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EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of the
20th day of July, 1999, by and between XxXxxx.xxx Corporation, a Delaware
corporation (the "COMPANY"), and Networks Associates, Inc., a Delaware
corporation ("NAI").
RECITALS
WHEREAS, the Company is a wholly owned subsidiary of NAI and desires to
grant NAI registration rights.
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 Agreement:
(a) The term "ACT" means the Securities Act of 1933,
as amended.
(b) The terms "CLASS A COMMON STOCK" and "CLASS B
COMMON STOCK" mean, respectively, the Company's Class A Common Stock, par value
$0.001 per share, and Class B Common Stock, par value $0.001 per share.
(c) The term "FORM S-3" means such form under the Act
as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(d) The term "CONTROL AFFILIATE" means any
combination, partnership, venture or the like with respect to which NAI directly
or indirectly owns a majority of the capital stock or equity interests or has
the right to elect a majority of the directors or individuals with comparable
responsibilities.
(e) The term "HOLDER" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.12 hereof.
(f) The term "1934 ACT" shall mean the Securities
Exchange Act of 1934, as amended.
(g) The terms "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.
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(h) The term "REGISTRABLE SECURITIES" means (i) the
shares of the Company's Class A Common Stock held by NAI or Class A Common Stock
issuable upon the conversion of the Company's Class B Common Stock held by NAI
and (ii) any Class A or Class B Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of the shares referenced in (i) above, excluding
in all cases, however, any Registrable Securities sold by a person in a
transaction in which his rights under this Section 1 are not assigned.
(i) The number of shares of "REGISTRABLE SECURITIES
THEN OUTSTANDING" shall be determined by (i) the number of shares of Class A
Common Stock outstanding which are Registrable Securities, and (ii) the number
of shares of Class A Common Stock issuable pursuant to then exercisable or
convertible securities (including shares of Class B Common Stock) which are
Registrable Securities.
(j) The term "SEC" shall mean the Securities and
Exchange Commission.
1.2 Demand Registration.
(a) If the Company shall receive at any time six (6)
months after the effective date of the first registration statement for a public
offering of securities of the Company (other than a registration statement
relating either to the sale of securities to employees of the Company pursuant
to a stock option, stock purchase or similar plan or a SEC Rule 145
transaction), a written request from either NAI or its control affiliates or
Holders of at least ten percent (10%) of the Registrable Securities then
outstanding ("INITIATING HOLDERS"), requesting that the Company file a
registration statement under the Act covering the registration of a portion of
the Registrable Securities then outstanding, then the Company shall:
(i) within ten (10) days of the receipt
thereof, give written notice of such request to all Holders; and
(ii) effect as soon as practicable, and in
any event within sixty (60) days of the receipt of such request, the
registration under the Act of all Registrable Securities which the Holders
request to be registered, subject to the limitations of subsection 1.2(b),
within fifteen (15) days of the mailing of such notice by the Company in
accordance with Section 2.5.
(b) If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
subsection 1.2(a) and the Company shall include such information in the written
notice referred to in subsection 1.2(a). The underwriter will be selected by NAI
(if it or its control affiliate is the Initiating Holder) or otherwise the
Company. The underwriter shall be reasonably acceptable, as applicable, to
Company or a majority in interest of the Initiating Holders. In such event, the
right of any Holder or other holder of securities of the Company to include
securities in such registration shall be conditioned upon such Holder's or
holders' participation in such underwriting and the inclusion of such Holder's
or holders' securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder
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or holder) to the extent provided herein. All Holders and other holders of
securities of the Company proposing to distribute their securities through such
underwriting shall (together with the Company as provided in subsection 1.5(e))
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this section 1.2, if the underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities and other holders of registration rights which would
otherwise be underwritten pursuant hereto, and the number of shares of
securities that may be included in the underwriting on behalf of each Holder or
other holder shall be allocated : (i) first, the Registrable Securities
requested to be included in such registration held by the Initiating Holders;
(ii) second, shares of Class A Common Stock held by other holders requested to
be included in such registration, provided that such amount shall be allocated
among such other holders on a pro rata basis based upon their respective
percentage of ownership of the total number of shares of Common Stock then
outstanding and (iii) third, shares of Class A Common Stock to be offered by the
Company in such registration. For purposes of allocation securities to be
included in any offering, for any selling stockholder which is a partnership or
corporation, the partners, retired partners and stockholders of such holder (and
in the case of a partnership, any affiliated partnerships), or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
(c) Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting a registration statement pursuant to this
Section 1.2, a certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to
defer the filing of such registration statement, the Company shall have the
right to defer taking action with respect to such filing for a period of not
more than ninety (90) days after receipt of the request of the Initiating
Holders; provided, however, that the Company may not utilize this right more
than once in any twelve-month period. In addition, the Company shall not be
obligated to effect, or to take any action to effect, any registration pursuant
to this Section 1.2 if (i) the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.4 below or (ii) the gross
proceeds of securities being registered pursuant to Section 1.2 shall not
reasonably be expected to exceed $2 million.
