EHIBIT 10(d)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of April 12, 1995, between
NAI TECHNOLOGIES, INC., a New York corporation (the "Company"), THE BANK OF NEW
YORK, a New York banking corporation ("BNY"), and CHEMICAL BANK, a New York
banking corporation ("Chemical"; each of Chemical and BNY shall hereinafter be
referred as a "Holder" and together as the "Holders").
RECITALS:
The parties hereto are parties to an Amended and Restated Credit
Agreement, dated as of April 12, 1995, among, inter alia, the Company and the
Holders (the "Credit Agreement").
Pursuant to the Credit Agreement, the Company is issuing,
contemporaneously therewith, to the Holders an aggregate of 250,000 shares of
the Company's Shares (as hereinafter defined).
THE PARTIES HERETO AGREE AS FOLLOWS:
1. Certain Definitions. Capitalized terms used herein which are not
otherwise defined herein and which are defined in, or by reference in, the
Credit Agreement shall have the meanings given therein. For the purposes of this
Agreement, the following terms shall have the following meanings:
"Agreement" shall mean this Registration Rights Agreement, as the
same may be amended, modified or supplemented from time to time.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency then administering the Securities Act
and the Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.
"Person" shall mean any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership or
government, or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement and all other amendments and
supplements to the prospec-
tus, including any post-effective amendments and all materials incorporated by
reference in the prospectus.
"Registrable Securities" shall mean the 250,000 shares of Common Stock
issued pursuant to the Credit Agreement and any securities issued in exchange
for or substitution of any thereof or as a result of a stock split or as a
dividend or other distribution in respect of any thereof. As to any particular
Registrable Securities, once issued, such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been disposed of pursuant to Rule 144 (or any
successor provision) under the Securities Act, (iii) they shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force (and the
Holder thereof shall have received an opinion of independent counsel for the
Company reasonably satisfactory to the Holder to the foregoing effects), or (iv)
they shall have ceased to be outstanding.
"Registration Expenses" shall mean all of the costs and expenses of
each Registration hereunder, and filing fees, fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registrable
Securities), rating agency fees, National Association of Securities Dealers
(NASD) fees for review of underwriting agreements, printing expenses (including
expenses of printing the Prospectus), messenger and delivery expenses, the fees
and expenses incurred in connection with the listing of the securities to be
registered on each securities exchange on which the Shares are then listed or
proposed to be listed, and fees and disbursements of counsel for the Company and
its independent certified public accountants (including the expenses of any
special audit or cold comfort letters required by or incident to such
performance), Securities Act liabilities insurance (if the Company elects to
obtain such insurance), the fees and expenses of any special experts retained by
the Company in connection with such Registration, reasonable fees and expenses
of one counsel (who shall be selected by the Holders) for the Holders incurred
in connection with each Registration hereunder and any reasonable out-of-pocket
expenses of the Holders (or the agents who manage their accounts) excluding any
travel costs and counsel fees except as set forth above (but not including any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities).
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"Registration Statement" shall have the meaning assigned to such term
in Section 4(a) of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such similar federal statute.
"Selling Holder" shall mean a Holder who is selling Registrable
Securities pursuant to a Registration.
"Shares" shall mean shares of the Company's authorized common stock,
par value $.10 per share, as constituted on the Closing Date and any securities
into which such shares may thereafter be changed.
2. Piggyback Registration Rights.
(a) Right to Piggyback. Subject to the last sentence of this subsection
(a), whenever the Company proposes to register any Shares (or securities
convertible into or exchangeable or exercisable for Shares) under the
Securities Act for its own account or for the account of Persons exercising
demand registration rights other than pursuant to Section 3 below, other
than under a Registration Statement on Form S-4, Form S-8 or any successor
form or filed in connection with an exchange offer or an offering of
securities solely to the Company's existing employees or securityholders (a
"Piggyback Registration"), the Company will give prompt written notice to
all Holders of its intention to effect such a Registration and will use its
best efforts, subject to Section 2(b) below, to include in such Piggyback
Registration all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 15 Business Days
after receipt of the Company's notice. Except as may otherwise be provided
in this Agreement, Registrable Securities with respect to which such request
for Registration has been received will be registered by the Company and
offered to the public on the same terms and subject to the same conditions
applicable to the Piggyback Registration to be sold by the Company or by the
other Persons selling under such Piggyback Registration. Notwithstanding the
foregoing, the Company shall have the right to postpone or withdraw any
Registration effected pursuant to this Section 2(a).
