or the Special Committee take any actions as are necessary to approve or resolve to approve the intention to enter into an agreement with respect to a "Superior Proposal" (as that term is defined below) or any announcement in connection with a Superior Proposal concurrently with the termination of the Merger Agreement in accordance with its terms. EA Engineering must promptly (but in no case later than 24 hours after receipt) provide our parent with a copy of any written Acquisition Proposal that it receives and a written statement with respect to any non- 34 written Acquisition Proposal it receives. The written statement must include the identity of the parties making the Acquisition Proposal and its material terms. EA Engineering has also agreed to keep our parent informed of the status and content of any discussions regarding any Acquisition Proposal with a third party. "Acquisition Proposal" means any offer or proposal for the merger, consolidation, share exchange, recapitalization, liquidation or other business combination involving EA Engineering or any of its subsidiaries or the acquisition or purchase of 20% or more of any class of equity securities of EA Engineering or any of its subsidiaries, or any tender offer (including self- tenders) or exchange offer that if consummated would result in any person beneficially owning 20% or more of any class of equity securities of EA Engineering or any of its subsidiaries, or a substantial portion of the assets of, EA Engineering or any of its subsidiaries, other than the transactions contemplated by the Merger Agreement with us. "Superior Proposal" means a written and unsolicited Acquisition Proposal which the Board of Directors or the Special Committee determines, in good faith after consultation with an independent, nationally recognized investment banking firm, (i) if consummated would result in a transaction more favorable to EA Engineering's stockholders, from a financial point of view, than the transactions contemplated by our Merger Agreement and any alternative proposed by us or our parent and (ii) is reasonably capable of being financed by the entity making the Acquisition Proposal. Directors' and Officers' Insurance and Indemnification. The Merger Agreement provides that the provisions of the certificate of incorporation and bylaws of EA Engineering as the surviving corporation in the merger relating to indemnification and exculpation from liability and advancement of expenses cannot be amended, repealed or otherwise modified for a period of six years from the effective time of the merger in any manner that would adversely affect the rights of individuals who at or prior to the effective time of the merger were directors or officers of EA Engineering, unless the modification is required by law. It further provides that, for a period of six years from the effective time of the merger, EA Engineering, as the surviving corporation in the merger, will maintain in effect directors' and officers' liability insurance policies, for the benefit of those persons who are covered by EA Engineering's directors' and officers' liability insurance policies at the effective time of the merger. See "Special Factors--Interests of Certain Persons in the Offer and the Merger." Agreement to Use Commercially Reasonable Efforts. Pursuant to the Merger Agreement and subject to the conditions in the Merger Agreement, we, our parent and EA Engineering have agreed to use our reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the offer, the merger and the other transactions contemplated by the Merger Agreement including, without limitation: . obtaining all necessary actions or non-actions, waivers, consents and approvals from governmental entities and the making of all necessary registrations and filings and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from or to avoid an action or proceeding by any governmental entity; . obtaining all necessary consents, approvals or waivers from third parties; . defending any lawsuits or other legal proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement, including seeking to have any stay or temporary restraining order entered by any court or other governmental entity vacated or reversed; and . executing and delivering any additional instruments necessary to consummate the transactions contemplated by the Merger Agreement. 35 Representations and Warranties. In the Merger Agreement, EA Engineering has made customary representations and warranties to us and our parent with respect to, among other things, its organization, corporate authority, capital structure, financial statements, public filings, litigation, compliance with applicable laws, employee benefit plans, brokers and finders fees, state takeover statutes, voting requirements, taxes, environmental matters, intellectual property and the absence of any material adverse changes in EA Engineering other than as disclosed in the reports filed by EA Engineering with the Securities and Exchange Commission. As part of the Merger Agreement, we and our parent have made customary representations and warranties to EA Engineering with respect to, among other things, our respective organizations, corporate authority, non-contravention, financing and brokers and finders fees. Termination. The Merger Agreement may be terminated and the merger may be abandoned at any time prior to the effective time of the merger, whether before or after approval of the Merger Agreement and the merger by the stockholders of EA Engineering, as follows: Either our parent upon the approval of its members or EA Engineering upon the approval of its Board of Directors or the Special Committee may terminate the Merger Agreement in the following situations: . by the mutual written consent of our parent and EA Engineering duly authorized by the members of our parent and the Board of Directors or the Special Committee of EA Engineering; . (i) a statute, rule or executive order shall have been enacted, entered or promulgated prohibiting the transactions contemplated by the Merger Agreement or (ii) any governmental entity shall have issued an order, decree or ruling or taken any other action (which order, decree, ruling or other action the parties shall have used their reasonable best efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Merger Agreement and the order, decree, ruling or other action shall have become final and non- appealable; or . if consummation of the offer shall not have occurred on or before December 1, 2001; provided, however, that the party seeking to terminate the Merger Agreement pursuant to this provision shall not have breached in any material respect its obligations under the Merger Agreement. EA Engineering may terminate the Merger Agreement, upon the approval of its Board of Directors or the Special Committee, in the following situations: . prior to consummation of the offer, if (i) the Board of Directors of EA Engineering or the Special Committee notifies our parent in writing that it intends to enter into an agreement with respect to a Superior Proposal, attaching the most current version of the agreement (or a description of all material terms and conditions) to the notice, if EA Engineering's Board of Directors or the Special Committee has determined in good faith (after receiving advice from independent outside counsel) that a failure to terminate the Merger Agreement and enter into an agreement to effect the Superior Proposal would constitute a breach of its fiduciary duties, (ii) our parent does not make, within five business days of receipt of EA Engineering's written notification of its intention to enter into a binding agreement for a Superior Proposal, an offer that the Board of Directors of EA Engineering or the Special Committee determines, in good faith after consultation with its financial advisor, is at least as favorable to the stockholders of EA Engineering as the Superior Proposal, it being understood that EA Engineering shall not enter into any binding agreement during the five-day period, and (iii) substantially contemporaneously with the termination of the Merger Agreement, EA Engineering enters into a definitive agreement to effect the Superior Proposal. EA Engineering agrees to notify our parent promptly if its intention to enter into a written agreement referred to in its notification changes at any time after giving effect to the notification; 36 . if we or our parent have terminated the offer or the offer expires and neither we nor our parent purchases any shares pursuant to the offer; provided that EA Engineering may not terminate the Merger Agreement if it is in material breach of the Merger Agreement; or . prior to the consummation of the offer, if (i) there has been a breach of any representation or warranty of us or our parent in the Merger Agreement that is qualified as to a material adverse effect, (ii) there has been a breach in any material respect of any representation or warranty of us or our parent in the Merger Agreement that is not so qualified, other than any breaches which, in the aggregate, have not had or would not reasonably be likely to have a material adverse effect on us or our parent, taken as a whole, or (iii) there has been a material breach by us or our parent of any of our covenants or agreements contained in the Merger Agreement, which breach, in the case of clauses (i), (ii) or (iii), either is not reasonably capable of being cured or, if it is reasonably capable of being cured, has not been cured within the earlier of (A) 20 days after giving notice to our parent of the breach and (B) the expiration of the offer, provided that EA Engineering may not terminate the Merger Agreement pursuant to this provision of the Merger Agreement if EA Engineering is in material breach of the Merger Agreement. We or our parent may terminate the Merger Agreement, upon the approval of the members of our parent or our Board of Directors, in the following situations: . prior to the consummation of the offer, if the Board of Directors of EA Engineering or the Special Committee has withdrawn, or modified or changed, in a manner adverse to us or our parent, its approval or recommendation of the offer, the Merger Agreement or the merger or resolved to do so or EA Engineering has received an Acquisition Proposal and has not rejected the proposal within ten business days of its receipt, or, if sooner, the date when its existence first becomes publicly disclosed; . prior to the consummation of the offer, if there has been a material breach by EA Engineering of any of the non-solicitation provisions of the Merger Agreement; . if the offer has expired or terminated without us or our parent purchasing any shares and, pursuant to the conditions of the offer, we are neither required to accept and pay for the shares tendered in the offer nor extend the expiration date of the offer; provided that we or our parent may not terminate the Merger Agreement pursuant to this provision if we or our parent are in material breach of the Merger Agreement; . prior to the consummation of the offer, if EA Engineering has exempted for purposes of Section 203 of the Delaware General Corporation Law any acquisition of shares by any person or "group" (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,) other than us, our parent or our respective affiliates; or . prior to the consummation of the offer, if (i) there has been a breach of any representation or warranty of EA Engineering in the Merger Agreement that is qualified as to material adverse effect, (ii) there has been a breach in any material respect of any representation or warranty of EA Engineering in the Merger Agreement that is not so qualified other than any breaches which, in the aggregate, have not had or would not reasonably be likely to have a material adverse effect on EA Engineering, or (iii) there has been a material breach by EA Engineering of any of its covenants or agreements contained in the Merger Agreement, which breach, in the case of clause (i), (ii) or (iii), either is not reasonably capable of being cured or, if it is reasonably capable of being cured, has not been cured within the earlier of (A) 20 days after giving of written notice to EA Engineering of the breach and (B) the expiration of the offer; provided that we or our parent may not terminate the Merger Agreement pursuant to this provision if we or our parent are in material breach of the Merger Agreement. Payment of Certain Fees and Expenses Upon Termination. All fees and expenses incurred in connection with the offer, the merger, the Merger Agreement and the transactions contemplated by the Merger Agreement will be paid by the party incurring the fees or expenses, 37 whether or not the offer or the merger is consummated. In the event that the termination of the Merger Agreement results from the material breach by a party of its representations, warranties, covenants or agreements set forth in the Merger Agreement, however, the non-breaching party will be entitled to recover by way of damages, as its sole remedy, the expenses incurred by it in connection with the transactions contemplated by the Merger Agreement including, without limitation, all legal and accounting fees and disbursements in connection with the preparation and negotiation of the Merger Agreement and the preparation of the offer to purchase. Appraisal Rights. You do not have appraisal rights as a result of the offer. If the merger is consummated, a holder of record of EA Engineering stock on the date of making a demand for appraisal, as described below, will be entitled to have those shares appraised by the Delaware Court of Chancery under Section 262 of the Delaware General Corporation Law and to receive payment for the "fair value" of those shares instead of the consideration provided for in the Merger Agreement. In order to be eligible to receive this payment, however, a holder must (i) continue to hold his or her shares through the time of the merger; (ii) strictly comply with the procedures discussed under Section 262; and (iii) not vote in favor of the merger. The statutory right of appraisal granted by Section 262 requires strict compliance with the procedures in Section 262. Failure to follow any of these procedures may result in a termination or waiver of appraisal rights under Section 262. The following is a summary of the principal provisions of Section 262 of the Delaware General Corporation Law. The following summary is not a complete statement of Section 262 of the Delaware General Corporation Law, and is qualified in its entirety by reference to Section 262 which is incorporated herein by reference, together with any amendments to the laws that may be adopted after the date of this offer to purchase. A copy of Section 262 is attached as Appendix A to this offer to purchase. A holder of EA Engineering stock who elects to exercise appraisal rights under Section 262 must deliver a written demand for appraisal of its shares of common stock of EA Engineering prior to the vote on the merger. The written demand must identify the stockholder of record and state the stockholder's intention to demand appraisal of his or her shares. Only a holder of shares of EA Engineering stock on the date of making a written demand for appraisal who continuously holds those shares through the time of the merger is entitled to seek appraisal. Demand for appraisal must be executed by or for the holder of record, fully and correctly, as that holder's name appears on the holder's stock certificates representing shares of EA Engineering stock. If EA Engineering stock is owned of record in a fiduciary capacity by a trustee, guardian or custodian, the demand should be made in that capacity. If EA Engineering stock is owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be made by or for all owners of record. An authorized agent, including one or more joint owners, may execute the demand for appraisal for a holder of record; that agent, however, must identify the record owner or owners and expressly disclose in the demand that the agent is acting as agent for the record owner or owners of the shares. A record holder such as a broker who holds shares of EA Engineering stock as a nominee for beneficial owners, some of whom desire to demand appraisal, must exercise appraisal rights on behalf of those beneficial owners with respect to the shares of EA Engineering stock held for those beneficial owners. In that case, the written demand for appraisal should state the number of shares of EA Engineering stock covered by it. Unless a demand for appraisal specifies a number of shares, the demand will be presumed to cover all shares of EA Engineering stock held in the name of the record owner. Beneficial owners who are not record owners and who intend to exercise appraisal rights should instruct the record owner to comply with the statutory requirements with respect to the exercise of appraisal rights before the date of the EA Engineering special stockholders meeting. 38 Within 10 days after the merger, the surviving corporation is required to send notice of the effectiveness of the merger to each stockholder who prior to the time of the merger complied with the requirements of Section 262. Within 120 days after the merger, the surviving corporation or any stockholder who has complied with the requirement of Section 262 may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of EA Engineering stock held by all stockholders seeking appraisal. A dissenting stockholder must serve a copy of the petition on the surviving corporation. If no petition is filed by either the surviving corporation or any dissenting stockholder within the 120-day period, the rights of all dissenting stockholders to appraisal will cease. Stockholders seeking to exercise appraisal rights should not assume that the surviving corporation will file a petition with respect to the appraisal of the fair value of their shares or that the surviving corporation will initiate any negotiations with respect to the fair value of those shares. The surviving corporation is under no obligation to and has no present intention to take any action in this regard. Accordingly, stockholders who wish to seek appraisal of their shares should initiate all necessary action with respect to the perfection of their appraisal rights within the time periods and in the manner prescribed in Section 262. Failure to file the petition on a timely basis will cause the stockholder's right to an appraisal to cease. Within 120 days after the time of the merger, any stockholder who has complied with subsections (a) and (d) of Section 262 is entitled, upon written request, to receive from the surviving corporation a statement setting forth the total number of shares of EA Engineering stock not voted in favor of the merger with respect to which demands for appraisal have been received by EA Engineering and the number of holders of those shares. The statement must be mailed within 10 days after EA Engineering has received the written request or within 10 days after the time for delivery of demands for appraisal under subsection (d) of Section 262 has expired, whichever is later. If a petition for an appraisal is filed in a timely manner, at the hearing on the petition, the Delaware Court of Chancery will determine which stockholders are entitled to appraisal rights and will appraise the shares of EA Engineering stock owned by those stockholders. The Court will determine the fair value of those shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, to be paid, if any, upon the fair value. Stockholders who consider seeking appraisal should consider that the fair value of their shares under Section 262 could be more than, the same as, or less than, the value of the consideration provided for in the Merger Agreement without the exercise of appraisal rights. The Court of Chancery may determine the cost of the appraisal proceeding and assess it against the parties as the Court deems equitable. Upon application of a dissenting stockholder, the Court may order that all or a portion of the expenses incurred by any dissenting stockholder in connection with the appraisal proceeding (including, without limitation, reasonable attorney's fees and the fees and expenses of experts) be charged pro rata against the value of all shares of EA Engineering stock entitled to appraisal. In the absence of a court determination or assessment, each party bears its own expenses. Any stockholder who has demanded appraisal in compliance with Section 262 will not, after the merger, be entitled to vote the stock for any purpose or receive payment of dividends or other distributions, if any, on the EA Engineering stock, except to receive payments of dividends or distributions, if any, payable to stockholders of record at a date prior to the merger. A stockholder may withdraw a demand for appraisal and accept the payment of $1.60 per share, net in cash, at any time within 60 days after the merger. If an appraisal proceeding is properly instituted, it may not be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and any approval may be conditioned on the Court of Chancery's deeming the terms to be just. If, after the merger, a holder of EA Engineering stock who had demanded appraisal for his shares fails to perfect or loses his right to appraisal, those shares will be treated as if they were converted as a result of the merger and payment will be delivered for those shares under the terms of the Merger Agreement. 39 In view of the complexity of these provisions of the Delaware General Corporation Law, any EA Engineering stockholder who is considering exercising appraisal rights should consult a legal advisor. Certain United States Federal Income Tax Consequences. The following is a general summary of the material U.S. federal income tax consequences of the sale of shares pursuant to the offer. This discussion is based on the Internal Revenue Code of 1986, as amended, its legislative history, Treasury Regulations thereunder and administrative and judicial interpretations thereof, as of the date hereof, all of which are subject to change (possibly on a retroactive basis). This summary does not discuss all the tax consequences that may be relevant to you in light of your particular circumstances and it is not intended to be applicable in all respects to all categories of stockholders. Some stockholders, such as insurance companies, tax-exempt persons, financial institutions, regulated investment companies, dealers in securities or currencies, persons that hold shares of common stock as a position in a "straddle" or as part of a "hedge," "conversion transaction" or other integrated investment, persons who received shares of common stock as compensation or persons whose functional currency is other than United States dollars, may be subject to different rules not discussed below. In addition, this summary does not address any state, local or foreign tax considerations that may be relevant to a stockholder's decision to tender shares of common stock pursuant to the offer. This summary assumes shares of common stock are held as capital assets within the meaning of Section 1221 of the Internal Revenue Code. In addition, this discussion applies only to "U.S. stockholders." For purposes of this discussion, a "U.S. stockholder" means a stockholder who is (a) a citizen or resident of the United States, (b) a corporation, partnership or other entity created or organized under the laws of the United States or of any State or political subdivision of the foregoing, (c) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (d) a trust with regard to which a court within the United States is able to exercise primary supervision over the administration and one or more U.S. persons have the authority to control all substantial decisions. You are urged to consult your own tax adviser with respect to the federal, state and local consequences of participating in the offer, as well as any tax consequences arising under the laws of any other taxing jurisdiction. In general, a U.S. stockholder will recognize a capital gain or loss for United States federal income tax purposes equal to the difference, if any, between the amount realized from the sale of shares of common stock and the U.S. stockholder's adjusted tax basis in such shares of common stock. In the case of a noncorporate U.S. stockholder, the maximum marginal United States federal income tax rate applicable to such gain will be lower than the maximum marginal United States federal income tax rate applicable to ordinary income, if the U.S. stockholder's holding period for such shares of common stock exceeds one year. In addition, there are limits on the deductibility of capital losses. A U.S. stockholder must calculate gain or loss separately for each block of shares (shares acquired at the same cost in a single transaction) of common stock that he or she owns. Backup Federal Income Tax Withholding. Payments in connection with the offer may be subject to "backup withholding" at a 30.5% rate. Under the backup withholding rules, a U.S. stockholder may be subject to backup withholding with respect to a payment of cash pursuant to the offer unless the stockholder (a) is a corporation or comes within certain other exempt categories (including financial institutions and certain non-U.S. stockholders) and, when required, demonstrates this fact or (b) provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding and otherwise complies with applicable requirements of the backup withholding rules. A U.S. stockholder that does not provide the Depositary with a correct taxpayer identification number may also be subject to penalties imposed by the IRS. To prevent backup withholding and possible penalties, each U.S. stockholder should complete the IRS Substitute Form W-9 included in the letter of transmittal. Any amount paid as backup withholding will be creditable against the U.S. stockholder's income tax liability, and may result in a refund, provided that the required information is given to the IRS. 40 You are advised to consult your own tax advisors regarding the federal, state, local and foreign tax consequences of exchanging shares for cash pursuant to the offer in light of your own particular circumstances. Financing of the Offer. We expect the amount of funds required to purchase all of the outstanding shares of common stock pursuant to the offer and the merger, other than the shares owned by Dr. Jensen and the Jensen Family Trusts, and to pay related fees and expenses to be approximately $6.1 million. The funds necessary to complete the offer will be contributed by Ecolair LLLP and The Louis Berger Group, Inc. to our parent immediately prior to the purchase of the shares pursuant to the offer. The offer is not subject to our receipt of any additional financing. Based on currently available information, we estimate that there is approximately $3.3 million of long-term and short-term indebtedness of EA Engineering, including capital lease obligations. It is anticipated that this indebtedness will be refinanced following the merger. Transactions and Arrangements Concerning the Common Stock. To our knowledge and the knowledge of our parent, Dr. Jensen, Ecolair LLLP, the Jensen Family Trusts and The Louis Berger Group, Inc., no transactions in the shares of common stock of EA Engineering, other than ordinary course purchases under EA Engineering's employee stock purchase plan, have been effected during the past 60 days by EA Engineering or its executive officers, directors, affiliates or subsidiaries, or by our parent, us, Dr. Jensen, Ecolair LLLP, the Jensen Family Trusts, The Louis Berger Group, Inc. or any of our or their executive officers, directors, affiliates or subsidiaries. Since the commencement of EA Engineering's second full fiscal year preceding the date of this offer to purchase, no purchases of shares of common stock were made by EA Engineering, our parent, us, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP or The Louis Berger Group, Inc. Except as set forth in this offer to purchase, neither EA Engineering nor, to EA Engineering's knowledge, any of its affiliates, directors or executive officers or any person controlling EA Engineering, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to, or in connection with, the offer with respect to any securities of EA Engineering (including, without limitation, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations). Except as described in this offer to purchase, since the second full fiscal year preceding the date of this offer to purchase, no contracts or negotiations concerning a merger, consolidation, or acquisition, a tender offer for or other acquisition of any securities of EA Engineering, an election of directors of EA Engineering, or a sale or other transfer of a material amount of assets of EA Engineering, has been entered into or has occurred between any affiliates of EA Engineering or between EA Engineering or any of its affiliates and any unaffiliated person. Except as described in this offer to purchase, since the third full fiscal year preceding the date of this offer to purchase, EA Engineering has not made any underwritten public offering of shares of common stock that was (i) registered under the Securities Act of 1933, as amended, or (ii) exempt from registration under the Securities Act of 1933, as amended, pursuant to Regulation A. We have been advised that, to the knowledge of EA Engineering, all of its directors (other than Dr. Jensen), affiliates and subsidiaries currently plan to tender pursuant to the offer all shares of common stock held of record or beneficially owned by each of them (other than shares of common stock issuable upon the exercise of stock options and shares of common stock, if any, which if tendered could cause any persons to 41 incur liability under the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended), subject to and consistent with any fiduciary obligations of such persons. Certain Effects of the Offer and the Merger. Market for Shares of Common Stock. The purchase of shares of common stock pursuant to the offer will reduce the number of shares of common stock that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining shares of common stock held by the public. Depending upon the aggregate market value and per share price of the shares of common stock not purchased pursuant to the offer, the common stock may no longer meet the guidelines for continued listing on The Nasdaq SmallCap Market. These guidelines require, among other things, that an issuer have (i) at least $2 million of net tangible assets, a market capitalization of $35 million or net income of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years, (ii) a minimum bid price per share of $1, (iii) at least 300 round lot holders of the common stock and (iv) 500,000 publicly held shares with a market value of at least $1 million. If these guidelines are not achieved, the common stock would no longer be "qualified" for Nasdaq reporting, and The Nasdaq SmallCap Market would cease to provide any quotations. Common stock held directly or indirectly by an officer or director of EA Engineering, or by any beneficial owner of more than 10% of the shares of common stock, ordinarily will not be considered as being publicly held for this purpose. If, as a result of the purchase of common stock pursuant to the offer or otherwise, the common stock no longer meets the requirements for continued inclusion in any tier of Nasdaq, and the common stock is no longer included in any tier of Nasdaq, the common stock could be adversely affected. In the event the common stock no longer meets the requirements for inclusion in any tier of Nasdaq, quotations might still be available from other sources. The extent of the public market for common stock and availability of quotations would, however, depend upon the number of holders of common stock remaining at the time, the interest in maintaining a market in the common stock on the part of securities firms, the possible termination of registration under the Securities Exchange Act of 1934, as amended, as described below, and other factors. Exchange Act Registration. The common stock is currently registered under the Securities Exchange Act of 1934, as amended. Registration of the common stock under the Securities Exchange Act of 1934, as amended, may be terminated upon application of EA Engineering to the Securities and Exchange Commission if the common stock is neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the common stock under the Securities Exchange Act of 1934, as amended, would substantially reduce the information required to be furnished by EA Engineering to its stockholders and to the Securities and Exchange Commission and would make certain provisions of the Securities Exchange Act of 1934, as amended, no longer applicable to EA Engineering, such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement pursuant to Section 14(a) in connection with stockholders meetings and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 with respect to "going private" transactions. Furthermore, the ability of "affiliates" of EA Engineering and persons holding "restricted securities" of EA Engineering to dispose of the securities pursuant to Rule 144 or 144A promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. We intend to apply for termination of registration of the common stock under the Securities Exchange Act of 1934, as amended, as soon after the completion of the offer as the requirements for the termination are met. If registration of the common stock is not terminated prior to the merger, then the common stock will be delisted from all stock exchanges and the registration of the common stock under the Securities Exchange Act of 1934, as amended, will be terminated following the consummation of the merger. 42 Margin Regulations. The shares of EA Engineering's common stock are currently "margin securities" under the rules of the Federal Reserve Board. This has the effect, among other things, of allowing brokers to extend credit to their customers using the shares as collateral. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the offer, shares of the common stock will no longer be "margin securities" and could therefore no longer be used as collateral for loans made by brokers. In any event, the shares of common stock will cease to be "margin securities" if registration of the common stock under the Securities Exchange Act of 1934, as amended, is terminated. 43 THE TENDER OFFER Terms of the Offer. Upon the terms and subject to the conditions of the offer, we will purchase all of the outstanding shares of common stock of EA Engineering that are properly tendered (and not validly withdrawn in accordance with "The Tender Offer--Withdrawal Rights" prior to the Expiration Date (as defined below)) at a price of $1.60 per share, net to the seller in cash, without interest, so long as at least the number of shares of EA Engineering common stock has been tendered (and not validly withdrawn) that, when added to the shares of common stock owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least 90% of the outstanding shares of common stock of EA Engineering on a fully-diluted basis. For purposes of the offer, "fully- diluted" is defined as the number of shares outstanding and shares which may be issued pursuant to outstanding stock options that are then exercisable at a price per share less than the purchase price in this offer. The term "Expiration Date" means 5:00 p.m., New York City time, on Thursday, August 30, 2001, unless and until we, in our sole discretion, have extended the period of time during which the offer will remain open, in which event the term "Expiration Date" will refer to the latest time and date at which the offer, as so extended by us, will expire. Subject to the terms of the Merger Agreement, the applicable rules and regulations of the Securities and Exchange Commission and to applicable law, we expressly reserve the right, in our sole discretion, at any time and from time to time, to extend for any reason the period of time during which the offer is open, including upon the occurrence of any of the events specified in "The Tender Offer--Conditions of the Offer," by giving notice of the extension to the Depositary and by making a public announcement of the extension, not later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration of the offer period. Except as otherwise provided in the Merger Agreement, there can be no assurance that we will exercise our right to extend the offer. If there is an extension, all shares of common stock previously tendered and not withdrawn will remain subject to the offer, subject to the rights to withdraw shares previously tendered. See "The Tender Offer--Withdrawal Rights." Subject to the terms of the Merger Agreement, the applicable rules and regulations of the Securities and Exchange Commission and to applicable law, we also expressly reserve the right, in our sole discretion, at any time and from time to time (i) to delay acceptance for payment of, or, regardless of whether the shares of common stock were accepted for payment, payment for, any shares of common stock in order to comply in whole or in part with any other applicable law, (ii) to terminate the offer on any scheduled Expiration Date and not accept for payment any shares of common stock if any of the conditions referred to in "The Tender Offer--Conditions of the Offer" are not satisfied or any of the events specified in "The Tender Offer--Conditions of the Offer" have occurred and (iii) to waive any condition or otherwise amend the offer in any respect by giving oral or written notice of the delay, termination, waiver or amendment to the Depositary and by making a public announcement of the extension. We reserve the right to modify the terms of the offer but, without the prior written consent of EA Engineering, we will not: . change the form of consideration to be paid in the offer; . decrease the offer price; . decrease the number of shares of common stock subject to the offer; . extend the expiration of the offer beyond twenty-one (21) business days after the commencement of the offer, except (i) as required by applicable law or by any rule or regulation of the Securities and Exchange Commission, (ii) that if, immediately prior to the expiration date of the offer (as it may be extended), the shares tendered and not withdrawn pursuant to the offer, when added to the shares then 44 owned by us, our parent, Dr. Jensen and the Jensen Family Trusts do not constitute at least 90% of the outstanding shares of common stock, we may, in our sole discretion, extend the offer for one or more periods not to exceed an aggregate of ten (10) business days after the expiration of the offer, notwithstanding that all other conditions to the offer have been satisfied as of such expiration date of the offer, or (iii) that if any condition to the offer has not been satisfied or waived, we may, in our sole discretion, extend the expiration date of the offer for one or more periods (not in excess of twenty (20) business days each) but in no event later than December 1, 2001; . waive the condition that there shall have been validly tendered and not withdrawn immediately prior to the expiration of the offer such number of shares which, when added to the shares owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, would constitute at least 90% of the outstanding shares of common stock on a fully-diluted basis, provided, however, that we may waive this condition in our sole discretion if there shall have been validly tendered and not withdrawn immediately prior to the expiration of the offer such number of shares which, together with the shares owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least a majority of the shares outstanding on a fully-diluted basis (for purposes of the offer, "fully-diluted" is defined as the number of shares outstanding and shares which may be issued pursuant to outstanding stock options that are then exercisable at a price per share less than the purchase price in this offer); . waive the condition relating to the non-termination of the Merger Agreement; . amend any term or any condition of the offer in any manner adverse to the holders of common stock; or .impose any additional condition to the offer. We acknowledge that Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended, requires us to pay the consideration offered or return the shares of common stock tendered promptly after the termination or withdrawal of the offer and we may not delay acceptance for payment of, or payment for (except in order to comply with any applicable law), any shares of common stock upon the occurrence of any of the conditions specified in "The Tender Offer--Conditions of the Offer" without extending the period of time during which the offer is open. During any extension, all shares of common stock previously tendered and not withdrawn will remain subject to the offer, subject to the rights to withdraw those shares of common stock. Any extension, delay, termination, waiver or amendment will be followed, as promptly as practicable, by a public announcement made no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled expiration of the offer period. Subject to applicable law (including Rules 14d-4(d), 14d-6(c) and 14e- 1 under the Securities Exchange Act of 1934, as amended, which require that material changes be promptly disseminated to holders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which we may choose to make any public announcement, we will have no obligation to publish, advertise or otherwise communicate any public announcement other than by issuing a press release or as otherwise may be required by applicable law. If we make a material change in the terms of the offer or the information concerning the offer, or if we waive a material condition of the offer, we will extend the offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Securities Exchange Act of 1934, as amended. The minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in the percentage of shares of common stock sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms or information. If, for example, the change concerns the price or the percentage of shares of common stock sought, a minimum period of ten business days is generally required to allow for adequate dissemination to stockholders and to allow for investor response. This offer to purchase and the related letter of transmittal will be mailed to record holders of shares of common stock and will be furnished to brokers, banks and similar persons whose names, or the names of 45 whose nominees, appear on our stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of the common stock. Procedures for Tendering Shares. Proper Tender of Shares. In order for your shares to be tendered properly pursuant to the offer: . the certificates for the shares (or confirmation of receipt of the shares pursuant to the procedures for book-entry transfer set forth below), together with a properly completed and duly executed letter of transmittal (or manually signed facsimile thereof), including any required signature guarantees or an Agent's Message (as defined below) and any other documents required by the letter of transmittal, must be received prior to 5:00 p.m., New York City time, on the Expiration Date by the Depositary at Reorganization Department, PO Box 3301, South Hackensack, NJ 07606, if by mail; Reorganization Department, 120 Broadway, 13th Floor, New York, NY 10271, if by hand; or Reorganization Department, 85 Challenger Rd., Mail Stop-Reorg, Ridgefield Park, NJ 07660, if by overnight delivery; or . you must comply with the guaranteed delivery procedure set forth below. If you hold your shares through a broker or a bank, you are urged to consult with your broker or bank to determine whether transaction costs may apply if you tender through them and not directly to the Depositary. To prevent backup federal income tax withholding of 30.5% of the gross proceeds, and, in the case of certain foreign stockholders, to prevent a 30% withholding tax, you must complete the forms specified in "Special Factors-- Certain United States Federal Income Tax Consequences" and include them with your letter of transmittal. If any tendered shares are not purchased or if less than all shares evidenced by a stockholder's certificate are tendered, certificates for unpurchased shares will be returned as promptly as practicable after the expiration or termination of the offer or, in the case of shares tendered by book-entry transfer at The Depositary Trust Company, ("DTC"), the shares will be credited to the appropriate account maintained by the tendering stockholder at DTC, in each case without expense to the stockholder. Signature Guarantees and Method of Delivery. No signature guarantee is required if: . the letter of transmittal is signed by the registered holder of the shares (which term, for purposes of this section, shall include any participant in DTC whose name appears on a security position listing as the owner of the shares) tendered therewith and the holder has not completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the letter of transmittal; or . shares are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, dealer, credit union, savings association or other entity that is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 of the Exchange Act (each such entity being hereinafter referred to as an "Eligible Institution"). See Instruction 1 of the letter of transmittal. If a certificate for shares is registered in the name of a person other than the person executing a letter of transmittal or if payment is to be made, or shares not purchased or tendered are to be issued, to a person other than the registered holder, then the certificate must be endorsed or accompanied by an appropriate stock power, in either case, signed exactly as the name of the registered holder appears on the certificate, or stock power guaranteed by an Eligible Institution. 46 In all cases, payment for shares tendered and accepted for payment pursuant to the offer will be made only after timely receipt by the Depositary of certificates for the shares (or a timely confirmation of a book-entry transfer of the shares into the Depositary's account at DTC as described below), a properly completed and duly executed letter of transmittal (or manually signed facsimile thereof) and any other documents required by the letter of transmittal. The method of delivery of all documents, including certificates for shares, letters of transmittal and any other required documents, is at the election and risk of the tendering stockholder. If delivery is by mail, we recommend that you use registered mail with return receipt requested and that you properly insure your package. In all cases, you should allow sufficient time to ensure timely delivery. Book-Entry Delivery. The Depositary will establish an account with respect to the shares for purposes of the offer at DTC within two business days after the date of this offer to purchase, and any financial institution that is a participant in DTC's system may make book-entry delivery of the shares by causing the facility to transfer shares into the Depositary's account in accordance with DTC's procedures for transfer. Although delivery of shares may be effected through a book-entry transfer into the Depositary's account at DTC, either: . a properly completed and duly executed letter of transmittal (or a manually signed facsimile thereof) with any required signature guarantees, or an Agent's Message (as defined below), and any other required documents must be transmitted to and received by the Depositary at Reorganization Department, PO Box 3301, South Hackensack, NJ 07606, if by mail; Reorganization Department, 120 Broadway, 13th Floor, New York, NY 10271, if by hand; or Reorganization Department, 85 Challenger Rd., Mail Stop-Reorg, Ridgefield Park, NJ 07660, if by overnight delivery, prior to the Expiration Date; or . the guaranteed delivery procedure described below must be followed. The term "Agent's Message" means a message transmitted by DTC to, and received by, the Depositary and forming a part of the confirmation that states that DTC has received an express acknowledgement from the DTC participant tendering the shares that the participant has received and agrees to be bound by the terms of the letter of transmittal and that we may enforce the agreement against the participant. Delivery of the letter of transmittal and any other required documents to DTC does not constitute delivery to the Depositary. Guaranteed Delivery. If a stockholder desires to tender shares of common stock pursuant to the offer and the stockholder's share certificates cannot be delivered to the Depositary prior to the Expiration Date (or the procedures for book-entry transfer cannot be completed on a timely basis) or if time will not permit all required documents to reach the Depositary prior to the Expiration Date, the shares may nevertheless be tendered, provided that all of the following conditions are satisfied: . the tender is made by or through an Eligible Institution; . the Depositary receives by hand, mail, telegram or facsimile transmission, prior to the Expiration Date, a properly completed and duly executed notice of guaranteed delivery in the form we have provided with this offer to purchase, including (where required) a signature guarantee by an Eligible Institution; and . the certificates for all tendered shares, in proper form for transfer (or confirmation of book-entry transfer of the shares into the Depositary's account at DTC), together with a properly completed and duly executed letter of transmittal (or a manually signed facsimile thereof) and any required signature 47 guarantees, or an Agent's Message, or other documents required by the letter of transmittal, are received by the Depositary within three Nasdaq trading days after the date of receipt by the Depositary of the notice of guaranteed delivery. Stock Option Plans. We are not offering, as part of the offer, to purchase any of the stock options outstanding under EA Engineering's stock option plans and tenders of the options will not be accepted. Holders of options who wish to participate in the offer may exercise their options and purchase shares of common stock and then tender the shares pursuant to the offer, provided that any exercise of an option and tender of shares is in accordance with the terms of the stock option plan and the options. An exercise of an option cannot be revoked even if the shares received upon the exercise and tendered in the offer are not purchased in the offer for any reason. Determination of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects; Our Acceptance Constitutes an Agreement. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of shares will be determined by us, in our sole discretion, and our determination will be final and binding on all parties. We reserve the absolute right to reject any or all tenders of any shares of common stock that we determine are not in appropriate form or the acceptance for payment of or payments for which may be unlawful. We also reserve the absolute right to waive any of the conditions of the offer or any defect or irregularity in any tender with respect to any particular shares or any particular stockholder. No tender of shares will be deemed to have been properly made until all defects or irregularities have been cured by the tendering stockholder or waived by us. No one, including us, the Depositary or any other person, will be obligated to give notice of any defects or irregularities in tenders, nor will anyone incur any liability for failure to give any notice. Subject to the terms of the Merger Agreement, our interpretation of the terms and conditions of the offer (including the letter of transmittal and the instructions thereto) will be final and binding. Certificates for shares, together with a properly completed letter of transmittal and any other documents required by the letter of transmittal, must be delivered to the Depositary and not to us or EA Engineering. Any documents delivered to us or EA Engineering will not be forwarded to the Depositary and therefore will not be deemed to be properly tendered. Our acceptance for payment of your shares of common stock tendered by you pursuant to the offer will constitute a binding agreement between you and us upon the terms and subject to the conditions of the offer. Lost or Destroyed Certificates. Stockholders whose certificates for part of their shares have been lost, stolen, misplaced or destroyed may contact the Depositary at (800) 413-6134 for instructions as to obtaining a replacement certificate. That certificate will then be required to be submitted together with the letter of transmittal in order to receive payment for shares that are tendered and accepted for payment. The Depositary may require you to post a bond to secure against the risk that the certificates may be subsequently recirculated. Stockholders are urged to contact the Depositary immediately in order to permit timely processing of this documentation and to determine if the posting of a bond is required. Withdrawal Rights. You may only withdraw your tendered shares in accordance with the provisions of this Section entitled "The Tender Offer--Withdrawal Rights." 48 You may withdraw your tendered shares at any time before 5:00 p.m., New York City time, on Thursday, August 30, 2001. If the offer is extended by us beyond that time, you may withdraw your tendered shares at any time until the expiration of the offer. In addition, unless we accept your tendered shares for payment before 5:00 p.m., New York City time, on September 30, 2001, you may withdraw your tendered shares at any time after September 30, 2001. For a withdrawal to be effective, a notice of withdrawal must be in written, telegraphic or facsimile transmission form and must be received in a timely manner by the Depositary at Reorganization Department, PO Box 3301, South Hackensack, NJ 07606 if by mail; Reorganization Department, 120 Broadway, 13th Floor, New York, NY 10271, if by hand; or Reorganization Department, 85 Challenger Rd., Mail Stop-Reorg, Ridgefield Park, NJ 07660, if by overnight delivery. Any notice of withdrawal must specify the name of the tendering stockholder, the name of the registered holder (if different from the name of the tendering stockholder), the number of shares tendered and the number of shares to be withdrawn. If the certificates for shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the release of the certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates for shares to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of shares tendered by an Eligible Institution). If shares of common stock have been tendered pursuant to the procedure for book-entry tender set forth in "The Tender Offer--Procedures for Tendering Shares," the notice of withdrawal also must specify the name and the number of the account at DTC to be credited with the withdrawn shares and otherwise comply with the procedures of DTC. No one, including us, the Depositary or any other person, shall be obligated to give notice of any defects or irregularities in any notice of withdrawal nor shall anyone incur any liability for failure to give any notice. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by us, in our sole discretion, which determination shall be final and binding. Withdrawals may not be rescinded and any shares withdrawn will thereafter be deemed not properly tendered for purposes of the offer unless the withdrawn shares are properly retendered prior to the Expiration Date by again following one of the procedures described in "The Tender Offer--Procedures for Tendering Shares." If we extend the offer, are delayed in our purchase of shares or are unable to purchase shares pursuant to the offer for any reason, then, without prejudice to our rights under the offer, the Depositary may, subject to applicable law, retain tendered shares on our behalf and the shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described above. Purchase of Shares and Payment of Purchase Price. Upon the terms and subject to the conditions of the offer, as promptly as practicable following the Expiration Date, we will accept for payment and pay for (and thereby purchase) shares of common stock properly tendered and not validly withdrawn prior to the Expiration Date. We will pay $1.60 in cash, without interest, for each share we purchase pursuant to the offer. All shares purchased will be purchased at this price. We will not offer, nor will we pay, different prices to different stockholders. For purposes of the offer, we will be deemed to have accepted for payment (and therefore purchased) shares of common stock that are tendered and not validly withdrawn only when, as and if we give oral or written notice to the Depositary of our acceptance of the shares for payment pursuant to the offer. We will pay for the shares purchased pursuant to the offer by depositing the aggregate purchase price of the shares with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from us and transmitting payment to the tendering stockholders. You will not be obligated to pay brokerage fees or commissions pursuant to the offer. If you hold your shares with your broker, you may be required by your broker to pay a service charge or other fee and you should, therefore, check with your broker. 49 We will pay all stock transfer taxes, if any, payable on the transfer to us of shares purchased pursuant to the offer. If, however, payment of the purchase price is to be made to, or if tendered certificates are registered in the name of any person other than the person signing the letter of transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or the other person), payable on account of the transfer to that person will be deducted from the purchase price unless satisfactory evidence of the payment of the stock transfer taxes, or exemption therefrom, is submitted. See Instruction 7 of the letter of transmittal. If you or your designated payee fail to complete fully, sign and return to the Depositary the IRS Substitute Form W-9 included with the letter of transmittal, you may be subject to required backup federal income tax withholding of 30.5% of the gross proceeds paid to you or your designated payee pursuant to the offer. See "Special Factors--Certain United States Federal Income Tax Consequences" regarding federal income tax consequences for non-U.S. stockholders. Price Range of Shares; Dividends. EA Engineering's common stock is traded on The Nasdaq SmallCap Market under the symbol "EACO." The following table sets forth, for the quarters indicated, the high and low trading prices per share of EA Engineering common stock.
