FORM OF SUPPORT AGREEMENT
EXHIBIT
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FORM OF SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT (this “Agreement”) is made and entered into as of October 2, 2006 by
and between McAfee, Inc., a Delaware corporation (“McAfee”), and the undersigned (the
“Stockholder”), solely in his individual capacity as a holder or beneficial owner of securities of
Citadel Security Software Inc., a Delaware corporation (“Citadel”), and not in his capacity as an
officer or director of Citadel.
RECITALS
A. McAfee, McAfee Security, LLC, a Delaware limited liability company (each a
“Buyer” and together the “Buyers”), Citadel, Citadel Security Software International, LLC, a
Delaware limited liability company, Canberra Operating, L.P., a Texas limited partnership (each a
“Seller” and together the “Sellers”) and Canberra, LLC, a Delaware limited liability company have
entered into an asset purchase agreement, dated as of October 2, 2006 (as amended from time to time
in accordance with its terms, the “Purchase Agreement”), which provides for the sale of
substantially all of the assets of the Sellers to the Buyers (the “Acquisition”).
B. The Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) of such number of: (i) shares of
the outstanding common stock of Citadel (the “Citadel Stock”); and (ii) shares of Citadel Stock
issuable upon the exercise of outstanding options or warrants to acquire such shares of Citadel
Stock, in each case as is set forth on the signature page of this Agreement.
C. As an inducement and condition to entering into the Purchase Agreement, Buyers
have required that the Stockholder agree, and the Stockholder has agreed, to enter into this
Agreement.
D. In consideration of the execution of the Purchase Agreement by Buyers, the
Stockholder (solely in his capacity as such) is hereby agreeing to vote, or cause to be voted, the
Shares (as defined below) and other such shares of capital stock of Citadel over which the
Stockholder has voting power so as to facilitate the consummation of the Acquisition.
NOW, THEREFORE, intending to be legally bound, the parties hereto hereby agree as follows:
1. Certain Definitions. Capitalized terms used but not otherwise defined herein
shall have the respective meanings ascribed to them in the Purchase Agreement. For purposes of
this Agreement, the following terms shall have the following respective meanings:
(a) “Expiration Date” shall mean the earlier to occur of (i) such date and time as the
Purchase Agreement shall have been terminated pursuant to the terms thereof, or (ii) the Effective
Time.
(b) “Shares” shall mean: (i) all securities of Citadel (including all shares of Citadel
Stock and all options, warrants and other rights to acquire shares of Citadel Stock or any other
securities of Citadel) owned by the Stockholder as of the date of this Agreement; and (ii) all
additional securities of Citadel (including all additional shares of Citadel Stock and all
additional options, warrants and other rights to acquire shares of Citadel Stock or any other
securities of Citadel) of which the Stockholder acquires ownership during the period from the date
of this Agreement through the Expiration Date, including, without limitation, through the exercise
of options, warrants or other rights to acquire such securities of Citadel, or the conversion of
other securities of Citadel into such securities of Citadel. In the event of a stock dividend or
distribution, or any change in the Shares by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term “Shares” shall be deemed to
refer to and include the Shares as well as all such stock dividends and distributions and any
shares into which or for which any or all of the Shares may be changed or exchanged.
(c) “Transfer” shall mean the direct or indirect: (i) sale, offer to sell, short sale of,
pledge, encumbrance, loan, hypothecation, entry into any type of equity swap or hedging of, grant
of an option with respect to, transfer or disposition of, any Shares or any interest therein, or
the economic consequences of ownership of any Shares or (ii) entry into an agreement, contract or
commitment providing for any of the foregoing (other than any such actions pursuant to which the
Stockholder maintains all voting rights with respect to such Shares).
2. Transfer of Shares.
(a) Transferee of Shares to be Bound by this Agreement. The Stockholder hereby
agrees that, at all times during the period commencing with the execution and delivery of this
Agreement until the Expiration Date, the Stockholder shall not cause or permit any Transfer of any
of the Shares (or any securities convertible into or exercisable or exchangeable for Shares), or
any interest in the foregoing, unless the transferee(s) expressly agrees in writing to be bound by
the terms of this Agreement.
