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EXHIBIT 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of July 28, 1998, by and between Networks Associates, Inc., a Delaware
corporation ("Parent"), and CyberMedia, Inc., a Delaware corporation (the
"Company").
RECITALS
A. Concurrently with the execution and delivery of this Agreement, the
Company, Parent and Cyclone Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Purchaser"), are entering into an Agreement
and Plan of Merger of even date herewith (the "Merger Agreement"), pursuant to
which Purchaser agrees to make a tender offer (the "Offer") for all outstanding
shares of common stock, par value $.01 per share (the "Shares"), of the Company,
at a price of $9.50 per Share (the "Offer Price") net to the seller in cash, to
be followed by a merger (the "Merger") of Purchaser with and into the Company
(capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement);
B. Concurrently with the execution and delivery of this Agreement, the
Company and Parent are entering into a Note Purchase and Security Agreement of
even date herewith pursuant to which Parent is lending the Company the principal
amount of $10,000,000, evidenced by a Secured Convertible Promissory Note of
even date herewith (the "Convertible Note"); and
C. As a condition and inducement to Parent's willingness to enter into the
Merger Agreement and make the Offer, Parent and Purchaser have required that the
Company agree, and the Company has agreed, to grant to Parent an option to
acquire certain shares of the Company's authorized but unissued common stock,
par value $.01 per share ("Company Common Stock"), on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, to induce Parent to enter into the Merger Agreement and in
consideration of the representations, warranties, covenants and agreements
contained herein and in the Merger Agreement, the parties hereto hereby agree as
follows:
1. Grant of Option. The Company hereby grants to Parent an irrevocable
option (the "Company Option") to purchase a number of shares of Company Common
Stock equal to the Option Number (as defined in Section 2(d)), on the terms
and subject to the conditions set forth below.
2. Exercise and Termination of the Company Option.
(a) Exercise. The Company Option may be exercised by Parent, in whole
or in part, at any time or from time to time after the occurrence of an event
which causes the Termination Fee (as defined in the Merger Agreement) to become
payable to Parent (a "Trigger Event") and prior to the termination of Parent's
right to exercise the Company Option by the terms of this
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Agreement. The Company shall notify Parent promptly in writing of the occurrence
of any Trigger Event; however, such notice shall not be a condition to the right
of Parent to exercise the Company Option. Notwithstanding the foregoing, the
Company Option may not be exercised if Parent is in material breach of any of
its material representations, warranties, covenants or agreements in this
Agreement or the Merger Agreement.
(b) Exercise Procedure. In the event that Parent wishes to exercise the
Company Option, Parent shall deliver to the Company written notice (an "Exercise
Notice") specifying the total number of shares of Company Common Stock that
Parent wishes to purchase. To the extent permitted by law and the Certificate of
Incorporation of the Company (the "Company Charter") and provided that the
conditions set forth in Section 3 to the Company's obligation to issue the
shares of Company Common Stock to Parent hereunder have been satisfied or
waived, Parent shall, upon delivery of the Exercise Notice and tender of the
applicable aggregate Exercise Price (as hereinafter defined), immediately be
deemed to be the holder of record of the shares of Company Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such shares of Company
Common Stock shall not theretofore have been delivered to Parent. Each closing
of a purchase of shares of Company Common Stock hereunder (a "Closing") shall
occur at a place, on a date, and at a time reasonably designated by Parent in an
Exercise Notice delivered at least two (2) business days prior to the date of
such Closing.
