EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of February 5, 2002 (this
"AGREEMENT"), by and between INTEGRATED DEFENSE TECHNOLOGIES, INC., a Delaware
corporation (the "COMPANY"), and IDT HOLDING, L.L.C. ("HOLDING").
W I T N E S S E T H :
WHEREAS, the Company and Holding desire to provide for the
circumstances under which the Company will register securities of the Company on
behalf of Holding.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the Company hereby covenants
and agrees with Holding, and with each subsequent holder of Restricted Stock (as
such term is defined herein), as follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall have
the following respective meanings:
"AFFILIATE" shall mean (i) in the case of an entity, any Person
who or which, directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, any
specified Person or (ii) in the case of an individual, such individual's
spouse, children, grandchildren or parents or a trust primarily for the
benefit of any of the foregoing. For purposes of this definition, "CONTROL"
(including with correlative meanings, the terms "CONTROLLING", "CONTROLLED
BY" and under "COMMON CONTROL WITH") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"CERTIFICATE OF INCORPORATION" shall mean the Certificate of
Incorporation of the Company, as amended, in effect on the date hereof.
"COMMISSION" shall mean the Securities and Exchange Commission,
or any other Federal agency at the time administering the Securities Act.
"REGISTRATION EXPENSES" shall mean the expenses so described in
SECTION 7 hereof.
"RESTRICTED STOCK" shall mean shares of Common Stock of the
Company, the certificates for which are required to bear the legend set
forth in SECTION 2 hereof.
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"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in
SECTION 7 hereof.
SECTION 2. RESTRICTIVE LEGEND. Each certificate representing the
Restricted Stock and, except as otherwise provided in Section 3 hereof, each
certificate issued upon exchange or transfer of any such securities shall be
stamped or otherwise imprinted with a legend substantially in the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
NOR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
SECTION 3. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer
of any Restricted Stock (other than under the circumstances described in SECTION
4 or 5 hereof), the holder thereof shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner of the proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel satisfactory to the Company to the effect
that the proposed transfer may be effected without registration under the
Securities Act, whereupon such holder shall be entitled to transfer such
securities in accordance with the terms of its notice; PROVIDED, HOWEVER, that
no such opinion of counsel shall be required for a transfer by a holder of
Restricted Stock (x) to an Affiliate of such holder or (y) in the case of a
holder that is a partnership, to a partner or employee of such holder or a
retired partner or retired employee of such holder who retires after the date
hereof, or to the estate of any such partner, retired partner, employee or
retired employee, or a transfer by gift, will or intestate succession from any
holder of Restricted Stock to his or her spouse or members of his or her or his
or her spouse's family or a trust for the benefit of any of the foregoing
persons, in any such case set forth in clauses (x) and (y), only if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if such transferee were an original holder of Restricted Stock
hereunder. All Restricted Stock transferred as above provided shall bear the
legend set forth in SECTION 2, except that such securities shall not bear such
legend if (i) such transfer is in accordance with the provisions of Rule 144 (or
any other rule permitting public sale without registration under the Securities
Act) or (ii) the opinion of counsel referred to above is to the further effect
that the transferee and any subsequent transferee (other than an affiliate of
the Company) would be entitled to transfer such securities in a public sale
without registration under the Securities Act.
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SECTION 4. REQUIRED REGISTRATION.
(a) At any time following the consummation of an initial public
offering by the Company of its securities, Holding may, by written notice,
request on not more than two occasions that the Company register under the
Securities Act all or any portion of the shares of Restricted Stock held by such
requesting holders for sale in the manner specified in such notice; PROVIDED,
HOWEVER, that the Company shall not be obligated to register Restricted Stock
pursuant to such request: (i) unless at the time of such request, Holding shall
hold in the aggregate 5.0% or more of all outstanding shares of Common Stock on
a fully diluted basis; (ii) in any particular jurisdiction (other than New York)
in which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration when it was
not then so qualified and had not filed such a consent; (iii) during the period
beginning 30 days prior to the filing, and ending on a date 90 days following
the effective date, of a registration statement filed by the Company relating to
an underwritten offering only of the Company's capital stock; or (iv) if counsel
to the Company opines to Holding that the filing of such a registration
statement would require the disclosure of material non-public information about
the Company, the disclosure of which could have a material adverse effect on the
business or financial condition of the Company, in which event no such
registration statement shall be filed until the earlier of the lapse of 90 days
from the issuance of the opinion of Company counsel or the issuance of a
subsequent opinion that such information is no longer required to be disclosed,
is not material or non-public, or its disclosure would not have a material
adverse effect on the business or financial condition of the Company; PROVIDED,
HOWEVER, that the Company may not exercise its right under this clause (iv) more
than once in any 12-month period. Notwithstanding anything to the contrary
contained herein, no request may be made under this SECTION 4 within 360 days
after the effective date of a registration statement filed by the Company
covering a firm commitment underwritten public offering in which the holders of
Restricted Stock shall have been entitled to join pursuant to this SECTION 4 or
SECTION 5 hereof and in which there shall have been effectively registered all
shares of Restricted Stock as to which registration shall have been so requested
(and which requests shall total at least fifty percent of the shares of
Restricted Stock originally purchased by Holding).
