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EXHIBIT 2.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into as of April ____, 2000, among ZixIt Corporation, a Texas corporation (the
"Company"), and H. Xxxxx Xxxxxxxx, an individual ("HWH"), and his affiliates and
assigns set forth in Schedule "1" hereto.
RECITALS
1. HWH and the stockholders set forth in Schedule "1" hereto
(collectively, the "Stockholders") have purchased and own shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), in the
amounts set forth in Schedule "1."
2. HWH and the warrant holders set forth in Schedule "1" hereto
(collectively, the "Warrant Holders") are the holders of warrants to purchase
shares of the Common Stock ("Warrants") in the amounts set forth in Schedule
"1."
3. The Company desires to grant to the Stockholders and the Warrant
Holders (collectively the "Holders") registration rights for the Registrable
Securities (as herein defined) pursuant to the terms and conditions set forth
herein.
AGREEMENT
In consideration of the premises and of the terms and conditions herein
contained, the parties hereto mutually agree as follows:
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings:
"Commission" means the United States Securities and Exchange Commission
or any successor Governmental Body.
"Cutback Registration" means any Requested Registration or Piggyback
Registration to be effected as an underwritten Public Offering in which the
Managing Underwriter with respect thereto advises the Company and the Requesting
Holder(s) in writing that, in its reasonable opinion, the number of securities
requested to be included in such registration (including securities of the
Company or other security holders that are not Registrable Securities) exceeds
the number that can reasonably be sold in such offering without a reduction in
the selling price anticipated to be received for the securities to be sold in
such Public Offering.
"Effective Registration" means a Requested Registration that has been
declared or ordered effective in accordance with the rules of the Commission.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis.
"Governmental Body" means any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality.
"Indemnified Party" means a party entitled to indemnity in accordance
with Section 2.6.
"Indemnifying Party" means a party obligated to provide indemnity in
accordance with Section 2.6.
"Inspectors" has the meaning ascribed to it in Section 2.3(j).
"Losses" has the meaning ascribed to it in Section 2.6(a).
"Managing Underwriter" means, with respect to any Public Offering, the
underwriter or underwriters managing such Public Offering.
"NASD" means the National Association of Securities Dealers.
"Notice of Piggyback Registration" has the meaning ascribed to it in
Section 2.2 (a).
"Person" means any individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Piggyback Registration" means any registration of equity securities of
the Company of the same class as the Registrable Securities under the Securities
Act (other than a registration in respect of a dividend reinvestment or similar
plan for stockholders of the Company or on Form S-4 or Form S-8 promulgated by
the Commission, or any successor forms thereto), whether for sale for the
account of the Company or for the account of any holder of securities of the
Company (other than Registrable Securities).
"Public Offering" means any offering of Common Stock to the public,
either on behalf of the Company or any or its securityholders, pursuant to an
effective registration statement under the Securities Act.
"Records" has the meaning ascribed to it in Section 2.3(j).
"Registrable Securities" means (i) the Common Stock held by the
Stockholders; (ii) the Warrant Stock; and (iii) any additional shares of Common
Stock issued or distributed by way of a dividend, stock split or other
distribution in respect of the securities under subsections (i) or (ii)
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above or acquired by way of any rights offering or similar offering made in
respect of the securities under subsections (i) or (ii) above. As to any
particular Registrable Securities, once issued, such securities shall cease to
be Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (ii) such securities shall have been distributed to the public
pursuant to Rule 144, (iii) such securities shall have ceased to be outstanding
or (iv) such securities can be distributed to the public without restrictions of
any kind pursuant to Rule 144(k) promulgated by the Commission under the
Securities Act.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with its obligations under this Agreement to effect
the registration of Registrable Securities in a Requested Registration or a
Piggyback Registration, including, without limitation, all registration, filing,
securities exchange listing and NASD fees, all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance, any fees or disbursements for opinions to delete Securities legends
or restrictions, and any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities. Registration Expenses expressly exclude,
however, underwriting or selling commissions or fees, transfer taxes, fees and
disbursements of counsel to the Requesting Holder(s) and any other fees and
disbursements incurred by the Requesting Holders solely in their discretion.