(c) Termination of the Company Option. Parent's right to exercise the
Company Option shall terminate upon the earliest to occur of: (i) the Effective
Time; (ii) the termination of the Merger Agreement pursuant to, Section
7.1(b)(i) (solely as a result of a failure to satisfy the conditions specified
in clauses (iii)(a) or (iii)(b) of Annex I to the Merger Agreement), Section
7.1(b)(ii) or Section 7.1(d) thereof; (iii) six (6) months following the receipt
by Parent of written notice from the Company of the occurrence of a Trigger
Event; (iv) twelve (12) months following the termination of the Merger Agreement
if during such twelve (12)-month period no Trigger Event has occurred, and no
transaction the consummation of which would give rise to a Trigger Event, is
pending; and (v) the date following twelve (12) months after the termination of
the Merger Agreement when no transaction entered into or commenced prior to that
date that, if consummated, would have given rise to a Trigger Event, remains
pending. Notwithstanding the foregoing, if, after the occurrence of a Trigger
Event and prior to the termination of the Company Option pursuant to the
foregoing, the Company Option cannot be exercised by reason of any applicable
judgment, decree, order, law or regulation, the Company Option shall remain
exercisable and shall not terminate until the earlier of (x) the date on which
such impediment shall become final and not subject to appeal and (y) 5:00 p.m.,
Pacific Standard Time, on the tenth (10th) business day after such impediment
shall have been removed. The rights of Parent set forth in Section 10 shall not
terminate upon termination of Parent's right to exercise the Company Option, but
shall extend to the time provided in such section.
(d) Option Number. The "Option Number" shall initially be the number of
Shares equal to nineteen and nine-tenths percent (19.9%) of the total number of
shares of Company Common Stock issued and outstanding as of the date of this
Agreement less the number of shares issuable upon full conversion of the
Convertible Note, and shall be adjusted hereafter to reflect
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changes in the Company's capitalization occurring after the date hereof in
accordance with Section 11 (provided that the number of Shares issuable
hereunder shall be reduced to the extent necessary so that the aggregate number
of Shares issuable hereunder and upon conversion of the Convertible Note shall
not, upon such issuance, constitute more than nineteen and nine-tenths percent
(19.9%) of the total number of shares of Company Common Stock issued and
outstanding).
(e) Exercise Price. The purchase price per share of Company Common
Stock purchased pursuant to exercise of the Company Option (the "Exercise
Price") shall be a cash amount per share equal to the Offer Price or such higher
price as is payable pursuant to the Offer.
(f) Certain Limitations. In the event that Parent (and/or any of its
affiliates) receives Net Proceeds (as defined below) which, combined with any
Termination Fee paid to Parent pursuant to Section 7.3 of the Merger Agreement
and any payment made to Parent (and/or any of its affiliates) pursuant to
Section 7 hereof (or upon any other sale of the Company Option), exceed
$5,500,000, an amount equal to all Net Proceeds in excess of such amount shall
be promptly remitted by Parent to the Company. For purposes of this Agreement,
"Net Proceeds" shall mean the aggregate proceeds from the sale or other
disposition of shares of Company Common Stock acquired by Parent (and/or any of
its affiliates) upon exercise of the Company Option (plus any securities or
other assets issued to Parent (and/or any of its affiliates) in exchange for or
as dividends upon such shares and any cash dividends received by Parent (and/or
any of its affiliates) with respect to such shares) less the Exercise Price
multiplied by the number of such shares included in such disposition.
3. Conditions to Closing. The obligation of the Company to issue the
shares of Company Common Stock to Parent hereunder is subject to the conditions
that (a) all waiting periods, if any, under the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1975, as amended (the "HSR Act"), applicable to the issuance
of the shares of Company Common Stock by the Company and the acquisition of such
shares by Parent hereunder shall have expired or been terminated; (b) no
preliminary or permanent injunction or other order by any court of competent
jurisdiction prohibiting or otherwise restraining such issuance shall be in
effect; and (c) all consents, approvals, orders, authorizations and permits of
any federal, state, local or foreign governmental authority, if any, required in
connection with the issuance of the shares of Company Common Stock and the
acquisition of such shares by Parent hereunder shall have been obtained. It is
agreed that at any time during which Parent shall be entitled to deliver to the
Company an Exercise Notice, the parties will use their respective best efforts
to satisfy all conditions to any Closing so that such Closing may take place as
promptly as practicable.
