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AMENDED AND RESTATED LIMITED LIABILITY COMPANY
OPERATING AGREEMENT
of
IDT HOLDING, L.L.C.
Dated as of December 10, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...................................................1
ARTICLE II FORMATION.....................................................6
ARTICLE III CLASSES OF MEMBERSHIP, CONTRIBUTIONS AND CAPITAL
ACCOUNTS......................................................7
ARTICLE IV ALLOCATIONS AND DISTRIBUTIONS.................................8
ARTICLE V RIGHTS AND DUTIES OF MEMBERS.................................13
ARTICLE VI INDEMNIFICATION OF MEMBERS...................................15
ARTICLE VII MANAGEMENT...................................................16
ARTICLE VIII DISPOSITION OF MEMBERSHIP INTERESTS; OTHER RIGHTS............17
ARTICLE IX ACCOUNTING AND RECORDS; CERTAIN TAX MATTERS..................20
ARTICLE X WITHDRAWALS; ACTION FOR PARTITION; BREACHES..................21
ARTICLE XI DISSOLUTION AND WINDING UP...................................22
ARTICLE XII AMENDMENT....................................................23
Article XIII MISCELLANEOUS PROVISIONS.....................................23
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Amended and Restated
Limited Liability Company Operating Agreement
of
IDT Holding, L.L.C.
This Amended and Restated
Limited Liability Company Operating
Agreement of IDT Holding, L.L.C. (the "COMPANY"), a limited liability company
organized pursuant to the
Delaware Limited Liability Company Act (the "ACT"), is
entered into and shall be effective as of December 10, 1999, by and among The
Veritas Capital Fund, L.P., a
Delaware limited partnership ("VERITAS"), those
employees of PEI Electronics , Inc., a
Delaware corporation ("PEI"), listed on
the signature page hereof and on SCHEDULE A and SCHEDULE B hereto (the "PEI
EMPLOYEES") and those employees of Sierra Tech., Inc., a
Delaware corporation
("Sierra"), listed on the signature page hereof and on SCHEDULE A and SCHEDULE B
hereto (the "SIERRA EMPLOYEES").
WHEREAS, pursuant to the
Limited Liability Company Operating
Agreement, dated as of August 6, 1999 (the "EXISTING OPERATING AGREEMENT"),
among Veritas and certain named employees of PEI (collectively, the "ORIGINAL
MEMBERS"), the Company was originally formed; and
WHEREAS, the Original Members desire to admit Additional Members
upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions contained herein, the parties hereby agree that the Existing
Operating Agreement is hereby amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement unless the context clearly indicates
otherwise, the following terms shall have the following meanings:
"ACT" is defined in the Preamble.
"ADJUSTED INVESTED CAPITAL" means at any time the sum of all amounts
paid by any Class A Member in consideration for Integrated Defense Technologies
Shares plus any additional Capital Contribution made by such Class A Member,
less all distributions made up to the time of reference to such Class A Member
pursuant to SECTION 4.4(b).
"ADDITIONAL MEMBERS" means those Persons admitted as Members of the
Company pursuant to SECTION 3.3.
"AFFILIATE" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by or under common control with such
Person.
"AGREEMENT" means this Amended and Restated
Limited Liability
Company Operating Agreement, as originally executed and as amended from time to
time, as the context requires. Words such as "herein", "hereinafter", "hereto",
"hereby" and "hereunder", when used with reference to this Agreement, refer to
this Agreement as a whole, unless the context otherwise requires.
"AVAILABLE CASH" means the gross cash proceeds of the Company from
all sources less all amounts used to pay or establish reserves for all Company
expenses, all as determined by the Manager. "Available Cash" shall not be
reduced by depreciation, amortization, cost recovery deductions or similar
allowances, but shall be increased by any reductions of reserves previously
established pursuant to the first sentence of this definition.
"BANKRUPTCY" means, with respect to a Person, the occurrence of any
of the following events: (a) the filing by that Person of a petition commencing
a voluntary case in bankruptcy under applicable bankruptcy laws; (b) entry
against that Person of an order for relief under applicable bankruptcy laws; (c)
written admission by that Person of its inability to pay its debts as they
mature, or an assignment by that Person for the benefit of creditors; or (d)
appointment of a receiver for the property or affairs of that Person.
"BUSINESS DAY" means each day of the calendar year other than days
on which banks are required or authorized to close in the State of
Delaware.
"CAPITAL ACCOUNT" means the account maintained for a Member
determined in accordance with ARTICLE III.
"CAPITAL CONTRIBUTION" means the amount of capital to be contributed
by the Members to the Company as set forth on SCHEDULE A or SCHEDULE B, as the
case may be, as may be modified or supplemented from time to time.
"CERTIFICATE OF FORMATION" means the document filed with the
Secretary of State of
Delaware and through which the Company is formed and any
duly authorized, executed and filed amendments or restatements thereof.
"CHANGE OF CONTROL" is defined in SECTION 4.2(b).
"CLASS A MEMBER" means a Member identified on SCHEDULE A at the time
of reference.
"CLASS A MEMBERSHIP INTEREST" means each Class A Membership Interest
described in SECTION 3.1.
"CLASS A PERCENTAGE INTEREST" means, with respect to any Class A
Member, the percentage interest set forth opposite such Class A Member's name on
SCHEDULE A, as it may be modified or supplemented from time to time.
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"CLASS B MEMBER" means a Member identified on SCHEDULE B at the time
of reference.
"CLASS B MEMBERSHIP INTEREST" means each Class B Membership Interest
described in SECTION 3.1.
"CLASS B PERCENTAGE INTEREST" means, with respect to any Class B
Member, the percentage interest set forth opposite such Class B Member's name on
SCHEDULE B, as it may be modified or supplemented from time to time.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time (or any corresponding provisions of succeeding law).
"COMPANY" is defined in the Preamble.
"DISTRIBUTION" means a transfer of property to a Member on account
of a Membership Interest as described in ARTICLE IV.
"EXISTING OPERATING AGREEMENT" is defined in the Preamble.
"FAIR MARKET VALUE" is defined in SECTION 8.4(b).
"FISCAL YEAR" means the fiscal year of the Company, as determined by
the Manager.
"INTEGRATED DEFENSE TECHNOLOGIES" means Integrated Defense
Technologies, Inc., a
Delaware corporation and the holder of all of the issued
and outstanding shares of capital stock of PEI and Sierra.
"INTEGRATED DEFENSE TECHNOLOGIES SHARES" means shares of common
stock, par value $.01 per share, of Integrated Defense Technologies.
"INVESTED CAPITAL" means the amount paid by any Class A Member in
consideration for Integrated Defense Technologies Shares plus any additional
Capital Contribution made by such Class A Member.
"INVESTED CAPITAL CONTRIBUTION DATE" means the date any Class A
Member made a contribution of Invested Capital.
"MANAGER" means the Member that will have the authority and powers
set forth in ARTICLE VII.
"MEMBER" means each Person who is a Class A Member or a Class B
Member.
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"MEMBERSHIP INTEREST" means the rights of a Member in Distributions
(liquidating or otherwise) and allocations of the profits, losses, gains,
deductions, and credits of the Company.
"NET PROFITS" - and "NET LOSS" means, for each Fiscal Year or other
period, an amount equal to the Company's taxable income or loss for such year or
period, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(a) any income of the Company that is exempt from federal income tax
not otherwise taken into account in computing Net Profits or Net Loss
shall be added to such taxable income or loss; and
(b) any expenditures of the Company described in Code Section
705(b)(2)(B) or treated as Code Section 705(b)(2)(B) expenditures pursuant
to Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into
account in computing Net Profits or Net Loss shall be subtracted from such
taxable income or loss.
"ORIGINAL MEMBERS" is defined in the Preamble.
"PEI" is defined in the Preamble.
"PEI CLASS B MEMBER" means a Class B Member employed by PEI.
"PEI EMPLOYEES" is defined in the Preamble.
"PEI REDUCTION PERCENTAGE" is defined in SECTION 4.2(a).
"PEI EMPLOYMENT DATE" is defined in SECTION 4.2(a).
"PEI TERMINATION DATE" is defined in SECTION 4.2(a).
"PERCENTAGE INTEREST" means, with respect to any Member, the total
percentage interest set forth opposite each Member's name on SCHEDULE A or
SCHEDULE B as the case may be, as it may be modified or supplemented from time
to time.
"PERMITTED TRANSFEREE" is defined in SECTION 8.1.
"PERSON" means an individual, trust, estate, or any
incorporated or unincorporated organization permitted to be a member of a
limited liability company under the laws of the State of
Delaware.
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"PRIORITY RETURN" means a sum sufficient to result in a pre-tax 15%
per annum internal rate of return (compounded annually) on the Adjusted Invested
Capital of the Class A Members. Such rate of return shall be calculated
commencing from the Invested Capital Contribution Date.
"PROCEEDING" means any administrative, judicial, or adversary
proceeding, including, without limitation, litigation, arbitration,
administrative adjudication, mediation, and appeal or review of any of the
foregoing.
"PROPERTY" means all of the assets of the Company, both tangible and
intangible or any portion thereof.
"REGULATIONS" means, except where the context indicates otherwise,
the permanent, temporary, proposed, or proposed and temporary regulations of the
Department of the Treasury under the Code, as such regulations may be lawfully
changed from time to time (including corresponding provisions of succeeding
regulations).
"RULE 144" is defined in SECTION 5.2(i).
"SALE TRANSACTION" is defined in SECTION 8.2.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SIERRA" is defined in the Preamble.
"SIERRA CLASS B MEMBER" means a Class B Member employed by Sierra.
"SIERRA EMPLOYEES" is defined in the Preamble.
"SIERRA REDUCTION PERCENTAGE" is defined in SECTION 4.2(B).
"SIERRA EMPLOYMENT DATE" is defined in SECTION 4.2(B).
"SIERRA TERMINATION DATE" is defined in SECTION 4.2(B).
"SUBSIDIARY" means, with respect to any Person, a corporation or
other entity of which more than 50% of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
Integrated Defense Technologies.
"TRANSFER" means, as a noun, any voluntary or involuntary transfer,
sale, or other disposition and, as a verb, voluntarily or involuntarily to sell,
assign, transfer, grant, give away, hypothecate, pledge or otherwise dispose of
and shall include any transfer by will, gift or intestate succession.
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"VERITAS" is defined in the Preamble.