"Requesting Holder(s)" means, with respect to any Requested
Registration or Piggyback Registration, the Holder(s) of Registrable Securities
requesting to have Registrable Securities included in such registration in
accordance with this Agreement.
"Requested Registration" means any registration of Registrable
Securities under the Securities Act effected in accordance with Section 2.1.
"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act, and any successor provision thereto.
"Securities" means any of the Warrants, Warrant Stock or Common Stock.
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations thereunder.
"Warrant Stock" means the Common Stock issuable upon exercise of the
Warrants.
SECTION 1. Company's Obligation to Effect Registration. Immediately following
the date hereof, the Company shall commence the preparation of and file as
promptly thereafter as practicable, a registration statement on Form S-3 (or
such other form as the Holders or their counsel may
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reasonably require) so as to permit the resale by such Holders of all
Registrable Securities pursuant to such registration statement and, in any
event, the Company shall use its best efforts to effect the registration under
the Securities Act of all the Registrable Securities by June 1, 2000.
SECTION 2. Registration Rights.
2.1 Requested Registrations.
(a) Registration Requests. If the Company fails to effect the
registration referred to in Section 1 hereof, at any time and from time to time
after June 1, 2000, upon the written request of Holders owning at least thirty
three and one-third percent (33 1/3%) of the Registrable Securities (the
"Necessary Holders") that the Company effect the registration under the
Securities Act of all or part of such Holders' Registrable Securities (which
request shall specify the number of Registrable Securities which the Requesting
Holder proposes the Company to register and the Requesting Holders' intended
method of disposition thereof, which shall be no less than thirty three and
one-third percent of the Registrable Securities), the Company shall use its best
efforts to effect the registration under the Securities Act of the Registrable
Securities which the Company has been so requested by the Requesting Holders to
register so as to permit their disposition pursuant to such registration and to
effect the registration in accordance with the Requesting Holders' intended
method of disposition of such Registrable Securities. If requested by the
Requesting Holders, the method of disposition of all Registrable Securities
included in such registration shall be in an underwritten offering effected in
accordance with Section 2.4(a). Notwithstanding the foregoing, the Company may
postpone effecting a Requested Registration for a reasonable period of time (not
to exceed sixty (60) days) after receipt of the Necessary Holders' written
request therefor if: (a) the Board of Directors of the Company in good faith
resolves that effecting the registration would require the Company to make
public disclosure of material, non-public information that, if publicly
disclosed, would have a material adverse effect upon a material corporate
development or transaction then pending or in progress that involves the
Company; and (b) the Company notifies the Requesting Holders in writing, within
five (5) days after the Necessary Holders have requested such registration, of
such postponement and the grounds therefor; provided that the Company shall not
postpone effecting such registration pursuant to this sentence more than once in
any twelve (12) month period; and, provided, further, that the Company shall
promptly proceed with its obligations hereunder to effect such registration once
such information is publicly disclosed or the disclosure of such information is
not likely to have a material adverse effect upon such corporate development or
transaction. The Company and other securityholders who hold piggyback
registration rights shall have the right to include any of the Company's
Securities (other than Registrable Securities) in a registration statement to be
filed as part of a Requested Registration subject in all events to subsection
(e) below.
(b) Maximum Number of Requested Registrations Per Holder.
Notwithstanding anything herein to the contrary, the Company will not be
required to honor a Holder's request for a Requested Registration if the Company
has previously effected two (2) Effective Registrations under this Section 2.1.
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(c) Registration Statement Form. The Requested Registration
shall be on such appropriate registration form promulgated by the Commission as
shall be selected by the Company that shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods
specified in the Requesting Holder's request for such registration.
(d) Registration Expenses. The Company will pay all
Registration Expenses incurred in connection with any Requested Registration.