4. Closing. At any Closing:
(a) The Company shall deliver to Parent or its designee a single
certificate in definitive form representing the number of shares of Company
Common Stock designated by Parent in its Exercise Notice, such certificate to be
registered in the name of Parent and to bear the legend set forth in Section 12;
(b) Parent shall deliver to the Company the aggregate Exercise Price
for the shares of
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Company Common Stock so designated and being purchased by wire transfer of
immediately available funds to the account or accounts specified in writing by
the Company or by certified or official bank check payable to the order of the
Company;
(c) Each party shall pay all expenses incurred by such party, and
Parent shall pay any and all federal, state and local taxes and other charges
that may be payable in connection with the preparation, issue and delivery by
the Company of stock certificates under this Section 4; and
(d) The Company shall cause the shares being delivered by it pursuant
hereto to be approved for quotation on The Nasdaq National Market and shall pay
all expenses in connection with the application for approval of such quotation.
5. Representations and Warranties of the Company. The Company represents
and warrants to Parent that:
(a) the Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all corporate
power and authority required to enter into this Agreement and to carry out its
obligations hereunder;
(b) the execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company and
no other corporate proceedings on the part of the Company and no action of the
Company's stockholders are necessary to authorize this Agreement or any of the
transactions contemplated hereby; this Agreement has been duly and validly
executed and delivered by the Company, and, assuming the due authorization,
execution and delivery hereof by Parent and the receipt of all required
governmental approvals, constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally, and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought;
(c) except for any filings required under the HSR Act, the Company has
taken all necessary corporate action to authorize and reserve for issuance and
to permit it to issue, upon exercise of the Company Option, and at all times
from the date hereof through the expiration of the Company Option will have
reserved for issuance, a number of authorized and unissued shares of Company
Common Stock not less than the Option Number, such amount being subject to
adjustment as provided in Section 11, all of which, upon their issuance and
delivery in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and nonassessable;
(d) the shares of Company Common Stock issued to Parent upon the
exercise of the Company Option will be, upon delivery thereof to Parent, free
and clear of all claims, liens, charges, encumbrances and security interests of
any nature whatsoever, excluding those created or imposed by Parent;
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(e) the execution and delivery of this Agreement by the Company do not,
and the consummation by the Company of the transactions contemplated hereby will
not, violate, conflict with, or result in a breach of any provision of, or
constitute a default (with or without notice or lapse of time, or both) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination, cancellation, or acceleration of any
obligation or the loss of a material benefit under, or the creation of a lien,
pledge, security interest or other encumbrance on assets (any such violation,
conflict, breach, default, termination, acceleration, right of termination,
cancellation or acceleration, loss, or creation, a "Violation") by the Company
or any of its subsidiaries, pursuant to (i) any provision of the Company Charter
or the Bylaws of the Company, (ii) any provision of any material loan or
material credit agreement, note, mortgage, indenture, lease, benefit plan or
other material agreement, obligation, instrument, permit, concession, franchise
or license (a "Material Contract") of the Company or any of its subsidiaries or
to which any of them is a party or by which any of them or their properties or
assets are bound, or (iii) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the Company or any of its subsidiaries or any
of their properties or assets;
(f) the execution and delivery of this Agreement by the Company does
not, and (except for the expiration or early termination of the waiting period
under the HSR Act and except as contemplated by Sections 10(e), (f) and
(j)) the performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby will not, require any consent, approval,
order, authorization or permit of, filing with, or notification to any
Governmental Entity; and
(g) assuming the representations and warranties of Parent contained in
Section 6(e) and 6(f) are true and correct, the issuance, sale and delivery
of the shares of Company Common Stock hereunder would be exempt from the
registration and prospectus delivery requirements of the Securities Act, as in
effect on the date hereof, and the Company shall not take any action which would
cause the issuance, sale, and delivery of shares of Company Common Stock
hereunder not to be exempt from such requirements.
