<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
APRIL 12, 2000 (APRIL 11, 2000)
ZIXIT CORPORATION
-----------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 0-17995 75-2216818
----- ------- ----------
(STATE OR OTHER (COMMISSION FILE (IRS EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
ONE GALLERIA TOWER
13355 NOEL ROAD
SUITE 1555
DALLAS, TEXAS 75240-6604
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(972) 702-7055
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ITEM 5. OTHER EVENTS.
On April 11, 2000, ZixIt Corporation (the "Registrant") entered into a
Common Stock and Warrant Purchase Agreement with H. Wayne Huizenga and his
affiliates and assigns (collectively, the "Investors"). Pursuant to the
agreement:
o the Investors will invest $44 million in the Registrant
o the Registrant will issue to the Investors: (1) 916,667 shares of the
Registrant's common stock, $0.01 par value per share (the "Common Stock"),
(2) ten-year warrants to purchase 916,667 shares of Common Stock at $57.60
per share, and (3) four-year warrants to purchase 1,222,223 shares of Common
Stock at $12.00 per share, which will be reallocated options Mr. Cook will
surrender to the Registrant as described below. These four-year warrants are
not exercisable until one year following the closing of the transaction.
(The warrants noted in (2) and (3) are collectively referred to herein as
the "Warrants.")
In connection with the transaction, David P. Cook, the Registrant's
chairman and chief executive officer, will voluntarily surrender to the
Registrant 1,222,223 of his personal options to acquire shares of Common
Stock, for reallocation to the Investors (in the form of the four-year
warrants described in (3) above). The original exercise price for the Cook
options surrendered and reallocated to the Investors was $7.00 per share.
Following the transaction, Mr. Cook will retain options to purchase
approximately 2.5 million shares of Common Stock.
Under the agreement, Mr. Huizenga will be elected to the Registrant's
Board of Directors and appointed Vice Chairman of the Board of Directors. The
consummation of the transaction is subject to approval by the Registrant's Board
of Directors and other customary conditions. The transaction is expected to
close within two weeks.
The Investors will pay for the Common Stock and Warrants by delivering
secured personal, recourse promissory notes in the principal amount of their
respective shares of the purchase price, which promissory notes are payable in
three equal installments on May 1, 2000, June 30, 2000 and September 1, 2000
(the "Notes"). The Notes do not bear interest and are secured by security
interests in and pledges of the securities being purchased pursuant to a Stock
Pledge and Security Agreement. The Stock Pledge and Security Agreement provides
for the release of one-third of the pledged shares as principal installments
are paid under the Notes.
Under the terms of a Registration Rights Agreement, the Registrant will
agree to use its best efforts to register by June 1, 2000 the resale of the
shares of Common Stock sold and the shares of Common Stock issuable upon the
exercise of the Warrants. This registration statement is expected to be a "shelf
registration statement" pursuant to which the Investors would be entitled to
resell their shares of Common Stock from time-to-time. If the Registrant fails
to effect this registration for any reason, the Investors have two "demand"
registration rights. In addition, if the Registrant fails to effect this
registration, the Investors will have certain "piggyback" or incidental
registration rights in the event of a registered offering of shares of Common
Stock by the Registrant or other shareholders of the Registrant.
2
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The foregoing summary of the terms of the Common Stock and Warrant
Purchase Agreement, the Warrants, the Notes, the Stock Pledge and Security
Agreement, and the Registration Rights Agreement is qualified in its entirety by
reference to these documents, which are filed as exhibits to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
2.1 Common Stock and Warrant Purchase Agreement, dated April 11,
2000, between ZixIt Corporation and H. Wayne Huizenga, his
affiliates and assigns identified on schedule 1 (schedules
omitted, except for schedule 1, but will be provided to the
Commission upon request).
2.2 Form of Common Stock Warrant Certificate (ten-year warrant).
2.3 Form of Common Stock Warrant Certificate (four-year warrant).
2.4 Form of Non-Negotiable Secured Promissory Note.
2.5 Form of Stock Pledge and Security Agreement.
2.6 Form of Registration Rights Agreement.
99.1 Press Release issued by the Registrant on April 10, 2000
relating to the subject of this Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZIXIT CORPORATION
Date: April 12, 2000 By: /s/ Steve M. York
----------------------------------------------
Steve M. York
Senior Vice President, Chief Financial Officer
and Treasurer
3
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
2.1 Common Stock and Warrant Purchase Agreement, dated April 11,
2000, between ZixIt Corporation and H. Wayne Huizenga, his
affiliates and assigns identified on schedule 1 (schedules
omitted, except for schedule 1, but will be provided to the
Commission upon request).
2.2 Form of Common Stock Warrant Certificate (ten-year warrant).
2.3 Form of Common Stock Warrant Certificate (four-year warrant).
2.4 Form of Non-Negotiable Secured Promissory Note.
2.5 Form of Stock Pledge and Security Agreement.
2.6 Form of Registration Rights Agreement.
99.1 Press Release issued by the Registrant on April 10, 2000
relating to the subject of this Form 8-K.
</TABLE>
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EXHIBIT 2.1
COMMON STOCK AND WARRANT
PURCHASE AGREEMENT
For
ZIXIT CORPORATION,
A TEXAS CORPORATION
April 11, 2000
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Purchase Authorization..........................................................................1
2. Closing; Payment of Purchase Price..............................................................2
2.1 Corporation's Deliveries at Closing....................................................2
2.2 Purchaser's Deliveries at Closing......................................................2
2.3 Payment of Purchase Price..............................................................2
3. Corporation's Representations and Warranties....................................................2
3.1 Organization and Standing..............................................................3
3.2 Power and Authority....................................................................3
3.3 Enforceability.........................................................................3
3.4 Validity of Shares.....................................................................3
3.5 Capitalization.........................................................................3
3.6 No Violation...........................................................................4
3.7 Corporation Reports and Financial Statements...........................................4
3.8 Absence of Certain Changes.............................................................5
3.9 Proprietary Rights.....................................................................5
3.10 No Commission..........................................................................6
3.11 Registration Rights....................................................................6
4. Purchasers' Representations and Warrants........................................................6
4.1 Organization and Standing..............................................................6
4.2 Power and Authority....................................................................6
4.3 Enforceability.........................................................................6
4.4 Investment Representations.............................................................7
4.4.1 Economic Risk................................................7
4.4.2 Acquisition for Own Account..................................7
4.4.3 Protection...................................................8
4.4.4 Corporation Information......................................8
4.4.5 Residence....................................................8
5. Purchasers' Conditions..........................................................................8
5.1 Representations and Warranties True and Correct........................................8
5.2 Performance of Obligations.............................................................8
5.3 Compliance Certificate.................................................................8
5.4 Omnibus Certificate....................................................................8
5.5 Related Agreements.....................................................................9
5.6 Legal Investment.......................................................................9
5.7 Consents...............................................................................9
5.8 Expenses...............................................................................9
</TABLE>
ii
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<TABLE>
<S> <C> <C>
5.9 Election of Directors..................................................................9
5.10 Proceedings and Documents.............................................................10
6. Corporation's Conditions.......................................................................10
6.1 Representations and Warranties True and Correct.......................................10
6.2 Performance of Obligations............................................................10
6.3 Related Agreements....................................................................10
6.4 Consents..............................................................................10
6.5 Board Approval........................................................................10
7. Certain Covenants..............................................................................10
7.1 Registration of Securities Issuable to Purchasers.....................................10
7.2 Appointment of HWH to Board of Directors..............................................10
7.3 Board Approval........................................................................11
7.4 HSR Act...............................................................................11
7.5 HSR Fees..............................................................................11
7.6 Access to Information.................................................................11
7.7 Further Assurances....................................................................11
7.8 Notification of Certain Matters.......................................................11
7.9 Execution of Further Documents........................................................12
8. Remedies.......................................................................................12
9. Miscellaneous..................................................................................12
9.1 Survival of Representations and Warranties............................................12
9.2 Successors and Assigns................................................................12
9.3 Consent to Amendments; Waivers........................................................12
9.4 Severability..........................................................................13
9.5 Descriptive Headings..................................................................13
9.6 Notices...............................................................................13
9.7 Governing Law.........................................................................13
9.8 Exhibits and Schedules................................................................13
9.9 Exchange of Certificates..............................................................13
9.10 Final Agreement.......................................................................14
9.11 Execution in Counterparts.............................................................14
9.12 Remedies; Attorneys' Fees.............................................................14
</TABLE>
Exhibits
Exhibit A - Form of Warrant Certificate
Exhibit B - Form of Registration Rights Agreement
Exhibit C - Form of Note
Exhibit D - Form of Pledge and Security Agreement
iii
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Schedules
Schedule 1 - Purchasers
Schedule 3.1 - Organization of Corporation
Schedule 3.6 - No Violation
Schedule 3.7 - Corporation Reports and Financial Statements
Schedule 3.8 - Absence of Certain Changes
Schedule 3.9 - Proprietary Rights
Schedule 3.11 - Registration Rights
iv
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ZIXIT CORPORATION
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
THIS AGREEMENT effective as of April 11, 2000 ("Effective Date"),
between ZIXIT CORPORATION, a Texas corporation (the "Corporation") and H. Wayne
Huizenga ("HWH"), his affiliates and assigns identified on Schedule 1
(collectively, the "Purchasers" and each, a "Purchaser").
R E C I T A L S
A. The Corporation is a publicly traded company in the business of
providing a secure document delivery, private e-mail, and message tracking
service that enables Internet users to send and receive encrypted and digitally
signed communications using their existing e-mail systems and addresses
("Encrypted e-mail"). The Corporation has under development a secure payment
service ("Secure Payment Services") with application to e-commerce transactions
as well as developing other products and services with applications for the
Internet and e-commerce.
B. The Corporation requires additional capital in order to develop
and/or expand the Corporation's business and operations. The Corporation and the
Purchasers entered into discussions regarding the Corporation's business,
capital needs and the Purchasers' possible investment and reached an agreement
in principle on price and other material economic terms on March 2, 2000.
Accordingly: (1) the Corporation desires to sell, assign, transfer, convey,
issue and deliver to the Purchasers and the Purchasers, severally, desire to
purchase from the Corporation, an aggregate of (i) Nine Hundred Sixteen Thousand
Six Hundred Sixty-Seven (916,667) shares (the "Shares") of the Corporation's
common stock, par value $0.01 per share (the "Common Stock"); (ii) warrants (the
"$57.60 Warrants") to purchase Nine Hundred Sixteen Thousand Six Hundred
Sixty-Seven (916,667) shares of the Common Stock at an exercise price equal to
Fifty-Seven and 60/100 Dollars ($57.60) per share, which warrants shall be
exercisable commencing on the Closing Date (as herein defined) until the tenth
anniversary of the Closing Date; and (iii) warrants (the "$12.00 Warrants", and
collectively with the $57.60 Warrants, the "Warrants") to purchase One Million
Two Hundred Twenty-Two Thousand Two Hundred Twenty-Three (1,222,223) shares of
Common Stock at an exercise price equal to Twelve Dollars ($12.00) per share
which warrants shall be exercisable commencing one (1) year from the Closing
Date until the fourth anniversary of the Closing Date, for an aggregate purchase
price of Forty-Four Million Sixteen Dollars ($44,000,016) (the "Purchase Price")
for all the Shares and the Warrants.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Purchase Authorization. Subject to the terms and conditions set
forth in this Agreement, the Corporation hereby agrees to sell, assign,
transfer, convey, issue and deliver to each Purchaser, severally and not
jointly, the number of Shares of Common Stock and the Warrants set forth
opposite such Purchaser's name on Schedule 1, for the Purchase Price payable in
accordance with Section 2.3 below. Prior to the Closing (as herein defined), the
Corporation shall: (1) duly
<PAGE> 6
authorize the issuance to the Purchasers of the Shares and the Warrants; and (2)
duly authorize and reserve for issuance the shares of Common Stock to be issued
upon the exercise of the Warrants (the "Warrant Shares").