HIGH LOW ----- ----- Fiscal Year Ended August 31, 2001 Fourth Quarter (through July 23, 2001).......................... $1.20 $1.05 Third Quarter................................................... 1.56 1.00 Second Quarter.................................................. 1.63 0.81 First Quarter................................................... 1.28 0.78 Fiscal Year Ended August 31, 2000 Fourth Quarter.................................................. $1.09 $0.69 Third Quarter................................................... 2.06 0.53 Second Quarter.................................................. 3.88 0.50 First Quarter................................................... 1.13 0.50 Fiscal Year Ended August 31, 1999 Fourth Quarter.................................................. $1.38 $1.00 Third Quarter................................................... 1.56 0.94 Second Quarter.................................................. 1.50 1.00 First Quarter................................................... 2.00 1.00
As of July 23, 2001, the last day of trading before the public announcement of the offer, the closing price of EA Engineering's common stock, as reported on The Nasdaq SmallCap Market, was $1.06 per share. EA Engineering has never paid dividends on its common stock. As described above, the Merger Agreement provides that, subject to certain exceptions, EA Engineering will not, and will not permit any of its subsidiaries to, without the prior written consent of our parent, (i) declare, set aside or pay any dividends on, or make any other distributions in respect of its capital stock, (ii) split, combine, subdivide or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock, or (iii) directly or indirectly purchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock. Source and Amount of Funds. Assuming we purchase all of the outstanding shares of common stock pursuant to the offer at a purchase price of $1.60 per share, (other than the shares owned by Dr. Jensen and the Jensen Family Trusts) we expect the maximum aggregate cost to purchase shares and to pay related fees and expenses to be approximately $6.1 million. We will obtain the funds to purchase the shares in the offer and the merger from Ecolair LLLP and 50 The Louis Berger Group, Inc., who have agreed to contribute the funds to our parent immediately prior to the purchase of the shares pursuant to the offer. There is no financing condition. Effect of the Offer on the Market for the Shares of Common Stock; Exchange Act Registration. Our purchase of the shares of common stock pursuant to the offer will reduce the number of shares of common stock that might otherwise trade publicly and the number of holders of the shares of common stock, could adversely affect the liquidity and market value of the remaining shares of common stock held by the public and have other consequences with respect to Nasdaq listing, Exchange Act registration and availability of margin credit. See "Special Factors--Certain Effects of the Offer and the Merger." Fees and Expenses. Except as set forth below, neither we nor our parent will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of shares of common stock pursuant to the Offer. We and our parent have retained Mellon Investor Services LLC as the Depositary. The Depositary has not been retained to make solicitations or recommendations in its role as Depositary. The Depositary will receive reasonable and customary compensation for its services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection with its services, including certain liabilities under the United States federal securities laws. In addition, we and our parent have also retained Mellon Investor Services LLC to act as the Information Agent in connection with the offer. The Information Agent will receive reasonable and customary compensation for its services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection with its services, including certain liabilities under the United States federal securities laws. No fees or commissions will be payable to brokers, dealers or other persons (other than fees to the Depositary and Information Agent as described above) for soliciting tenders of shares pursuant to the offer. We, however, upon request, will reimburse brokers, dealers and commercial banks for customary mailing and handling expenses incurred by the persons in forwarding the offer and related materials to the beneficial owners of shares of common stock held by any person as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or trust company has been authorized to act as the agent of us or the Depositary for purposes of the offer. It is estimated that the fees and expenses that we incur and that are incurred by our parent in connection with the offer, the merger and the other transactions contemplated by the Merger Agreement will be approximately as set forth below: Securities and Exchange Commission filing fee..................... $ 2,100 Depositary fees and expenses...................................... 22,000 Information agent fees and expenses............................... 8,000 Printing and mailing expenses..................................... 17,000 Legal fees and expenses........................................... 200,000 Miscellaneous expenses............................................ 30,900 -------- Total........................................................... $280,000 ========
Certain Information Concerning EA Engineering. EA Engineering. Except as is otherwise indicated in the offer to purchase, the information concerning EA Engineering contained in this offer to purchase, including financial information, has been taken from or is based upon 51 publicly available documents and records on file with the Securities and Exchange Commission and other public sources. Neither we nor our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP or The Louis Berger Group, Inc. assume any responsibility for the accuracy or completeness of the information concerning EA Engineering that is contained in those documents and records or for any failure by EA Engineering to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to us, our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP or The Louis Berger Group, Inc. EA Engineering, together with its wholly owned subsidiaries, is a consulting firm that provides integrated solutions to environmental, safety, and health issues. Through its network of more than 20 regional and satellite offices, EA Engineering provides scientific, engineering, technology, and management solutions to federal, state, and local government, industrial and other private sector utility clients. The goal of EA Engineering is to help management in industry and government improve their performance and achieve their business and organizational objectives. EA Engineering provides its services through a network of offices located throughout the United States, Mexico and Guam. EA Engineering integrates science, engineering, and technology to provide solutions to its clients' complex environmental and health and safety issues affecting business performance and profitability. EA Engineering's primary areas of service include waste quality and water resources management, natural resources and risk management, site characterization and remediation, in-plant and industrial hygiene services, solid waste management and strategic planning of environmental issues. In providing its services, EA Engineering has developed certain remedial and analytical technologies, planning and management services and processes for the mitigation and control of environmental damage and risks. In addition, EA Engineering assists clients in responding to issues raised by regulatory agencies, community groups, and "interested" organizations. All of its service areas are part of a vertical set of capabilities that EA Engineering can offer its clients. EA Engineering's provides its services directly to governmental, industrial and utility clients and indirectly through work performed for architect/engineers, engineer/contractors, law firms and financial institutions. On July 27, 2001, the employment of Barbara L. Posner with EA Engineering terminated. Ms. Posner had served as Executive Vice President, Chief Financial Officer and Chief Operating Officer of EA Engineering. EA Engineering is a Delaware corporation. The address of its principal executive offices is 11019 McCormick Road, Hunt Valley, Maryland 21031. EA Engineering's telephone number is (410) 584-7000. Information concerning EA Engineering's directors and executive officers is set forth on Schedule II of this offer to purchase. Capital Structure. The authorized capital stock of EA Engineering consists of 10,000,000 shares of common stock, $.01 par value, and 8,000,000 shares of preferred stock, $.01 par value. As of July 24, 2001, EA Engineering had 5,842,652 shares of common stock outstanding and no shares of any series or class of preferred stock issued or outstanding. EA Engineering has issued options or other rights to acquire shares of common stock pursuant to a stock option plan and two other non-employee director stock option plans. As of July 24, 2001, 672,251 shares of common stock were reserved for future issuance pursuant to outstanding stock options, of which stock options to purchase 104,337 shares of common stock were then exercisable at a price per share less than the purchase price in this offer. 52 EA Engineering, Science, and Technology, Inc. Selected Consolidated Financial and Operating Data Set forth below is certain selected consolidated financial information relating to EA Engineering and its subsidiaries which has been derived from the financial statements contained in EA Engineering's Annual Report on Form 10-K for the fiscal year ended August 31, 1999, its Annual Report on Form 10-K for the fiscal year ended August 31, 2000 and its Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2001. More comprehensive financial information is included in these reports and other documents filed by EA Engineering with the Securities and Exchange Commission. The financial information that follows is qualified in its entirety by reference to these reports and other documents, including the financial statements and related notes contained therein. These reports and other documents may be inspected at, and copies may be obtained from, the same places and in the manner set forth below.
Fiscal Year Ended Nine Months Ended ------------------------------- ------------------ August 31 August 31 August 31 May 31 May 31 1998 1999 2000 2000 2001 --------- --------- --------- -------- -------- (in thousands, except per share amounts) Statement of Operations Data: Total revenue............. $52,237 $48,728 $60,868 $ 42,989 $ 41,771 Less--Subcontractor costs.................... (11,003) (8,904) (19,399) (12,200) (12,827) Less--Other direct project costs.................... (5,915) (5,676) (6,273) (4,269) (3,647) ------- ------- ------- -------- -------- Net revenue.............. 35,320 34,147 35,196 26,520 25,297 ------- ------- ------- -------- -------- Operating costs and expenses: Direct salaries and other operating............... 26,935 26,199 27,596 20,576 20,550 Sales, general and administrative.......... 8,833 8,043 6,964 5,237 4,943 Gain on "key employee" life insurance.......... (261) -- -- -- -- Restructuring charges.... -- 2,133 -- -- -- ------- ------- ------- -------- -------- Total operating expenses................ 35,507 36,375 34,560 25,813 25,493 ======= ======= ======= ======== ======== Income (loss) from continuing operations.... (187) (2,228) 635 707 (197) Interest expense.......... (221) (269) (356) (237) (315) Interest income........... 99 88 98 70 64 ------- ------- ------- -------- -------- Net income (loss) from continuing operations before income taxes...... (309) (2,408) 378 540 (448) Provision (benefit) for income taxes............. (131) (961) 150 216 (125) ------- ------- ------- -------- -------- Income (loss) from continuing operations.... (178) (1,447) 227 324 (323) Loss from discontinued operations............... (62) (84) -- -- -- ------- ------- ------- -------- -------- Net income (loss)......... $ (240) $(1,530) $ 227 $ 324 $ (323) ======= ======= ======= ======== ======== Per Share Data: Basic earnings (loss) from continuing operations per share.................... $ (0.03) $ (0.23) $ 0.04 $ 0.05 $ (0.06) Diluted earnings (loss) from continuing operations per share..... (0.03) (0.23) 0.04 0.05 (0.06) Basic net earnings (loss) per share................ (0.04) (0.24) 0.04 0.05 (0.06) Diluted net earnings (loss) per share......... (0.04) (0.24) 0.04 0.05 (0.06) Balance Sheet Data: Current assets............ $16,552 $17,053 $19,210 $ 21,630 $ 16,774 Total assets.............. 22,140 22,664 25,516 27,213 23,295 Current liabilities....... 7,746 7,722 10,371 10,960 8,652 Total liabilities......... 9,095 11,048 14,044 15,540 12,235 Long-term borrowing, net of current portion....... 1,349 3,326 3,673 4,580 3,582 Total stockholders' equity................... 13,046 11,616 11,471 11,673 11,060 Other Data: Ratio of earnings to fixed charges.................. (0.4)x (7.97)x 2.01x 1.71x (4.05)x Book value per share...... $ 2.08 $ 1.83 $ 1.94 $ 1.94 $ 1.90
53 Available Information of EA Engineering. EA Engineering is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and is obligated to file reports and other information with the Securities and Exchange Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning EA Engineering's directors and officers, their remuneration, options granted to them, the principal holders of EA Engineering's securities and any material interest of such persons in transactions with them is required to be disclosed in proxy statements distributed to its stockholders and filed with the Securities and Exchange Commission. These reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at: . 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549; . 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and . 7 World Trade Center, New York, New York 10048. Copies of the material may also be obtained by mail, upon payment of the Securities and Exchange Commission's customary charges, from the Public Reference Section of the Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room in Washington, D.C. by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a Web site on the World Wide Web at http://www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. These reports, proxy statements and other information concerning EA Engineering also can be inspected at the offices of The Nasdaq Stock Market, 1735 K Street NW, Washington, DC 20006. Certain Projected Financial Data for EA Engineering Prior to entering into the Merger Agreement, our parent received from management of EA Engineering certain information concerning EA Engineering which we and our parent believe was not and is not publicly available, including certain projected financial data for the fiscal years 2001 through 2005 which we refer to as the "projections." These projections were also provided to EA Engineering's financial advisors. EA Engineering does not publicly disclose projections, and the projections were not prepared with a view to public disclosure. The information is set forth below in this offer to purchase for the limited purpose of giving you and the other holders of common stock access to financial projections prepared by EA Engineering's management that were made available to us and our parent in connection with the Merger Agreement and the offer.
Fiscal Year Ended ------------------------------------------------- August 31 August 31 August 31 August 31 August 31 2001 2002 2003 2004 2005 --------- --------- --------- --------- --------- (in thousands) Financial Data: Total revenue................ $54,436 $53,860 $56,123 $59,760 $62,895 Net revenue.................. 33,471 35,477 37,142 38,986 41,015 Direct labor................. 11,378 12,454 12,984 13,742 14,454 Gross profit................. 22,093 23,023 24,158 25,244 26,561 Total indirect costs......... 22,284 21,880 22,543 23,009 23,655 Operating income (loss)...... (191) 1,143 1,615 2,235 2,906
54 Cautionary Statements Concerning the Projections and Forward-Looking Statements These projections were not prepared with a view to public disclosure or compliance with published guidelines of the Securities and Exchange Commission, the guidelines established by the American Institute of Certified Public Accountants for Prospective Financial Information or generally accepted accounting principles. The projections were not prepared with the approval of EA Engineering's Board of Directors. Neither our parent's nor EA Engineering's certified public accountants have examined or compiled any of the projections or expressed any conclusion or provided any form of assurance with respect to the projections and, accordingly, assume no responsibility for the projections. The projections are included in this offer to purchase to give you access to information which was provided to our parent and to EA Engineering's financial advisors and which is believed by our parent and us to not be publicly available. Certain matters discussed in this offer to purchase (including, but not limited to, the projections) are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from the statements included herein (including the projections) and should be read with caution. The projections are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and recent developments. While presented with numerical specificity, the projections were not prepared in the ordinary course and are based upon a variety of estimates and hypothetical assumptions made by management of EA Engineering with respect to, among other things, industry performance, general economic, market, interest rate and financial conditions, revenues, subcontractor costs, other direct project costs, operating costs and expenses, capital expenditures and working capital of EA Engineering, and other matters which may not be accurate, may not be realized, and are inherently subject to significant business, economic and competitive uncertainties and contingencies, all of which are difficult to predict and any of which are beyond EA Engineering's control. Accordingly, there can be no assurance that the projections will prove to be accurate, and actual results may be materially greater or less than those contained in the projections. In addition, the projections do not take into account any of the transactions contemplated by the Merger Agreement, including the offer and the merger. For these reasons, as well as the bases and assumptions on which the projections were compiled, the inclusion of the projections in this offer to purchase should not be regarded as an indication that we, our parent or EA Engineering or any of our or their respective affiliates or representatives considers the information to be an accurate prediction of future events, and the projections should not be relied on as such. Neither we, nor our parent, EA Engineering nor any of our or their respective affiliates or representatives assume any responsibility for the reasonableness, completeness, accuracy or reliability of the projections. Neither we, nor our parent, EA Engineering nor any of our or their respective affiliates or representatives has made, or makes, any representation to any person regarding the information contained in the projections and, except to the extent required by applicable law, neither we nor they intend to update or otherwise revise the projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events even in the event that any or all of the assumptions are shown to be in error. Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP and The Louis Berger Group, Inc. EA Engineering Holdings, LLC and EA Engineering Acquisition Corporation. We are a wholly owned subsidiary of our parent. Both of us have been formed solely for the purpose of the offer and merger and neither has conducted any unrelated business activities. The Louis Berger Group, Inc. currently owns 79.8% of the interests of our parent and Ecolair LLLP currently owns 20.2%. After expiration of the offer and at the time of acceptance of the shares properly tendered and not withdrawn pursuant to the offer, Dr. Jensen and the Jensen Family Trusts will contribute 1,552,978 and 702,000 shares of common stock of EA Engineering, respectively, which represents all of the shares of common stock of EA Engineering owned by each, to our parent in exchange for equity interests in our parent. As a result, at the effective time of the merger, Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP will collectively own 51% of the equity interests of our parent and The Louis Berger Group, Inc. will own 49% of the equity interests of our parent. 55 Dr. Jensen and the Jensen Family Trusts have entered into a Stock Voting, Non-Tender and Contribution Agreement by and among our parent, us, Ecolair LLLP and The Louis Berger Group, Inc. pursuant to which the parties to the agreement have agreed not to tender their shares of common stock in the offer, to contribute their shares to our parent after the expiration of the offer and immediately prior to the purchase of the shares properly tendered and not withdrawn pursuant to the offer, to vote their shares in favor of the Merger Agreement and the transactions contemplated thereby if stockholder approval is required and to vote against any competing offer. In addition, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, The Louis Berger Group, Inc. and EA Engineering have entered into a Stockholders Agreement that will become effective upon the closing of the offer and which contains terms relating to the voting and transfer of the stock of EA Engineering. Except as set forth in this offer to purchase, neither The Louis Berger Group, Inc. nor Dr. Jensen, the Jensen Family Trusts nor Ecolair LLLP nor any of their respective executive officers, directors, general partners or controlling affiliates currently have any other relationship with us or our parent. Our principal executive office and the principal executive office of our parent is located at 11019 McCormick Road, Suite 250, Hunt Valley, Maryland 21031 and our telephone number is (410) 527-3501. Information concerning our directors and executive officers and the members of our parent is set forth on Schedule I of this offer to purchase. Dr. Jensen, the Jensen Family Trusts, and Ecolair LLLP. At the effective time of the merger, Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP will collectively own 51% of the outstanding equity interests of our parent by reason of the cash investment of $1.2 million by Ecolair LLLP and through the contribution by Dr. Jensen and the Jensen Family Trusts of their shares of EA Engineering common stock to our parent prior to the merger. At the effective time of the merger, Dr. Jensen, the Jensen Family Trusts and Ecolair LLLP will own 26.6%, 12.0% and 12.4% of the equity interests of our parent, respectively. See "Special Factors--Interests of Certain Persons in the Offer and the Merger." Dr. Jensen's principal business address is c/o EA Engineering, Science, and Technology, Inc., 11019 McCormick Road, Hunt Valley, Maryland 21031 and his telephone number is (410) 584-7000. Further information concerning Dr. Jensen is set forth on Schedule I of this offer to purchase. The principal executive office of Ecolair LLLP is located at 11019 McCormick Road, Suite 250, Hunt Valley, Maryland 21031 and its telephone number is (410) 527-3501. This is also the principal business address of the Jensen Family Trusts. Information concerning the general partner of Ecolair LLLP is set forth on Schedule I of this offer to purchase. The Louis Berger Group, Inc. The Louis Berger Group, Inc., a New Jersey corporation, is a professional services firm that provides civil, structural, mechanical, electrical and environmental engineering services. The principal executive office of The Louis Berger Group, Inc. is located at 100 Halsted Street, East Orange, New Jersey 07018 and its telephone number is (973) 678-1960. Background and Past Contacts, Transactions, Negotiations and Agreements During the last five years, neither we nor our parent, The Louis Berger Group, Inc., Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP or, to the best of our and their respective knowledge, any of our or their respective directors, executive officers, general partners, trustees or controlling affiliates has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. 56 Except as described in this offer to purchase neither we nor our parent, The Louis Berger Group, Inc., Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP or, to the best of our and their respective knowledge, any associate or majority-owned subsidiary of us, our parent, The Louis Berger Group, Inc., Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP or, to the best of our and their knowledge, any associate or majority-owned subsidiary of any of our or their respective directors, executive officers, general partners or controlling affiliates beneficially owns or has any right to acquire, directly or indirectly, any equity securities of EA Engineering and neither we nor our parent, The Louis Berger Group, Inc., Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP or, to the best of our and their respective knowledge, any of our or their respective directors, executive officers, general partners or controlling affiliates has effected any transaction in such equity securities during the past 60 days. Except as described in this offer to purchase, neither we nor our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, The Louis Berger Group, Inc., or, to the best of our and their respective knowledge, any of our or their respective directors, executive officers, general partners or controlling affiliates has any contract, arrangement, understanding or relationship with any other person with respect to any securities of EA Engineering, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies. Except as set forth in this offer to purchase, during the past two years, there have been no contacts, negotiations or transactions between us, any of our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, The Louis Berger Group, Inc., or any of our or their subsidiaries or, to the best of our knowledge and the knowledge of our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, The Louis Berger Group, Inc., any of their respective directors, executive officers, general partners or controlling affiliates, on the one hand, and EA Engineering or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. EA Engineering leases approximately 43,700 square feet of office space in Hunt Valley, Maryland, which serves as its corporate headquarters, from Merrymack Limited Partnership, a Maryland limited partnership of which Dr. Jensen is the limited partner and Ecolair LLLP is the general partner. Of the 43,700 square feet, EA Engineering sublets 4,200 square feet to other tenants. The prime lease expires December 31, 2006. For the years ended August 31, 1999 and August 31, 2000, total payments under the lease (including pass-through taxes and operating expenses) were $796,200 and $883,900, respectively. For the nine months ended May 31, 2001, total payments under the lease (including pass- through taxes and operating expenses) were $629,090. EA Engineering also leases approximately 32,400 square feet of office space in Sparks, Maryland from Ecolair LLLP. The lease expires November 30, 2007. For the years ended August 31, 1999 and August 31, 2000, total payments under the lease (including pass-through taxes and operating expenses) were $621,500 and $611,800, respectively. For the nine months ended May 31, 2001, total payments under the lease (including pass-through taxes and operating expenses) were $474,907. EA Engineering is a party to a subcontract with The Louis Berger Group, Inc. pursuant to which EA Engineering provides certain environmental services to The Louis Berger Group, Inc. EA Engineering has recognized approximately $650,000 in revenues from The Louis Berger Group, Inc. under that subcontract in the current fiscal year. Except as set forth above and in this offer to purchase, during the past two years, neither we nor our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, The Louis Berger Group, Inc., or, to the best of our and their respective knowledge, any of our or their respective directors, executive officers, general partners or controlling affiliates has had any business relationship or transaction with EA Engineering or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the Securities and Exchange Commission applicable to the offer. Available Information. We, our parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP, and The Louis Berger Group, Inc. are generally not subject to the information filing requirements of the Securities Exchange Act of 1934, as 57 amended, and are generally not required to file reports, proxy statements and other information with the Securities and Exchange Commission relating to our and their respective businesses, financial condition and other matters. However, pursuant to Rule 14d-3 under the Exchange Act, we filed with the Commission a Schedule TO, together with exhibits, including this offer to purchase and the Merger Agreement, which provides certain additional information with respect to the offer. The Schedule TO and any amendments thereto, including exhibits, are available for inspection and copies are obtainable at: . 450 Fifth Street, N.W., Room 2120, Washington, D.C. 20549; . 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and . 7 World Trade Center, New York, New York 10048. Copies of the material may also be obtained by mail, upon payment of the Securities and Exchange Commission's customary charges, from the Public Reference Section of the Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room in Washington, D.C. by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a Web site on the World Wide Web at http://www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the Securities and Exchange Commission. Conditions of the Offer. Notwithstanding any other term of the offer or the Merger Agreement, we are not required to accept for payment, purchase or, subject to any applicable rules and regulations of the Securities and Exchange Commission, including Rule 14e-1(c) of the Securities Exchange Act of 1934, as amended, pay for, any tendered shares of common stock and may postpone the acceptance for payment or, subject to the restrictions referred to above, the payment for, any tendered shares of common stock, if there shall not have been tendered a number of shares of common stock that, when added to the shares of common stock owned by us, our parent, Dr. Jensen and the Jensen Family Trusts, constitutes at least 90% of the outstanding shares of common stock on a fully-diluted basis. This condition may be waived by us in our sole discretion provided that there shall have been validly tendered and not properly withdrawn prior to the expiration of the offer a number of shares which, when added to the shares owned by us, our parent, Dr. Jensen, and Jensen Family Trusts, constitutes at least a majority of the outstanding shares of EA Engineering on a fully-diluted basis. For purposes of the offer, "fully-diluted" is defined as the number of shares outstanding and shares which may be issued pursuant to outstanding stock options that are then exercisable at a price per share less than purchase price in this offer. In addition to and not limiting the foregoing, notwithstanding any other provision of the offer, we are not required to accept for payment or, subject to the applicable rules and regulations of the Securities and Exchange Commission, including Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended, pay for any tendered shares of common stock and may terminate, subject to the terms of the Merger Agreement, or amend the offer and may postpone the acceptance of and payment for, tendered shares of common stock at any time on or after August 1, 2001 and at or before the time of acceptance of tendered shares of common stock for payment pursuant to the offer or payment therefor (whether or not any tendered shares of common stock have been accepted for payment or paid for) if any of the following events shall occur: . there shall be threatened, instituted or pending any action or proceeding by any governmental entity, or by any other person, domestic or foreign, before any court of competent jurisdiction or governmental entity, which could reasonably be expected to: (i) make illegal, impede or otherwise directly or indirectly restrain or prohibit the offer or the merger or seeking to obtain material damages in connection therewith, (ii) prohibit or materially limit the ownership or operation by our parent or us of all or any material portion of the business or assets of EA Engineering and its subsidiaries taken as a whole or compel our parent or us or our respective affiliates to dispose of or hold separately all or any material portion of the business or assets of our parent, us or EA Engineering and its subsidiaries taken as a whole, or seeking to impose any limitation on the ability of our parent or us or our respective affiliates to conduct their business or own such assets, (iii) impose limitations on the ability of our 58 parent or us effectively to exercise full rights of ownership of the shares of stock of EA Engineering, including, without limitation, the right to vote any shares acquired or owned by our parent or us on all matters properly presented to EA Engineering's stockholders, (iv) require divestiture by our parent or us of any shares of stock of EA Engineering or (v) otherwise directly or indirectly relating to the offer or the merger and which would reasonably be expected to have a material adverse effect on EA Engineering, our parent or us; . there shall be any statute, rule, regulation, legislation, interpretation, judgment, order or injunction, enacted, enforced, promulgated, amended or issued and applicable to (i) our parent, us, EA Engineering or any of its subsidiaries or (ii) the offer or the merger, by any legislative body or other governmental entity which could reasonably be expected to directly or indirectly, result in any of the consequences referred to in clauses (i) through (v) of the condition described immediately above; . there shall have occurred any event, change, circumstance or occurrence that has had or that would reasonably be expected to have a material adverse effect on EA Engineering; . any of the representations or warranties made by EA Engineering in the Merger Agreement shall be untrue or incorrect in any respect (without giving effect to materiality or similar qualifications contained therein) that when taken together with all such other representations and warranties that are not true and correct would reasonably be expected to have a material adverse effect in each case as of the date of the Merger Agreement or the date of consummation of the offer, except that those representations and warranties which address matters only as of a particular date shall remain true and correct as of such date; . EA Engineering shall have failed to perform in any material respect any obligation or to comply in any material respect with any agreement or covenant to be performed or complied with by it under the Merger Agreement on or prior to the date of consummation of the offer; . EA Engineering's Board of Directors or the Special Committee shall have withdrawn, or shall have modified or amended in a manner adverse to our parent or us, the approval or recommendation of the offer, the merger or the Merger Agreement, or resolved to do so, or approved or recommended any Acquisition Proposal other than the offer and the merger or shall have not rejected such Acquisition Proposal within ten (10) business days of its receipt or, if sooner, the date of its existence first becomes publicly disclosed, shall fail to reaffirm its approval and recommendation of the offer, the merger or the Merger Agreement within three (3) business days after our parent's request for such reaffirmation; . it shall have been publicly disclosed, or our parent or we shall have otherwise learned, that beneficial ownership (which for purposes of this paragraph is determined by reference to Rule 13d-3 promulgated under the Exchange Act) of 15% or more of the shares has been acquired other than pursuant to the Merger Agreement; . there shall have occurred, and be continuing, (i) any general suspension of, or limitation on prices for, trading in securities on The New York Stock Exchange or through the Nasdaq Stock Market, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) a commencement of a war, armed hostilities or other national or international crisis directly or indirectly involving the United States or (iv) in the case of any of the foregoing clauses (i) through (iii) existing at the time of the commencement of the offer, a material acceleration or worsening thereof; or . the Merger Agreement shall have been terminated in accordance with its terms. These conditions may be waived by us or our parent, in whole or part, at any time and from time to time, in our or our parent's sole discretion (subject to the terms of the Merger Agreement). The failure by us or our parent at any time to exercise any of the rights described above will not be deemed a waiver of any right and each right will be deemed an ongoing right which may be asserted at any time and from time to time. 59 Certain Legal Matters. General. Except as otherwise disclosed in this offer to purchase, neither we nor our parent is aware of (i) any license or regulatory permit that appears to be material to the business of EA Engineering and its subsidiaries, taken as a whole, that might be adversely affected by the acquisition of shares of common stock by us pursuant to the offer, merger or otherwise or (ii) any approval or other action by any governmental, administrative or regulatory agency or authority, domestic or foreign, that would be required for the acquisition or ownership of shares of common stock by us as contemplated in this offer to purchase. Should any approval or other action be required, we currently contemplate that we would seek such approval or action. Our obligation under the offer to accept for payment and pay for shares of common stock is subject to certain conditions. See "The Tender Offer--Conditions of the Offer." While, except as described in this offer to purchase, we do currently intend to delay the acceptance for payment of shares of common stock tendered pursuant to the offer pending the outcome of any such matter, there can be no assurance that any approval or action, if needed, would be obtained or would be obtained without substantial conditions or that adverse consequences might not result to our business or the business of EA Engineering, or our parent or that certain parts of our business or the business of EA Engineering or our parent might not have to be disposed of in the event that approvals were not obtained or any other actions were not taken. Delaware Business Combination Statute. Section 203 of the Delaware General Corporation Law limits the ability of a Delaware corporation to engage in business combinations with "interested stockholders" (defined generally as any beneficial owner of 15% or more of the outstanding voting stock of the corporation) unless, among other things, the corporation's board of directors has given its prior approval to either the business combination or the transaction which resulted in the stockholder becoming an "interested stockholder." In the Merger Agreement, EA Engineering represented that Section 203 of the Delaware General Corporation Law is inapplicable to the execution, delivery and performance of the Merger Agreement and consummation of the transactions contemplated by the Merger Agreement. In addition, it agreed that it would take all reasonable steps necessary to exempt the offer and merger from Section 203 of the Delaware General Corporation Law as well as the requirements of any state takeover statute or other similar state law which would prevent or impede the consummation of the offer and the transactions contemplated by the Merger Agreement, by action of the EA Engineering Board of Directors or otherwise. State Takeover Laws. In addition to Delaware, a number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, stockholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana may, as a matter of corporate law and, in particular, with respect to those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquirer of "Control Shares" (ones representing ownership in excess of a certain voting power threshold, e.g., 20%, 33% or 50%) from voting on the affairs of a target corporation without the prior approval of the remaining stockholders. The state law before the Supreme Court was by its terms applicable only to corporations that had a substantial number of holders in the state and were incorporated there. In BNS Inc. v. Koppers Co., the United State District Court for the District of Delaware upheld the constitutionality of Section 203 of the DGCL, finding that it did not impermissibly impede interstate commerce in violation of the Commerce Clause of the United States Constitution. EA Engineering, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. Based on representations made by EA Engineering in the Merger Agreement, we do not believe that any state takeover statutes apply to the offer. Neither we nor 60 our parent has currently complied with any state takeover statute or regulation. We reserve the right to challenge the applicability or validity of any state law purportedly applicable to the offer or the merger and nothing in this offer to purchase or any action taken in connection with the offer or the merger is intended as a waiver of that right. In the event it is asserted that one or more state takeover laws is applicable to the offer or the merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the offer or the merger, we might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, we might be unable to accept for payment any shares of common stock tendered pursuant to the offer, or be delayed in continuing or consummating the offer and the merger. If this happens, we may not be obligated to accept for payment any shares of common stock tendered. See "The Tender Offer--Conditions of the Offer." Going Private Transactions. Rule 13e-3 under the Securities Exchange Act of 1934, as amended, is applicable to certain "going private" transactions. Rule 13e-3 will be applicable to the offer. Rule 13e-3 requires, among other things, that certain financial information regarding EA Engineering and certain information regarding the fairness of the merger and the consideration offered to stockholders of the EA Engineering in the merger to be filed with the Securities and Exchange Commission and disclosed to stockholders of EA Engineering prior to consummation of the merger. See "Special Factors-- Background of the Offer." Regulatory Approvals. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules that have been promulgated under that act by the Federal Trade Commission, certain mergers and acquisitions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice and the Federal Trade Commission and certain waiting period requirements have been satisfied. Our acquisition of shares of common stock pursuant to the offer and the merger is not subject to the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended. Miscellaneous. We are not aware of any jurisdiction where the making of the offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the offer is not in compliance with any valid applicable law, we will make a good faith effort to comply with the law. If, after such good faith effort, we cannot comply with the law, the offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of shares of common stock residing in the jurisdiction. Pursuant to Rule 14d-3 under the Securities Exchange Act of 1934, as amended, we and our parent have filed with the Securities and Exchange Commission a Tender Offer Statement on Schedule TO, which contains additional information with respect to the offer. The Schedule TO, including the exhibits and any amendments, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth in "The Tender Offer--Certain Information Concerning Us, Our Parent, Dr. Jensen, the Jensen Family Trusts, Ecolair LLLP and The Louis Berger Group, Inc." with respect to information concerning us. We have not authorized any person to make any recommendation on our behalf as to whether you should tender or refrain from tendering your shares pursuant to the offer. You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to give you any information or to make any representation in connection with the offer other than those contained in this offer to purchase or in the related letter of transmittal. If anyone makes any recommendation or gives any information or representation, you must not rely upon that recommendation, information or authorization as having been authorized by us. August 1, 2001 EA Engineering Acquisition Corporation 61 SCHEDULE I INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF EA ENGINEERING ACQUISITION CORPORATION, EA ENGINEERING HOLDINGS, LLC, THE LOUIS BERGER GROUP, INC. AND ECOLAIR LLLP 1. Board of Directors and Executive Officers of EA Engineering Acquisition Corporation. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each member of the board of directors and each executive officer of EA Engineering Acquisition Corporation. The principal address of EA Engineering Acquisition Corporation is and, unless indicated below, the current business address for each individual listed below is 11019 McCormick Road, Suite 250, Hunt Valley, Maryland 21031, Telephone: (410) 527-3501. Each such person is a citizen of the United States.