(b) Priority on Piggyback Registrations. If a Piggyback Registration
relates to an underwritten offering and the managing underwriter or
underwriters advise the Company in writing that in its or their opinion the
number of securities proposed to be sold in a Piggyback Registration exceeds
the number which can be sold in such offering within a price range
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acceptable to the Company or the other Persons exercising demand
registration rights, the Company will include in such Piggyback Registration
the number of securities which, in the opinion of such underwriter or
underwriters, can be sold within such price range, which securities shall be
allocated as follows: (x) first, the securities proposed to be sold by other
Persons exercising demand registration rights granted on or prior to the
Closing Date, (y) second, Registrable Securities held by Holders who have
made requests to be included in such Piggyback Registration (pro rata among
the Holders who have requested their Registrable Securities to be included
therein), together with any other securities requested to be included in
such Piggyback Registration by other holders, pro rata among the Holders of
Registerable Securities to be included therein and the other holders of such
other securities requested to be included in such Piggyback Registration,
and (z) third, the securities the Company proposes to sell.
(c) Underwriting. If a Piggyback Registration for which the Company
gives notice is for a registered public offering involving an underwriting,
the Company shall so advise the Holders in the notice given pursuant to
Section 2(a), which notice shall include the name of the managing
underwriter or underwriters. In such event, the right of any Holder to
Piggyback Registration pursuant to this Section 2 shall be conditional upon
such Holder's participation in such underwriting with respect to all of its
securities included in such Piggyback Registration.
3. Demand Registration Rights.
(a) Right to Demand. At any time before the expiration of five years
from the date of original issuance of the Registrable Securities, each
Holder may make one written request and both Holders may jointly make one
written request (provided in each case no Holder has registered Registrable
Securities pursuant to Section 2 above within 120 days prior to such
request) to the Company for registration with the Commission under and in
accordance with the provisions of the Securities Act of not less than 50% of
the Registrable Securities (a "Demand Registration"). Notwithstanding any
thing to the contrary contained herein, the Company shall not be required to
effect more than three Demand Registrations hereunder. Unless expressly
agreed to by the Holders, no securities of the Company or of any other
Person other than Registrable Securities shall be included in a Demand
Registration.
(b) Priority on Demand Registrations. If the managing underwriter or
underwriters of a Demand Registration (or in the case of a Demand
Registration not being underwritten, the
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Holders) advise the Company in writing that in its or their opinion the
number of Registrable Securities proposed to be sold in such Demand
Registration exceeds the number which can be sold in such offering, the
Company will include in such Demand Registration only the number of
Registrable Securities which, in the opinion of such underwriter or
underwriters (or the Holders, as the case may be), can be sold in such
offering on a pro rata basis.
(c) Selection of Underwriters. If any Demand Registration is an
underwritten offering, the Holders will select a managing underwriter or
underwriters to administer the offering which managing underwriter or
underwriters shall be of nationally recognized standing and shall be
reasonably acceptable to the Company.
4. Registration Procedures. With respect to any Registration, the
Company will (subject to Section 11 below) promptly:
(a) prepare and file with the Commission a Registration Statement (a
"Registration Statement") which includes the Registrable Securities and use
its best efforts to cause such Registration Statement to become effective as
promptly as practicable; provided that before filing a Registration
Statement or any amendments thereto of any Prospectus, the Company will
furnish to one counsel selected by the Holders of the Registrable Securities
covered by such Registration Statement and the underwriters, if any, draft
copies of all such documents proposed to be filed at least 5 Business Days
prior thereto, which documents will be subject to the reasonable review of
such counsel and underwriters, and the Company will not file any
Registration Statement or amendment thereto or any Prospectus to which
Holders of a majority of the Registrable Securities covered by a Demand
Registration, shall reasonably object (provided that nothing herein shall
prevent the Company from making a timely filing of any report required to be
filed by it pursuant to the Exchange Act in such form as it determines is
appropriate) and will notify each Holder of the Registrable Securities of
any stop order issued or threatened by the Commission in connection
therewith and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for a period of not less than
four months (or such shorter period which will terminate when all
Registrable Securities covered by such Registration Statement have been sold
or withdrawn, but not prior to the expiration of any applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder,
if applicable); cause the Prospectus to
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be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act; and
comply with the provisions of the Securities Act applicable to it with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Registration
Statement or Prospectus supplement;
(c) furnish to any Holder holding Registrable Securities included in
such Registration Statement and the underwriter or underwriters, if any, at
least one signed copy of the Registration Statement and any post-effective
amendment thereto, upon request, and such number of conformed copies thereof
and such number of copies of the Prospectus (including each preliminary
Prospectus), and any documents incorporated by reference therein, as such
Holder or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by such Holder (it
being understood that the Company consents to the use of the Prospectus by
each Holder holding Registrable Securities covered by the Registration
Statement and the underwriter or underwriters, if any, in connection with
the offering and sale of the Registrable Securities covered by the
