Registration Rights Agreement - ZixIt Corp. and Lante Corp.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), effective as of
November 24, 1999, and entered into by and between ZixIt Corporation f/k/a
CustomTracks Corporation, a Texas corporation (the "Company" or "ZixIt"), and
Lante Corporation, a Delaware corporation and successor-in-interest to Lante
Corporation, an Illinois corporation ("Lante"), amends and restates that certain
Registration Rights Agreement entered into between ZixIt and Lante's
predecessor-in-interest, effective as of February 2, 1999 (the "Prior
Registration Rights Agreement"). Terms used herein with their initial letter
capitalized but not defined herein will have the meaning given such terms in the
Option (as defined below), unless the context otherwise requires.
WITNESSETH:
WHEREAS, ZixIt and Lante have entered into an Amended and Restated Stock
Option Agreement as of the date hereof whereby Lante has been granted an option
(the "Option") to acquire up to 166,666 shares of ZixIt's common stock, $.01 par
value per share (the "Common Stock");
WHEREAS, ZixIt desires to grant Lante certain registration rights with
respect to the shares of Common Stock issuable under the Option in accordance
with the terms and conditions set forth herein;
NOW, THEREFORE, ZixIt and Lante agree as follows:
1. Shares. As used herein, the term "Shares" shall mean the shares of
Common Stock issuable upon the exercise of the Option.
2. Registration. Subject to the immediately following sentence, upon its
receipt of a written notice from Lante, ZixIt shall promptly prepare and file
with the Securities and Exchange Commission (the "SEC") a registration statement
on Form S-3 (or such successor or other form as the SEC may stipulate or
require) under the Securities Act of 1933, as amended (the "Securities Act")
covering the Shares that are the subject of the request. The notice from Lante
may be delivered at any time after the following conditions are met (or within a
reasonable period of time prior to the date when the conditions are anticipated
to be met): (i) the Transfer restrictions pertaining to the Shares (as set forth
in Subsection 8(b) of the Option) have lapsed and (ii) ZixIt is permitted to
deliver a demand registration notice under paragraph 2.A. of Section 2 of the
registration rights agreement pertaining to the Lante Option, or ZixIt is
permitted to sell all of the shares issuable upon exercise of the Lante Option
without restriction within 90 days pursuant to Rule 144 under the Securities
Act, or an event specified in subsection 8(b)(ii) or (iii) of the Option has
occurred. ZixIt shall use its commercially reasonable efforts to cause such
registration statement to become effective as promptly as practicable following
the later to occur of (a) both conditions set forth above are met and (b) the
receipt of the written notice. ZixIt shall
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also file such post-effective amendments to such registration statement in order
for it to remain effective without lapse until the earlier of (i) 90 days
following the date the registration statement is declared effective or (ii) all
the Shares so registered have been sold, subject to the three immediately
following sentences. Upon request of Lante and subject to the consent of ZixIt
(which consent is not to be unreasonably withheld), the effectiveness of the
registration statement will be extended for up to an additional 30 days. If,
during the effectiveness of the registration statement, Lante determines that it
no longer desires to sell any (or further) Shares at that time, Lante will so
advise ZixIt so that ZixIt can withdraw the registration statement. The running
of the aforesaid periods of time shall be extended to account for any stop order
suspending the effectiveness of a registration statement is in effect. Lante
shall be entitled to make one registration request under this Section 2. Lante
shall pay the expenses described in Section 4 for the registration pursuant to
this Section 2. The parties acknowledge and agree that any registration effected
under this Section 2 shall not be an underwritten offering.
