-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RzMcdoLx2PC0I7LxMgk1VMnCImZd/3DmuAjkNFHKiUsq2vUZpuJ31ddiV56FskuG BF68jq5tFHBFfeBNLmUUZA== 0000950008-98-000401.txt : 19981005 0000950008-98-000401.hdr.sgml : 19981005 ACCESSION NUMBER: 0000950008-98-000401 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19981002 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ODS NETWORKS INC CENTRAL INDEX KEY: 0000736012 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 751911917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49215 FILM NUMBER: 98720173 BUSINESS ADDRESS: STREET 1: 1101 E ARAPAHO ROAD CITY: RICHARDSON STATE: TX ZIP: 75081 BUSINESS PHONE: 2142346400 MAIL ADDRESS: STREET 1: 1101 E ARAPAHO ROAD CITY: RICHRICHARDSON STATE: TX ZIP: 75081 FORMER COMPANY: FORMER CONFORMED NAME: OPTICAL DATA SYSTEMS INC DATE OF NAME CHANGE: 19950517 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SCIENCE APPLICATIONS INTERNATIONAL CORP CENTRAL INDEX KEY: 0000353394 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT [8700] IRS NUMBER: 953630868 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 10260 CAMPUS POINT DR STREET 2: LEGAL DEPT CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6195466000 MAIL ADDRESS: STREET 1: LEGAL DEPT STREET 2: 10260 CAMPUS POINT DR CITY: SAN DIEGO STATE: CA ZIP: 92121 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 ODS Networks, Inc. - ------------------------------------------------------------------------------- (Name of Issuer) Common Stock - ------------------------------------------------------------------------------- (Title of Class of Securities) 67082N109 - ------------------------------------------------------------------------------- (CUSIP Number) Douglas E. Scott, Esq. 10260 Campus Point Drive San Diego, CA 92121 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 25, 1998 - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box / /. NOTE: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See section 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 67082N109 13D Page 2 of 12 Pages 1. NAME OF REPORTING PERSON Science Applications International Corporation S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON ###-##-#### - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / / - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS WC - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / / - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER 3,100,000 SHARES BENEFICIALLY --------------------------------------------------------- OWNED BY EACH 8. SHARED VOTING POWER N/A REPORTING PERSON --------------------------------------------------------- WITH 9. SOLE DISPOSITIVE POWER 3,100,000 --------------------------------------------------------- 10. SHARED DISPOSITIVE POWER N/A - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,100,000 - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.5% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- CUSIP No. 67082N109 13D Page 3 of 12 Pages Item 1. Security and Issuer. - ------ ------------------- (a) Title of class of equity securities: Common Stock. (b) Name of Issuer: ODS Networks, Inc. (c) Address of the principal executive office of the issuer: 1101 East Arapaho Road Richardson, TX 75081 Item 2. Identity and Background. - ------ ----------------------- (a) Name: Science Applications International Corporation. The executive officers and directors of Science Applications International Corporation are set forth on Appendix A hereto. (b) Principal Business Address: 10260 Campus Point Drive San Diego, CA 92121 (c) Principal Business: Science Applications International Corporation provides diversified professional and technical services and designs, develops and manufactures high-technology products. (d) Criminal Proceedings: During the last five years, neither the Reporting Person nor any executive officer or director of the Reporting Person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). CUSIP No. 67082N109 13D Page 4 of 12 Pages (e) Civil Proceedings: During the last five years, neither the Reporting Person nor any executive officer or director of the Reporting Person has been party to any civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person would have been subject to any judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) State of Incorporation: Delaware. Item 3. Source and Amount of Funds or Other Consideration. - ------ ------------------------------------------------- Funds for the purchase of the securities are derived from the Reporting Person's working capital and the sale of certain assets of the Reporting Person. Specifically, $1,500,000 in cash in addition to certain of the Reporting Person's assets (as set forth in the Asset and Securities Purchase Agreement by and between the Issuer and the Reporting Person dated as of September 25, 1998 (the "Agreement")) were paid to