REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of August 31, 1998,
by and between Networks Associates, Inc., a Delaware corporation (the
"Company"), and the undersigned shareholders of QA Information Security
Holding AB (the "Shareholders").
RECITALS
WHEREAS, concurrent with delivery of this Agreement, the Company,
and the Shareholders are entering into a Stock Purchase Agreement (the
"Purchase Agreement") which provides for the purchase (the "Purchase")
of all of the issued and outstanding shares of QA Information Security
Holding AB by the Company in exchange for shares of Company Common
Stock;
WHEREAS, as an inducement to the Shareholders to enter into the
Purchase Agreement, as of the Closing Date, the shares of Company Common
Stock that are issued to the Shareholders pursuant to the Purchase
Agreement shall be granted registration rights as set forth herein; and
WHEREAS, all terms not otherwise defined herein shall have the
same meanings ascribed to them in the Purchase Agreement;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933,
as amended.
(b) The term "1934 Act" shall mean the Securities
Exchange Act of 1934, as amended.
(c) The term "register," "registered," and
"registration" refer to a registration effected by preparing
and filing a registration statement or similar document in
compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document.
(d) The term "Registrable Securities" means the
Common Stock of the Company ("Common Stock") issued to the
Shareholders in accordance with the terms and conditions of
the Purchase Agreement and any securities of the Company
issued as a dividend on or other distribution with respect
to, or in exchange for or replacement of, such common stock.
(e) The term "SEC" shall mean the Securities and
Exchange Commission.
1.2 Obligations of the Company. Whenever required under
this Section 1 to effect the registration of any Registrable
Securities, the Company shall, as soon as reasonably possible:
(a) Prepare and file with the SEC as soon as
reasonably possible, but in no event later than 60 days
after the Closing Date, a registration statement on Form S-
3, or other available form of registration statement with
respect to such Registrable Securities (hereinafter referred
to as the "Registration Statement") and use its reasonable
best efforts to cause such registration statement to become
effective as soon as reasonably possible thereafter, and,
subject to the provisions below, use its reasonable best
efforts to, keep such registration statement effective for a
period of 360 days or, if earlier, until the Shareholders
have sold all of the Registrable Securities. If at any time
after a registration statement becomes effective, the
Company advises the Shareholders' Agent (defined below) in
writing that due to the existence of material information
that has not been disclosed to the public and included in
the registration statement it is necessary to amend the
registration statement, the Shareholders shall suspend any
further sale of Registrable Securities pursuant to the
Registration Statement until the Company advises the
Shareholders' Agent that the registration statement has been
amended. In such event, the Company shall cause the
registration statement to be amended forthwith, provided
that the Company shall not be required to amend the
registration statement during any time when the Company's
officers and director are prohibited from buying or selling
the Company's Common Stock pursuant to the Company's xxxxxxx
xxxxxxx policy. Notwithstanding the foregoing sentence, the
Company shall file any amendment necessary for the
Shareholders to recommence sales under the registration
statement concurrently with the commencement of any period
in which directors and officers of the Company are allowed
to buy or sell Common Stock pursuant to the Company's
xxxxxxx xxxxxxx policy. In addition, the Company may
suspend use of the registration statement to the extent the
Company is advised by its legal counsel, such action is
reasonably necessary to comply with federal securities law.
In the event the sales of Registrable Securities of the
Shareholders are suspended as provided above, the 360-day
period during which a registration statement must be kept
effective shall be extended for the total number of days
during which sales are suspended.
(b) Subject to subsection 1.2(a), prepare and file
with the SEC such amendments and supplements to such
Registration Statement and the prospectus used in connection
with such Registration Statement as may be necessary to
comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration
Statement.
(c) Furnish to Xxxx Xxxxx (the "Shareholders'
Agent") such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements
of the Act, and such other documents as the Shareholders may
reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such
other (U.S.) securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the
Shareholders, provided that the Company shall not be
required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions,
unless the Company is already subject to service in such
jurisdiction and except as may be required by the Act.
(e) The Company may include securities issued in
connection with any acquisition not otherwise registered on
an S-4 Registration Statement in the registration pursuant
to this Agreement.
1.3 Information from Shareholders. It shall be a
condition precedent to the obligations of the Company to take any
action pursuant to this Section 1 with respect to the Registrable
Securities of the Shareholders that the Shareholders shall furnish
to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of
disposition of such securities, as shall be required to effect the
registration of the Registrable Securities.
1.4 Expenses of Registration. All expenses of the
Shareholders, including (without limitation) all registration,
filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company shall be borne by the
Company; provided, however, that the Company shall not be required
to pay any professional fees of the Shareholders other than the
fees of one counsel to the Shareholders' Agent (not to exceed
$10,000).
1.5 Indemnification. In the event any Registrable
Securities are included in the Registration Statement under this
Section 1:
(a) The Company will indemnify and hold harmless the
Shareholders, each of their directors, officers, trustees or
beneficiaries, if applicable and each person, if any, who
controls a non-individual shareholder within the meaning of
the Act against any losses, claims, damages, or liabilities
(joint or several) to which the Shareholders may become
subject under the Act, or the 1934 Act or other federal or
state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement, including any
preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto, (ii) the omission
or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the
statements' therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the 1934
Act, or any rule or regulation promulgated under the Act, or
the 1934 Act; and the Company will pay to the Shareholders
as incurred any legal or other expenses reasonably incurred
by the Shareholders in connection with investigating or
defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement
contained in this subsection 1.5(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without
the consent of the Company, which consent shall not be
unreasonably withheld, nor shall the Company be liable in
any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing expressly
for use in connection with such registration by the
Shareholders seeking indemnification hereunder. In
addition, the Company shall not be liable for any untrue
statement or omission in any prospectus if a supplement or
amendment thereto correcting such untrue statement or
omission was delivered to the Shareholders' Agent prior to
the pertinent sale or sales by the Shareholders.