(e) Priority in Cutback Registrations. If a Requested
Registration becomes a Cutback Registration, the Company will include in any
such registration to the extent of the number which the Managing Underwriter
advises the Company can be sold in such offering (i) first, Registrable
Securities requested to be included by the Requesting Holder, and (ii) second,
other securities of the Company, if permitted, proposed to be included in such
registration, allocated among the Company and the holders thereof in accordance
with the priorities then existing among the Company and the holders of such
other securities; and any securities so excluded shall be withdrawn from and
shall not be included in such Requested Registration.
2.2 Piggyback Registrations.
(a) Right to Include Registrable Securities. Unless the
Company has registered for resale the Registrable Securities pursuant to Section
1 or Section 2.1, then if the Company at any time proposes to effect a Piggyback
Registration after June 1, 2000, it will each such time give prompt written
notice (a "Notice of Piggyback Registration"), at least twenty (20) days prior
to the anticipated filing date, to all Holders of Registrable Securities of its
intention to do so and of such Holders' rights under this Section 2.2, which
Notice of Piggyback Registration shall include a description of the intended
method of disposition of such securities. Upon the written request of any Holder
made within fifteen (15) days after receipt of a Notice of Piggyback
Registration (which request shall specify the Registrable Securities intended to
be disposed of by such Holder and, subject to the provisions of Section 2.3(b),
the intended method of disposition thereof), the Company will use its best
efforts to include in the registration statement relating to such Piggyback
Registration all Registrable Securities which the Company has been so requested
to register. Notwithstanding the foregoing, if, at any time after giving a
Notice of Piggyback Registration and prior to the effective date of the
registration statement filed in connection with such registration, the Company
determines for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to register, the Company will be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), and (ii) in the case of a determination to delay
registering, the Company shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other
securities. No registration effected under this Section 2.2 shall relieve the
Company of its obligations to effect a Requested Registration under Section 2.1.
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(b) Registration Expenses. The Company will pay all
Registration Expenses incurred in connection with each Piggyback Registration.
(c) Priority in Cutback Registrations. If a Piggyback
Registration becomes a Cutback Registration, the Company will include in such
registration to the extent of the amount of the securities which the Managing
Underwriter advises the Company can be sold in such offering: (1) first, if such
registration as initially proposed by the Company was primarily a registration
of its securities for its own account, the securities proposed by the Company to
be sold for its own account; (2) second, if such registration was primarily a
registration of securities pursuant to the demand registration rights of a third
party, the securities proposed to be sold for such party's account; and (3)
third, any Registrable Securities and other securities requested to be included
in such registration by Requesting Holders or other Persons holding registration
rights, pro rata on the basis of the number of securities sought to be sold by
Requesting Holders or other Persons holding registration rights.
2.3 Registration Procedures. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act pursuant to Section 2.1 or Section 2.2, the Company
shall use its best efforts to effect the registration of such Registrable
Securities in accordance with the intended methods of disposition thereof
specified by the Requesting Holder(s). Without limiting the foregoing, the
Company in each such case will use its best efforts to, as expeditiously as
possible:
(a) prepare and file with the Commission the requisite
registration statement to effect such registration and use its best efforts to
cause such registration statement to become effective, provided that such
registration statement or any amendment thereto will not be filed with the
Commission until the Requesting Holder(s) and their counsel have had a
reasonable opportunity to review the same and to exercise their rights under
Section 2.3(j);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and any prospectus used in connection
therewith as may be reasonably necessary to maintain the effectiveness of such
registration statement and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by such
registration statement, in accordance with the intended methods of disposition
thereof, until the earlier of (i) such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement and (ii) for as long
as the Warrants remain exercisable;
(c) promptly notify each Requesting Holder and the underwriter
or underwriters, if any:
(1) when such registration statement or any
prospectus used in connection therewith, or any amendment or supplement thereto,
has been filed and, with respect to such registration statement or any
post-effective amendment thereto, when the same has become effective;
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(2) of any written comments from the Commission with
respect to any filing referred to in clause (1) above and of any written request
by the Commission for amendments or supplements to such registration statement
or prospectus;
(3) of the notification to the Company by the
Commission of its initiation of any proceeding with respect to the issuance by