ZixIt may defer the filing (but not the preparation) of the
registration statement for a period of up to 90 days if (a) at the time ZixIt or
any of its subsidiaries is engaged in material confidential negotiations or
other material confidential business activities, disclosure of which would be
required in such registration statement (but would not be required if such
registration statement were not filed), and the Board of Directors of ZixIt
determines, reasonably and in good faith, that such disclosure would be
materially detrimental to ZixIt and its shareholders or would have a material
adverse effect on any such confidential negotiations or other confidential
business activities; or (b) at the time ZixIt is engaged in business activities
pertaining to an underwritten public offering of ZixIt's securities and the
underwriters have advised ZixIt in writing that the filing of the registration
statement would have a material adverse effect on its ability to consummate such
offering; or (c) pursuant to an underwriting agreement in connection with an
underwritten offering, ZixIt has agreed not to file any registration statement
pursuant to which the Shares may be registered. A deferral of the filing of the
registration statement will be lifted, and the registration statement shall be
filed as soon as practicable thereafter forthwith, if the negotiations or other
activities are completed, disclosed or terminated or the underwritten public
offering is completed, terminated or postponed. In order to defer the filing of
a registration statement, ZixIt will deliver to Lante a certificate signed by a
senior executive officer of ZixIt setting forth a statement of the reason for
such deferral and an approximation of the anticipated delay, which information
Lante shall treat as confidential. Moreover, ZixIt shall have no obligation to
register any Shares under this Section 2 if Lante is, at the time of the
registration request, permitted to sell all Shares sought by it to be registered
without restriction within 90 days pursuant to Rule 144 under the Act. ZixIt may
not defer the filing or effectiveness of a registration statement pursuant to
this paragraph more than once in any 12 month period.
3. Registration Procedures. If, and whenever, ZixIt is required by
Section 2 to effect the registration of Shares under the Securities Act, ZixIt
will as expeditiously as possible:
(a) prepare and file with the SEC a registration statement with
respect to such securities, and use its commercially reasonable efforts to cause
such registration statement to become and remain effective for the period set
forth in Section 2 (the "Effective Period"); provided that, before filing, ZixIt
will furnish to Lante's counsel copies of such documents to be filed, which
documents will be subject to such counsel's review;
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(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for the Effective
Period as may be reasonably necessary to effect the sale of such securities;
(c) furnish to Lante and to the underwriters of the securities being
registered, such reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other documents as Lante and
such underwriters may reasonably request in order to facilitate the public
offering of such securities;
(d) use commercially reasonable efforts to register or qualify the
Shares covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as Lante may reasonably request in writing,
except that ZixIt shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified or subject itself
to taxation in a jurisdiction where it had not previously been subject to
taxation, or take any other action that would subject ZixIt to service of
process in a lawsuit other than one arising out of the registration of the
Shares;
(e) notify Lante, promptly after it shall receive notice thereof, of
the time when such registration statement has become effective or a supplement
to any prospectus forming a part of such registration statement has been filed;
(f) notify Lante promptly of any request by the SEC for the amending
or supplementing of such registration statement or prospectus or for additional
information;
(g) prepare and file with the SEC, promptly upon the request of
Lante, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for Lante (and concurred in by
counsel for ZixIt), is required under the Securities Act or the rules and
regulations thereunder in connection with the distribution of Shares by Lante;
(h) prepare and promptly file with the SEC and promptly notify Lante
of the filing of such amendment or supplement to such registration statement or
prospectus as may be necessary to correct any statements or omissions if, at any
time when a prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading;
(i) advise Lante, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of such registration statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued;
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(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission; and
(k) upon the issuance of any stop order suspending the effectiveness
of a registration statement, or of any order suspending or preventing the use of
any related prospectus or suspending the qualification of any Shares included in
such registration statement for sale in any jurisdiction, ZixIt will use its
reasonable best efforts promptly to obtain the withdrawal of such order.
4. Expenses. Subject to the limitation stated in the next sentence, all
fees, costs, and expenses of and incidental to such registration and public
offering of the Shares in connection therewith for which the selling holders are
responsible shall be borne by Lante, including any commissions and transfer
taxes in respect of the sale of its Shares. Lante's liability for any fees and
expenses of ZixIt's professional advisors in connection with the registration of
the S-3 and the public offering of the Shares in connection therewith shall be
limited to $12,500 (in 1999 dollars).
5. Indemnification.
(a) ZixIt will indemnify and hold harmless Lante, its directors,
officers, employees, and agents, any underwriter (as defined in the Securities
Act) for Lante and any person controlling Lante or such underwriter from and
against, and will reimburse such persons with respect to, any and all loss,
damage, liability, cost and expense to which such persons may become subject
under the Securities Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, 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, in light of the circumstances in which they were made, not
misleading; provided, however, that ZixIt will not be liable in any such case to
the extent that any such loss, damage, liability, cost or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by or on
behalf of Lante in writing specifically for use in the preparation thereof.