2. Closing; Payment of Purchase Price. The consummation of the purchase
and sale of the Shares and the Warrants and the transactions contemplated by
this Agreement (the "Closing") will be held at the offices of the Corporation at
12:00 p.m. local time, on the date that is two business days following the
receipt by the parties of all necessary governmental approvals required in order
to conclude the transactions contemplated hereby, including, but not limited to,
consents required under the HSR Act (as defined in Section 7.4) or at such other
time, date and place as may be agreed to by the Corporation and the Purchasers
(the "Closing Date").
2.1 Corporation's Deliveries at Closing. At the Closing,
the Corporation shall deliver to each Purchaser: (1)
a certificate or certificates, duly executed and
registered in the name of each of the Purchasers or
the Purchasers' nominees, representing the number of
Shares to be purchased by such Purchaser; (2) a
certificate or certificates in the name of each of
the Purchasers or the Purchasers' nominees in
substantially the form attached hereto as Exhibit A
evidencing the Warrants to be purchased by such
Purchaser ("Warrant Certificate"); (3) the
Registration Rights Agreement substantially in the
form attached hereto as Exhibit B (the "Registration
Rights Agreement") duly executed by the Corporation;
(4) the certificate required under and duly executed
in accordance with Section 5.3 below; (5) the
certificate required under and duly executed in
accordance with Section 5.4 below; and (6) any other
documents, deliveries, certificates or instruments
reasonably necessary to conclude the transactions
contemplated by this Agreement.
2.2 Purchaser's Deliveries at Closing. At the Closing,
each Purchaser shall deliver to the Corporation: (1)
a secured promissory note substantially in the form
attached hereto as Exhibit C ("Note"), duly executed
by such Purchaser, evidencing such Purchaser's
promise to pay its proportionate share of the
Purchase Price as set forth in Schedule 1 hereto in
accordance with the installment payment schedule set
forth in Section 2.3 below; (2) the Registration
Rights Agreement duly executed by the Purchaser; (3)
a stock pledge and security agreement (the "Pledge
and Security Agreement") substantially in the form
attached hereto as Exhibit D; and (4) any other
documents, deliveries, certificates or instruments
reasonably necessary to conclude the transactions
contemplated by this Agreement.
2.3 Payment of Purchase Price. Each Purchaser shall
deliver its Note to the Corporation on the Closing
Date, which, pursuant to its terms, shall provide for
payment of such Purchaser's proportionate portion of
the Purchase Price in three (3) equal installments
which shall be payable on each of May 1, 2000, June
30, 2000 and September 1, 2000.
2
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3. Corporation's Representations and Warranties. As an inducement to
the Purchasers to enter into and perform this Agreement, the Corporation hereby
represents and warrants to the Purchasers as follows:
3.1 Organization and Standing. The Corporation is a
corporation duly organized, validly existing and in
good standing under the laws of the State of Texas.
The Corporation has the requisite power and authority
to own all of its properties, to conduct its business
as presently being conducted and to conduct its
business as it is proposed to be conducted. The
Corporation is duly qualified to do business in every
jurisdiction where failure to qualify could have a
material adverse effect on its business, condition or
assets.
3.2 Power and Authority. The Corporation has all
requisite power and authority to: (1) enter into this
Agreement and the Registration Rights Agreement, the
Warrant Certificates and each of the agreements,
certificates and instruments to be executed in
connection herewith (collectively, the "Related
Agreements"); (2) issue and sell the Shares and the
Warrants; (3) issue the Warrant Shares; (4) carry out
and perform its obligations under the terms of this
Agreement and the Related Agreements; and (5) carry
on its business as currently conducted and as
contemplated by its current business plans.
3.3 Enforceability. This Agreement and each of the
Related Agreements are legal, valid and binding
obligations of the Corporation, enforceable against
the Corporation in accordance with their respective
terms.
3.4 Validity of Shares. The Shares, the Warrants and the
Warrant Shares when issued in accordance with the
terms of this Agreement and the Warrant Certificates,
as the case may be, will be duly and validly issued,
fully paid, non-assessable and free and clear of all
liens, claims and encumbrances except as may be
imposed by the terms of this Agreement, the Note, the
Pledge and Security Agreement or any other liens,
claims and encumbrances permitted or imposed by the
Purchasers.
3.5 Capitalization. The Corporation's authorized capital
stock consists of (a) One Hundred Seventy-Five
Million (175,000,000) shares of Common Stock (i)
15,611,696 of which shares of Common Stock are issued
and outstanding, (ii) 5,813,527 shares of Common
Stock are unissued but reserved for issuance under
outstanding warrants or stock options and other
convertible securities or instruments awarded to
employees, consultants and investors of the
Corporation of which 3,703,300 shares of Common Stock
subject to options, warrants and other convertible
securities or instruments are held by David Cook and
(iii) 859,120 shares of Common Stock are available
and reserved for future grants under the
Corporation's stock option plans and (b) Ten Million
(10,000,000) shares of Preferred Stock, par value
$1.00 per share (the "Preferred Stock"), none of
which shares of Preferred Stock is issued and
3
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outstanding. Except as described above or in the
Corporation's SEC Filings (as defined in Section 3.7
hereof) (exclusive of any Shares, Warrants and
Warrant Shares issued or issuable under this
Agreement): (1) the Corporation has not issued,
reserved for issuance, nor committed to be issued any
shares of capital stock of the Corporation; (2) there
are no declared but unpaid dividends or undeclared
dividend arrearage on any shares of capital stock of
the Corporation; and (3) there do not exist any stock
appreciation rights, phantom stock plans, preemptive
rights, conversion rights, options, warrants or
agreements granted, issued by or binding on the
Corporation for the purchase or acquisition of any
shares of its capital stock.
3.6 No Violation. Except as set forth on Schedule 3.6,
the execution, delivery, consummation and performance
of this Agreement or the Related Agreements or the
transactions contemplated hereby or thereby will not
(with or without notice, the passage of time or
both): (1) conflict with or result in a breach of any
provision of the articles of incorporation or bylaws
of the Corporation; (2) result in a default, give
rise in any third party of the right to exercise any
termination, cancellation, acceleration or any other
remedy, or require any consent or approval under the
terms, conditions or provisions of any note, bond,
mortgage, indenture, loan, factoring arrangement,
license, agreement, lease or other instrument or
obligation that is binding on the Corporation or any
of its assets; or (3) violate any law, judgment,
order, writ, injunction, decree, statute, rule or
regulation of any court, administrative agency,
bureau, board, commission, office, authority,
department or other governmental entity applicable to
the Corporation or any of its assets, which conflict,
breach, default or violation referred to in (1)
through (3) above would reasonably be expected to
have a material adverse effect on the Corporation's
business, condition or assets.
3.7 Corporation Reports and Financial Statements. The
Corporation has heretofore delivered to Purchasers
true and complete copies of all reports, registration
statements and other filings filed by the Corporation
with the Securities and Exchange Commission ("SEC")
since January 1, 1998 (such reports, registration
statements and other filings, together with any
amendments thereto, are sometimes collectively
referred to as the "SEC Filings"). All of such
reports, registration statements and filings are
listed on Schedule 3.7. As of their respective dates,
the SEC Filings did not, and as of the date hereof
and considered together the SEC Filings do not,
contain any 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 light of circumstances under which they were made,
not misleading. The Corporation has furnished the
Purchasers with: (1) the balance sheets, statements
of operations and statements of cash flows of the
Corporation for the fiscal years ended December 31,
1997, December 31, 1998 and December 31, 1999; (2)
the interim balance sheet, statement of operations
4
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and statement of cash flows of the Corporation (the
"Current Balance Sheet") for the two (2) month period
ended February 29, 2000 (which, together with the
items in subsection (1) of this Section are
hereinafter referred to as the "Financial
Statements"). Each of the Financial Statements has
been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a
consistent basis and fairly and accurately presents
the Corporation's financial position as of the dates
thereof and the results of operations and cash flows
for the periods then ended (except as otherwise noted
therein, or in the case of unaudited statements,
subject to normal recurring year-end adjustments that
have been made historically and are non- material in
amount, other adjustments described therein, and the
lack of footnote disclosure). All the books, records
and accounts of the Corporation are in all material
respects accurate and complete, maintained in
accordance with good business practice, comply with
all laws, regulations and rules applicable to the
Corporation and accurately present and reflect in all
material respects all of the transactions entered
into during the applicable period.
3.8 Absence of Certain Changes. Except as set forth on
Schedule 3.8, referred to in Section 3.5, disclosed
in the SEC Filings, or as related in any way to the
transactions contemplated by this Agreement and the
Related Agreements, since the date of the Current
Balance Sheet, the Corporation has neither caused,
permitted, nor suffered any of the following: (1) any
change, occurrence, condition or development that
will or is likely to materially and adversely affect
the business, affairs, assets, operations, employee
relations, vendor relations or condition of
(financial or otherwise) the Corporation; (2) any
dividend, distribution, recapitalization,
combination, redemption, subdivision or purchase with
respect to any shares of the capital stock of the
Corporation; (3) any material indebtedness incurred
by the Corporation other than in the ordinary course
of business; (4) any sale, transfer, lease, mortgage
or pledge of, grant of security interest in or other
lien against a material amount of the assets of the
Corporation other than in the ordinary course of
business; (5) any cancellation, compromise, release
or waiver of any claims, indebtedness or obligations
owing to the Corporation except (whether pursuant to
a contract, agreement or otherwise) as a result of
payments of such obligations in the ordinary course
of business consistent with past practices; (6) any
physical damage, destruction or loss (whether or not
covered by insurance) with respect to the material
properties, business or prospects of the Corporation;
(7) any changes in the accounting principles, methods
or practices utilized by the Corporation (including
depreciation or amortization policies or rates); (8)
any actual or threatened cancellation, default,
termination or dispute under any agreement, contract
or relationship that is binding on the Corporation or
any of its assets that would likely result in a
material adverse effect upon the Corporation; or (9)
any action taken by the Corporation with respect to
the foregoing.
5
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3.9 Proprietary Rights. Schedule 3.9 sets forth a list of
the intellectual property rights for which the
Corporation has applied for registration. Except as
set forth on Schedule 3.9, (1) the Corporation owns
the Proprietary Rights; (2) no claim regarding the
validity, enforceability, use or ownership of any
such Proprietary Rights has been made, is currently
outstanding or is threatened, and there is no
reasonable basis for any such claim in the future;
and (3) neither the Corporation or any of its
affiliates has received notice, and does not have
knowledge of or any reasonable basis for, a claim of
infringement, misappropriation or conflict with
respect to such Proprietary Rights. For purposes of
this Agreement, the term "Proprietary Rights" means
(i) patents, patent disclosures and inventions, (ii)
trademarks, service marks, trade dress, trade names
and corporate names, (iii) copyrights, (iv) to the
Corporation's knowledge, computer code, computer
software, data, data bases and documentation for any
of the foregoing, and (v) trade secrets, formulas,
compositions, inventions, know-how, ideas, processes,
techniques, research and development information,
drawings, specifications, designs, plans, technical
data, plans and customer and supplier lists and
information, in each case, relating to the Encrypted
E-Mail and the Secure Payment Services, except in any
case with respect to items (1) through (3) above,
where any such failure or breach would not have a
material adverse effect on the Corporation, its
business, conditions or assets.