ARTICLE II
FORMATION
This
Limited Liability Company Operating Agreement of IDT Holding,
L.L.C., is entered into and shall be effective as of the date first above
written by and among the Members set forth on the signature pages hereof,
pursuant to the provisions of the Act, on the following terms and conditions:
2.1 ORGANIZATION. The Members hereby organize the Company as a
Delaware
limited liability company pursuant to the provisions of the Act.
2.2 NAME. The name of the Company is "IDT Holding, L.L.C.". All business
conducted in the State of
Delaware shall be conducted under such name. All
business of the Company shall be conducted under that name or under any other
name, but in any case, only to the extent permitted by applicable law. The
Company shall hold all of its property in the name of the Company and not in the
name of any Member.
2.3 TERM. The Company shall be dissolved and its affairs wound up in
accordance with the Act and this Agreement on December 31, 2020, unless the
Company shall be sooner dissolved and its affairs wound up in accordance with
the Act or this Agreement.
2.4 REGISTERED AGENT AND OFFICE. The registered agent for the service of
process and the registered office shall be that Person and location reflected in
the Certificate of Formation as filed in the office of the Secretary of State of
Delaware. The Company may, from time to time, change the registered agent or
office through appropriate filings with the Secretary of State. In the event the
registered agent ceases to act as such for any reason or the registered office
shall change, the Company shall promptly designate a replacement registered
agent or file a notice of change of address, as the case may be.
2.5 PRINCIPAL OFFICE. The principal office of the Company shall be located
c/o Veritas at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
place as may be determined by Veritas. The Company may also have such other
offices as the Veritas may determine.
2.6 PURPOSE. The purpose of the Company is to hold Integrated Defense
Technologies Shares and to engage in any and all lawful businesses and in all
activities necessary, customary, convenient, or incidental to any of the
foregoing.
2.7 STATUTORY COMPLIANCE. The Company shall exist under and be governed
by, and this Agreement shall be construed in accordance with, the applicable
laws of the State of Delaware. The Members shall make all filings and
disclosures required by, and shall otherwise
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comply with, all such laws. The Members shall execute and file in the
appropriate records any assumed or fictitious name certificates and other
documents and instruments as may be necessary or appropriate with respect to the
formation of, and conduct of business by, the Company.
2.8 TITLE TO PROPERTY. All real and personal property owned by the Company
shall be owned by the Company as an entity and no Member shall have any
ownership interest in such property in its individual name or right, and each
Member's interest in the Company shall be deemed personal property for all
purposes. Except as otherwise provided in this Agreement, the Company shall hold
all of its real and personal property in the name of the Company and not in the
name of any Member.
2.9 PAYMENTS OF INDIVIDUAL OBLIGATIONS. The Company's credit and assets
shall be used solely for the benefit of the Company, and no asset of the Company
shall be transferred or encumbered for or in payment of any individual
obligation of a Member.
ARTICLE III
CLASSES OF MEMBERSHIP, CONTRIBUTIONS AND CAPITAL ACCOUNTS
3.1 TWO CLASS OF MEMBERSHIP INTEREST. The Company shall have two classes
of Membership Interests, Class A Membership Interests and Class B Membership
Interests. Each of the Class A Membership Interests and Class B Membership
Interests shall have identical rights, obligations and privileges, except as
otherwise provided in this Agreement.
3.2 CONTRIBUTIONS. The names, addresses, Capital Contributions and Class A
Percentage Interests of the Class A Members are set forth on SCHEDULE A. The
names, addresses, Capital Contributions and Class B Percentage Interests of the
Class B Members are set forth on SCHEDULE B.
3.3 ADDITIONAL MEMBERS. Following formation, the Company may admit one or
more Additional Members from time to time. The Capital Contributions and
Percentage Interests of any Additional Members shall be determined by the
Manager. Upon the admission to the Company of any Additional Members who are
allocated Membership Interests, the Membership Interests of the other Members
shall be reduced accordingly on a PRO RATA basis. SCHEDULE A and SCHEDULE B
shall be amended from time to time in accordance with the foregoing provisions
of this SECTION 3.3 effective as of the effective date of the admission of an
Additional Member to the Company. As a condition to being admitted to the
Company, each Additional Member shall execute an agreement to be bound by the
terms and conditions of this Agreement. In no event shall the aggregate Class B
Percentage Interests exceed 7.5%.
3.4 MAINTENANCE OF CAPITAL ACCOUNTS. The Company shall establish and
maintain Capital Accounts for each Member. Each Member's Capital Account shall
be increased by (i) the amount of any money actually contributed by the Member
to the capital of the Company, (ii) the fair market value of any property
contributed by the Member, as determined by the Company
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and the contributing Member at arm's length at the time of contribution (net of
liabilities assumed by the Company or subject to which the Company takes such
property), and (iii) the Member's share of Net Profits. Each Member's Capital
Account shall be decreased by (i) the amount of any money actually distributed
to the Member from the capital of the Company, (ii) the fair market value of any
property distributed to the Member, as determined by the Company and the
contributing Member at arm's length at the time of distribution (net of
liabilities of the Company assumed by the Member or subject to which the Member
takes such property), and (iii) the Member's share of Net Loss.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations and any amendment or successor provision
thereto.
3.5 ADDITIONAL CAPITAL CONTRIBUTIONS. Other than contributions by
Additional Members, no Member shall be required to make any Capital
Contributions to the Company in excess of the amounts set forth in SCHEDULE A
and SCHEDULE B without the unanimous consent of all of the Members.
3.6 TRANSFERS OF MEMBERSHIP INTERESTS. In the event any Member Transfers
any Membership Interest in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account, Capital Contributions, Invested
Capital and Adjusted Invested Capital of the transferor to the extent it relates
to the transferred Interest.
3.7 OTHER MATTERS.
(a) Except as otherwise provided in this Agreement, no Member shall demand
or receive a return of his Capital Contributions or withdraw from the Company.
No Member shall have the right to withdraw any part of his Capital Contributions
from the Company prior to its liquidation and termination, unless such
withdrawal is permitted under this Agreement.
(b) No Member shall receive any interest, salary, or drawing with respect
to his Capital Contributions or his Capital Account or for services rendered on
behalf of the Company or otherwise in his capacity as a Member, except as
otherwise provided in this Agreement or agreed to by the Members.
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
4.1 ALLOCATION OF NET PROFITS AND NET LOSS OF THE COMPANY. Net Profits and
Net Loss of the Company in each Fiscal Year shall be allocated to the Members as
follows:
(a) NET PROFITS. Net Profits shall be allocated among the Members
as follows:
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(i) first to offset any Net Loss allocated to a Member,
(ii)next to the Class A Members PRO RATA in accordance with
their respective Class A Percentage Interests in an amount equal to
their Priority Return,
(iii) next to the Class B Members PRO RATA in accordance with
their respective Class B Percentage Interests in an amount equal to
the quotient of (A) the aggregate Class B Percentage Interests and
(B) 100%, times the Priority Return allocated under SECTION
4.1(A)(II) and
(iv)thereafter among the Members PRO RATA in accordance with
their respective Percentage Interests.
(b) NET LOSS. Net Loss shall be allocated in proportion to the
Members' positive Capital Account balances.
4.2 REDUCTION OF CLASS B PERCENTAGE INTERESTS. (a) Subject to SECTION
4.2(C), in the event that prior to November 1, 2003 or the fifth anniversary of
the date the subject PEI Class B Member was employed by PEI (the "PEI EMPLOYMENT
DATE"), whichever is later, the employment of a PEI Class B Member by Integrated
Defense Technologies or any of its Subsidiaries on a full time basis terminates
for any reason, then as of the date of such termination of employment (the "PEI
TERMINATION DATE"), the Class B Percentage Interest of such PEI Class B Member
shall be reduced by the following percentage (the "PEI REDUCTION PERCENTAGE"):
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PEI Termination Date PEI Reduction Percentage
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Prior to November 1, 1999 or the first
anniversary of the PEI Employment
Date, whichever is later...................................100%
After October 31, 1999 or the first anniversary of the PEI
Employment Date, whichever is later, but prior to November
1, 2000 or the second anniversary of the PEI Employment
Date, whichever is later....................................80%
After October 31, 2000 or the second anniversary of the PEI
Employment Date, whichever is later, but prior to November
1, 2001 or the third anniversary of the PEI Employment
Date, whichever is later....................................60%
After October 31, 2001 or the third anniversary of the PEI
Employment Date, whichever is later, but prior to November
1, 2002 or the fourth anniversary of the PEI Employment
Date, whichever is later....................................40%
After October 31, 2002 or the fourth anniversary of the PEI
Employment Date, whichever is later, but prior to November
1, 2003 or the fifth anniversary of the PEI Employment
Date, whichever is later....................................20%
After October 31, 2003 or the fifth
anniversary of the PEI Employment
Date, whichever is later.....................................0%
By way of example, if a PEI Class B Member whose EPI Employment Date was
prior to November 1, 1998 were to terminate his employment with Integrated
Defense Technologies or any of its Subsidiaries on December 31, 2001, his Class
B Percentage Interest would be reduced by 40%.
(b) Subject to SECTION 4.2(c), in the event that prior to August 7, 2004
or the fifth anniversary of the date the subject Sierra Class B Member was
employed by Sierra (the "SIERRA EMPLOYMENT DATE"), whichever is later, the
employment of a Sierra Class B Member by Integrated Defense Technologies or any
of its Subsidiaries on a full time basis terminates for any reason, then as of
the date of such termination of employment (the "SIERRA TERMINATION DATE"),
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the Class B Percentage Interest of such Sierra Class B Member shall be reduced
by the following percentage (the "SIERRA REDUCTION PERCENTAGE"):
Sierra Termination Date Sierra Reduction Percentage
----------------------- ---------------------------
Prior to August 7, 2000 or the first
anniversary of the Sierra Employment
Date, whichever is later ..................................100%
After August 6, 2000 or the first anniversary of the Sierra
Employment Date, whichever is later, but prior to August 7,
2001 or the second anniversary of the Sierra Employment
Date, whichever is later................................... 80%
After August 6, 2001 or the second anniversary of the Sierra
Employment Date, whichever is later, but prior to August 7,
2002 or the third anniversary of the Sierra Employment
Date, whichever is later................................... 60%
After August 6, 2002 or the third anniversary
of the Sierra Employment Date, whichever
is later, but prior to August 7, 2003 or the
fourth anniversary of the Sierra Employment
Date, whichever is later................................... 40%
After August 6, 2003 or the fourth anniversary of the Sierra
Employment Date, whichever is later, but prior to August 7,
2004 or the fifth anniversary of the Sierra Employment
Date, whichever is later................................... 20%
After August 6, 2004 or the fifth
anniversary of the Sierra Employment
Date, whichever is later................................... 0%
By way of example, if a Sierra Class B Member whose Sierra Employment Date
was prior to August 7, 1999 were to terminate his employment with Integrated
Defense Technologies or any of its Subsidiaries on December 31, 2002, his Class
B Percentage Interest would be reduced by 40%
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(c) Upon a Change of Control, the PEI Reduction Percentage and the Sierra
Reduction Percentage shall be 0%. For purposes of this agreement, "CHANGE OF
CONTROL" means the occurrence of any of the following events:
(i) Veritas ceases to be the owner of a majority of
the outstanding Percentage Interests;
(ii) Integrated Defense Technologies ceases to be the record
or beneficial owner (as such term is defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934, as amended) of a
majority in the aggregate of the total voting power of all classes
of capital stock of PEI and Sierra then outstanding and normally
entitled to vote on the election of directors; or
(iii) the sale of all or substantially all of the assets of
PEI and Sierra to a third party not Affiliated with Veritas.