(b) Promptly following receipt of any notice under this SECTION 4, the
Company shall file and use its best efforts to have declared effective a
registration statement under the Securities Act for the public sale, in
accordance with the method of disposition specified in such notice from
requesting holders, of the number of shares of Restricted Stock specified in
such notice (and in any notices received from other holders of Restricted Stock
within 20 days after the date of such notice from the Company). If such method
of disposition shall be an underwritten public offering, the Company may
designate the managing underwriter of such offering, subject to the approval of
a majority in interest of the selling holders of Restricted Stock, which
approval shall not be unreasonably withheld. The number of shares of Restricted
Stock to be included in such an underwriting may be reduced if and to the extent
that the managing underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold therein. The Company
shall be obligated to register Restricted Stock pursuant to requests made by
Holding under this SECTION 4 on two occasions only; PROVIDED, HOWEVER, that as
to such occasion such obligation shall be deemed satisfied only when a
registration statement covering all shares of
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Restricted Stock specified in notices received as aforesaid, for sale in
accordance with the method of disposition specified by the requesting holders,
shall have become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been sold
pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this SECTION 4 for which the method of distribution is
an underwritten public offering, for sale in accordance with the method of
disposition specified by Holding, shares of Common Stock to be sold by the
Company for its own account, except as and to the extent that, in the opinion of
the managing underwriter (if such method of disposition shall be an underwritten
public offering), such inclusion would adversely affect the marketing of the
Restricted Stock to be sold. Except with respect to registration statements on
Form S-3 or Form S-8, or as otherwise provided in this paragraph 4(c), the
Company will not file with the Commission any other registration statement with
respect to its Common Stock, whether for its own account or that of other
stockholders, from the date of receipt of a notice from requesting holders
pursuant to this SECTION 4 until the completion of the period of distribution of
the registration contemplated thereby.
SECTION 5. INCIDENTAL REGISTRATION; FORM S-3 REGISTRATION.
(a) If the Company at any time (other than pursuant to Section 4
hereof) proposes to register any of its securities under the Securities Act for
sale to the public, whether for its own account or for the account of other
security holders or both (except with respect to registration statements on Form
S-4 or S-8 or another form not available for registering Restricted Stock for
sale to the public), each such time it will give written notice to all holders
of Restricted Stock of its intention so to do. Upon the written request of any
such holder, given within 20 days after the date of receipt of any such notice,
to register any of its Restricted Stock (which request shall state the intended
method of disposition thereof), the Company will use its best efforts to cause
the Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to permit the sale or
other disposition by the holder (in accordance with its written request) of such
Restricted Stock so registered. The Company may withdraw any such registration
statement before it becomes effective or postpone the offering of securities
contemplated by such registration statement without any obligation to the
holders of any Restricted Stock. In the event that any registration pursuant to
this SECTION 5 shall be, in whole or in part, an underwritten public offering of
Common Stock, any request by a holder pursuant to this SECTION 5 to register
Restricted Stock shall specify that either (i) such Restricted Stock is to be
included in the underwriting on the same terms and conditions as the shares of
Common Stock otherwise being sold through underwriters under such registration
or (ii) such Restricted Stock is to be sold in the open market without any
underwriting, on terms and conditions comparable to those normally applicable to
offerings of common stock in reasonably similar circumstances. The number of
shares of Restricted Stock to be included in such an underwriting may be reduced
if and to the extent that the managing underwriter shall be of the opinion that
such inclusion would adversely affect the marketing of the securities to be sold
by the
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Company therein; PROVIDED, HOWEVER, that if any shares are to be included in
such underwriting for the account of any person other than the Company, the
number of shares to be included by any such person shall be reduced first; and
PROVIDED FURTHER, HOWEVER, that the number of any such shares held by any person
other than the holders of Restricted Stock hereunder shall be reduced before the
number of any such shares held by the holders of Restricted Stock hereunder is
reduced. Notwithstanding anything to the contrary contained in this SECTION 5,
in the event that there is an underwritten offering of securities of the Company
pursuant to a registration covering Restricted Stock and a selling holder of
Restricted Stock does not elect to sell his, her or its Restricted Stock to the
underwriters of the Company's securities in connection with such offering, such
holder shall refrain from selling such Restricted Stock not registered pursuant
to this SECTION 5 during the period of distribution of the Company's securities
by such underwriters and the period in which the underwriting syndicate
participates in the after market; PROVIDED, HOWEVER, that such holder shall, in
any event, be entitled to sell its Restricted Stock in connection with such
registration commencing on the 120th day after the effective date of such
registration statement.
