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Exhibit 10.1
REGISTRATION AGREEMENT
This Registration Agreement (this "Agreement") is made and entered into
as of the ___ day of June, 1998 by and among CYBERGUARD CORPORATION, a Florida
corporation ("COMPANY"), and each of the shareholders of ARCA Systems, Inc, a
California corporation ("ARCA") who are signatories hereto ("SIGNATORY
SHAREHOLDERS").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated
as of May 29, 1998 (the "ACQUISITION AGREEMENT"), by and among the Company,
ARCA, ARCA Acquisition Corporation and the Party Shareholders (as defined in the
Acquisition Agreement), the shareholders of ARCA ("SHAREHOLDERS") acquired
590,429 shares of the Company's common stock, par value $.01 per share (the
"COMMON STOCK"), at the Effective Time of the Merger.
WHEREAS, pursuant to the Acquisition Agreement and as a condition
precedent to ARCA's and the Party Shareholders' obligations under the
Acquisition Agreement, the Company has agreed to grant certain registration
rights with respect to the Common Stock received by the Shareholders pursuant to
the Acquisition Agreement, at the Effective Time of the Merger.
WHEREAS, each term which is capitalized but undefined in this Agreement
shall have the meaning ascribed thereto in the Acquisition Agreement.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, the parties agree as follows:
1. REGISTRATION RIGHTS.
(a) SHELF REGISTRATIONS. The Company will use its best efforts
to file, no later than three business days after Closing, a shelf registration
statement ("SHELF REGISTRATION STATEMENT NO.1") on Form S-3 covering 50% of the
shares of Common Stock issued to the Shareholders at the Effective Time by the
Company as a result of the Merger together with all of the Common Stock issued
to certain Shareholders in exchange for the Loans pursuant to Section 2.6 of the
Acquisition Agreement and thereafter shall use its best efforts to cause Shelf
Registration Statement No. 1 to be declared effective as soon as practicable
following such filing and to maintain such effectiveness for a period of 2 years
from the date it is declared effective by the Commission. The Company will use
its best efforts to file, no later than 150 days after Closing, a shelf
registration statement ("SHELF REGISTRATION STATEMENT NO.2") on Form S-3
covering 30% of the shares of Common Stock issued to the Shareholders at the
Effective Time by the Company as a result of the Merger and thereafter shall use
its best efforts to cause Shelf Registration Statement No. 2 to be declared
effective as soon as practicable following such filing and to maintain such
effectiveness for a period of 2 years from the date it is declared effective by
the Commission. The Company will use its best efforts to file, no later than 270
days after Closing, a shelf registration statement ("SHELF REGISTRATION
STATEMENT NO.3", along with Shelf Registration
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Statement No.1 and Shelf Registration Statement No. 2, the "SHELF REGISTRATION
STATEMENTS") on Form S-3 covering the remaining 20% of the shares of Common
Stock issued to the Shareholders at the Effective Time by the Company as a
result of the Merger (including any Escrowed Consideration) and thereafter shall
use its best efforts to cause Shelf Registration Statement No. 3 to be declared
effective as soon as practicable following such filing and to maintain such
effectiveness for a period of 2 years from the date it is declared effective by
the Commission. Notwithstanding anything to the contrary set forth herein, the
Company shall have the right to prohibit the sale of Common Stock by the Party
Shareholders pursuant to each Shelf Registration Statement, during the period
starting with the date 10 days prior to the Company's estimate of the date of
filing of, and ending on a date 90 days after the effective date of, a Company
initiated registration in which the Company is selling securities on its own
behalf, or such longer post-effective periods as may be reasonably required by
the underwriter or underwriters if such offering is underwritten. In connection
with each Registration Statement, the Company will use its best efforts to
effect, and to maintain the effectiveness of, such other registrations,
qualifications and compliances (including, without limitation, obtaining
appropriate qualifications under applicable state securities or "blue sky" laws
and compliance with any other applicable governmental requirements or
regulations), if any, as any selling Shareholder may reasonably request and that
would permit or facilitate the sale of shares subject to such Shelf Registration
Statement (provided however that the Company shall not be required in connection
therewith to qualify to do business or to file a general consent to service of
process in any such state or jurisdiction), in each case so that all other such
registrations, qualifications and compliances will be effective for as much of
the same period as the Shelf Registration Statement as is reasonably
practicable. The Company will from time to time amend or supplement each Shelf
Registration Statement and the prospectuses contained therein as and to the
extent necessary to comply with the 1933 Act, the Exchange Act and any
applicable state securities statute or regulation, subject to the following
limitations and qualifications. Subject to the provisions of this Section 1,
when a Shareholder is entitled to sell shares pursuant to a Shelf Registration
Statement, the Company shall, within two (2) trading days following a request
from such Shareholder, furnish to such Shareholder a reasonable number of copies
of the prospectus in conformity with the requirements of the 1933 Act, and such
other documents as such Shareholder may reasonably request, and any supplement
to or amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in light of the circumstances then existing.