Present Principal Occupation or Employment; Name and Current Material Positions Held During the Past Five Business Address Years ---------------- -------------------------------------------- Loren D. Jensen, Ph.D. ...... President, Chief Executive Officer, and Chairman c/o EA Engineering, Science, of the Board of Directors of EA Engineering, and Technology, Inc. Science, and Technology, Inc. (8/73 to present); 11019 McCormick Road General Partner of Ecolair LLLP (9/78 to Hunt Valley, MD 21031 present); President of EA Engineering Holdings, LLC (7/01 to present); President and Director of EA Engineering Acquisition Corporation (7/01 to present). Leon A. Marantz, Esq. ....... Director, General Counsel and Chairman of the 100 Halsted Street Finance Committee of The Louis Berger Group, East Orange, NJ 07018 Inc. (1/86 to present); Director of EA Engineering Acquisition Corporation (7/01 to present).
2. Members and Executive Officers of EA Engineering Holdings, LLC. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each member and each executive officer of EA Engineering Holdings, LLC. The principal address of EA Engineering Holdings, LLC is and, unless indicated below, the current business address for each person listed below is 11019 McCormick Road, Suite 250, Hunt Valley, Maryland 21031, Telephone: (410) 527- 3501. Each such person is, unless indicated below, a citizen of the United States.
Name and Current Present Principal Occupation or Employment; Business Address Material Positions Held During the Past Five Years ---------------- -------------------------------------------------- Ecolair LLLP.................. Member The Louis Berger Group, Inc... Member 100 Halsted Street East Orange, NJ 07018 Loren D. Jensen, Ph.D. ....... President, Chief Executive Officer, and Chairman of the Board of Directors of EA Engineering, c/o EA Engineering, Science, Science, and Technology, Inc. (8/73 to present); General Partner of Ecolair LLLP (9/78 to and Technology, Inc. present); President of EA Engineering Holdings, LLC (7/01 to present); President and Director 11019 McCormick Road of EA Engineering Acquisition Corporation (7/01 to present). Hunt Valley, MD 21031
I-1 3. Loren D. Jensen, Ph.D. Loren D. Jensen Ph.D.'s principal occupation and employment during the past five years has been with the corporations and organizations set forth below. Included on the table below is the name and address of each business as well as the positions held by Dr. Jensen, the principal business of the corporations and organizations and the respective dates of service. Dr. Jensen is a citizen of the United States.
Name and Current Business Address Title Principal Business Dates of Service - ---------------- ----- ------------------ ---------------- EA Engineering, Science, and Technology, Inc...... President, Chief Executive Environmental engineering 8/73 to present 11019 McCormick Road Officer, and Chairman of the industry Hunt Valley, MD 21031 Board of Directors Ecolair LLLP.............. General Partner Real estate 9/78 to present 11019 McCormick Road management Suite 250 Hunt Valley, MD 21031 EA Engineering Holdings, LLC...................... President The acquisition of EA 7/01 to present 11019 McCormick Road Engineering, Science, Suite 250 and Technology, Inc. Hunt Valley, MD 21031 EA Engineering Acquisition Corporation.............. President and Director The acquisition of EA 7/01 to present 11019 McCormick Road Engineering, Science, Suite 250 and Technology, Inc. Hunt Valley, MD 21031
4. Board of Directors and Executive Officers of The Louis Berger Group, Inc. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each member of the board of directors and each executive officer of The Louis Berger Group, Inc. The principal address of The Louis Berger Group, Inc. is and, unless indicated below, the current business address for each individual listed below is 100 Halsted Street, East Orange, New Jersey 07018, Telephone: (973) 678-1960. Each such person is, unless indicated below, a citizen of the United States.
Name and Current Present Principal Occupation or Employment; Material Business Address Positions Held During the Past Five Years - ---------------- ---------------------------------------------------- Derish M. Wolff.......... President and Chief Executive Officer and Director. Leon A. Marantz, Esq. ... Chairman of the Finance Committee and Director. Frederic Berger.......... Senior Vice President and Director. Michael Jichlinski....... Executive Vice-President and Chief Operating Officer.
I-2 5. General Partner of Ecolair LLLP. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of the general partner of Ecolair LLLP. The principal address of Ecolair LLLP is and, unless indicated below, the current business address for each individual listed below is 11019 McCormick Road, Suite 250, Hunt Valley, MD 21031, Telephone: (410) 527-3501. Each such person is, unless indicated below, a citizen of the United States.
Name and Current Business Present Principal Occupation or Employment; Address Material Positions Held During the Past Five Years ------------------------- -------------------------------------------------- Loren D. Jensen, Ph.D. .. President, Chief Executive Officer, and Chairman of the Board of Directors of EA Engineering, Science, and Technology, Inc. (8/73 to present); General Partner of Ecolair LLLP (9/78 to present); President of EA Engineering Holdings, LLC (7/01 to present); President and Director of EA Engineering Acquisition Corporation (7/01 to present).
I-3 SCHEDULE II INFORMATION CONCERNING TRANSACTIONS IN THE COMMON STOCK OF EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. 1. Directors and Executive Officers of EA Engineering, Science, and Technology, Inc. Set forth below is the name, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each director and executive officer of EA Engineering, Science, and Technology, Inc. The principal address of EA Engineering Science, and Technology, Inc. is 11019 McCormick Road, Hunt Valley, MD 21031, Telephone: (410)584-7000. The current business address for each individual listed below, unless indicated below, is c/o EA Engineering, Science, and Technology, Inc. 11019 McCormick Road, Hunt Valley, MD 21031, Telephone: (410)584-7000. Each such person is, unless indicated below, a citizen of the United States.
Present Principal Occupation or Employment; Name and Current Material Positions Held During the Past Five Business Address Years ---------------- -------------------------------------------- Loren D. Jensen, Ph.D. ..... President, Chief Executive Officer and Chairman of the Board of Directors. Edmund J. Cashman, Jr. ..... Director. Senior Executive Vice President of Legg Mason, Inc. and Legg Mason Wood Walker, Incorporated; Director/Trustee of various Legg Mason registered investment companies. Rudolph P. Lamone, Ph.D. ... Director. Chairman of the Board, Michael P. Dingman Center for Entrepreneurship, Robert H. Smith School of Business, University of Maryland. Cleaveland D. Miller, Esq... Director. Managing Partner, Semmes, Bowen & Semmes.
2. Ownership of shares of Common Stock by Directors and Executive Officers. Except for the transactions described in this offer to purchase, none of the persons listed on this Schedule II has effected any transactions in the shares of common stock during the past 60 days.
Name Shares Beneficially Owned Percentage Owned ---- ------------------------- ---------------- Loren D. Jensen, Ph.D............... 1,552,978 26.6% Edmund J. Cashman, Jr............... 58,375(1) * Rudolph P. Lamone, Ph.D............. 15,298(1) * Cleaveland D. Miller, Esq........... 15,625(1) * * represents less than 1%.
- -------- (1) Includes options to purchase 11,500, 11,500 and 14,500 shares by Messrs. Cashman, Lamone and Miller, respectively, which are currently exercisable within 60 days. II-1 APPENDIX A DELAWARE GENERAL CORPORATION LAW SECTION 262 (S) 262 Appraisal Rights. (a) Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to (S) 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder's shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word "stockholder" means a holder of record of stock in a stock corporation and also a member of record of a nonstock corporation; the words "stock" and "share" mean and include what is ordinarily meant by those words and also membership or membership interest of a member of a nonstock corporation; and the words "depository receipt" mean a receipt or other instrument issued by a depository representing an interest in one or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository. (b) Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to (S) 251 (other than a merger effected pursuant to (S) 251(g) of this title), (S) 252, (S) 254, (S) 257, (S) 258, (S) 263 or (S) 264 of this title: (1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of (S) 251 of this title. (2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to (S)(S) 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except: a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders; c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph. A-1 (3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under (S) 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation. (c) Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as is practicable. (d) Appraisal rights shall be perfected as follows: (1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder's shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder's shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder's shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or (2) If the merger or consolidation was approved pursuant to (S) 228 or (S) 253 of this title, each constituent corporation, either before the effective date of the merger or consolidation or within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section; provided that, if the notice is given on or after the effective date of the merger or consolidation, such notice shall be given by the surviving or resulting corporation to all such holders of any class or series of stock of a constituent corporation that are entitled to appraisal rights. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder's shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder's shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder's shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of A-2 determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given. (e) Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) hereof and who is otherwise entitled to appraisal rights, may file a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder shall have the right to withdraw such stockholder's demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder's written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) hereof, whichever is later. (f) Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation. (g) At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. (h) After determining the stockholders entitled to an appraisal, the Court shall appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. In determining the fair rate of interest, the Court may consider all relevant factors, including the rate of interest which the surviving or resulting corporation would have had to pay to borrow money during the pendency of the proceeding. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, permit discovery or other pretrial proceedings and may proceed to trial upon the appraisal prior to the final determination of the stockholder entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder's A-3 certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section. (i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Interest may be simple or compound, as the Court may direct. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court's decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state. (j) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney's fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal. (k) From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder's demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just. (l) The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation. A-4 Manually signed facsimile copies of the letter of transmittal will be accepted. The letter of transmittal and certificates for shares and any other required documents should be sent or delivered by each stockholder or by the stockholder's broker, dealer, commercial bank, trust company or nominee to the Depositary at one of its addresses set forth below. To confirm delivery of shares, stockholders are directed to contact the Depositary. THE DEPOSITARY FOR THE OFFER IS: MELLON INVESTOR SERVICES LLC By Mail By Hand Reorganization Department Reorganization Department PO Box 3301 120 Broadway South Hackensack, NJ 07606 13th Floor New York, NY 10271
By Overnight Delivery Reorganization Department 85 Challenger Rd. Mail Stop-Reorg Ridgefield Park, NJ 07660 You may request additional copies of this offer, the letter of transmittal or the Notice of Guaranteed Delivery from and direct questions and requests for assistance to the Information Agent. THE INFORMATION AGENT FOR THE OFFER IS: MELLON INVESTOR SERVICES LLC (800) 413-6134 44 Wall Street, 7/th/ Floor New York, New York 10005 EX-99.A.2 4 dex99a2.txt LETTER OF TRANSMITTAL EXHIBIT (a)(2) LETTER OF TRANSMITTAL To Tender Shares of Common Stock of EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. at $1.60 per share Pursuant to the Offer to Purchase Dated August 1, 2001 by EA Engineering Acquisition Corporation A Direct Wholly Owned Subsidiary of EA Engineering Holdings, LLC --------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, AUGUST 30, 2001, UNLESS THE OFFER IS EXTENDED. --------------------------------------------------------------------- The Depositary for the Offer is: MELLON INVESTOR SERVICES LLC
By Mail: By Hand: By Overnight Delivery: Mellon Investor Services LLC Mellon Investor Services LLC Mellon Investor Services LLC Reorganization Department Reorganization Department Reorganization Department P.O. Box 3301 120 Broadway 85 Challenger Road South Hackensack, NJ 07606 13th Floor Mail Stop--Reorg New York, NY 10271 Ridgefield Park, NJ 07660
Delivery of this Letter of Transmittal to an address other than as set forth above will not constitute a valid delivery. Deliveries to EA Engineering Acquisition Corporation or EA Engineering, Science, and Technology, Inc. will not be forwarded to the Depositary and therefore will not constitute valid delivery. Deliveries to DTC will not constitute valid delivery to the Depositary.
======================================================================================================== DESCRIPTION OF SHARES TENDERED (See Instructions 3 and 4) - -------------------------------------------------------------------------------------------------------- Name(s) and address(es) of registered holder(s) (please fill in, if blank, exactly as name(s) Shares Tendered appear(s) on certificate(s)) (attach signed additional list if necessary) - -------------------------------------------------------------------------------------------------------- Total Number of Shares Number of Certificate(s) Represented by Shares Number/1/ Certificate(s)/2/ Tendered/3/ -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- -------------------------------------------------------------- ========================================================================================================
/1/ Need not be completed by stockholders tendering Shares by book-entry transfer. /2/ This letter of transmittal may not be used for Shares attributable to accounts under the EA Engineering, Science, and Technology, Inc. Stock Option Plans. See "Tender Offer--Procedures for Tendering Shares" in the Offer to Purchase. /3/ If you desire to tender fewer than all Shares evidenced by any certificates listed above, please indicate in this column the number of Shares you wish to tender. Otherwise, all Shares evidenced by such certificates will be deemed to have been tendered. See Instruction 4. If you wish to tender all or any part of your Shares of Common Stock you should either: . complete and sign this Letter of Transmittal (or a facsimile hereof) in accordance with the instructions hereto and either mail or deliver it with any required signature guarantee and any other required documents to Mellon Investor Services LLC (the "Depositary"), and either mail or deliver the stock certificates for your Shares to the Depositary (with all such other documents) or tender your Shares pursuant to the procedure for book-entry tender set forth in "The Tender Offer--Procedures for Tendering Shares" of the Offer to Purchase, or . request a broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you. If your Shares of Common Stock are registered in the name of a broker, dealer, commercial bank, trust company or other nominee you should contact such person if you desire to tender your Shares. If you desire to tender Shares of Common Stock and your certificates for such Shares cannot be delivered to the Depositary or you cannot comply with the procedure for book-entry transfer or your other required documents cannot be delivered to the Depositary, in any case, by the expiration of the Offer, you must tender such Shares pursuant to the guaranteed delivery procedure set forth in "The Tender Offer--Procedures for Tendering Shares" of the Offer to Purchase. See Instruction 2. Questions and requests for assistance or for additional copies of this Letter of Transmittal, the Offer to Purchase or the Notice of Guaranteed Delivery may be directed to Mellon Investor Services LLC, 44 Wall Street, 7th Floor, New York, NY 10005 (telephone: 1-800-413-6134). LOST, STOLEN OR DESTROYED CERTIFICATES: [_]Check here if any of the certificates representing Shares that you own have been lost, destroyed or stolen. See Instruction 13. Number of Shares represented by lost, destroyed or stolen certificates: __________ 2 - ------------------------------------------------------------------------------- TENDER OF SHARES [_]Check here if tendered Shares are enclosed herewith. [_]Check here if tendered Shares are being delivered by book-entry transfer made to the account maintained by the Depositary at DTC and complete the following (for use by Eligible Institutions only): Name of Tendering Institution:____________________________________ DTC Account Number:_______________________________________________ Transaction Code Number:__________________________________________ [_]Check here if tendered Shares are being delivered pursuant to a Notice of Guaranteed Delivery enclosed herewith and complete the following (for use by Eligible Institutions only): Name of Registered Holder(s):_____________________________________ Window Ticket Number (if any):____________________________________ Date of Execution of Notice of Guaranteed Delivery:_______________ Name of Eligible Institution that Guaranteed Delivery:____________ =============================================================================== 3 TO MELLON INVESTOR SERVICES LLC The undersigned hereby tenders to EA Engineering Acquisition Corporation, a Delaware corporation ("EA Acquisition"), the above described shares of Common Stock, $.01 par value per share (the "Shares"), at a price of $1.60 per share net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 1, 2001 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constitute the "Offer"). Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered hereby in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, EA Acquisition, all right, title and interest in and to all the Shares that are being tendered hereby and order the registration of all such Shares if tendered by book-entry transfer that are purchased pursuant to the Offer and hereby irrevocably constitutes and appoints the Depositary as the undersigned's true and lawful agent and attorney-in-fact (with full knowledge that said Depositary also acts as the agent of EA Acquisition) with respect to such Shares with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to: (a) deliver certificate(s) for the Shares or transfer ownership of the Shares on the account books maintained by DTC, together, in either case, with all accompanying evidences of transfer and authenticity, to, or upon the order of, EA Acquisition upon receipt by the Depositary, as the undersigned's agent, of the Purchase Price (as defined below) with respect to the Shares; (b) present certificates for the Shares for cancellation and transfer on our books; and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of the Shares, subject to the next paragraph, all in accordance with the terms and subject to the conditions of the Offer. The undersigned hereby represents and warrants to EA Acquisition that: (a) tenders of Shares pursuant to any one of the procedures described in "The Tender Offer--Procedures for Tendering Shares" of the Offer to Purchase and in the instructions hereto will constitute the acceptance of the undersigned of the terms and conditions of the Offer. (b) the undersigned has full power and authority to tender, sell, assign and transfer Shares tendered hereby and that, when and to the extent EA Acquisition accepts such Shares for purchase, EA Acquisition will acquire good, marketable and unencumbered title to them, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to their sale or transfer, and not subject to any adverse claim; (c) on request, the undersigned will execute and deliver any additional documents EA Acquisition or the Depositary deem necessary or desirable to complete the assignment, transfer and purchase of the Shares tendered; and (d) the undersigned has read, understood and agrees to all of the terms of the Offer. The undersigned acknowledges that under no circumstances will EA Acquisition pay interest on the Purchase Price, including without limitation, by reason of any delay in making payment. All authorities conferred or agreed to be conferred in this Letter of Transmittal shall not be affected by, and shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy, and legal representatives of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. EA Acquisition's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the undersigned and EA Acquisition upon the terms and subject to the conditions of the Offer. 4 The name(s) and address(es) of the registered holder(s) should be printed above, if they are not already printed above, exactly as they appear on the certificates representing Shares tendered. The certificate numbers, the number of Shares represented by such certificates and the number of Shares that the undersigned wishes to tender, should be set forth in the appropriate boxes above. The undersigned understands that EA Acquisition will purchase all Shares of Common Stock properly tendered and not validly withdrawn for $1.60 per share (the "Purchase Price"), subject to the terms and the conditions of the Offer, and that EA Acquisition will return to the undersigned all tendered Shares not purchased pursuant to the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, EA Acquisition may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for, Shares tendered. In any such event, the undersigned understands that certificate(s) for any Shares delivered herewith but not tendered or not purchased will be returned to the undersigned at the address indicated above, unless otherwise indicated under the "Special Payment Instructions" or "Special Delivery Instructions" boxes below. The undersigned recognizes that EA Acquisition has no obligation, pursuant to the "Special Payment Instructions," to transfer any certificate for Shares from the name of its registered holder, or to order the registration or transfer of Shares tendered by book-entry transfer, if EA Acquisition purchases none of the Shares represented by such certificate or tendered by such book- entry transfer. The check for the aggregate Purchase Price for such of the Shares tendered hereby as are purchased will be issued to the order of the undersigned and mailed to the address indicated above, unless otherwise indicated under the "Special Payment Instructions" or "Special Delivery Instructions" boxes below. ================================================================================ SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 4, 6, 7 and 8) To be completed ONLY if certificates for Shares not tendered or not purchased and/or any check for the aggregate Purchase Price of Shares purchased are to be issued in the name of and sent to someone other than the undersigned. [_] Issue Certificate(s) and/or Check to: Name:__________________________________________________________________________ (please print or type) Address:_______________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ (include zip code) _______________________________________________________________________________ Tax identification or Social Security Number (See IRS Substitute Form W-9) ================================================================================ ================================================================================ SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 4, 6 and 8) To be completed ONLY if certificates for Shares not tendered or not purchased and/or any check for the aggregate Purchase Price of Shares purchased are to be issued in the name of and sent to someone other than the undersigned. [_] Mail Certificate(s) and/or Check to: Name:__________________________________________________________________________ (please print or type) Address:_______________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ (include zip code) =============================================================================== 5 HOLDER(S) PLEASE SIGN HERE (See Instructions 2 and 6) (Please Complete IRS Substitute Form W-9 Contained Herein As Well) Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) or, in the case of book-entry securities, on a security position listing or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted with this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or another person acting in a fiduciary or representative capacity, please set forth the signer's full title and see Instruction 6. SIGNATURE OF OWNER(S) X _____________________________________________________________________________ X ----------------------------------------------------------------------------- (Signature(s) of Holder(s) or Authorized Signatory) Date: ____________ __, 2001 Name(s): ---------------------------------------------------------------------- (Please Print) Capacity: _____________________________________________________________________ Address: ---------------------------------------------------------------------- (Please include ZIP code) Telephone No. (with area code): ------------------------------------------------------------------------------- Tax ID No.: _______________________ ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- GUARANTEE OF SIGNATURES (See Instructions 1 and 6 below) Certain Signatures Must be Guaranteed by an Eligible Institution ------------------------------------------------------------------------------- (Authorized Signature) ------------------------------------------------------------------------------- (Print Name) ------------------------------------------------------------------------------- (Capacity (full title)) ------------------------------------------------------------------------------- (Name of Eligible Institution Guaranteeing Signature) ------------------------------------------------------------------------------- (Address of Firm -- Please include ZIP code) ------------------------------------------------------------------------------- (Address of Firm-- Please include ZIP code) Telephone No. (with area code) of Firm: _______________________________________________________________________________ Date: __________ __, 2001 ------------------------------------------------------------------------------- 6 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE TENDER OFFER 1. Guarantee of Signatures. Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a firm that is a bank, broker, dealer, credit union, savings association, or other "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the 1934 Act (each, an "Eligible Institution"). No signature guarantee is required on this Letter of Transmittal (i) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith, unless such holder(s) has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" included herein, or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instructions 6 and 8. 2. Delivery of Letter of Transmittal and Share Certificates; Guaranteed Delivery Procedures. This Letter of Transmittal is to be used only if certificates for Shares are delivered with it to the Depositary (or such certificates will be delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary) or if a tender for Shares is being made concurrently pursuant to the procedure for tender by book-entry transfer set forth in "The Tender Offer--Procedures for Tendering Shares" of the Offer to Purchase. Certificates for all physically tendered Shares or confirmation of a book-entry transfer into the Depositary's account at DTC of Shares tendered electronically, together in each case with a properly completed and duly executed Letter of Transmittal or duly executed and manually signed facsimile of it, and any other documents required by this Letter of Transmittal, should be mailed or delivered to the Depositary at the appropriate address set forth above and must be delivered to the Depositary on or before the Expiration Date (as defined in the Offer to Purchase). If certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Delivery of documents to DTC does not constitute delivery to the Depositary. Stockholders whose certificates are not immediately available or who cannot deliver certificates for their Shares and all other required documents to the Depositary before the Expiration Date, or whose Shares cannot be delivered on a timely basis pursuant to the procedures for book-entry transfer, must, in any case, tender their Shares by or through an Eligible Institution by properly completing and duly executing and delivering a Notice of Guaranteed Delivery (or facsimile of it) and by otherwise complying with the guaranteed delivery procedure set forth in "The Tender Offer--Procedures for Tendering Shares" of the Offer to Purchase. Pursuant to such procedure, certificates for all physically tendered Shares or book-entry confirmations, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or facsimile of it) and all other documents required by this Letter of Transmittal, must be received by the Depositary within three (3) Nasdaq trading days after receipt by the Depositary of such Notice of Guaranteed Delivery, all as provided in "The Tender Offer--Procedures for Tendering Shares" of the Offer to Purchase. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a signature guarantee by an Eligible Institution in the form set forth in such Notice. For Shares to be tendered validly pursuant to the guaranteed delivery procedure, the Depositary must receive the Notice of Guaranteed Delivery on or before the Expiration Date. The method by which you deliver your documents, including Share certificates, the Letter of Transmittal and any other required documents, is at your option and risk, and the delivery will be deemed made only when actually received by the Depositary. If you elect to deliver your documents by mail, EA Acquisition recommends that you use registered mail with return receipt requested and that you properly insure the documents. In all cases, you should allow sufficient time to ensure timely delivery. 7 EA Acquisition will not accept any alternative, conditional or contingent tenders, nor will it purchase any fractional Shares. All tendering stockholders, by execution of this Letter of Transmittal (or a facsimile of it), waive any right to receive any notice of the acceptance of their tender. 3. Inadequate Space. If the space provided in the box captioned "Description of Shares Tendered" is inadequate, the certificate numbers, the class or classes, and/or the number of Shares should be listed on a separate signed schedule and attached to this Letter of Transmittal. 4. Partial Tenders and Unpurchased Shares. (Not applicable to stockholders who tender by book-entry transfer.) If fewer than all of the Shares evidenced by any certificate are to be tendered, fill in the number of Shares that are to be tendered in the column entitled "Number of Shares Tendered," in the box captioned "Description of Shares Tendered." In such case, if any tendered Shares are purchased, a new certificate for the remainder of the Shares (including any Shares not purchased) evidenced by the old certificate(s) will be issued and sent to the registered holder(s), unless otherwise specified in either the "Special Payment Instructions" or "Special Delivery Instructions" box on this Letter of Transmittal, as soon as practicable after the Expiration Date. Unless otherwise indicated, all Shares represented by the certificates(s) listed and delivered to the Depositary will be deemed to have been tendered. 5. Price at Which Shares are being Tendered. All Shares of Common Stock properly tendered and not validly withdrawn will be purchased for $1.60 per share net to the seller in cash, without interest, subject to the terms and the conditions of the Offer. 6. Signatures on Letter of Transmittal, Stock Powers and Endorsements. (a) If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever. (b) If any tendered Shares are registered in the names of two or more joint holders, each such holder must sign this Letter of Transmittal. (c) If any tendered Shares are registered in different names on different certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of certificates. (d) When this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsement(s) of certificate(s) representing such Shares or separate stock power(s) are required unless payment of the Purchase Price is to be made or the certificate(s) for the Shares not tendered or not purchased are to be issued to a person other than the registered holder(s). If this Letter of Transmittal is signed by a person other than the registered holder(s) of the certificate(s) listed, or if payment is to be made to a person other than the registered holder(s), the certificate(s) must be endorsed or accompanied by appropriate stock power(s), in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate(s). Signature(s) on such certificate(s) or stock power(s) must be guaranteed by an Eligible Institution. See Instruction 1. (e) If this Letter of Transmittal or any certificate(s) or stock powers(s) is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in fiduciary or representative capacity, such persons should so indicate when signing and must submit proper evidence satisfactory to EA Acquisition of their authority to so act. 8 7. Stock Transfer Taxes. Except as provided in this Instruction 7, no stock transfer tax stamps or funds to cover such stamps need accompany this Letter of Transmittal. EA Acquisition will pay or cause to be paid any stock transfer taxes payable on the transfer of Shares purchased pursuant to the Offer. If, however: (a) payment of the aggregate Purchase Price for Shares tendered and accepted for purchase is to be made to any person other than the registered holder(s); (b) Shares not tendered or not accepted for purchase are to be registered in the name(s) of any person(s) other than the registered holder(s); or (c) tendered certificates are registered in the name(s) of any person(s) other than the person(s) signing this Letter of Transmittal; then the Depositary will deduct from such aggregate Purchase Price the amount of any stock transfer taxes (whether imposed on the registered holder, such other person or otherwise) payable on account of the transfer to such person, unless satisfactory evidence of the payment of such taxes or any exemption from them is submitted. 8. Special Payment and Delivery Instructions. If certificate(s) for Shares not tendered or not purchased and/or check(s) are to be issued in the name of a person other than the signer of the Letter of Transmittal or to the signer at a different address, the boxes captioned "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed as applicable and signatures must be guaranteed as described in Instruction 1. 9. Irregularities. All questions as to the number of Shares to be accepted, the price to be paid therefor and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by EA Acquisition in its sole discretion, which determinations shall be final and binding on all parties. EA Acquisition reserves the absolute right to reject any or all tenders of Shares it determines not to be in proper form or the acceptance of which or payment for which may, in the opinion of EA Acquisition's counsel, be unlawful. EA Acquisition also reserves the absolute right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular Shares, and its interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as EA Acquisition shall determine. Neither EA Acquisition nor the Depositary nor any other person is or will be obligated to give notice of any defects or irregularities in tenders and no person will incur any liability for failure to give any such notice. 10. Questions and Requests for Assistance and Additional Copies. Questions and requests for assistance may be directed to, or additional copies of the Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of Transmittal may be obtained from Mellon Investor Services LLC, 44 Wall Street, 7th Floor, New York, NY 10005 (telephone: 1-800-413-6134). 11. Backup Withholding. Under federal income tax law, a stockholder who receives a payment pursuant to the Offer is required to provide the Depositary (as payor) with such stockholder's correct taxpayer identification number ("TIN") on IRS Substitute Form W-9 below. If the stockholder is an individual, the TIN is his or her social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service and payments that are made to the stockholder or other payee with respect to the Offer may be subject to backup withholding of up to 30.5%. Certain stockholders (including, among others, corporations and certain foreign individuals) may not be subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the stockholder must submit to the Depositary a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 can be obtained from the Depositary. 9 If backup withholding applies, the Depositary is required to withhold up to 31% of any such payments made to the stockholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld, provided that the required information is given to the Internal Revenue Service. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The box in Part 3 of the IRS Substitute Form W-9 may be checked if the submitting stockholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the stockholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 30.5% on all payments made prior to the time a properly certified TIN is provided to the Depositary. However, such amounts will be refunded to the stockholder if a TIN is provided to the Depositary within 60 days. The stockholder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record owner of the Shares or of the last transferee appearing on the transfers attached to, or endorsed on, the Shares. If the shares are registered in more than one name or are not registered in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 12. Withholding for Non-U.S. Stockholders. Although a non-U.S. stockholder may be exempt from U.S. federal income tax backup withholding, certain payments to non-U.S. stockholders are subject to U.S. withholding tax at a rate of 30%. Foreign stockholders should consult their tax advisors regarding application of U.S. federal income tax withholding, including eligibility for a withholding tax reduction or exemption and refund procedures. 13. Lost, Destroyed or Stolen Certificates. If any of your certificate(s) representing Shares has been lost, destroyed or stolen, you should promptly notify the Depositary by checking the box provided in the box titled "Description of Shares Tendered" and indicating the number of Shares represented by the certificate so lost, destroyed or stolen. You will then be instructed by the Depositary as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificates have been followed. Please allow at least ten to fourteen business days to complete such procedures. In order to expedite the lost security process, please call 1-800-413-6134. Important: This Letter of Transmittal, properly completed and duly executed, or manually signed facsimile of this Letter of Transmittal, together with certificates representing shares being tendered or confirmation of book-entry transfer and all other required documents, or a Notice of Guaranteed Delivery, must be received before 5:00 P.M., New York City time, on the Expiration Date. Stockholders are encouraged to return a completed Substitute W-9 with this Letter of Transmittal. 10 - -------------------------------------------------------------------------------- Payer's Name: Mellon Investor Services LLC - -------------------------------------------------------------------------------- Part 1 -- PLEASE PROVIDE Social security number or SUBSTITUTE YOUR TIN IN THE BOX AT / / Form W-9 RIGHT AND CERTIFY BY --------------------------- SIGNING AND DATING BELOW. Employer identification number - -------------------------------------------------------------------------------- Payer's Part 2 -- Certification -- Under penalties of perjury, I Request for certify that: Taxpayer (1) The number shown on this form is my correct Taxpayer Identification Identification Number (or I am waiting for a number Number (TIN) to be issued to me) and (2) I am not subject to backup withholding because (i) I am exempt from backup withholding, (ii) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of failure to report all interest of dividends, or (iii) the IRS has notified me that I am no longer subject to backup withholding and (3) I am a U.S. person (including a U.S. resident alien). (4) Any information provided on this form is true, correct and complete. - -------------------------------------------------------------------------------- Certificate Instructions -- You must cross out item (2) in Part 2 above if you have been notified by the IRS that Part 3 -- you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, Awaiting if after being notified by the IRS that TIN [_] you are subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2). _________________________ Date ______, 2001 Signature ------------------------- Name (please print) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE: Failure to complete and return this IRS Substitute Form W-9 may result in backup withholding of up to 30.5% of any payments made to you pursuant to the Offer. Please review the enclosed Guidelines for Certification of Taxpayer Identification Number on IRS Substitute Form W-9 for additional details. You must complete the following certification if you checked the box in Part 3 of this IRS Substitute Form W-9. - -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, up to 30.5% of all reportable payments made to me will be withheld; but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days. Signature: __________________________ Date: __________________, 2001 Name (please print) _________________ - -------------------------------------------------------------------------------- 11 EX-99.A.3 5 dex99a3.txt NOTICE OF GUARANTEED DELIVERY EXHIBIT (a)(3) NOTICE OF GUARANTEED DELIVERY For Tender of Shares of Common Stock (not to be used for signature guarantees) of EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. at $1.60 per share by EA Engineering Acquisition Corporation A Direct Wholly Owned Subsidiary of EA Engineering Holdings, LLC This form, or a form substantially equivalent to this form, must be used to accept the Offer (as defined below) if certificates for the shares of common stock, par value $.01 per share, of EA Engineering, Science, and Technology, Inc. are not immediately available, or if the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all other documents required by the Letter of Transmittal to be delivered to the Depositary prior to the Expiration Date (as defined in "The Tender Offer--Terms of the Offer" of the Offer to Purchase (as defined below)). Such form may be delivered by hand or transmitted by mail or overnight courier, or (for Eligible Institutions (as defined below) only) by facsimile transmission, to the Depositary. See "The Tender Offer--Procedures for Tendering Shares" in the Offer to Purchase. The Depositary for the Offer is: MELLON INVESTOR SERVICES LLC By Mail: By Hand: By Overnight Delivery: Mellon Investor Services LLC Mellon Investor Services LLC Mellon Investor Services LLC Reorganization Department Reorganization Department Reorganization Department P.O. Box 3301 120 Broadway 85 Challenger Road South Hackensack, NJ 07606 13/th/ Floor Mail Stop -- Reorg New York, NY 10271 Ridgefield Park, NJ 07660