Prospectus);
(d) notify each Holder holding Registrable Securities included in such
Registration Statement, at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, when the Company becomes
aware of the happening of any event as a result of which the Prospectus
included in such Registration Statement (as then in effect) contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein (in the case of the Prospectus or
any preliminary Prospectus, in light of the circumstances under which they
were made) not misleading and, as promptly as practicable thereafter,
prepare and file with the Commission and make available a supplement or
amendment to such Prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus will not contain
any untrue statement of a material fact or omit to state material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(e) use its best efforts to cause all Registrable Securities to be
listed, by the date such Registrable Securities cease to be Registrable
Securities as a result of Registration or otherwise, on each securities
exchange on which the Shares are then listed or proposed to be listed, if
any;
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(f) make generally available to its security holders an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act
no later than 45 days after the end of the 12-month period beginning with
the first day of the Company's first fiscal quarter commencing after the
effective date of the Registration Statement, which earnings statement shall
cover said 12-month period; provided, however, that in the event that the
first day of the Company's first fiscal quarter commencing after the
effective date of the Registration Statement shall also be the first day
of the Company's fiscal year, such earnings statement shall be made
generally available no later than 90 days after the end of such 12-month
period;
(g) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(h) if requested by the managing underwriter or underwriters or any
Holder holding Registrable Securities covered by the Registration Statement
promptly incorporate in a Prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters or such Holder
requests to be included therein with respect to the number of Registrable
Securities being sold by such Holder to such underwriter or underwriters,
the purchase price being paid therefor by such underwriter or underwriters
and with respect to any other terms of the underwritten offering of the
Registrable Securities to be sold in such offering; and promptly make all
required filings of such Prospectus supplement or post-effective amendment;
(i) as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a Registration Statement,
deliver a copy of such document to each Holder holding Registrable
Securities covered by such Registration Statement;
(j) on or prior to the date on which the Registration Statement is
declared effective, use its best efforts to register or qualify, and
cooperate with the Holders holding Registrable Securities included in such
Registration Statement, the underwriter or underwriters, if any, and their
counsel, in connection with the registration or qualification of the
Registrable Securities covered by the Registration Statement for offer and
sale under the securities or blue sky laws of each state and other
jurisdiction of the United States as any such Holder or underwriter
reasonably requests in writing, to use its best efforts to keep each such
registration or qualification effective, including through new filings, or
amendments or renewals, during the period such Registration Statement is
required to be kept effective
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pursuant to Section 4(b) hereof and to do any and all other acts or things
necessary or advisable to permit the disposition in all such jurisdictions
of the Registrable Securities covered by the applicable Registration
Statement;
(k) cooperate with the Holders holding Registrable Securities covered
by the Registration Statement and the managing underwriter or underwriters,
if any, to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legends) representing Registrable Securities to
be sold under the Registration Statement and enable such securities to be in
such denominations and registered in such names as the managing underwriter
or underwriters, if any, or Holders may request;
(l) use its best efforts to cause the Registrable Securities covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may be
necessary to enable the Selling Holders thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(m) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions as the Holders
of a majority of the Registrable Securities being sold or the underwriters
retained by Holders participating in an underwritten public offering, if
any, reasonably request in order to expedite or facilitate the disposition
of such Registrable Securities;
(n) make available for inspection by any Holder of Registrable
Securities included in such Registration Statement, any underwriter
participating in any disposition pursuant to such Registration Statement,
and any attorney, accountant or other agent retained by any such seller or
underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company and
its direct and indirect subsidiaries (collectively the "Records") as shall
be reasonably necessary to enable them to exercise their due diligence
reasonably, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in
connection with such Registration Statement; provided, that the Records
which the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed to the
Inspectors unless (x) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in the Registration Statement or (y)
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction; provided, however, that any
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decision not to disclose information pursuant to clause (x) shall be made
after consultation with counsel for the Company, and each Holder of
Registrable Securities included in such Registration Statement agrees that
it will, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, give notice to the Company and allow the Company,
at the Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential; and
(o) use its best efforts to obtain a cold comfort letter from the
Company's independent public accountants and an opinion of outside counsel
to the Company, each in customary form and covering such matters of the type
customarily covered by cold comfort letters or opinions of counsel, as the
case may be, as the Holders of a majority of the Registrable Securities
being sold reasonably request.