the Commission of, or of the issuance by the Commission of, any stop order
suspending the effectiveness of such registration statement; and
(4) of the receipt by the Company of any notification
with respect to the suspension of the qualification or registration of any
Registrable Securities for sale under the applicable securities or blue sky laws
of any jurisdiction;
(d) furnish to each seller of Registrable Securities covered
by such registration statement such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits and documents incorporated by reference), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 (or any successor rule) promulgated under the
Securities Act relating to such Holder's Registrable Securities, and such other
documents, as such seller may reasonably request to facilitate the disposition
of its Registrable Securities;
(e) unless otherwise exempt from such requirements in such
applicable jurisdictions, use its best efforts to register or qualify all
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each Holder thereof shall
reasonably request, to keep such registration or qualification in effect for so
long as such registration statement remains in effect, and take any other action
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such Holder, except that the Company will not for any such purpose be
required to (i) qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this Section
2.3(e) be obligated to be so qualified, (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to general service of process in any
jurisdiction;
(f) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other Governmental Body as may be necessary to enable each Holder thereof to
consummate the disposition of such Registrable Securities;
(g) in an underwritten public offering, furnish to each
Requesting Holder a signed counterpart, addressed to such Holder (and the
underwriters, if any), of
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(1) an opinion of counsel for the Company, dated the
effective date of such registration statement, reasonably satisfactory in form
and substance to such Holder, and
(2) a "comfort" letter, dated the effective date of
such registration statement, signed by the independent public accountants who
have certified the Company's financial statements included in such registration
statement, in each case covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and, in the
case of the accountants' letter, with respect to events subsequent to the date
of such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten Public Offerings of securities, and in the case of the accountants'
letter, such other financial matters as such Holder (or underwriters, if any)
may reasonably request;
(h) notify each Holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which any prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and at the request of any Holder promptly prepare and
furnish to such Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus will 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, in the light
of the circumstances under which they were made, not misleading;
(i) otherwise use the Company's best efforts to comply with
all applicable rules and regulations of the Commission;
(j) make available for inspection by any Requesting Holder,
any underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as will be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such registration statement, and permit the
Inspectors to participate in the preparation of such registration statement and
any prospectus contained therein and any amendment or supplement thereto.
Records which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential will not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the registration statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction or (iii) the information in such Records has
been made generally available to the public. Each seller of Registrable
Securities agrees by acquisition of such Registrable Securities that it will,
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upon learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(k) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;
(l) use the Company's best efforts to cause all Registrable
Securities covered by such registration statement to be listed, upon official
notice of issuance, on any securities exchange or quotation system on which any
of the securities of the same class as the Registrable Securities are then
listed;
(m) the Company may require each Holder of Registrable
Securities as to which any registration is being effected to, and each such
Holder, as a condition to including Registrable Securities in such registration,
will, furnish the Company with such information and affidavits regarding such
Holder and the distribution of such Securities as the Company may from time to
time reasonably request in writing in connection with such registration; and
(n) each Holder of Registrable Securities agrees by
acquisition of such Registrable Securities that upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
2.3(h), such Holder will forthwith discontinue such Holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.3(h) and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's possession
of the prospectus relating to such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice,
then any periods of time in which any Holder is required to take or refrain from
taking any action referred to in this Agreement shall be deemed to be extended
by a number of days equal to the number of days during the period from and
including the giving of notice pursuant to Section 2.3(h) and to and including
the date when each holder of any Registrable Securities covered by such
registration statement will receive the copies of the supplemented or amended
prospectus contemplated by Section 2.3(h).