By Facsimile Transmission: (Eligible Institutions only. See Instruction 1) (201) 296-4293 Confirm by Telephone: (201) 296-4860 Delivery of this instrument to an address, or transmission of instructions via a facsimile number, other than as set forth above will not constitute a valid delivery. Deliveries to EA Engineering Acquisition Corporation or EA Engineering, Science, and Technology, Inc. will not be forwarded to the Depositary and therefore will not constitute valid delivery. Deliveries to DTC will not constitute valid delivery to the Depositary. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for shares to the Depositary within the time shown herein. Failure to do so could result in a financial loss to such Eligible Institution. Ladies and Gentlemen: The undersigned hereby tenders to EA Engineering Acquisition Corporation, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 1, 2001 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), receipt of which is hereby acknowledged, the number of shares of common stock, $.01 par value (the "Shares"), of EA Engineering, Science, and Technology, Inc. listed below, pursuant to the guaranteed delivery procedure set forth in the section entitled "The Tender Offer--Procedures for Tendering Shares" of the Offer to Purchase. --------------------------------------------------------------------------- If Shares will be tendered by book-entry transfer: Name of Tendering Institution: ___________________________________________________________________________ ___________________________________________________________________________ Area Code and Telephone Number Account No.__________ at The Depository Trust Company ____________________________________________ Signature(s) Number of Shares: Name(s) (Please Print): _____________________________ ____________________________________________ ____________________________________________ Certificate Nos.: (if available) Address(es):________________________________ _____________________________ ____________________________________________ ____________________________________________ (Including Zip Code) ---------------------------------------------------------------------------- 2 ---------------------------------------------------------------------------- GUARANTEE (Not To Be Used For Signature Guarantee) The undersigned, a firm which is a bank, broker, dealer, credit union, savings association, or other "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the 1934 Act (each, an "Eligible Institution"), hereby guarantees that the undersigned will deliver to the Depositary, at one of its addresses set forth above, certificate(s) for the Shares tendered hereby, in proper form for transfer, or a confirmation of the book-entry transfer of the Shares tendered hereby into the Depositary's account at The Depository Trust Company, in each case together with a properly completed and duly executed Letter(s) of Transmittal (or manually signed facsimile(s) thereof), with any required signature guarantee(s) and any other required documents, all within three Nasdaq trading days after the date hereof. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for shares to the Depositary within the time shown herein. Failure to do so could result in a financial loss to such eligible institution. Name of Firm:______________________________________________________________ Authorized Signature:______________________________________________________ Name:______________________________________________________________________ (Please print) Title:_____________________________________________________________________ Address:___________________________________________________________________ ___________________________________________________________________________ (City, State, Zip Code) Area Code and Telephone Number:____________________________________________ Dated:________________ ---------------------------------------------------------------------------- NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL. 3 EX-99.A.4 6 dex99a4.txt LETTER TO BROKERS ET AL EXHIBIT (a)(4) Mellon Investor Services LLC EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF ITS COMMON STOCK AT $1.60 PER SHARE by EA Engineering Acquisition Corporation A Direct Wholly Owned Subsidiary of EA Engineering Holdings, LLC ---------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, AUGUST 30, 2001, UNLESS THE OFFER IS EXTENDED. ---------------------------------------------------------------------- August 1, 2001 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: In our capacity as Depositary, we are enclosing the material listed below relating to the offer by EA Engineering Acquisition Corporation, a Delaware corporation ("EA Acquisition"), to purchase all of the outstanding shares of common stock of EA Engineering, Science, and Technology, Inc. ("EA Engineering"), $.01 par value (the "Shares"), at a price of $1.60 per share net to the seller in cash, without interest (the "Purchase Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 1, 2001 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). EA Acquisition will purchase all Shares properly tendered and not validly withdrawn, upon the terms and subject to the conditions of the Offer described in the Offer to Purchase. See "Tender Offer--Terms of the Offer" in the Offer to Purchase. The Purchase Price will be paid in cash with respect to all Shares purchased, without interest. All Shares tendered and not purchased pursuant to the Offer will be returned at EA Acquisition's expense as promptly as practicable following the Expiration Date. The offer is conditioned on, among other things, there having been validly tendered and not properly withdrawn prior to the expiration of the offer a number of shares of common stock of EA Engineering which, when added to the shares of common stock owned by EA Acquisition, EA Engineering Holdings, LLC, Loren D. Jensen Ph.D. and certain trusts established for the benefit of the children of Dr. Jensen, constitutes at least ninety percent (90%) of the outstanding shares of common stock on a fully-diluted basis (as defined in the Offer to Purchase). The Offer is also subject to other terms and conditions described in "The Tender Offer--Conditions of the Offer" in the Offer to Purchase. We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. EA Acquisition will, upon request, reimburse you for reasonable and customary handling and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. For your information and for forwarding to your clients, we are enclosing the following documents: l. The Offer to Purchase. 2. The Letter of Transmittal for your use and for the information of your clients together with the accompanying Substitute Form W-9. 3. A letter to the stockholders of EA Engineering from the President of EA Acquisition. 4. The Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents cannot be delivered to the Depositary by the Expiration Date (each as defined in the Offer to Purchase). 5. A letter that may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space for obtaining such clients' instructions with regard to the Offer. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights expire at 5:00 P.M., New York City time, on Thursday, August 30, 2001, unless the Offer is extended. EA Acquisition will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. EA Acquisition will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and customary handling and mailing expenses incurred by them in forwarding materials relating to the Offer to their customers. EA Acquisition will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the Letter of Transmittal. The Board of Directors of EA Engineering, based upon the unanimous recommendation of a special committee of independent directors, has unanimously approved the making of the Offer and recommends that stockholders tender their shares pursuant to the offer. In order to tender Shares in the Offer, a duly executed and properly completed Letter of Transmittal, or a manually signed facsimile of the Letter of Transmittal, including any required signature guarantees, or an Agent's Message, as defined in the Offer to Purchase, in the case of book-entry transfer, and any other required documents should be sent to the Depositary together with either certificate(s) representing tendered Shares or timely confirmation of their book-entry transfer, all in accordance with the instructions described in the Offer to Purchase and the related Letter of Transmittal. Questions and requests for assistance or for additional copies of this Letter of Transmittal, the Offer to Purchase or the Notice of Guaranteed Delivery may be directed to Mellon Investor Services LLC, 44 Wall Street, 7th Floor, New York, NY 10005 (telephone: 1-800-413-6134). Very truly yours, MELLON INVESTOR SERVICES LLC Nothing contained herein or in the enclosed documents shall constitute you or any other person the agent of EA Acquisition or the Depositary, or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the documents enclosed herewith and the statements made herein. 2 EX-99.A.5 7 dex99a5.txt LETTER TO CLIENTS EXHIBIT (a)(5) EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF ITS COMMON STOCK AT $1.60 PER SHARE by EA Engineering Acquisition Corporation A Direct Wholly Owned Subsidiary of EA Engineering Holdings, LLC ----------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY, AUGUST 30, 2001, UNLESS THE OFFER IS EXTENDED. ----------------------------------------------------------------------------- To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated August 1, 2001 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") setting forth an offer by EA Engineering Acquisition Corporation, a Delaware corporation ("EA Acquisition"), to purchase all of the outstanding shares of the common stock of EA Engineering, Science, and Technology, Inc. ("EA Engineering"), $.01 par value (the "Shares"), at a price of $1.60 per Share, net to the seller in cash, without interest (the "Purchase Price"), upon the terms and subject to the conditions of the Offer. Also enclosed herewith is certain other material related to the Offer, including a letter to stockholders from Loren D. Jensen, President of EA Acquisition. EA Acquisition will purchase all Shares properly tendered and not validly withdrawn, upon the terms and subject to the conditions of the Offer described in the Offer to Purchase. See "Tender Offer--Terms of the Offer" in the Offer to Purchase. The Purchase Price will be paid in cash with respect to all Shares purchased, without interest. All Shares tendered and not purchased pursuant to the Offer will be returned at EA Acquisition's expense as promptly as practicable following the Expiration Date. We are the holder of record of Shares held for your account. As such, a tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us - ------------------------- for your account. Accordingly, we request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal. Your attention is invited to the following: 1. All Shares purchased by EA Acquisition in the Offer will be purchased at $1.60 per share net to the seller in cash without interest and less any required withholding of taxes, upon the terms, and subject to the conditions set forth, in the Offer. 2. The Offer is for all of the outstanding shares of the common stock of EA Engineering as of August 1, 2001. The Offer is subject to certain conditions set forth in the Offer to Purchase. See "Tender Offer-- Conditions of the Offer" of the Offer to Purchase. 3. The Offer and withdrawal rights will expire at 5:00 P.M., New York City time, on Thursday, August 30, 2001, unless the Offer is extended. Your instructions to us should be forwarded to us in ample time to permit us to submit a tender on your behalf. 4. Tendering stockholders will not be obligated to pay any brokerage commissions or solicitation fees on the purchase by EA Acquisition of Shares in the Offer. If you hold your shares with your broker or bank, we urge you to consult with your broker or bank to determine whether service charges or other fees are applicable. Any stock transfer taxes applicable to the purchase of Shares by EA Acquisition pursuant to the Offer will be paid by EA Acquisition, except as otherwise provided in Instruction 7 of the Letter of Transmittal. The Board of Directors of EA Engineering, based on the unanimous recommendation of a special committee of independent directors, has unanimously approved the making of the Offer and recommends that stockholders tender their shares pursuant to the offer. If you wish to have us tender any or all of your Shares held by us for your account upon the terms and subject to the conditions set forth in the Offer to Purchase, please so instruct us by completing, executing and returning to us the attached Instruction Form. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the Instruction Form. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the expiration of the Offer. The Offer is being made to all holders of Shares. EA Acquisition is not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If EA Acquisition becomes aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, EA Acquisition will make a good faith effort to comply with such law. If, after such good faith effort, EA Acquisition cannot comply with such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such jurisdiction. 2 INSTRUCTION FORM WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. AT $1.60 PER SHARE The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated August 1, 2001, and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") in connection with the Offer by EA Engineering Acquisition Corporation ("EA Acquisition") to purchase all of the outstanding shares of the common stock of EA Engineering, Science, and Technology, Inc., $.01 par value (the "Shares"), at a price of $1.60 per Share net to the seller, in cash, without interest, upon the terms and subject to the conditions of the Offer. This will instruct you, the holder of record, to tender to EA Acquisition the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions of the Offer. SHARES TENDERED [_]If fewer than all Shares are to be tendered, please check the box and indicate below the aggregate number of Shares to be tendered by us. ________________Shares Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. The method of delivery of this document is at the election and risk of the tendering stockholders. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to assure delivery. Sign Here:_____________________________________________________________________ _______________________________________________________________________________ Signature(s) Name(s):_______________________________________________________________________ _______________________________________________________________________________ (Please print name(s)) Address(es):___________________________________________________________________ _______________________________________________________________________________ (Include Zip Code) Dated: _________ , 2001 ______________________________________________________ (Tax Identification or Social Security Number(s)) EX-99.A.7 8 dex99a7.txt PRESS RELEASE Exhibit (a)(7) Press Release EA Engineering Acquisition Corporation Commences Tender Offer to Acquire EA Engineering, Science, and Technology, Inc. Contact: Melanie Jensen-Ney Tel - (410) 527-3501 Fax: (410) 771-1812 Baltimore, MD (August 1, 2001) -- EA Engineering Acquisition Corporation announced today that it has commenced a tender offer to purchase all of the outstanding shares of common stock of EA Engineering, Science, and Technology, Inc. (NASDAQ: EACO) for $1.60 per share in cash. The terms and conditions of the offer are set forth in documents filed today with the Securities and Exchange Commission. The tender offer is not contingent upon obtaining financing. The offer and withdrawal rights are scheduled to expire at 5:00 p.m., New York City time, on August 30, 2001, unless the offer is extended. The offer is being made pursuant to the previously announced Agreement and Plan of Merger among EA Engineering, Science, and Technology, Inc., EA Engineering Acquisition Corporation and EA Engineering Holdings, LLC. Following the successful completion of the tender offer, EA Engineering Acquisition Corporation will be merged with and into EA Engineering, Science, and Technology, Inc. and, as a result, EA Engineering, Science, and Technology, Inc. will become a private company. The Board of Directors of EA Engineering, Science, and Technology, Inc. designated a Special Committee of independent directors to evaluate EA Engineering Acquisition Corporation's offer. The Board of Directors of EA Engineering, Science, and Technology, Inc., based on the unanimous recommendation of the Special Committee, has unanimously approved the transaction and recommended that stockholders tender their shares in the tender offer. This press release is neither an offer to purchase nor a solicitation of an offer to sell securities. The tender offer is made only through the Offer to Purchase, the related Letter of Transmittal and the other tender offer documents, which are being mailed to stockholders of EA Engineering, Science, and Technology, Inc. beginning August 1, 2001. Stockholders are advised to read the tender offer documents because they contain important information. Stockholders may obtain a copy of the tender offer documents for free at the SEC's website at www.sec.gov. Mellon Investor Services LLC is acting as Information Agent for EA Engineering Acquisition Corporation in the tender offer. Copies of the offering documents may also be obtained by calling Mellon Investor Services LLC at 1-800-413-6134. EX-99.C 9 dex99c.txt FAIRNESS OPINION EXHIBIT (C) Form of Fairness Opinion July 23, 2001 The Special Committee of the Board of Directors EA Engineering, Science, and Technology, Inc. 11019 McCormick Road Hunt Valley, Maryland 21031 Attention: Cleaveland D. Miller, Esq. Members of the Special Committee: We are advised that EA Engineering, Science, and Technology, Inc. ("EA" or the "Company") is considering entering into an Agreement and Plan of Merger (the "Agreement") with EA Engineering Holdings, LLC and EA Engineering Acquisition Corporation (collectively the "Purchaser"), pursuant to which Purchaser will commence a tender offer to purchase all of the issued and outstanding shares of common stock of EA at a price of $1.60 per share net to the seller in cash, followed by a merger of EA Engineering Acquisition Corporation with and into the Company on terms and conditions as more fully set forth in the Agreement (the tender offer and merger are referred to herein as the "Transaction"). You have requested our opinion, as investment bankers, as to the fairness to the stockholders of the Company, from a financial point of view, of the consideration to be received by the stockholders of the Company in the Transaction. For purposes of rendering this opinion, we have, among other things: (i) reviewed the draft of the definitive Agreement and certain related documents; (ii) reviewed the restated audited consolidated financial statements of EA as of and for the twelve month periods ended August 31, 2000, 1999, and 1998 and the audited consolidated financial statements of EA as of and for the twelve month period ended August 31, 1997; (iii) reviewed a draft form of the unaudited consolidated financial statements of EA for the nine month period ended May 31, 2001; (iv) reviewed certain publicly available information concerning EA; (v) reviewed forecast financial statements of EA furnished to us by the senior management of EA; (vi) reviewed and analyzed certain publicly available financial and stock market data with respect to operating statistics relating to selected public companies that we deemed relevant to our inquiry; (vii) reviewed the reported prices and trading activity of the publicly- traded securities of EA; (viii) analyzed certain publicly available information concerning the terms of selected merger and acquisition transactions that we considered relevant to our inquiry; (ix) held meetings and discussions with certain officers and employees of EA concerning the operations, financial condition and future prospects of EA; and (x) conducted such other financial studies, analyses and investigations and considered such other information as we deemed necessary or appropriate for purposes of our opinion. In connection with our review, we have assumed and relied upon the accuracy and completeness of all financial and other information supplied to us by EA or that is publicly available, and we have not independently verified such information. We have further relied upon the assurance of management of EA that they are unaware of any facts that would make such information incomplete or misleading. We also have relied 1 upon the management of EA, as to the reasonableness and achievability of the financial projections (and the assumptions and bases therein) provided to us, and we have assumed that such projections have been reasonably prepared on bases reflecting the best currently available estimates and judgments of management as to the future operating performance of EA. The Company does not publicly disclose internal management projections of the type provided to Legg Mason in connection with Legg Mason's review of the Transaction. Such projections were not prepared with the expectation of public disclosure. The projections were based on numerous variables and assumptions that are inherently uncertain, including without limitation, factors related to general economic and competitive conditions. Accordingly, actual results could vary significantly from those set forth in such projections. We have not been requested to make, and have not made, an independent appraisal or evaluation of the assets, properties or liabilities of EA and we have not been furnished with any such appraisal or evaluation. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies and assets may actually be sold. Because such estimates are inherently subject to uncertainty, Legg Mason assumes no responsibility for their accuracy. We have not reviewed any of the books and records of EA or assumed any responsibility for conducting a physical inspection of the properties or facilities of the Company. Further, this opinion is based upon prevailing market conditions and other circumstances and conditions existing and disclosed to us on the date hereof. We have assumed that the Transaction will be consummated on the terms and conditions described in the Agreement reviewed by us and that the definitive Agreement will not differ materially from the draft we reviewed. It is understood that subsequent developments may affect the conclusions reached in this opinion and that we do not have any obligation to update, revise or reaffirm this opinion. In the ordinary course of our business, we make a market in the equity securities of EA and may at any time hold a long or short position in such securities. We have served as a financial advisor to assist the Company in locating an acquiror and will receive a customary fee upon consummation of the Transaction. In addition, Edmund J. Cashman, Jr., a Senior Executive Vice President of Legg Mason, Inc. and Legg Mason Wood Walker, Incorporated, is a director of EA. It is understood that this letter is directed to the Company's Special Committee of the Board of Directors. The opinion expressed herein is provided for the use of the Company's Special Committee of the Board of Directors in its evaluation of the proposed Transaction and does not constitute a recommendation to any stockholder of the Company either of the Transaction or as to how such stockholder should vote on or otherwise respond to the Transaction. In addition, this letter does not constitute a recommendation of the Transaction over any other alternative transaction which may be available to the Company and does not address the underlying business decision of the Special Committee of the Board of Directors of the Company to proceed with or effect the Transaction. This letter is not to be quoted or referred to, in whole or in part, in any registration statement, prospectus or proxy statement, or in any other document used in connection with the offering or sale of securities, nor shall this letter be used for any other purposes, without the prior written consent of Legg Mason Wood Walker, Incorporated; provided that this opinion may be included in its entirety in any filing made by the Company or the Purchaser with the Securities and Exchange Commission with respect to the Transaction. Based upon and subject to the foregoing, we are of the opinion that, as of the date hereof, the consideration to be received by the stockholders of EA (other than Loren D. Jensen, Ph.D. and certain trusts established for the benefit of his children) in the Transaction is fair to such stockholders from a financial point of view. Very truly yours, Legg Mason Wood Walker, Incorporated Alexsander M. Stewart Managing Director 2 EX-99.D.1 10 dex99d1.txt AGREEMENT AND PLAN OF MERGER EXHIBIT (d)(1) AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER, dated as of July 24, 2001 (this "Agreement"), among EA ENGINEERING HOLDINGS, LLC, a Delaware limited liability company ("Parent"), EA ENGINEERING ACQUISITION CORPORATION, a Delaware corporation and a wholly-owned subsidiary of Parent ("Purchaser"), and EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC., a Delaware corporation (the "Company"). RECITALS: WHEREAS, the members of Parent and the respective Boards of Directors of Purchaser and the Company have determined that it would be advisable and in the best interests of their respective members and stockholders, as the case may be, for Parent to acquire the Company upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, to effectuate the acquisition, it is proposed that Purchaser commence a cash tender offer (as it may be amended from time to time as permitted under this Agreement, (the "Offer") to purchase all of the issued and outstanding shares of common stock, par value $0.01 per share (the "Common Stock"), of the Company at a price of $1.60 per share (such price, as it may hereafter be modified, the "Offer Price"), net to the seller in cash, followed by a merger (the "Merger") of Purchaser with and into the Company on the terms and subject to the conditions set forth in this Agreement and the Offer Documents (as defined in Section 1.02(a)); WHEREAS, the Board of Directors of the Company (the "Board") and a disinterested Committee of the Board (the "Disinterested Committee") have each unanimously (a) determined that the Offer and the Merger are fair to and in the best interests of the Company and its stockholders (other than Loren D. Jensen ("Jensen") and the trusts established for the benefit of Jensen's children (the "Jensen Family Trusts")) and (b) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance with the General Corporation Law of the State of Delaware (the "DGCL"); and the Board and the Disinterested Committee are each unanimously recommending that the holders of the shares of Common Stock of the Company (the "Shares") (other than Jensen and the Jensen Family Trusts) accept the Offer; WHEREAS, in connection with the Merger, each issued and outstanding Share not owned directly or indirectly by Parent, Purchaser or the Company will be converted into the right to receive the per Share consideration paid pursuant to the Offer; and NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows: ARTICLE I THE OFFER SECTION 1.01 The Offer. (a) Provided that this Agreement shall not have --------- been terminated in accordance with Article VIII and so long as none of the events set forth in Annex A hereto (the "Tender Offer Conditions") shall have occurred and be continuing, subject to the provisions of this Agreement, as promptly as reasonably practicable, but in no event later than seven (7) Business Days after the public announcement by Parent and the Company of the execution and delivery of this Agreement (counting the Business Day on which such announcement is made), Purchaser shall commence, within the meaning of Rule 14d-2 under the U.S. Securities Exchange Act of 1934, as amended (together with the rules and regulations thereunder, the "Exchange Act"), the Offer at the Offer Price. The obligation of Purchaser to commence the Offer, to consummate the Offer and to accept for payment and pay for Shares validly tendered in the Offer and not withdrawn shall be subject to the conditions set forth in Annex A, any of which may be waived by Parent or Purchaser in their sole discretion. (b) On the terms and subject to the prior satisfaction or waiver of the Tender Offer Conditions, Parent shall provide, or cause to be provided, funds to Purchaser and Purchaser shall accept for payment and pay for all Shares validly tendered and not withdrawn pursuant to the Offer as soon as practicable after the expiration date thereof. (c) Without the prior written consent of the Company, Purchaser shall not (i) change the form of the consideration paid in the Offer; (ii) decrease the Offer Price; (iii) decrease the number of Shares sought pursuant to the Offer; (iv) extend the expiration date of the Offer beyond the initial expiration date of the Offer (which shall be the 21st Business Day after commencement of the Offer), except (A) as required by applicable law or by any rule or regulation of the U.S. Securities and Exchange Commission (the "SEC"), or (B) that if, immediately prior to the expiration date of the Offer (as it may be extended), the Shares tendered and not withdrawn pursuant to the Offer, when added to the Shares then owned by Parent, Purchaser, Jensen and the Jensen Family Trusts, do not constitute at least 90% of the outstanding shares of Common Stock on a fully-diluted basis ("on a fully-diluted basis" meaning the number of Shares outstanding, together with the Shares which the Company may be required to issue pursuant to warrants, Stock Options (as defined in Section 2.08) or obligations outstanding at that date under employee stock or similar benefit plans or otherwise that are then exercisable at a price per share less than the Offer Price), Purchaser may, in its sole discretion, extend the Offer for one or more periods not to exceed an aggregate of ten Business Days, notwithstanding that all other conditions to the Offer are satisfied as of such expiration date of the Offer, or (C) that if any condition to the Offer has not been satisfied or waived, Purchaser may, in its sole discretion, extend the expiration date of the Offer for one or more periods (not in excess of 20 Business Days each) but in no event later than December 1, 2001; (v) waive the condition (the "Minimum Condition") that there shall have been validly tendered and not 2 withdrawn immediately prior to the time the Offer expires such number of Shares which, together with the Shares then owned by Parent, Purchaser, Jensen and the Jensen Family Trusts, would constitute at least ninety percent (90%) of the Shares outstanding on a fully-diluted basis on the date of purchase; (vi) waive the condition relating to the non-termination of this Agreement; (vii) amend any term or other condition of the Offer in any manner adverse to holders of Shares, in any material respect; or (viii) impose any additional condition to the Offer; provided, however, that, except as set forth above and subject to applicable legal requirements, Parent or Purchaser may waive any condition to the Offer in their sole discretion; and provided further that the Offer may be extended in connection with an increase in the consideration to be paid pursuant to the Offer so as to comply with applicable rules and regulations of the SEC. Notwithstanding the foregoing or anything in this Agreement to the contrary, Purchaser may waive the Minimum Condition in its sole discretion provided that there shall have been validly tendered and not withdrawn immediately prior to the time the Offer expires such number of Shares which, together with the Shares then owned Parent, Purchaser, Jensen and the Jensen Family Trusts, would constitute at least a majority of the Shares outstanding on a fully diluted basis on the date of purchase. If the Offer shall not have been consummated at the scheduled expiration thereof due to the failure to satisfy any of the Tender Offer Conditions, Parent will, at the request of the Company, cause Purchaser to extend the expiration date of the Offer for one or more periods (not in excess of ten Business Days each) but in no event later than December 1, 2001, unless Parent reasonably believes at such time that such conditions are not capable of being satisfied. SECTION 1.02 Offer Documents. (a) As promptly as reasonably practicable on --------------- the date of commencement of the Offer, Parent and Purchaser shall file or cause to be filed with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, the "Schedule TO") with respect to the Offer. The Schedule TO shall contain or shall incorporate by reference an offer to purchase (the "Offer to Purchase") and forms of the related letter of transmittal and any related summary advertisement (the Schedule TO, the Offer to Purchase and such other ancillary documents, together with all supplements, instruments and amendments thereto, being referred to herein collectively as the "Offer Documents"). The Company will promptly supply to Parent and Purchaser in writing, for inclusion in the Offer Documents, all information concerning the Company required under the Exchange Act to be included in the Offer Documents. (b) Each of Parent and Purchaser further agrees to take all steps necessary to cause the Offer Documents to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Each of Parent, Purchaser and the Company shall promptly correct any information provided by them for use in the Offer Documents if and to the extent that such information shall be or have become false or misleading in any material respect, and Parent and Purchaser shall take all lawful action necessary to cause the Offer Documents as so corrected to be filed promptly with the SEC and to be disseminated to holders of Shares as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given a reasonable opportunity to review and 3 comment on the Offer Documents and any amendments thereto prior to the filing thereof with the SEC. Parent and Purchaser agree to provide the Company and its counsel any comments Parent, Purchaser or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments. SECTION 1.03 Company Actions. (a) The Company hereby approves of and --------------- consents to the Offer and represents and warrants that (i) the Board and the Disinterested Committee (at meetings duly called and held on July 23, 2001 and July 23, 2001, respectively) has by the unanimous vote of all directors (A) determined that each of this Agreement, the Offer and the Merger are fair to and in the best interests of the Company's stockholders (other than Jensen and the Jensen Family Trusts, (B) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and such approval is sufficient to render the restrictions on "business combinations" (as defined in Section 203 of the DGCL) set forth in Section 203 of the DGCL inapplicable to this Agreement and the transactions contemplated hereby, including the Offer and the Merger and taken all other action necessary to render Section 203 of the DGCL inapplicable to the Offer and the Merger and the transactions contemplated hereby, and (C) declared the advisability of this Agreement and resolved to recommend acceptance of the Offer and adoption of this Agreement by the holders of Shares; provided, however, that prior to the consummation of the Offer, the Board and the Disinterested Committee may modify, withdraw or change such recommendation to the extent that the Board or the Disinterested Committee, after receiving advice from outside counsel, concludes in good faith that such action is reasonably necessary in order for the Board or Disinterested Committee to act in a manner consistent with its fiduciary duties under applicable law, and (ii) Legg Mason Wood Walker, Incorporated has delivered to the Board and the Disinterested Committee its opinion that the Offer Price to be received by the holders of Shares in the Offer and the Merger is fair, from a financial point of view, to such holders. The Company hereby consents to the inclusion in the Offer Documents of the recommendation of the Board and the Disinterested Committee described in the immediately preceding sentence. The Company has been advised by its directors and executive officers that each of them, other than Jensen, intends to tender all Shares beneficially owned by them to Purchaser pursuant to the Offer. (b) The Disinterested Committee shall file, or cause to be filed, with the SEC, as promptly as reasonably practicable on the date of commencement of the Offer, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any supplements or amendments thereto, the "Schedule 14D-9"). The Schedule 14D-9 shall contain the recommendation described in paragraph (a) of this Section 1.03. Each of Parent and Purchaser will promptly supply to the Company in writing, for inclusion in the Schedule 14D-9, all information concerning the Parent Designees (as defined in Section 1.04(a) hereof), as required by Section 14(f) of the Exchange Act and Rule 14f-1 thereunder, and the Company shall include such information in the Schedule 14D-9. Parent will promptly supply to the Company in writing, for inclusion in the Schedule 14D-9, any information concerning Parent or Purchaser required under the Exchange Act and the rules and regulations thereunder to be included in the Schedule 14D-9. 4 The Company further agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to the holders of Shares, in each case as and to the extent required by applicable federal securities laws. Each of the Company, Parent and Purchaser shall promptly correct any information provided by them for use in the Schedule 14D-9 if and to the extent that such information shall be or have become false or misleading in any material respect and the Company shall take all lawful action necessary to cause the Schedule 14D-9 as so corrected to be filed promptly with the SEC and disseminated to the holders of Shares as and to the extent required by applicable federal securities laws. Parent, Purchaser and their counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 and any amendments thereto prior to the filing thereof with the SEC. The Company agrees to provide Parent and its counsel any comments the Company or its counsel receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments. (c) In connection with the Offer, the Company shall promptly furnish Parent and Purchaser with mailing labels, security position listings and all available listings or computer files containing the names and addresses of the record holders of Shares as of the latest practicable date and shall furnish Parent and Purchaser with such information and assistance (including updated lists of stockholders, mailing labels and lists of security positions) as Parent and Purchaser or their agents may reasonably request in communicating the Offer to the record and beneficial holders of Shares. SECTION 1.04 Directors. (a) Promptly upon the acceptance for payment of, --------- and payment by Purchaser for, the Shares pursuant to the Offer, Purchaser shall be entitled to designate such number of directors (the "Parent Designees"), rounded up to the next whole number, on the Company's Board of Directors as is equal to the product of the total number of directors on such Board (after giving effect to any increase in the size of such Board pursuant to this Section 1.04) multiplied by the percentage that the number of Shares beneficially owned by Parent, Purchaser and their Affiliates at such time (including Shares so accepted for payment) represents of the total number of Shares then outstanding; provided that, in the event the Minimum Condition shall have been satisfied, in no event shall the Parent Designees constitute less than a majority of the entire Board of Directors. In furtherance thereof, the Company shall, upon the request of Parent, use its reasonable best efforts promptly either to increase the size of its Board of Directors or to secure the resignations of such number of its incumbent directors, or both, as is necessary to enable the Parent Designees to be so elected or appointed to the Company's Board of Directors, and the Company shall take all actions available to the Company to cause the Parent Designees to be so elected or appointed. At such time, the Company shall, if requested by Parent, also take all action necessary to cause persons designated by Parent to constitute at least the same percentage (rounded up to the next whole number) as is on the Company's Board of Directors of (i) each committee of the Company's Board of Directors, (ii) each board of directors (or similar body) of each Subsidiary (as defined in Section 9.02) of the Company and (iii) each committee (or similar body) of each such board. 5 (b) The Company's obligation to appoint Parent Designees to the Company's Board of Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under Section 1.04(a), including mailing to stockholders the information required by such Section 14(f) and Rule 14f-1 (or including such information in the Schedule 14D- 9 initially filed with the SEC and distributed to the stockholders of the Company) as is necessary to enable Parent Designees to be elected to the Company's Board of Directors. Parent or Purchaser will supply to the Company in writing and be solely responsible for any information with respect to Parent and Purchaser and their nominees, officers, directors and affiliates to the extent required by such Section 14(f) and Rule 14f-1. The provisions of this Section 1.04 are in addition to and shall not limit any rights which Purchaser, Parent or any of their affiliates may have as a holder or beneficial owner of Shares as a matter of applicable law with respect to the election of directors or otherwise. ARTICLE II THE MERGER SECTION 2.01 The Merger. On the terms and subject to the conditions set ---------- forth in this Agreement, and in accordance with the DGCL, the Merger shall be effected and Purchaser shall be merged with and into the Company at the Effective Time. At the Effective Time, the separate corporate existence of Purchaser shall cease and the Company shall continue as the surviving corporation of the Merger (as such, the "Surviving Corporation") and shall continue to be governed by the laws of the State of Delaware with all its rights, privileges, immunities, powers and franchises. SECTION 2.02 Closing. Unless this Agreement shall have been terminated and ------- the transactions contemplated hereby shall have been abandoned pursuant to Article VIII, and subject to the satisfaction or waiver of the conditions set forth in Article VII, the closing of the Merger (the "Closing") will take place as soon as practicable, but in no event later than 10:00 a.m. on the second Business Day (the "Closing Date") following satisfaction or waiver of all of the conditions set forth in Article VII, other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions, at the offices of Hogan & Hartson L.L.P., 111. S. Calvert Street, Suite 1600, Baltimore, MD 21201, unless another date, time or place is agreed to in writing by the parties hereto. SECTION 2.03 Effective Time. On the Closing Date (or on such other date as -------------- Parent and the Company may agree), the parties hereto shall file with the Secretary of State of the State of 6 Delaware a certificate of merger or, if applicable, a certificate of ownership and merger (in either case the "Certificate of Merger") and any other appropriate documents, executed in accordance with the relevant provisions of the DGCL, and shall make all other filings or recordings in such form as is required by, and executed in accordance with, the DGCL and other applicable law in connection with the Merger. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, or at such later time as is mutually agreed by the parties and set forth therein (the "Effective Time"). SECTION 2.04 Effects of the Merger. At the Effective Time, the Merger --------------------- shall have the effects set forth in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all property, rights, privileges, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Purchaser shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation. SECTION 2.05 Certificate of Incorporation; By-Laws. (a) At the Effective ------------------------------------- Time, subject to Section 6.07(a), the restated certificate of incorporation of the Company shall be the certificate of incorporation of the Surviving Corporation until thereafter changed or amended in accordance with the provisions thereof and applicable law. (b) The by-laws of the Company shall be the by-laws of the Surviving Corporation until thereafter changed or amended in accordance with the provisions thereof and applicable law. SECTION 2.06 Directors; Officers. From and after the Effective Time, (a) ------------------- the directors of Purchaser immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, until the earlier of (i) their resignation or removal or (ii) the time at which their respective successors are duly elected and qualified, as the case may be, and (b) the officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation, until the earlier of (i) their resignation or removal or (ii) the time at which their respective successors are duly elected and qualified, as the case may be. SECTION 2.07 Effect on Capital Stock. At the Effective Time, by virtue of ----------------------- the Merger and without any action on the part of Parent, Purchaser, the Company or any holder of Shares or any other shares of capital stock of the Company or Purchaser: (a) Common Stock of Purchaser. Each share of common stock, par value $0.01 per share, of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation. 