Exhibit 99.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of September 25, 1998, by and between ODS NETWORKS, INC., a
Delaware corporation (the "COMPANY"), and SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION, a Delaware corporation ("SAIC").
RECITALS
The Company and SAIC are parties to an Asset and Securities
Purchase Agreement of even date herewith (the "ASPA"), providing, among other
things, for the purchase by SAIC of shares of common stock of the Company.
The execution and delivery of this Agreement by the Company and
SAIC is a condition to the closing of the transactions contemplated by the
ASPA.
NOW, THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings indicated:
"BUSINESS DAY" means any day except Saturday, Sunday and any day
which shall be a legal holiday.
"CLOSING DATE" means the date of the closing of the ASPA, as
provided in SECTION 2.1 therein.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON STOCK" means the Company's Common Stock, par value $.01 per
share.
"DEMAND REGISTRATION" means the type of registration referred to in
SECTION 2.1(a) hereof.
"HOLDER" or "HOLDERS" means SAIC and any transferee of Registrable
Stock transferred in accordance with SECTION 4.5 hereof.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization and a governmental entity or
any department, agency or political subdivision thereof.
"POTENTIAL MATERIAL EVENT" means any of the following: (a) the
possession by the Company of material non-public information required to be
disclosed or incorporated by reference in the Registration Statement and the
determination in good faith by the Board of Directors of the Company that
disclosure of such information in the Registration Statement at that time
would be detrimental to the business and affairs of the Company; or (b) any
material engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, if disclosed or
incorporated by reference in the Registration Statement at such time, be
materially and adversely affected, which determination shall be accompanied
by a good faith determination by the Board of Directors of the Company that
the Registration Statement would be materially misleading absent the
inclusion of such information.
"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"PROSPECTUS" means the Prospectus included in the Registration
Statement (including, without limitation, a Prospectus that includes any
information previously omitted from a Prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any Prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Stock covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
"REGISTRATION EXPENSES" means all expenses incident to the
Company's performance of or compliance with ARTICLE II hereof, including,
without limitation, all registration, filing fees, NASD fees, all fees and
expenses of complying with securities or blue sky laws, printing expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of "cold comfort" letters required
by or incident to such performance and compliance, and, in the case of a
registration pursuant to SECTION 2.1 the reasonable fees and expenses (not to
exceed $30,000) of Special Counsel to the selling Holders (selected by the
selling Holders representing at least 50% of the Registrable Stock covered by
such registration); PROVIDED, HOWEVER, that Registration Expenses shall
exclude, and the Holders of the Registrable Stock being registered shall pay,
any underwriting discounts, commissions and transfer taxes in respect of the
Registrable Stock being registered.
"REGISTRABLE STOCK" means (a) all Common Stock received by SAIC in
connection with the ASPA and to be received by SAIC and/or Holders upon
exercise of the Warrants (as defined in the ASPA) and (b) any securities
issued or issuable with respect to such shares of Common Stock by way of a
stock dividend or stock split or in connection with a combination or
reclassification of shares, recapitalization, merger, consolidation or other
reorganization or otherwise; PROVIDED, HOWEVER, that any particular
Registrable Stock shall cease to be Registrable
Stock when (x) a Registration Statement with respect to the sale of such
stock shall become effective under the Securities Act and such stock shall
have been disposed of in accordance with such Registration Statement, or
(y) such stock shall have been sold pursuant to Rule 144, or (z) such stock
is transferred without complying with the provisions of SECTION 4.5 hereof;
and PROVIDED, FURTHER, that all Registrable Stock held by a particular Holder
shall cease to be Registrable Stock when all such stock may be disposed of by
such Holder within a single three (3)-month period pursuant to Rule 144.
"REGISTRATION STATEMENT" means the Registration Statement and any
additional Registration Statements contemplated by SECTION 2.1, including (in
each case) the Prospectus, amendments and supplements to such Registration
Statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference in such Registration Statement.
"RULE 144" means Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.
"RULE 158" means Rule 158 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPECIAL COUNSEL" means one special counsel to the Holders
(initially Xxxxxx and Xxxxx, LLP).
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" means a
registration in connection with which securities of the Company are sold to
an underwriter on a firm commitment basis for reoffering to the public
pursuant to an effective Registration Statement.