2.4 Underwritten Offerings.
(a) Underwritten Requested Offerings. In the case of any
underwritten Public Offering being effected pursuant to a Requested
Registration, the Managing Underwriter and any other underwriter or underwriters
with respect to such offering will be selected by the Company with the prior
written approval of the Holders of a majority of the Registrable Securities to
be included in such underwritten offering which approval shall not be
unreasonably withheld. The Company will enter into an underwriting agreement in
customary form with such underwriter or underwriters, which will include, among
other provisions, indemnities to the effect and to the extent provided in
Section 2.6. The Holders of Registrable Securities to be distributed by such
underwriters will be
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parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters also be
made to and for their benefit and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement also be
conditions precedent to their obligations. No Holder of Registrable Securities
will be required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties or
agreements regarding such Holder and such Holder's ownership of the Securities
being registered on its behalf and such Holder's intended method of distribution
and any other representation required by law. No Requesting Holder may
participate in such underwritten offering unless such Holder agrees to sell its
Registrable Securities on the basis provided in such underwriting agreement and
completes and executes all questionnaires, powers of attorney, indemnities and
other documents reasonably required under the terms of such underwriting
agreement. If any Requesting Holder disapproves of the terms of an underwriting,
such Holder may elect to withdraw therefrom and from such registration by notice
to the Company and the Managing Underwriter, and each of the remaining
Requesting Holders will be entitled to increase the number of Registrable
Securities being registered to the extent of the Registrable Securities so
withdrawn in the proportion which the number of Registrable Securities being
registered by such remaining Requesting Holder bears to the total number of
Registrable Securities being registered by all such remaining Requesting
Holders.
(b) Underwritten Piggyback Offerings. If the Company at any
time proposes to register any of its securities in a Piggyback Registration and
such securities are to be distributed by or through one or more underwriters,
the Company will, subject to the provisions of Section 2.2(c), arrange for such
underwriters to include the Registrable Securities to be offered and sold by
such Holder among the securities to be distributed by such underwriters. All
Registrable Securities included in such a Piggyback Registration must be
distributed through such underwriters in the same manner as all other securities
are being distributed in such Public Offering. The Holders of Registrable
Securities to be distributed by such underwriters will be parties to the
underwriting agreement between the Company and such underwriter or underwriters
and may, at their option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters also be made to and for their benefit and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement also be conditions precedent to their
obligations. No Holder of Registrable Securities will be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
Holder and such Holder's ownership of the securities being registered on its
behalf and such Holder's intended method of distribution and any other
representation required by law. No Requesting Holder may participate in such
underwritten offering unless such Holder agrees to sell its Registrable
Securities on the basis provided in such underwriting agreement and completes
and executes all questionnaires, powers of attorney, indemnities and other
documents reasonably required under the terms of such underwriting agreement. If
any Requesting Holder disapproves of the terms of an underwriting, such Holder
may elect to withdraw therefrom and from such registration by notice to the
Company and the Managing Underwriter, and each of the remaining Requesting
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Holders will be entitled to increase the number of Registrable Securities being
registered to the extent of the Registrable Securities so withdrawn in the
proportion which the number of Registrable Securities being registered by such
remaining Requesting Holder bears to the total number of Registrable Securities
being registered by all such remaining Requesting Holders.
2.5 Holdback Agreements.
(a) Registrable Securities. If and to the extent requested by
the Managing Underwriter, each Holder of Registrable Securities, by acquisition
of such Registrable Securities, agrees, to the extent permitted by law, not to
effect any public sale or distribution (including a sale under Rule 144) of such
Securities, or any Securities convertible into or exchangeable or exercisable
for such Securities, during the ten (10) days prior to and the ninety (90) days
after the effective date of any registration statement filed by the Company in
connection with an underwritten Public Offering (or for such shorter period of
time as is sufficient and appropriate, in the opinion of the Managing
Underwriter, in order to complete the sale and distribution of the Securities
included in such registration), except as part of such registration statement,
whether or not such Holder participates in such registration.