ZixIt will not be subject to any liability for any settlement made without its
consent, which consent shall not be unreasonably withheld.
(b) Lante will indemnify and hold harmless ZixIt, its directors,
officers, employees, and agents, any underwriter for ZixIt and any person
controlling ZixIt or such underwriter from and against, and will reimburse such
persons with respect to, any and all loss, damage, liability, cost and expense
to which such persons may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
any untrue statement or alleged untrue statement of any material fact contained
in such registration statement, any prospectus contained therein or any
amendment or supplement thereto, 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, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only
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to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was so made in reliance upon and in conformity with
written information furnished by or on behalf of Lante specifically for use in
the preparation thereof. Lante will not be subject to any liability for any
settlement made without its consent, which consent shall not be unreasonably
withheld; provided that, the obligation to indemnify will be limited to the net
proceeds received by Lante with respect to the sale of the Shares.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of Subsection (a) or (b) of this Section 5 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said
Subsection (a) or (b), promptly notify the indemnifying party of the
commencement thereof; but the omission to so notify the indemnifying party will
not relieve it from any liability that it may have to any indemnified party,
except to the extent that such omission materially and adversely affects the
indemnifying party's ability to defend against or compromise such claim. In case
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any action include both the
indemnified party and the indemnifying party and there is a conflict of interest
that would prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties. After notice from the indemnifying party
to an indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said Subsection (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than out-of-pocket costs of investigation, unless (i) the
indemnified party shall have employed counsel in accordance with the provisions
of the preceding sentence, (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of the commencement
of the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
(d) If the indemnification provided for herein 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 herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
will contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party, on the
one hand, and of the indemnified party, on the other, in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party will 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
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to information and opportunity to correct or prevent such statement or omission.
The obligation to contribute will be individual to Lante and will be limited to
the amount by which the net amount of proceeds received by Lante from the sale
of the Shares exceeds the amount of losses, liabilities, damages and expenses
that Lante has otherwise been required to pay by reason of such statements or
omissions.
(e) The indemnification and contribution provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling person of such indemnified party and will survive the transfer of
securities and the termination or expiration of this Agreement.
6. Miscellaneous.
(a) Any notice to be given to ZixIt under the terms of this Agreement
shall be in writing, addressed to ZixIt at the address set forth in Section 3 of
the Option, Attn: Chief Financial Officer; and any notice to be given to Lante
shall be addressed to Lante at its address set forth in the Lante Option. A
party may specify a different address for receiving notice by giving written
notice thereof to the other parties. Any such notice shall be deemed to have
been duly given upon personal delivery, one business day after deposit with a
nationally recognized overnight courier delivery service, or three business days
after deposit in the U.S. mail, first class, return receipt requested.
(b) Lante may not Transfer this Agreement or its rights and
privileges hereunder, except in connection with a permitted Transfer of the
Option. Subject to the preceding sentence, this Agreement shall be binding upon
and inure to the benefit of the assignees, representatives, executors,
successors or beneficiaries of the parties hereto.
(c) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE UNITED
STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
(d) If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties shall be
relieved of all obligations arising under such provision, but only to the extent
that it is illegal, unenforceable or void, it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(e) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions of
this Agreement.
(f) The parties shall execute all documents, provide all information,
and take or refrain from taking all actions as may be necessary or appropriate
to achieve the purposes of this Agreement.
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(g) This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
written and prior or contemporaneous oral agreements and understandings
pertaining hereto.
(h) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute a waiver of
any such breach or any other covenant, duty, agreement or condition.
(i) This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. This Agreement supersedes the Prior Registration Rights
Agreement.
(j) This Agreement shall continue in effect until the earlier of (a)
all of the Shares are publicly sold pursuant to a Section 2 registration
statement or (b) Lante is permitted to sell all the Shares then held by it
without restriction within 90 days pursuant to Rule 144 under the Securities
Act.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
set forth below, to be effective as of the date first above written.
ZIXIT CORPORATION
By: /s/ Ronald A. Woessner
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Its: V.P.
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Date: 11/24/99
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LANTE CORPORATION
By: /s/ C.R. Puryear
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Its: President & CEO
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Date: 11/24/99
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