(b) If, at a time when Form S-3 is available for such registration, the
Company shall receive from Holding a written request or requests that the
Company effect a registration on Form S-3 of any of such holder's Restricted
Stock, the Company will promptly give written notice of the proposed
registration to all other holders of Restricted Stock and, as soon as
practicable, effect such registration and all such related qualifications and
compliances as may be requested and as would permit or facilitate the sale and
distribution of all Restricted Stock as are specified in such request and any
written requests of other holders given within 20 days after receipt of such
notice. The Company shall not be required to file a registration statement under
Form S-3 if it would not be required to file a registration statement under
SECTION 4 hereof pursuant to SECTION 4(a)(iv). The Company shall have no
obligation to effect a registration under this SECTION 5(b) unless either (i)
all the outstanding shares of Restricted Stock are requested to be sold pursuant
to such registration or (ii) the aggregate offering price of the securities
requested to be sold pursuant to such registration is, in the good faith
judgment of the Company, expected to be equal to or greater than $1,000,000. Any
registration under this SECTION 5(b) will not be counted as a registration under
SECTION 4 above.
SECTION 6. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of SECTION 4 or 5 hereof to use its best efforts to
effect the registration of any shares of Restricted Stock under the Securities
Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to SECTION 4
hereof, shall be on Form S-1 or other form of general applicability satisfactory
to the managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
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(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph 6(a) above and as to comply with the
provisions of the Securities Act with respect to the disposition of all
Restricted Stock covered by such registration statement in accordance with the
sellers' intended method of disposition set forth in such registration statement
for such period;
(c) furnish to Holding and to each underwriter such number of copies of
the registration statement and the prospectus included therein (including each
preliminary prospectus) as such persons may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Stock covered
by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or blue sky laws of
such jurisdictions as Holding or, in the case of an underwritten public
offering, the managing underwriter shall reasonably request;
(e) immediately notify Holding under such registration statement and
each underwriter, 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 contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein not misleading in the light of the
circumstances then existing;
(f) use its best efforts to furnish, at the request of Holding, on the
date that Restricted Stock is delivered to the underwriters for sale pursuant to
such registration: (i) an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters and
to Holding, stating (A) that such registration statement has become effective
under the Securities Act, (B) that, to the best knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or contemplated
under the Securities Act and (C) that the registration statement and the related
prospectus, and each amendment or supplement thereof, comply as to form in all
material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder (except that such counsel
need not express any opinion as to financial statements contained therein), and
to such other effects as may reasonably be requested by counsel for the
underwriters or by Holding or its counsel, and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters and to Holding, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to the
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registration in respect of which such letter is being given as such underwriters
or Holding may reasonably request; and
(g) make available for inspection by Holding, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by Holding or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any Holding, underwriter, attorney,
accountant or agent in connection with such registration statement.
For purposes of paragraphs 6 (a) and (b) above and of SECTION 4(C)
hereof, the period of distribution of Restricted Stock in a firm commitment
underwritten public offering shall be deemed to extend until each underwriter
has completed the distribution of all securities purchased by it, and the period
of distribution of Restricted Stock in any other registration shall be deemed to
extend until the earlier of the sale of all Restricted Stock covered thereby or
nine months after the effective date thereof.
In connection with each registration hereunder, the selling holders of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as shall be
necessary in order to assure compliance with Federal and applicable state
securities laws.