(b) By the Company. If and to the extent requested by the
Managing Underwriter, the Company agrees not to effect any public or private
sale or distribution of its equity Securities, or any Securities convertible
into or exchangeable or exercisable for such Securities, during the ten (10)
days prior to and the ninety (90) days after the effective date of the
registration statement filed in connection with an underwritten offering made
pursuant to a Requested Registration or a Piggyback Registration (or for such
shorter period of time as is sufficient and appropriate, in the opinion of the
Managing Underwriter, in order to complete the sale and distribution of the
securities included in such registration), except as part of such underwritten
registration and except pursuant to registrations on Form S-4 or Form S-8
promulgated by the Commission or any successor or similar forms thereto.
(c) Exception. The foregoing provisions will not apply to any
Holder of securities of the Company to the extent such Holder is prohibited by
applicable law from agreeing to withhold from sale.
2.6 Indemnification.
(a) Indemnification by the Company. The Company will, to the
full extent permitted by law, indemnify and hold harmless each Holder of
Registrable Securities included in any registration statement filed in
connection with a Requested Registration or a Piggyback Registration, its
directors and officers, and each other Person, if any, who controls any such
seller within the meaning of the Securities Act, against any losses, claims,
damages, expenses or liabilities, joint or several (together, "Losses"), to
which such Holder or any such director or officer or controlling Person may
become subject under the Securities Act or otherwise, insofar as such Losses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon
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any untrue or alleged untrue statement of any material fact contained in any
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, and the Company will reimburse such Holder and each such director,
officer and controlling Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such Loss (or
action or proceeding in respect thereof); provided that the Company will not be
liable in any such case to the extent that any such Loss (or action or
proceeding in respect thereof) arises out of or is based upon an untrue
statement or omission made in any such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon or in conformity with written information furnished to the Company
through an instrument duly executed by or on behalf of such Holder specifically
stating that it is for use in the preparation thereof. Such indemnity will
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any such director, officer or controlling Person, and
will survive the transfer of such Securities by such Holder. The Company will
also indemnify each other Person who participates (including as an underwriter)
in the offering or sale of Registrable Securities, their officers and directors
and each other Person, if any, who controls any such participating Person within
the meaning of the Securities Act to the same extent as provided above with
respect to sellers of Registrable Securities.
(b) Indemnification by the Sellers. Each Holder of Registrable
Securities which are included or are to be included in any registration
statement filed in connection with a Requested Registration or a Piggyback
Registration, as a condition to including Registrable Securities in such
registration statement, will, to the full extent permitted by law, indemnify and
hold harmless the Company, its directors and officers, and each other Person, if
any, who controls the Company within the meaning of the Securities Act, against
any Losses to which the Company or any such director or officer or controlling
Person may become subject under the Securities Act or otherwise, insofar as such
Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement of any material
fact contained in any such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, if such untrue statement or omission was made in reliance upon and
in conformity with written information furnished to the Company through an
instrument duly executed by or on behalf of such Holder specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement; provided, however, that the obligation to provide indemnification
pursuant to this Section 2.6(b) will be several, and not joint and several,
among such Indemnifying Parties on the basis of the number of Registrable
Securities included in such registration statement. Such indemnity will remain
in full force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer or controlling Person and will survive
the transfer of such securities by such Holder. Such Holders will also indemnify
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each other Person who participates (including as an underwriter) in the offering
or sale of Registrable Securities, their officers and directors and each other
Person, if any, who controls any such participating Person within the meaning of
the Securities Act to the same extent as provided above with respect to the
Company.