6. Representations and Warranties of Parent. Parent represents and
warrants to the Company that:
(a) Parent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all corporate
power and authority required to enter into this Agreement and to carry out its
obligations hereunder;
(b) the execution and delivery of this Agreement by Parent and the
consummation by Parent of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent, and no other
corporate proceedings on the part of Parent and no action of Parent's
stockholders are necessary to authorize this Agreement or any of the
transactions contemplated hereby; this Agreement has been duly and validly
executed and delivered by Parent and, assuming the due authorization, execution
and delivery hereof by the Company and the receipt of all required governmental
approvals, constitutes the valid and binding obligation of Parent, enforceable
against Parent in accordance with its terms, except as
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may be limited by applicable bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally, and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding may be brought;
(c) the execution and delivery of this Agreement by Parent do not, and
the consummation by Parent of the transactions contemplated hereby will not,
violate, conflict with, or result in the breach of any provision of, or
constitute a default (with or without notice or a lapse of time, or both) under,
or result in any Violation by Parent or any of its subsidiaries, pursuant to (i)
any provision of the Certificate of Incorporation or Bylaws of Parent, (ii) any
Material Contract of Parent or any of its subsidiaries or to which any of them
is a party or by which any of them or any of their properties or assets are
bound, or (iii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or its properties or assets, which Violation, in
the case of each of clauses (ii) or (iii), would have a Material Adverse Effect
on Parent;
(d) the execution and delivery of this Agreement by Parent does not,
and (except for the expiration or early termination of the waiting period under
the HSR Act and except as contemplated by Sections 10(e), (f) and (j)) the
performance of this Agreement by Parent and the consummation of the transactions
contemplated hereby will not, require any consent, approval, order,
authorization or permit of, filing with, or notification to any Governmental
Entity;
(e) any shares of Company Common Stock acquired by Parent upon exercise
of the Company Option will be acquired for Parent's own account, for investment
purposes only and will not be, and the Company Option is not being, acquired by
Parent with a view to the public distribution thereof, in violation of any
applicable provision of the Securities Act; and
(f) Parent is, and at the time of any exercise of the Company Option
will be, an "accredited investor" as defined in Regulation D promulgated under
the Securities Act.
7. Put Right.
(a) At any time during which the Company Option is exercisable pursuant
to Section 2, Parent may, by delivering written notice to the Company (the
"Repurchase Notice"), require the Company to repurchase from Parent all or any
portion of the Company Option, as specified by Parent, at the Option Repurchase
Price (as defined below).
(b) For purposes of this Agreement, "Option Repurchase Price" shall
mean (i) the difference between the Exercise Price and the Market Price (as
defined below) as of the date of the applicable Repurchase Notice multiplied by
(ii) the number of shares of Company Common Stock purchasable pursuant to the
Company Option and covered by the applicable Repurchase Notice.
(c) For purposes of this Agreement, "Market Price" shall mean, as of
any date, the average per share closing sale price of the Company Common Stock
on the Nasdaq National
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Market for the ten (10) trading days immediately preceding such date.
(d) In the event that Parent exercises its rights under this Section 7,
the Company shall, within ten (10) business days thereafter, pay the Option
Repurchase Price to Parent by wire transfer of immediately available funds to
the account or accounts specified in writing by Parent; provided, however, that
the Company shall not be required pursuant to this Section 7 to pay to Parent an
amount which, when combined with any Termination Fee paid to Parent pursuant to
Section 7.3 of the Merger Agreement and any Net Proceeds received by Parent,
exceeds $5,500,000.