In connection with each registration pursuant to SECTIONS 4 and 5
hereof covering an underwritten public offering, the Company agrees to enter
into a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature, provided that such
agreement shall not contain any such provision applicable to the Company which
is inconsistent with the provisions hereof and provided, further, that the time
and place of the closing under said agreement shall be as mutually agreed upon
between the Company and such managing underwriter.
SECTION 7. EXPENSES. All expenses incurred by the Company in complying
with SECTIONS 4 and 5 hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and costs of insurance and fees and expenses of counsel for Holding,
but excluding any Selling Expenses, are herein called "Registration Expenses."
All underwriting discounts and selling commissions applicable to the sale of
Restricted Stock are herein called "Selling Expenses." The Company will pay all
Registration Expenses in connection with each registration statement filed
pursuant to SECTION 4 or SECTION 5 hereof. All Selling Expenses incurred in
connection with any sale of Restricted Stock by Holding shall be borne by
Holding, PROVIDED, HOWEVER, if the Company withdraws any registration statement
before it becomes effective with respect to which Holding shall
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have exercised incidental registration rights as contemplated by SECTION 5(A),
the Company shall reimburse Holding for all Selling Expenses incurred in
connection with such registration.
SECTION 8. INDEMNIFICATION. In the event of a registration of any of
the Restricted Stock under the Securities Act pursuant to SECTION 4 or 5 hereof,
the Company will indemnify and hold harmless Holding and each underwriter of
such Restricted Stock thereunder and each other person, if any, who controls
Holding or underwriter within the meaning of the Securities Act, against any and
all losses, claims, damages, expenses or liabilities, joint or several, to which
Holding or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to SECTION 4 or 5, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Holding, each such
underwriter and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, expense or action; PROVIDED, HOWEVER, that
the Company will not be liable in any such case if and to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by Holding, such underwriter or such
controlling person in writing specifically for use in such registration
statement or prospectus.
In the event of a registration of any of the Restricted Stock under the
Securities Act pursuant to SECTION 4 or 5 hereof, each seller of such Restricted
Stock thereunder, severally and not jointly, will indemnify and hold harmless
the Company and each person, if any, who controls the Company within the meaning
of the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Securities Act, against all
losses, claims, damages, expenses or liabilities, joint or several, to which the
Company or such officer or director or underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, expenses or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to SECTION 4
or 5, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, and PROVIDED, HOWEVER, that Holding will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged
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untrue statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to Holding, as such, furnished in writing
to the Company by Holding specifically for use in such registration statement or
prospectus; PROVIDED, FURTHER, HOWEVER, that the liability of Holding hereunder
shall be limited to the proportion of any such loss, claim, damage, liability or
expense which is equal to the proportion that the public offering price of the
shares sold by Holding under such registration statement bears to the total
public offering price of all securities sold thereunder, but not to exceed the
proceeds received by Holding from the sale of Restricted Stock covered by such
registration statement. Promptly after receipt by an indemnified party hereunder
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to any indemnified party under this SECTION 8. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying party to such indemnified party of its
election to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this SECTION 8 for any legal
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation and of liaison with
counsel so selected; PROVIDED, HOWEVER, that, if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select a separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of this SECTION
8 is unavailable to or insufficient to hold harmless an indemnified party under
such paragraphs in respect of any losses,
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claims, damages or liabilities or actions in respect thereof referred to
therein, then each indemnifying party shall in lieu of indemnifying such
indemnified party contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or actions in
such proportion as appropriate to reflect the relative fault of the Company, on
the one hand, and Holding, on the other, in connection with the statement or
omissions which resulted in such losses, claims, damages, liabilities or
actions, as well as any other relevant equitable considerations including the
failure to give any notice under the third paragraph of this SECTION 8. 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 relates to information supplied by the
Company, on the one hand, or by Holding, on the other, and to the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and Holding agree that it would not be just and equitable
if contribution pursuant to this SECTION 8 were determined by PRO RATA
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or action in respect thereof, referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this and the immediately
preceding paragraph, Holding shall not be required to contribute any amount in
excess of the amount, if any, by which the total price at which the Common Stock
sold by it was offered to the public exceeds the amount of any damages which it
would have otherwise been required to pay by reason of such untrue or alleged
untrue statement of omission. 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 is not guilty of such fraudulent
misrepresentation. The indemnification of underwriters provided for in this
SECTION 8 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters. In that event the
indemnification of Holding in such underwriting shall at Holding's request be
modified to conform to such terms and conditions.