ARTICLE II
REGISTRATION RIGHTS
2.1 REQUEST FOR REGISTRATION.
(a) On no more than three (3) occasions, Holders of at least
66 2/3% of the Registrable Stock then outstanding may request that the
Company register the offering of up to all of the shares of Registrable Stock
held by the Holders; PROVIDED, HOWEVER, that any such request relates to the
registration of shares having a market value of at least $2,000,000. If so
requested by the Holders initiating such request, such registration shall be
in the form of a shelf registration providing for the registration and resale
of such shares on a continuous or delayed basis (a "SHELF REGISTRATION").
(b) The Company shall not be required to cause any
Registration Statement to be declared effective prior to the first
anniversary of the Closing Date. The Holders shall take into account a
reasonable period of time for preparation of the Registration Statement and
any SEC review period that may be required prior to the effectiveness of the
Registration Statement when making its request for a Demand Registration (a
"REGISTRATION REQUEST"). Such Registration Request shall specify (i) the
number of shares of Registrable Stock held by the requesting Holders that are
requested to be included in such registration and (ii) the intended method of
distribution of such shares. The Company will promptly give notice of such
requested registration to all other Holders of Registrable Stock and, subject
to Section 2.1(c), will include in such registration all shares of
Registrable Stock that Holders of Registrable Stock have requested the
Company to include in such registration by notice to the Company within
20 days after the date of receipt of the Company's notice.
(c) If the Holders initiating a Registration Request intend
to distribute the Registrable Stock covered by such request by means of an
Underwritten Offering, then such Holders shall so advise the Company as a
part of their Registration Request and the Company shall include such
information in the written notice referred to in SECTION 2.1(b). In such
event, the right of the Holders to include their Registrable Stock in such
registration shall be conditioned upon the Holders participation in such
underwriting and the inclusion of the Holders' Registrable Stock in the
underwriting. Any Registrable Stock excluded and withdrawn from such
underwriting shall be withdrawn from the registration. Notwithstanding any
other provision of this Agreement, if the managing underwriter determines in
good faith that marketing factors require a limitation of the number of
shares to be underwritten, then the managing underwriter may exclude shares
(including Registrable Stock) from the registration and the underwriting, and
the number of shares that may be included in the registration and the
underwriting shall be allocated, FIRST, pro rata among the Holders of
Registrable Stock requesting to be included in such registration on the basis
of the number of shares that such Holders have requested be included in the
registration, SECOND, to the Company, THIRD, pro rata among all other
security holders having contractual rights to include their securities in
such registration on the basis of the number of shares that such holders have
requested to be included in the registration, and FOURTH, to all other
security holders requesting to include securities in such registration.
2.2 SELECTION OF MANAGING UNDERWRITER(S). The Company will have
the right to select one or more nationally recognized underwriters to manage
any offering which is the subject of a Demand Registration that is intended
to be an Underwritten Offering.
2.3 RIGHT TO DEFER REGISTRATION. No Registration Request shall
require a Registration Statement requested therein to be filed (i) prior to
the effective date of a registration statement filed by the Company covering
an Underwritten Offering of Common Stock if the Company shall have given
written notice in the manner provided in SECTION 2.4 below of such
Registration Statement to the Holders prior to the receipt of a Registration
Request and shall have thereafter pursued the preparation, filing and
effectiveness of such registration statement with diligence (it being
understood by such Holders that advance notice of the pendency of such
registration may be material, non-public information) or (ii) if the Company
shall furnish to the Holders a certificate signed by the Chairman of the
Board of the Company stating that, in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company
and its stockholders for such registration to be effected at such time, in
which
event the Company shall have the right to defer the filing of the
Registration Statement for a period of not more than sixty (60) days after
receipt of the Registration Request. If the Company shall so postpone the
filing of a Registration Statement, such Holders of Registrable Stock
requesting registration thereof pursuant to SECTION 2.1 shall have the right
to withdraw the request for registration by giving written notice to the
Company within thirty (30) days after receipt of the notice of postponement
and, in the event of such withdrawal, such request shall not count as the
request for registration to which Holders of Registrable Stock are entitled
pursuant to SECTION 2.1 hereof. Any registration requested pursuant to
SECTION 2.1 shall not be deemed to have been effected (i) unless the
Registration Statement with respect thereto has become effective, (ii) if
after it has become effective and prior to the sale of all of the Registrable
Stock covered thereby, such registration is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the selling
Holders and has not thereafter become effective, or (iii) if the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied or waived, other than by
reason of a failure on the part of the selling Holders.