(b) Transfer of Voting Rights. The Stockholder hereby agrees that, at all times
during the period commencing with the execution and delivery of this Agreement through the
Expiration Date, the Stockholder shall not deposit (or permit the deposit of) any Shares in a
voting trust or grant any proxy, or enter into any voting agreement or similar agreement or
arrangement in contravention of the obligations of the Stockholder under this Agreement with
respect to any of the Shares.
(c) Limitation on Registration of Transfer. The Stockholder agrees with, and
covenants to, Buyers that the Stockholder shall not request that Citadel register the Transfer of
any certificate or uncertificated interest representing any of the Shares, unless such Transfer is
made in compliance with this Agreement.
3. Agreement to Vote Shares.
(a) Agreement to Vote. Until the Expiration Date, at every meeting of the
Stockholders of Citadel called, and at every adjournment or postponement thereof, and on every
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action or approval by written consent of the stockholders of Citadel, the Stockholder (solely in
his capacity as such) shall cause the Shares to be voted: (i) in favor of the Acquisition and the
Stockholder Approval Matters; (ii) in favor of the Purchase Agreement (as the same may be amended
from time to time) and each action contemplated therein; (iii) in favor of any matter that could
reasonably be expected to facilitate the Acquisition and the Stockholder Approval Matters; and (iv)
against any matter that is inconsistent with the prompt consummation of the Acquisition, the
Stockholder Approval Matters and the other transactions contemplated by the Purchase Agreement (as
the same may be amended from time to time).
(b) No Other Agreement. Prior to the Expiration Date, the Stockholder shall not
enter into any agreement or understanding with any Person to vote or give instructions in any
manner inconsistent with the terms of this Section 3.
(c) Other Agreements. To the extent the Stockholder is party to any other agreement
or arrangement that requires Stockholder’s consent, or requires a waiver of any rights, Stockholder
hereby irrevocably gives such consent or waiver.
4. Irrevocable Proxy. As security for the agreements of the Stockholder provided
for herein, the Stockholder hereby grants and delivers to McAfee, concurrently with the execution
and delivery of this Agreement, a proxy in the form attached hereto as Exhibit A (the “Proxy”),
which shall be irrevocable to the fullest extent permitted by applicable law, with respect to the
Shares.
5. Representations and Warranties of the Stockholder. The Stockholder hereby
represents and warrants to Buyers, as of the date hereof and at all times until the Expiration Date
(unless indicated otherwise), as follows:
(a) Shares. The Stockholder is the beneficial owner of, and has good and valid
title to, the Shares, free and clear of any liens, claims, options, rights of first refusal,
co-sale rights, charges or other encumbrances. As of the date hereof, Stockholder does not
beneficially own or have any written or unwritten agreement or arrangement to acquire any
securities of Citadel other than the shares of Citadel Stock and options and warrants to purchase
shares of Citadel Stock indicated on the signature page of this Agreement. The Stockholder has
sole voting power, sole power of disposition, sole power to issue instructions with respect to the
matters set forth in Sections 2 and 3 hereof, sole power to agree to all of the matters set forth
in this Agreement, in each case with respect to all of the Shares, with no limitations,
qualifications or restrictions on such rights, subject to applicable federal securities laws and
the terms of this Agreement.
(b) Authorization; Validity of Agreement. The Stockholder has full power and
capacity to execute and deliver this Agreement, to perform his obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Stockholder, and, assuming this Agreement constitutes a valid and binding
obligation of Buyer, constitutes a valid and binding obligation of the Stockholder, enforceable
against him in accordance with its terms, except as enforceability may be limited by bankruptcy and
other similar laws and general principles of equity.
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(c) Consents and Approvals; No Violations. Neither the execution, delivery or
performance of this Agreement by Stockholder nor the consummation by him of the transactions
contemplated hereby nor compliance by him with any of the provisions hereof will (i) (if such
Stockholder is an entity) conflict with or result in any breach of any provision of its certificate
of formation, operating agreement, by-laws or other charter documents, (ii) require any filing
with, or permit, authorization, consent or approval of, any court, administrative agency or
commission or other governmental authority or instrumentality (except where the failure to obtain
such permits, authorizations, consents or approvals or to make such filings would not materially
impair the ability of the Stockholder to consummate the transactions contemplated hereby), (iii)
result in a violation or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment, cancellation of acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract, agreement or other instrument
or obligation to which Stockholder is a party or by which he or any his properties or assets may be
bound or (iv) as of the date hereof, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to him or any of his properties or assets.