(d) Company Registration. If (but, without any
obligation to do so), the Company proposes to register (including for this
purpose a registration effected by the Company for stockholders other than the
Holders) any of its stock or other securities under the Act in connection with
the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities or a
registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities which are also
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being registered), the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given within fifteen (15) days after mailing of such notice by the Company in
accordance with Section 2.5, the Company shall, subject to the provisions of
paragraph (b) below, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
(e) Underwriting Requirements. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under this Section 1.3 to include any of the
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (or by other persons entitled to select the underwriters). If the total
amount of securities, including Registrable Securities requested by stockholders
to be included in such offering, exceeds the amount of securities that the
underwriters determine in their sole discretion is compatible with the success
of the offering in view of market conditions, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering, but in no event
shall the amount of securities of the selling Holders included in the offering
be reduced below twenty-five percent (25%) of the total amount of securities
included in such offering. Allocation of securities to be sold in any such
offering shall be made pro-rata amongst the selling stockholders according to
the total number of securities held by each such selling stockholder and
entitled to inclusion therein on the basis of a registration rights agreement
with the Company. For purposes of allocation securities to be included in any
offering, for any selling stockholders which is a partnership or corporation,
the partners, retired partners and stockholders of such holder (and in the case
of a partnership, any affiliated partnerships), or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
1.4 Form S-3 Registration. In case the Company shall receive from
one or more of the Holders a written request or requests that the Company effect
a registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) as soon as practicable, effect such registration
and all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within fifteen (15) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
1.4: (1) if Form S-3 is not available for such offering by the Holders; (2) if
the Holders,
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together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than one million dollars
($1,000,000); (3) if the Company shall furnish to the Holders a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such Form S-3 Registration to be effected
at such time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a period of not more than
ninety (90) days after receipt of the request of the Holder or Holders under
this Section 1.4; provided, however, that the Company shall not utilize this
right more than once in any twelve month period; (4) if the Company has, within
the twelve (12) month period preceding the date of such request, already
effected four (4) registrations on Form S-3 for the Holders pursuant to this
Section 1.4; or (5) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file
a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders. Registrations effected pursuant to this
Section 1.4 shall not be counted as demands for registration or registrations
effected pursuant to Sections 1.2 or 1.3, respectively.
1.5 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 a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of up to one
hundred eighty (180) days or until the distribution contemplated in the
Registration Statement has been completed, whichever period is longer; provided,
however, that such 180-day period shall be extended for a period of time equal
to the period the Holder refrains from selling any securities included in such
registration at the request of an underwriter of Common Stock (or other
securities) of the Company.
(b) 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 Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they 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
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be reasonably requested by the Holders; 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.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
(i) Use its best efforts to furnish, at the request
of any Holder requesting registration of Registrable Securities pursuant to this
Section 1, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this Section
1, if such securities are being sold through underwriters, (i) an opinion, dated
such date, of the counsel representing the Company for the purposes of such
registration, in substantially the form as may be given to the underwriters in
such public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (ii) a letter dated such
date, from the independent certified public accountants of the Company, in
substantially the form as may be given by independent certified public
accountants to underwriters in such public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities; provided in any such case, the Company is required to provide such
opinion or letter, as the case may be, to the underwriters in such offering.