2.4 PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. If, after the first anniversary of
the Closing Date, the Company proposes to register any offering of its
securities under the Securities Act, whether or not for sale for its own
account (other than pursuant to a Demand Registration or on Form X-0, Xxxx X-0
or any successor form), and the registration form to be used permits the
registration of an offering of Registrable Stock by the Holders (a "PIGGYBACK
REGISTRATION"), the Company will give prompt notice to all Holders of
Registrable Stock of its intention to effect such a registration (each a
"PIGGYBACK NOTICE"). Subject to SECTION 2.4(b) below, the Company will
include in such registration all shares of Registrable Stock that the Holders
thereof have requested the Company to include in such registration by notice
to the Company within 20 days after the date of receipt of the Company's
notice. No such registration effected under this SECTION 2.4 shall relieve
the Company of its obligation to effect any registration upon request under
SECTION 2.1.
(b) PRIORITY ON PRIMARY REGISTRATIONS. If any Piggyback
Registration shall be an Underwritten Offering, the right of any such
Holder's Registrable Stock to be included in such Piggyback Registration
shall be conditioned upon such Holder's participation in such underwriting
and the inclusion of such Holder's Registrable Stock in the underwriting to
the extent provided herein. Notwithstanding any other provision of this
Agreement, if the managing underwriter determines in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter may exclude shares (including
Registrable Stock) from the registration and the underwriting, and the number
of shares that may be included in the registration and the underwriting shall
be allocated, FIRST, to the Company, SECOND, pro rata among all security
holders having contractual rights to include their securities in such
registration (including the Holders) on the basis of the number of shares
that such holders have requested (consistent with their contractual rights)
to be included in the registration, and THIRD, to all other security holders
requesting to include securities in such registration. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter. Any Registrable
Stock excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration.
2.5 REGISTRATION PROCEDURES. In connection with any registration
hereunder, the Company will use its best efforts to effect the registration
and the sale of such Registrable Stock in accordance with the intended method
of distribution thereof and will as expeditiously as possible:
(a) prepare and file with the Commission, a Registration
Statement on Form S-3 (or if the Company is not then eligible to register for
resale the Registrable Stock on Form S-3 such registration shall be on
another appropriate form) which shall contain a "Plan of Distribution" in the
form (which shall be reasonable and customary) to be supplied to the Company
in writing by the selling Holders, and use its best efforts to cause the
Registration Statement to become effective and remain effective as provided
herein; PROVIDED, HOWEVER, that within a reasonable period prior to the
filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto, the Company shall furnish to the Holders,
the Special Counsel and any managing underwriters, copies of all such
documents proposed to be filed, which documents will be subject to the
reasonable comments of such Holders, the Special Counsel and such managing
underwriters. The Company shall not file the Registration Statement or any
such Prospectus or any amendments or supplements thereto to which the Holders
of a majority of the Registrable Stock, their Special Counsel, or any
managing underwriters, shall reasonably object on a timely basis;
(b) (i) prepare and file with the Commission such amendments
and post-effective amendments to such Registration Statement as may be
necessary to keep such Registration Statement effective for such period as
shall be required for the disposition pursuant to the terms of such
registration of all Registrable Stock covered thereby (but not to exceed, in
the case of: (A) any Demand Registration (if not a Shelf Registration) or any
Piggyback Registration, 60 days PLUS any additional periods represented by
any "BLACK-OUT PERIOD" (as defined in the last paragraph of this SECTION 2.5)
or (B) any Demand Registration (if a Shelf Registration), the first
anniversary of the effective date of such registration PLUS any additional
periods represented by any Black-Out Period), (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities
Act; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to the Registration Statement or
any amendment thereto and as promptly as reasonably possible provide the
Holders true and complete copies of all correspondence from and to the
Commission relating to the Registration Statement; and (iv) comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Stock covered by the Registration Statement during the applicable
period in accordance with the intended methods of distribution by the Holders
thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented;
(c) furnish to each Holder, the Special Counsel and any
managing underwriters, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with
the Commission;
(d) deliver to each Holder, the Special Counsel, and any
underwriters, without charge, as many copies of the Prospectus or
Prospectuses (including each form of Prospectus) and each amendment or
supplement thereto as such Persons may reasonably request in order to
facilitate the disposition of the Registrable Stock proposed to be sold;
(e) use its best efforts to register or qualify or cooperate
with the selling Holders, any underwriters or its Special Counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Stock for offer and sale
under such other securities or blue sky laws of such jurisdictions as any
Holder or underwriter reasonably requests to keep such registration or
qualification (or exemption therefrom) in effect for as long as the relevant
Registration Statement is in effect and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable Stock
proposed to be sold by such Holder; PROVIDED, HOWEVER, that the Company will
not be required (i) to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this SUBSECTION (e)
or (ii) to consent to general service of process in any such jurisdiction;
(f) notify each Holder of such Registrable Stock, at any time
when a Prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
Prospectus included in such Registration Statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading and, at the request of any such Holder, the