Each Holder, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(d), will forthwith
discontinue disposition of the Registrable Securities until such Holders'
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 4(d) or until it is advised in writing (the "Advice") by the Company
that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
Prospectus, and, if so directed by the Company, such Holder will, or will
request the managing underwriter or underwriters, if any, to deliver to the
Company all copies, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities at the time
of receipt of such notice. In the event the Company shall give any such notice,
the time period mentioned in Section 4(b) shall be extended by the number of
Business Days during the period from and including the date of the giving of
such notice to and including the date when each Selling Holder covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 4(d) or the Advice.
Each Holder shall furnish to the Company such information regarding the
Registrable Securities held by it and the intended method of disposition thereof
and other information concerning the Holder as the Company shall reasonably
request and as shall be required in connection with the Registration Statement
to be filed by the Company.
5. Holdback Arrangements.
(a) Restrictions on Public Sale by Holder of Registrable Securities. To
the extent not inconsistent with applicable law, each Holder whose
Registrable Securities are included in an underwritten Registration agrees
not to effect any public
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sale or distribution of the securities being registered or a similar
security of the Company, or any securities convertible into or exchangeable
or exercisable for such securities, including a sale pursuant to Rule 144 or
Rule 144A under the Securities Act, during the 14 days prior to, and during
and not exceeding 90 days after the effective date of such Registration
Statement as may be reasonably requested by the managing underwriter or
underwriters, except as part of such Registration Statement.
(b) Restrictions on Public Sale by the Company. The Company agrees (x)
not to effect any public sale or distribution of any securities similar to
those being registered, or any securities convertible into or exchangeable
or exercisable for such securities (other than any such sale or distribution
of such securities in connection with any merger or consolidation
involving the Company or a subsidiary thereof or the acquisition by the
Company or a subsidiary thereof of the capital equity or substantially all
of the assets of any other Person or with respect to any employee benefit or
stock plan), during the 14 days prior to, and during such period not
exceeding 90 days after the effective date of any Registration Statement
except as part of such Registration Statement; and (y) that any agreement
entered into after the date of this Agreement pursuant to which the Company
issues or agrees to issue any privately placed securities (which securities
shall be subject to the provisions of Section 2(b)) shall contain a
provision under which holders of such securities agree not to effect any
public sale or distribution of any such securities during the period
described in (x) above, in each case including a sale pursuant to Rule 144
or Rule 144A under the Securities Act (except as part of any such
registration, if permitted); provided, however, that the provision of this
Section 5(b) shall not prevent the conversion or exchange of any securities
pursuant to their terms as in effect prior to the commencement of such
period into or for other securities.
(c) Other Registrations. If the Company has previously filed a
Registration Statement with respect to Registrable Securities, and if such
previous registration has not been withdrawn or abandoned, the Company will
not file or cause to be effective any other registration of any of the
Shares (or securities convertible into or exchangeable or exercisable for
the Shares) under the Securities Act (except on Form S-4 or S-8 or any
successor forms or filed in connection with an exchange after or an offering
of securities solely to the Company's existing employees or security
holders), whether on its own or at the request of any holder or holders of
the Shares (or securities convertible into or exchangeable or exercisable
for the Shares), until a period of at least 120 days has elapsed from the
effective date of such previous registration (provided that in the case of a
Demand
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Registration such period shall commence on the date the Company is first
served the notice of demand registration and shall continue until at least
ninety (90) days have elapsed from the effective date of such Demand
Registration).
6. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Selling Holder of Registrable Securities, its officers,
directors and agents and each Person, if any, who controls such Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (each an "Indemnitee") from and against any and all losses,
claims, damages, liabilities and expenses (including reasonable attorneys'
fees and costs of investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses
arise out of or are based upon information with respect to such Indemnitee
furnished in writing to the Company by such Indemnitee expressly for use
therein. It is agreed that the indemnification agreement contained in this
Section 6(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage or liability if such settlement is effected without the
consent of the Company (which consent has not been unreasonably withheld.
The Company also agrees to indemnify any underwriters on substantially the
same basis as that of the indemnification of the Selling Holders provided in
this Section 6(a).