8. Voting of Shares. Following the date hereof and prior to the fifth
anniversary of the date hereof (the "Expiration Date"), (a) Parent shall vote
any shares of Company Common Stock acquired by Parent pursuant to this Agreement
("Restricted Shares"), or otherwise beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) by Parent, on each matter
submitted to a vote of the stockholders of the Company for and against such
matter in the same proportion as all other shares of Company Common Stock are
voted (whether by proxy or otherwise) for and against such matter, and (b)
Parent shall execute written consents with respect to the Restricted Shares in
the same proportion as written consents are executed by other holders of Company
Capital Stock. Before acquiring any Restricted Shares hereunder, Parent shall
execute and deliver a proxy to the Company authorizing the Company to vote and
execute written consents with respect to all Restricted Shares acquired by
Parent hereunder in accordance with the provisions of this Section 8.
9. Restrictions on Transfer.
(a) Restrictions on Transfer. Prior to the Expiration Date, Parent
shall not, directly or indirectly, by operation of law or otherwise, sell,
assign, pledge, or otherwise dispose of or transfer any Restricted Shares
beneficially owned by Parent, other than in accordance with Sections 9(b),
9(c) or 10.
(b) Permitted Sales. Following the termination of the Merger Agreement,
Parent shall be permitted to sell any Restricted Shares beneficially owned by it
if such sale is made pursuant to a tender or exchange offer that has been
approved or recommended, or otherwise determined to be fair to and in the best
interests of the holders of Company Common Stock by a majority of the members of
the Board of Directors of the Company.
(c) The Company's Right of First Refusal. At any time after the first
occurrence of a Trigger Event and prior to the expiration of twenty-four (24)
months immediately following the first purchase of shares of Company Common
Stock pursuant to the Company Option, if Parent shall desire to sell, assign,
transfer or otherwise dispose of all or any of the shares of Company Common
Stock or other securities acquired by it pursuant to the Company Option, it
shall give the Company written notice of the proposed transaction (a "Parent
Offer Notice"), identifying the proposed transferee, accompanied by a copy of a
binding offer to purchase such shares or other securities signed by such
transferee and setting forth the terms of the proposed transaction. A Parent
Offer Notice shall be deemed an offer by Parent to Company, which may be
accepted within five (5) business days of the receipt of such Parent Offer
Notice, on the same terms and
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conditions and at the same price at which Parent is proposing to transfer such
shares or other securities to such transferee. The purchase of any such shares
or other securities by the Company shall be settled within five (5) business
days of the date of the acceptance of the offer and the purchase price shall be
paid to Parent in immediately available funds. In the event of the failure or
refusal of the Company to purchase all the shares or other securities covered by
a Parent Offer Notice, Parent may sell all, but not less than all, of such
shares or other securities to the proposed transferee at no less than the price
specified and on terms no more favorable to the transferee than those set forth
in the Parent Offer Notice; provided that the provisions of this sentence shall
not limit the rights Parent may otherwise have in the event the Company has
accepted the offer contained in the Parent Offer Notice and wrongfully refuses
to purchase the shares or other securities subject thereto. The requirements of
this Section 9((c)) shall not apply to (i) any disposition as a result of which
the proposed transferee would own beneficially not more than one percent (1%) of
the outstanding voting power of the Company, (ii) any disposition of Company
Common Stock or other securities by a person to whom Parent has assigned its
rights under the Company Option with the consent of the Company, (iii) any sale
by means of a public offering registered under the Securities Act, or (iv) any
transfer to a wholly-owned subsidiary of Parent which agrees in writing to be
bound by the terms hereof.
