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 1 <PAGE> 2 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; 2 <PAGE> 3 (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; 3 <PAGE> 4 (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 4 <PAGE> 5 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 5 <PAGE> 6 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. 6 <PAGE> 7 (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 ----------------------------------------- Its: V.P. ---------------------------------------- Date: 11/24/99 ---------------------------------------- LANTE CORPORATION By: /s/ C.R. Puryear ---------------------------------------- Its: President & CEO ---------------------------------------- Date: 11/24/99 ---------------------------------------- 7