the Issuer in consideration for (a) 1,600,000 shares of Common Stock of the Issuer; (b) a warrant to purchase an additional 750,000 shares of Common Stock of the Issuer at an exercise price of $8.00 per share, exercisable at any time on or before March 25, 2000; and (c) a warrant to purchase 750,000 shares of the Issuer's Common Stock at an exercise price of $10.50 per share, exercisable at any time on or before September 25, 2000. CUSIP No. 67082N109 13D Page 5 of 12 Pages Item 4. Purpose of the Transaction. - ------ -------------------------- The Reporting Person acquired the Common Stock and the warrants (as described below) as an investment and in connection with the Agreement and certain related agreements by and between the Issuer and the Reporting Person pursuant to which the Reporting Person sold to the Issuer certain of the Reporting Person's assets (as set forth in the Agreement) and paid to the Issuer $1,500,000 in exchange for (a) 1,600,000 shares of the Common Stock of the issuer; (b) a warrant to purchase 750,000 shares of Common Stock of the Issuer at an exercise price of $8.50 per share, exercisable at any time on or before March 25, 2000; and (c) a warrant to purchase 750,000 shares of the Common Stock of the Issuer at an exercise price of $10.50 per share, exercisable at any time on or before September 25, 2000. Pursuant to the Stockholder and Voting Agreement dated as of September 25, 1998 by and among the Issuer, the Reporting Person and certain stockholders of the Issuer (the "Stockholder and Voting Agreement"), the Reporting Person has agreed that it will not purchase any additional shares of Common Stock of the Issuer without first obtaining the written consent of the Issuer (other than pursuant to the exercise of the warrants and except to retain the Reporting Person's relative percentage of ownership of the Issuer's Common Stock) (the "Standstill Provision"). Subject to such Standstill Provision, in the future, from time to time, the Reporting Person may purchase additional shares of Common Stock of the Issuer depending on the then prevailing market conditions and the price at which such Common Stock shares are traded in the open market or privately negotiated transactions. CUSIP No. 67082N109 13D Page 6 of 12 Pages Item 5. Interest in Securities of the Issuer. - ------ ------------------------------------ According to the Form 10-Q for the quarter ended June 30, 1998 of the Issuer, there are approximately 16,887,233 shares of Common Stock issued and outstanding (before giving effect to the issuance of the 1,600,000 shares of Common Stock and the 1,500,000 shares of Common Stock issuable upon exercise of the warrants). (a) Amount beneficially owned: 3,100,000* Percent of class: 15.5%. (b) The number of shares as to which the Reporting Person has: (i) Sole power to vote or direct the vote: 3,100,000 shares; (ii) Shared power to vote or direct the vote: none; (iii) Sole power to dispose or direct the disposition of: 3,100,000 shares; (iv) Shared power to dispose or direct the disposition of: none. (c) Recent Transactions: On September 25, 1998, the Reporting Person acquired the Common Stock and the warrants (as described in Items 3 and 4 above) as an investment and in connection with the Agreement (as defined in Item 3 above) and certain related agreements between the Issuer and the Reporting Person pursuant to which the Reporting Person: (i) paid $1,500,000 in cash and transferred to the Issuer certain assets as set forth in the Agreement and (ii) entered into a strategic alliance with the Issuer pursuant to the related agreements. - -------- * Includes up to 1,500,000 shares of Common Stock that the Reporting Person has a right to acquire pursuant to the warrants described in Items 3 and 4. Such shares are beneficially owned by the Reporting Person under Rule 13d-3 because the Reporting Person has a right to acquire such shares within the next 60 days. CUSIP No. 67082N109 13D Page 7 of 12 Pages Pursuant to the Registration Rights Agreement between the Reporting Person and the Issuer, the Reporting Person has, under certain circumstances, various rights related to (d) registration of Common Stock of the Issuer held by the Reporting Person and (e) participation in future sales and issuances of securities by the Issuer. Pursuant to the Stockholder and Voting Agreement between the Reporting Person and the Issuer, the Reporting Person has, under certain circumstances, various rights related to the voting of the Common Stock of the Issuer held by the Reporting Person, including, but not limited to, the right to nominate candidate(s) to the Issuer's board of directors, the right to consent to certain transactions of the Issuer and certain preemptive rights with respect to future offerings of stock of the Issuer. The Reporting Person is also subject to the Standstill Provision contained in the Stockholder and