3.10 No Commission. The Corporation has not incurred any
obligation for any finder's or broker's or agent's
fees or commissions or similar compensation in
connection with the transactions contemplated hereby.
3.11 Registration Rights. Except as set forth in the
Registration Rights Agreement or as otherwise set
forth in Schedule 3.11, the Corporation is not under
any obligation to register any of its presently
outstanding securities or any of its securities that
may hereafter be issued.
3.12 Appointment of HWH to Board of Directors. Under the
Corporation's bylaws and applicable law, the
Corporation's Board of Directors is authorized and
empowered to elect HWH to the Board of Directors at
the time of Closing.
4. Purchasers' Representations and Warrants. Each Purchaser, severally
and not jointly, represents and warrants to the Corporation with respect to
itself as follows:
4.1 Organization and Standing. Each Purchaser which is an
entity is duly organized, validly existing and in
good standing under the laws of the state of its
organization.
4.2 Power and Authority. Each Purchaser has all requisite
legal power to execute, deliver and perform this
Agreement, the Note, the Pledge and Security
Agreement and the Related Agreements to be executed
by such
6
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Purchaser. Each Purchaser has taken all necessary
action for the authorization, execution, delivery and
performance of this Agreement, the Note, the Pledge
and Security Agreement and the Related Agreements to
be executed by such Purchaser, and the consummation
of the transactions contemplated thereby.
4.3 Enforceability. This Agreement, the Note, the Pledge
and Security Agreement and the Related Agreements to
be executed by such Purchaser, are legal, valid and
binding obligations of the Purchaser, which are
enforceable against the Purchaser in accordance with
their respective terms.
4.4 Investment Representations. The Purchaser understands
that the Shares, the Warrants and the Warrant Shares
have not been registered under the Securities Act.
The Purchaser also understands that the Shares, the
Warrants and the Warrant Shares are being offered and
sold pursuant to an exemption from registration
contained in the Securities Act based in part upon
each Purchaser's representations and warranties
contained in this Agreement. Purchaser hereby
represents and warrants to the Corporation as
follows:
4.4.1 Economic Risk. The Purchaser has substantial
experience in evaluating and investing in private
placement transactions of securities in companies
similar to the Corporation such that the Purchaser is
capable of evaluating the merits and risks of an
investment in the Corporation. The Purchaser
understands that: (1) the investment contemplated by
this Agreement involves a substantial degree of risk;
and (2) the Purchaser must bear the economic risk of
this investment indefinitely unless and until the
Shares or the Warrant Shares, which will constitute
"restricted securities" within the meaning of Rule
144 under the Securities Act, are registered pursuant
to the Securities Act, or an exemption from
registration is available. The Purchaser also
understands that there is no assurance that any
exemption from registration under the Securities Act
will be available and that, even if available, such
exemption may not allow such Purchaser to transfer
all or any portion of the Shares or the Warrant
Shares. Each Purchaser agrees that, until the
Corporation has caused the registration of the Shares
or the Warrant Shares under the Securities Act of
1933, as amended, each certificate evidencing the
Shares or the Warrant Shares may be inscribed with a
legend to the foregoing effect, which legend will be
as follows:
The shares represented by this certificate have been
acquired solely for investment purposes and have not
been registered under the Securities Act of 1933, as
amended, or the securities laws of any state. The
shares may not be sold, transferred, assigned or
otherwise disposed of unless and until such shares
are first registered under the Securities Act of
1933, all
7
<PAGE> 12
applicable state securities laws and all rules and
regulations promulgated thereunder or unless and
until the holder hereof provides either (i)
information reasonably satisfactory to the
Corporation that such registration is not required or
(ii) an opinion of counsel reasonably acceptable to
the Corporation to the effect that such registration
is not required.
4.4.2 Acquisition for Own Account. The Purchaser is
acquiring the Shares, the Warrants and the Warrant
Shares for such Purchaser's own account for
investment purposes only, and not with a view toward
distribution.
4.4.3 Protection. The Purchaser represents that it:
(1) is an "accredited investor" within the meaning of
Regulation D promulgated under the Securities Act;
and (2) has the capacity to protect its own interests
in connection with the transactions contemplated in
this Agreement.
4.4.4 Corporation Information. The Purchaser: (1) has
received and read all information that it has
requested regarding the Corporation's business,
management and financial affairs; and (2) had the
opportunity to ask questions of and receive answers
from the Corporation and its management regarding the
terms and conditions of Purchaser's investment in the
Corporation.
4.4.5 Residence. If the Purchaser is an individual,
then the Purchaser resides in the state or province
identified in the address of the Purchaser set forth
in Schedule 1 attached as a part hereof. If the
Purchaser is a partnership, corporation, limited
liability company or other entity, then the office or
offices of the Purchaser in which its investment
decision was made is located at the address or
addresses of the Purchaser set forth on Schedule 1.
The Purchaser represents that no offer to purchase
securities of the Corporation was made outside such
jurisdiction.
5. Purchasers' Conditions: The obligation of each Purchaser to purchase
the Shares and the Warrants at the Closing is subject to the fulfillment to such
Purchaser's satisfaction of each of the following conditions:
5.1 Representations and Warranties True and Correct. The
representations and warranties made by the
Corporation in Section 3 of this Agreement shall be
true and correct when made and shall be true and
correct as of the Closing (except the third sentence
of Section 3.7 which was true and correct when made
but may not be true and correct at Closing) with the
same force and effect as if made on the Closing Date.
8
<PAGE> 13
5.2 Performance of Obligations. All covenants, agreements
and conditions contained in this Agreement and the
Related Agreements to be performed by the Corporation
at or prior to the Closing shall have been performed
in all material respects.
5.3 Compliance Certificate. The Corporation shall have
delivered to each Purchaser a certificate of the
Corporation, executed by its President dated the date
of Closing, truthfully certifying to the fulfillment
of the conditions specified in Sections 5.1 and 5.2
of this Agreement, that there has not been a material
adverse change in the Corporation or the assets,
condition or businesses of the Corporation and such
other matters as the Purchasers may reasonably
request.
5.4 Omnibus Certificate. The Corporation shall have
delivered to each Purchaser copies of each of the
following in form and substance satisfactory to the
Purchaser and certified by the Secretary of the
Corporation to be in full force and effect on the
date of the Closing: (1) the long form certificate of
existence of the Corporation certified by the
Secretary of State of the State of Texas as of a date
not more than five (5) days prior to the Closing; (2)
a good standing certificate with respect to the
Corporation certified by the Comptroller of Public
Accounts of the State of Texas as of a date not more
than five (5) days prior to the Closing; (3) a good
standing certificate with respect to the Corporation
certified by the states in which the conduct of its
business requires it to be in good standing, in each
case as of a date not more than five (5) days prior
to the Closing; (4) the bylaws of the Corporation in
effect immediately prior to the Closing; (5)
resolutions of the board of directors of the
Corporation (the "Board of Directors"), and, as
necessary, the shareholders of the Corporation
authorizing the (i) execution, delivery and
performance of this Agreement and the Related
Agreements, and (ii) the transactions contemplated
thereby including the issuance and sale of the Shares
and the Warrants to the Purchasers; and (6) a true
and correct copy of all required governmental
consents including the consent required under the HSR
Act.
5.5 Related Agreements. The Corporation shall have
executed and delivered to each Purchaser on or prior
to Closing each of the agreements, certificates,
instruments and other items set forth in Section 2.1
of this Agreement.
5.6 Legal Investment. As of the Closing, the purchase of
the Shares and Warrants by each Purchaser hereunder
will be legally permitted by all laws and regulations
to which such Purchaser is subject or by all
agreements to which any of them is bound.
5.7 Consents. As of the Closing, all authorizations,
approvals, consents, qualifications, filings, permits
or waivers that are necessary for the
9
<PAGE> 14
Corporation to consummate the transactions
contemplated hereby and by the Related Documents
shall have been obtained, made or waived and evidence
thereof provided to Purchasers.
5.8 Expenses. At or prior to Closing, the Corporation
shall have paid or reimbursed each of the Purchasers
for its respective reasonable, documented
out-of-pocket fees, costs and expenses (including,
without limitation, the fees and expenses of its
counsel) incurred in connection with the negotiation
of this Agreement and the Related Agreements,
documentation of the transactions contemplated
hereunder and thereunder and closing costs, except
that if H. Wayne Huizenga files a notification under
the HSR Act, then the Corporation and Mr. Huizenga
shall each be responsible for one-half of such HSR
Act filing fees.
5.9 Election of Directors. At or prior to the Closing,
all actions shall have been taken to cause the Board
of Directors initially to consist of eight (8)
directors consisting of, among others, HWH, and to
cause HWH to be appointed to the position of the
Corporation's Vice Chairman of the Board of
Directors, which appointment shall be effective no
earlier than two business days following the Closing.
5.10 Proceedings and Documents. As of the Closing, all
corporate and other proceedings in connection with
the transactions contemplated hereby and by the
Related Agreements, and all documents and instruments
incident to such transactions, shall be in form and
substance satisfactory to the Purchasers.
6. Corporation's Conditions. The Corporation's obligation to issue and
sell the Shares and the Warrants to any given Purchaser is subject to the
satisfaction, on or prior to the Closing, of the following conditions:
6.1 Representations and Warranties True and Correct. The
representations and warranties made by such Purchaser
in Section 4 of this Agreement shall be true and
correct when made and shall be true and correct as of
the Closing, with the same force and effect as if
made on the Closing Date.
6.2 Performance of Obligations. All covenants, agreements
and conditions contained in this Agreement and the
Related Agreements to be performed by such Purchaser
at or prior to the Closing shall have been performed.
6.3 Related Agreements. Each Purchaser shall have
executed and delivered to the Corporation, on or
prior to Closing, the Note and the Pledge and
Security Agreement.
6.4 Consents. Such Purchaser shall have obtained, as of
the Closing, all authorizations, approvals, consents,
permits and waivers that are necessary
10
<PAGE> 15
for such Purchaser to consummate the transactions
contemplated by this Agreement.
6.5 Board Approval. The Board of Directors approval
contemplated by Section 7.3 shall have been obtained.
7. Certain Covenants. The Corporation and the Purchasers covenant and
agree as follows:
7.1 Registration of Securities Issuable to Purchasers. At
the Closing, the Corporation and the Purchasers will
enter into the Registration Rights Agreement
substantially in the same form and substance as
Exhibit B attached hereto.
7.2 Appointment of HWH to Board of Directors. The
Corporation shall cause, no earlier than the date
that is two business days following the Closing, (a)
HWH to be appointed to the Board of Directors, (b)
HWH to be appointed to the position of the
Corporation's Vice Chairman of the Board of Directors
and (c) the Board of Directors to initially consist
of eight (8) directors. In consideration of his
service as a member of the Corporation's Board of
Directors, HWH will be entitled to receive director's
fees, reimbursement of expenses, and to participate
in the Corporation's stock option plans on the same
basis as all other members of the Board of Directors.