(b) Conduct of Indemnification Proceedings. If any action or proceeding
(including any governmental investigation) shall be brought or asserted
against any Selling Holder (or its officers, directors or agents) or any
Person controlling any such Selling Holder in respect of which indemnity
may be sought from the Company, the Company shall be permitted to assume the
defense of such claim, unless in the reasonable judgment of such Indemnitee
a conflict of interest may exist between such Indemnitee and the Company
with respect to such claim or differing or additional defenses may be
available to such Indemnitee. If defense of a claim is assumed by the
Company, Indemnitees shall not be liable for any settlement of such action
or proceedings effected without their prior written consent. The Company
will not consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnitee of a release from all liability in respect
of such claim or litigation. If the Company is not
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entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel for the
Indemnitees as a group with respect to such claim in each jurisdiction in
which a claim is brought, unless in the reasonable judgment of any
Indemnitee a conflict of interest may exist between such Indemnitee and any
other Indemnitee with respect to such claim or differing or additional
defense may be available to such Indemnitee, in which event the Company
shall be obligated to pay the fees and expenses of such additional counsel
or counsels. Any Selling Holder entitled to indemnification hereunder agrees
to give prompt written notice to the Company after the receipt by such
Selling Holder of any written notice of the commencement of any action,
suit, proceedings or investigation or threat thereof made in writing for
which such Selling Holder may claim indemnification or contribution pursuant
to this Agreement; provided, however, that failure to give such notice shall
not limit the Indemnitee's right to indemnification or contribution
hereunder unless and to the extent that the Company did not otherwise learn
of such action and such failure results in the forfeiture by it of
substantial rights and defenses.
(c) Indemnification by Holders of Registrable Securities. Each Selling
Holder agrees to indemnify and hold harmless the Company, and the other
Selling Holders and each of their respective directors, officers and agents
and each Person, if any, who controls the Company or any other Selling
Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Selling Holder but only with respect to information
furnished in writing by such Selling Holder with respect to such Selling
Holder which contained a material misstatement of fact or omission of a
material fact expressly for use in any Registration Statement or any
amendment thereto or any Prospectus, or any preliminary Prospectus relating
to the Registrable Securities. In case any action or proceeding shall be
brought against the Company, any other Selling Holder or any of their
respective directors, officers or agents, or any such controlling Person, in
respect of which indemnity may be sought against such Selling Holder, such
Selling Holder shall have the rights and duties given to the Company, and
the Company, each other Selling Holder or each of their respective
directors, officers, or agents or such controlling Person shall have the
rights and duties given to such Selling Holder, by Section 6(b).
(d) Contribution. If the indemnification provided for in this Section 6
is unavailable to the Company, the Selling Holders or the underwriters in
respect to any losses, claims, damages, liabilities or judgments referred to
herein, then
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each such indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities and judgments
in such proportion as is appropriate to reflect the relative fault of the
indemnifying parties and indemnified parties in connection with such
statements or omissions which resulted in the losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission of alleged omissions to state a material fact relates to
information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities, or judgments referred to
in the immediately preceding paragraph shall be deemed to include, subject
to the limitation set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. No Person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentations. For the purposes of this Section 6(d),
each director of the Company, each officer who signed the Registration
Statement and each Person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.
7. Participation in Underwritten Registrations. No Holder may
participate in any underwritten Registration hereunder (which shall be conducted
in accordance with the provisions of Section 2(b) or 3) unless such Holder (i)
agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements (approved by the applicable Holders as provided
herein) and (ii) completes and executes all questionnaires, powers of attorneys,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and these registration rights.
8. Rule 144. The Company covenants that it will file any reports
required to be filed by it under the Securities Act and
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the Exchange Act and the rules and regulations adopted by the Commission
thereunder (or, if the Company is not required to file such reports, it will,
upon the request of the Holders, make publicly available other information so
long as necessary to permit sales under Rule 144 under the Securities Act), that
it will take such further action as the Holders may reasonably request, all to
the extent required from time to time to enable Holders to sell Registrable
Securities without registration under the Securities Act within the limitations
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended form time to time, or (ii) any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any Holder, the Company
will deliver to such Holder a written statement as to whether it has complied
with the requirements of this Section 8.