(b) LIMITATIONS. Notwithstanding anything to the contrary set
forth herein, the Company shall have the right to suspend the sale of Common
Stock pursuant to any and/or each Shelf Registration Statement if in the
reasonable judgment of the Company after consultation with counsel there is or
may be in existence material undisclosed information or events concerning the
Company (the "Suspension Right"). In the event the Company exercises the
Suspension Right, such suspension will continue for the period of time
reasonably necessary for disclosure to occur at a time that is not materially
detrimental to the Company and its shareholders (but in any case not later than
the time such disclosure is otherwise actually made or is legally required to be
made)
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or until such time as the information or event is no longer material, each as
determined in good faith by the Company. The Company will promptly give the
Shareholders written notice of the commencement and termination of any such
period of suspension (which information the Shareholders shall maintain as
confidential) and will use all reasonable efforts to minimize the length of the
suspension. All shares of Common Stock offered and sold pursuant to a Shelf
Registration Statement must be sold in accordance with the restrictions set
forth in the Affiliate Letters and Xxxxxxx Xxxxxxx Agreements (as such terms are
used in the Acquisition Agreement) to the extent a Shareholder is a party to
either such instrument.
(c) ALLOCATION OF REGISTRATION OPPORTUNITIES. The maximum
number of shares of Common Stock that each Shareholder shall be entitled to sell
pursuant to each Shelf Registration Statement shall be determined pro rata based
on the total number of shares of Common Stock (including Escrowed Consideration,
if any) owned by such Shareholders and issued to him or her at the Effective
Time by the Company as a result of the Merger, and the Company shall utilize
this allocation in preparing the information concerning selling Shareholders in
each Shelf Registration Statement. For example, in the case of Shelf
Registration Statement No. 1, the maximum number of shares of Common Stock that
each Shareholder shall be entitled to sell shall be equal to 50% of the shares
of Common Stock issued to such Shareholder at the Effective Time by the Company
as a result of the Merger.
2. INDEMNIFICATION.
(a) COMPANY'S INDEMNIFICATION. The Company will indemnify and
hold harmless each Signatory Shareholder, any underwriter (as defined in the
0000 Xxx) for such Signatory Shareholder, and each person who controls any
Signatory Shareholder or underwriter within the meaning of the 1933 Act and the
Exchange Act against any losses, claims, expenses, damages or liabilities
(including reasonable attorneys' fees), joint or several, to which such
Signatory Shareholder, underwriter or controlling persons become subject under
the 1933 Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, expenses, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the registration statement under which such
Registrable Securities were registered under the 1933 Act pursuant to Section 1
hereof, any preliminary or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon 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, and will pay each such
Signatory Shareholder, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, expense, damage, liability or action; PROVIDED,
HOWEVER, that the Company will not be liable under this Section 2(a) in any such
case if and to the extent that any such loss, claim, expense, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with written
information furnished to the Company by any such Signatory Shareholder,
underwriter or controlling person or any affiliate of any of them expressly for
inclusion in such Shelf Registration Statement; and
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PROVIDED, FURTHER, that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any Prospectus under a Shelf
Registration Statement, the indemnity contained in this Section 2(a) shall not
inure to the benefit of any Signatory Shareholder (or the benefit of any person
controlling any Signatory Shareholder) if the person asserting any such loss,
claim, liability, expense or damage purchased the Common Stock that is the
subject thereof, and such Signatory Shareholder or any person controlling such
Signatory Shareholder (i) failed to deliver the version of the prospectus most
recently provided by the Company to such Signatory Shareholder as of the date of
such sale, or (ii) utilized a prospectus during a time period that such
Signatory Shareholder was notified, in accordance with Section 1 hereof, to
suspend making any offers or sales of Common Stock pursuant to a Shelf
Registration Statement.
(b) SIGNATORY SHAREHOLDERS' INDEMNIFICATION. Each Signatory
Shareholder will, severally but not jointly, indemnify and hold harmless the
Company and each underwriter of the Company's securities under Section 1 and
each person who controls the Company or underwriter within the meaning of the
1933 Act and the Exchange Act, each officer of the Company who signs the
registration statement and each director of the Company, against all losses,
claims, expenses, damages or liabilities (including reasonable attorneys' fees),
joint or several, to which the Company, underwriter or such officer or director
or controlling person become subject under the 1933 Act, the Exchange Act or
other federal or state law, but only insofar as such losses, claims, expenses,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the registration statement under which such Registrable Securities
were registered under the 1933 Act pursuant to Section 1 hereof, any preliminary
or final prospectus contained therein, or any amendment or supplement thereof
and made in reliance on and in conformity with written information relating to
such Signatory Shareholder furnished to the Company expressly for use in the
Registration Statement, prospectus, amendment or supplement, or contained in any
prospectus which was utilized by such Signatory Shareholder or any controlling
person or affiliate of such Signatory Shareholder during a time period in which
such Signatory Shareholder was notified, in accordance with Section 1 hereof, to
suspend making any offers or sales of Common Stock pursuant to a Shelf
Registration Statement.