SECTION 9. CHANGES IN COMMON STOCK. If, and as often as, there are any
changes in the Common Stock by way of stock split, stock dividend, combination
or reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed.
SECTION 10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Holding as follows (which representations and
warranties shall survive the execution and delivery of this Agreement):
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(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or By-laws of the Company, or any
provision of any indenture, agreement or other instrument to which it or any of
its properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
SECTION 11. RELATIONSHIP TO OTHER AGREEMENT. The rights of Holding and
the Company under this Agreement are subject to the cutback provisions, as
applicable, contained in the Amended and Restated Registration Rights Agreement,
dated as of September 29, 2000, by and between the Company, X.X. Xxxxxxx
Mezzanine Fund, L.P., X.X. Xxxxxxx Market Value Fund, L.P., XxxxxXxxx Capital,
L.P., First Union Investors, Inc. and BNY Capital Partners, L.P.
SECTION 12. RULE 144 REPORTING. The Company agrees as follows:
(a) The Company shall make and keep public information available as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after 90 days following the effective date of the first
registration of the Company under the Securities Act of an offering of its
securities to the general public.
(b) The Company shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under Section 13(a)
or 15(d) of the Exchange Act at any time after the Company has become subject to
such reporting requirements of the Exchange Act.
(c) The Company shall furnish to Holding forthwith upon request (i) a
written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time from and after 90 days following the
effective date of the first registration statement of the Company for an
offering of its securities to the general public), and of the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents so filed as Holding may
reasonably request to avail itself of any rule or regulation of the Commission
allowing Holding to sell any such securities without registration.
11
SECTION 13. MISCELLANEOUS.
(a) The rights arising under SECTIONS 4 and 5 shall terminate when (i)
Holding is no longer an "affiliate" as used in Rule 144 and (ii) Holding is
permitted to sell all Restricted Stock then held by them pursuant to Rule
144(k).
(b) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. Without limiting the generality of the foregoing, the registration rights
conferred herein on Holding shall inure to the benefit of any and all subsequent
holders from time to time of its Restricted Stock for so long as the
certificates representing the Restricted Stock shall be required to bear the
legend specified in SECTION 2 hereof.
(c) All notices, requests and other communications to be given or
otherwise made to any Stockholder or other party hereto shall be deemed to be
sufficient if contained in a written instrument duly transmitted by telecopy or
telex or duly sent by overnight courier service or first class registered or
certified mail, postage prepaid, addressed to such party at the address set
forth below or at such other address as may hereafter be designated in writing
by the addressee to the address or listing all parties:
(a) if to Holding:
IDT Holding, L.L.C.
x/x Xxx Xxxxxxx Xxxxxxx Xxxx, X.X.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxxxx X. XxXxxx and
Xx. Xxxxxx X. Xxxxxxxx
with a copy to:
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxx, Esq.
(b) if to the Company:
Integrated Defense Technologies, Inc.
000 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
12
All notices hereunder shall be effective on the date of transmission if
transmitted by telex or telecopy, on the first day after delivery to an
overnight national courier service if sent by such service and on the date of
receipt if sent by mail.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(e) (I) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY
LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH
COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE
AND ANY CLAIM THAT THE SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN
SECTION 12(C) SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
(II) THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING
SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE COMPANY (X) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF HOLDING HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT HOLDING WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (Y) ACKNOWLEDGES THAT HOLDING HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED HEREIN.
(f) This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be modified or amended except
in writing signed by the Company and Holding.
13
(g) Holding may assign and transfer its rights and obligations
hereunder, provided that any such assignee or transferee shall have assumed in
writing all the obligations of Holding hereunder.
(h) Telefacsimile transmissions of any executed original document
and/or retransmission of any executed telefacsimile transmission shall be deemed
to be the same as the delivery of an executed original. At the request of any
party hereto, Holding shall confirm telefacsimile transmissions by executing
duplicate original documents and delivering the same to the requesting party or
parties. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
INTEGRATED DEFENSE TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
IDT HOLDING, L.L.C.
By: The Veritas Capital Fund, L.P., as Manager
By: /s/ Xxxxxx X. XxXxxx
---------------------------------------------
Name: Xxxxxx X. XxXxxx, a Managing
Member of Veritas Capital
Management, L.L.C., General Partner