Company will promptly prepare a supplement or amendment to such Prospectus so
that, as thereafter delivered to the purchasers of such Registrable Stock,
such Prospectus will not contain an untrue statement of a material fact or
omit to state any fact necessary to make the statements therein, in light of
the circumstances under which such statements are made, not misleading;
(g) cause all such Registrable Stock to be listed on each
securities exchange on which similar securities issued by the Company are
then listed and to be qualified for trading on each system on which similar
securities issued by the Company are from time to time qualified;
(h) provide a transfer agent and registrar for all such
Registrable Stock not later than the effective date of such Registration
Statement and thereafter maintain such a transfer agent and registrar;
(i) cooperate with the Holders and any managing underwriters
to facilitate the timely preparation and delivery of certificates
representing Registrable Stock to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent
permitted by applicable law, of all restrictive legends, and to enable such
Registrable Stock to be in such denominations and registered in such names as
any such managing underwriters or Holders may request at least two Business
Days prior to any sale of Registrable Stock;
(j) in the case of any Underwritten Offering, enter into such
customary agreements (including an underwriting agreement in form, scope and
substance as is customary in Underwritten Offerings) and take all such other
reasonable actions in connection therewith (including those reasonably
requested by any managing underwriters and the Holders of a majority of the
Registrable Stock being sold) in order to expedite or facilitate the
disposition of such Registrable Stock, and (i) make such representations and
warranties to such Holders and such underwriters as are customarily made by
issuers in Underwritten Offerings; (ii) obtain and deliver copies thereof to
each Holder and the managing underwriters, if any, of opinions of counsel to
the Company and updates thereof addressed to each Holder and each such
underwriter, in form, scope and substance reasonably satisfactory to any such
managing underwriters and Special Counsel to the selling Holders covering the
matters customarily covered in opinions requested in Underwritten Offerings;
(iii) immediately prior to the effectiveness of the Registration Statement,
and at the time of delivery of any Registrable Stock sold pursuant thereto,
obtain and deliver copies to the Holders and the managing underwriters, if
any, of "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or
of any business acquired by the Company for which financial statements and
financial data is, or is required to be, included in the Registration
Statement), addressed to the Company in form and substance as are customary
in connection with Underwritten Offerings; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions
and procedures no less favorable to the selling Holders than those set forth
in ARTICLE III hereof (or such other provisions and procedures acceptable to
the holders of a majority of Registrable Stock participating in such
Underwritten Offering);
(k) make available for inspection by the selling Holders, any
representative of such Holders, any underwriter participating in any
disposition of Registrable Stock, and any attorney or accountant retained by
such selling Holders or underwriters, at the offices where normally kept,
during reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the officers, directors, agents and employees of the Company and its
subsidiaries to supply all information reasonably requested by any such
Holder, representative, underwriter, attorney, accountant or agent in
connection with such Registration Statement;
(l) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months beginning with the first day of the
Company's first full calendar quarter after the effective date of the
Registration Statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
(m) notify the Holders of Registrable Stock to be sold, the
Special Counsel and any managing underwriters as promptly as reasonably
possible when: (i)(A) a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be
filed; (B) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
selling Holders); and (C) with respect to
the Registration Statement or any post-effective amendment, when the same has
become effective; (ii) of any request by the Commission or any state
governmental authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any Proceedings for that purpose;
(iv) if at any time any of the representations and warranties of the Company
contained in any agreement (including any underwriting agreement)
contemplated hereby ceases to be true and correct in all material respects;
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Stock for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (vi) of the occurrence of
any event that requires any revisions to the Registration Statement,
Prospectus or any document incorporated therein by reference so that, in the
case of the Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to state any
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 Holder of shares covered by a Registration Statement agrees that if the
Company has delivered preliminary or final Prospectuses to such Holder and
after having done so the Company shall give notice to such Holder that (i) the
Prospectus needs to be amended or supplemented to comply with the
requirements of the Securities Act, (ii) a stop order suspending the
effectiveness of the Registration Statement is issued by the Commission or
(iii) a Potential Material Event shall exist, then each such Holder shall
immediately cease making offers and sales of Registrable Stock and return all
remaining Prospectuses to the Company. Following such amendment or
supplement, the lifting of any stop order or such time as the Potential
Material Event shall no longer exist, the Company shall promptly provide such
Holders with revised Prospectuses and, following receipt of the revised
Prospectuses, such Holders shall be free to resume making offers of the
Registrable Stock, or any portion thereof. The period during which the
Company exercises its rights as described in this paragraph to postpone,
delay or interrupt the offer and sale of the Registrable Stock (which may not
exceed 90 days during any twelve-month period) or during the pendency of any
stop order, injunction or other order or requirement of the Commission or any
other governmental agency or court shall be referred to herein as a
"BLACK-OUT PERIOD."