(d) Upon a reduction in the Class B Percentage Interest of a Class B
Member in accordance with SECTION 4.2(a) or SECTION 4.2(b), the portion of such
Class B Member's Class B Percentage Interest which is so reduced shall be
allocated to the Class A Members in proportion to their respective Class A
Percentage Interests. In the event of such reduction, such Class B Member shall
be entitled to no payment whatsoever as compensation for such reduction in his
or her Class B Percentage Interest.
4.3 AVAILABLE CASH. Any distributions of Available Cash shall be
made as soon as practicable following the receipt thereof by the Company.
4.4 DISTRIBUTIONS. Available Cash shall be distributed to the
Members as follows:
(a) FIRST, to the Class A Members in proportion to their unpaid Priority
Returns until such time as they have received cumulative distributions under
this SECTION 4.4 equal to their Priority Return;
(b) SECOND, to the Class A Members in proportion to their unreturned
Invested Capital until such time as they have received cumulative distributions
under this SECTION 4.4 equal to all of their Invested Capital;
(c) THIRD to the Class B Members PRO RATA in accordance with their
respective Class B Percentage Interests until such time as they have received an
amount equal to the sum allocated under SECTION 4.1(a)(iii); and
(d) THEREAFTER, to the Members PRO RATA in accordance with their
respective Percentages Interests.
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4.5 AMOUNTS WITHHELD. All amounts withheld pursuant to the Code or any
provision of any state or local tax law with respect to any payment,
distribution or allocation to the Company or the Members shall be treated as
amounts distributed to the Members pursuant to this Section for all purposes
under this Agreement. The Company is authorized to withhold from distributions,
or with respect to allocations, to the Members and to pay over to any federal,
state, or local government any amounts required to be so withheld pursuant to
the Code or any provisions of any other federal, state or local law and shall
allocate such amounts to the Members with respect to which such amount was
withheld.
ARTICLE V
RIGHTS AND DUTIES OF MEMBERS
5.1 LIABILITY OF MEMBERS. No Member shall be liable as such for the
liabilities of the Company. The failure of the Company to observe any
formalities or requirements relating to the exercise of its powers or management
of its business or affairs under this Agreement or the Act shall not be grounds
for imposing personal liability on the Members for liabilities of the Company.
5.2 REPRESENTATIONS AND WARRANTIES. As of the date of this
Agreement, each of the Members hereby represents and warrants to each of
the other Members and the Company as follows:
(a) The Membership Interest being acquired by such Member is being
purchased for such Member's own account and not with a view to, or for sale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act or any applicable state securities laws. Such Member
understands that his, her or its Membership Interest has not been registered
under the Securities Act or any state securities laws by reason of their
contemplated issuance in transactions exempt from the registration and
prospectus delivery requirements thereof and that the reliance of the Company
and others upon such exemptions is predicated in part by the representations and
warranties of such Member contained herein. No other Person has any right with
respect to or interest in the Membership Interest acquired by such Member, nor
has such Member agreed to give any Person any such interest or right in the
future.
(b) Such Member has the requisite power and authority (whether corporate
or otherwise) and legal capacity to enter into, and to carry out his, her or its
obligations under, this Agreement. The execution and delivery by such Member of
this Agreement and the consummation by such Member of the transactions
contemplated hereby have been duly authorized by all necessary action (corporate
or otherwise) on the part of such Member.
(c) This Agreement has been duly executed and delivered by such Member and
constitutes a valid and binding obligation enforceable against such Member in
accordance with its terms.
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(d) Such Member is not subject to, or obligated under, any provision of
(i) any agreement, contracts, arrangement or understanding, (ii) any license,
franchise or permit, or (iii) any law, regulation, order, judgment or decree,
that would be breached or violated, or in respect of which a right of
termination or acceleration or any encumbrance or other lien on any of such
Member's assets would be created, by such Member's execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
(e) No authorization, consent or approval of, waiver or exemption by, or
filing or registration with, any public body, court or other governmental
authority or any other third party is necessary on such Member's part for the
consummation of the transactions contemplated by this Agreement that has not
previously been obtained by such Member.
(f) No Person has or will have, as a result of any act or omission by such
Member, any right, interest or valid claim against the Company or any other
Member for any commission, fee or other compensation as a finder or broker, or
in any similar capacity, in connection with any of the transactions contemplated
by this Agreement.
(g) Neither such Member nor any of its Affiliates is, nor will the Company
as a result of such Member holding an interest in the Company be, an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended.
(h) Such Member is acquiring his, her or its interest in the Company based
upon his, her or its own investigation, and the exercise by such Member of his,
her or its rights and the performance of his, her or its obligations under this
Agreement will be based upon his, her or its own investigation, analysis and
expertise. Such Member has such knowledge and experience in financial and
business matters such that such Member is capable of evaluating the merits and
risks of the investment contemplated by this Agreement and such Member is able
to bear the economic risk of his, her or its investment in the Company
(including a complete loss of his, her or its investment). During negotiation of
the transactions contemplated herein, such Member has been afforded full and
free access to books, financial statements, records, contracts, documents and
other information concerning the Company and Integrated Defense Technologies and
its Subsidiaries, and has been afforded the opportunity to ask questions
concerning the business, operations, financial condition, assets and liabilities
of the Company and Integrated Defense Technologies and its Subsidiaries and
other relevant matters as such Member has deemed necessary or desirable and has
been provided with all such information as has been requested.
(i) Such Member recognizes that no public market exists for the Membership
Interest acquired hereunder, and no representation has been made to such Member
that any such public market will exist in the future. Such Member understands
that he, she or it must bear the economic risk of such Member's investment in
the Company indefinitely unless such Member's Membership Interest is registered
pursuant to the Securities Act or an exemption from such registration is
available, and unless the disposition of such Membership Interest is registered
or qualified under applicable state securities laws or an exemption from such
registration or qualification is available, and that the Company has no
obligation or intention of so registering or
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qualifying such Membership Interest. Such Member understands that there is no
assurance that any exemption from the Securities Act will be available, or, if
available, that such exemption will allow such Member to dispose of or otherwise
Transfer any of or all such Member's Membership Interest, in the amounts or at
the times any such Member might desire. Such Member understands that at the
present time Rule 144 (other than Rule 144(k) promulgated under the Securities
Act by the Securities and Exchange Commission ("RULE 144")) is not applicable to
sale of any of or all such Member's Membership Interest because such Membership
Interest is not registered under Section 12 of the Securities Exchange Act of
1934, as amended, and the information concerning the Company specified in Rule
144 is not publicly available. Such Member acknowledges that the Company is not
presently under any obligation to register under Section 12 of the Securities
Exchange Act of 1934, as amended, or to make publicly available the information
specified in Rule 144 and that it may never be required to do so.
ARTICLE VI
INDEMNIFICATION OF MEMBERS
6.1 GENERAL. The Company, its receiver or its trustee (to the extent of
the Company's assets) shall indemnify, save harmless, and pay all judgments and
claims against each Member or any officers, directors or partners of such Member
relating to any liability or damage incurred by reason of any act performed or
omitted to be performed by such Member, officer or director in connection with
the business of the Company, including attorneys' fees and expenses incurred by
such Member, officer or director in connection with the defense of any action
based on any such act or omission, which attorneys' fees and expenses may be
paid as incurred, including all such liabilities under federal and state
securities laws (including the Securities Act) as permitted by law.
6.2 COMPANY EXPENSES. The Company shall indemnify, save harmless, and pay
all expenses, costs, or liabilities of any Member who for the benefit of the
Company makes any deposit, acquires any option, or makes any other similar
payment or assumes any obligation in connection with any property proposed to be
acquired by the Company, which action shall have been consented to by Veritas,
and who suffers any financial loss as the result of such action.
6.3 LIMITATIONS.
(a) Notwithstanding anything to the contrary in SECTIONS 6.1 and 6.2
above, no Member shall be indemnified from any liability for fraud, bad faith,
willful misconduct, or gross negligence.
(b) Notwithstanding anything to the contrary in SECTIONS 6.1, 6.2 and
6.3(a) above, in the event that any provision of such Sections is determined to
be invalid in whole or in part, the remainder of such Section shall be
enforceable to the maximum extent permitted by law.
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ARTICLE VII
MANAGEMENT
7.1 MANAGEMENT AND AUTHORITY.
(a) THE MANAGER. The Company shall be managed by Veritas (the
"MANAGER"). The Manager shall have such rights, duties and powers as are
specified in this Agreement and the Act.
(b) GENERAL RIGHTS, DUTIES AND POWERS OF THE MANAGER. The Manager is the
general manager and chief executive officer of the Company and shall have
complete and exclusive control over the management of the business of the
Company.
(c) SPECIFIC POWERS AND DUTIES OF THE MANAGER. In addition to the general
powers given to the Manager by law and by this Agreement, except as expressly
limited by the provisions of this Agreement, the Manager shall have the power to
enter into, make, sign, seal, deliver and perform all agreements, contracts,
documents, instruments and other undertakings and to engage in all activities
and transactions as may be necessary or desirable, in the sole discretion of the
Manager, in order to carry out the business of the Company, all on behalf of the
Company, including, without limitation, the following:
(i) to admit Additional Members;
(ii) to acquire, hold, sell, transfer, exchange, pledge and dispose
of Integrated Defense Technologies Shares and exercise all rights, powers,
privileges, and other incidents of ownership or possession with respect
thereto (including voting such stock);
(iii) to open, maintain and close bank accounts and draw
checks or other orders for the payment of money;
(iv) to borrow or raise monies and to secure the payment or
performance of obligations of the Company by mortgage, hypothecation,
pledge or other security assignment of all or any part of the assets of
the Company; and
(d) to otherwise deal in any manner with the assets of the Company.