(c) Notice of Claims, etc. Promptly after receipt by an
Indemnified Party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.6(a) or Section 2.6(b), such
Indemnified Party will, if a claim in respect thereof is to be made against an
Indemnifying Party pursuant to such paragraphs, give written notice to the
latter of the commencement of such action, provided that the failure of any
Indemnified Party to give notice as provided herein will not relieve the
Indemnifying Party of its obligations under the preceding paragraphs of this
Section 2.6, except to the extent that the Indemnifying Party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an Indemnified Party, the Indemnifying Party will be entitled to
participate in and, unless a conflict of interest between such Indemnified Party
and any Indemnifying Party exists with respect to such claim, to assume the
defense thereof, jointly with any other Indemnifying Party similarly notified to
the extent that it may wish, 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 the defense thereof, the
Indemnifying Party will not be liable to such Indemnified Party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation; provided that the
Indemnified Party may participate in such defense at the Indemnified Party's
expense; and provided further that the Indemnified Party or Indemnified Parties
will have the right to employ one counsel to represent it or them if they have
legal defenses which are different from or in addition to those available to the
Indemnifying Party, and in that event the reasonable fees and expenses of such
one counsel will be paid by the Indemnifying Party. If the Indemnifying Party is
not entitled to, or elects not to, assume the defense of the claim, it will not
be obligated to pay the fees and expenses of more than one counsel for the
Indemnified Parties with respect to such claim, unless in the reasonable
judgment of any Indemnified Party a conflict of interest may exist between such
Indemnified Party and any other Indemnified Parties with respect to such claim,
in which event the Indemnifying Party will be obligated to pay the fees and
expenses of such additional counsel for the Indemnified Parties. No Indemnifying
Party will consent to entry of any judgment or enter into any settlement without
the consent of the Indemnified Party, unless only money damages are involved,
and in any event such consent will not be unreasonably withheld. No Indemnifying
Party will be subject to any liability for any settlement made without its
consent, which consent will not be unreasonably withheld.
(d) Contribution. If the indemnity and reimbursement
obligation provided for in any paragraph of this Section 2.6 is unavailable or
insufficient to hold harmless an Indemnified Party in respect of any Losses (or
actions or proceedings in respect thereof) referred to therein, then the
Indemnifying Party will contribute to the amount paid or payable by the
Indemnified Party as a result of such Losses (or actions or proceedings in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other hand in connection with statements or omissions which resulted in such
Losses, as well as any
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other relevant equitable considerations. The relative fault will be determined
by reference to, among other things, whether the untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the Indemnifying Party or the Indemnified Party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section 2.6(d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this Section 2.6(d). The amount paid by an Indemnified Party as a
result of the Losses referred to in the first sentence of this Section 2.6(d)
will be deemed to include any legal and other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any Loss
which is the subject of this Section 2.6(d). No Indemnified Party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from the Indemnifying Party if
the Indemnifying Party was not guilty of such fraudulent misrepresentation.
(e) Other Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Section 2.6 (with appropriate
modifications) will be given by the Company and each Holder of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any Governmental Body
other than the Securities Act. The provisions of this Section 2.6 will be in
addition to any other rights to indemnification or contribution which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.
(f) Indemnification Payments. The indemnification required by
this Section 2.6 will be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
Losses are incurred.
2.7 Covenants Relating to Rule 144. If at any time the Company is
required to file reports in compliance with either Section 13 or Section 15(d)
of the Exchange Act, the Company will file reports in compliance with the
Exchange Act, will comply with all rules and regulations of the Commission
applicable in connection with the use of Rule 144 and take such other actions
and furnish each Holder with such other information as such Holder may
reasonably request in order to avail itself of such rule or any other rule or
regulation of the Commission allowing such holder to sell any Registrable
Securities without registration, and will, at its expense, forthwith upon the
request of any holder of Registrable Securities, deliver to such holder a
certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's Internal Revenue Service identification number, (c) the Company's
Commission file number, (d) the number of shares of each class of stock
outstanding as shown by the most recent report or statement published by the
Company, and (e) whether the Company has filed the reports required to be filed
under the Exchange Act for a period of at least ninety (90) days prior to the
date of such certificate and in addition has filed the most recent annual report
required to be filed thereunder.