(d) No Finder’s Fee. Except as disclosed in the Purchase Agreement, no broker,
investment banker, financial advisor or other person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the Stockholder.
6. Purchase Agreement and Related Filings. The Stockholder hereby covenants and
agrees to use reasonable efforts to cooperate with Buyers and Sellers to consummate the Acquisition
upon the terms, and subject to the conditions, set forth in the Purchase Agreement (as the same may
be amended from time to time).
7. No Solicitation. From the date hereof until the termination hereof, the
Stockholder will not, directly or indirectly, (i) take any action to solicit, initiate or encourage
any acquisition by another entity (the “Acquisition Proposal”) or (ii) engage in negotiations or
discussions with, or disclose any nonpublic information relating to Citadel or any subsidiary of
Citadel to, or otherwise assist, facilitate or encourage, any person (other than the Buyers) that
may be considering making, or has made, a Acquisition Proposal. The Stockholder will promptly
notify McAfee after receipt of any Acquisition Proposal or any indication that any such third party
is considering making an Acquisition Proposal or any request for nonpublic information relating to
Citadel or any subsidiary of Citadel or for access to the properties, books or records of Citadel
or any such subsidiary by any such third party that may be considering making, or has made, a
Acquisition Proposal and will keep McAfee fully informed of the status and details of any such
Acquisition Proposal, indication or request. The foregoing provisions of this Section 7 will not
be construed to limit actions taken, or to require actions to be taken, by the Stockholder that are
required or restricted by fiduciary duties or employment duties of the Stockholder, or permitted by
the Purchase Agreement (as the same may be amended from time to time), and that, in each case, are
undertaken solely in the Stockholder’s capacity as a director or officer of Citadel, if applicable.
8. No Solicitation of Proxies. The Stockholder agrees (solely in his capacity as
such) that he will not directly or indirectly, engage in any solicitation (as defined in Regulation
14A of the
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Rules and Regulations of the Exchange Act) of other stockholders of Citadel against the approval of
the Acquisition or any of the other actions contemplated by the Purchase Agreement (as the same may
be amended from time to time).
9. Further Assurances. From time to time, at McAfee’s request and without further
consideration, the Stockholder shall execute and deliver such additional documents and take all
such further action as may be necessary or appropriate to consummate the transactions contemplated
by this Agreement.
10. Legending of Shares. If so requested by McAfee, the Stockholder hereby agrees
that the Shares shall bear a legend stating that they are subject to this Agreement and to an
irrevocable proxy. Subject to the terms of Section 2 hereof, the Stockholder hereby agrees that
the Stockholder shall not Transfer the Shares without first having the aforementioned legend
affixed to the certificates representing the Shares.
11. Termination. This Agreement shall terminate and shall have no further force or
effect as of the Expiration Date.
12. Miscellaneous.
(a) Waiver. No waiver by any party hereto of any condition or any breach of any
term or provision set forth in this Agreement shall be effective unless in writing and signed by
each party hereto. The waiver of a condition or any breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other previous or subsequent
breach of any term or provision of this Agreement.
(b) Severability. In the event that any term, provision, covenant or restriction
set forth in this Agreement, or the application of any such term, provision, covenant or
restriction to any person, entity or set of circumstances, shall be determined by a court of
competent jurisdiction to be invalid, unlawful, void or unenforceable to any extent, the remainder
of the terms, provisions, covenants and restrictions set forth in this Agreement, and the
application of such terms, provisions, covenants and restrictions to persons, entities or
circumstances other than those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall remain in full force and effect, shall not be impaired, invalidated or
otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted
by applicable law.
(c) Binding Effect; Assignment. This Agreement and all of the terms and provisions
hereof shall be binding upon, and inure to the benefit of, the parties hereto and their respective
successors and permitted assigns, but, except as otherwise specifically provided herein, neither
this Agreement nor any of the rights, interests or obligations of the Stockholder may be assigned
to any other Person without the prior written consent of McAfee.
(d) Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement executed by each of the
parties hereto.