7 (b) Cancellation of Treasury Shares and Parent-Owned Shares. Each Share issued and outstanding immediately prior to the Effective Time that is owned by the Company or any Subsidiary of the Company or by Parent, Purchaser or any other Subsidiary of Parent (other than shares in trust accounts, managed accounts, custodial accounts and the like that are beneficially owned by third parties) shall automatically be canceled and shall cease to exist, and no cash or other consideration shall be delivered or deliverable in exchange therefor. (c) Conversion of Shares. Each Share issued and outstanding immediately prior to the Effective Time (other than Shares to be canceled in accordance with Section 2.07(b) and any Dissenting Shares (as defined in Section 2.07(d)) shall be converted into the right to receive from the Surviving Corporation in cash the Offer Price, payable to the holder thereof, without any interest thereon (the "Merger Consideration"), less any required withholding Taxes (as defined in Section 3.1(h)(v)(A)), upon surrender and exchange of a Certificate (as defined in Section 2.09(b)). All such Shares, when so converted, shall no longer be outstanding and shall automatically be canceled and retired and each holder of a Certificate representing any such Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration. (d) Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, Shares issued and outstanding immediately prior to the Effective Time held by any person who, if applicable, has not voted such Shares in favor of the Merger and who has the right to demand, and who properly demands, an appraisal of such Shares ("Dissenting Shares") in accordance with Section 262 of the DGCL (or any successor provision) shall not be converted into a right to receive the Merger Consideration unless such holder fails to perfect or otherwise loses such holder's right to such appraisal, if any. If, after the Effective Time, such holders fails to perfect or loses any such right to appraisal, if any, each such Share of such holder shall be treated as a Share that had been converted as of the Effective Time into the right to receive the Merger Consideration in accordance with Section 2.07(c). At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in Section 262 of the DGCL (or any successor provision) and as provided in the immediately preceding sentence. The Company shall give prompt notice to Parent of any demands received by the Company for appraisal of Shares, withdrawals of such demands, and any other instruments served pursuant to Section 262 of the DGCL and received by the Company. Parent shall have the right to participate in and direct all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to, or offer to settle, any such demands. SECTION 2.08 Options; Stock Plans. (a) The Company shall (i) terminate the -------------------- Company's Stock Option Plan, the Company's Employee Stock Purchase Plan, the 1993 Stock Incentive Plan, the 1993 Non-Employee Director Stock Option Plan, the Amended and Restated Stock Option Plan, the 1995 Non-Employee Director Stock Option Plan, and any other plan, 8 program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any of its Subsidiaries (collectively, "Stock Incentive Plans"), immediately prior to the Effective Time, (ii) grant no additional Stock Options (as hereinafter defined), restricted stock awards, stock appreciation rights or other interests in respect of any Shares under the Stock Incentive Plans and (iii) amend, immediately prior to the Effective Time, the provisions of any other Employee Benefit Plan (as hereinafter defined), program, arrangement or agreement providing for the issuance, transfer or grant of any Shares, or any interest in respect of any Shares, to provide no continuing rights to acquire, hold, transfer, or grant any Shares or any interest in any Shares. (b) Each outstanding option to purchase Shares (a "Stock Option") which immediately prior to the Effective Time is not vested will accelerate and become fully vested and exercisable upon the Effective Time in accordance with the terms of the applicable Company Stock Option Plan (the "Accelerated Stock Options"). As of the Effective Time, each Stock Option (including the Accelerated Stock Options) shall be canceled by the Company and in consideration of such cancellation, the Company shall pay to each holder of a canceled Stock Option at the Effective Time an amount (the "Option Spread") equal to the product of (A) the excess, if any, of (i) the Merger Consideration over (ii) the exercise price per Share of such Stock Option multiplied by (B) the number of Shares subject to such Stock Option immediately prior to its cancellation. The Option Spread, after reduction for any required withholding Taxes, shall be paid in cash as promptly as practicable following the Effective Time. (c) The Company shall deliver to Purchaser within five (5) Business Days of the date hereof a true and complete list of Stock Options under the Stock Incentive Plans which are outstanding as of the date hereof, together with detailed calculations of the cash payments relating to such Stock Options that would have been payable had the Effective Time occurred on the date of delivery thereof. The Company shall update such list and such calculations as of, and deliver such update to Purchaser on, the date that is two (2) Business Days prior to the Effective Time, with such updated list and calculations made as if the Effective Time would occur on such date. (d) The Company shall take all actions necessary to ensure that following the Effective Time no holder of a Stock Option or any participant in any employee incentive or benefit plans or programs or arrangements or non- employee director plans maintained by the Company shall have any right thereunder to acquire any Shares or any capital stock of Parent or the Surviving Corporation or to receive any payment in respect thereof. SECTION 2.09 Payment for Shares. (a) Payment Fund. Concurrently with the ------------------ Effective Time, Parent shall deposit, or shall cause to be deposited, with or for the account of a bank or trust company designated by Parent, which shall be reasonably satisfactory to the Company (the "Paying Agent"), for the benefit of the holders of Shares, cash in an amount sufficient to pay the aggregate Merger Consideration payable upon the conversion of Shares pursuant to Section 9 2.07(c) or Section 2.08 (the "Payment Fund"). (b) Letters of Transmittal; Surrender of Certificates. As soon as reasonably practicable after the Effective Time, Parent shall instruct the Paying Agent to mail to each holder of record (other than the Company or any of its Subsidiaries or Parent, Purchaser or any other Subsidiary of Parent) of a certificate or certificates that, immediately prior to the Effective Time, evidenced outstanding Shares (the "Certificates"), (i) a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent, and shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by the Surviving Corporation, together with such letter of transmittal, duly executed, and such other customary documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor cash in an amount equal to the product of (i) the number of Shares formerly represented by such Certificate and (ii) the Merger Consideration, and the Certificate so surrendered shall forthwith be canceled. No interest shall be paid or accrued on any cash payable upon the surrender of any Certificate. If payment is to be made to a person or entity other than the person or entity in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such payment shall pay any transfer or other Taxes required by reason of the payment to a person other than the registered holder of the surrendered Certificate, or establish to the satisfaction of Parent and the Surviving Corporation that such Taxes have been paid or are not applicable. (c) Cancellation of Shares; No Further Rights. As of the Effective Time, all Shares (other than Shares to be canceled in accordance with Section 2.07(b)) issued and outstanding immediately prior to the Effective Time shall cease to be outstanding and shall automatically be canceled and shall cease to exist, and each holder of any such Shares shall cease to have any rights with respect thereto or arising therefrom (including without limitation the right to vote), except the right to receive the Merger Consideration, without interest, upon surrender of such Certificate in accordance with Section 2.09(b), and until so surrendered, each such Certificate shall represent for all purposes only the right to receive the Merger Consideration (without interest), other than in the case of Dissenting Shares. The Merger Consideration paid upon the surrender for exchange of Certificates in accordance with the terms of this Section 2.09 shall be deemed to have been paid in full satisfaction of all rights pertaining to the Shares formerly represented by such Certificates. At the close of business on the date of the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Shares on the record of the Company. (d) Investment of Payment Fund. The Paying Agent shall invest the Payment 10 Fund, as directed by Parent or Purchaser, in (i) direct obligations of the United States of America, (ii) obligations for which the full faith and credit of the United State of America is pledged to provide for the payment of principal and interest, (iii) commercial paper rated of the highest quality by Moody's Investors Service, Inc. or Standard & Poor's Corporation, or (iv) certificates of deposit, bank repurchase agreements or bankers' acceptances of commercial banks with capital exceeding $500 million. Any net earnings with respect to the Payment Fund shall be the property of and paid over to Parent as and when requested by Parent. (e) Termination of Payment Fund. Any portion of the Payment Fund which remains undistributed to the holders of Certificates for 180 days after the Effective Time shall be delivered to the Surviving Corporation (including, without limitation, all interest and other income received by the Paying Agent in respect of all such funds), upon demand, and any holders of Certificates that have not theretofore complied with this Section 2.09 shall thereafter look only to the Surviving Corporation (subject to the terms of this Agreement, abandoned property, escheat and other similar laws), and only as general creditors thereof, for payment of their claim for any Merger Consideration, without interest. (f) No Liability. None of Parent, Purchaser, the Surviving Corporation or the Paying Agent shall be liable to any person in respect of any payments or distributions payable from the Payment Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Subject to applicable law and public policy, if any Certificates shall not have been surrendered prior to three years after the Effective Time (or immediately prior to such earlier date on which any Merger Consideration in respect of such Certificate would otherwise escheat to or become the property of any Governmental Entity (as defined in Section 3.01(c))), any amounts payable in respect of such Certificate shall, to the extent permitted by applicable law and public policy, become the property of the Surviving Corporation, free and clear of all claims or interest of any person previously entitled thereto. (g) Withholding Rights. Parent and Purchaser shall be entitled to deduct and withhold, or cause to be deducted or withheld, from the consideration otherwise payable pursuant to this Agreement to any holder of Shares, Stock Options or Certificates such amounts as are required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of applicable state, local or foreign Tax law. To the extent that amounts are so deducted and withheld, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to such holders in respect of which such deduction and withholding was made. (h) Lost, Stolen or Destroyed Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof as determined in accordance with this Article II; provided, that the Person to whom the Merger 11 Consideration is paid shall, as a condition precedent to the payment thereof, give the Surviving Corporation a bond in such sum as it may direct or otherwise indemnify the Surviving Corporation in a manner satisfactory to it against any claim that may be made against the Surviving Corporation with respect to the Certificate claimed to have been lost, stolen or destroyed. SECTION 2.10 Further Assurances. If at any time after the Effective Time ------------------ the Surviving Corporation shall consider or be advised that any deeds, bills of sale, assignments or assurances or any other acts or things are necessary, desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation, its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of either of Purchaser or the Company, or (b) otherwise to carry out the purposes of this Agreement, the Surviving Corporation and its officers and directors or their designees shall be authorized to execute and deliver, in the name and on behalf of either of Purchaser or the Company in the Merger, all such deeds, bills of sale, assignments and assurances and do, in the name and on behalf of Purchaser or the Company, all such other acts and things necessary, desirable or proper, consistent with the terms of this Agreement (as in effect immediately prior to the acceptance of Shares in the Offer, or as thereafter amended in accordance with Section 8.04), to vest, perfect or confirm its right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties or assets of Purchaser or the Company and otherwise to carry out the purposes of this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.01 Representations and Warranties of Company. Except as set ----------------------------------------- forth in the Disclosure Schedule to this Agreement (the "Company Disclosure Schedule"), the Company represents and warrants to Parent and Purchaser as follows: (a) Organization, Standing and Power. Each of the Company and its -------------------------------- Subsidiaries (as defined in Section 8.11(h)) is a corporation duly incorporated or otherwise organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation or organization, has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each of the Company and its Subsidiaries is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary other than in such jurisdictions where the failure to so qualify or be in good standing would not, individually or in the aggregate, have a Material Adverse Effect (as defined herein) on the Company. Section 3.01(a) of the Company Disclosure Schedule sets forth a complete and 12 accurate list of each direct and indirect Subsidiary of the Company. The copies of the certificates of incorporation and by-laws of the Company and its Subsidiaries that were previously furnished to Parent are true, complete and correct copies of such documents as in effect on the date of this Agreement. (b) Capital Structure. ----------------- (i) As of the date of this Agreement, the authorized capital stock of the Company consisted of 10,000,000 shares of the Company Common Stock and 8,000,000 shares of Preferred Stock. At the close of business on the date immediately preceding the date of this Agreement, (a) 5,842,652 shares of the Company Common Stock were issued and outstanding, (b) no shares of Preferred Stock were issued and outstanding and (c) 672,251 shares of the Company Common Stock were reserved for future issuance pursuant to outstanding Stock Options, of which Stock Options to purchase 104,337 shares of Company Common Stock were then exercisable at a price per share less than the Offer Price. All issued and outstanding shares of the Company Common Stock are duly authorized, validly issued, fully paid and nonassessable, and holders of the Company Common Stock are not entitled to preemptive rights. Other than those disclosed in Section 3.1(b)(i) of the Company Disclosure Schedule, there are no options, warrants or other rights to acquire capital stock from the Company which have been issued or granted and remain outstanding. (ii) Other than as disclosed in Section 3.1(b)(ii) of the Company Disclosure Schedule, no bonds, debentures, notes or other indebtedness of the Company or any of its Subsidiaries having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders may vote ("Company Voting Debt") are issued and outstanding. (iii) Other than those disclosed in Section 3.1(b)(iii) of the Company Disclosure Schedule, there are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party, or by which any of them is bound, obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other securities of the Company or any of its Subsidiaries or, securities convertible into or exchangeable for shares of capital stock or securities of the Company or any of its Subsidiaries, or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, 13 commitment, agreement, arrangement or undertaking. There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries or to provide funds to, or make any investment in any other Person, or to vote or to dispose of any shares of the capital stock of any of the Subsidiaries. (iv) All of the outstanding shares of capital stock of each Subsidiary of the Company are duly authorized, validly issued, fully paid and nonassessable and, along with any equity interest in any Subsidiary that is a partnership, limited liability company or other similar entity, are owned, beneficially and of record, by the Company or a Subsidiary, which is wholly owned, directly or indirectly, by the Company. All of the outstanding capital stock of, or ownership interests in, each Subsidiary is owned by the Company, directly or indiretly. (v) Except for the company's interest in its Subsidiaries, neither the Company nor its Subsidiaries owns directly or indirectly any interest or investment (whether equity or debt) in, nor is the Company or any of its Subsidiaries subject to any obligation or requirement to provide for or to make any investment (in the form of a loan, capital contribution or otherwise) to or in, any Person. (c) Authority; No Violations. ------------------------ (i) The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby, subject in the case of the consummation of the Merger to the approval of this Agreement by the Required Company Vote (as defined in Section 3.01(k)). The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Company, and no other corporate or shareholder proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than in the case of the consummation of the Merger, the approval of this Agreement by the Required Company Vote). This Agreement has been duly and validly executed and delivered by the Company and constitutes a valid and binding agreement of the Company, enforceable against it in accordance with its terms. 14 (ii) The execution and delivery of this Agreement by the Company do not or will not, as the case may be, and the performance of the Agreement and the consummation of the Merger by the Company and the other transactions contemplated hereby will not, result in any violation of, conflict with or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, amendment, cancellation or acceleration of any obligation or the loss of a benefit under, or the creation of an Encumbrance on any assets of the Company or any of its Subsidiaries (any such violation, default, right of termination, amendment, cancellation or acceleration, loss or creation, a "Violation") pursuant to: (A) any provision of the Certificate of Incorporation or By-laws or similar organizational document of the Company or any Subsidiary of the Company, or (B) except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company, subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in paragraph (iii) below, any loan or credit agreement, note, mortgage, bond, indenture, lease, benefit plan or other agreement, obligation, instrument, permit, concession, franchise, or license to which the Company or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound (collectively, "Contracts"), or any statute, law, ordinance, rule, regulation, whether federal, state, local or foreign (collectively, "Laws"), or any judgment, order, writ, injunction or decree, whether federal, state, local or foreign (collectively, "Orders") applicable to the Company or any Subsidiary of the Company or their respective properties or assets. (iii) No consent, approval, permit, order or authorization of, or registration, declaration or filing with, or notice to, any foreign, supranational, national, federal, state, municipal or local government, any instrumentality, subdivision, court, administrative agency or commission or other authority thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi governmental authority (a "Governmental Entity"), is required by or with respect to the Company or any Subsidiary of the Company in connection with the execution and delivery of this Agreement by the Company or the performance of this Agreement and the consummation of the Merger and the other transactions contemplated hereby, except for those required under or in relation to (A) the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (B) the DGCL with respect to the filing of the Agreement of Merger and the filing of the Certificate of Merger and other 15 appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (C) Laws, practices and Orders of any state or local departments of public health or departments of health or similar state or local regulatory bodies or of any federal, state or local regulatory body having jurisdiction over environmental protection or environmental conservation or similar matters ("Health Agencies"), each of which is identified in Section 3.1(c)(iii)(C) of the Company Disclosure Schedule, (D) rules and regulations of the National Association of Security Dealers Automatic Quotation system (the "NASDAQ"), and (E) such consents, approvals, permits, Orders, authorizations, registrations, declarations and filings the failure of which to make or obtain would not, individually or in the aggregate, have a Material Adverse Effect on the Company and would not reasonably be expected to prevent or materially delay the consummation of the Merger. Consents, approvals, permits, Orders, authorizations, registrations, declarations and filings required under or in relation to any of the foregoing clauses (A) through (E) are hereinafter referred to as "Company Required Consents." The parties hereto agree that references in this Agreement to "obtaining" Company Required Consents means obtaining such consents, approvals or authorizations, making such registrations, declarations or filings, giving such notices, and having such waiting periods expire as are necessary to avoid a violation of Law or an Order. (d) Reports and Financial Statements. The Company has filed all -------------------------------- required reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act or the Securities Act (together with the rules and regulations thereunder) with the Securities and Exchange Commission (the "SEC") (collectively, including all exhibits thereto, the "Company SEC Reports"). No Subsidiary of the Company is required to file any form, report or other document with the SEC, any stock exchange or any comparable Governmental Entity. None of the Company SEC Reports including, without limitation, any financial statements or schedules included therein, as of their respective dates (and, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing), contained or will contain any untrue statement of a material fact or omitted or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Each of the audited consolidated financial statements and unaudited interim financial statements (including the related notes) included in the Company SEC Reports presents fairly, in all material respects, the consolidated financial position and consolidated results of operations and cash flows of the Company and its Subsidiaries as of the respective dates or for the respective periods set forth therein, all in conformity with United States generally accepted accounting principles ("GAAP") consistently applied during the periods involved except as otherwise noted therein, and subject, in the case of the unaudited interim financial statements, to normal and recurring year-end adjustments that have not been and 16 are not expected to be material in amount. All of such Company SEC Reports, as of their respective dates (and as of the date of any amendment to the respective Company SEC Report), complied in all material respects with the applicable requirements of the Securities Act of 1933, as amended, and the Exchange Act and the rules and regulations promulgated thereunder. (e) Absence of Liabilities. Except for liabilities or obligations ---------------------- which are accrued or reserved against in the Company's most recent financial statements dated prior to the date hereof (or in the related notes thereto) included in the Company SEC Reports or which were incurred in the ordinary course of business and consistent with past practices since the date of the Company's most recent financial statements included in the Company SEC Reports, the Company and each of its Subsidiaries do not have any material liabilities or obligations (whether absolute, accrued, contingent or otherwise) of a nature required by GAAP to be reflected in a consolidated balance sheet (or reflected in the notes thereto) of the Company. (f) Employee Benefit Plans; ERISA ------------------------------ (i) Section 3.1(f)(i) of the Company Disclosure Schedule contains a true and complete list of each deferred compensation and each bonus or other incentive compensation, stock purchase, stock option and other equity compensation or ownership plan, program, agreement or arrangement, each severance or termination pay, medical, surgical, hospitalization, life insurance and other "welfare" plan, fund or program (within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder ("ERISA")) (excluding any payroll practices, compensation arrangements and fringe benefits or perquisites which, individually or in the aggregate, are not material); each profit- sharing, stock bonus or other "pension" plan, fund or program (within the meaning of Section 3(2) of ERISA); each employment, retention, consulting, termination or severance agreement with any officer or director or any other employee (if the cash severance amount payable to such employee under such agreement could be reasonably expected to exceed $50,000); and each other material employee benefit plan, fund, program, agreement or arrangement, in each case, that is sponsored, maintained or contributed to or required to be contributed to by the Company or by any trade or business, whether or not incorporated (an "ERISA Affiliate"), that together with the Company would be deemed a "single employer" within the meaning of section 4001(b) of ERISA, or to which the company or an ERISA Affiliate is party for the benefit of any employee or former employee of the Company or any Subsidiary of the Company, in respect of which the Company or any Subsidiary of the Company will have 17 continuing liability on or after the Effective Time (the "Company Benefit Plans"). (ii) With respect to each Company Benefit Plan, (A) no material amendment has been made thereto since the date hereof, or in the case of a pension benefit plan intended to be "qualified" under Section 401(a) of the Code, since the date of its most recent favorable determination letter from the Internal Revenue Service (other than as required by applicable Law or as would not result in any increased cost that would have a Material Adverse Effect), and (B) the Company has heretofore delivered or made available to Parent true and complete copies of the Company Benefit Plans, any related trust or other funding vehicle, the most recent annual report on Form 5500, the current summary plan description and the most recent determination letter received from the IRS with respect to each Company Benefit Plan intended to qualify under Section 401 of the Code. (iii) Each Company Benefit Plan has been operated and administered in accordance with its terms, the terms of any applicable collective bargaining agreement and applicable Law, including but not limited to ERISA and the Code, except as would not be reasonably expected to result in a Material Adverse Effect, and each Company Benefit Plan intended to be "qualified" within the meaning of Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service. (iv) There is no pending, or to the knowledge of the Company, threatened or anticipated claim by or on behalf of any Company Benefit Plan, by any employee or beneficiary covered under any such Company Benefit Plan, or otherwise involving any such Company Benefit Plan (other than routine claims for benefits) that would be reasonably expected to result in liability that would have a Material Adverse Effect. (v) The execution of this Agreement and the consummation of the transactions contemplated hereby do not constitute a triggering event under any Company Benefit Plan, policy, arrangement, statement, commitment or agreement, whether or not legally enforceable, which (either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (whether of severance pay or otherwise), "parachute payment" (as such term is defined in Section 280G of the Code), acceleration, vesting or increase in benefits to any employee or former employee or director of the Company or any of its Subsidiaries. No Company Benefit Plan provides for the payment of severance, termination, change in control or similar-type payments or benefits. 18 (g) Absence of Certain Changes or Events. Except as disclosed in the ------------------------------------ Company SEC Reports filed with the SEC prior to the date hereof, (a) the businesses of the Company and its Subsidiaries have been conducted in the ordinary course, consistent with past practices and (b) there has not been any event, occurrence, development or state of circumstance or fact that has had, or would have, individually or in the aggregate, a Material Adverse Effect on the Company or could prevent or materially delay the consummation of the transactions contemplated hereby. (h) Taxes. ----- (i) The Company and its Subsidiaries have (A) timely filed (or there has been filed on their behalf) with the appropriate Governmental Entities all Tax Returns (as defined in Section 3.1(h)(v)(B)) required to be filed by them on or prior to the date hereof, other than those Tax Returns the failure of which to file would not, individually or in the aggregate, result in a Material Adverse Effect on the Company, and such Tax Returns are true, correct and complete in all material respects, (B) duly paid in full (or there has been paid) all Taxes (as defined in Section 3.1(h)(v)(A)) shown to be due on such Tax Returns, and (C) withheld or collected all material Taxes they were required to withhold and collect, and have timely paid to the proper authorities such Taxes withheld or collected to the extent due and payable. (ii) Except as set forth in Section 3.1(h) of the Company Disclosure Schedule, there are no ongoing federal, state, local or foreign audits or examinations of any Tax Return of the Company or any of its Subsidiaries. (iii) There is no outstanding request, agreement, consent or waiver to extend the statutory period of limitations applicable to the assessment of any Tax or deficiency against the Company or any of its Subsidiaries. (iv) Neither the Company nor any of its Subsidiaries is a party to any agreement providing for the allocation or sharing of Taxes. Neither the Company nor any of its Subsidiaries has been included in any "consolidated," "unitary" or "combined" Tax Return of any other Person provided for under the law of the United States, any foreign jurisdiction or any state or locality with respect to material Taxes for any taxable period for which the statute of limitations has not expired. (v) No consent under Section 341 of the Code has been filed with respect to the Company or any of its Subsidiaries. 19 (v) For purposes of this Agreement: (A) "Taxes" means any and all federal, state, local, foreign or other taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any taxing authority, including, without limitation, taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation or net worth, and taxes or other charges in the nature of excise, withholding, ad valorem or value added, and (B) "Tax Return" means any return, report or similar statement (including the attached schedules) required to be filed with respect to any Tax, including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax. (vi) The Company is not a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code. (i) Insurance. Each of the Company and its Subsidiaries is insured --------- with financially responsible insurers in such amounts and against such risks and losses as are customary in all material respects for companies in the United States conducting the business conducted by the Company and its Subsidiaries, except for such insurance the absence of which would not have a Material Adverse Effect. The Company has fulfilled all of its obligations under each material insurance policy, including the timely payment of premiums, other than such failures to fulfill its obligations that would not reasonably be expected, individually or in the aggregate, to reduce or nullify the benefits under such policy. (j) Board Approval. The Board of Directors of the Company and the -------------- Disinterested Committee, by resolutions duly and unanimously adopted at meetings duly called and held and not subsequently rescinded or modified in any way (the "Company Board Approval"), has duly (i) determined that this Agreement and the Merger are advisable and in the best interests of the Company and its shareholders, (ii) approved this Agreement and the Merger and (iii) recommended that the shareholders of the Company accept the Offer and approve and adopt this Agreement. The Board of Directors of the Company has taken all such action necessary to render Section 203 of the DGCL inapplicable to this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and there is no other state takeover statute and no charter or bylaw provisions applicable to the Offer, the Merger, this Agreement and the transactions contemplated hereby. (k) Vote Required. The affirmative vote of the holders of a majority ------------- of the outstanding shares of the Company Common Stock to adopt this Agreement (the "Required Company Vote") is the only vote of the holders of any class or series of the Company capital 20 stock necessary to adopt this Agreement and approve the transactions contemplated hereby. (l) Brokers or Finders. No agent, broker, investment banker, ------------------ financial advisor or other firm or Person is or will be entitled to any broker's or finder's fee or financial advisor's fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement, except Legg Mason Wood Walker, Incorporated and TechKNOWLEDGEy Strategic Group (collectively the "Company Financial Advisor"), whose fees and expenses will be paid by the Company in accordance with the Company's agreement with such firms. (m) Opinion of the Company Financial Advisor. The Company has ---------------------------------------- received, or will have received prior to the Effective Time, the opinion of Legg Mason Wood Walker, Incorporated, dated the date of this Agreement, to the effect that, as of such date, the Merger Consideration is fair, from a financial point of view, to the holders of the Company Common Stock and such opinion has not been withdrawn or modified. A complete and correct signed copy of such opinion has been delivered to Parent. The Company has been authorized by Legg Mason Wood Walker, Incorporated to permit the inclusion of such fairness opinion (and references thereto) in the Offer Documents and in the Schedule 14D-9. (n) Litigation. Except for claims, actions, suits, proceedings or ---------- investigations that would not have a Material Adverse Effect on the Company (collectively, "Claims"), there are no claims, actions, suits, proceedings or investigations pending or, to the Company's knowledge, threatened against the Company or any of its Subsidiaries, or any properties or rights of the Company or any of its Subsidiaries, by or before any Governmental Entity. Section 3.1(n) of the Company Disclosure Schedule sets forth all material Claims which are pending or, to the Company's knowledge, threatened against any of the Company or its Subsidiaries. Neither the Company nor any of its Subsidiaries is subject to any outstanding Order that could reasonably be expected to have a Material Adverse Effect on the Company or prevent or materially delay the consummation of the Merger (o) No Parent Capital Stock. The Company does not own or hold ----------------------- directly or indirectly any capital stock of Parent, or any options, warrants or other rights to acquire any capital stock of Parent, or in each case, any interests therein. (p) Contracts. All contracts which are material to the Company and --------- its Subsidiaries ("Material Contracts") have been made available to Parent. Each Material Contract to which the Company or any of its Subsidiaries is a party or by which its assets are bound is in full force and effect and a valid and binding obligation of the Company or such Subsidiary and, to the knowledge of the Company, the valid and binding obligation of each other party thereto. Neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is in violation of or in default under (nor does there exist any event, occurrence, condition or act, including consummation of the Merger and the transactions contemplated hereby, which upon the passage of time or the giving of notice or the happening of 21 any other event or condition would cause such a violation or default under) any Material Contract, except for such violations or defaults that could not reasonably be expected to result in a Material Adverse Effect. No approval or consent of, or notice to, any Person is needed in order that each Material Contract shall continue in full force and effect in accordance with its terms without penalty, acceleration or rights of early termination by reason of the consummation of the transactions contemplated by this Agreement. (q) Intellectual Property. The Company or its Subsidiaries owns, --------------------- leases or licenses all Intellectual Property Rights necessary to conduct the business of the Company, except where the failure to own, lease or license would not have, individually or in the aggregate, a Material Adverse Effect on the Company. There has been no claim made against the Company or any of its Subsidiaries asserting the invalidity, misuse or unenforceability of any Intellectual Property Rights or challenging the ownership of any of the Intellectual Property Rights, the Company is not aware of any infringement or misappropriation of any of the Intellectual Property Rights, and neither the Company nor any of its Subsidiaries has infringed or misappropriated any intellectual property or proprietary right of any other Person. All granted and issued patents and all registered trademarks and service marks constituting part of the Company's Intellectual Property Rights are valid, subsisting and enforceable, except as would not, individually or in the aggregate, have a Material Adverse Effect on the Company. Neither the Company nor any of its Subsidiaries is, or as a result of the execution, delivery or performance of the Company's obligations hereunder will, in violation of, or lose any rights pursuant to, any license or agreement constituting an Intellectual Property Right, except as would not individually or in the aggregate have a Material Adverse Effect on the Company. As used herein, "Intellectual Property Rights" mean any trademark, servicemark, registration therefor or application for registration therefor, trade name, invention, patent, patent application, trade secret, know-how, copyright, copyright registration, application for copy registration, Internet domain names, technology, computer software programs or applications or any other similar type of proprietary intellectual property, in each case owned, leased or licensed and used or held for use by the Company or any Subsidiary. (r) Environmental Matters. No written notice, notification, demand, --------------------- request for information, citation, summons, complaint or order has been received by, and no investigation, action, claim, suit, proceeding or review is pending or, to the knowledge of the Company or any of its Subsidiaries, threatened by any Person against, the Company or any of its Subsidiaries, and no penalty has been assessed within the past three years against the Company or any of its Subsidiaries, in each case with respect to any matters relating to or arising out of any Environmental Law. The Company and its Subsidiaries are in material compliance with all Environmental Laws. There are no liabilities of or relating to the Company or any of its Subsidiaries relating to or arising out of any Environmental Law and there is no existing condition, situation or set of circumstances which would reasonably be expected to result in such a liability. For purposes of this Section 3.1, the term "Environmental Laws" means federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, codes, 22 injunctions, permits and governmental agreements relating to human health and the environment, including, but not limited to, Hazardous Materials; and the term "Hazardous Material" means all substances or materials regulated as hazardous, toxic, explosive, dangerous, flammable or radioactive under any Environmental Law including, but not limited to: (i) petroleum, asbestos, or polychlorinated biphenyls and (ii) in the United States, all substances defined as Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. (S) 300.5. (s) Accounts Receivable. The accounts receivable reflected on the ------------------- Balance Sheet attached hereto as Section 3.1(s) of the Company Disclosure Schedule are bona fide receivables, accounted for in accordance with GAAP applied on a basis consistent with that used in the preparation of the financial statements provided to Parent by the Company, representing amounts due with respect to actual transactions in the ordinary course of the operation of the Company's business. (t) Work in Process. To the best of the Company's knowledge, all the --------------- Company work in process: (i) meets the specifications of the Person who contracted with the Company to perform such work and (ii) is accurately reflected on the financial statements provided to Parent by the Company. (u) Labor Relations. Except as set forth on Section 3.1(u) of the --------------- Company Disclosure Schedule, there are no controversies pending or, to the Company's knowledge, threatened between the Company and any of its current or former employees or any labor or other collective bargaining unit representing any of its current or former employees that could reasonably be expected to result in a labor strike, dispute, slow-down or work stoppage or otherwise have a Material Adverse Effect on the Company. The Company is not aware of any organizational effort presently being made or threatened by or on behalf of any labor union with respect to its employees. To the Company's knowledge, no executive, key employee or group of employees has any plan to terminate employment. (v) Offer Documents; Schedule 14D-9. The Schedule 14D-9 will comply ------------------------------- in all material respects with the requirements of the Exchange Act and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by the Company with respect to information supplied by Parent or Purchaser in writing expressly for inclusion in the Schedule 14D-9. The information supplied or to be supplied by the Company or its Subsidiaries expressly for inclusion or incorporation by reference in the Offer Documents, if any, together with any amendment or supplement thereto, will not at the respective times such documents are filed with the SEC and are first published, sent or given to the Company's stockholders contain any untrue statement of a material fact required to be stated therein or 23 necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading. Notwithstanding the foregoing, no representation or warranty is made with respect to any information concerning Parent or Purchaser of their officers, directors and affiliates provided to the Company by Parent or Purchaser expressly for inclusion in the Offer Documents. (w) Compliance with Applicable Law. The Company and its Subsidiaries ------------------------------ hold all permits, licenses, variances, exceptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses (the "Company Permits"), except for failures to hold such permits, licenses, variances, exemptions, orders and approvals which would not, individually or in the aggregate, have a Material Adverse Effect on the Company and could not prevent or materially delay the consummation of the transactions contemplated hereby. The Company and its subsidiaries are in compliance with the terms of the Company Permits, except where the failure so to comply would not, individually or in the aggregate, have a Material Adverse Effect on the Company and would not prevent or materially delay the consummation of the transactions contemplated hereby. The businesses of the Company and its Subsidiaries are not in violation of any Law except for violations or possible violations that would not, individually or in the aggregate, have a Material Adverse Effect on the Company and could not prevent or materially delay the consummation of the transactions contemplated hereby. (x) Real and Personal Property. -------------------------- (i) The Company does not own any real property. (ii) Section 3.1(x) of the Company Disclosure Schedule lists all leases and sublease agreements relating to all Leased Real Property. With respect to each such Leased Property: (1) such lease or sublease constitutes the entire agreement to which the Company is a party with respect to the real property leased thereunder; (2) except as disclosed on Section 3.1(x) of the Company Disclosure Schedule, the Company has not assigned, sublet, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold; (3) all facilities leased or subleased thereunder have received all approvals of Governmental Entities (including all permits) required in connection with the operation thereof and have been operated and maintained in accordance with all applicable laws; (4) there is no action, suit or proceeding pending against the Company or, to the best of the Company's knowledge, any action suit or proceeding pending or threatened against the Company; and (5) all facilities leased or subleased thereunder are supplied with utilities and other services necessary for the operation of such facilities, including gas, electricity, water, telephone, sanitary sewer and storm sewer, and 24 there is no condition, to the Company's knowledge, that is reasonably likely to result in the discontinuation of the aforementioned utilities relating to the Leased Real Property. (iii) To the Company's knowledge, all of the Leased Real Property, and all components of all improvements included within the Leased Real Property, including the roofs and structural elements thereof and the sprinkler and fire protection systems, heating, ventilation, air conditioning, plumbing, electrical, mechanical, sewer, waste water, storm water, paving and parking equipment, systems and facilities included therein, are in good condition and repair, working order and do not require material repair or replacement in order to serve their intended purposes in all material respects, including use and operation consistent with their intended purposes in all material respects, including use and operation consistent with their present use and operation, except for scheduled maintenance, repairs and replacements conducted or required in the ordinary course of the operation of the Leased Real Property. The Company has made all repairs and replacements known to the Company to be required to be made by it under the leases and subleases relating to the Leased Real Property. (iv) Other than options, rights of first refusal or other similar arrangements in favor of the Company under the leases and subleases relating to the Leased Real Property, the Company has not entered into any contract, arrangement or understanding with respect to the future ownership development, use, occupancy or operation of the Leased Real Property. (v) There are no pending, or to the Company's knowledge, threatened or contemplated condemnation or eminent domain proceedings that affect the Leased Real Property, and the Company has not received any notice, oral or written, of the intention of any Governmental Entity or other Person to take or use all or any part thereof. (vi) Neither the Leased Real Property nor any part thereof has suffered any damage by fire or other casualty that has not been restored. (vii) The Company has not received any written notice from an insurance company that has issued a policy to the Company with respect to the Leased Real Property requiring the performance of any structural or other repairs to such property. 