(c) NOTIFICATION. Promptly after receipt by an indemnified
party hereunder of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof;
PROVIDED, HOWEVER, that any failure to give such notice will not waive any
rights of the indemnified party except to the extent the rights of the
indemnified party are materially prejudiced. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party
and, after notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this Section 2 for any legal
expenses subsequently incurred by such indemnified party in connection
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with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; PROVIDED, HOWEVER, that (i) if the
indemnifying party has failed to assume the defense and employ counsel or (ii)
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it that are different from or
additional to those available to the indemnifying party or if the interests of
the indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, then the indemnified party shall have the right to
select separate counsel and to assume such legal defense and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
(d) If the indemnification provided for in this Section 2 is
unavailable or insufficient to hold harmless an indemnified party in respect of
any losses, claims, expenses, damages or liabilities or actions in respect
thereof, then each indemnifying party shall in lieu of indemnifying such
indemnified party contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, expenses, damages, liabilities or
actions in such proportion as is appropriate to reflect the relative fault of
the Company, on the one hand, and such Signatory Shareholder, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, expenses, damages, liabilities or actions as well as any other relevant
equitable considerations, including the failure to give any required notice. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or any affiliate thereof, on the one hand, or such Signatory Shareholder
or any affiliate thereof, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or present such
statement or omission. The Company and the Signatory Shareholders agree that it
would not be just and equitable if contribution pursuant to this Section 2(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 2(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, expenses, damages, liabilities or actions in
respect thereof referred to above in this Section 2(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
3. EXPENSES. In connection with each Shelf Registration Statement filed
pursuant to Section 1 of this Agreement: (i) neither the Company nor ARCA will
pay any expenses of the Shareholders' legal counsel, accountants and other
experts; (ii) the Company shall pay all of the fees and disbursements of legal
counsel for the Company, fees and disbursements of accountants and any other
experts used by the Company in connection with such registration, expenses of
any audits of the Company incidental to or required in connection with such
registration and all expenses of registration not otherwise specifically
described in this Section 3, including expenses incidental to any post-effective
amendment to any such registration statement; and (iii) the
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Company shall pay all Commission and blue sky registration and filing fees, fees
and expenses attributable to the printing and distribution of Prospectuses,
reasonable fees and disbursements of underwriters' counsel, and reasonable
disbursements of the underwriters, underwriting discounts and commissions.
4. REGISTRABLE SECURITIES. For purposes of this Agreement, the term
"REGISTRABLE SECURITIES" shall mean (i) the shares of Common Stock issued to
Shareholders at the Effective Time pursuant to the Acquisition Agreement as a
result of the Merger (including Escrowed Consideration) and (ii) any shares of
Common Stock issued or issuable with respect to the shares of Common Stock
described in (i) above, by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganizations.
5. INFORMATION FOR REGISTRATION STATEMENT. In the case of each
Shareholder, the Company's obligations under Section 1 with respect to such
Shareholder are expressly conditioned upon the Shareholder furnishing to the
Company in writing such information concerning such Shareholder and his or her
controlling persons and the terms of the Shareholder's proposed offering of
shares of the Registrable Securities as the Company shall reasonably request for
inclusion in the registration statement.
6. RULE 144 COVENANTS. The Company agrees during the effectiveness of
the Registration Statements contemplated hereby to (i) file with the Commission,
in a timely manner, all reports required to be filed by the Company under the
Exchange Act, and (ii) to provide the Shareholders, upon request, information
regarding the number of shares of Common Stock outstanding as shown by the most
recent report or statement published by the Company.
7. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Florida, without
regard to the conflict of law principles thereof.
8. BINDING EFFECT; THIRD PARTY BENEFICIARIES. The obligations of this
Agreement shall be binding upon the parties, their heirs, successors and legal
representatives. Each Shareholder shall be a third-party beneficiary of this
Agreement, except for Section 2 hereof. Any Shareholder may, by execution and
delivery to the Company of a counterpart signature page hereto, become an
additional party to this Agreement whether before or after the Effective Time.
9. ASSIGNMENT. This Agreement may not be assigned by any party without
the prior written consent of the other party hereto.
10. AMENDMENT. Amendments to this Agreement may only be made in writing
signed by CyberGuard and the holders of a majority of the ARCA Common Stock.
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11. NOTICES. Any notice or other communication under this Agreement
shall be in writing and shall be delivered personally or sent by registered
mail, return receipt requested, postage prepaid, or sent by prepaid overnight
courier to the parties at the addresses set forth below their names on the
signature pages of this Agreement (or at such other addresses as shall be
specified by the parties by like notice). Such notices, demands, claims and
other communications shall be deemed given when actually received or: (A) in the
case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery; or (B) in the case of registered
U.S. mail, five days after deposit in the U.S. mail.
12. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties and there are no other agreements, written or oral, regarding the
subject matter hereof.
13. SEVERABILITY. Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CYBERGUARD CORPORATION
By:
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Name:
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Title:
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Address:
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Name:
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Address:
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