7.3 Board Approval. The Corporation shall seek to obtain,
promptly following the date hereof and in any event
prior to Closing, approval by the Board of Directors
of the Corporation, as necessary pursuant to the
Corporation's bylaws and applicable law, of this
Agreement and the Related Agreements and the
transactions contemplated hereby and thereby.
7.4 HSR Act. Each of the parties hereto shall make
promptly (and in no event later than ten (10) days
following the date hereof) its respective filings, if
required by applicable law, and thereafter make any
other required submissions, under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated
thereunder (the "HSR Act"), with respect to the
transactions contemplated hereby.
7.5 HSR Fees. All fees incurred in connection with any
filing by H. Wayne Huizenga under the HSR Act shall
be borne equally by Mr. Huizenga on the one hand, and
the Corporation, on the other hand.
7.6 Access to Information. The Corporation shall (and
shall cause its directors, officers, employees,
auditors, counsel and agents to) afford the
Purchasers and their respective officers, employees,
auditors, counsel and agents reasonable access at all
reasonable times to the Corporation's business,
11
<PAGE> 16
operations and assets, to its officers and employees
with knowledge or information concerning the
Corporation's business and to all books and records
of the Corporation, and shall furnish such persons
with all financial, operating and other data and
information related to the Corporation as may be
reasonably requested. Neither the due diligence
investigation made by the Purchasers in connection
with the transactions contemplated hereby nor
information provided to or obtained by the Purchasers
shall affect any representation or warranty of the
Corporation in this Agreement. The Purchasers'
failure or decision not to conduct any such due
diligence review shall not affect any representation
or warranty of the Corporation under this Agreement.
7.7 Further Assurances. Each party shall execute and
deliver such additional instruments and other
documents and shall take such further actions as may
be necessary or appropriate to effectuate, carry out
and comply with all of the terms of this Agreement
and the transactions contemplated hereby.
7.8 Notification of Certain Matters. The Corporation
shall give prompt written notice to the Purchasers of
the occurrence or non-occurrence of any event that
would likely cause any representation or warranty
contained herein to be untrue or inaccurate in any
material respect, or any covenant, condition, or
agreement contained herein not to be complied with or
satisfied in any material respect.
7.9 Execution of Further Documents. From and after the
Closing, upon the reasonable request of any
Purchaser, the Corporation shall execute, acknowledge
and deliver all such further assignments, transfers,
conveyances, powers of attorney and assurances as may
be required or appropriate to convey and transfer to
and vest in such Purchaser and protect its right,
title and interest in all of the Shares, Warrants and
Warrant Shares and to carry out the transactions
contemplated by this Agreement.
8. Remedies. On the occurrence of a default that remains uncured upon
the expiration of ten (10) days following delivery of written notice to the
defaulting party setting forth in reasonable detail such default, the
non-defaulting party may elect to exercise any remedy at law or in equity or any
remedy provided by this Agreement. The parties acknowledge and agree that the
Corporation will look solely to the applicable Purchaser for any breach or
default by such Purchaser, and no Purchaser shall be liable for the breach or
default of any other Purchaser under this Agreement, the Note, the Pledge and
Security Agreement, the Registration Rights Agreement and each of the Related
Agreements. The liability of each of the Purchasers, including but not limited
to H. Wayne Huizenga, under this Agreement, the Note, the Pledge and Security
Agreement, the Registration Rights Agreement and each of the Related Agreements
shall be several and not joint.
12
<PAGE> 17
9. Miscellaneous. The parties further agree as follows:
9.1 Survival of Representations and Warranties. All
representations and warranties contained herein or
made in writing by any party in connection herewith
will survive the execution and delivery of this
Agreement for a period of twenty-four (24) months
following the Effective Date.
9.2 Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements
contained in this Agreement by or on behalf of any of
the parties hereto will bind and inure to the benefit
of the respective successors and assigns of the
parties hereto, whether so expressed or not. In
addition, and whether or not any express assignment
has been made, the provisions of this Agreement that
are for the benefit of each Purchaser or holder of
Shares, Warrants or Warrant Shares are also for the
benefit of, and enforceable by, any subsequent
holders of such shares or securities.
9.3 Consent to Amendments; Waivers. The provisions of
this Agreement may be amended or waived at any time
only by the written agreement of the Corporation and
all the Purchasers. Any waiver, permit, consent or
approval of any kind or character on the part of a
party of any provisions or conditions of this
Agreement must be made in writing and will be
effective only to the extent specifically set forth
in such writing. No course of dealing between the
Corporation and any Purchaser and no delay in
exercising any right, remedy or power conferred
hereby, or now or hereafter existing at law or in
equity, by statute or otherwise, will operate as a
waiver of or otherwise prejudice any such right,
power or remedy.
9.4 Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but
if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating
the remainder of this Agreement.
9.5 Descriptive Headings. The descriptive headings of
this Agreement are inserted for convenience of
reference only and do not constitute a part of and
will not be utilized in interpreting this Agreement.
9.6 Notices. Any notice, demand or communication required
or permitted to be given by any provision of this
Agreement will be in writing and will be deemed to
have been given and received when delivered
personally or by telefacsimile to the party
designated to receive such notice, or on the date
following the day sent by overnight courier, or on
the third business day after the same is sent by
certified mail, postage and charges prepaid, directed
to the
13
<PAGE> 18
following addresses or to such other or additional
addresses as any party might designate by written
notice to the other parties:
To the Corporation: One Galleria Tower
13355 Noel Road, Suite 1555
Dallas, Texas 75240-6604
Facsimile: (972) 702-7056
To Purchaser: The address set forth for such
Purchaser in Schedule 1
9.7 Governing Law. All questions concerning the
construction, validity and interpretation of this
Agreement, and the performance of the obligations
imposed by this Agreement, will be governed by the
laws of the State of Texas applicable to contracts
made and wholly to be performed in that state,
excluding its conflict of laws principles.
9.8 Exhibits and Schedules. All exhibits and schedules
hereto are an integral part of this Agreement.
9.9 Exchange of Certificates. Upon surrender by a
Purchaser to the Corporation of any certificate or
certificates evidencing any shares of capital stock
of the Corporation, the Corporation will issue in
exchange therefor, and deliver to such Purchaser, a
new certificate or certificates representing such
shares of stock of the Corporation, in such
denomination or denominations as may be requested.
Upon receipt of evidence satisfactory to the
Corporation of the loss, theft, destruction or
mutilation of any certificate representing any shares
of capital stock of the Corporation, and in case of
any such mutilation, upon surrender and cancellation
of such certificate, the Corporation will issue and
deliver to the Purchaser a new certificate evidencing
such shares of capital stock of the Corporation of
like tenor, in lieu of such lost, stolen, destroyed
or mutilated certificate, subject to the Purchaser's
delivery to the Corporation of a "lost certificate"
affidavit and indemnity agreement or bond.
9.10 Final Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Related
Agreements constitutes the complete and final
agreement of the parties concerning the matters
referred to herein, and supersedes all prior
agreements and understandings.
9.11 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which
when so executed and delivered will be deemed an
original, and such counterparts together will
constitute one instrument.
14
<PAGE> 19
9.12 Remedies; Attorneys' Fees. If the Purchasers, on the
one hand, or the Corporation, on the other, shall
have a claim for damages arising from or in
connection with the breach of a representation,
warranty, covenant or agreement of the other party in
this Agreement or any Related Agreement then the
injured party may take any action or exercise any
remedy available to it by appropriate legal or
equitable proceedings. In any action to enforce this
Agreement or any Related Agreement, the prevailing
party in any such action shall be entitled to recover
its reasonable attorneys' fees.
9.13 Confidentiality. Each party hereby agrees that,
except with the prior written consent of the other
party, or to the extent required by law, court order
or the NASDAQ rules, it shall at all times keep
confidential and not disclose, divulge, furnish or
make accessible to any other Person any information,
knowledge or data concerning or relating to the
business or financial affairs of the other parties
other than that which is currently in the public
domain or comes into the public domain other than by
a breach by any party hereto of this Agreement, and
to which such party has been or shall become privy by
reason of this Agreement or any draft or final
documentation, letters of intent, term sheets,
correspondence, discussions or negotiations relating
to this Agreement or the transactions contemplated
hereby, the performance of its obligations or the
exercise of its rights hereunder or the ownership of
the Shares and the Warrants purchased hereunder. For
purposes of this Agreement the term "Person(s)" shall
mean any natural person, corporation, general
partnership, limited partnership, limited liability
company, trust, union, association, court, agency,
instrumentality, commission, board, bureau or other
entity or authority.
(SIGNATURES ON FOLLOWING PAGE)
15
<PAGE> 20
SIGNATURE PAGE
(STOCK PURCHASE AGREEMENT)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the date first set forth above.
CORPORATION:
ZIXIT CORPORATION,
a Texas corporation
By: /s/ DAVID P. COOK
--------------------------------------
Name: David P. Cook
---------------------------------
Title: Chairman & CEO
--------------------------------
PURCHASER:
/s/ H. WAYNE HUIZENGA
-----------------------------------------
H. Wayne Huizenga
16
<PAGE> 21
SCHEDULE I
PURCHASERS
<TABLE>
<CAPTION>
NO. OF
SHARES OF
PURCHASE PRICE COMMON NO. OF $12 NO. OF $57.60
NAME ADDRESS ($) STOCK WARRANTS WARRANTS
---- ------- -------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
1. Andrew J. Sukawaty 5306 Sunset Drive $ 99,984.00 2,083 2,777 2,083
Revocable Trust dated Kansas City, MO 64112
January 14, 2000 Attn: Andrew J. Sukawaty
2. Rosalie V. Arthur 4609 N.E. 23 Avenue $ 50,016.00 1,042 1,389 1,042
Ft. Lauderdale, FL 33308
3. Rosanne Badowski 94 Tranquility Drive $ 99,984.00 2,083 2,777 2,083
Easton, CT 06612
4. John E. Berndt 3525 Twin Lakes Way $ 99,984.00 2,083 2,777 2,083
Plano, TX 75093
5. Berrard Holdings One Financial Plaza $ 999,984.00 20,833 27,777 20,833
Limited Partnership Suite 1100
Ft. Lauderdale, FL 33394
Attn: Steven R. Berrard
6. Cris V. Branden 450 E. Las Olas Blvd. $ 200,016.00 4,167 5,556 4,167
15th Floor
Ft. Lauderdale, FL 33301
7. Kevin E. Brauer 221 West 48th St., #1507 $ 99,984.00 2,083 2,777 2,083
Kansas City, MO 64112
8. Cascade Investment, 2365 Carillon Point $1,000,000.00 20,833 27,777 20,833
L.L.C. Kirkland, WA 98033
Attn: Manager
9. William J. Conaty 111 Golden Pond Lane $ 99,984.00 2,083 2,777 2,083
Fairfield, CT 06430
10. Dennis D. Dammerman 1657 Fairfield Beach Rd. $ 99,984.00 2,083 2,777 2,083
Fairfield, CT 06430
11. DBV Investments, L.P. c/o MSD Capital, L.P. $1,000,000.00 20,833 27,777 20,833
780 Third Avenue
43rd Floor
New York, NY 10017
Attention: John Phelan
12. Michael S. Egan 1575 Ponce de Leon Drive $1,039,968.00 21,666 28,888 21,666
Ft. Lauderdale, FL 33316
</TABLE>
1
<PAGE> 22
<TABLE>
<CAPTION>
NO. OF
SHARES OF
PURCHASE PRICE COMMON NO. OF $12 NO. OF $57.60
NAME ADDRESS ($) STOCK WARRANTS WARRANTS
---- ------- -------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
13. John C. Esrey 2351 Bay St. $ 99,984.00 2,083 2,777 2,083
San Francisco, CA 94123
14. William T. Esrey, Jr. 6536 High Drive $ 99,984.00 2,083 2,777 2,083
Mission Hills, KS 66208
15. David E. Fanta 27 Dumfries Street $ 80,016.00 1,667 2,222 1,667
Sugarland, TX 77479
16. David C. Feldman 62 Wincrest Falls Drive $ 80,016.00 1,667 2,222 1,667
Cypress, TX 77429
17. Finally Limited 450 E. Las Olas Blvd. $ 699,984.00 14,583 19,444 14,583
Partnership 15th Floor
Ft. Lauderdale, FL 33301
Attn: Robert J. Henninger,
Jr.