9. Other Registration Rights. Except for registration rights granted to
other Persons on or prior to the Closing Date, the Company will not grant any
Person any demand or piggyback registration rights with respect to the Shares
(or securities convertible into or exchangeable or exercisable for Shares) other
than registration rights ("new rights") that (i) would not be inconsistent with
the terms of this Section 9 and (ii) do not provide that the Holders have a
piggyback right upon the exercise of such new rights and shall be included in
the registration statement and on an equal basis with the securities being
registered pursuant to the exercise of the new rights.
10. Registration Expenses. The Registration Expenses related to any
Demand Registration or Piggyback Registration shall be borne solely by the
Company.
11. Stand-Off and Special Audit.
(a) Stand-Off. If at the time of any request for a Demand Registration
pursuant to Section 3, the Company (i) is engaged or has fixed plans to
engage, within 30 days of the time of the request, in a registered public
offering as to which the Holders may, pursuant to Section 2, include all
Registrable Securities proposed to be sold by them, and which in fact
becomes effective within 90 days after the request, or (ii) is engaged in
any other activity which, in the good faith determination of the Company's
board of directors, would be adversely affected by the Demand Registration
to the material detriment of the Company, then the Company may at its option
direct that such request be delayed for a period not to exceed six months
from the effective date of such offering or the date of commencement of such
other material activity, as the case may be.
(b) Provisions for Special Audit. In the event that a special audit of
the Company's financial statements would be required to effect a
Registration pursuant to Section 3, the
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Company shall promptly notify the Holders requesting Registration that a
special audit is required. In such event, the Holders who initiated the
Demand Registration shall have the right to either (i) withdraw such request
for Registration, in which case the request shall not count as a Demand
Registration to which the Holders are entitled under this Agreement or
(ii) pay the expenses of conducting the special audit.
12. Public Trading Market. Until the earlier of (a) three years after
the date hereof or (b) the date on which there are no Registrable Securities,
the Company shall use its best efforts to maintain a public trading market for
its Shares.
13. Restriction on Resale. Unless otherwise agreed by the Company,
until the earlier of (a) three years after the date hereof or (b) the date on
which there are no Registrable Securities, the Holders will not resell the
Registrable Securities without registration under the Securities Act, compliance
with Rule 144, or an opinion of counsel for such holder, addressed to the
Company, to the effect that no such registration is required.
14. Miscellaneous.
(a) Amendments and Waivers. This Agreement may not be amended without
the written consent of the parties hereto.
(b) Successors and Assigns. The Holder shall not assign any of its
rights or obligations under this Agreement except to (i) an Affiliate (as
such term is defined in Section 1.01 of the Credit Agreement) of the Holder
or (ii) anyone who purchases at least 40,000 of the Registrable Securities
from the Holder prior to the filing of a Registration Statement pursuant to
Section 2 or 3 hereof. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. No other person shall acquire or have any rights under or
by virtue of this Agreement.
(c) Notices. All notices and other communications provided for
hereunder shall be given and shall be effective as provided in the Credit
Agreement.
(d) Descriptive Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise effect the
meaning of terms contained herein.
(e) Severability. In the event that any one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of such provision, paragraph, word, clause,
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phrase or sentence in every other respect and of the remaining provisions,
paragraphs, words, clauses, phrases or sentences hereof shall not be in any
way impaired, it being intended that all rights, powers and privileges of
the parties hereto shall be enforceable to the fullest extent permitted by
law.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one
such counterpart.
(g) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
(h) Remedies. The Company acknowledges that monetary damages will not
be adequate compensation for any loss incurred by reason of a breach by it
of the provisions hereof and agrees, to the fullest extent permitted by law,
to waive the defense of adequacy of legal remedies in any action for
specific performance hereof.
(i) Merger, etc. If, directly or indirectly, (i) the Company shall
merge with and into, or consolidate with, any other Person, (ii) any Person
shall merge with and into, or consolidate with, the Company and the Company
shall be the surviving corporation of such merger or consolidation and, in
connection with such merger or consolidation, all or part of the Registrable
Securities shall be changed into or exchanged for stock or other securities
of any other Person, then, in each such case, proper provision shall be made
so that such Person shall be bound by the provisions of this Agreement and
the term "Company" shall thereafter be deemed to refer to such Person.
(j) Other Agreements. The Company shall not enter into any agreement
inconsistent with any of the provisions hereof.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed on its behalf as of the date first written above.
NAI TECHNOLOGIES, INC.
By Richard A. Schneider
---------------------------------
Title Executive Vice President
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THE BANK OF NEW YORK
By J. B. Lifton
---------------------------------
Title Vice President
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CHEMICAL BANK
By Kathryn A. Duncan
---------------------------------
Title Vice President
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