7.2 MANAGER'S STANDARD OF CARE. The Manager's duty of care in the
performance of its duties to the Company and the other Members is limited to the
performance of such duties in good faith and with that degree of care that an
ordinarily prudent Person in a like position would use under similar
circumstances. In performing such duties, the Manager shall be entitled to rely
on information, opinions, reports or statements, including financial statements
and other financial data, in each case presented or prepared by (i) one or more
agents or employees of the Company, or (ii) counsel, public accountants or other
Persons as to matters that the Manager believes to be within such Person's
professional or expert competence. Except in the case of gross negligence
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or willful misconduct, the Manager shall not be liable to the Company or any
Member for damages for any act or omission taken or suffered by the Manager in
connection with this Agreement or the conduct of the business of the Company.
7.3 COMPENSATION OF MANAGER.
(a) The Manager shall not receive any fees for its services in
administering the Company.
(b) The Manager shall be entitled to reimbursement from the Company for
all out-of-pocket costs and expenses incurred by it, in its reasonable
discretion, for or on behalf of the Company.
ARTICLE VIII
DISPOSITION OF MEMBERSHIP INTERESTS; OTHER RIGHTS
8.1 RESTRICTIONS ON TRANSFER. No Member, other than Veritas and its
Transferees, may directly or indirectly, Transfer all or a portion of his or her
Membership Interest except to a Permitted Transferee or as otherwise expressly
provided in this Agreement. Any purported Transfer in violation of this
Agreement shall be null and void AB INITIO and the Company shall not recognize
any such Transfer or accord to any purported transferee any rights as a Member
of the Company. Each individual Member shall have the right during his or her
lifetime and in the event of his or her death to Transfer any or all of the
Membership Interest owned by him or her, to a Permitted Transferee, provided
that at the time of any such Transfer, each such transferee agrees in writing
(in form and substance satisfactory to the Company) to be bound by all of the
provisions of this Agreement applicable to the Transferring individual Member so
long as he, she or it continues to own any of the Membership Interest so
Transferred. As used herein, "PERMITTED TRANSFEREE" means such individual
Member's spouse or issue, including adopted children, or to a trust for the
exclusive benefit of such individual Member's spouse or issue.
8.2 TAG-ALONG RIGHTS. In the event of a proposed Sale Transaction, Veritas
shall not Transfer any portion of its Membership Interest until the other
Members have been given the opportunity, at their option, exercisable within 10
days after the date of Veritas' written notice of the proposed Sale Transaction,
to sell to the proposed Transferee at the same price and upon the same terms and
conditions offered to Veritas, up to that percentage of the Membership Interest
held by the other Members as is equivalent to the percentage of the Membership
Interest held by Veritas that Veritas proposes to Transfer. In order to be
entitled to exercise their rights to sell their Membership Interests pursuant to
this SECTION 8.2, the other Members must agree to make to the Transferee
substantially the same representations, warranties, covenants, indemnities and
agreements as Veritas agrees to make in connection with the proposed Sale
Transaction.
As used herein, "SALE TRANSACTION" means the Transfer by Veritas
and/or any of its Transferees, in one transaction or a series of transactions
(other than pursuant to a public
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offering under the Securities Act or pursuant to Rule 144 ), of all or any
portion of its or their Membership Interests to one or more Persons or group of
Persons (other than an Affiliate) and, as a result of which, such Person or
group of Persons would own a majority of the outstanding Percentage Interests of
the Company.
8.3 DRAG-ALONG RIGHTS. In the event of a proposed Sale Transaction,
Veritas and/or its Transferees may require that each other Member Transfer his
or her Membership Interest in the Sale Transaction. Each Member will receive in
the Sale Transaction in respect of his or her Membership Interest his or her PRO
RATA portion of the entire consideration to be received by all the Members in or
following the Sale Transaction. Veritas and/or its Transferees shall notify the
other Members at least 10 days in advance of entering into a definitive
agreement in connection with a proposed Sale Transaction. In any such agreement,
the other Members will be required to make the same representations, warranties,
covenants, indemnities and agreements Veritas and/or its Transferees agree to
make in connection with the proposed Sale Transaction.
8.4 PURCHASE RIGHT.
(a) Veritas (and/or its Transferees) is hereby granted the right to
purchase the entire Membership Interest (or at the discretion of Veritas any
portion of the Membership Interest) held by any Member who is a PEI Employee or
a Sierra Employee or who is a Permitted Transferee of a PEI Employee or a Sierra
Employee in the event the employment of such Member (or the transferor of such
Member) by PEI or Sierra, as the case may be, on a full time basis terminates
(i) for cause or such Member voluntarily terminates his employment, with respect
to such Member's Class A Membership Interest, or (ii) for any reason, with
respect to such Member's Class B Membership Interest. Veritas may exercise this
right at any time within the 60-day period immediately following the date such
Member (or transferor of such Member) ceases to be a full-time employee of PEI
or Sierra, as the case may be.
(b) For purposes hereof, "TERMINATION FOR CAUSE" means termination of such
Member's employment by PEI or Sierra, as the case may be, by reason of (i) such
Member's willful dishonesty towards, fraud upon, or deliberate injury or
attempted injury to, or breach of fiduciary duty to PEI or Sierra, as the case
may be; or (ii) conduct by such Member, in connection with the performance of
the duties contemplated that would result in serious prejudice to the interests
of PEI or Sierra, as the case may be, if such Member were to continue to be
employed, including, without limitation, the conviction of a felony or a good
faith determination by the Board of Directors of PEI or Sierra, as the case may
be, that such Member has committed acts involving moral turpitude; or (iii) such
Member's failure to follow reasonable instructions or directions of the Board of
Directors of PEI or Sierra, as the case may be, or any policy, rule or procedure
of PEI or Sierra, as the case may be, in force from time to time.
(c) The purchase price at which Veritas may exercise its purchase right
shall be (i) with respect to any Class A Membership Interest, (x) for any period
until the third anniversary of the Invested Capital Contribution Date, the
Invested Capital of the Member plus 50% of the amount by which, if any, the Fair
Market Value of the Class A Membership Interest exceeds the Invested
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Capital of the Member, or the Fair Market Value of the Class A Membership
Interest, whichever is lower, and (y) for any period after the third anniversary
of the Invested Capital Contribution Date, the Fair Market Value of the Class A
Membership Interest; and (ii) with respect to any remaining Class B Membership
Interest after application of the PEI Reduction Percentage or the Sierra
Reduction Percentage, as the case may be, the Fair Market Value of the Class B
Membership Interest. For purposes of this Agreement "FAIR MARKET VALUE" of the
Membership Interest shall be determined by the Board of Directors of Integrated
Defense Technologies based on the most recent financial statements of PEI and
Sierra available on the date such Member ceases to be a full time employee of
PEI or Sierra, as the case may be.
(d) The purchase right shall be exercisable by written notice delivered to
the Member prior to the expiration of the 60-day purchase period referred to in
SECTION 8.4(a). The notice shall indicate the portion of the Membership Interest
to be purchased, the purchase price and the date on which the purchase is to be
effected, such date to be not more than 30 days after the date of notice.
8.5 MANDATORY SALE.
(a) Any Member who is a PEI Employee or a Sierra Employee or who is a
Permitted Transferee of a PEI Employee or a Sierra Employee shall sell his
entire Class A Membership Interest to Veritas at a purchase price equal to the
Invested Capital of the Member or the Fair Market Value of the Membership
Interest, whichever is greater, in the event the employment of such Member (or
the transferor of such Member) by PEI or Sierra, as the case may be, is
terminated without cause (as defined in SECTION 8.4(b) above).
(b) The sale shall take place within 60 days following the termination of
such Member's employment by PEI or Sierra, as the case may be.
8.6 LEGENDS. If at any time Membership Interests are represented by
certificates, then each such certificate shall have stamped, printed or typed
thereon, in addition to any other legend required by law, the following legends:
THIS CERTIFICATE AND THE MEMBERSHIP INTEREST REPRESENTED HEREBY ARE
SUBJECT TO AND SHALL BE TRANSFERABLE ONLY IN ACCORDANCE WITH THE
PROVISIONS OF A CERTAIN AMENDED AND RESTATED
LIMITED LIABILITY COMPANY
OPERATING AGREEMENT OF IDT HOLDING, L.L.C. DATED AS OF AUGUST 7, 1999,
AMONG THE MEMBERS NAMED THEREIN, A COPY OF WHICH IS ON FILE AT THE
OFFICE OF THE COMPANY.
THE MEMBERSHIP INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES
AND REGULATIONS THEREUNDER (THE "ACT"), OR UNDER
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THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE MEMBERSHIP INTEREST UNDER THE
ACT AND APPLICABLE STATE LAWS OR AN EXEMPTION THEREFROM.
ARTICLE IX
ACCOUNTING AND RECORDS; CERTAIN TAX MATTERS
9.1 RECORDS TO BE MAINTAINED.
(a) The Company shall maintain at its principal office separate books of
account for the Company which shall reflect a true and accurate record of all
costs and expenses incurred, all charges made, all credits made and received,
and all income derived in connection with the operation of the Company business
in accordance with generally accepted accounting principles consistently applied
and, to the extent inconsistent therewith, in accordance with this Agreement.
Each Member shall, at his sole expense, have the right, at any time without
notice to any other Member, to examine, copy, and audit the Company's books and
records during normal business hours.
(b) The Company shall maintain the following records at its
principal office:
(i) A current list of the full name and last known business
address of Member;
(ii) A copy of the Certificate of Formation and all
amendments thereto;
(iii) Copies of the Company's federal, foreign, state and local
income tax returns and reports, if any, for the six most recent years;
(iv) Copies of this Agreement, including all amendments
thereto;
(v) Any financial statements of the Company for the six most
recent Fiscal Years;
(vi) A writing or other data compilation from which information can
be obtained through retrieval devices into reasonably usable form setting
forth the following:
(A) the amount of cash and a description and statement of the
agreed value of the other property or services contributed by each
Member and which each Member has agreed to contribute;
-20-
(B) any right of a Member to receive, or of the Company to
make, distributions to a Member which include a return of all or any
part of Member's Capital Contribution; and
(C) any events upon the happening of which the Company is to
be dissolved and its affairs wound up.
9.2 REPORTS.
(a) The Company shall be responsible for the preparation of financial
reports of the Company and the coordination of financial matters of the Company
with the Company's accountants.