Voting Agreement. The Reporting Person paid $1,500,000 in cash and transferred certain assets as set forth in the Agreement in exchange for 1,600,000 shares of Common Stock of the Issuer, a warrant to purchase an additional 750,000 shares of Common Stock of the Issuer at an exercise price of $8.00 per share, exercisable at any time on or before March 25, 2000, and a warrant to purchase an additional 750,000 shares of Common Stock of the Issuer at an exercise price of $10.50 per share, exercisable at any time on or before September 25, 2000. (f) Grants with Respect to Dividends or Sales Proceeds: Not applicable. CUSIP No. 67082N109 13D Page 8 of 12 Pages (g) Date of Cessation of Five Percent Beneficial Ownership: Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with - ------ ------------------------------------------------------------- Respect to Securities of the Issuer. ----------------------------------- Pursuant to the Registration Rights Agreement between the Reporting Person and the Issuer, the Reporting Person has, under certain circumstances, various rights related to (a) registration of Common Stock of the Issuer held by the Reporting Person and (b) participation in future sales and issuances of securities by the Issuer. Pursuant to the Stockholder and Voting Agreement between the Reporting Person and the Issuer, the Reporting Person has, under certain circumstances, various rights related to the voting of the Common Stock of the Issuer held by the Reporting Person, including, but not limited to, the right to nominate candidate(s) to the Issuer's board of directors, the right to consent to certain transactions of the Issuer and certain preemptive rights with respect to future offerings of stock of the Issuer. Item 7. Material to be filed as Exhibits. - ------ -------------------------------- Exhibit 1 Stockholder and Voting Agreement dated as of September 25,1998, by and among Science Applications International Corporation, ODS Networks, Inc. and certain stockholders of ODS Networks, Inc. CUSIP No. 67082N109 13D Page 9 of 12 Pages SIGNATURE --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated as of October 2, 1998. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION By /s/ Douglas E. Scott ----------------------------------------- Douglas E. Scott Senior Vice President and General Counsel CUSIP No. 67082N109 13D Page 10 of 12 Pages APPENDIX A Directors The following is a list of all directors of Science Applications International Corporation ("SAIC") and certain other information with respect to each director. All directors are United States citizens.
Name, Principal Business and Address of Corporation or Other Organization on Name Principal Occupation Which Employment is Conducted ---- -------------------- ----------------------------- Duane P. Andrews Corporate Executive Vice President and Director 1710 Goodrich Drive of SAIC McLean, VA 22102 J. Robert Beyster Chairman of the Board, Chief Executive Officer, 1241 Cave Street President and Director of SAIC La Jolla, CA 92037 Vincent N. Cook Director of SAIC 1000 South Frontage Road West Glen Lyon Building, Suite 200 Vail, CO 81657 Wolfgang H. Demisch Managing Director of Wasserstein Perella, an Wasserstein Perella investment bank 31 West 52nd Street, 27th Floor New York, NY 10019 David W. Dorman Chief Executive Officer of PointCast, 501 Macara Avenue Incorporated, provider of news and information Sunnyvale, CA 94086 services via the Internet Wayne A. Downing Director of SAIC 2860 S. Circle Drive, Suite 2400 Colorado Springs, CO 80906 John E. Glancy Corporate Executive Vice President and Director 1241 Cave Street of SAIC La Jolla, CA 92037 Bobby R. Inman Director of SAIC 701 Brazos, Suite 500 Austin, TX 78701 Anita K. Jones Professor, Dept. of Computer Science, University Department of Computer Science of Virginia Thornton Hall University of Virginia Charlottesville, VA 22903 Harry M. Jansen Kraemer, Jr. President of Baxter International Inc., a health One Baxter Parkway care products, systems and services company Deerfield, IL 60015 CUSIP No. 67082N109 13D Page 11 of 12 Pages Name, Principal Business and Address of Corporation or Other Organization on Name Principal Occupation Which Employment is Conducted ---- -------------------- ----------------------------- Claudine B. Malone President of Financial Management Consulting, 7570 Potomac Fall Road Inc., a consulting company McLean, VA 22102 John W. McRary Chairman, President and Chief Executive Officer 3500 W. Balcones Center Drive of Microelectronics and Computer Technology Austin, TX 78759 Corporation, a corporation involved in research and development of advanced computer architec- ture, software technology, component packaging and computer-aided design and manufacturing Stephen D. Rockwood Executive Vice President and Director of SAIC 16701 West Bernardo Drive San Diego, CA 92127 Richard C. Smith Chief