18. Albert Fried, Jr. 40 Exchange Place $ 300,000.00 6,250 8,333 6,250
Fifth Floor
New York, NY 10005
19. G Harry Huizenga 450 E. Las Olas Blvd. $ 100,032.00 2,084 2,778 2,084
Enterprises, L.L.C. 15th Floor
Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
20. Troy L. Gabriel 2512 AquaVista Blvd. $ 75,024.00 1,563 2,083 1,563
Ft. Lauderdale, FL 33301
21. H Family Limited 450 E. Las Olas Blvd. $5,000,016.00 104,167 138,886 104,167
Partnership 15th Floor
Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
22. H. Wayne Huizenga, Jr. 450 E. Las Olas Blvd., $2,499,984.00 52,083 69,444 52,083
Suite 1500
Ft. Lauderdale, FL 33301
23. H Wayne Huizenga Sr 450 E. Las Olas Blvd. $ 729,168.00 15,191 20,254 15,191
Perpetual Trust Master 15th Floor
Trust I Share A Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
24. H Wayne Huizenga Sr 450 E. Las Olas Blvd. $ 729,168.00 15,191 20,254 15,191
Perpetual Trust Master 15th Floor
Trust I Share B Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
</TABLE>
2
<PAGE> 23
<TABLE>
<CAPTION>
NO. OF
SHARES OF
PURCHASE PRICE COMMON NO. OF $12 NO. OF $57.60
NAME ADDRESS ($) STOCK WARRANTS WARRANTS
---- ------- -------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
25. H Wayne Huizenga Sr 450 E. Las Olas Blvd. $ 729,168.00 15,191 20,254 15,191
Perpetual Trust Master 15th Floor
Trust I Share C Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
26. H Wayne Huizenga Sr 450 E. Las Olas Blvd. $ 729,168.00 15,191 20,254 15,191
Perpetual Trust Master 15th Floor
Trust I Share D Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
27. Kris E. Hansel 2690 Edgewater Court $ 20,016.00 417 556 417
Weston, FL 33332
28. Harris W. Hudson 1080 Southeast 3rd Ave. $2,000,016.00 41,667 55,555 41,667
Ft. Lauderdale, FL 33316
29. Holly J. Hudson 1080 Southeast 3rd Ave. $ 941,664.00 19,618 26,157 19,618
Ft. Lauderdale, FL 33316
30. Steven W. Hudson 1080 Southeast 3rd Ave. $ 941,664.00 19,618 26,157 19,618
Ft. Lauderdale, FL 33316
31. Huizenga Family 450 E. Las Olas Blvd. $ 499,968.00 10,416 13,888 10,416
Foundation, Inc. 15th Floor
Ft. Lauderdale, FL 33301
Attn: Richard C. Rochon
32. Huizenga Investments 450 E. Las Olas Blvd. $1,000,080.00 20,835 27,780 20,835
Limited Partnership 15th Floor
Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
33. Joseph H. Izhakoff 2200 N.E. 201 Street $ 20,016.00 417 556 417
North Miami Beach, FL
33180
34. Jean Huizenga 450 E. Las Olas Blvd. $ 99,984.00 2,083 2,777 2,083
Enterprises, L.L.C. 15th Floor
Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
35. George D. Johnson, Jr. P.O. Box 3524 $2,000,016.00 41,667 55,555 41,667
Spartanburg, SC 29302
36. JWC Trust dated 909 Mt. Pleasant Rd. $ 999,984.00 20,833 27,777 20,833
December 28, 1982 Winnetka, IL 60093
Attn: John W. Croghan
</TABLE>
3
<PAGE> 24
<TABLE>
<CAPTION>
NO. OF
SHARES OF
PURCHASE PRICE COMMON NO. OF $12 NO. OF $57.60
NAME ADDRESS ($) STOCK WARRANTS WARRANTS
---- ------- -------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
37. Kevin F. Flynn June, 120 North LaSalle St. $5,249,984.00 109,375 145,830 109,375
1992 Non-Exempt Trust Suite 3300
Chicago, IL 60602
Attn: Kevin F. Flynn
38. James L. Kirk 450 E. Las Olas Blvd. $ 184,992.00 3,854 5,137 3,854
Suite 1400
Ft. Lauderdale, FL 33301
39. Meljay C. Krause 8611 Reinbartt Ln. $ 99,984.00 2,083 2,777 2,083
Leawood, KS 66206
40. Arthur A. Kurtze 913 Challenger Drive $ 99,984.00 2,083 2,777 2,083
Austin, TX 78734-4209
41. Ronald T. Lemay 1025 W. 54th Street $1,000,080.00 20,835 27,780 20,835
Kansas City, MO 64112
42. Lion Ventures LLC 3055 Harbor Drive $ 125,000.00 2,604 3,472 2,604
Suite 1602
Ft. Lauderdale, FL 33316
Attn: Edward A.
Cespedes
43. LM Private Investments, 1815 North Boulevard $ 80,016.00 1,667 2,222 1,667
L.P. Houston, TX 77098
Attn: William D. Leven
44. Martha J Huizenga 450 E. Las Olas Blvd. $ 500,016.00 10,417 13,889 10,417
Holdings Limited 15th Floor
Partnership Ft. Lauderdale, FL 33301
Attn: Cris V. Branden
45. Michael B. Fuller and 2920 West 113th Street $ 99,984.00 2,083 2,777 2,083
Mary G. Fuller, Joint Leawood, KS 66211
Tenants By The
Entireties
46. Michael S. Egan Grantor 1575 Ponce de Leon Drive $ 99,984.00 2,083 2,777 2,083
Retained Annuity Trust Ft. Lauderdale, FL 33316
F/B/O Riley Martin Attn: Michael S. Egan
Michael Egan
47. Michael S. Egan Grantor 1575 Ponce de Leon Drive $ 99,984.00 2,083 2,777 2,083
Retained Annuity Trust Ft. Lauderdale, FL 33316
F/B/O Teague Michael Attn: Michael S. Egan
Thomas Egan
</TABLE>
4
<PAGE> 25
<TABLE>
<CAPTION>
NO. OF
SHARES OF
PURCHASE PRICE COMMON NO. OF $12 NO. OF $57.60
NAME ADDRESS ($) STOCK WARRANTS WARRANTS
---- ------- -------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
48. Gene J. Ostrow 450 E. Las Olas Blvd. $ 99,984.00 2,083 2,777 2,083
Suite 1400
Ft. Lauderdale, FL 33301
49. Philip V. Petrocelli 325 Seven Isles Dr. $ 99,984.00 2,083 2,777 2,083
Ft. Lauderdale, FL 33301
50. PKI Investment 676 N. Michigan Avenue $1,750,000.00 36,458 48,609 36,458
Company, L.L.C. Suite 4000
Chicago, IL 60611
Attn: Donald F. Flynn
51. Gary Reiner 1 Hockanum Road $ 99,984.00 2,083 2,777 2,083
Westport, CT 06880
52. Richard Rosenblatt 549 El Medio $ 350,000.00 7,292 9,722 7,292
Pacific Palisades, CA
90272
53. John M. Samuels 270 Old Church Road $ 99,984.00 2,083 2,777 2,083
Greenwich, CT 06830
54. Theodore H. Schell 1272 W. 59th Street $ 99,984.00 2,083 2,777 2,083
Kansas City, MO 64113
55. John A. Schneider 711 Fifth Ave., 9th Floor $1,000,000.00 20,834 27,777 20,834
New York, NY 10022
56. Robin M. Segaul 1 Las Olas Circle #212 $ 9,984.00 208 277 208
Ft. Lauderdale, FL 33316
57. Keith S. Sherin 42 Michaels Way $ 99,984.00 2,083 2,777 2,083
Weston, CT 06883
58. Donald R. Sinclair 3756 Knollwood $ 80,016.00 1,667 2,222 1,667
Houston, TX 77019
59. Thistle Hill Partners, 7600 W. Tidwell $ 80,016.00 1,667 2,222 1,667
Ltd. Suite 806
Houston, TX 77040
Attn: John A. Blaisdell
60. U/T/A dated December 2624 Verona Road $1,000,080.00 20,835 27,780 20,835
12, 1985, F/B/O Shawnee Mission, KS
William T. Esrey 66208
Attn: William T. Esrey
61. I. Benjamin Watson, III 13133 Lamar $ 99,984.00 2,083 2,777 2,083
Overland Park, KS 66209
</TABLE>
5
<PAGE> 26
<TABLE>
<CAPTION>
NO. OF
SHARES OF
PURCHASE PRICE COMMON NO. OF $12 NO. OF $57.60
NAME ADDRESS ($) STOCK WARRANTS WARRANTS
---- ------- -------------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
62. Weezor I Limited 450 E. Las Olas Blvd. $ 2,499,984.00 52,083 69,442 52,083
Partnership 15th Floor
Ft. Lauderdale, FL 33301
Attn: Richard C. Rochon
63. John F. Welch 3135 Easton Turnpike $ 1,000,080.00 20,835 27,780 20,835
Fairfield, CT 06431
64. Wincrest Ventures, L.P. 7600 W. Tidwell $ 800,016.00 16,667 22,222 16,667
Suite 806
Houston, TX 77040
Attn: John A. Blaisdell
65. Peter W. Wright 1080 Southeast 3rd Ave. $ 999,984.00 20,833 27,777 20,833
Ft. Lauderdale, FL 33316
66. Other TBD $ 724,952.00 15,103 20,173 15,103
TOTALS $44,000,016.00 916,667 1,222,223 916,667
</TABLE>
6
<PAGE> 1
EXHIBIT 2.2
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED, OR
OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH ACT AND THE RULES AND
REGULATIONS THEREUNDER AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
ZIXIT CORPORATION (THE "COMPANY") WILL TRANSFER SUCH WARRANT AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE THEREOF ONLY UPON RECEIPT OF AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, THAT THE
REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR THAT SUCH
REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE ANY
APPLICABLE STATE SECURITIES LAWS.