10. Registration Rights.
(a) Following any exercise of the Company Option, Parent and/or any
permitted transferee(s) of Restricted Shares under clauses (ii) or (iv) of
Section 9(c) (a "Holder") may by written notice (the "Registration Notice") to
the Company request the Company to register under the Securities Act all or any
part of the Restricted Shares beneficially owned by the Holder(s) (the
"Registrable Securities") pursuant to a bona fide firm commitment underwritten
public offering in which the Holder(s) and the underwriters shall effect as wide
a distribution of such Registrable Securities as is reasonably practicable and
shall use reasonable efforts to prevent any person (including any "group" as
used in Rule 13d-5 under the Exchange Act)) and its affiliates from purchasing
through such offering Restricted Shares representing more than one percent (1%)
of the outstanding shares of Company Common Stock on a fully diluted basis (a
"Permitted Offering"); provided, however, that any such Registration Notice must
relate to a number of shares equal to at least two percent (2%) of the
outstanding shares of Company Common Stock on a fully diluted basis and that any
rights to require registration hereunder shall terminate with respect to any
shares that may be sold pursuant to Rule 144(k) under the Securities Act.
(b) The Registration Notice shall include a certificate executed by the
Holder(s) and its or their proposed managing underwriter, which underwriter
shall be an investment banking firm of nationally recognized standing (the
"Manager"), stating that (i) they have a good faith intention to commence
promptly a Permitted Offering, and (ii) the Manager in good faith believes that,
based on the then-prevailing market conditions, it will be able to sell the
Registrable Securities to the public in a Permitted Offering within one hundred
twenty (120) days at a per share price equal to at least eighty percent (80%) of
the average per share closing sale price of the Company Common Stock on the
Nasdaq National Market for the twenty (20) trading days immediately preceding
the date of the Registration Notice (the "Registration Notice Price").
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(c) The Company (and/or any person designated by the Company) shall
thereupon have the option, exercisable by written notice delivered to the
Holder(s) within five (5) business days after the receipt of the Registration
Notice, irrevocably to agree to purchase all or any part of the Registrable
Securities proposed to be so sold for cash at a price equal to the product of
(i) the number of Registrable Securities to be so purchased by the Company
and/or its designee and (ii) the Registration Notice Price.
(d) Any purchase of Registrable Securities by the Company (or its
designee) under Section 10(c) shall take place at a closing to be held at the
principal executive offices of the Company or at the offices of its counsel at
any reasonable date and time designated by the Company and/or such designee in
such notice within twenty (20) business days after delivery of such notice, and
any payment for the shares to be so purchased shall be made by delivery at the
time of such closing in immediately available funds.
(e) If the Company does not elect to exercise its option pursuant to
Section 10((c)) with respect to all Registrable Securities, it shall use its
best efforts to effect, as promptly as practicable, the registration under the
Securities Act of the unpurchased Registrable Securities proposed to be so sold;
provided, however, that (i) the Holder(s) shall not be entitled to demand more
than an aggregate of two (2) effective registration statements hereunder, and
(ii) the Company will not be required to file any such registration statement
during any period of time (not to exceed forty (40) days after such request in
the case of clause (A) below or ninety (90) days after such request in the case
of clauses (B) and (C) below) when (A) the Company is in possession of material
non-public information which it reasonably believes would be detrimental to be
disclosed at such time and, in the opinion of counsel to the Company, such
information would be required to be disclosed if a registration statement were
filed at that time; (B) the Company is required under the Securities Act to
include audited financial statements for any period in such registration
statement and such financial statements are not yet available for inclusion in
such registration statement; or (C) the Company determines, in its reasonable
judgment, that such registration would interfere with any financing, acquisition
or other transaction involving the Company or any of its material subsidiaries
and that such transaction is material to the Company and its subsidiaries taken
as a whole. If consummation of the sale of any Registrable Securities pursuant
to a registration hereunder does not occur within one hundred twenty (120) days
after the effectiveness of the initial registration statement, the provisions of
this Section 10 shall again be applicable to any proposed registration.
(f) The Company shall use its reasonable efforts to cause any
Registrable Securities registered pursuant to this Section 10 to be qualified
for sale under the securities or Blue Sky laws of such jurisdictions as the
Holder(s) may reasonably request and shall continue such registration or
qualification in effect in such jurisdiction; provided, however, that the
Company shall not be required to qualify to do business in, or consent to
general service of process in, any jurisdiction by reason of this provision.