Executive Officer of Bell Communications 445 South Street Research, Inc., a wholly owned subsidiary of Morristown, NJ 07960 SAIC Edward A. Straker Executive Vice President and Director of SAIC 11251 Roger Bacon Drive Reston, VA 20190 Monroe E. Trout Director of SAIC 6135 Via Posada Del Norte Rancho Santa Fe, CA 92067 Joseph P. Walkush Sector Vice President and Director of SAIC 1241 Cave Street La Jolla, CA 92037 John H. Warner, Jr. Corporate Executive Vice President and Director 10260 Campus Point Drive of SAIC San Diego, CA 92121 Jasper A. Welch President of Jasper Welch Associates, a consulting 2129 Foothill Road firm Santa Fe, NM 87505 James B. Wiesler Director of SAIC 605 San Fernando Road San Diego, CA 92106 A. Thomas Young Director of SAIC 12921 Esworthy Road N. Potomac, MD 20878
CUSIP No. 67082N109 13D Page 12 of 12 Pages Executive Officers ------------------ The following is a list of all executive officers of Science Applications International Corporation ("SAIC"), excluding executive officers who are also directors. Unless otherwise indicated, each officer's business address is 10260 Campus Point Drive, San Diego, CA 92121. All executive officers are United States citizens. Daniel W. Baldwin Senior Vice President and Treasurer David A. Cox Executive Vice President SAIC 4242 Campus Point Court San Diego, CA 92121 J. Dennis Heipt Senior Vice President for Administration and Corporate Secretary Peter N. Pavlics Senior Vice President and Controller William A. Roper, Jr. Senior Vice President and Chief Financial Officer SAIC 1241 Cave Street La Jolla, CA 92037 Robert A. Rosenberg Executive Vice President SAIC 1710 Goodridge Drive McLean, VA 22102 Douglas E. Scott Senior Vice President and General Counsel EX-1 2 STOCKHOLDER AND VOTING AGREEMENT STOCKHOLDER AND VOTING AGREEMENT This Stockholder and Voting Agreement ("AGREEMENT"), is made effective as of September 25, 1998, by and among SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, a Delaware corporation ("SAIC"), ODS NETWORKS, INC., a Delaware corporation ("ODS"), and the stockholders of ODS identified below ("STOCKHOLDERS"), who agree as follows: 1. BOARD OF DIRECTORS; OTHER. In consideration of SAIC's investment in ODS pursuant to the Asset and Securities Purchase Agreement between SAIC and ODS of even date herewith ("A&SPA"), so long as SAIC beneficially owns, directly or indirectly, the lesser of (i) five percent (5%) or more of the outstanding shares of the common stock of ODS ("Common Stock")or (ii) 1,000,000 shares of the Common Stock (as appropriately adjusted for stock splits, stock dividends or other similar transactions), Stockholders and ODS agree to take such action as may be required to cause: (a) the expansion of the number of members of the ODS Board of Directors from five (5) to six (6) members contemporaneously with the closing of the A&SPA and; (b) said sixth director to be nominated by SAIC and the Stockholders to affirmatively support the election of such SAIC nominee; (c) the ODS Board of Directors to permit a non-voting SAIC designee to attend and observe any meetings of the ODS Board of Directors or any committee thereof, provided, however, that in the event that the ODS Board of Directors is expanded to more than six (6) members and a nominee of SAIC is elected as the seventh member of the Board of Directors, then upon such election, SAIC's right to have a non-voting designee attend the ODS Board of Directors meetings shall cease; (d) SAIC to designate a nominee as the seventh director in the event the ODS Board of Directors is expanded to more than six (6) directors and the Stockholders to affirmatively support the election of such SAIC nominee; (e) SAIC to have the right to approve the nomination by any of the Stockholders of additional members of the ODS Board of Directors in the event the ODS Board of Directors is expanded up to nine (9) members, which such approval shall not be unreasonably withheld or delayed; -1- (f) the Board of Directors to not be increased above nine (9) members without the advance written consent of the members of the Board of Directors nominated by SAIC; (g) ODS to obtain the consent of SAIC to engage in a transaction involving: (i) the sale of all or substantially all of the assets of ODS or the merger of ODS, other than a merger into a wholly owned subsidiary, in which ODS is not the surviving entity or the consolidation of ODS with one or more other corporations where, in any such event, the transaction proceeds consist, in whole or in part, of unregistered securities or registered securities of a company that is publicly traded and the average trading volume of said entity is less than fifteen percent (15%), on a fully-diluted basis, of SAIC's holdings of shares of Common Stock and the shares of Common --- Stock to be issued upon the exercise of any warrants held by SAIC from time to time or (ii) any future