(b) Within ninety (90) days after the end of each Fiscal Year and within
sixty (60) days after the end of any fiscal quarter, the Company shall cause
each Member to be furnished with a copy of the balance sheet of the Company as
of last day of the applicable period, a statement of income or loss of the
Company such period, and a statement of the Company's cash flow for such period.
Annual statements shall also include a statement of the Members' Capital
Accounts and changes therein for such Fiscal Year. Annual statements shall be
reviewed by the accountants.
9.3 TAX RETURNS; INFORMATION. The Company shall arrange for the
preparation of all income and other tax returns of the Company and shall cause
the same to be filed in a timely manner. The Company shall furnish to each
Member a copy of each such return, together with any schedules or other
information each Member may require in connection with such Member's own tax
affairs.
9.4 TAX MATTERS MEMBER. Veritas is specifically authorized to act
as the Tax Matters Member under the Code and in any similar capacity under
state or local law.
ARTICLE X
WITHDRAWALS; ACTION FOR PARTITION; BREACHES
10.1 WAIVER OF PARTITION. No Member shall, either directly or indirectly,
take any action to require partition, file a xxxx for Company accounting or
appraisement of the Company or of any of its assets or properties or cause the
sale of any Company property; and, notwithstanding any provisions of applicable
law to the contrary, each Member (and each of his legal representatives,
successors, or assigns) hereby irrevocably waives any and all rights it may have
to maintain any action for partition or to compel any sale with respect to his
Company interest, or with respect to any assets or properties of the Company,
except as expressly provided in this Agreement.
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10.2 COVENANT NOT TO WITHDRAW OR DISSOLVE. Notwithstanding any provision
of the Act, but except as otherwise provided in this Agreement, each Member
hereby covenants and agrees that the Members have entered into this Agreement
based on their mutual expectation that all Members will continue as Members and
carry out the duties and obligations undertaken by them hereunder and that,
except as otherwise expressly required or permitted hereby, each Member hereby
covenants and agrees not to (a) take any action to file a certificate of
dissolution or its equivalent with respect to itself, (b) take any action that
would cause voluntary bankruptcy of such Member, (c) withdraw or attempt to
withdraw from the Company, (d) exercise any power under the Act to dissolve the
Company, (e) transfer all or any portion of his interest in the Company, (f)
petition for judicial dissolution of the Company, or (g) demand a return of such
Member's contributions or profits (or a bond or other security for the return of
such contributions or profits) without the unanimous consent of the Members.
ARTICLE XI
DISSOLUTION AND WINDING UP
11.1 DISSOLUTION; LIQUIDATING EVENTS. The Company shall be
dissolved and its affairs wound up upon the first to occur of the
following events:
(a) the expiration of the term of this Agreement, unless the
business of the Company is continued with the written consent of the
Manager;
(b) the determination the Manager; and
(c) the sale of substantially all of the assets of the Company.
11.2 EFFECT OF DISSOLUTION. Upon dissolution, the Company shall cease
carrying on as distinguished from the winding up of the Company business, but
the Company is not terminated, but continues until the winding up of the affairs
of the Company is completed and the certificate of dissolution has been issued
by the Secretary of State of the State of Delaware.
11.3 DISTRIBUTION OF ASSETS ON DISSOLUTION. Upon the winding up of
the Company, the Company's assets shall be distributed:
(a) to creditors, including Members who are creditors to the
extent by law, in satisfaction of Company liabilities; and
(b) to Members in accordance with SECTION 4.4. Such distributions shall be
in cash or property (which need not be distributed proportionately) or partly in
both, as determined by the Manager.
11.4 WINDING UP AND CERTIFICATE OF DISSOLUTION. The winding up of the
Company shall be completed when all debts of the Company have been paid and
discharged or reasonably adequate provision therefor has been made, and all of
the remaining assets of the Company have
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been distributed to the Members. Upon the completion of winding up of the
Company, a certificate of dissolution shall be delivered to the Secretary of
State of the State of Delaware for filing. The certificate of dissolution shall
set forth the information required by the Act.
ARTICLE XII
AMENDMENT
12.1 AGREEMENT MAY BE AMENDED. This Agreement may be amended by Veritas;
provided, however, that no such amendment may, except as otherwise herein
provided, (a) adversely affect a Member's Percentage Interest, or (b) adversely
affect any payments to which a Member or a former Member has become entitled
pursuant to this Agreement.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 ENTIRE AGREEMENT. This Agreement represents the entire agreement
among all the Members and between the Members and the Company with respect to
the subject matter hereof, and supersedes any and all prior agreements and
understandings with respect to the subject matter hereof.
13.2 LOANS BY MEMBERS. Loans by Members to the Company shall be
made voluntarily and only upon such terms and conditions as the Members
may determine.
13.3 NO PARTNERSHIP INTENDED FOR NONTAX PURPOSES. The Members have formed
the Company under the Act, and expressly do not intend hereby to form a
partnership under any partnership or limited partnership act. The Members do not
intend to be partners one to another, or partners as to any third party. To the
extent any Member, by word or action, represents to another person that any
other Member is a partner or that the Company is a partnership, the Member
making such wrongful representation shall be liable to any other Member who
incurs personal liability by reason of such wrongful representation.
13.4 RIGHTS OF CREDITORS AND THIRD PARTIES UNDER AGREEMENT. This Agreement
is entered into among the Company and the Members for the exclusive benefit of
the Company, its Members, and their successors and assigns. This Agreement is
expressly not intended for the benefit of any creditor of the Company or any
other Person. Except and only to the extent provided by applicable statute, no
such creditor or third party shall have any rights under this Agreement or any
agreement between this Company and any Member with respect to any Capital
Contribution or otherwise.
13.5 NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this Agreement shall
confer upon any Member any right to continue in the service of Integrated
Defense Technologies, PEI or Sierra (or any parent corporation, Subsidiary, or
Affiliate thereof) for any period of time
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or restrict in any way the rights of the Integrated Defense Technologies, PEI or
Sierra (or any parent corporation, Subsidiary or Affiliate thereof), to
terminate any such Member's employment at any time for any reason whatsoever,
with or without cause.
13.6 NO WAIVER. The failure of the Company or Veritas (or assignees of the
Company or Veritas) in any instance to exercise any rights granted under this
Agreement shall not constitute a waiver of any other rights that may
subsequently arise under the provisions of this Agreement or any other agreement
between or among the Company, Veritas and a Member. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different nature.
13.7 NOTICES. Any notice, payment, demand, or communication required or
permitted to be given by any provision of this Agreement shall be in writing and
sent by overnight courier, or by telephone or facsimile, if such telephone
conversation or facsimile is followed by a hard copy of the telephone
conversation or facsimilied communication sent by overnight courier, charges
prepaid, addressed as reflected on SCHEDULE A or SCHEDULE B or to such other
address as such Person may from time to time specify by notice to the Members.
Any such notice shall be deemed to be delivered, given, and received as of the
date so delivered.
13.8 BINDING EFFECT. Except as otherwise provided in this Agreement, every
covenant, term and provision of this Agreement shall be binding upon and inure
to the benefit of the Members and their respective successors, transferees and
assigns.
13.9 CONSTRUCTION. Every covenant, term, and provision of this Agreement
shall be construed simply according to its fair meaning and not strictly for or
against any Member.
13.10 HEADINGS. Section and other headings contained in this Agreement are
for reference purposes only and are not intended to describe, interpret, define,
or limit the scope, extent, or intent of this Agreement or any provision hereof.
13.11 SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement.
13.12 INCORPORATION BY REFERENCE. Each Schedule attached to this
Agreement and referred to herein is incorporated in this Agreement by
reference and made a part hereof as if fully set forth herein.
13.13 FURTHER ACTION. Each Member agrees to perform all further acts and
execute, acknowledge, and deliver any documents which may be reasonably
necessary, appropriate, or desirable to carry out the provisions of this
Agreement.
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13.14 VARIATION OF PRONOUNS. All pronouns and any variations
thereof shall be deemed to refer to masculine, feminine, or neuter,
singular or plural, as the identity of the Person or Persons may require.
13.15 GOVERNING LAW. The laws of the State of Delaware (without reference
to its choice of laws principles) shall govern the validity of this Agreement,
the construction of its terms, and the interpretation of the rights and duties
of the Members.
13.16 COUNTERPART EXECUTION. This Agreement may be executed in any
number of counterparts with the same effect as if all of the Members had
signed the same document. All counterparts shall be construed together
and shall constitute one agreement.
13.17 CONSENT TO JURISDICTION. Each Member hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York or the United States of America located in New York
City for any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby and agrees not to commence
any action, suit or proceeding relating hereto except in such courts, and
further agrees that service of any process, summons, notice or document by
United States registered or certified mail shall be effective service of process
for any action, suit or proceeding brought in any court. Each of the parties
hereto hereby irrevocably and unconditionally waives any objection to personal
jurisdiction and the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby, in the courts of
the State of New York or the United States of America located in the New York
City, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
THE VERITAS CAPITAL FUND, L.P.
By Veritas Capital Management, L.L.C.
General Partner
By: /s/ Xxxxxx X. XxXxxx
-----------------------------------
Xxxxxx X. XxXxxx, Member
[PEI EMPLOYEES AND PERMITTED TRANSFEREES]
[SIERRA EMPLOYEES AND PERMITTED TRANSFEREES]
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Amendment No. 1 to the
Amended and Restated
Limited Liability Company Operating Agreement of
IDT Holding, L.L.C.
This Amendment No. 1 (this "AMENDMENT") to the Amended and Restated
Limited Liability Company Operating Agreement of IDT Holding, L.L.C., a Delaware
limited liability company (the "COMPANY"), is entered into as of February 25,
2000 by and among The Veritas Capital Fund, L.P., a Delaware limited partnership
("Veritas"), and the Persons listed as Additional Members on the signature page
hereof (the "ADDITIONAL MEMBERS").
WHEREAS, the Company was formed pursuant to that certain
Limited Liability
Company Operating Agreement dated as of August 6, 1999 among Veritas and certain
named employees of PEI, as amended by that certain Amended and Restated Limited
Liability Company Operating Agreement dated as of December 10, 1999 among
Veritas and certain named employees of PEI and Sierra (the "OPERATING
AGREEMENT");
WHEREAS, the Members desire to admit the Additional Members to the
Company, including, without limitation non-employee directors of Integrated
Defense Technologies ("DIRECTOR CLASS B MEMBERS"), and to make certain
amendments to the Operating Agreement;
NOW, THEREFORE, in consideration of the mutual agreements made herein, the
Members hereby agree to amend the Operating Agreement as follows:
1. Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed to them in the Operating Agreement.