(g) The registration rights set forth in this Section 10 are subject to
the condition that the Holder(s) shall provide the Company with such information
with respect to the Holders' Registrable Securities, the plans for the
distribution thereof, and such other information with
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respect to the Holder(s) as, in the reasonable judgment of counsel for the
Company, is necessary to enable the Company to include in such registration
statement all material facts required to be disclosed with respect to a
registration thereunder.
(h) A registration effected under this Section 10 shall be effected at
the Company's expense, except for underwriting discounts and commissions and the
fees and expenses of counsel to the Holder(s), and the Company shall provide to
the underwriters such documentation (including certificates, opinions of counsel
and "comfort" letters from auditors) as is customary in connection with
underwritten public offerings as such underwriters may reasonably require.
(i) In connection with any registration effected under this Section 10,
the parties agree (i) to indemnify each other and the underwriters in the
customary manner, (ii) to enter into an underwriting agreement in form and
substance customary for transactions of such type with the Manager and the other
underwriters participating in such offering, and (iii) to take all further
actions which shall be reasonably necessary to effect such registration and sale
(including, if the Manager deems it necessary, participating in road-show
presentations).
(j) The Company shall be entitled to include (at its expense)
additional shares of Company Common Stock in a registration effected pursuant to
this Section 10 only if and to the extent the Manager determines that such
inclusion will not adversely affect the prospects for success of such offering.
11. Adjustment Upon Changes in Capitalization.
(a) Without limiting any restriction on the Company contained in this
Agreement or in the Merger Agreement, in the event of any change in the Company
Common Stock by reason of any stock dividend, stock split, merger (other than
the Merger), recapitalization, combination, exchange of shares or any similar
transaction, the type and number of shares or securities subject to the Company
Option, and the Exercise Price per share provided herein, shall be adjusted
appropriately and proper provision shall be made in the agreements governing
such transaction so that Parent shall receive, upon exercise of the Company
Option, the number and class of securities or property that Parent would have
received in respect of the shares of Company Common Stock issuable to Parent if
the Company Option had been exercised immediately prior to such event or the
record date therefor, as applicable.
(b) In the event that the Company shall enter into an agreement: (i) to
consolidate with or merge into any person, other than Parent or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger; (ii) to permit any person, other than Parent or one of
its subsidiaries, to merge into the Company and the Company shall be the
continuing or surviving corporation, but, in connection with such merger, the
then-outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other person or
cash or any other property; or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Parent or one of its
subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provision so that upon the consummation of such
transaction and upon the subsequent exercise of the Company Option, Parent shall
be entitled to receive, for each share of Company
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Common Stock with respect to which the Company Option has not theretofore been
exercised, an amount of consideration in the form of and equal to the per share
amount of consideration that would be received by the holder of one share of
Company Common Stock (and, in the event of an election or similar arrangement
with respect to the type of consideration to be received by the holders of
Company Common Stock, subject to the foregoing, proper provision shall be made
so that the holder of the Company Option would have the same election or similar
rights as would the holder of the number of shares of Company Common Stock for
which the Company Option is then exercisable).
12. Restrictive Legends. Each certificate representing shares of Company
Common Stock issued to Parent hereunder shall include a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE
SKY LAWS, AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCK OPTION AGREEMENT DATED AS OF
JULY 28, 1998, A COPY OF WHICH MAY BE OBTAINED FROM THE CORPORATION.
It is understood and agreed that (i) the reference to the resale restrictions of
the Securities Act and state securities or Blue Sky laws in the foregoing legend
shall be removed by delivery of substitute certificate(s) without such reference
if Parent shall have delivered to the Company a copy of a letter from the staff
of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that such legend is not required for
purposes of the Securities Act or such laws; (ii) the reference to the
provisions of this Agreement in the foregoing legend shall be removed by
delivery of substitute certificate(s) without such reference if the shares have
been sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law. Certificates
representing shares sold in a registered public offering pursuant to Section 10
shall not be required to bear the legend set forth in this Section 12.