issuance by ODS of shares of ODS stock representing twenty percent (20%) or more of the then outstanding voting stock of ODS whether in a single transaction or a series of transactions between ODS and the same party or the affiliates of such party (in which case SAIC may condition its consent upon SAIC receiving preemptive rights); provided, however, that SAIC's approval will not be required with respect to any ODS stock (i) to be issued pursuant to an employee stock option plan, or (ii) to be offered to the public pursuant to an underwritten public offering. (h) preemptive rights to be provided to SAIC with respect to any future offering of additional shares of ODS stock other than shares of ODS stock (i) any transaction approved by SAIC pursuant to this Agreement, (ii) to be issued pursuant to an employee stock option plan, (iii) to be offered to the public pursuant to an underwritten public offering, or (iv) issued as full or partial consideration in connection with a merger or acquisition by or of ODS. 2. TRANSFER OF SHARES. Nothing in this Agreement shall restrict the ability of the a Stockholder to sell, transfer, or otherwise dispose of any of the shares of Common Stock owned by them (the "Stockholder Shares"); provided, however that for as long as a Stockholder owns any Common Stock such Stockholder shall be bound by this Agreement.. 3. STANDSTILL. For a period of one (1) year from the date of this Agreement and subject to the exceptions provided in this Agreement, unless SAIC shall have obtained the written consent of ODS, SAIC agrees that it will not purchase, directly or indirectly, any additional shares of Common Stock (other than pursuant to the exercise of warrants issued to SAIC by ODS) except to retain SAIC's relative percentage of ownership of ODS stock. Notwithstanding the foregoing, in the event a Stockholder sells any Stockholder Shares, SAIC may, at any time thereafter, and without the consent of ODS, purchase an amount equal to the Stockholder Shares sold by the Stockholder(s). -2- 4. HOLDING PERIOD. SAIC agrees that it will hold the Common Stock, warrants to purchase Common Stock or other securities of ODS issued to or held by SAIC pursuant to the A&SPA and any shares of Common Stock or other securities issued upon the exercise of the warrants (collectively, the "Shares") for at least twelve (12) months from the date of this Agreement; provided, however, that nothing in the foregoing will be deemed to preclude SAIC from exercising any warrants during the twelve (12) month period following the date of this Agreement or to purchase additional Common Stock as provided for in Section 3 above. 5. MISCELLANEOUS. SAIC agrees to make appropriate personnel available for comment to industry analysts from time to time. 6. ARBITRATION OF DISPUTES. The parties agree that any controversy or claim (whether such controversy or claim is based upon or sounds in statute, contract, tort or otherwise) arising out of or relating to this Agreement, any performance or dealings among the parties, or any dispute arising out of the interpretation or application of this Agreement, which the parties are not able to resolve, shall be settled exclusively by arbitration in Dallas, Texas by a single arbitrator pursuant to the American Arbitration Association's Commercial Arbitration Rules then in effect and judgment upon the award rendered by the arbitrator shall be entered in any court having jurisdiction thereof and such arbitrator shall have the authority to grant injunctive relief in a form similar to that which a court of law would otherwise grant. The arbitrator shall be chosen from a panel of licensed attorneys having at least fifteen (15) years of professional experience who are familiar with the subject matter of this Agreement. The arbitrator shall be appointed within thirty (30) days of the date the demand for arbitration was sent to the other party. Discovery shall be permitted in accordance with the Federal Rules of Civil Procedure. If an arbitration proceeding is brought pursuant to this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and necessary disbursements incurred in addition to any other relief to which such party may be entitled. 7. CHOICE OF LAW. The Agreement and the performance or breach thereof shall be governed by and interpreted as to substantive matters in accordance with the applicable laws of the State of Delaware (excluding its choice of law rules). 8. ASSIGNMENT. No portion of this Agreement or any right or obligation hereunder can be assigned, in whole or in part, by any Stockholder hereto without the prior written consent of SAIC unless the assignee executes a document substantially similar to this Agreement, intending to be legally bound thereby, and delivers same to SAIC. SAIC may not assign this Agreement and any attempt to do so will be void and of no effect. 