2. Effective as of the date hereof, the Persons listed as Additional
Members on the signature page hereof are hereby admitted to the Company.
3. SCHEDULE A and SCHEDULE B to the Operating Agreement are hereby amended
in the forms annexed hereto to reflect the names, addresses, Capital
Contributions, Class A Percentage Interests and Class B Percentage Interests of
the Members after the admission of the Additional Members to the Company, the
increased Class B Percentage Interest of certain Class B Members and the
decreased Class B Percentage Interest of certain Class B Members.
4. For purposes of the Operating Agreement, employees of Excalibur Systems
Limited, an Ontario corporation and a wholly-owned subsidiary of Sierra
("EXCALIBUR"), shall be deemed to be Sierra Employees. The Sierra Employment
Date of the Additional Member who is an employee of Excalibur shall be deemed to
be January 31, 2000 for purposes of Section 4.2(c) of the Operating Agreement.
5. Section 4.2(c) is hereby amended to read in its entirety as
follows:
"(c) Upon a Change of Control, the PEI Reduction Percentage, the
Sierra Reduction Percentage and the Director Reduction Percentage (as
defined in Section
4.2(e)) shall be 0%. For purposes of this Agreement, "CHANGE OF
CONTROL" means the occurrence of any of the following events:
(i) Veritas ceases to be the owner of a majority of
the outstanding Percentage Interests;
(ii) Integrated Defense Technologies ceases to be the record
or beneficial owner (as such term is defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934, as amended) of a
majority in the aggregate of the total voting power of all classes
of capital stock of PEI and Sierra then outstanding and normally
entitled to vote on the election of directors; or
(iii) the sale of all or substantially all of the assets of
PEI and Sierra to a third party not Affiliated with Veritas."
6. Section 4.2(d) is hereby amended to read in its entirety as
follows:
"(d) Upon a reduction in the Class B Percentage Interest of a Class
B Member in accordance with SECTION 4.2(a), SECTION 4.2(b) or SECTION
4.2(e), the portion of such Class B Member's Class B Percentage Interest
which is so reduced shall be allocated to the Class A Members in
proportion to their respective Class A Percentage Interests. In the event
of such reduction, such Class B Member shall be entitled to no payment
whatsoever as compensation for such reduction in his or her Class B
Percentage Interest."
7. A new Section 4.2(e) is hereby added to read as follows:
"(e) Subject to SECTION 4.2(c), in the event that prior to August 7,
2004 or the fifth anniversary of the date the subject Director Class B
Member became a director of Integrated Defense Technologies (the
"DIRECTORSHIP DATE"), whichever is later, a Director Class B Member ceases
to be a director of Integrated Defense Technologies for any reason, then
as of the date of the termination of such directorship (the "DIRECTORSHIP
TERMINATION DATE"), the Class B Percentage Interest of such Director Class
B Member shall be reduced by the following percentage (the "DIRECTOR
REDUCTION PERCENTAGE"):
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Directorship Termination Date Director Reduction Percentage
----------------------------- -----------------------------
Prior to August 7, 2000 or the first
anniversary of the Directorship
Date, whichever is later ..................................100%
After August 6, 2000 or the first anniversary of the
Directorship Date, whichever is later, but prior to August
7, 2001 or the second anniversary of the Directorship Date,
whichever
is later................................................... 80%
After August 6, 2001 or the second anniversary of the
Directorship Date, whichever is later, but prior to August
7, 2002 or the third anniversary of the Directorship Date,
whichever
is later................................................... 60%
After August 6, 2002 or the third anniversary
of the Directorship Date, whichever
is later, but prior to August 7, 2003 or the
fourth anniversary of the Directorship
Date, whichever is later................................... 40%
After August 6, 2003 or the fourth anniversary of the
Directorship Date, whichever is later, but prior to August
7, 2004 or the fifth anniversary of the Directorship Date,
whichever is later......................................... 20%
After August 6, 2004 or the fifth
anniversary of the Directorship
Date, whichever is later................................... 0%
By way of example, if a Director Class B Member whose Directorship
Date was on or prior to August 7, 1999 were to cease serving as a director
of Integrated Defense Technologies on December 31, 2002, his Class B
Percentage Interest would be reduced by 40%."
8. A new Section 8.4(e) is hereby added to read as follows:
"(e) Veritas (and/or its Transferees) is hereby granted the right to
purchase any remaining Class B Membership Interest held by any Director
Class B Member (or any
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Permitted Transferee of any Director Class B Member) after application
of the Director Reduction Percentage (or at the discretion of Veritas
any portion thereof) in the event such Director Class B Member ceases
to be a director of Integrated Defense Technologies for any reason at
the Fair Market Value thereof (as determined in accordance with SECTION
8.4(c)). This purchase right shall be exercisable by written notice
delivered to the Director Class B Member within the 60-day period
immediately following the date such Director Class B Member ceases to
be a director of Integrated Defense Technologies."
9. All other terms of the Operating Agreement shall remain in full force
and effect and by their execution of this Amendment, the Additional Members make
the representations and warranties set forth in Section 5.2 of the Operating
Agreement and agree to be bound by all of the terms and conditions of the
Operating Agreement applicable to the Members.
10. This Amendment may be executed in several counterparts, and all
counterparts so executed shall constitute one agreement, binding on all of the
parties hereto, notwithstanding that all of the parties are not signatory to the
original or the same counterpart.
-4-
IN WITNESS WHEREOF, each of Veritas and the Additional Members has
executed this Amendment as of the date first above written.
THE VERITAS CAPITAL FUND, L.P.
By: /s/ Xxxxxx X. XxXxxx
-------------------------------
Authorized Signature
ADDITIONAL MEMBERS:
[Director Class B Member]
[PEI Class B Members]
-5-
Amendment No. 2 to the
Amended and Restated Limited Liability Company Operating Agreement of
IDT Holding, L.L.C.
This Amendment No. 2 (this "AMENDMENT") to the Amended and Restated
Limited Liability Company Operating Agreement of IDT Holding, L.L.C., a Delaware
limited liability company (the "COMPANY"), is entered into as of June 1, 2000 by
and among The Veritas Capital Fund, L.P., a Delaware limited partnership
("Veritas"), and the Persons listed as Additional Members on the signature page
hereof (the "ADDITIONAL MEMBERS").
WHEREAS, the Company was formed pursuant to that certain Limited Liability
Company Operating Agreement dated as of August 6, 1999 among Veritas and certain
named employees of PEI, as amended by that certain Amended and Restated Limited
Liability Company Operating Agreement dated as of December 10, 1999 among
Veritas and certain named employees of PEI and Sierra, and as further amended by
Amendment No. 1 to the Amended and Restated Limited Liability Company Operating
Agreement dated as of February 25, 2000 among Veritas and the Additional Members
named therein (the "OPERATING AGREEMENT");
WHEREAS, the Members desire to admit the Additional Members to the
Company, to increase the Class B Percentage Interest of certain Class B Members,
and to eliminate the Class B Interest of a certain Class B Member;
NOW, THEREFORE, in consideration of the mutual agreements made herein, the
Members hereby agree to amend the Operating Agreement as follows:
1. Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed to them in the Operating Agreement.
2. Effective as of the date hereof, the Persons listed as Additional
Members on the signature page hereof are hereby admitted to the Company.
3. SCHEDULE A and SCHEDULE B to the Operating Agreement are hereby amended
in the forms annexed hereto to reflect the names, addresses, Capital
Contributions, Class A Percentage Interests and Class B Percentage Interests of
the Members after the admission of the Additional Members to the Company, the
increased Class B Percentage Interest of certain Class B Members and the
elimination of the Class B Percentage Interest of a certain Class B Member.
4. All other terms of the Operating Agreement shall remain in full force
and effect and by their execution of this Amendment, the Additional Members make
the representations and warranties set forth in Section 5.2 of the Operating
Agreement and agree to be bound by all of the terms and conditions of the
Operating Agreement applicable to the Members.
5. This Amendment may be executed in several counterparts, and all
counterparts so executed shall constitute one agreement, binding on all of the
parties hereto, notwithstanding that all of the parties are not signatory to the
original or the same counterpart.
IN WITNESS WHEREOF, each of Veritas and the Additional Members has
executed this Amendment as of the date first above written.
THE VERITAS CAPITAL FUND, L.P.
By: /s/ Xxxxxx x. XxXxxx
-------------------------------
Authorized Signature
ADDITIONAL MEMBERS:
[PEI Class B Members]
[Sierra Class B Members]
-2-
Amendment No. 3 to the
Amended and Restated Limited Liability Company Operating Agreement of
IDT Holding, L.L.C.
This Amendment No. 3 (this "AMENDMENT") to the Amended and Restated
Limited Liability Company Operating Agreement of IDT Holding, L.L.C., a Delaware
limited liability company (the "COMPANY"), is entered into as of September 29,
2000 by and among The Veritas Capital Fund, L.P., a Delaware limited partnership
("Veritas"), and the Persons listed as Additional Members on the signature page
hereof (the "ADDITIONAL MEMBERS").
WHEREAS, the Company was formed pursuant to that certain Limited Liability
Company Operating Agreement dated as of August 6, 1999 among Veritas and certain
named employees of PEI, as amended by that certain Amended and Restated Limited
Liability Company Operating Agreement dated as of December 10, 1999 among
Veritas and certain named employees of PEI and Sierra, as further amended by
Amendment No. 1 to the Amended and Restated Limited Liability Company Operating
Agreement dated as of February 25, 2000 among Veritas and the Additional Members
named therein, and as further amended by Amendment No. 2 to the Amended and
Restated Limited Liability Company Operating Agreement dated as of June 1, 2000
among Veritas and the Additional Members named therein (collectively, the
"OPERATING AGREEMENT");
WHEREAS, the Members desire to amend the Operating Agreement to reflect an
increased Capital Contribution from Veritas and to admit the Additional Members
to the Company;
NOW, THEREFORE, in consideration of the mutual agreements made herein, the
Members hereby agree to amend the Operating Agreement as follows:
1. Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed to them in the Operating Agreement.
2. Effective as of the date hereof, (a) Veritas shall increase its Capital
Contribution as reflected on SCHEDULE A hereto and (b) the Persons listed as
Additional Members on the signature page hereof are hereby admitted to the
Company.