13. Binding Effect; No Assignment; No Third-Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Except as expressly
provided for in this Agreement, neither this Agreement nor the rights or
obligations of either party hereto are assignable, except by operation of law,
or with the written consent of the other party, and any such attempted
assignment in violation of this Agreement shall be void and of no force or
effect. Nothing contained in this Agreement, express or implied, is intended to
confer upon any person other than the parties hereto and their respective
permitted assigns any rights or remedies of any nature whatsoever. Any
Restricted Shares sold by a party in compliance with the provisions of Section
10 shall, upon consummation of such sale, be free of the restrictions imposed
with respect to such shares by this Agreement, unless and until such party shall
repurchase or otherwise become the beneficial owner of such
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shares, and any transferee of such shares shall not be entitled to the
registration rights of such party.
14. Specific Performance. The parties hereto recognize and agree that if
for any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party agrees that, in addition to other
remedies, whether at law or in equity, the other party shall be entitled to an
injunction to prevent or restrain any violation or threatened violation of the
provisions of this Agreement. In the event that any action should be brought in
equity to enforce the provisions of this Agreement, neither party will allege,
and each party hereby waives the defense, that there is an adequate remedy at
law.
15. Validity.
(a) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.
(b) In the event that any Governmental Entity holds any provisions of
this Agreement to be null, void or unenforceable, the parties hereto shall
negotiate in good faith the execution and delivery of an amendment to this
Agreement in order, as nearly as possible, to effectuate, to the extent
permitted by law, the intent of the parties hereto with respect to such
provision and the economic effects thereof.
(c) If for any reason any Governmental Entity determines that Parent is
not permitted to acquire the full number of shares of Company Common Stock
provided in this Agreement (as the same may be adjusted pursuant to the
provisions hereof) or that the Company is not permitted to purchase from Parent
pursuant to Section 7 the full portion of the Company Option provided in said
section, it is the express intention of the Company to allow Parent to acquire
or to require the Company to repurchase such lesser number of shares or such
lesser portion of the Company Option as may be permissible without any other
amendment or modification hereof.
16. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if (a) delivered personally, or (b) if sent by
overnight courier service (receipt confirmed in writing), or (c) if delivered by
facsimile transmission (with receipt confirmed), or (d) five (5) days after
being mailed by registered or certified mail (return receipt requested) to the
parties in each case to the following addresses (or at such other address for a
party as shall be specified by like notice):
(a) If to the Company, to:
CyberMedia, Inc.
0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attn: Chief Executive Officer
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Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
Fax: (000) 000-0000
(b) If to Networks Associates, Inc., to:
Networks Associates, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to:
Xxxx Xxxx Xxxx & Freidenrich LLP
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Rock, Esq.
Fax: (000) 000-0000
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State and without regard to its choice
of law principles.
18. Interpretation. The headings contained in this Agreement are for
reference purposes and shall not affect in any way the meaning or interpretation
of the Agreement. When reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement, unless otherwise indicated.
Whenever the words "include," "includes," or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." Whenever "or" is used in this Agreement it shall be construed in
the nonexclusive sense. The words "herein," "hereby," "hereof," "hereto,"
"hereunder" and words of similar import refer to this Agreement.
19. Counterparts; Effect. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
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20. Expenses. Except as otherwise expressly provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
21. Amendments; Waiver. This Agreement may be amended by the parties
hereto and the terms and conditions hereof may be waived only by an instrument
in writing signed on behalf of each of the parties hereto, or, in the case of a
waiver, by an instrument signed on behalf of the party waiving compliance.
22. Further Assurance. Each party agrees to execute and deliver all such
further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
NETWORKS ASSOCIATES, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President, Legal Affairs
and Corporate Development
CYBERMEDIA, INC.
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Executive Officer and
Chairman of the Board
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