COMMON STOCK WARRANT CERTIFICATE
ZIXIT CORPORATION
April __, 2000
No. __ For the Purchase of ___________ Shares of
Common Stock of Zixit Corporation
FOR VALUE RECEIVED, ___________________________________ (the "Holder")
or the Holder's registered assigns is hereby granted the right to purchase from
Zixit Corporation, a Texas corporation (the "Company"), ___________ shares (the
"Warrant Shares", which number shall be adjusted from time to time in accordance
with Section 2 hereof) of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), at a purchase price of $57.60 per share (as adjusted from
time to time in accordance with Section 2 hereof, the "Exercise Price"),
exercisable in whole or in part at any time and from time to time from April __,
2000 until 6:00 p.m. on the date that is ten years after the date hereof (the
"Exercise Period"), on the terms and conditions set forth in this Warrant (this
"Warrant").
I. EXERCISE
1.1 EXERCISE OF WARRANT. This Warrant may be exercised, in whole or in
part, at any time or from time to time, during the Exercise Period by (i)
surrendering this Warrant Certificate, with the form of exercise notice attached
hereto as Exhibit A duly executed by the Holder, to the Company at its principal
office, and (ii) making payment to the Company of the aggregate Exercise Price
for the applicable Warrant Shares in cash, by certified check, bank check or
wire transfer to an account designated by the Company. The minimum number of
shares of Common Stock with respect to which this Warrant may be exercised, in
whole or in part, at any time shall be the lesser of twenty-five percent (25%)
of the total number of Warrant Shares which may be purchased under this Warrant
or the maximum number of Warrant Shares available for purchase under this
Warrant
<PAGE> 2
at the time of exercise. Upon any partial exercise of this Warrant, the Company,
at its expense, shall promptly issue to the Holder for Holder's surrendered
Warrant Certificate a replacement Warrant Certificate identical in all respects
to this Warrant Certificate, except that the number of Warrant Shares shall be
reduced accordingly.
1.2 ISSUANCE OF WARRANT SHARES. The Warrant Shares purchased by Holder
shall be issued as of the close of business on the date on which all actions
required to be taken by the Holder and all payments required to be received by
the Company, pursuant to Section 1.1, shall have been so taken and received.
Certificates for the Warrant Shares so purchased shall be delivered to the
Holder as soon as practicable after this Warrant is surrendered and the Exercise
Price is received.
II. ADJUSTMENTS TO WARRANT.
The number of Warrant Shares for which this Warrant is exercisable and
the Exercise Price shall be subject to adjustment from time to time as set forth
below.
2.1 STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If the Company
shall, at any time or from time to time: (a) make (or fix a record date for the
holders of shares of its Common Stock entitled to receive) a dividend payable
in, or other distribution of, additional shares of Common Stock, (b) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or (c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then (i) the number of Warrant Shares issuable
upon the exercise of this Warrant immediately prior to the occurrence of any
such event shall be adjusted so that the Holder of this Warrant upon exercise on
or after that date shall be entitled to receive the aggregate number of Warrant
Shares which the Holder of this Warrant would have owned and been entitled to
receive as a result of such event had this Warrant been exercised immediately
prior thereto, and (ii) the Exercise Price in effect immediately prior to such
event shall be adjusted by multiplying such Exercise Price by a fraction, the
numerator of which is the aggregate number of Warrant Shares purchasable upon
exercise of this Warrant immediately prior to such event, and the denominator of
which is the aggregate number of Warrant Shares purchasable upon exercise of
this Warrant immediately thereafter.
2.2 DIVIDENDS AND DISTRIBUTIONS IN OTHER SECURITIES. If the Company
shall, at any time or from time to time, make (or fix a record date for the
holders of shares of its Common Stock entitled to receive) a dividend or other
distribution payable in other securities of the Company or in the securities of
any subsidiary of the Company (other than shares of Common Stock), then lawful
and adequate provision shall be made so that the Holder of this Warrant shall be
entitled to receive upon exercise of this Warrant, for the aggregate Exercise
Price in effect prior thereto, in addition to the number of Warrant Shares
immediately theretofore issuable upon exercise of this Warrant, the kind and
number of other securities of the Company or securities of any subsidiary of the
Company, which the Holder would have owned and been entitled to receive had this
Warrant been exercised immediately prior to that date.
2.3 CASH DIVIDENDS AND DISTRIBUTIONS. If the Company shall, at any time
or from time to time, make (or fix a record date for the holders of shares of
its Common Stock entitled to receive)
-2-
<PAGE> 3
a dividend payable in, or other distribution of cash, then the number of Warrant
Shares issuable upon the exercise of the Warrant, for the aggregate Exercise
Price in effect prior thereto, immediately prior to the occurrence of any such
event shall be increased by: (i) the amount of the dividend the Holder of this
Warrant would have received had the Holder exercised its warrant immediately
prior to the record date (or, if no record date has been set the date of
distribution or dividend), divided by (ii) the Current Market Price of the
Company's Common Stock. As used in this Warrant the term "Current Market Price"
means with respect to any security: (a) for so long as the issuer is a Public
Entity (as hereafter defined), and the security is traded on an organized
exchange the average closing price of the security on the stock exchange where
the security is traded or the last bid price as quoted on the NASDAQ for the
immediately preceding five (5) trading days; and (b) for so long as the issuer
is not a Public Entity or the security is not traded on an organized exchange,
the price per share of the security as determined in good faith by the
Corporation's board of directors. If such valuation is objected to by the Holder
of this Warrant, such valuation will be made by a reputable investment bank of
national standing mutually selected by the Holder and the Corporation, the
expense of which will be paid by the Corporation. "Public Entity" will mean: (i)
an entity that has registered its Common Stock pursuant to Section 12(b) or
Section 12(g) of the Securities Exchange Act of 1934, as amended, and (ii) the
aggregate market value of Common Stock held by nonaffiliates which is then
available for public trading is not less than Twenty-Five Million Dollars
($25,000,000.00), computed by reference to the closing price of the Common Stock
on the stock exchange where the Common Stock is traded or the last bid price as
quoted on the NASDAQ.
2.4 REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If any
of the following transactions (each, a "Special Transaction") shall become
effective: (a) a capital reorganization, whether by reclassification, exchange,
substitution or otherwise (other than a stock or cash dividend, subdivision,
combination or other distribution provided for elsewhere in this Section 2), (b)
a consolidation or merger of the Company with another entity, or (c) a sale or
conveyance of all or substantially all of the Company's assets; then as a
condition of any such Special Transaction, lawful and adequate provision shall
be made so that the Holder of this Warrant shall thereafter have the right to
purchase and receive upon exercise of this Warrant, in lieu of the Warrant
Shares immediately theretofore issuable upon exercise of this Warrant, for the
aggregate Exercise Price in effect immediately prior to such consummation, such
shares of stock, other securities, cash or other assets as may be issued or
payable in and pursuant to the terms of such Special Transaction to the holders
of shares of Common Stock for which this Warrant could have been exercised
immediately prior to such Special Transaction. In connection with any Special
Transaction, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions of this
Warrant (including without limitation the provisions of this Section 2), shall
thereafter be applicable, as nearly as may be practicable, to any shares of
stock, other securities, cash or other assets thereafter deliverable upon the
exercise of this Warrant.
2.5 NOTICE. In the event that:
(a) the Company shall fix a record date for the holders of
shares of its Common Stock for the purpose of entitling them to receive
any dividend or other distribution of shares of Common Stock or other
securities of the Company; or
-3-
<PAGE> 4
(b) the Company shall enter into any agreement or adopt any
plan for a capital reorganization of the Company, the consolidation or
merger of the Company with or into another entity, or the sale or
conveyance of all or substantially all of the assets of the Company to
another entity; or
(c) the Company shall adopt any plan for or otherwise shall
become subject to any voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(d) the Company shall propose to take any other action which
would require an adjustment pursuant to Sections 2.1 through 2.4,
then, and in each such case, the Company shall mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be: (i) the date on
which a record is to be fixed for the purpose of such dividend or distribution,
and stating the amount and character of such dividend or distribution, or (ii)
the date on which such reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up or other action is to become effective,
and the time, if any, to be fixed, as to which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up or other action. Such notice
shall be mailed at least 20 days prior to the date therein specified and this
Warrant may be exercised prior to said date during the Exercise Period.
2.6 FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of shares of Common Stock upon the exercise of this Warrant. If any
fraction of a share of Common Stock would be issuable upon the exercise of this
Warrant, the Company shall, in lieu of such issuance, purchase such fraction for
an amount in cash equal to the current value of such fraction, computed on the
basis of the Current Market Price of the Common Stock on the last business day
prior to the date of exercise upon which such a sale of Common Stock shall have
been effected.
2.7 EFFECT OF ALTERNATE SECURITIES. If at any time, as a result of an
adjustment made pursuant to this Section 2, the Holder of this Warrant shall
thereafter become entitled to receive any securities of the Company other than
shares of Common Stock, then the number of such other securities receivable upon
exercise of this Warrant shall be subject to adjustment from time to time on
terms as nearly equivalent as practicable to the provisions with respect to the
Warrant Shares as contained in this Section 2.
2.8 SUCCESSIVE APPLICATION; READJUSTMENT. The provisions of this
Section 2 shall similarly apply from time to time to successive events covered
by this Section. If the Company shall fix a record date for the holders of its
Common Stock for the purpose of entitling them to receive a dividend or
distribution and shall, thereafter and before the distribution to shareholders
thereof, legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment shall be required by reason of the
taking of such record date and any such adjustment previously made in respect
thereof shall be rescinded and annulled.
-4-
<PAGE> 5
2.9 CERTIFICATE AS TO ADJUSTMENTS. In the event of an adjustment in
the number of Warrant Shares or in the Exercise Price, the Company at its
expense will promptly compute such adjustment in accordance with the terms of
this Warrant and prepare a certificate executed by an executive officer of the
Company setting forth such adjustment and showing in detail the facts upon which
such adjustment is based. The Company will forthwith mail a copy of each such
certificate to the Holder.
III. RIGHTS OF THE HOLDER
3.1 NO RIGHTS AS SHAREHOLDER. The Holder shall not, solely by virtue of
this Warrant and prior to the issuance of the Warrant Shares upon due exercise
hereof, be entitled to any rights of a shareholder in the Company.
3.2 NO IMPAIRMENT; CERTAIN COVENANTS. The Company shall not by any
action including, without limitation, amending its certificate of incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company will (a) take all such action as may be
necessary or appropriate in order that the Warrant Shares will, upon issuance in
accordance with the terms hereof and the payment of the Exercise Price therefor,
be duly authorized, validly issued and outstanding, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issuance thereof, (b) at all times during the Exercise Period have authorized
and reserved sufficient shares of Common Stock to provide for the exercise of
this Warrant in full, and (c) use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to and agrees with the Holder as
follows:
4.1 Sufficient Shares. The Company has authorized sufficient shares of
Common Stock to fulfill the Company's obligations under this Warrant and all of
the other warrants, options and convertible securities issued by the Company. On
exercise of this Warrant and satisfaction of the Exercise Price, the Warrant
Shares issued to the Holder will be validly issued, fully paid, non-assessable
and free and clear of all liens, claims and encumbrances, except as may be
imposed by the Pledge and Security Agreement dated as of the date hereof, or any
liens, claims, or encumbrances permitted by or imposed by the Holder.