9. WAIVER. No waiver of, no delay in the exercise of, and no omission to exercise any rights or remedies by any party shall be construed as a waiver by such party of any other rights or remedies that such party may have under this Agreement. 10. NOTICE. Unless otherwise specified herein, any notice required or permitted to be given under this Agreement shall be sufficient, if in writing, and shall be deemed to be fully given -3- if personally delivered, if sent by registered mail, by facsimile with an original copy by regular mail, or by telex with receipt acknowledged, to the following addresses: (a) If to SAIC, to: Douglas M. Schrier, Senior Vice President Science Applications International Corporation 10260 Campus Point Drive, M/S L5-A San Diego CA 92121 FAX: 619-546-6980 With a copy to: Kevin A. Werner, Esq. Associate General Counsel Science Applications International Corporation 10260 Campus Point Drive, M/S F3 San Diego CA 92121 FAX: 619-535-7992 (b) If to ODS, to: G. Ward Paxton Chairman, President and Chief Executive Officer ODS Networks, Inc. 1101 E. Arapaho Road Richardson, Texas 75081 FAX: 972-301-3841 (c) If to Stockholders, to the address immediately below such Stockholder's name. The foregoing addresses and individuals may be changed by either party by giving to the other party prior written notice of any such change. 11. THIRD PARTIES. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or corporation other than the parties hereto and their successors or assigns, any rights or remedies under or by reason of this Agreement. 12. FURTHER ASSURANCES. Each of the parties hereto agrees that from time to time, at the request of any of the other parties hereto and without further consideration, it will execute and deliver such other documents and take such other action as such other party may reasonably request in order to consummate more effectively the transactions contemplated hereby. -4- 13. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and may only be modified by a written instrument executed by an authorized officer of both parties. All proposals, negotiations and representations (if any) made prior, and with reference to the subject matter of this Agreement, are merged herein. This Agreement may be executed in multiple counterparts and each counterpart will be deemed an original, but all counterparts together will constitute a single instrument. This Agreement has been negotiated by the parties and their respective counsel and will be interpreted fairly in accordance with its terms and without any strict construction in favor of or against either party. Neither SAIC, ODS nor any Stockholder shall be bound by any oral agreement or representation, irrespective of when made. IN WITNESS WHEREOF, as of the day first above written, SAIC and ODS have caused this Agreement to be signed by their respective duly authorized officers and each Stockholder and spouse, if any, have caused this Agreement to be signed. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION, a Delaware corporation By: /s/ Douglas M. Schrier ------------------------------------ Name: Douglas M. Schrier ---------------------------------- Title: Senior Vice President --------------------------------- ODS NETWORKS, INC., a Delaware corporation By: /s/ G. Ward Paxton ------------------------------------ Name: G. Ward Paxton ---------------------------------- Title: Chief Executive Officer --------------------------------- STOCKHOLDERS OF ODS NETWORKS, INC. /s/ T. Joe Head --------------------------------------- T. Joe Head ----------------------------- (spouse) Address: 1101 E. Arapaho Road ------------------------------- Richardson, TX 75081 ------------------------------- -5- /s/ Timothy W. Kinnear --------------------------------------- Timothy W. Kinnear /s/ Judy E. Kinnear ----------------------------- (spouse) Address: 415 Wolverly Lane ------------------------------- Allen, TX 75002 ------------------------------- /s/ G. Ward Paxton --------------------------------------- G. Ward Paxton /s/ Pat Paxton ----------------------------- (spouse) Address: P. O. Box 227 ------------------------------- Allen, TX 75013 ------------------------------- /s/ Mark A. Paxton --------------------------------------- Mark A. Paxton /s/ Barbara E. Paxton ----------------------------- (spouse) Address: P. O. Box 437 ------------------------------- Allen, TX 75013 ------------------------------- /s/ Michael L. Paxton --------------------------------------- Michael L. Paxton /s/ Kathryn Paxton ----------------------------- (spouse) Address: 7111 Round Hill Road ------------------------------- McKinney, TX 75070 ------------------------------- /s/ Julie Paxton Puckett --------------------------------------- Julie Paxton Puckett ----------------------------- (spouse) Address: 2 White Rock Trail ------------------------------- Lucas, TX 75002 ------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----