2.6 PAYMENT OF EXPENSES. The Company shall pay all Registration
Expenses in connection with any Demand Registration and any Piggyback
Registration.
2.7 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any registration hereunder which is underwritten unless such
Holder (a) agrees to sell such Holder's securities on the basis provided in
any underwriting arrangements approved by the Person or Persons entitled
hereunder to approve such arrangements; (b) completes and executes all
questionnaires, powers of attorney, indemnities, standstill or holdback
agreements, underwriting agreements and other documents required under the
terms of such underwriting arrangements; and (c) if requested by the managing
underwriter, agrees not to sell or otherwise dispose of Registrable Stock or
other Company securities held by such Holder in any transaction other than
pursuant to such underwriting for such period (not to exceed 180 days) as
determined in the discretion of the Board of Directors of the Company (such
agreement to be in writing in a
form satisfactory to the Company and such managing underwriter), PROVIDED,
that no Holder of Registrable Stock shall be required to enter into such an
agreement unless each other Holder of Registrable Stock participating in such
offering enters into a substantially identical agreement relating to such
underwriting. The Company may impose stop-transfer instructions to its
transfer agent with respect to the Registrable Stock and other securities
subject to the restriction described in clause (c) above until the end of the
lock-up period.
2.8 INFORMATION OF THE HOLDERS. As a condition to participation
in any registration hereunder, each Holder shall furnish to the Company such
information regarding such Holder and the distribution proposed by the Holder
as the Company may reasonably request and as shall be required in connection
with any registration, qualification or compliance contemplated by this
Agreement.
2.9 RULE 144 INFORMATION. From and after the first anniversary of
the Closing Date and for so long as necessary in order to permit the Holders
to sell the Registrable Stock pursuant to Rule 144 under the Securities Act,
the Company will file on a timely basis all reports required to be filed by
it pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
referred to in paragraph (c)(1) of Rule 144 under the Securities Act (or, if
applicable, the Company will make publicly available the information
regarding itself referred to in paragraph (c)(2) of Rule 144), in order to
permit the Holders to sell the Registrable Stock, pursuant to the terms and
conditions of the applicable provisions of Rule 144.
ARTICLE III
INDEMNIFICATION
3.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify, to the extent permitted by law, each Holder, its officers and
directors and each Person who controls such Holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained
in any Registration Statement, Prospectus or preliminary Prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by
or contained in any information furnished in writing to the Company by such
Holder, its officers and directors and each Person who controls such Holder
expressly for use therein or by such Holder's failure to deliver a copy of
the Registration Statement or Prospectus or any amendments or supplements
thereto after the Company has furnished such Holder with a sufficient number
of copies of the same.
3.2 INDEMNIFICATION BY HOLDERS. In connection with any
Registration Statement in which a Holder is participating, each such Holder
will, to the extent permitted by law, indemnify the Company, its directors
and officers and each Person who controls the Company (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material
fact contained in the Registration Statement, Prospectus or preliminary
Prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading (but only to the
extent that such untrue statement or omission is contained in any information
furnished in
writing by such Holder expressly for use therein) and any failure by each
such Holder to deliver a copy of the Registration Statement or Prospectus or
any amendments or supplements thereto after the Company has furnished such
Holder with a sufficient number of copies of the same.