25 (viii) The Company is not in default under any leases or subleases relating to the Leased Real Property and to the Company's knowledge the respective landlords relating to such Leased Real Property are not under default under such leases or subleases. (ix) The Company owns all of its material tangible properties and assets including, without limitation, all such properties and assets reflected in the Company's financial statements, except for properties and assets reflected in the Company's financial statements that have been sold or otherwise disposed of in the ordinary course of business after such date, in each case subject to no Encumbrance, except for Encumbrances reflected in the Company's financial statements or Encumbrances that do not materially detract from the value of, or materially impair the use of, such property by the Company or its Subsidiaries in the operation of its respective business. SECTION 3.02 Representations and Warranties of Parent. Parent represents ---------------------------------------- and warrants to the Company as follows: (a) Organization, Standing and Power. Parent is a limited liability -------------------------------- company duly organized and validly existing under the Laws of the State of Delaware, has all requisite power and authority to carry on its business as now being conducted, and is duly qualified to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary other than in such jurisdictions where the failure so to qualify or to be in good standing would not, individually or in the aggregate, have a Material Adverse Effect on Parent. (b) Authority; No Violations. ------------------------ (i) Parent has all requisite authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of Parent. This Agreement has been duly and validly executed and delivered by Parent and constitutes a valid and binding agreement of Parent, enforceable against it in accordance with its terms. (ii) The execution and delivery of this Agreement by Parent does not or will not, as the case may be, and the performance of this Agreement and the consummation by Parent of the Merger and the other actions contemplated hereby will not, result in a Violation pursuant to: (A) any 26 provision of the Certificate of Formation or Limited Liability Company Operating Agreement of Parent or (B) except as would not, individually or in the aggregate, have a Material Adverse Effect on Parent, subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in paragraph (iii) below, any Contract, Laws or Orders applicable to Parent or its properties or assets. (iii) No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any Governmental Entity is required by or with respect to Parent in connection with the execution and delivery of this Agreement by Parent or the performance of this Agreement and the consummation of the Merger and the other transactions contemplated hereby, except for those required under or in relation to (A) the Exchange Act, (B) the DGCL with respect to the filing of the Agreement of Merger and appropriate documents with the relevant authorities of other states in which the Parent is qualified to do business, (C) rules and regulations of NASDAQ and (D) such consents, approvals, orders, authorizations, registrations, declarations and filings the failure of which to make or obtain would not, individually or in the aggregate, have a Material Adverse Effect on Parent. The Consents, approvals, orders, authorizations, registrations, declarations and filings required under or in relation to the foregoing clauses (A) through (D) are hereinafter referred to as the "Parent Required Consents". The parties hereto agree that references in this Agreement to "obtaining" Parent Required Consents means obtaining such consents, approvals or authorizations, making such registrations, declarations or filings, giving such notices; and having such waiting periods expire as are necessary to avoid a violation of Law or an Order. (c) Member Approval. The members of Parent, by resolutions duly --------------- adopted by unanimous written consent and not subsequently rescinded or modified in any way, have duly (i) determined that this Agreement and the Merger are in the best interests of Parent and its members and (ii) approved this Agreement and the Merger. (d) Vote Required. No vote of the holders of any membership interest ------------- in Parent is necessary to approve this Agreement, the Merger or the other transactions contemplated hereby, other than such vote that has already been obtained. (e) Brokers or Finders. No agent, broker, investment banker, ------------------ financial advisor or other firm or Person is or will be entitled to any broker's or finder's fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent. 27 (f) Litigation. As of the date hereof, there are no claims, actions, ---------- suits, proceedings or investigations pending or, to Parent's knowledge, threatened against Parent or any of its Subsidiaries, or any properties or rights of Parent or any of its Subsidiaries, before any Governmental Entity that (i) seek to materially delay or prevent the consummation of the Merger or the other transactions contemplated hereby or (ii) could reasonably be expected to affect adversely the ability of Parent to fulfill its obligations hereunder. (g) Financing. Parent has or will have available, prior to the --------- Effective Time, sufficient funds to pay the Merger Consideration pursuant to this Agreement and otherwise to satisfy its obligations hereunder. SECTION 3.03 Representations and Warranties of Parent and Purchaser ------------------------------------------------------ Regarding Purchaser. Parent and Purchaser represent and warrant to the Company - ------------------- as follows: (a) Organization, Standing and Power. Purchaser is a corporation -------------------------------- duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Purchaser is a wholly-owned subsidiary of Parent. (b) Authority; No Violations. ------------------------ (i) Purchaser has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution, delivery and performance by Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate and shareholder action on the part of Purchaser. This Agreement has been duly and validly executed and delivered by Purchaser and constitutes a valid and binding agreement of Purchaser, enforceable against it in accordance with its terms. (ii) The execution and delivery of this Agreement by Purchaser do not or will not, as the case may be, and the performance of this Agreement and the consummation by Purchaser of the Merger and the other transactions contemplated hereby will not, result in a Violation pursuant to: (A) any provision of the certificate incorporation or by-laws of Purchaser or (B) except as would not, individually or in the aggregate, have a Material Adverse Effect on Purchaser, subject to obtaining or making the consents, approvals, orders, authorizations, registrations, declarations and filings referred to in paragraph (iii) below, any Contract, Laws or Orders applicable to Purchaser or its properties or assets. 28 (iii) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by or with respect to Purchaser in connection with the execution and delivery of this Agreement by Purchaser or the consummation of the Merger and the other transactions contemplated hereby, except for (A) the Exchange Act, (B) the DGCL with respect to the filing of the Agreement of Merger and appropriate documents with the relevant authorities of other states in which the Parent is qualified to do business, (C) rules and regulations of NASDAQ and (D) such consents, approvals, orders, authorizations, registrations, declarations and filings the failure of which to make or obtain would not, individually or in the aggregate, have a Material Adverse Effect on Purchaser. (c) Board and Shareholder Approval. The Board of Directors of ------------------------------ Purchaser, by resolutions duly adopted without a meeting by unanimous consent thereto in writing and not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement and the Merger are advisable and in the best interest of Purchaser and its shareholder, (ii) approved this Agreement and the Merger and (iii) recommended that the shareholder of Purchaser adopt this Agreement. Following the adoption of such resolutions by the Board of Directors of Purchaser, the sole shareholder of Purchaser, without a meeting by consent in writing, has duly adopted this Agreement. (d) No Business Activities. Purchaser has not conducted any ---------------------- activities other than in connection with its organization, the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. Purchaser has no Subsidiaries. ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS SECTION 4.01 Covenants of the Company. During the period from the date of ------------------------ this Agreement and continuing until the Effective Time or the earlier termination of this Agreement in accordance with its terms, the Company agrees as to itself and its Subsidiaries that (except as expressly contemplated or permitted by this Agreement or as otherwise indicated in Section 4.1 of the Company Disclosure Schedule or as required by a Governmental Entity of competent jurisdiction (written notice of which will be given promptly to Parent) or to the extent that Parent shall otherwise consent in writing): 29 (a) Ordinary Course. --------------- (i) The Company and each of its Subsidiaries shall carry on their respective businesses in the usual, regular and ordinary course, in all material respects, in substantially the same manner as heretofore conducted, and shall use all reasonable efforts to preserve intact their present lines of business, business organizations and reputations, maintain their rights, franchises and permits, keep available the services of their officers and key employees, maintain their assets and properties in good working order and condition, ordinary wear and tear excepted, and preserve their relationships with customers, suppliers and others having business dealings with them to the end that their ongoing businesses shall not be impaired in any material respect at the Effective Time. (ii) Other than with the prior written consent of Parent, the Company shall not, and shall not permit any of its Subsidiaries to, (A) enter into any new material line of business or (B) incur or commit to any capital expenditures other than capital expenditures contemplated in the Company's capital budget, reasonable amounts required to meet emergencies, and such additional amounts as may be required to comply with Laws and Orders then in effect or required by a Governmental Entity. (b) Dividends; Changes in Share Capital. The Company shall not, and ----------------------------------- shall not permit any of its Subsidiaries to, and shall not propose to, (i) declare, set aside or pay any dividends on or make other distributions (whether in cash or otherwise) in respect of any of its capital stock, (ii) split, combine, subdivide or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock, except for any such transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary of the Company after consummation of such transaction, (iii) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or (iv) directly or indirectly repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock. (c) Issuance of Securities. The Company shall not, and shall not ---------------------- permit any of its Subsidiaries to, issue, deliver or sell, pledge or encumber, or authorize or propose the issuance, delivery or sale, pledge or encumbrance of, any shares of its capital stock of any class, or any securities convertible or exercisable for, or any rights, warrants or options to acquire any such shares, or enter into any agreement with respect to any of the foregoing. (d) Governing Documents. The Company shall not, and shall not permit ------------------- any 30 of its Subsidiaries to, amend or propose to amend their respective articles or certificate of incorporation, by-laws or other governing documents. (e) No Acquisitions. Other than with the prior written consent of --------------- Parent, the Company shall not, and shall not permit any of its Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets other than the acquisition of assets as are used in the operations of the business of the Company and its Subsidiaries in the ordinary course, consistent with past practice. (f) No Dispositions. Other than (i) with the prior written consent --------------- of Parent, (ii) and other than as set forth in Section 4.1(f) of the Disclosure Schedule and (iii) and other than transfers between the Company and the wholly- owned Subsidiaries of the Company and between the wholly-owned Subsidiaries of the Company, the Company shall not, and shall not permit any Subsidiary of the Company to, sell, lease, transfer, encumber or otherwise dispose of, or agree to sell, lease, transfer, encumber or otherwise dispose of, any of its assets (including capital stock of Subsidiaries of the Company) which are material to the Company. (g) Investments; Indebtedness. The Company shall not, and shall not ------------------------- permit any of its Subsidiaries to, (i) other than as set forth on Schedule 4.1(g) of the Disclosure Schedule, make any loans, advances or capital contributions to, or investments in, any other Person, other than loans, advances, capital contributions and investments by the Company or a Subsidiary of the Company to or in the Company or any wholly owned Subsidiary of the Company, (ii) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than payments, discharges, settlements or satisfactions incurred or committed to in the ordinary course of business consistent with past practice or reflected in the most recent consolidated financial statements (or the notes thereto) of the Company included in the most recent Company SEC Reports filed prior to the date of this Agreement or (iii) other than in the ordinary course of business and as set forth on Schedule 4.1(g) of the Disclosure Schedule, create, incur, assume or suffer to exist any indebtedness, guarantees, loans or advances or any debt securities or any warrants or rights to acquire any debt securities not in existence as of the date of this Agreement except for short-term indebtedness incurred under the Company's current short- term facilities (and any replacements thereof) in the ordinary course of business. (h) Compensation. Except as otherwise agreed by Parent, the Company ------------ shall not, and shall not permit any of its Subsidiaries to, (i) materially increase the amount of compensation of any executive officer, director or employee, (ii) make any material increase in or commitment to increase any employee benefits, (iii) issue any equity-based awards or shares of the Company Common Stock pursuant to the Company Benefit Plans, adopt or make any 31 commitment to enter into, adopt, amend in any material manner or terminate any Company Benefit Plan, or any other agreement, arrangement, plan or policy between the Company or one of its Subsidiaries and one or more of its directors, officers or employees, (iv) make any contribution, other than regularly scheduled contributions, to any Company Benefit Plan, (v) grant any severance or termination pay not currently required to be paid under existing severance plans or enter into or adopt, or amend any existing severance plan, agreement or arrangement, (vi) enter into or amend any Company Benefit Plan except as required by applicable law, or (vii) enter into or amend any employment or consulting agreement. (i) Other Actions. The Company shall not, and shall not permit any ------------- of its Subsidiaries to take any action that would, or fail to take any action which failure would, or that could reasonably be expected to, result in, (i) a material breach of any provision of this Agreement, or (ii) any of the conditions to the Merger set forth in Article VI not being satisfied. (j) Accounting Methods; Income Tax Matters. Except as disclosed in -------------------------------------- the Company SEC Reports filed prior to the date of this Agreement, or as required by a Governmental Entity, the Company shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting or accounting practices in effect at August 31, 2000, except as required by GAAP. The Company shall not, nor shall it permit any of its Subsidiaries to, (i) change its fiscal year, (ii) make or rescind any material tax election, (iii) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit, or controversy in respect of Taxes for any amount in excess of the amount reserved therefor and reflected in the most recent consolidated financial statements (or the notes thereto) of the Company included in the most recent Company SEC Report, or (iv) change in any material respect any of its methods of reporting income, deductions or accounting for federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the taxable year ending August 31, 2000. (k) Contracts. The Company shall not, nor shall it permit any of its --------- Subsidiaries, except in the ordinary course of business consistent with past practice (i) to modify, amend, terminate or fail to use commercially reasonable efforts to renew any material Contract or waive, release or assign any material rights or claims under a Contract to which the Company or any of its Subsidiaries is a party or (ii) to enter into any new material Contracts. (l) Compromise; Settlement. Other than in the normal course of ---------------------- business, neither the Company nor any of its Subsidiaries shall settle or compromise any pending or threatened Claims or arbitrations (other than any Claims or arbitrations relating to matters set forth in the Company SEC Reports), other than settlements which involve solely the payment of money (without admission of liability) that would not result in an uninsured payment by or liability of the Company in excess of $100,000 in the aggregate above the reserves established specifically therefor on the books of the Company as of the date hereof. 32 (m) Stockholder Agreement. Simultaneous with the execution of this --------------------- Agreement, the Company shall enter into and become a party to that certain Stockholder Agreement by and among the Company, Jensen, the Jensen Family Trusts, Ecolair LLP, and the Louis Berger Group, Inc. in the form attached hereto as Annex B. SECTION 4.02 Covenants of Parent. During the period from the date of this ------------------- Agreement and continuing until the Effective Time, Parent agrees as to itself and to Purchaser that (except as expressly contemplated or permitted by this Agreement or as required by a Governmental Entity of competent jurisdiction (written notice of which will be given promptly to the Company) or to the extent that the Company shall otherwise consent in writing) Parent shall not, and shall not permit Purchaser to, take any action that would, or fail to take any action which failure would impair Parent's ability to have available sufficient funds to pay the Merger Consideration pursuant to this Agreement and otherwise to satisfy its obligations hereunder. SECTION 4.03 Advice of Changes; Governmental Filings. Each party shall --------------------------------------- (a) confer on a regular and frequent basis with the other, with respect to matters relevant to the Merger and (b) report (to the extent permitted by Law, Order or any applicable confidentiality agreement) on operational matters with respect to the Company and its Subsidiaries, and the Company shall promptly advise Parent, orally and in writing, of any material change or event affecting its business or operations, including any complaint, investigation or hearing by any Governmental Entity (or communication indicating the same may be contemplated) or the institution or threat of material litigation. The Company shall timely file all reports required to be filed by it with the SEC (and all other Governmental Entities) between the date of this Agreement and the Effective Time and shall (to the extent permitted by Law, Order or any applicable confidentiality agreement) deliver to Parent copies of all such reports, announcements and publications promptly after the same are filed. ARTICLE V ADDITIONAL AGREEMENTS [Article V intentionally omitted] ARTICLE VI 33 ADDITIONAL COVENANTS SECTION 6.01 Company Stockholders Meeting; Proxy Statement; Merger. (a) As ----------------------------------------------------- soon as practicable following the acceptance for payment of and payment for Shares by Purchaser in the Offer, if approval of the Merger by the shareholders of the Company is required by law to consummate the Merger, the Company shall with the cooperation of the Parent take all action necessary, in accordance with the DGCL, the Exchange Act and other applicable law and its certificate of incorporation and by-laws, to convene and hold a special meeting of the stockholders of the Company (the "Stockholders Meeting") for the purpose of considering and voting upon the adoption of this Agreement and to approve the Merger and to solicit proxies pursuant to the Proxy Statement (as defined below) in connection therewith and the Company agrees that this Agreement and the Merger shall be submitted at the Stockholders Meeting. The Board of Directors of the Company shall recommend that the holders of Shares vote in favor of the adoption of this Agreement and to approve the Merger at the Stockholders Meeting and shall cause such recommendation to be included in the Proxy Statement. At the Stockholders Meeting, Parent and Purchaser shall cause all of the Shares owned by them to be voted in favor of the adoption of this Agreement and the Merger. (b) The Company, if requested by Parent, shall promptly prepare and file with the SEC a proxy statement (together with any supplement or amendment thereto, the "Proxy Statement") relating to the Stockholders Meeting in accordance with the Exchange Act and the rules and regulations thereunder. Parent, Purchaser and the Company will cooperate with each other in the preparation of the Proxy Statement, and the Company shall notify Parent of the receipt of any comments of the SEC with respect to the Proxy Statement and of any requests by the SEC for any amendment or supplement thereto or for additional information and shall provide to Parent promptly copies of all correspondence between the Company or any representative of the Company and the SEC. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Proxy Statement, including all amendments and supplements thereto, prior to the filing thereof with the SEC. The Company agrees to provide Parent and Purchaser and its counsel any comments the Company or its counsel may receive from the SEC or its staff with respect to the Proxy Statement promptly after receipt of such comments. Without limiting the generality or effect of the foregoing, the Company shall use its best efforts to respond to all SEC comments with respect to the Proxy Statement and, subject to compliance with SEC rules and regulations, to cause the Proxy Statement to be cleared by the SEC and mailed to the Company's stockholders at the earliest practicable date. Each of Parent and Purchaser shall promptly supply to the Company in writing, for inclusion in the Proxy Statement, all information concerning Parent and Purchaser required under the Exchange Act and the rules and regulations thereunder to be included in the Proxy Statement. If at any time prior to the approval of this Agreement by the Company's shareholders there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Company will prepare and mail to its shareholders such an amendment or supplement. The Company shall not use any proxy material in connection with the Stockholders Meeting without Parent's prior 34 approval. (c) Notwithstanding the foregoing clauses (a) and (b), in the event that Purchaser shall acquire ownership of at least 90% of the outstanding Shares upon consummation of the Offer, Purchaser and Parent shall take all necessary actions to cause the Merger to become effective, as soon as practicable after the expiration of the Offer, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL. SECTION 6.02 Access to Information; Notification of Certain Matters. (a) ------------------------------------------------------ Subject to the provisions of any confidentiality agreement by which the Company is bound (provided that the Company shall advise Parent that information is not being provided as a result thereof and whether such information, in the good faith belief of the Company, has had or would reasonably be expected to have a Material Adverse Effect on the Company), the Company shall, and shall cause each of its Subsidiaries to, afford to Parent and its officers, employees, counsel, financial advisors and other representatives prompt, reasonable access during the period prior to the Effective Time to all of the Company's and its Subsidiaries' properties, books, contracts, commitments, Returns, personnel and records, and, during such period, the Company shall, and shall cause each of its Subsidiaries to, furnish as promptly as practicable to Parent such information concerning the Company's and its Subsidiaries' businesses, properties, financial condition, operations and personnel as Parent may from time to time reasonably request. Any such investigation by Parent shall not affect the representations or warranties of the Company contained in this Agreement. Parent will hold any information provided under this Section 6.02 that is nonpublic in confidence to the extent required by, and in accordance with, the provisions of the letter dated October 17, 2000 (the "Confidentiality Agreement"), between the Company and The Louis Berger Group, Inc. (b) The Company shall give prompt notice to Parent of (i) the occurrence or nonoccurrence of any event which would cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time and (ii) any material failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, in either case which would reasonably be expected to cause any of the conditions set forth in clause (e) of Annex A hereto to fail to be satisfied; provided, however, that the delivery of any notice pursuant to this Section 6.02(b) shall not limit or otherwise affect the rights or remedies available hereunder to Parent; provided further that this Section 6.02 shall not constitute a covenant or agreement for the purpose of Section 8.01(e)(v) or clause (e)of Annex A hereto. SECTION 6.03 Reasonable Best Efforts. On the terms and subject to the ----------------------- conditions set forth in this Agreement, including, without limitation, Section 6.05 hereof, each of the parties shall use its reasonable best efforts to take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the 35 Offer, the Merger and the other transactions contemplated hereby, including the satisfaction of the respective conditions set forth in Article VII including, without limitation, (a) obtaining all necessary actions or non-actions, waivers, consents and approvals from Governmental Entities and the making of all necessary registrations and filings and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from or to avoid an action or proceeding by any Governmental Entity, (b) obtaining all necessary consents, approvals or waivers from third parties, (c) defending any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and (d) executing and delivering any additional instruments necessary to consummate the transactions contemplated by this Agreement. SECTION 6.04 Public Filings/Announcements. The Company shall prepare ---------------------------- distribute and file the Schedule 14D-9. Parent and Purchaser shall prepare and file the Offer Documents. Parent and Purchaser, on the one hand, and the Company, on the other hand, shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release, SEC filing (including the Offer Documents, the Schedule 14D-9 and the Proxy Statement) or other public statements with respect to the transactions contemplated hereby, including the Offer and Merger, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, by court process or by obligations pursuant to any listing agreement with any securities exchange. SECTION 6.05 No Solicitation. (a) From the date hereof, the Company shall --------------- not (whether directly or indirectly through advisors, agents or other intermediaries), and the Company shall use its reasonable best efforts to cause its Subsidiaries and its and their respective officers, directors, advisors, representatives and other agents not to, directly or indirectly, (i) solicit, initiate, facilitate or knowingly encourage any inquiries relating to, or the submission of, any Acquisition Proposal (as hereinafter defined), (ii) participate in any discussions or negotiations regarding any Acquisition Proposal, or, in connection with any Acquisition Proposal, furnish to any person any information or data with respect to or access to the properties of the Company or any of its Subsidiaries, or take any other action to facilitate the making of any proposal that constitutes or may reasonably be expected to lead to, any Acquisition proposal or (iii) enter into any agreement, arrangement or understanding with respect to any Acquisition Proposal or approve or resolve to approve any Acquisition Proposal; provided that, prior to consummation of the Offer, if the Board of Directors or the Disinterested Committee of the Company, after receiving advice from outside counsel, has concluded in good faith that such action is reasonably necessary for the Board of Directors or the Disinterested Committee to act in a manner consistent with its fiduciary duties under applicable law, then the Company may furnish information with respect to the Company and its Subsidiaries and participate in discussions or negotiations regarding such Acquisition Proposal, in which case the Company will not disclose any information to such person without entering into a confidentiality agreement substantially identical to the Confidentiality Agreement (it being understood that the 36 Company may enter into a confidentiality agreement without a standstill or with a standstill provision less favorable to the Company if it waives or similarly modifies the standstill provision in the Confidentiality Agreement). The Company shall promptly (but in no case later than 24 hours after receipt) provide Parent with a copy of any written Acquisition Proposal received and a written statement with respect to any non-written Acquisition Proposal received, which statement shall include the identity of the parties making the Acquisition Proposal and the material terms thereof. The Company shall keep Parent informed on a current basis of the status and content of any discussions regarding any Acquisition Proposal with a third party. Nothing contained in this Section 6.05 prohibits the Company or the Company's Board of Directors or the Disinterested Committee from taking and disclosing to the Company's stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act (or any similar communications in connection with the making or amendment of a tender offer or exchange offer) or from making any disclosure required by applicable law or, prior to the consummation of the Offer, from taking any action contemplated by Section 8.01(d)(i), including having the Board of Directors or the Disinterested Committee take such actions as are necessary to approve or resolve to approve the intention to enter into an agreement with respect to a Superior Proposal (as hereinafter defined) (or any announcement in connection therewith) or enter into an agreement with respect to a Superior Proposal concurrently with termination pursuant to Section 8.01(d)(i). (b) "Acquisition Proposal" means any offer or proposal for the merger, consolidation, share exchange, recapitalization, liquidation or other business combination involving the Company or any of its Subsidiaries or the acquisition or purchase of 20% or more of any class of equity securities of the Company or any of its Subsidiaries, or any tender offer (including self-tenders) or exchange offer that if consummated would result in any person beneficially owning 20% or more of any class of equity securities of the Company or any of its Subsidiaries, or a substantial portion of the assets of the Company or any of its Subsidiaries, other than the transactions contemplated by this Agreement. (c) "Superior Proposal" means a written and unsolicited Acquisition Proposal by any Person or group (other than the Parent or any of its subsidiaries) which the Board of Directors or the Disinterested Committee determines, in good faith after consultation with an independent, nationally recognized investment banking firm, (i) if consummated would result in a transaction more favorable to the Company's stockholders, from a financial point of view, than the transactions contemplated by this Agreement and any alternative proposed by Parent or Purchaser and (ii) is reasonably capable of being financed by the Person making such Acquisition Proposal. SECTION 6.06 Consents, Approvals and Filings. (a) Upon the terms and ------------------------------- subject to the conditions hereof, each of the parties hereto shall (i) make promptly its respective filings, and thereafter make any other required submissions, the Exchange Act and any other relevant statute, rule or regulation, with respect to the Offer, the Merger and the other transactions contemplated 37 hereby and (ii) use reasonable best efforts (or, in connection with obtaining antitrust approval from any U.S. Governmental Entity, best efforts) to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Offer, the Merger and the other transactions contemplated hereby, including using reasonable best efforts to obtain all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Entities and cooperate to obtain all consents, approvals and authorizations (without out-of-pocket expense to the Company) of parties to contracts with the Company and its Subsidiaries as are necessary for the consummation of the Offer, the Merger and the other transactions contemplated hereby and to fulfill the conditions to the Offer and the Merger. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall use their reasonable best efforts to take all such action. (b) Notwithstanding anything to the contrary herein, Parent agrees to use its best efforts to take, or cause to be taken, all necessary action and to do, or cause to be done, all things necessary to satisfy the conditions to the Offer set forth in Annex A hereto; provided that nothing in this Agreement shall require Parent or any of its Subsidiaries to take, or cause to be taken, or do or cause to be done, any action which would result in a material detriment to Parent and Purchaser or would result in a material restriction on the business activities thereof. SECTION 6.07 Indemnification; Directors' and Officers' Insurance. (a) For --------------------------------------------------- a period of six years after the Effective Time, the provisions with respect to the indemnification, exculpation and advancement of expenses set forth in Article TENTH of the certificate of incorporation of the Company and Article VIII of the Bylaws of the Company as in effect on the date of this Agreement (true, correct and complete copies of which have been made available to Parent), shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of individuals who at any time prior to the Effective Time were directors or officers of the Company in respect of actions or omissions occurring at or prior to the Effective Time (including, without limitation, the transactions contemplated by this Agreement), unless such modification is required by law. (b) For a period of six years after the Effective Time, Parent shall cause to be maintained in effect policies of directors' and officers' liability insurance, for the benefit of those persons who are covered by the Company's directors' and officers' liability insurance policies at the Effective Time, providing coverage with respect to matters occurring prior to or at the Effective Time that is at least equal to the coverage provided under the Company's current directors' and officers' liability insurance policies, to the extent that such liability insurance can be maintained at an annual cost to Parent not greater than 150 percent of the premium for the current Company directors' and officers' liability insurance; provided that if such insurance cannot be so maintained at such cost, Parent shall cause to be maintained as much of such 38 insurance as can be so maintained at a cost equal to 150 percent of the current annual premiums of the Company for such insurance. (c) In the event that Parent or the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then, and in each such case, proper provision shall be made so that the successors or assigns of Parent or the Surviving Corporation shall succeed to the obligations set forth in this Section 6.07. SECTION 6.08 State Takeover Laws. If any "fair price," "business ------------------- combination" or "control share acquisition" statute or other similar statute or regulation shall become applicable to the transactions contemplated hereby, Parent, the Company and its Board of Directors shall take all such action as may be necessary or advisable to obtain such approvals and take such actions as are necessary or advisable so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to minimize the effects of any such statute or regulation on the transactions contemplated hereby.. ARTICLE VII CONDITIONS PRECEDENT SECTION 7.01 Conditions to Each Party's Obligation to Effect the Merger. ---------------------------------------------------------- The respective obligations of each party to effect the Merger shall be subject to the satisfaction or written waiver on or prior to the Closing Date of the following conditions: (a) Completion of the Offer. Purchaser shall have accepted for payment and paid for all Shares validly tendered in the Offer and not withdrawn in an amount sufficient to satisfy the Minimum Condition; provided, however, that Purchaser may waive the Minimum Condition in its sole discretion pursuant to Section 1.01(c) hereof, and provided further, however, that neither Parent nor Purchaser may invoke this condition if Purchaser shall have failed to purchase Shares so tendered and not withdrawn in violation of the terms of this Agreement or the Offer. (b) Stockholder Approval. This Agreement shall have been adopted by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock of the Company if such vote is required pursuant to the Company's certificate of incorporation, as amended, the DGCL or other applicable law. (c) No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other 39 legal restraint or prohibition preventing the consummation of the Merger shall be in effect provided, however, that, prior to invoking this condition, the party so invoking this condition shall have complied with its obligations under Section 6.03 and Section 6.06 and the parties hereto shall have used their reasonable best efforts to lift or remove such order, injunction, restraint or prohibition. ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER SECTION 8.01 Termination. This Agreement may be terminated and the Merger ----------- contemplated herein may be abandoned at any time prior to the Effective Time, whether before or after approval of this Agreement and the Merger by the stockholders of the Company, as follows: (a) By the mutual written consent of Parent and the Company duly authorized by the members of Parent and the Board of Directors or the Disinterested Committee of the Company. (b) By either of Parent or the Company duly authorized by the members of Parent or the Board of Directors or the Disinterested Committee of the Company, respectively if (i) a statute, rule or executive order shall have been enacted, entered or promulgated prohibiting the transactions contemplated hereby by this Agreement or (ii) any Governmental Entity shall have issued an order, decree or ruling or taken any other action (which order, decree, ruling or other action the parties hereto shall use their reasonable best efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated hereby and such order, decree, ruling or other action shall have become final and non-appealable. (c) By either of Parent or the Company duly authorized by the members of Parent or the Board of Directors or the Disinterested Committee of the Company, respectively, if consummation of the Offer shall not have occurred on or before December 1, 2001 (the "Termination Date"); provided, however, that the party seeking to terminate this Agreement pursuant to this Section 8.01(c) shall not have breached in any material respect its obligations under this Agreement. (d) By the Company, upon approval of its Board of Directors or the Disinterested Committee: (i) prior to consummation of the Offer, if (A) the Board of Directors or the Disinterested Committee of the Company notifies Parent in writing that it intends to enter into an agreement with respect to a Superior 40 Proposal, attaching the most current version of such agreement (or a description of all material terms and conditions thereof) to such notice, if the Company's Board of Directors or the Disinterested Committee has determined in good faith (after receiving advice from independent outside counsel) that a failure to terminate this Agreement and enter into an agreement to effect the Superior Proposal would constitute a breach of its fiduciary duties, (B) Parent does not make, within five Business Days of receipt of the Company's written notification of its intention to enter into a binding agreement for a Superior Proposal, an offer that the Board of Directors or the Disinterested Committee of the Company determines, in good faith after consultation with its financial advisor, is at least as favorable to the stockholders of the Company as such Superior Proposal, it being understood that the Company shall not enter into any such binding agreement during such five-day period and (C) substantially contemporaneously with such termination, the Company enters into a definitive agreement to effect the Superior Proposal. The Company agrees to notify Parent promptly if its intention to enter into a written agreement referred to in its notification shall change at any time after giving effect to such notification; or (ii) if Parent or Purchaser shall have terminated the Offer or the Offer expires without Parent or Purchaser, as the case may be, purchasing any Shares pursuant thereto; provided that the Company may not terminate this Agreement if the Company is in material breach of this Agreement; or (iii) prior to the consummation of the Offer, if (A) there shall be a breach of any representation or warranty of Parent or Purchaser in this Agreement that is qualified as to Material Adverse Effect, (B) there shall be a breach in any material respect of any representation or warranty of Parent or Purchaser in this Agreement that is not so qualified, other than any such breaches which, in the aggregate, have not had or would not reasonably be likely to have a Material Adverse Effect on Parent and Purchaser, taken as a whole, or (C) there shall be a material breach by Parent or Purchaser of any of its covenants or agreements contained in this Agreement, which breach, in the case of clause (A), (B) or (C), either is not reasonably capable of being cured or, if it is reasonably capable of being cured, has not been cured within the earlier of (i) 20 days after giving notice to Parent of such breach and (ii) the expiration of the Offer, provided that the Company may not terminate this Agreement pursuant to this Section 8.01(d)(iii) if the Company is in material breach of this Agreement. 