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SECTION 3. Survival. The terms and provisions of this Agreement and all the
rights and benefits inuring to the Holders and the obligations imposed on the
Company hereunder shall survive any Change of Control (as herein defined). For
purposes hereof, a "Change of Control" shall mean and include any of the
following (i) a merger or consolidation of the Company with or into any other
corporation or other business entity in which the Company is the surviving
corporation (except one in which the holders of capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 50%
of the outstanding securities having the right to vote in an election of the
Board of Directors ("Voting Stock") of the Company); or any such merger or
consolidation in which the Company is not the surviving corporation; (ii) a
sale, lease, exchange or other transfer (in one transaction or a related series
of transactions) of all or substantially all of the Company's assets; (iii) the
acquisition by any person or any group of persons (other than the Company, any
of its direct or indirect subsidiaries, or any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or trust of
the Company or any of its direct or indirect subsidiaries) acting together in
any transaction or related series of transactions, of such number of shares of
the Company's Voting Stock as causes such person, or group of persons, to own
beneficially, directly or indirectly, as of the time immediately after such
transaction or series of transactions, 50% or more of the combined voting power
of the Voting Stock of the Company other than as a result of an acquisition of
securities directly from the Company, or solely as a result of an acquisition of
securities by the Company which by reducing the number of shares of the Voting
Stock outstanding increases the proportionate voting power represented by the
Voting Stock owned by any such person to 50% or more of the combined voting
power of such Voting Stock; or (iv) a change in the composition of the Company's
Board of Directors following a tender offer or proxy contest, as a result of
which persons who, immediately prior to a tender offer or proxy contest,
constituted the Company's Board of Directors shall cease to constitute at least
a majority of the members of the Board of Directors.
SECTION 4. Term. The Company's obligations under this Agreement will terminate
as to any individual Holder at the earlier of (1) the first time at which that
Holder would be entitled, under Rule 144 under the Act, to sell all of the
Common Stock and the Warrant Stock then owned by the Holder in a single three
month period regardless of the volume of trading in the Company's common stock,
and (2) the tenth anniversary of the date hereof.
SECTION 5. Miscellaneous.
5.1 Successors And Assigns. This Agreement will be binding upon and
will inure to the benefit of the parties, and their respective successors and
assigns, including any assignee of all or part of the Registrable Securities.
5.2 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Texas, without regard to its conflict
of laws principles.
5.3 Headings. Section headings are inserted herein for convenience only
and do not form a part of this Agreement.
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5.4 Entire Agreement; Amendment. This Agreement contains the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, supersedes all prior written agreements and negotiations and oral
understandings, if any, and may not be amended, supplemented or discharged
except by performance or by an instrument in writing signed by all the parties
hereto.
5.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
5.6 Notices. All notices, statements, instructions or other documents
required to be given hereunder, will be in writing and will be given personally,
by courier, by mailing the same in a sealed envelope, first-class mail, postage
prepaid and either certified or registered, return receipt requested, or by
confirmed telecopy addressed to each of the Holders at the address set forth on
the signature pages hereof and to the Company at its principal office, One
Galleria Tower, 00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000-0000 Attention:
President, Facsimile: (000) 000-0000 Each party hereto, by written notice given
to the other parties hereto in accordance with this Section 5.6, may change the
address to which notices, statements, instructions or other documents are to be
sent to such party. All notices, statements, instructions and other documents
hereunder that are mailed will be deemed to have been given when actually
received or three (3) days after deposited in the United States mails.
5.7 Accounting Terms. Unless otherwise specified, all accounting terms
used in this Agreement will be interpreted in accordance with GAAP.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
CORPORATION:
ZIXIT CORPORATION,
a Texas corporation
By:
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Name:
---------------------------------
Title:
--------------------------------
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HOLDERS:
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H. Xxxxx Xxxxxxxx
COUNTERPART SIGNATURE PAGES FOR EACH
HOLDER ARE ATTACHED HERETO
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COUNTERPART SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT
The undersigned Holder hereby executes the Registration Rights
Agreement among ZixIt Corporation, H. Xxxxx Xxxxxxxx and his affiliates and
assigns as of the date first set forth above.
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SCHEDULE 1