3. SCHEDULE A and SCHEDULE B to the Operating Agreement are hereby amended
in the forms annexed hereto to reflect the names, addresses, Capital
Contributions, Class A Percentage Interests and Class B Percentage Interests of
the Members after the increased Capital Contribution of Veritas, the admission
of the Additional Members to the Company and the termination of employment of a
certain PEI Class B Member effective as of the date hereof.
4. The definition of "Change of Control" in Article I of the Operating
Agreement is hereby amended to read in its entirety as follows:
"'CHANGE OF CONTROL' is defined in SECTION 4.2(c)."
5. The definition of "Fair Market Value" in Article I of the Operating
Agreement is hereby amended to read in its entirety as follows:
"'FAIR MARKET VALUE' is defined in SECTION 8.4(c)."
6. The first sentence of Section 8.1 of the Operating Agreement is hereby
amended to read as follows:
"No Member, other then Veritas and its Transferees, may
directly or indirectly, Transfer all or a portion of his, her or its
Membership Interest except to a Permitted Transferee or as otherwise
expressly provided in this Agreement; PROVIDED, HOWEVER, that
Veritas and any other Class A Member that is not an individual may
Transfer all or a portion of their Membership Interests to
Affiliates."
7. Section 11.3(b) of the Operating Agreement is hereby amended to read in
its entirety as follows:
"(b) to Members in accordance with SECTION 4.4. Such
distribution shall be in cash or property (which shall be
distributed proportionally) or partly in both, as determined in good
faith by the Manager."
8. All other terms of the Operating Agreement shall remain in full force
and effect and by their execution of this Amendment, the Additional Members make
the representations and warranties set forth in Section 5.2 of the Operating
Agreement and agree to be bound by all of the terms and conditions of the
Operating Agreement applicable to the Members.
9. This Amendment may be executed in several counterparts, and all
counterparts so executed shall constitute one agreement, binding on all of the
parties hereto, notwithstanding that all of the parties are not signatory to the
original or the same counterpart.
-2
IN WITNESS WHEREOF, each of Veritas and the Additional Members has
executed this Amendment as of the date first above written.
THE VERITAS CAPITAL FUND, L.P.
By: /s/ Xxxxxx X. XxXxxx
-------------------------------
Authorized Signature
-3-
[ADDITIONAL MEMBERS]
-4-
Amendment No. 4 to the
Amended and Restated Limited Liability Company Operating Agreement of
IDT Holding, L.L.C.
This Amendment No. 4 (this "AMENDMENT") to the Amended and Restated
Limited Liability Company Operating Agreement of IDT Holding, L.L.C., a Delaware
limited liability company (the "COMPANY"), is entered into as of June 1, 2001 by
and among The Veritas Capital Fund, L.P., a Delaware limited partnership
("Veritas"), and the Persons listed as Additional Members on the signature page
hereof (the "ADDITIONAL MEMBERS").
WHEREAS, the Company was formed pursuant to that certain Limited Liability
Company Operating Agreement dated as of August 6, 1999 among Veritas and certain
named employees of PEI, as amended by that certain Amended and Restated Limited
Liability Company Operating Agreement dated as of December 10, 1999 among
Veritas and certain named employees of PEI and Sierra, as further amended by
Amendment No. 1 to the Amended and Restated Limited Liability Company Operating
Agreement dated as of February 25, 2000 among Veritas and the Additional Members
named therein, as further amended by Amendment No. 2 to the Amended and Restated
Limited Liability Company Operating Agreement dated as of June 1, 2000 among
Veritas and the Additional Members named therein, and as further amended by
Amendment No. 3 to the Amended and Restated Limited Liability Company Operating
Agreement dated as of September 29, 2000 among Veritas and the Additional
Members named therein (the "OPERATING AGREEMENT");
WHEREAS, on September 29, 2000 Integrated Defense Technologies acquired
Metric Systems Corporation, a Florida corporation ("METRIC"), Enterprise
Electronics Corporation, an Alabama corporation ("ENTERPRISE"), and Continental
Electronics Corporation, a Nevada corporation ("CONTINENTAL");
WHEREAS, the Members desire to admit the Additional Members to the
Company, including, without limitation certain employees of Metric, Enterprise
and Continental, and to make certain amendments to the Operating Agreement;
NOW, THEREFORE, in consideration of the mutual agreements made herein, the
Members hereby agree to amend the Operating Agreement as follows:
1. Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed to them in the Operating Agreement.
2. Effective as of the date hereof, the Persons listed as Additional
Members on the signature pages hereof are hereby admitted to the Company.
3. SCHEDULE A and SCHEDULE B to the Operating Agreement are hereby amended
in the forms annexed hereto to reflect the names, addresses, Capital
Contributions, Class A Percentage Interests and Class B Percentage Interests of
the Members after the admission of the Additional Members to the Company and the
decreased or eliminated Class B Percentage Interests of certain Class B Members.
4. For purposes of the Operating Agreement, employees of Integrated
Defense Technologies shall be deemed to be PEI Employees and Class B Members
employed by Integrated Defense Technologies shall be deemed to be PEI Class B
Members.
5. Article I is hereby amended by adding the following definitions:
"'CONTINENTAL CLASS B MEMBER' means a Class B Member employed by
Continental."
"'ENTERPRISE CLASS B MEMBER' means a Class B Member employed by
Enterprise."
"'IDT EMPLOYEE' means a Member who is an employee of Integrated
Defense Technologies or any of its Subsidiaries."
"'METRIC CLASS B MEMBER' means a Class B Member employed by Metric."
6. Section 4.2(c) is hereby amended to read in its entirety as follows:
"(c) Upon a Change of Control, the PEI Reduction Percentage, the
Sierra Reduction Percentage, the Director Reduction Percentage (as defined
in Section 4.2(e)) and the Metric/Enterprise/Continental Reduction
Percentage (as defined in Section 4.2(f)) shall be 0%. For purposes of
this Agreement, "CHANGE OF CONTROL" means the occurrence of any of the
following events:
(i) Veritas ceases to be the owner of a majority of the
outstanding Percentage Interests;
(ii) Integrated Defense Technologies ceases to be the direct
or indirect beneficial owner (as such term is defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, as amended) of
a majority in the aggregate of the total voting power of all classes
of capital stock of PEI, Sierra, Metric, Enterprise and Continental
then outstanding and normally entitled to vote on the election of
directors; or
(iii) the sale of all or substantially all of the assets of
Integrated Defense Technologies and its Subsidiaries to a third
party not Affiliated with Veritas."
7. Section 4.2(d) is hereby amended to read in its entirety as follows:
-2-
"(d) Upon a reduction in the Class B Percentage Interest of a Class
B Member in accordance with SECTION 4.2(a), SECTION 4.2(b), SECTION
4.2(e), or SECTION 4.2(f), the portion of such Class B Member's Class B
Percentage Interest which is so reduced shall be allocated to the Class A
Members in proportion to their respective Class A Percentage Interests. In
the event of such reduction, such Class B Member shall be entitled to no
payment whatsoever as compensation for such reduction in his or her Class
B Percentage Interest."
8. A new Section 4.2(f) is hereby added to read as follows:
"(f) Subject to SECTION 4.2(c), in the event that prior to September
30, 2005 or the fifth anniversary of the date the subject Metric Class B
Member, Enterprise Class B Member or Continental Class B Member was
employed by Metric, Enterprise or Continental, as the case may be (the
"METRIC/ENTERPRISE/CONTINENTAL EMPLOYMENT DATE"), whichever is later, the
employment of a Metric Class B Member, Enterprise Class B Member or
Continental Class B Member by Integrated Defense Technologies or any of
its Subsidiaries on a full time basis terminates for any reason, then as
of the date of the termination of such employment (the
"METRIC/ENTERPRISE/CONTINENTAL TERMINATION DATE"), the Class B Percentage
Interest of such Metric Class B Member, Enterprise Class B Member or
Continental Class B Member, as the case may be, shall be reduced by the
following percentage (the "METRIC/ENTERPRISE/CONTINENTAL REDUCTION
PERCENTAGE"):
-3-
Metric/Enterprise/Continental Metric/Enterprise/Continental
Termination Date Reduction Percentage
---------------- --------------------
Prior to September 30, 2001 or the first
anniversary of the Metric/Enterprise/
Continental Employment Date,
whichever is later .....................................................100%
After September 30, 2001 or the first anniversary of the
Metric/Enterprise/ Continental Employment Date, whichever
is later, but prior to September 30, 2002 or the second
anniversary of the Metric/Enterprise/
Continental Employment Date,
whichever is later...................................................... 80%
After September 30, 2002 or the second
anniversary of the Metric/Enterprise/
Continental Employment Date, whichever is later, but prior
to September 30, 2003 or the third anniversary of the
Metric/ Enterprise/Continental Employment
Date, whichever is later............................................... 60%
After September 30, 2003 or the third
anniversary of the Metric/Enterprise/
Continental Employment Date, whichever is later, but prior
to September 30, 2004 or the fourth anniversary of the
Metric/ Enterprise/Continental Employment Date,
whichever is later..................................................... 40%
After September 30, 2004 or the fourth
anniversary of the Metric/Enterprise/
Continental Employment Date, whichever is later, but prior
to September 30, 2005 or the fifth anniversary of the
Metric/ Enterprise/Continental Employment Date,
whichever is later...................................................... 20%
After September 30, 2005 or the fifth
anniversary of the Metric/Enterprise/
Continental Employment Date,
whichever is later...................................................... 0%
-4-
By way of example, if a Metric Class B Member whose
Metric/Enterprise/Continental Employment Date was on or prior to September
30, 2000 were to terminate his employment with Integrated Defense
Technologies or any of its Subsidiaries on December 31, 2003, his Class B
Percentage Interest would be reduced by 40%."
9. Section 8.4(a) is hereby amended to read in its entirety as follows:
"(a) Veritas (and/or its Transferees) is hereby granted the right to
purchase the entire Membership Interest (or at the discretion of Veritas
any portion of the Membership Interest) held by any Member who is an IDT
Employee, or who is a Permitted Transferee of an IDT Employee, in the
event the employment of such Member (or the Transferor of such Member) by
Integrated Defense Technologies or any of its Subsidiaries on a full time
basis terminates (i) for cause or such Member voluntarily terminates his
employment, with respect to such Member's Class A Membership Interest, or
(ii) for any reason, with respect to such Member's Class B Membership
Interest. Veritas may exercise this right at any time within the 60-day
period immediately following the date such Member (or Transferor of such
Member) ceases to be a full-time employee of Integrated Defense
Technologies or any of its Subsidiaries."