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(e) Specific Performance; Injunctive Relief. Each of the parties hereto hereby
acknowledges that (i) the representations, warranties, covenants and restrictions set forth in this
Agreement are necessary, fundamental and required for the protection of Buyers and to preserve for
Buyers the benefits of the Acquisition; (ii) such covenants relate to matters which are of a
special, unique, and extraordinary character that gives each such representation, warranty,
covenant and restriction a special, unique, and extraordinary value; and (iii) a breach of any such
representation, warranty, covenant or restriction, or any other term or provision of this
Agreement, will result in irreparable harm and damages to Buyers which cannot be adequately
compensated by a monetary award. Accordingly, the Stockholder hereby expressly agrees that in
addition to all other remedies available at law or in equity, Buyers shall be entitled to the
immediate remedy of specific performance, a temporary and/or permanent restraining order,
preliminary injunction, or such other form of injunctive or equitable relief as may be used by any
court of competent jurisdiction to restrain or enjoin the Stockholder from breaching any
representations, warranties, covenants or restrictions set forth in this Agreement, or to
specifically enforce the terms and provisions hereof.
(f) Governing Law. This Agreement shall be governed by and construed, interpreted
and enforced in accordance with the internal laws of the State of Delaware without giving effect to
any choice or conflict of law provision, rule or principle (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than the
State of Delaware.
(g) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) on the date of
confirmation of receipt (or, the first business day following such receipt if the date is not a
business day) of transmission by telecopy or telefacsimile or (iii) on the date of confirmation of
receipt (or, the first business day following such receipt if the date is not a business day) if
delivered by a nationally recognized courier service. All notices hereunder shall be delivered as
set forth below, or pursuant to such other instructions as may be designated in writing by the
party to receive such notice:
(i) If to a Buyer:
McAfee, Inc. Corporation
McAfee, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
McAfee, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Xxxx, LLP
0000 Xxxx Xx.
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx
0000 Xxxx Xx.
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx
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Fax: (000) 000-0000
(ii) If to the Stockholder: To the address for notice set forth on the signature page hereof.
with a copy to:
Citadel Security Software Inc.
5420 Xxxxxx B Xxxxxxx Fwy
0 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Fax: (000) 000-0000
5420 Xxxxxx B Xxxxxxx Fwy
0 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Fax: (000) 000-0000
and
Wood & Xxxxxxx, LLP
00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx
Fax: (000) 000-0000
00000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx
Fax: (000) 000-0000
(h) Enforcement; Consent to Jurisdiction; Waiver of Jury Trial.
(i) Each of the parties hereto:
(A) agrees that he will not attempt to deny or defeat such personal jurisdiction or venue
by motion or other request for leave from any such court;
(B) agrees that he will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than such courts;
(C) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to a party at his address set forth in Section 12(g) or at such other address of
which a party shall have been notified pursuant thereto; and
(D) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to xxx in any other jurisdiction.
(ii) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING IN RELATION TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
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(iii) All rights, powers and remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(i) Entire Agreement. This Agreement, the Proxy, the Purchase Agreement and any
other agreements referred to in the Purchase Agreement contain the entire understanding of the
parties in respect of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject matter.
(j) Headings. The section headings set forth in this Agreement are for convenience
of reference only and shall not affect the construction or interpretation of this Agreement in any
manner.
(k) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and all of which together shall constitute one and the same
instrument.
(l) No Ownership Interest. Nothing contained in this Agreement shall be
deemed to vest in McAfee any direct or indirect ownership or incidence of ownership of or with
respect to any Shares. All rights, ownership and economic benefits of and relating to the Shares
shall remain vested in and belong to the Stockholder, and McAfee shall have no authority to manage,
direct, superintend, restrict, regulate, govern or administer any of the policies or operations of
Sellers or exercise any power or authority to direct the Stockholder in the voting of any of the
Shares, except as provided herein.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the day and
year first above written.
By:
Xxxx X. Xxxxx
Chief Financial Officer
Xxxx X. Xxxxx
Chief Financial Officer
STOCKHOLDER
Address:
Facsimile
Number:
Number:
Shares Beneficially Owned:
Number of Shares
held
held
Number of Shares issuable
upon exercise of outstanding options or
warrants held
upon exercise of outstanding options or
warrants held
[SIGNATURE PAGE TO SUPPORT AGREEMENT]
EXHIBIT A
IRREVOCABLE PROXY
IRREVOCABLE PROXY
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