1.6 Furnish Information.
(a) 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 any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
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(b) The Company shall have no obligation with respect
to any registration requested pursuant to Section 1.2 or Section 1.4 if, due to
the operation of subsection 1.6(a), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in subsection 1.2(a) or subsection
1.4(b)(2), whichever is applicable.
1.7 Expenses of Demand or S-3 Registration. All expenses, other
than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2 or 1.4,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the Company
and the reasonable fees and disbursements of one counsel for the selling Holders
shall be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 or 1.4 if the registration request is subsequently withdrawn at
the request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses),
unless (i) the registration is withdrawn following any deferral of the
registration by the Company pursuant to Section 1.2(c) or 1.4(b)(3); or (ii) the
registration is withdrawn due to a material adverse change in the Company's
business or financial condition.
1.8 Expenses of Company Registration. The Company shall bear and
pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.12), including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto and the fees and disbursements of counsel for the Company and one
counsel for the selling Holders selected by them, but excluding underwriting
discounts and commissions relating to Registrable Securities.
1.9 No Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the officers, directors and constituent
general partners of such Holder, any underwriter (as defined in the Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, 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 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
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statements therein not misleading, or (iii) any violation or alleged violation
by the Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will pay, as incurred, to each such Holder, the officers,
directors and constituent general partners of such Holder, each such underwriter
or controlling person any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action, as such expenses are incurred; provided, however, that the
indemnity agreement contained in this Section 1.10(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 written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling
Holder 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 underwriter, any
other Holder selling securities in such registration statement and the officers,
directors and constituent general partners of such Holder and any controlling
person of any such underwriter or other Holder, severally but not jointly,
against any losses, claims, damages, or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Act, 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 Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
Section 1.10(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 1.10(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 the Holder, which consent shall
not be unreasonably withheld; provided, further, that in no event shall any
Holder's cumulative, aggregate liability under this Section 1.10(b), under
Section 1.10(d), or under such sections together, exceed the gross proceeds from
the offering received by such Holder.
(c) Promptly after receipt by an indemnified party
under this Section 1.10 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 1.10,
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 one 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
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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 shall not
relieve such indemnifying party of any liability to the indemnified party under
this Section 1.10 unless the failure to deliver notice is materially prejudicial
to its ability to defend such action. Any omission to so 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 1.10.
(d) If the indemnification provided for in this
Section 1.10 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; provided, however, that (A) in no event shall any
Holder's cumulative, aggregate liability under this Section 1.10(d), or under
Section 1.10(b), or under such sections together, exceed the net proceeds from
the offering received by such Holder. Notwithstanding anything to the contrary
herein, no party shall be liable for contribution under this Section 1.10(d),
except to the extent and under the circumstances as such party would have been
liable to indemnity under Section 1.10(a) or Section 1.10(b), as the case may
be, if such indemnification were enforceable under applicable law. 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) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control with respect to the parties to such agreement.