10. Section 8.4(b) is hereby amended to read in its entirety as follows:
"(b) For purposes hereof, "TERMINATION FOR CAUSE" means termination
of such Member's employment by Integrated Defense Technologies or any of
its Subsidiaries by reason of (i) such Member's willful dishonesty
towards, fraud upon, or deliberate injury or attempted injury to, or
breach of fiduciary duty to Integrated Defense Technologies or any of its
Subsidiaries; or (ii) conduct by such Member, in connection with the
performance of the duties contemplated that would result in serious
prejudice to the interests of Integrated Defense Technologies or any of
its Subsidiaries, if such Member were to continue to be employed,
including, without limitation, the conviction of a felony or a good faith
determination by the Board of Directors of Integrated Defense Technologies
or any of its Subsidiaries that such Member has committed acts involving
moral turpitude; or (iii) such Member's failure to follow reasonable
instructions or directions of the Board of Directors of Integrated Defense
Technologies or any of its Subsidiaries, or any policy, rule or procedure
of Integrated Defense Technologies or any of its Subsidiaries, in force
from time to time."
11. Section 8.4(c) is hereby amended to read in its entirety as follows:
"(c) The purchase price at which Veritas may exercise its right
shall be (i) with respect to any Class A Membership Interest, (x) for any
period until the third anniversary of the Invested Capital Contribution
Date, the Invested Capital of the Member plus 50% of the amount by which,
if any, the Fair Market Value of the Class A Membership Interest exceeds
the Invested Capital of the Member, or the Fair Market Value of the
-5-
Class A Membership Interest, whichever is lower, and (y) for any period
after the third anniversary of the Invested Capital Contribution Date, the
Fair Market Value of the Class A Membership Interest; and (ii) with
respect to any remaining Class B Membership Interest after application of
the PEI Reduction Percentage, the Sierra Reduction Percentage or the
Metric/Enterprise/Continental Reduction Percentage, as the case may be,
the Fair Market Value of the Class B Membership Interest. For purposes of
this Agreement "FAIR MARKET VALUE" of the Membership Interest shall be
determined by the Board of Directors of Integrated Defense Technologies
based on the most recent financial statements of Integrated Defense
Technologies and its Subsidiaries available on the date such Member ceases
to be a full time employee of Integrated Defense Technologies or any of
its Subsidiaries."
12. Section 8.5 is hereby amended to read in its entirety as follows:
"8.5 MANDATORY SALE.
(a) Any Member who is an IDT Employee or who is a Permitted
Transferee of an IDT Employee shall sell his entire Class A Membership
Interest to Veritas at a purchase price equal to the Invested Capital of
the Member or the Fair Market Value of the Membership Interest, whichever
is greater, in the event the employment of such Member (or the Transferor
of such Member) by Integrated Defense Technologies or any of its
Subsidiaries, is terminated without cause (as defined in SECTION 8.4(b)
above).
(b) The sale shall take place within 60 days following the
termination of such Member's employment by Integrated Defense Technologies
or any of its Subsidiaries."
13. All other terms of the Operating Agreement shall remain in full force
and effect and by their execution of this Amendment, the Additional Members make
the representations and warranties set forth in Section 5.2 of the Operating
Agreement and agree to be bound by all of the terms and conditions of the
Operating Agreement applicable to the Members.
14. This Amendment may be executed in several counterparts, and all
counterparts so executed shall constitute one agreement, binding on all of the
parties hereto, notwithstanding that all of the parties are not signatory to the
original or the same counterpart.
-6-
IN WITNESS WHEREOF, each of Veritas and the Additional Members has
executed this Amendment as of the date first above written.
THE VERITAS CAPITAL FUND, L.P.
By: /s/ Xxxxxx X. XxXxxx
-------------------------------
Authorized Signature
ADDITIONAL MEMBERS:
[DIRECTOR CLASS B MEMBER]
[PEI CLASS B MEMBERS]
[METRIC CLASS B MEMBERS]
[ENTERPRISE CLASS B MEMBERS]
[CONTINENTAL CLASS B MEMBERS]
-7-
Amendment No. 6 to the
Amended and Restated Limited Liability Company Operating Agreement of
IDT Holding, L.L.C.
This Amendment No. 6 (this "AMENDMENT") to the Amended and Restated
Limited Liability Company Operating Agreement of IDT Holding, L.L.C., a Delaware
limited liability company (the "COMPANY"), is entered into as of February 5,
2002 by and among The Veritas Capital Fund, L.P., a Delaware limited partnership
("VERITAS"), and the Members listed on the signature page hereof (the
"MEMBERS").
WHEREAS, the Company was formed pursuant to that certain Limited Liability
Company Operating Agreement dated as of August 6, 1999 among Veritas and certain
named employees of PEI, as amended by that certain Amended and Restated Limited
Liability Company Operating Agreement dated as of December 10, 1999 among
Veritas and certain named employees of PEI and Sierra, as further amended by
Amendment No. 1 to the Amended and Restated Limited Liability Company Operating
Agreement dated as of February 25, 2000 among Veritas and the Additional Members
named therein, as further amended by Amendment No. 2 to the Amended and Restated
Limited Liability Company Operating Agreement dated as of June 1, 2000 among
Veritas and the Additional Members named therein, as further amended by
Amendment No. 3 to the Amended and Restated Limited Liability Company Operating
Agreement dated as of September 29, 2000 among Veritas and the Additional
Members named therein, as further amended by Amendment No. 4 to the Amended and
Restated Limited Liability Company Operating Agreement dated as of June 1, 2001
among Veritas and the Additional Members named therein, and as further amended
by Amendment No. 5 to the Amended and Restated Limited Liability Operating
Agreement dated as of October 1, 2001 among Veritas and the Additional Members
named therein (the "OPERATING AGREEMENT");
WHEREAS, Integrated Defense Technologies, Inc., a subsidiary of the
Company, proposes to offer shares of its common stock ("IDT SHARES") in an
initial public offering (the "IPO"); and
WHEREAS, Veritas and the Members have determined to amend the
Operating Agreement in light of the IPO;
NOW, THEREFORE, in consideration of the mutual agreements made herein,
Veritas and the Members hereby agree to amend the Operating Agreement as
follows:
1. Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed to them in the Operating Agreement.
2. The last sentence of Section 3.3 is hereby amended to read as follows:
"In no event shall the aggregate Class B Percentage Interests exceed
5.8816%."
3. Section 4.1(a) is hereby amended to read in its entirety as follows:
"4.1 ALLOCATION OF NET PROFITS AND NET LOSS OF THE COMPANY. Net
Profits and Net Loss of the Company in each Fiscal Year shall be allocated to
the Members as follows:
(a) NET PROFITS. Net Profits shall be allocated among the
Members as follows:
(i) first to offset any Net Loss allocated to a Member;
(ii) next to the Class B Members PRO RATA in accordance
with their respective Class B Percentage Interests in an
amount equal to the quotient of (A) the aggregate Class B
Percentage Interests and (B) 100%, times the amounts
distributed to the Class A Members under Section 4.4(a) and to
the Class B Members under Section 4.4(b)(ii); and
(iii) thereafter among the Members PRO RATA in
accordance with their respective Percentage Interests."
4. Section 4.4 is hereby amended to read in its entirety as follows:
"4.4 DISTRIBUTIONS. Available Cash shall be distributed to the
Members as follows:
(a) FIRST to the Class A Members in proportion to their unreturned
Invested Capital until such time as they have received cumulative distributions
under this SECTION 4.4 equal to all of their Invested Capital;
(b) SECOND to the Class B Members PRO RATA in accordance with their
respective Class B Percentage Interests until such time as they have received an
amount equal to (i) the quotient of (A) the aggregate Class B Percentage
Interests and (B) 100%, times the amount distributed to the Class A Members
under Section 4.4(a) plus (ii) such additional amounts so that the distributions
to the Class B Members under this Section 4.4(b) divided by the total amounts
distributed under Sections 4.4(a) and 4.4(b) equals the aggregate of the Class B
Percentage Interests, when expressed as a percentage; and
(c) THEREAFTER, to the Members PRO RATA in accordance with their
respective Percentage Interests."
5. A new Section 4.6 is hereby added to read as follows:
2
4.6 SPECIAL RESTRICTIONS ON POST-IPO SALES BY AFFECTED CLASS A
MEMBERS AND CLASS B MEMBERS. Notwithstanding the foregoing provisions of
this Article IV, the Class A Members identified on SCHEDULE 1 to this
Amendment (the "AFFECTED CLASS A MEMBERS") and the Class B Members shall
not be allocated income from or be entitled to distributions from the sale
of IDT Shares occurring within 180 days after the public offering date set
forth on the final prospectus used to sell IDT Shares in connection with
the IPO (the "RESTRICTION PERIOD"). After the termination of the
Restriction Period, distributions and allocations will be made first to
the Affected Class A Members and the Class B Members in amounts they would
have been allocated and received but for the application of this Section
4.6 (the "IPO MAKEUP"). After the IPO Makeup and the expiration of the
Restriction Period, the Affected Class A Members and the Class B Members
shall participate under this Article IV as if this Section 4.6 had not
been in effect."
6. A new Section 4.7 is hereby added to read as follows:
"4.7 DISTRIBUTION OF TAX ADVANCES. Veritas, in its discretion, may
cause the Company to make an advance ("TAX ADVANCE") to the Class A
Members and/or for the Class B Members as a group to the extent that cash
distributions are insufficient to pay the combined Federal, state and
local income tax liabilities of such Members assuming for this purpose
that all such Members are required to pay Federal, state and local income
tax on such income at the highest rate applicable to such income. Tax
Advances shall be repaid by reducing the amount of current or succeeding
distributions which would otherwise be paid to such Members, or if such
distributions are not sufficient for that purpose, by reducing the
proceeds of liquidation otherwise payable to such Members."
7. SCHEDULE A and SCHEDULE B to the Operating Agreement are hereby amended
in the forms attached hereto to reflect the names, addresses, Capital
Contributions, Class A Percentage Interests and Class B Percentage Interests of
the Member after giving effect to the amendments to the Operating Agreement
effected by this Amendment.
8. All other terms of the Operating Agreement shall remain in full force
and effect.
9. This Amendment may be executed in several counterparts, and all
counterparts so executed shall constitute one agreement, binding on all of the
parties hereto, notwithstanding that all of the parties are not signatory to the
original or the same counterpart.
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IN WITNESS WHEREOF, each of Veritas and the Members has executed this
amendment as of the date first above written.
THE VERITAS CAPITAL FUND, L.P.
By: /s/ Xxxxxx X. XxXxxx
-------------------------------
Authorized Signature
[MEMBERS]
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