4.2 Authority. The Company has taken all necessary action to authorize
the execution and delivery of this Warrant and the issuance of the Warrant
Shares on the exercise of this Warrant. This Warrant is a valid, binding and
enforceable obligation of the Company. The execution, delivery and performance
of this Warrant will not violate: (a) any provision of the organizational
documents
-5-
<PAGE> 6
or charter of the Company; (b) any order, writ, injunction or decree of any
court, administrative agency or governmental body applicable to the Company or
the Common Stock; or (c) any contract, lease, note, bond, mortgage or other
agreement to which the Company is a party, by which the Company is bound or to
which any of the Company's assets are subject.
V. RESTRICTIVE LEGEND.
5.1 This Warrant is being acquired and any Warrant Shares to be
acquired by the Holder pursuant to this Warrant (collectively, "Securities")
will be acquired for investment for the Holder's own account and not for resale
in connection with any distribution of such Securities within the meaning of the
Securities Act of 1933 (the "Securities Act"). The Securities will not be sold,
transferred or otherwise disposed of without registration under the Securities
Act and state securities laws or qualification for exemptions therefrom. The
Holder agrees that, until the Company has caused the registration of such shares
under the Securities Act of 1933, as amended, each certificate evidencing the
Warrant Shares may be inscribed with a legend to the foregoing effect, which
legend will be as follows:
The shares represented by this certificate have been acquired
solely for investment purposes and have not been registered
under the Securities Act of 1933, as amended, or the
securities laws of any state. The shares may not be sold,
transferred, assigned or otherwise disposed of unless and
until such shares are first registered under the Securities
Act of 1933, all applicable state securities laws and all
rules and regulations promulgated thereunder or unless and
until the holder hereof provides either (i) information
reasonably satisfactory to the Company that such registration
is not required or (ii) an opinion of counsel reasonably
acceptable to the Company to the effect that such registration
is not required.
VI. REGISTRATION RIGHTS AGREEMENT.
6.1 This Warrant and the Warrant Shares will qualify for all benefits
and be subject to the terms and conditions of that certain Registration Rights
Agreement of even date herewith among the Company, the Holder and others (the
"Registration Rights Agreement"). The Holder agrees that each certificate
evidencing the Warrant Shares may be inscribed with a legend to the foregoing
effect as provided in the Registration Rights Agreement.
VII. TRANSFER OR LOSS OF WARRANT.
7.1 TRANSFER. Subject to compliance with federal and state securities
laws, the Holder may sell, assign, transfer or otherwise dispose of all or any
portion of this Warrant or the Warrant Shares acquired upon any exercise hereof
at any time and from time to time. Upon the sale, assignment, transfer or other
disposition of all or any portion of this Warrant, the Holder shall deliver to
Company a written notice of such in the form attached hereto as Exhibit B duly
executed by
-6-
<PAGE> 7
Holder which includes the identity and address of any purchaser, assignor, or
transferee. On such delivery, the Company will, subject to conditions set forth
herein, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument of
assignment, and this Warrant will promptly be canceled. The conditions to
transferability specified in this Warrant are intended to provide certain
protections to the Holder and the Company and to ensure compliance with the
provisions of the Securities Act and applicable state securities laws in respect
of the transfer of any Warrant or any Warrant Shares and are to be strictly
construed.
7.2 LOST, STOLEN, DESTROYED OR MUTILATED WARRANTS. In case any Warrant
is mutilated, lost, stolen or destroyed, the Company agrees to issue a new
Warrant of like date, tenor and denomination and deliver the same in exchange
and substitution for and upon surrender and cancellation of any mutilated
Warrant, or in lieu of any Warrant lost, stolen or destroyed, on receipt of
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant.
VIII. MISCELLANEOUS.
8.1 NOTICES. Any notice, demand or communication required or permitted
to be given by any provision of this Warrant must be in writing and will be
deemed to have been given and received when delivered personally or by
telefacsimile to the party designated to receive such notice, or on the date
following the day sent by overnight courier, or on the third (3rd) business day
after the same is sent by certified mail, postage and charges prepaid, directed
to the following addresses or to such other or additional addresses as any party
might designate by written notice to the other parties:
To the Company: Zixit Corporation
One Galleria Tower
13355 Noel Road
Suite 1555
Dallas, Texas 75240-6604
Attn: President
Fax: (972) 702-7056
To the Holder:
------------------------
------------------------
------------------------
------------------------
8.2 EXPENSES; TAXES. Any sales tax, stamp duty, deed transfer or other
tax (except only taxes based on the income of Holder) arising out of the
issuance and sale of this Warrant or the Warrant Shares issuable upon exercise
of this Warrant and consummation of the transactions contemplated by this
Warrant Certificate shall be paid by the Company.
8.3 AMENDMENT; WAIVER. This Warrant Certificate may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by the Company and
-7-
<PAGE> 8
the Holder. No failure to exercise, and no delay in exercising, any right, power
or privilege under this Warrant Certificate shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be
impled from any course of dealing between the Company and the Holder. No
extension of time for performance of any obligations or other acts hereunder or
under any other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts.
8.4 HEADINGS. The headings contained in this Warrant Certificate are
for convenience of reference only and are not to be given any legal effect and
shall not affect the meaning or interpretation of this Warrant Certificate.
8.5 GOVERNING LAW. This Warrant is being delivered and is intended to
be performed in the State of Texas and will be construed and enforced in
accordance with, and the rights of the parties will be governed by, the law of
such state, without regard to its conflict of laws principles.
8.6 SEVERABILITY. Should any part of this Warrant for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in full force and effect as if
this Warrant had been executed with the invalid portion thereof eliminated, and
it is hereby declared the intention of the parties hereto that they would have
executed and accepted the remaining portion of this Warrant without including
therein any such part, parts or portion which may, for any reason, be hereafter
declared invalid.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed and delivered as of the day and year first above written.
ZIXIT CORPORATION,
a Texas corporation
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
-8-
<PAGE> 9
EXHIBIT A
EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
The undersigned registered owner of the attached Warrant Certificate
irrevocably exercises this Warrant for the purchase of the number of shares of
Common Stock of Zixit Corporation (the "Company") as is set forth below, and
herewith makes payment therefor, all at the price and on the terms and
conditions specified in the attached Warrant Certificate and requests that
certificates for the shares of Common Stock hereby purchased (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to the person specified below whose address is set forth below, and,
if such shares of Common Stock shall not include all of the shares of Common
Stock now and hereafter issuable as provided in the attached Warrant
Certificate, then the Company shall, at its own expense, promptly issue to the
undersigned a new Warrant Certificate of like tenor and date for the balance of
the shares of Common Stock issuable thereunder.
Date:
----------------------
Amount of Shares Purchased:
--------------
Aggregate Purchase Price: $
-------------
Printed Name of Registered Holder:
----------------------------------------------
Signature of Registered Holder:
-------------------------------------------------
NOTICE: The signature on this Exercise Notice must correspond with the
name as written upon the face of the attached Warrant
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Stock Certificates to be issued and registered in the following name, and
delivered to the following address:
-----------------------------------------
(Name)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
<PAGE> 10
EXHIBIT B
ASSIGNMENT NOTICE
[To be executed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the person named below, whose address is set forth below, the rights
represented by the attached Warrant Certificate to purchase the number of shares
of Common Stock of Zixit Corporation (the "Company") as is set forth below, to
which the attached Warrant Certificate relates, and appoints ___________
_________________ attorney to transfer such rights on the books of the Company
with full power of substitution in the premises. If such shares of Common Stock
of the Company shall not include all of the shares of Common Stock now and
hereafter issuable as provided in the attached Warrant Certificate, then the
Company, at its own expense, shall promptly issue to the undersigned a new
Warrant Certificate of like tenor and date for the balance of the Common Stock
issuable thereunder.
Date:
----------------------
Amount of Shares Purchased:
--------------
Aggregate Purchase Price: $
-------------
Printed Name of Registered Holder:
----------------------------------------------
Signature of Registered Holder:
-------------------------------------------------
NOTICE: The signature on this Assignment Notice must
correspond with the name as written upon the face of
the attached Warrant Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
Warrant Certificate for transferred Warrants to be issued and registered in the
following name, and delivered to the following address:
-----------------------------------------
(Name)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
<PAGE> 1
EXHIBIT 2.3
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, OR UNDER ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED, OR
OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH ACT AND THE RULES AND
REGULATIONS THEREUNDER AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
ZIXIT CORPORATION (THE "COMPANY") WILL TRANSFER SUCH WARRANT AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE THEREOF ONLY UPON RECEIPT OF AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, THAT THE
REGISTRATION PROVISIONS OF SUCH ACT HAVE BEEN COMPLIED WITH OR THAT SUCH
REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE ANY
APPLICABLE STATE SECURITIES LAWS.
COMMON STOCK WARRANT CERTIFICATE
ZIXIT CORPORATION
April __, 2000
No. __ For the Purchase of ___________ Shares of
Common Stock of Zixit Corporation
FOR VALUE RECEIVED, ___________________________________ (the "Holder")
or the Holder's registered assigns is hereby granted the right to purchase from
Zixit Corporation, a Texas corporation (the "Company"), ___________ shares (the
"Warrant Shares", which number shall be adjusted from time to time in accordance
with Section 2 hereof) of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), at a purchase price of $12.00 per share (as adjusted from
time to time in accordance with Section 2 hereof, the "Exercise Price"),
exercisable in whole or in part at any time and from time to time from April __,
2001 until 6:00 p.m. on the date that is four (4) years after the date hereof
(the "Exercise Period"), on the terms and conditions set forth in this Warrant
(this "Warrant").
I. EXERCISE
1.1 EXERCISE OF WARRANT. This Warrant may be exercised, in whole or in
part, at any time or from time to time, during the Exercise Period by (i)
surrendering this Warrant Certificate, with the form of exercise notice attached
hereto as Exhibit A duly executed by the Holder, to the Company at its principal
office, and (ii) making payment to the Company of the aggregate Exercise Price
for the applicable Warrant Shares in cash, by certified check, bank check or
wire transfer to an account designated by the Company. The minimum number of
shares of Common Stock with respect to which this Warrant may be exercised, in
whole or in part, at any time shall be the lesser of twenty-five percent (25%)
of the total number of Warrant Shares which may be purchased under this Warrant
or the maximum number of Warrant Shares available for purchase under this
Warrant
<PAGE> 2
at the time of exercise. Upon any partial exercise of this Warrant, the Company,
at its expense, shall promptly issue to the Holder for Holder's surrendered
Warrant Certificate a replacement Warrant Certificate identical in all respects
to this Warrant Certificate, except that the number of Warrant Shares shall be
reduced accordingly.
1.2 ISSUANCE OF WARRANT SHARES. The Warrant Shares purchased by Holder
shall be issued as of the close of business on the date on which all actions
required to be taken by the Holder and all payments required to be received by
the Company, pursuant to Section 1.1, shall have been so taken and received.
Certificates for the Warrant Shares so purchased shall be delivered to the
Holder as soon as practicable after this Warrant is surrendered and the Exercise
Price is received.
II. ADJUSTMENTS TO WARRANT.
The number of Warrant Shares for which this Warrant is exercisable and
the Exercise Price shall be subject to adjustment from time to time as set forth
below.