(f) The obligations of the Company and Holders under
this Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.11 Reports under Securities Exchange Act of 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company and NAI (for
so long as the Company's eligibility to use Form S-3 is partially dependent upon
NAI's eligibility to use Form S-3) each agree to:
(a) make and keep public information available, as
those terms are understood and defined in SEC Rule 144, at all times after
ninety (90) days after the effective date of
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the first registration statement filed by the Company for the offering of its
securities to the general public;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the 1934 Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable after the
end of the fiscal year in which the first registration statement filed by the
Company for the offering of its securities to the general public is declared
effective;
(c) file with the SEC in a timely manner all reports
and other documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC Rule 144
(at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12 Assignment of Registration Rights. The rights to
cause the Company to register Registrable Securities pursuant to this Section 1
may be assigned (but only with all related obligations) by NAI (or its control
affiliate) to any control affiliate of NAI. In addition, the rights to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities who, after such assignment or transfer, holds at
least Two Hundred Thousand (200,000) shares of Registrable Securities (subject
to appropriate adjustment for stock splits, stock dividends, combinations and
other recapitalizations), provided: (a) the Company is, within a reasonable time
after such transfer, furnished with written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including without limitation the provisions of Section 1.14 below;
and (c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the number
of shares of Registrable Securities held by a transferee or assignee of a holder
of Registrable Securities, (i) the holdings of affiliated partnerships, limited
liability companies and other entities, and their constituent or retired
partners or members (collectively, "AFFILIATED PERSONS"), and (ii) the holdings
of spouses, ancestors, lineal descendants and siblings who acquire Registrable
Securities by gift, will or intestate succession (collectively, "FAMILY
MEMBERS"), shall in each case be aggregated together, provided that all
assignees and transferees who would not qualify individually for assignment of
registration rights shall designate in writing to the Company from time to time
a single attorney-in-fact on behalf of the entire group of Affiliated Persons or
Family Members, as the case may be, for the purpose of exercising any rights,
receiving notices or taking any action under this Section 1.
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1.13 Limitations on Subsequent Registration Rights. From
and after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company that would allow such holder or prospective holder
to include such securities in any registration filed under Sections 1.2, 1.3 or
1.4 hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any registration pursuant to Section 1.2
or only to the extent that the inclusion of his securities will not reduce the
amount of the Registrable Securities of the Holders that is included or pursuant
to Section 1.3 subject to the allocation provisions set forth in Section 1.3.
1.14 Termination of Registration Rights. The right of any
Holder to request registration or inclusion in any registration pursuant to
Section 1.3 shall terminate three (3) years after the Company's initial firmly
underwritten public offering, if all shares of Registrable Securities
beneficially owned or subject to Rule 144 aggregation by such Holder may
immediately be sold under Rule 144 (without regard to Rule 144(k)) during any
90-day period.
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
(including transferees of any shares of Registrable Securities). 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.
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. All notices and other communications
required or permitted hereunder shall be in writing, shall be effective when
given, and shall in any event be deemed to be given upon receipt or, if earlier,
(a) five (5) days after deposit with the U.S. Postal Service or other applicable
postal service, if delivered by first Class mail, postage prepaid, (b) upon
delivery, if delivered by hand, (c) one (1) business day after the business day
of deposit with Federal Express or similar overnight courier, freight prepaid or
(d) one (1) business day after the business day of facsimile transmission, if
delivered by facsimile transmission with copy by first Class mail, postage
prepaid, and shall be addressed (i) if to NAI, at the address of its principal
corporate offices (attention: Secretary), or at such other address as a party
may designate by ten (10) days' advance written notice to the other party
pursuant to the provisions above, (ii) if to a Holder (other than NAI
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or a control affiliate thereof), at the address of its principal corporate
offices (attention: Secretary), or at such other address as a party may
designate by ten (10) days' advance written notice to the other party pursuant
to the provisions above; and (iii) if to the Company, at the address of its
principal corporate offices (attention: Secretary), or at such other address as
a party may designate by ten (10) days' advance written notice to the other
party pursuant to the provisions above.
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 holders of
Registrable Securities holding at least a majority of the Registrable Securities
then outstanding (or the sale holder of Registrable Securities). Any amendment
or waiver effected in accordance with this paragraph shall be binding upon each
holder of any Registrable Securities then outstanding, each future holder of all
such Registrable Securities, and the Company.
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 (including the
Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and supersedes all prior agreements and understandings with respect to the
subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
COMPANY: XxXXXX.XXX CORPORATION
By: /s/ XXXXXXX XXXXXXX
----------------------------------
Xxxxxxx Xxxxxxx, President
Address: 0000 Xxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
NAI: NETWORKS ASSOCIATES, INC.
By: /s/ XXXXXXX XXXXX
----------------------------------
Address: 0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