3.3 NOTICE: DEFENSE OF CLAIMS. Any Person entitled to
indemnification hereunder will (a) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (b) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to
the indemnified party. If such defense is assumed, the indemnifying party
will not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel (in addition to local counsel) for
all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party a conflict
of interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
3.4 CONTRIBUTION. If the indemnification provided for in this
ARTICLE III is unavailable or insufficient to hold harmless an indemnified
party under SECTION 3.1 or 3.2, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to above (a) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other
from the offering of the securities or (b) if the allocation provided by
clause (a) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (a)
above but also the relative fault of the indemnifying party on the one hand
and the indemnified party on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other equitable considerations. The relative benefits received
by the indemnifying party on the one hand and the indemnified party on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering received by the indemnifying party bear to the total net
proceeds received by the indemnified party. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact related to information supplied by the indemnifying
party or written information supplied by indemnified party, and the parties'
relevant intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this SECTION 3.4 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or
claim that is the subject of this section. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any obligation of a Holder to provide
contribution will be individual to such Holder and will be limited to the net
amount of proceeds received by such Holder from the sale of Registrable Stock
that is the subject of any claim.
3.5 SURVIVAL. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive the
transfer of securities.
ARTICLE IV
MISCELLANEOUS
4.1 NOTICES. All notices and other communications hereunder shall
be in writing and shall be delivered personally or by commercial delivery
service, or mailed by registered or certified mail (return receipt requested)
or sent via facsimile (with confirmation of receipt) to the parties at the
following address (or at such other address for a party as shall be specified
by like notice):
(a) if to the Company, to:
Xxxxxxx Xxxxxxx
Chief Financial Officer
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
Tel: (000) 000-0000
(b) if to the Holder, to:
Xxxxxxx X. Xxxxxxx
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0-X
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Associate General Counsel
Science Applications International Corporation
00000 Xxxxxx Xxxxx Xxxxx, X/X X0
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
(c) If to any other Person who is then the registered Holder:
To the address of such Holder as it appears in the stock
transfer books of the Company or such other address as may
be designated in writing hereafter by such Person.
Notice given by personal delivery, commercial delivery service or
mail shall be effective upon actual receipt. Notice given by facsimile shall
be confirmed by appropriate answer back and shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours.
4.2 REMEDIES CUMULATIVE. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
4.3 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
no amendment, modification, termination or cancellation of this Agreement
shall be effective as to (a) the Company, unless made in writing signed by
the Company or (b) the Holders of Registrable Stock, unless made in writing
signed by the Holders of 66-2/3 of the then outstanding shares of Registrable
Stock.
4.4 SUCCESSORS AND ASSIGNS. This Agreement, and the rights and
obligations hereunder, shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties.
4.5 ASSIGNMENT OF REGISTRATION RIGHTS. The rights of each Holder
hereunder, including the rights to cause the Company to register securities,
may be transferred or assigned by a Holder only to a transferee or an
assignee of not less than 800,000 shares of Registrable Stock (as presently
constituted and subject to adjustments for stock splits, stock dividends,
reverse stock splits, and the like), PROVIDED that the Company is given
written notice at the time of or within a reasonable time after said transfer
or assignment, stating the name and address of the transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and, PROVIDED FURTHER, that the transferee or
assignee assumes in writing the obligations of such Holder under this
Agreement. Any such transferee or assignee shall be deemed a "Holder" for
purposes of this Agreement.
4.6 SEVERABILITY. In the event that any provision of this
Agreement, or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with
a valid and enforceable provision that will achieve, to the extent possible,
the economic, business and other purposes of such void or unenforceable
provision.
4.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
4.8 OTHER AGREEMENTS. After the date hereof, the Company shall
not grant to any holder of securities of the Company any registration rights
which have a priority greater than or equal to those granted to the Holders
pursuant to this Agreement without the prior written consent of the Holders
of at least 50% of the then-outstanding Registrable Stock.
4.9 HEADINGS. The headings of this Agreement are for convenience
only and do not constitute a part of this Agreement.
4.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (other than
the conflicts of law principles thereof).
4.11 FURTHER ASSURANCES. Each party to this Agreement hereby
covenants and agrees, without the necessity of any further consideration, to
execute and deliver any and all such further documents and take any and all
such other actions as may be necessary to appropriately carry out the intent
and purposes of this Agreement and to consummate the transactions
contemplated hereby.
4.12 COUNTERPARTS. This Agreement may be executed in one or more
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, it being understood that
all parties need not sign the same counterpart.
IN WITNESS WHEREOF, the Company and SAIC have executed this
Agreement as of the date first written above.
ODS NETWORKS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx
Chief Financial Officer
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