(b) Each Shareholder will indemnify and hold
harmless the Company, each of its directors, each of its
officers who has signed the Registration Statement, each
person, if any, who controls the Company within the meaning
of the Act, any other shareholder selling securities in such
Registration Statement and any controlling person of any
such shareholder, against any losses, claims, damages, or
liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Act, or the 1934 Act
or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with
written information furnished by such Shareholder expressly
for use in connection with such registration; and such
Shareholder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be
indemnified pursuant to this subsection 1.5(b), in
connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that
the indemnity agreement contained in this subsection 1.5(b)
shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement
is effected without the consent of such Shareholder, which
consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subsection 1.5(b)
by such Shareholder exceed the gross proceeds from the
offering received by such Shareholder.
(c) Promptly after receipt by an indemnified party
under this Section 1.5 of notice of the commencement of any
action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 1.5,
deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with
all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to
retain one separate counsel, with the fees and expenses to
be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party
and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party
under this Section 1.5, but the omission so to deliver
written notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party
otherwise than under this Section 1.5.
(d) If the indemnification provided for in this
Section 1.5 is held by a court of competent jurisdiction to
be unavailable to an indemnified party with respect to any
loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and
of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other
relevant equitable considerations. The relative fault of
the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such
statement or omission.
(e) The obligations of the Company, and the
Shareholders under this Section 1.5 shall survive the
completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.6 Reports Under the Securities Exchange Act. The
Company agrees to file with the SEC in a timely manner all reports
and other documents and information required of the Company under
the 1934 Act, and take such other actions as may be necessary to
assure the availability of Form S-3 for use in connection with the
registration rights provided in this Agreement.
1.7 Rules 144 and 144A. The Company shall use
commercially reasonable efforts to file the reports required to be
filed by it under the Act and the 1934 Act in a timely manner and,
if at any time the Company is not required to file such reports,
it will, upon the written request of the Shareholders' Agent, make
publicly available other information so long as necessary to
permit sales of the Shareholders' securities pursuant to Rule 144
and 144A. The Company covenants that it will take such further
action as the Shareholders may reasonably request, all to the
extent required from time to time to enable the Shareholders to
sell securities without registration under the Act within the
limitation of the exemptions provided by Rules 144 and 144A
(including the requirements of Rule 144A(d)(4)).
2. Miscellaneous.
2.1 Notices. Notice to the Shareholders' Agent shall
constitute notice to all the shareholders party hereto. All
notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or
by commercial delivery service, or mailed by registered or
certified mail (return receipt requested) or sent via
facsimile (with acknowledgment of complete transmission) to
the parties at the following addresses (or at such other
address for a party as shall be specified by like notice) :
(1) if to the Company:
Networks Associates, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000, XXX
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Facsimile No.: x0 (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000, XXX
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Facsimile No.: x0 (000) 000-0000
(2) if to the Shareholders' Agent, to
Xxxx Xxxxx
Xxxxxxxxxx 00
XX-000 00 Xxxxxxxx, Xxxxxx
Facsimile No.: x00 (0) 000 000 00
with a copy to:
Advokatfirman Xxxxx
Box 1703
XX-000 00 Xxxxxxxxx, Xxxxxx
Attention: Xxxxxxxx Xxxxxxxxx
Facsimile No.: x00 (0) 000 00 00
2.2 Interpretation. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
2.3 Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party, it
being understood that all parties need not sign the same counterpart.
2.4 Entire Agreement; Assignment. This Agreement and
the documents and instruments and other agreements among the parties
hereto referenced herein: (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof; (b) are not intended
to confer upon any other person (including, without limitation, those
persons listed on any exhibits hereto) any rights or remedies hereunder;
and (c) without the prior written consent of each party shall not
be assigned by operation of law or otherwise, except that the Company
may assign its rights and obligations hereunder to an affiliate of the
Company provided that the Company shall remain liable for all its
obligations hereunder notwithstanding such assignment. Any assignment
of rights or delegation of duties under this Agreement by a party
without the prior written consent of the other parties, if such consent
is required hereby, shall be void.
2.5 Severability. In the event that any provision of
this Agreement or the application thereof, becomes or is declared by a
court of competent jurisdiction to be illegal, void or unenforceable,
the remainder of this Agreement will continue in full force and effect
and the application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the parties
hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that
will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
2.6 Other Remedies. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy
conferred hereby, or by law or equity upon such party, and the exercise
by a party of any one remedy will not preclude the exercise of any other
remedy.
2.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
* * * *
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first above written.
NETWORKS ASSOCIATES, INC.
By: /S/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx,
Chief Financial Officer,
Vice President of
Finance and Administration
Address: 0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
SHAREHOLDERS
/S/ XXXX XXXXX
___________________________________________
Xxxx Xxxxx
/S/ XXXXXX XXXXXXX
___________________________________________
Xxxxxx Xxxxxxx
/S/ XXX XXXXXXXX
___________________________________________
Xxx Xxxxxxxx