41 (e) By Parent or Purchaser duly authorized by the members or Board of Directors of such Person, as applicable: (i) prior to the consummation of the Offer, if the Board of Directors or the Disinterested Committee of the Company shall have withdrawn, or modified or changed, in a manner adverse to Parent or Purchaser, its approval or recommendation of the Offer, this Agreement or the Merger or resolved to do so or the Company has received an Acquisition Proposal and the Company shall not have rejected such proposal within ten Business Days of its receipt or, if sooner, the date of its existence first becomes publicly disclosed; or (ii) prior to the consummation of the Offer, if there shall have been a material breach by the Company of any provision of Section 6.05; or (iii) if the Offer has expired or terminated without Parent or Purchaser purchasing any Shares thereunder and, pursuant to the Tender Offer Conditions and Article I hereof, Purchaser is neither required to accept and pay for the Shares tendered in the Offer nor to extend the expiration date of the Offer; provided that Parent or Purchaser may not terminate this Agreement pursuant to this Section 8.01(e)(iii) if Parent or Purchaser is in material breach of this Agreement; or (iv) prior to the consummation of the Offer, if the Company shall have exempted for purposes of Section 203 of the DGCL any acquisition of Shares by any person or "group" (as defined in Section 13(d)(3) of the Exchange Act), other than Parent, Purchaser or their affiliates; or (v) prior to the consummation of the Offer, if (A) there shall be a breach of any representation or warranty of the Company in this Agreement that is qualified as to Material Adverse Effect, (B) there shall be a breach in any material respect of any representation or warranty of the Company in this Agreement that is not so qualified other than any such breaches which, in the aggregate, have not had or would not reasonably be likely to have a Material Adverse Effect on the Company, or (C) there shall be a material breach by the Company of any of its covenants or agreements contained in this Agreement, which breach, in the case of clause (A), (B) or (C), either is not reasonably capable of being cured or, if it is reasonably capable of being cured, has not been cured within the earlier of (i) 20 days after giving of written notice to the Company of such breach and (ii) the expiration of the Offer; provided that Parent or Purchaser may not terminate this Agreement pursuant to this 42 Section 8.01(e)(v) if Parent or Purchaser is in material breach of this Agreement. SECTION 8.02 Effect of Termination. In the event of termination of this --------------------- Agreement by either the Company or Parent or Purchaser as provided in Section 8.01, written notice thereof shall forthwith be given to the other party or parties specifying the provisions hereof pursuant to which such termination is made and this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Parent, Purchaser or the Company, except this Section 8.02, Section 8.03 and Article IX and except to the extent that such termination results from the material breach by a party of any of its representations, warranties, covenants or agreements set forth in this Agreement and, in such event, the non-breaching party shall be entitled to recover from the breaching party by way of damages, and as its sole remedy, the expenses incurred by it in connection with the transactions contemplated by this Agreement including, without limitation, all legal and accounting fees and disbursements, in connection with the preparation and negotiation of this Agreement and the preparation of the Offer Documents. SECTION 8.03 Fees and Expenses. Subject to Section 8.02, all fees and ----------------- expenses incurred in connection with the Offer, the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees or expenses, whether or not the Offer or the Merger is consummated. SECTION 8.04 Amendment and Modification. This Agreement may be amended, -------------------------- modified and supplemented in any and all respects whether before or after any vote of Purchaser or the stockholders of the Company contemplated hereby by written agreement of the parties hereto, at any time prior to the Effective Time with respect to any of the terms contained herein; provided, however, that after the adoption of this Agreement by the stockholders of the Company, if applicable, no amendment shall be made which, under applicable law, requires the further approval of such stockholders without such approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. SECTION 8.05 Extension; Waiver. Subject to Section 1.04 hereof, at any ----------------- time prior to the Effective Time, any party hereto may (a) extend the time for the performance of any of the obligations or other acts of any other party, (b) waive any inaccuracies in the representations and warranties of any other party contained in this Agreement or in any document delivered pursuant to this Agreement, or (c) subject to applicable law, waive compliance with any of the agreements of any other or conditions to the obligations of such party contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights. 43 ARTICLE IX GENERAL PROVISIONS SECTION 9.01 Notices. All notices, requests, claims, demands and other ------- communications under this Agreement shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice) on the date of delivery, or if by facsimile, upon confirmation of receipt: (a) if to Parent or to Purchaser, to: EA Engineering Holdings, LLC c/o EA Engineering, Science, and Technology, Inc. 11019 McCormick Road, Suite 250 Hunt Valley, MD 21031 Attention: Loren D. Jensen Facsimile: (410) 527-3502 and EA Engineering Acquisition Corporation c/o EA Engineering, Science, and Technology, Inc. 11019 McCormick Road, Suite 250 Hunt Valley, MD 21031 Attention: Loren D. Jensen Facsimile: (410) 527-3502 with a copy (which shall not constitute notice) to: Hogan & Hartson L.L.P. 111 S. Calvert Street, Suite 1600 Baltimore, MD 21202 Attention: Walter G. Lohr, Jr. Facsimile: (410) 539-6981_ (b) if to the Company, to: EA Engineering, Science, and Technology, Inc. 44 11019 McCormick Road Hunt Valley, Maryland 21031 Attention: Loren D. Jensen, Ph.D., CEO Facsimile: (410) 771-1812 with a copy (which shall constitute notice) to: Cleaveland D. Miller, Esq. Semmes, Bowen & Semmes 250 West Pratt Street Baltimore, Maryland 21201 Facsimile: (410) 539-5223 SECTION 9.02 Certain Definitions. For purposes of this Agreement: ------------------- (a) "affiliate" of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person. (b) "Business Day" means any day other than Saturday, Sunday or any other day on which banks in Baltimore, Maryland are required or permitted to close. (c) "knowledge" means the knowledge of any officer of the Company. (d) "Material Adverse Effect" means (i) when used with respect to the Company, any materially adverse change in or effect on the business, assets, liabilities, properties, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries taken as a whole or (ii) when used with respect to Parent, Purchaser or the Company, as the case may be, any materially adverse change in or effect on the ability of Parent, Purchaser or the Company, as the case may be, to perform their respective obligations hereunder. (e) "person" means an individual, corporation, partnership, joint venture, association, trust, unincorporated organization or other entity. (f) "Subsidiary" of any person means any other person of which (i) such person or any Subsidiary thereof is a general partner, (ii) such person and/or one or more of its Subsidiaries holds voting power to elect a majority of the board of directors or others performing similar functions or (iii) such person, directly or indirectly, owns or controls more than 50% of the equity interests of such other person. SECTION 9.03 Interpretation. When a reference is made in this Agreement to -------------- an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise 45 indicated. The table of contents and headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The inclusion of any matter in the Company's Disclosure Schedule in connection with any representation, warranty, covenant or agreement that is qualified as to materiality or "Material Adverse Effect" shall not be an admission by the Company that such matter is material or would have a Material Adverse Effect. Matters disclosed in any section of the Company's Disclosure Schedule or in Article III shall be considered disclosed for all purposes under Article III, to the extent that such matter on its face would reasonably be expected to be pertinent in light of the disclosure made. SECTION 9.04 Entire Agreement; No Third-Party Beneficiaries. This ---------------------------------------------- Agreement (together with the Confidentiality Agreement) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement (except for the Confidentiality Agreement). Other than the provisions of Sections 2.08 and 6.07, this Agreement is not intended to confer upon any person (including, without limitation, any current or former employees of the Company), other than the parties hereto, any rights or remedies; provided that the persons (other than the parties hereto) referred to in the provisions of Section 2.08 or 6.07 shall be third-party beneficiaries of, and shall have the right to enforce, such provisions and, in addition, the persons (other than the parties hereto) referred to in the provisions in Section 2.08 or 6.07 shall be entitled to receive from Parent their reasonable costs and expenses arising out of any breach by Parent or the Surviving Corporation of such provisions. The parties acknowledge and agree that each person (other than the parties hereto) referred to in the provisions of Sections 2.08 and 6.07 would suffer irreparable damage, and no adequate remedy at law exists, in the event of a breach of such provisions and that each such person shall be entitled to an injunction or injunctions to prevent breaches of such provisions of this Agreement and to enforce specifically such provisions of this Agreement in any competent court of jurisdiction in the State of Delaware. SECTION 9.05 Governing Law. This Agreement shall be governed by, and ------------- construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. SECTION 9.06 Assignment. Neither this Agreement nor any of the rights, ---------- interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other parties, and any such assignment without such prior written consent shall be null and void, except that Parent and/or Purchaser may assign this Agreement to any direct or indirect wholly owned Subsidiary of Parent without the prior consent of the Company; provided that Parent and/or Purchaser, as the case may be, shall remain liable for all of its obligations under this Agreement. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. 46 SECTION 9.07 Enforcement. The parties agree that irreparable damage would ----------- occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any competent court of jurisdiction in the State of Delaware. SECTION 9.08 Waiver of Jury Trial. Each of the parties hereto hereby -------------------- waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the Offer and Merger. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party hereto has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement and the Offer and Merger, as applicable, by, among other things, the mutual waivers and certifications in this Section 9.08. SECTION 9.09 Severability. Whenever possible, each provision or portion of ------------ any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein. SECTION 9.10 Counterparts. This Agreement may be executed in one or more ------------ counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. SECTION 9.11 Non-Survival of Representations and Warranties. None of the ---------------------------------------------- representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time; provided, however, this Section 9.11 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time. 47 IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above. ATTEST: EA ENGINEERING HOLDINGS, LLC /s/ Melissa L. Kunkel By: /s/ Loren D. Jensen (SEAL) - --------------------- ------------------- Name: Loren D. Jensen, Ph.D. Title: President EA ENGINEERING ACQUISITION CORPORATION /s/ Melissa L. Kunkel By: /s/ Loren D. Jensen (SEAL) - --------------------- ------------------- Name: Loren D. Jensen, Ph.D. Title: President EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. /s/ Melissa L. Kunkel By: /s/ David S. Santoro (SEAL) - --------------------- -------------------- Name: David S. Santoro Title: Senior Vice President Annex A Tender Offer Conditions ----------------------- The capitalized terms used in this Annex A shall have the meanings set forth in the Agreement to which it is attached. Tender Offer Conditions. Notwithstanding any other term of the Offer or ----------------------- this Agreement, Purchaser shall not be required to accept for payment, purchase or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) of the Exchange Act, pay for, any tendered Shares and may postpone the acceptance for payment or, subject to the restrictions referred to above, the payment for, any tendered Shares, if (i) there shall not have been validly tendered and not validly withdrawn pursuant to the Offer, a number of Shares which, when added to the Shares then owned by Parent, Purchaser, Jensen and the Jensen Family Trusts, constitute at least ninety percent (90%) of the Shares outstanding on a fully diluted basis (the "Minimum Condition"). In addition to and not limiting the foregoing, notwithstanding any other provision of the Offer, the Purchaser shall not be required to accept for payment or, subject to the applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act, pay for any tendered Shares and may elect not to commence the Offer, may terminate, subject to the terms of this Agreement, or amend the Offer and may postpone the acceptance of and payment for, tendered Shares at any time on or after this date and at or before the time of acceptance of tendered Shares for payment pursuant to the Offer or payment therefor (whether or not any tendered Shares have been accepted for payment or paid for) if any of the following events shall occur: (a) there shall be threatened, instituted or pending any action or proceeding by any Governmental Entity, or by any other Person, domestic or foreign, before any court of competent jurisdiction or Governmental Entity, which could reasonably be expected to: (i) make illegal, impede or otherwise directly or indirectly restrain or prohibit the Offer or the Merger or seeking to obtain material damages in connection therewith, (ii) prohibit or materially limit the ownership or operation by Parent or Purchaser of all or any material portion of the business or assets of the Company and its Subsidiaries taken as a whole or compel Parent or Purchaser or their affiliates to dispose of or hold separately all or any material portion of the business or assets of Parent, Purchaser or the Company and its Subsidiaries taken as a whole, or seeking to impose any limitation on the ability of Parent or Purchaser or their affiliates to conduct their business or own such assets, (iii) impose limitations on the ability of Parent or Purchaser effectively to exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired or owned by Parent or Purchaser on all matters properly presented to the Company's shareholders, (iv) require divestiture by Parent or Purchaser of any Shares or (v) otherwise directly or indirectly relating to the Offer or the Merger and which would reasonably be expected to have a Material Adverse Effect on the Company, Parent or Purchaser; A-1 (b) there shall be any statute, rule, regulation, legislation, interpretation, judgment, order or injunction, enacted, enforced, promulgated, amended or issued and applicable to (i) Parent, Purchaser, the Company or any of its Subsidiaries or (ii) the Offer or the Merger, by any legislative body or other Governmental Entity which could reasonably be expected to directly or indirectly, result in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; (c) there shall have occurred any event, change, circumstance or occurrence that has had or that would reasonably be expected to have a Material Adverse Effect on the Company; (d) any of the representations or warranties made by the Company in the Merger Agreement shall be untrue or incorrect in any respect (without giving effect to materiality or similar qualifications contained therein) that when taken together with all such other representations and warranties that are not true and correct would reasonably be expected to have a Material Adverse Effect in each case as of the date of the Merger Agreement or the date of consummation of the Offer, except that those representations and warranties which address matters only as of a particular date shall remain true and correct as of such date; (e) the Company shall have failed to perform in any material respect any obligation or to comply in any material respect with any agreement or covenant of the Company to be performed or complied with by it under this Agreement on or prior to the date of consummation of the Offer; (f) the Company's Board of Directors or the Disinterested Committee shall have withdrawn, or shall have modified or amended in a manner adverse to Parent or Purchaser, the approval or recommendation of the Offer, the Merger or the Merger Agreement, or resolved to do so, or approved or recommended any Acquisition Proposal other than the Offer and the Merger or shall have not rejected such Acquisition Proposal within ten (10) Business Days of its receipt or, if sooner, the date of its existence first becomes publicly disclosed, shall fail to reaffirm its approval and recommendation of the Offer, the Merger or the Merger Agreement within three (3) Business Days after Parent's request for such reaffirmation; (g) it shall have been publicly disclosed, or Parent or Purchaser shall have otherwise learned, that beneficial ownership (determined for the purposes of this paragraph (g) as set forth in Rule 13d-3 promulgated under the Exchange Act) or 15% or more of the Shares has been acquired other than pursuant to this Agreement; (h) there shall have occurred, and be continuing, (i) any general suspension of, or limitation on prices for, trading in securities on The New York Stock Exchange or through the Nasdaq Stock Market, (ii) a declaration of a banking moratorium or any suspension of payments A-2 in respect of banks in the United States, (iii) a commencement of a war, armed hostilities or other national or international crisis directly or indirectly involving the United States or (iv) in the case of any of the foregoing clauses (i) through (iii) existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; or (i) the Merger Agreement shall have been terminated in accordance with its terms. The foregoing conditions are for the sole benefit of Parent and Purchaser and my be asserted by Parent or Purchaser or may be waived by Parent or Purchaser, in whole or part, at any time and from time to time, in the sole discretion of Parent or Purchaser (subject to the terms of the Merger Agreement). The failure by Parent or Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any right and each right will be deemed an ongoing right which may be asserted at any time and from time to time. A-3 EX-99.D.2 11 dex99d2.txt STOCKHOLDERS AGREEMENT Exhibit (d)(2) STOCKHOLDERS AGREEMENT THIS STOCKHOLDERS AGREEMENT (this "Agreement") is entered into as of July 24, 2001 by and among EA Engineering, Science, and Technology, Inc., a Delaware corporation (the "Company"), Loren D. Jensen ("Jensen"), the Melanie Ann Jensen Irrevocable Trust, the Allison Ann Jensen Irrevocable Trust and the Aaron Keith Jensen Irrevocable Trust (collectively, the "Jensen Family Trusts"), Ecolair LLLP, a Maryland limited liability limited partnership ("Ecolair" and, collectively, with Jensen and the Jensen Family Trusts, the "Jensen Interests"), and The Louis Berger Group, Inc., a New Jersey corporation ("Berger"). The Jensen Interests and Berger, together with other stockholders of the Company, who may become parties hereto, are referred to herein collectively as the "Stockholders" and individually as a "Stockholder." WHEREAS, each of the Stockholders owns the issued and outstanding shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), set forth opposite the Stockholder's name on Appendix I hereto; ---------- WHEREAS, Ecolair and Berger have formed EA Engineering Holdings, LLC (the "Parent"), a Delaware limited liability company formed for the special purpose of acquiring the outstanding Common Stock of the Company; WHEREAS, the Parent has formed a wholly owned corporate subsidiary under the laws of the State of the Delaware (the "Acquisition Subsidiary") to effect the purchase of the shares of the outstanding Common Stock of the Company; WHEREAS, the Company, Parent and the Acquisition Subsidiary have entered into a merger agreement (the "Merger Agreement") that provides for the acquisition of the outstanding Common Stock of the Company, subject to the terms and conditions contained therein; WHEREAS, the Stockholders desire to enter into this Agreement in order to provide, among other things, for certain mutual restrictions relating to the transfer of the Equity Securities (as hereinafter defined) and other rights and responsibilities as set forth herein; and NOW, THEREFORE, for and in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. DEFINITIONS For all purposes of this Agreement, certain capitalized terms specified in Exhibit A shall have the meanings set forth in Exhibit A, except as --------- --------- otherwise expressly provided. 2. DIRECTORS OF THE COMPANY 2.1. Board of Directors Each Stockholder (for so long as the Stockholder owns any Equity Securities of the Company) shall take or cause to be taken all action within its respective power and authority (including without limitation the voting of shares of Equity Securities held by it or the taking of action by consent with respect to the shares owned by it) as may be required: (1) to establish and maintain the authorized size of the Board of Directors of the Company at five (5) directors; to maintain the quorum requirements for actions of the Board of Directors at a majority of the entire number of directors (which must include at least one (1) director designated by Berger); and to maintain the voting requirements for actions of the Board of Directors at a majority of directors present at a meeting at which there is a quorum, except in respect of the matters as this Agreement, the Articles or the Bylaws of the Company may impose a greater voting requirement; (2) to cause to be elected to the Board of Directors of the Company (A) three (3) directors designated by the Jensen Interests, and (B) two (2) directors designated by Berger; (3) to remove forthwith from the Board of Directors any director when removal is requested for any reason by the Stockholder group designating the election of the director pursuant to Section 2.1(2) above (each a "Designating Group"), with or without cause; (4) in the case of death, resignation or other removal as herein provided of the director, to elect another person designated by the respective Designating Group to fill the vacancy created thereby; and (5) to use its best efforts to prevent any action from being taken by the Board of Directors of the Company during the pendency of any vacancy due to death, resignation or removal of a director, unless the Designating Group shall have failed for a period of ten days after written notice of the vacancy to designate a replacement. 2.2. Board Meetings Each Stockholder agrees to take, or cause the Board of Directors to take, all actions necessary to hold meetings of the Board of Directors at least once each calendar quarter in accordance with the Bylaws of the Company. 2.3. Board Committees Each Stockholder further agrees to take, or to cause the Board of Directors to take, all actions necessary to cause any action establishing the duties or membership of any committee of the Board of Directors to be approved by at least three (3) directors (which must include at least one (1) director designated by Berger) and to cause each committee of the Board of Directors to consist of at least two (2) directors (which must include at least one (1) director designated by Berger). -2- 2.4. Amendment to Certificate of Incorporation and Bylaws Each Stockholder further agrees to take, or to cause the Board of Directors to take, all of the actions necessary to cause the Certificate of Incorporation and Bylaws of the Company to be amended to the extent necessary to conform to, and to be consistent with this Agreement, including any amendments hereto. 3. TRANSFER OF EQUITY SECURITIES; PREEMPTIVE RIGHTS Until the termination of this Agreement, the following restrictions shall apply to the Transfer of Equity Securities: 3.1. Restrictions on Transfer of Shares by the Stockholders No Stockholder shall (during his lifetime, in the case of an individual) make any Transfer (as defined herein) of any Equity Securities now or hereafter held or acquired by it except in accordance with this Section 3 without first obtaining the prior written consent of each of the other Stockholders. No Transfer of Equity Securities in violation of this Agreement shall be made or recorded on the books of the Company, and any such Transfer shall be void and of no effect. 3.2. Berger Ownership and Control Berger will not, and will cause its affiliates not to, acquire additional Equity Securities if doing so would have the effect of increasing Berger's aggregate percentage ownership of the Company above forty-nine percent (49.0%) without first obtaining the written consent of the Jensen Interests. Berger hereby covenants that it will not seek to exercise control over the management and operations of the Company other than through its ability to designate two members of the Company's Board of Directors. Notwithstanding the foregoing, Berger may acquire additional Equity Securities and thereby increase its percentage ownership of the Company without obtaining the written consent of the Jensen Interests if the acquisition occurs as a result of the exercise of the rights provided for in this Section 3. 3.3. Rights of First Refusal and Tag-Along Rights 3.3.1. First Offer Rights In the event that a Stockholder (a "Transferor"), desires to Transfer for value Equity Securities (a "Sale of Shares") now or hereafter held or acquired by it, before the Transferor may effect a Sale of Shares, the Transferor first must make the offer(s) required by this Section 3.3 and the offer(s) must not have been accepted as provided in this Section 3.3. Notwithstanding the foregoing, this Section 3.3 shall not apply to (i) Transfers pursuant to Section 3.5 hereof, (ii) Transfers between Berger and the Jensen Interests, or (iii) Transfers among the Jensen Interests. -3- 3.3.2. Offer Prior to effecting a Sale of Shares, the Transferor shall first deliver a written notice (the "Transfer Notice") to the Company and to each other Stockholder specifying (i) the name and address of the individual or entity to whom the Transferor wishes to Transfer any Equity Securities, (ii) the number and class or series of Equity Securities which the Transferor wishes to Transfer (the "Offered Shares"), (iii) the cash or other purchase price offered for the Equity Securities (the "Offer Price"), and (iv) any other terms and conditions of the Transfer. The Transfer Notice shall constitute an irrevocable offer by the Transferor to sell to each other Stockholder the Offered Shares at the price under the same terms and conditions contained in the Transfer Notice and pursuant to the terms of this Section 3.3. 3.3.3. Stockholder Rights The Stockholders shall have the right to purchase the Offered Shares. Within ten (10) Business Days following its receipt of the Transfer Notice, each other Stockholder shall notify the Company and the Transferor as to the number of the Offered Shares, if any, that it is electing to purchase (each notice being a "Stockholder Acceptance"). If the number of Offered Shares is less than the total number included in all Stockholder Acceptances, then the number of Offered Shares shall be allocated as nearly as practicable among the Stockholders pro-rata in proportion to the number of shares of Equity Securities (determined on an as-if converted basis with respect to all then-outstanding securities convertible into Common Stock) held by each such Stockholder. Each of the Stockholders shall have the right of over-subscription such that if any of the Stockholders fails to exercise the right to purchase its pro rata portion of the Offered Shares, the Transferor shall promptly notify each of the other Stockholders and each of the other Stockholders may purchase the non-purchasing Stockholder's portion, within ten (10) Business Days of the date of this subsequent notice from the Transferor, allocated as nearly as practicable among the Stockholders pro-rata in proportion to the number of shares of Equity Securities (determined on an as-if converted basis with respect to all then- outstanding securities convertible into Common Stock) held by each Stockholder. Each Stockholder Acceptance shall be deemed to be an irrevocable commitment to purchase from the Transferor that number of the Offered Shares which the Stockholders have elected to purchase pursuant to their Stockholder Acceptances. 3.3.4. Sale by Transferor If the Stockholders do not deliver to the Transferor the Stockholder Acceptances to purchase all of the Offered Shares or exercise Tag-Along Rights within the time frames set forth in Section 3.3.3 above, the Transferor (a) shall be under no obligation to sell any of the Offered Shares to the Stockholders, unless the Transferor so elects, and (b) may, within a period of 90 days from the date of the Transfer Notice, sell all, but not less than all, of the Offered Shares to one or more Third Parties (each a "Third Party Transferee"), for cash or other consideration substantially on the terms specified in the Transfer Notice; provided that if there is more than one Third -------- ---- Party Transferee, the Transferor in good faith must obtain binding and definitive commitments to purchase all the Offered Shares within the 90-day period before any sale to a Third Party Transferee of the Offered Shares may take place. Upon any such sale, the Third Party Transferee of the Offered Shares shall execute an agreement in form and substance satisfactory to the Stockholders pursuant to which the Third Party Transferee agrees that the Equity Securities it acquired from the Transferor are subject to the provisions of this Section 3 -4- and otherwise agrees to become a party to this Agreement as a Stockholder. Any Third Party Transferee to whom Offered Shares are Transferred pursuant to and in compliance with this Section 3.3 shall, upon consummation of such Transfer, be deemed a Stockholder. If the Transferor does not complete the sale of the Offered Shares within the 90-day period, the provisions of this Section 3 shall again apply, and no Transfer of Shares held by the Transferor shall be made otherwise than in accordance with the terms of this Agreement. 3.3.5. Closing The closing of purchases of Offered Shares by the Stockholders (or their designees) pursuant to this Section 3.3. shall take place within 90 days after the date of the Transfer Notice at 11:00 A.M. local time at the principal offices of the Company, or at such other date, time or place as the parties to the sale may agree. At least five (5) Business Days prior to the closing, the Stockholders shall notify the Transferor in writing of the name and number of purchasers and the portion of the Offered Shares to be purchased by the Stockholders. At the closing, the Transferor shall sell, transfer and deliver to each of the Stockholders participating in the purchase, full right, title and interest in and to the Offered Shares so purchased, free and clear of all liens, security interests or adverse claims of any kind and nature (except as otherwise set forth in the Certificate of Incorporation and this Agreement and applicable securities laws) and shall deliver to all participating Stockholders a certificate or certificates representing the Offered Shares sold, in each case duly endorsed for transfer or accompanied by appropriate stock transfer powers duly endorsed with signatures guaranteed by a commercial bank, trust company or registered broker dealer. Simultaneously with delivery of the certificates, each of the participating Stockholders shall deliver to the Transferor, in full payment of the purchase price of the Offered Shares purchased, (a) any cash consideration for the shares by wire transfer of immediately available funds to the bank and the account designated by the Transferor and/or (b) any non-cash consideration for the shares in person to the Transferor at Closing. 3.3.6. Assignment of Right of First Refusal A Stockholder may assign its right to purchase the Offered Shares pursuant to Section 3.3.3 hereof to either the Company or any other Stockholder, but to no other person or entity. 3.3.7. Tag-Along Rights To the extent any rights of first refusal are not exercised under this Section 3.3 as to all the Offered Shares or the consideration in any proposed sale is other than cash or promissory notes, the Transferor proposing to effect a Sale of Shares shall afford the Stockholders the opportunity to participate in the sale with the Transferor (the "Tag-Along Right") with each such Stockholder (including the Transferor) participating in the sale pro-rata in proportion to the ownership of the Equity Securities by each of the Stockholders (determined on an as-if converted basis with respect to all then-outstanding securities convertible into Common Stock), and for the same consideration and otherwise on the same terms as specified in the Transfer Notice. In the event that any Stockholder shall propose a Sale of Shares, the Transferor shall provide written notice to the Company and the Stockholders in accordance with Section 3.3, and if the Stockholders intend to participate in the proposed sale, they shall state their intention to participate in the Stockholder Acceptance, as the case may be, delivered to the Transferor in accordance with Section 3.3. -5- 3.4. Obligation to Sell (1) In the event that the Company has received a proposal for any consolidation, merger, sale of all or substantially all of the Company's assets, recapitalization, sale of Equity Securities or other form of business combination in a bona fide arms length transaction with a Third Party (other than a public offering under the Act) (an "Acquisition Offer") and the Stockholders have approved the Acquisition Offer by the affirmative vote of at least two-thirds (2/3) of the outstanding voting Equity Securities (voting on an as-if converted basis with respect to all then-outstanding securities convertible into Common Stock), the Stockholders shall be obligated to, and shall, (a) Transfer to such Third Party all Equity Securities owned by such Stockholder, (b) if stockholder approval of the transaction is required, vote its Equity Securities in favor thereof and (c) take all other actions required in order to effectuate fully the transactions contemplated by such Acquisition Offer. The requirements of this Section 3.4 shall apply only in the event that (a) the per share consideration to be received in the transaction contemplated by the Acquisition Offer is in excess of the applicable Threshold Price and (b) the consideration offered in the transaction contemplated by the Acquisition Offer consists of (i) cash, (ii) securities listed on an established national securities exchange or automated quotation system and registered under the Act or (iii) a combination thereof. (2) The obligations of the Stockholders pursuant to this Section 3.4 are subject to the satisfaction of the following conditions: (a) if any Stockholders of a class or series are given an option as to the form and amount of consideration to be received, all holders of such class or series will be given the same option; and (b) no Stockholder shall be obligated to make any out-of-pocket expenditure prior to the consummation of the transaction contemplated by the Acquisition Offer and no Stockholder shall be obligated to pay more than its pro rata share (based upon the amount of consideration received) of reasonable expenses incurred in connection with the consummation of such transaction to the extent such costs are incurred for the benefit of all Stockholders and are not otherwise paid by the Company or the acquiring party (costs incurred by or on behalf of a Stockholder for its sole benefit will not be considered costs of the transaction hereunder), provided that a Stockholder's liability for such expenses shall be capped at the total purchase price received by such Stockholder for its Equity Securities of the Company. 3.5. Put Rights of the Jensen Interests At any time following the closing of the Tender Offer pursuant to which Acquisition Subsidiary has accepted for payment and purchased shares of Common Stock of the Company (the "Tender Offer Closing"), each of the Jensen Interests shall have the right to sell, and Berger shall have the obligation to purchase, all or any portion of the Equity Securities of the Company held by any of the Jensen Interests. Each of the Jensen Interests may exercise this right with regard to all or a part of the Equity Securities of the Company held by it by sending written notice to Berger requesting that Berger purchase its Equity Securities. The purchase price per share of Common Stock shall be the Put Price Per Share (as defined herein), subject to adjustment as indicated in the definition thereof. The closing of the transaction contemplated by this Section 3.5 shall occur at the Company's principal executive offices on a date agreed to by Berger and the Jensen Interest exercising such right, but the closing shall occur no later than -6- thirty (30) days after Berger's receipt of the notice from the Jensen Interest pursuant to this Section 3.5. At the closing, the Jensen Interest exercising the put right pursuant to this Section 3.5 shall sell, transfer and deliver to Berger full right, title and interest in and to the Equity Securities to be purchased by Berger, free and clear of all liens, security interests or adverse claims of any kind and nature (except as otherwise set forth in the Certificate of Incorporation and this Agreement and applicable securities laws) and shall deliver to Berger a certificate or certificates representing the Equity Securities sold, in each case duly endorsed for transfer or accompanied by appropriate stock transfer powers duly endorsed with signatures guaranteed by a commercial bank, trust company or registered broker dealer. Simultaneously with delivery of the certificates, Berger shall deliver to the Jensen Interest exercising the put right pursuant to this Section 3.5, in full payment of the purchase price of the Equity Securities purchased, cash in an amount equal to the aggregate purchase therefor by wire transfer of immediately available funds to the bank and the account designated by the Jensen Interest. Berger shall deliver to the Jensen Interest exercising the put right pursuant to this Section 3.5, any adjustment to the Put Price Per Share, as determined in accordance with the definition thereof, cash in an amount equal to such adjustment by wire transfer of immediately available funds to the bank and account designated by the applicable Jensen Interest within five (5) calendar days of when the determination of such adjustment can first be made. 4. ADDITIONAL COVENANTS OF THE STOCKHOLDERS AND THE COMPANY 4.1. Books and Records The Company shall keep and maintain adequate and proper books and records of account, in which complete entries are made in accordance with generally accepted accounting principles consistently applied and in accordance with all applicable laws, rules and regulations, reflecting all financial and other transactions of the Company normally or customarily included in books and records of account of companies engaged in the same or similar businesses and activities as the Company. 4.2. Access and Examination Rights The Company shall permit each Stockholder and any agents or representatives thereof to visit and inspect the properties of the Company, to examine and make abstracts from any of the Company's books and records (including agreements, licenses, and similar documents) at any reasonable time and as often as such Stockholder or such agents or representatives may reasonably request, and to discuss the business, operations, prospects, assets, properties, and condition (financial or otherwise) of the Company with any of the officers, directors, employees, agents, or representatives of the Company; provided, however, that such rights of access and examination shall be subject to such security or safety rules and regulations as the Company may have in effect from time to time that are applicable to all visitors to its facilities and to applicable laws and regulations, including those applying to classified material and facilities. 4.3. Financial and Business Information The Company shall furnish to the Stockholders: -7- (1) as soon as available and in any event within 90 days after the end of each fiscal year of the Company, a copy of the audited balance sheet of the Company as of the end of such fiscal year and the related audited statements of income and cash flows for the fiscal year, all prepared in reasonable detail, and certified by independent certified public accountants as presenting fairly the financial position of the Company and approved by the Board of Directors of the Company, including footnotes and setting forth in comparative form the corresponding figures for the corresponding period of the preceding fiscal year. The Company shall also provide the figures for such period set forth in the operating plan and budget delivered by the Company pursuant to subsection (3) hereof; (2) as soon as available and in any event within 45 days after the end of each fiscal quarter of the Company (other than the last quarter of each fiscal year) in the case of quarterly statements and within 30 days after the close of each month of each fiscal year in the case of monthly statements, a copy of the unaudited balance sheet of the Company as of the end of the quarter or month and the related unaudited statements of income and cash flows of the Company for the periods commencing at the end of the previous quarter or month and ending at the end of the quarter or month and commencing at the beginning of the fiscal year and ending at the end of the quarter or month, in each case (a) setting forth in comparative form the corresponding figures for the corresponding period of the preceding fiscal year and the figures for the period set forth in the operating plan and budget delivered by the Company pursuant to subsection (3) hereof and (b) in the case of quarterly financial statements, accompanied by a report from the Company's Chief Financial Officer (or other member of management acting in such capacity) summarizing the Company's financial condition and results of operations during such period and in comparison to the periods set forth in (a) immediately preceding; and 4.4. Defaults; Litigation The Company shall furnish to the Stockholders notifications of any material defaults under any of its contracts or agreements and copies of any litigation brought against the Company, including in each case, a detailed description thereof. 4.5. Additional Information The Company shall furnish to the Stockholders such additional information as the Stockholders may reasonably request. 4.6. Special Meetings The Stockholders agree that, upon a request by a Stockholder that a special meeting of the Company's stockholders be called, the other Stockholders will request the Company to call such a special meeting. -8- 4.7. Stock Ownership Each of the Stockholders hereby represents that as of the date of this Agreement, it owns (free and clear of any liens) the number of issued and outstanding Equity Securities set forth opposite such Stockholder's name on Appendix I hereto. - ---------- 4.8. Status as a Small Business Until such time as the put rights of the Jensen Interests pursuant to Section 3.5 shall be exercised in full, the Stockholders will take all action reasonably necessary to cause the Company to maintain its status as a "Small Business," as defined in the Small Business Investment Act of 1958, as amended, and the regulations thereunder. 