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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of December 5, 1997, by
and between Networks Associates, Inc. (formerly McAfee Associates, Inc.), a
Delaware corporation (the "Company"), and Xxxx Xxxxxx, as representative (the
"Representative") of the holders of Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. ("GKM")
and the Class B Preferred Stock of Pretty Good Privacy, Inc.
(together with GKM, the "Stockholders").
RECITALS
WHEREAS, concurrent with delivery of this Agreement, the Company, PG
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the
Company ("Merger Sub"), and Pretty Good Privacy, Inc. ("PGP") are entering into
an Agreement and Plan of Reorganization (the "Merger Agreement") which provides
for the merger (the "Merger") of Merger Sub with and into the PGP. Pursuant to
the Merger, GKM and the holders of shares of Series B Preferred Stock of PGP
(the "Series B Preferred") will be, among other things, entitled to receive
warrants (each a "Warrant") to purchase a certain number of shares of Common
Stock of the Company;
WHEREAS, the execution and delivery of this Agreement is a condition to
the closing of the Merger Agreement;
WHEREAS, the Merger Agreement provides that the shares of Common Stock
of the Company that are issuable upon exercise of the Warrants to the
Stockholders 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 Merger 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.
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(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") issuable to the Stockholders upon exercise
of the Warrants in accordance with the terms and conditions of the Merger
Agreement and the Warrants.
(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 expeditiously as reasonably possible:
(a) Prepare and file with the SEC as soon as practicable,
but in no event later than 30 days after the Closing Date, a registration
statement on Form S-3 with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective, and,
subject to the provisions below, use its best efforts to, keep such registration
statement effective for a period of 365 days or, if earlier, until the
distribution contemplated in the registration statement has been completed. If
at any time after a registration statement becomes effective, the Company
advises the Representative 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
Representative shall notify the Stockholders of such circumstances and instruct
the Stockholders to suspend any further sale of Registrable Securities pursuant
to the Registration Statement until the Company advises the Representative that
the registration statement has been amended. In such event, the Company shall
cause the registration statement to be amended as soon as reasonably
practicable, 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 if the Company reasonably determines that such
amendment would require the premature public disclosure of material non-public
information. Notwithstanding the foregoing sentence, the Company shall file any
amendment necessary for the Stockholders 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 that, such action is reasonably necessary to comply with
applicable federal securities laws. In the event the sales of Registrable
Securities of the Stockholders are suspended as provided above, the 365-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.
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(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 the Representative for the benefit of the
Stockholders such numbers of copies of a prospectus in conformity with the
requirements of the Act, and such other documents as the Stockholders 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 securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Representative on behalf of the Stockholders; 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 Stockholder. 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 Stockholders that
the Representative or the Stockholders shall furnish to the Company such
information regarding the Stockholders, 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 Representative
and the Stockholders, including (without limitation) all registration, filing
and qualification fees, printers' and accounting fees, and 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 Representative and the Stockholders other than the fees
of one counsel to the Representative and the Stockholders (not to exceed
$10,000).
1.5 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) The Company will indemnify and hold harmless the
Representative and the Stockholders against any losses, claims, damages, or
liabilities (joint or several) to which Stockholder may become subject under the
Act, or the 1934 Act, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
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following statements, omissions or violations (collectively a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such 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 Representative and the Stockholders any legal or
other expenses reasonably incurred by them 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 expressly for use in
connection with such registration by the Stockholders. 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 Representative on behalf of the Stockholders prior to the
pertinent sale or sales by the Stockholder.
(b) Each Stockholder 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, the Representative and any other stockholder selling
securities in such registration statement and any controlling person of the
Representative and any such stockholder, 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 Stockholder expressly for use
in connection with such registration; and Stockholder 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
Stockholder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subsection 1.5(b) exceed the gross
proceeds from the offering received by Stockholder.
(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
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(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, the Representative and
the Stockholders 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.
2. Miscellaneous.
2.1 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
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2.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
2.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.5 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon facsimile (with confirmed receipt), or personal delivery
to the party to be notified at the address indicated for such party on the
signature page hereof, or at such other address as such party may designate by
ten (10) days' advance written notice to the other parties.
2.6 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
2.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
Representative (acting upon or at the direction of holders of a majority of the
outstanding Warrants).
2.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
2.9 Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject hereof.
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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
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Xxxxxxx X. Xxxxx, Chief Financial Officer
Address: 0000 Xxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000
REPRESENTATIVE
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Address:
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