4.9. [Intentionally Omitted] 4.10. Protective Provisions Except upon the affirmative vote of at least two-thirds (2/3) of the outstanding voting Equity Securities (voting on an as-if converted basis with respect to all then-outstanding securities convertible into Common Stock) in the aggregate and given in writing or by vote at a meeting, the Company shall not take any of the following actions: (a) amend, repeal or change, directly or indirectly, any of the provisions of the Company's Certificate of Incorporation or Bylaws; (b) consolidate or merge with or into any other corporation or entity, or acquire or purchase all or substantially all of the assets of any other entity, including shares of stock or other evidences of beneficial ownership of other entities; (c) sell, lease, license, assign, pledge, transfer or otherwise dispose of all or substantially of its properties or assets; (d) voluntarily or involuntarily dissolve, liquidate or wind-up its affairs; and (e) enter into any business substantially different from the business currently engaged in by the Company. 4.11. Publicity Each Stockholder hereby covenants and agrees that such Stockholder shall not, directly or indirectly, make any press release or public notice, announcement, or filing available to the public concerning the Company, its Stockholders, or its intended business without prior notice to and reasonable consultation with the other Stockholders, unless such notice and consultation is impracticable under applicable laws or governmental regulations. It is specifically recognized that Stockholders that are subject to the disclosure requirements of the Securities Exchange Act of 1934 or that are making offerings or distributions subject to the Securities Act of 1933 or other applicable laws governing disclosure may, from time to time, be -9- required to make such releases, notices, announcements or filings without the opportunity for prior notice to or reasonable consultation with the other Stockholders. 4.12. Confidentiality Each Stockholder (in its capacity as a Stockholder) hereby covenants and agrees that, unless each other Stockholder otherwise consent in advance in writing, and except as otherwise required by any applicable law or governmental regulation, such Stockholder shall not, directly or indirectly, disclose to anyone other than the Stockholders or the officers or directors of the Company any non-public information regarding this Agreement or the transactions contemplated hereby or the Stockholders or the business of the Company. 4.13. Good Faith Operation of the Company In the event that the Put Price Per Share is calculated using the EBITDA for the twelve (12) full calendar months immediately preceding the Calculation Months, as required by the second sentence of the definition thereof, during the twelve (12) full calendar months immediately following the Calculation Months, Berger shall (i) operate the Company, as nearly as reasonably practicable, in the ordinary course of business and consistent with past practice and (ii) operate the business in good faith and without oppression so as to not deprive the Stockholders who exercised the put right pursuant to Section 3.5 hereof of the reasonable benefits contemplated by the adjustment mechanism in the definition of Put Price Per Share. 4.14. Company Stock Incentive Plan The Stockholders agree that, following the consummation of the transactions contemplated by the Merger Agreement, Berger shall set aside up to five percent (5%) of its stock of the Company for purchase by employees of the Company as a form of incentive compensation arrangement. The total number of shares set aside, the terms and conditions of the purchase transactions and the employees eligible to participate shall be decided by the Stockholders after the consummation of the Merger. 5. REPRESENTATIONS AND WARRANTIES 5.1. Representatives and Warranties of Non-Individual Stockholders Each Stockholder that is a corporation, partnership, limited liability company or trust hereby represents and warrants to each other Stockholder as follows: 5.1.1. Organization and Standing Such Stockholder is duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is organized. Such Stockholder has the corporate, partnership, limited liability company or trust power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. -10- 5.1.2. Authorization Such Stockholder has taken all corporate, partnership, limited liability company or trust action necessary for it to enter into this Agreement and to consummate the transactions contemplated hereby. 5.1.3. Absence of Violation Neither the execution and delivery of this Agreement, or of any document or instrument to be executed and delivered by such Stockholder pursuant hereto, nor the consummation of the transactions contemplated hereby and thereby will constitute a violation of, or default under, or conflict with, or require any consent under (other than a violation or default that has been waived or a consent that has been obtained), any term or provision of the certificate or articles of incorporation or bylaws, partnership agreement, certificate or articles of formation or limited liability company agreement or trust agreement of such Stockholder or any contract, commitment, indenture, lease, or other agreement to which such Stockholder is a party or by which such Stockholder or any of its assets is bound. 5.1.4. Binding Obligation This Agreement constitutes a valid and binding obligation of such Stockholder, enforceable in accordance with its terms, except to the extent that such enforceability may be limited by bankruptcy, insolvency, and similar laws affecting the rights and remedies of creditors generally, and by general principles of equity and public policy; and each document and instrument to be executed by such Stockholder pursuant hereto, when executed and delivered in accordance with the provisions hereof, shall be a valid and binding obligation of such Stockholder, enforceable in accordance with its terms (with the aforesaid exceptions). 5.2. Representations and Warranties of Individual Stockholders Each Stockholder who is an individual hereby represents and warrants to the Company and each other Stockholder as follows: 5.2.1. Power and Authority The Stockholder has the legal capacity and all other necessary power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. 5.2.2. Absence of Violation Neither the execution and delivery of this Agreement, or of any document or instrument to be executed and delivered by such Stockholder pursuant hereto, nor the consummation of the transactions contemplated hereby and thereby will constitute a violation of, or default under, or conflict with, or require any consent under (other than a violation or default that has been waived or a consent that has been obtained), any term or provision of any contract, commitment, indenture, lease, or other agreement to which such Stockholder is a party or by which such Stockholder or any of his assets is bound. -11- 5.2.3. Binding Obligation This Agreement constitutes a valid and binding obligation of such Stockholder, enforceable in accordance with its terms, except to the extent that such enforceability may be limited by bankruptcy, insolvency, and similar laws affecting the rights and remedies of creditors generally, and by general principles of equity and public policy; and each document and instrument to be executed by such Stockholder pursuant hereto, when executed and delivered in accordance with the provisions hereof, shall be a valid and binding obligation of such Stockholder, enforceable in accordance with its terms (with the aforesaid exceptions). 5.3. Representatives and Warranties of the Company The Company hereby represents and warrants to each Stockholder as follows: 5.3.1. Organization and Standing The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. 5.3.2. Authorization The Company has taken all corporate action necessary for it to enter into this Agreement and to consummate the transactions contemplated hereby. 5.3.3. Absence of Violation Neither the execution and delivery of this Agreement, or of any document or instrument to be executed and delivered by the Company pursuant hereto, nor the consummation of the transactions contemplated hereby and thereby will constitute a violation of, or default under, or conflict with, or require any consent under (other than a violation or default that has been waived or a consent that has been obtained), any term or provision of the Certificate of Incorporation or bylaws of the Company or any contract, commitment, indenture, lease, or other agreement to which the Company is a party or by which the Company or any of its assets is bound. 5.3.4. Binding Obligation This Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that such enforceability may be limited by bankruptcy, insolvency, and similar laws affecting the rights and remedies of creditors generally, and by general principles of equity and public policy; and each document and instrument to be executed by the Company pursuant hereto, when executed and delivered in accordance with the provisions hereof, shall be a valid and binding obligation of the Company, enforceable in accordance with its terms (with the aforesaid exceptions). -12- 6. MISCELLANEOUS 6.1. Legend The Stockholders shall cause the certificates or other evidence representing the Equity Securities held by the Stockholders to bear a legend (the "Legend") in substantially the following form: The shares represented by this certificate have not been registered under the Securities Act of 1933 (the "Act") or state securities laws and cannot be offered, sold or otherwise transferred in the absence of registration or the availability of an exemption from registration under the Act and regulations promulgated thereunder and applicable state securities laws. The voting rights with respect to, and sale or other disposition of, the securities represented by this certificate are restricted by and subject to the provisions of a Stockholders' Agreement dated as of July 24, 2001, a copy of which is available for inspection at the offices of the Company. 6.2. Specific Performance With respect to the terms of this Agreement, in addition to any other remedies which the Stockholders may have at law or in equity, each Stockholder hereby acknowledges the harm which might result to the other Stockholders from breaches by it of its obligations to take all necessary actions with respect to the rights and obligations set forth in this Agreement cannot be adequately compensated by damages. Accordingly, each Stockholder agrees that the parties to this Agreement shall have the right to have all obligations and undertakings set forth in this Agreement specifically performed by each other party to this Agreement and that any Stockholder shall have the right to obtain an order or decree of such specific performance in any of the courts of the United States of America or of any state or other political subdivision thereof. 6.3. Effectiveness and Termination (a) This Agreement is effective for all purposes upon the acquisition of shares of Common Stock of the Company pursuant to the Tender Offer contemplated by the Merger Agreement and if the consummation of the acquisition of the shares of Common Stock of the Company pursuant to the Tender Offer contemplated by the Merger Agreement has not been consummated by December 1, 2001, this Agreement shall be void and of no force and effect. In addition, this Agreement shall terminate, and all agreements, covenants and obligations of the parties hereunder shall become wholly void and of no effect, upon the first to occur of (i) the closing date of a Qualified Public Offering, (ii) the closing date of a Change of Control Transaction, (iii) written agreement of all of the Stockholders to terminate this Agreement and (iv) the occurrence of any event which reduces the number of Stockholders to one. (b) When effective, this Agreement shall apply with respect to all Equity Securities of the Company owned by each of the Stockholders at the time of the effectiveness of this Agreement and any other Equity Securities acquired or received by such Stockholder as long as this Agreement is in effect. -13- 6.4. Assignment No Stockholder shall assign this Agreement or its rights or obligations hereunder, in whole or in part, whether by operation of law or otherwise, unless (a) such person shall have obtained the prior written consent of all the other parties, (b) such assignment is in connection with a Transfer of Equity Securities pursuant to Section 3 hereof, (c) such assignment is pursuant to a transfer contemplated by provision (b) of the definition of "Transfer," or (d) such assignment consists solely of the rights to purchase Equity Securities from a Transferor pursuant to Section 3.3.3 hereof and the assignee of such rights is the Company as contemplated by Section 3.3.6 hereof. Any purported assignment of this Agreement contrary to the terms hereof shall be null and void and of no force and effect. 6.5. Entire Agreement; Amendment This Agreement, including the Exhibits hereto, constitutes the entire agreement among the parties hereto with respect to the matters provided for herein, and it supersedes all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by all of the Stockholders. 6.6. Waiver No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Agreement or under any other instruments given in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein. 6.7. No Third Party Beneficiaries It is the explicit intention of the parties hereto that no person or entity other than the parties hereto is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto or their respective successors, heirs, executors, administrators, legal representatives and permitted assigns. 6.8. Binding Effect This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, heirs, executors, administrators, legal representatives and permitted assigns. -14- 6.9. Governing Law This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Delaware (excluding the choice of law rules thereof). 6.10. Notices All notices, demands, requests, or other communications which may be or are required to be given, served, or sent by any party to any other party pursuant to this Agreement shall be in writing and shall be hand-delivered or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by telecopy as follows: (i) If to the Company: EA Engineering, Science, and Technology, Inc. 11019 McCormick Road Hunt Valley, MD 21031 Telecopy No.: (410) 771-1812 Attention: Loren D. Jensen with a copy (which shall constitute notice) to: ----- Semmes, Bowen & Semmes 250 W. Pratt Street Baltimore, Maryland 21201 Telecopy No.: (410) 539-5223 Attention: Cleaveland D. Miller (ii) If to Jensen: Loren D. Jensen c/o EA Engineering, Science, and Technology, Inc. 11019 McCormick Road Hunt Valley, MD 21031 Telecopy No.: (410) 771-1812 with a copy (which shall not constitute notice) to: --------- Hogan & Hartson L.L.P. 111 S. Calvert Street, Suite 1600 Baltimore, MD 21202 Telecopy No.: (410) 539-6981 Attention: Walter G. Lohr, Jr. (iii) If to the Jensen Family Trusts: c/o Ecolair LLP 11019 McCormick Road, Suite 250 -15- Hunt Valley, MD 21031 Attention: Trustee Telecopy No.: (410) 527-3502 (iv) If to Ecolair: Ecolair LLLP 11019 McCormick Road, Suite 250 Hunt Valley, MD 21031 Telecopy No.: (410) 527-3502 Attention: Loren D. Jensen with a copy (which shall not constitute notice) to: --------- Hogan & Hartson L.L.P. 111 S. Calvert Street, Suite 1600 Baltimore, MD 21202 Telecopy No.: (410) 539-6981 Attention: Walter G. Lohr, Jr. -16- (v) If to Berger: The Louis Berger Group, Inc. 100 Halsted Street East Orange, New Jersey 07018 Telecopy No.: (973) 672-4284 Attention: Derish M. Wolff (vi) If to any other Stockholder: To the name and address set forth on the books and records of the Company. Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication which shall be hand-delivered, mailed, transmitted or telecopied in the manner described above, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, or the answerback being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation. 6.11. Execution in Counterparts To facilitate execution, this Agreement may be executed in as many counterparts as may be required; and it shall not be necessary that the signatures of, or on behalf of, each party, or that the signatures of all persons required to bind any party, appear on each counterpart; but it shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on one or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than a number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto. 6.12. Expenses Each party shall pay his or its own expenses incident to the preparation and negotiation of this Agreement, including all legal fees and disbursements. -17- IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have caused this Stockholders Agreement to be duly executed on their behalf, as of the day and year first hereinabove set forth. EA Engineering, Science, and Technology, Inc. By:/s/ David S. Santoro -------------------- Name: David S. Santoro Title: Senior Vice President /s/ Loren D. Jensen ------------------- Loren D. Jensen, Ph.D. Melanie Ann Jensen Irrevocable Trust By: /s/ Allison Ann Jensen ---------------------- Allison Ann Jensen, Trustee Allison Ann Jensen Irrevocable Trust By:/s/ Aaron Keith Jensen ---------------------- Aaron Keith Jensen, Trustee Aaron Keith Jensen Irrevocable Trust By: /s/ Melanie Ann Jensen-Ney -------------------------- Melanie Ann Jensen-Ney, Trustee Ecolair LLLP By:/s/ Loren D. Jensen ------------------- Name: Loren D. Jensen, Ph.D. Title: Its General Partner The Louis Berger Group, Inc. By: /s/ Leon A. Marantz ------------------- Name: Leon A. Marantz Title: Chairman of the Finance Committee EXHIBIT A TO STOCKHOLDERS' AGREEMENT DATED AS OF JULY 24, 2001 ------------------------- DEFINITIONS "Act" shall mean the Securities Act of 1933, as amended. "Agreement" shall mean this Stockholders' Agreement. "Business Day" shall mean Monday through Friday and shall exclude any federal or banking holidays observed in New York City. "Calculation Months" shall mean the twelve (12) full calendar months immediately preceding the closing of the put option transaction pursuant to Section 3.5 hereof. "Change of Control Transaction" shall mean any of the following: (a) a merger or consolidation of the Company into or with any Third Party where the stockholders of the Company immediately prior to such merger or consolidation possess less than a majority of the voting securities of the surviving entity immediately after such merger or consolidation; (b) a single transaction or a series of transactions, whether or not such transactions are related, in which the stockholders of the Company immediately prior to such transaction or first of such series of transactions possess less than a majority of the Company's voting securities immediately after such transaction or series of such transactions (provided that a Qualified Public Offering having such effect shall not be a "Change of Control Transaction"); or (c) a single transaction or series of transactions, whether or not such transactions are related, pursuant to which a Third Party acquires all or substantially all of the Company's assets determined on a consolidated basis. "Common Stock" shall mean the common stock, par value $0.01 per share, of the Company. "Company" shall mean EA Engineering, Science, and Technology, Inc., a Delaware corporation, or any successor thereto. "EBITDA" shall mean the Company's net income or loss before interest expense, taxes, depreciation and amortization, discontinued operations, non- recurring charges, extraordinary items and any changes in accounting practices, all as determined in accordance with GAAP. For purposes of determining EBITDA, Jensen's annual compensation shall be deemed to be $250,000, regardless of his actual compensation during any applicable period. "Effective Date" shall mean the date on which the Agreement is effective. "Equity Securities" shall mean the Common Stock and any warrants or other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock, or any stock or security convertible into or exchangeable for Common Stock or any other stock, security or interest in the Company whether or not convertible into or exchangeable for Common Stock. "GAAP" shall mean United States generally accepted accounting principles. "Net Funded Debt" shall mean all of the indebtedness of the Company, excluding accounts payable and accrued expenses incurred in the ordinary course of business, that is formalized by the issuance of written bank, bond or note obligations of the Company less the value of any cash, cash equivalents or marketable securities of the Company at the time of such determination. For purposes hereof, the amount of Net Funded Debt is determined at the close of business on the day immediately preceding the closing of the exercise of the put right pursuant to Section 3.5 hereof. "Put Price Per Share" shall mean the greater of (i) the Tender Offer Price and (ii) the calculation determined by (1) multiplying the Company's EBITDA during the Calculation Months by six (6), (2) subtracting therefrom the Net Funded Debt and (3) dividing such difference by the number of shares of Common Stock outstanding at the time of the exercise of the put right pursuant to Section 3.5 hereof determined on a fully-diluted basis. Notwithstanding the foregoing, in the event that the EBITDA for the Calculation Months exceeds 150% of the EBITDA for the twelve (12) full calendar months immediately preceding the Calculation Months, then the EBITDA amount to be used in the calculation in the preceding sentence shall equal the sum of (i) 150% of the EBITDA for the twelve (12) full calendar months immediately preceding the Calculation Months and (ii) one-half of the amount that the EBITDA for the Calculation Months exceeds 150% of the EBITDA for the twelve (12) full calendar months immediately preceding the Calculation Months, provided, however, that if the Put Price Per Share is ----------------- calculated using this sentence and the EBITDA for the twelve (12) full calendar months immediately following the Calculation Months is equal to or greater than the EBITDA for the Calculation Months, the Put Price Per Share shall be recalculated on the basis of the EBITDA for the Calculation Months and such recalculation shall constitute a post-closing adjustment to the Put Price Per Share. "Qualified Public Offering" shall mean the public sale of any equity securities of the Company under the Act through a nationally recognized underwriter in which the Company's aggregate net proceeds realized from the offering are at least $30 million, at an offering price per share equal to or greater than the Threshold Price. "Tender Offer" shall mean the tender offer by the Acquisition Company to acquire the outstanding Common Stock of the Company. "Tender Offer Price" shall mean the price pursuant to which the Acquisition Company has purchased certain or all of the outstanding Common Stock of the Company pursuant to the Tender Offer. "Third Party" shall mean any person or entity excluding each of the following: (a) the Company and any affiliate or associate of the Company; or (b) each of the Stockholders and any of their respective successors, officers, directors, affiliates or associates, and partners (limited and general). "Threshold Price" shall mean three times the Tender Offer Price Per Share. "Transfer" means the sale, gift, mortgage, pledge, exchange, assignment or other disposition or transfer, including a disposition under judicial order, legal process, execution, attachment or enforcement of an encumbrance, but shall not include: (a) a transfer by any Stockholder pursuant to the terms of a merger or acquisition agreement to which the Company is a party and which involves all of the Company's Equity Securities; (b) a transfer by a Stockholder to such Stockholder's parents, spouse, children or grandchildren, or to trustees or custodians for their benefit or any entity controlled by any of such persons solely for estate planning purposes or upon the death of the Stockholder, provided that the transferees shall hold the Equity Securities subject to the - -------- ---- terms of this Agreement and, as a condition precedent to such transfers, shall be required to execute and deliver this Agreement; or (c) a transfer by a Stockholder in a public offering registered under the Act. EX-99.D.3 12 dex99d3.txt STOCK VOTING, NON-TENDER AND CONTRIBUTION AGRMNT. EXHIBIT (d)(3) STOCK VOTING, NON-TENDER AND CONTRIBUTION AGREEMENT THIS STOCK VOTING, NON-TENDER AND CONTRIBUTION AGREEMENT (this "Agreement") dated as of July 24, 2001, by and among EA Engineering Holdings, LLC, a Delaware limited liability company ("Parent"), EA Engineering Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent ("Acquiror"), Loren D. Jensen ("Jensen"), and the Melanie Ann Jensen Irrevocable Trust, the Allison Ann Jensen Irrevocable Trust and the Aaron Keith Jensen Irrevocable Trust (collectively, the "Jensen Family Trusts"), Ecolair LLLP, a Maryland limited liability limited partnership ("Ecolair"), and The Louis Berger Group, Inc., a New Jersey corporation ("Berger"). Jensen and the Jensen Family Trusts are referred to herein collectively as the "Stockholders" and individually as a "Stockholder." RECITALS: WHEREAS, simultaneously with entering into this Agreement, Parent, Acquiror and EA Engineering, Science, and Technology, Inc., a Delaware corporation (the "Company"), are entering into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Acquiror will commence a cash tender offer (the "Offer") to purchase all of the issued and outstanding shares of common stock, par value $.01 per share (the "Common Stock") of the Company, at a price of $1.60 per share, and pursuant to which Acquiror will be merged with and into the Company (the "Merger"); WHEREAS, Ecolair and Berger have formed Parent in order to effect the Offer and the Merger through Acquiror, its wholly owned subsidiary; WHEREAS, as of the date hereof, each Stockholder is the record and beneficial owner of the number of shares of Common Stock of the Company (the "Shares") set forth opposite such Stockholders' name on Schedule I hereto; WHEREAS, each Stockholder has agreed that such Stockholder shall not tender any Shares beneficially owned by such Stockholder in the Offer, as set forth herein; WHEREAS, each Stockholder has agreed to vote any Shares beneficially owned by such Stockholder in favor of the Merger and the Merger Agreement and the transactions contemplated thereby if stockholder approval is required and such Stockholder has agreed to vote against any competing offer to acquire the Company; WHEREAS, after the Offer has expired and, subject to the satisfaction of the conditions of the Offer or the waiver of such conditions pursuant to the Merger Agreement, immediately prior to the purchase by Acquiror of the shares of Common Stock of the Company properly tendered and not withdrawn, (i) each Stockholder shall contribute all of his or its issued and outstanding shares of Common Stock of the Company to the Parent in exchange for a membership interest in the Parent, (ii) Ecolair and Berger shall make their initial capital contributions of cash to the Parent pursuant to Section 5.1.1 of the LLC Agreement (as defined herein) of Parent and (iii) Parent shall contribute such shares of Common Stock of the Company and cash to Acquiror; WHEREAS, as an inducement and a condition to entering into the Merger Agreement, Parent has required that each Stockholder, Ecolair and Berger enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual premises, representations, warranties, covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Definitions. For purposes of this Agreement capitalized terms ----------- used and not defined herein have the respective meanings ascribed to them in the Merger Agreement. 2. Non-Tender of Shares. -------------------- (a) Each Stockholder hereby agrees not to tender for acceptance by Acquiror in the Offer any Shares owned by such Stockholder as of the date hereof and any Shares hereafter acquired (all such Shares owned as of the date hereof or hereinafter acquired, the "Securities"). (b) Each Stockholder hereby agrees to permit Parent and Acquiror to publish and disclose in the Offer Documents and, if approval of the stockholders of the Company is required under applicable law, the Proxy Statement (including all documents and schedules filed with the SEC) its identity and intent with respect to the Securities and the nature of its commitments under this Agreement. 3. Voting of Securities. -------------------- (a) Agreement to Vote. Each Stockholder, in its capacity as a ----------------- stockholder of the Company, hereby agrees that during the period commencing on the date hereof and continuing until the earlier of the Effective Time or the termination of this Agreement (such period, the "Voting Period"), at any meeting of the holders of any class or classes of the capital stock of the Company, however called, or in connection with any written consent of the holders of any class or classes of the capital stock of the Company where the Stockholder is entitled to vote, such Stockholder shall vote (or cause to be voted) the Securities (x) in favor of the Merger, and the approval of the terms of the Merger Agreement and each of the other transactions contemplated by the Merger Agreement and this Agreement and any actions required in furtherance thereof, (y) against any action, transaction or agreement that would result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or of such Stockholder under this Agreement, and (z) except as otherwise agreed to in writing in advance by Acquiror, against the following actions (other than the Merger and the transactions contemplated by the Merger Agreement): (i) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its Subsidiaries; (ii) a sale, lease or transfer of a significant part of the assets of the Company or any of its Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of the Company or any of its Subsidiaries; (iii) (A) any change in the Persons who constitute the board of directors of the Company; (B) any change in the present capitalization of the Company or any amendment of the Company's Certificate of Incorporation or By-laws; (C) any other material change in the Company's corporate structure or business; or (D) any other action involving the Company or any of its Subsidiaries which is 2 intended, or could reasonably be expected, to impede, interfere with, delay, postpone, or have a material adverse effect on the Merger and the transactions contemplated by this Agreement or the Merger Agreement. Each Stockholder hereby agrees that such Stockholder shall not enter into any agreement or understanding with any Person the effect of which would be to violate the provisions and agreements contained in this Agreement. (b) Other Proxies Revoked. Each Stockholder represents and warrants --------------------- that any proxies heretofore given in respect of such Stockholder's Securities are not irrevocable, and that all such proxies have been or are hereby revoked. 4. Contribution of Securities and Cash. (a) After the Offer has ----------------------------------- expired and, subject to the satisfaction of the conditions of the Offer or the waiver of such conditions pursuant to the Merger Agreement, immediately prior to the purchase by Acquiror of the shares of Common Stock of the Company properly tendered and not withdrawn, then at such time each Stockholder shall contribute all of his or its issued and outstanding shares of Common Stock of the Company to the Parent in exchange for a membership interest in the Parent and Parent shall admit each Stockholder as a member. As a result of such contribution, Jensen and the Family Trusts shall own a LLC Interest in Parent representing the Percentage Interest in the Parent as set forth opposite such Stockholder's name on Schedule I hereto. Such LLC Interest shall be governed by the Parent's Limited Liability Company Agreement dated as of July 23, 2001 (the "LLC Agreement"). For purposes hereof, the terms "LLC Interest" and "Percentage Interest" shall have the meanings ascribed to such terms in the LLC Agreement. The Parent shall contribute the shares of Common Stock of the Company contributed by the Stockholders to the Acquiror. (b) After the Offer has expired and, subject to the satisfaction of the conditions of the Offer or the waiver of such conditions pursuant to the Merger Agreement, immediately prior to the purchase by Acquiror of the shares of Common Stock of the Company properly tendered and not withdrawn, then at such time Ecolair and Berger shall make their initial capital contributions of cash to the Parent pursuant to Section 5.1.1 of the LLC Agreement of the Parent. 5. Representations and Warranties of each Stockholder. Each -------------------------------------------------- Stockholder, severally and not jointly, hereby represents and warrants to Parent, Acquiror and Berger as follows: (a) Power, etc. Such Stockholder has all necessary power and ---------- authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by such Stockholder and, assuming its due authorization, execution and delivery by each other party hereto, constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms. (b) Ownership of Securities. Such Stockholder is the record and ----------------------- beneficial owner of the Securities listed beside such Stockholder's name on Schedule I attached hereto. The Securities listed on Schedule I constitute all of the shares of capital stock of the Company owned of record or beneficially by such Stockholder as of the date hereof. All of such Securities are issued and are outstanding and except as set forth on Schedule I attached hereto, such Stockholder does not own, of record or beneficially, any warrants, options or other rights to acquire any shares of capital stock of the Company. Such Stockholder has sole voting power and 3 sole power to issue instructions with respect to the matters set forth in Sections 2, 3 and 4 hereof, sole power of disposition, sole power of conversion, sole power to demand appraisal rights and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Securities, with no limitations, qualifications or restrictions on such rights, subject only to applicable laws, the Company's Certificate of Incorporation and the terms of this Agreement. (c) No Conflicts. (i) No filing with, and no permit, authorization, ------------ consent or approval of, any state or federal public body or authority is necessary for the execution of this Agreement by such Stockholder and the consummation by such Stockholder of the transactions contemplated hereby and (ii) none of the execution and delivery of this Agreement by such Stockholder, the consummation by such Stockholder of the transactions contemplated hereby or compliance by such Stockholder with any of the provisions hereof shall (A) conflict with or result in any breach of or constitute (with or without notice or lapse of time or both) a default (or give rise to any third party right of termination, cancellation, material modification or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, contract, commitment, arrangement, understanding, agreement or other instrument or obligation of any kind to which such Stockholder is a party or by which such Stockholder or any of such Stockholder's properties or assets may be bound, or (B) violate any order, writ, injunction, decree, judgment, order, statute, rule or regulation applicable to such Stockholder or any of such Stockholder's properties or assets. (d) No Finder's Fees. Except as disclosed pursuant to the Merger ---------------- Agreement, no broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of such Stockholder. (e) No Encumbrances. The Securities listed beside such Stockholder's --------------- name on Schedule I attached hereto and the certificates representing such Securities are now, and at all times during the term hereof will be, held by such Stockholder, or by a nominee or custodian for the benefit of such Stockholder, free and clear of all liens, claims, security interests, proxies, voting trusts or agreements, understandings or arrangements or any other encumbrances whatsoever, except for any such encumbrances or proxies arising hereunder. (f) Reliance by Acquiror. Such Stockholder understands and -------------------- acknowledges that Parent and Acquiror are entering into the Merger Agreement in reliance upon such Stockholder's execution and delivery of this Agreement. 6. Additional Covenants of each Stockholder. Each Stockholder ---------------------------------------- covenants and agrees as follows: (a) Restriction on Transfer, Proxies and Non-Interference. Such ----------------------------------------------------- Stockholder shall not (i) directly or indirectly, offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to or consent to the offer for sale, transfer, tender, pledge, encumbrance, assignment or other disposition of, any or all of the Securities or any Stock Option or any interest therein; (ii) except as contemplated by this Agreement, grant any proxies or powers of attorney, deposit any of the Securities into a voting trust or enter into a voting agreement with respect to any of the 4 Securities or any Stock Option; (iii) exercise any Stock Option; or (iv) take any action that would make any representation or warranty of such Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling such Stockholder from performing such Stockholder's obligations under this Agreement. (b) Waiver of Appraisal Rights. Such Stockholder hereby irrevocably -------------------------- waives any rights of appraisal or rights to dissent from the Merger that such Stockholder may have. (c) Cooperation. Such Stockholder, in the capacity as a stockholder, ----------- shall cooperate fully with Parent, Acquiror and the Company in connection with their respective efforts to fulfill the conditions to the Merger set forth in Article VII of the Merger Agreement and the conditions to the Offer set forth in Annex A to the Merger Agreement. 7. Fiduciary Duties. Notwithstanding anything in this Agreement to ---------------- the contrary, the covenants and agreements set forth herein shall not prevent any Stockholder serving on the Company's Board of Directors from taking any action, subject to the applicable provisions of the Merger Agreement, while acting in the capacity of a director of the Company. 8. Miscellaneous. ------------- (a) Further Assurances. From time to time, at Acquiror's request and ------------------ without further consideration, each Stockholder shall execute and deliver such additional documents and take all such further lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement. (b) Notices. All notices and other communications hereunder shall be ------- in writing and shall be deemed given if delivered personally, mailed, certified or registered mail with postage prepaid, sent by overnight courier or telecopied to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (i) if to Parent or Acquiror, to: EA Engineering Holdings, LLC 11019 McCormick Road, Suite 250 Hunt Valley, MD 21031 Attention: Loren D. Jensen Facsimile No.: (410) 527-3502 with a copy to: Hogan & Hartson L.L.P. 111 S. Calvert Street, Suite 1600 Baltimore, MD 21202 Attention: Walter G. Lohr, Jr. Facsimile No.: (410) 539-6981 (ii) if to Jensen, to: 5 Loren D. Jensen c/o EA Engineering, Science, and Technology Inc. 11019 McCormick Road Hunt Valley, MD 21031 Facsimile No.: (410) 771-1812 with a copy to: Hogan & Hartson L.L.P. 111 S. Calvert Street, Suite 1600 Baltimore, MD 21202 Attention: Walter G. Lohr, Jr. Facsimile No.: (410) 539-6981 (iii) if to any of the Jensen Family Trusts, to: c/o Ecolair LLP 11019 McCormick Road, Suite 250 Hunt Valley, MD 21031 Attention: Trustee Facsimile No.: (410) 527-3502 (iv) if to Ecolair, to: Ecolair LLLP 11019 McCormick Road, Suite 250 Hunt Valley, MD 21031 Attention: Loren D. Jensen Facsimile No.: (410) 527-3502 with a copy to: Hogan & Hartson L.L.P. 111 S. Calvert Street, Suite 1600 Baltimore, MD 21202 Attention: Walter G. Lohr, Jr. Facsimile No.: (410) 539-6981 (v) if to Berger, to The Louis Berger Group, Inc. 100 Halsted Street East Orange, New Jersey 07018 Facsimile No.: (973) 672-4284 Attention: Derish M. Wolff (c) Interpretation. When a reference is made in this Agreement -------------- to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not 6 affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." (d) Counterparts. This Agreement may be executed in counterparts, ------------ all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. (e) Entire Agreement; No Third-Party Beneficiaries. This Agreement, ---------------------------------------------- including the documents and instruments referred to herein (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (b) is not intended to confer upon any person or entity other than the parties any rights or remedies hereunder. (f) Governing Law. This Agreement shall be governed by, and construed ------------- in accordance with, the laws of the State of Delaware, without regard to the conflict of laws rules thereof. (g) Assignment. Neither this Agreement nor any of the rights, ---------- interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Parent and Acquiror may assign, in their sole discretion, any of or all their rights, interests and obligations under this Agreement to any direct or indirect wholly owned subsidiary of Parent. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. (h) Severability. If any term or other provision of this Agreement is ------------ invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions be consummated as originally contemplated to the fullest extent possible. (i) Enforcement of this Agreement. The parties agree that irreparable ----------------------------- damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity. 8. Termination. This Agreement shall terminate, and no party shall ----------- have any rights or obligations hereunder and this Agreement shall become null and void and have no effect upon the earlier of (i) the termination of the Merger Agreement in accordance with its terms and (ii) the Effective Time of the Merger, except nothing in this Section 8 shall relieve any party of liability for breach of this Agreement. 7 9. Intended Tax Consequences. It is the intention of the parties to ------------------------- this Agreement that, for federal income tax consequences, (1) the transfer by the Stockholders to Parent of all of his or its issued and outstanding shares of Common Stock of the Company, (2) the subsequent contribution by Parent to Acquiror of the shares of Common Stock of the Company received by Parent from the Stockholders, (3) the conversion of Acquiror's shares of common stock into Common Stock of the Company that will occur by operation of law pursuant to the Merger, and (4) the subsequent distribution to the Stockholders of the Common Stock of the Company upon the dissolution of Parent will be considered as circular and transitory steps and will be disregarded. It is also the intention of the parties to this Agreement that, for federal income tax consequences, the formation of Parent and the formation and merger of Acquiror are to be disregarded as transitory as both Parent and Acquiror are entities formed solely to effectuate the Offer and the Merger and will be created and extinguished in an integrated transaction. 8 IN WITNESS WHEREOF, Parent, Acquiror, each Stockholder, Ecolair and Berger have caused this Agreement to be duly executed as of the day and year first above written. EA ENGINEERING HOLDINGS, LLC By: /s/ Loren D. Jensen ------------------- Name: Loren D. Jensen, Ph.D. Title: President EA ENGINEERING ACQUISITION CORPORATION By: /s/ Loren D. Jensen ------------------- Name: Loren D. Jensen, Ph.D. Title: President /s/ Loren D. Jensen ------------------- Loren D. Jensen, Ph.D. MELANIE ANN JENSEN IRREVOCABLE TRUST By: /s/ Allison A. Jensen --------------------- Allison A. Jensen, Trustee ALLISON ANN JENSEN IRREVOCABLE TRUST By: /s/ Aaron K. Jensen ------------------- Aaron K. Jensen, Trustee AARON KEITH JENSEN IRREVOCABLE TRUST By: /s/ Melanie A. Jensen-Ney ------------------------- Melanie A. Jensen-Ney, Trustee ECOLAIR LLLP By: /s/ Loren D. Jensen ------------------- Name: Loren D. Jensen Title: General Partner THE LOUIS BERGER GROUP, INC. By: /s/ Leon A. Marantz ------------------- Name: Leon A. Marantz Title: Chairman of the Finance Committee Schedule I
- ---------------------------------------------------------------------------------------------- Number of Shares ---------------- Stockholder Beneficially Owned Percentage Interest in Parent - ----------- ------------------ ------------------------------- - ---------------------------------------------------------------------------------------------- Loren D. Jensen 1,552,978 26.6% - ---------------------------------------------------------------------------------------------- Melanie Ann Jensen 234,000 4.0% Irrevocable Trust - ---------------------------------------------------------------------------------------------- Allison Ann Jensen 234,000 4.0% Irrevocable Trust - ---------------------------------------------------------------------------------------------- Aaron Keith Jensen 234,000 4.0% Irrevocable Trust - ----------------------------------------------------------------------------------------------
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