2.1 STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If the Company
shall, at any time or from time to time: (a) make (or fix a record date for the
holders of shares of its Common Stock entitled to receive) a dividend payable
in, or other distribution of, additional shares of Common Stock, (b) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or (c) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then (i) the number of Warrant Shares issuable
upon the exercise of this Warrant immediately prior to the occurrence of any
such event shall be adjusted so that the Holder of this Warrant upon exercise on
or after that date shall be entitled to receive the aggregate number of Warrant
Shares which the Holder of this Warrant would have owned and been entitled to
receive as a result of such event had this Warrant been exercised immediately
prior thereto, and (ii) the Exercise Price in effect immediately prior to such
event shall be adjusted by multiplying such Exercise Price by a fraction, the
numerator of which is the aggregate number of Warrant Shares purchasable upon
exercise of this Warrant immediately prior to such event, and the denominator of
which is the aggregate number of Warrant Shares purchasable upon exercise of
this Warrant immediately thereafter.
2.2 DIVIDENDS AND DISTRIBUTIONS IN OTHER SECURITIES. If the Company
shall, at any time or from time to time, make (or fix a record date for the
holders of shares of its Common Stock entitled to receive) a dividend or other
distribution payable in other securities of the Company or in the securities of
any subsidiary of the Company (other than shares of Common Stock), then lawful
and adequate provision shall be made so that the Holder of this Warrant shall be
entitled to receive upon exercise of this Warrant, for the aggregate Exercise
Price in effect prior thereto, in addition to the number of Warrant Shares
immediately theretofore issuable upon exercise of this Warrant, the kind and
number of other securities of the Company or securities of any subsidiary of the
Company, which the Holder would have owned and been entitled to receive had this
Warrant been exercised immediately prior to that date.
2.3 CASH DIVIDENDS AND DISTRIBUTIONS. If the Company shall, at any time
or from time to time, make (or fix a record date for the holders of shares of
its Common Stock entitled to receive)
-2-
<PAGE> 3
a dividend payable in, or other distribution of cash, then the number of Warrant
Shares issuable upon the exercise of the Warrant, for the aggregate Exercise
Price in effect prior thereto, immediately prior to the occurrence of any such
event shall be increased by: (i) the amount of the dividend the Holder of this
Warrant would have received had the Holder exercised its warrant immediately
prior to the record date (or, if no record date has been set the date of
distribution or dividend), divided by (ii) the Current Market Price of the
Company's Common Stock. As used in this Warrant the term "Current Market Price"
means with respect to any security: (a) for so long as the issuer is a Public
Entity (as hereafter defined), and the security is traded on an organized
exchange the average closing price of the security on the stock exchange where
the security is traded or the last bid price as quoted on the NASDAQ for the
immediately preceding five (5) trading days; and (b) for so long as the issuer
is not a Public Entity or the security is not traded on an organized exchange,
the price per share of the security as determined in good faith by the
Corporation's board of directors. If such valuation is objected to by the Holder
of this Warrant, such valuation will be made by a reputable investment bank of
national standing mutually selected by the Holder and the Corporation, the
expense of which will be paid by the Corporation. "Public Entity" will mean: (i)
an entity that has registered its Common Stock pursuant to Section 12(b) or
Section 12(g) of the Securities Exchange Act of 1934, as amended, and (ii) the
aggregate market value of Common Stock held by nonaffiliates which is then
available for public trading is not less than Twenty-Five Million Dollars
($25,000,000.00), computed by reference to the closing price of the Common Stock
on the stock exchange where the Common Stock is traded or the last bid price as
quoted on the NASDAQ.
2.4 REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If any
of the following transactions (each, a "Special Transaction") shall become
effective: (a) a capital reorganization, whether by reclassification, exchange,
substitution or otherwise (other than a stock or cash dividend, subdivision,
combination or other distribution provided for elsewhere in this Section 2), (b)
a consolidation or merger of the Company with another entity, or (c) a sale or
conveyance of all or substantially all of the Company's assets; then as a
condition of any such Special Transaction, lawful and adequate provision shall
be made so that the Holder of this Warrant shall thereafter have the right to
purchase and receive upon exercise of this Warrant, in lieu of the Warrant
Shares immediately theretofore issuable upon exercise of this Warrant, for the
aggregate Exercise Price in effect immediately prior to such consummation, such
shares of stock, other securities, cash or other assets as may be issued or
payable in and pursuant to the terms of such Special Transaction to the holders
of shares of Common Stock for which this Warrant could have been exercised
immediately prior to such Special Transaction. In connection with any Special
Transaction, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions of this
Warrant (including without limitation the provisions of this Section 2), shall
thereafter be applicable, as nearly as may be practicable, to any shares of
stock, other securities, cash or other assets thereafter deliverable upon the
exercise of this Warrant.
2.5 NOTICE. In the event that:
(a) the Company shall fix a record date for the holders of
shares of its Common Stock for the purpose of entitling them to receive
any dividend or other distribution of shares of Common Stock or other
securities of the Company; or
-3-
<PAGE> 4
(b) the Company shall enter into any agreement or adopt any
plan for a capital reorganization of the Company, the consolidation or
merger of the Company with or into another entity, or the sale or
conveyance of all or substantially all of the assets of the Company to
another entity; or
(c) the Company shall adopt any plan for or otherwise shall
become subject to any voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(d) the Company shall propose to take any other action which
would require an adjustment pursuant to Sections 2.1 through 2.4,
then, and in each such case, the Company shall mail or cause to be mailed to the
Holder of this Warrant a notice specifying, as the case may be: (i) the date on
which a record is to be fixed for the purpose of such dividend or distribution,
and stating the amount and character of such dividend or distribution, or (ii)
the date on which such reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up or other action is to become effective,
and the time, if any, to be fixed, as to which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up or other action. Such notice
shall be mailed at least 20 days prior to the date therein specified and this
Warrant may be exercised prior to said date during the Exercise Period.
2.6 FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of shares of Common Stock upon the exercise of this Warrant. If any
fraction of a share of Common Stock would be issuable upon the exercise of this
Warrant, the Company shall, in lieu of such issuance, purchase such fraction for
an amount in cash equal to the current value of such fraction, computed on the
basis of the Current Market Price of the Common Stock on the last business day
prior to the date of exercise upon which such a sale of Common Stock shall have
been effected.
2.7 EFFECT OF ALTERNATE SECURITIES. If at any time, as a result of an
adjustment made pursuant to this Section 2, the Holder of this Warrant shall
thereafter become entitled to receive any securities of the Company other than
shares of Common Stock, then the number of such other securities receivable upon
exercise of this Warrant shall be subject to adjustment from time to time on
terms as nearly equivalent as practicable to the provisions with respect to the
Warrant Shares as contained in this Section 2.
2.8 SUCCESSIVE APPLICATION; READJUSTMENT. The provisions of this
Section 2 shall similarly apply from time to time to successive events covered
by this Section. If the Company shall fix a record date for the holders of its
Common Stock for the purpose of entitling them to receive a dividend or
distribution and shall, thereafter and before the distribution to shareholders
thereof, legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment shall be required by reason of the
taking of such record date and any such adjustment previously made in respect
thereof shall be rescinded and annulled.
-4-
<PAGE> 5
2.9 CERTIFICATE AS TO ADJUSTMENTS. In the event of an adjustment in the
number of Warrant Shares or in the Exercise Price, the Company at its expense
will promptly compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate executed by an executive officer of the
Company setting forth such adjustment and showing in detail the facts upon which
such adjustment is based. The Company will forthwith mail a copy of each such
certificate to the Holder.
III. RIGHTS OF THE HOLDER
3.1 NO RIGHTS AS SHAREHOLDER. The Holder shall not, solely by virtue of
this Warrant and prior to the issuance of the Warrant Shares upon due exercise
hereof, be entitled to any rights of a shareholder in the Company.
3.2 NO IMPAIRMENT; CERTAIN COVENANTS. The Company shall not by any
action including, without limitation, amending its certificate of incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company will (a) take all such action as may be
necessary or appropriate in order that the Warrant Shares will, upon issuance in
accordance with the terms hereof and the payment of the Exercise Price therefor,
be duly authorized, validly issued and outstanding, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issuance thereof, (b) at all times during the Exercise Period have authorized
and reserved sufficient shares of Common Stock to provide for the exercise of
this Warrant in full, and (c) use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to and agrees with the Holder as
follows:
4.1 Sufficient Shares. The Company has authorized sufficient shares of
Common Stock to fulfill the Company's obligations under this Warrant and all of
the other warrants, options and convertible securities issued by the Company. On
exercise of this Warrant and satisfaction of the Exercise Price, the Warrant
Shares issued to the Holder will be validly issued, fully paid, non-assessable
and free and clear of all liens, claims and encumbrances, except as may be
imposed by the Pledge and Security Agreement dated as of the date hereof, or any
liens, claims, or encumbrances permitted by or imposed by the Holder.
4.2 Authority. The Company has taken all necessary action to authorize
the execution and delivery of this Warrant and the issuance of the Warrant
Shares on the exercise of this Warrant. This Warrant is a valid, binding and
enforceable obligation of the Company. The execution, delivery and performance
of this Warrant will not violate: (a) any provision of the organizational
documents
-5-
<PAGE> 6
or charter of the Company; (b) any order, writ, injunction or decree of any
court, administrative agency or governmental body applicable to the Company or
the Common Stock; or (c) any contract, lease, note, bond, mortgage or other
agreement to which the Company is a party, by which the Company is bound or to
which any of the Company's assets are subject.
V. RESTRICTIVE LEGEND.
5.1 This Warrant is being acquired and any Warrant Shares to be
acquired by the Holder pursuant to this Warrant (collectively, "Securities")
will be acquired for investment for the Holder's own account and not for resale
in connection with any distribution of such Securities within the meaning of the
Securities Act of 1933 (the "Securities Act"). The Securities will not be sold,
transferred or otherwise disposed of without registration under the Securities
Act and state securities laws or qualification for exemptions therefrom. The
Holder agrees that, until the Company has caused the registration of such shares
under the Securities Act of 1933, as amended, each certificate evidencing the
Warrant Shares may be inscribed with a legend to the foregoing effect, which
legend will be as follows:
The shares represented by this certificate have been acquired
solely for investment purposes and have not been registered
under the Securities Act of 1933, as amended, or the
securities laws of any state. The shares may not be sold,
transferred, assigned or otherwise disposed of unless and
until such shares are first registered under the Securities
Act of 1933, all applicable state securities laws and all
rules and regulations promulgated thereunder or unless and
until the holder hereof provides either (i) information
reasonably satisfactory to the Company that such registration
is not required or (ii) an opinion of counsel reasonably
acceptable to the Company to the effect that such registration
is not required.
VI. REGISTRATION RIGHTS AGREEMENT.
6.1 This Warrant and the Warrant Shares will qualify for all benefits
and be subject to the terms and conditions of that certain Registration Rights
Agreement of even date herewith among the Company, the Holder and others (the
"Registration Rights Agreement"). The Holder agrees that each certificate
evidencing the Warrant Shares may be inscribed with a legend to the foregoing
effect as provided in the Registration Rights Agreement.
VII. TRANSFER OR LOSS OF WARRANT.
7.1 TRANSFER. Subject to compliance with federal and state securities
laws, the Holder may sell, assign, transfer or otherwise dispose of all or any
portion of this Warrant or the Warrant Shares acquired upon any exercise hereof
at any time and from time to time. Upon the sale, assignment, transfer or other
disposition of all or any portion of this Warrant, the Holder shall deliver to
Company a written notice of such in the form attached hereto as Exhibit B duly
executed by
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<PAGE> 7
Holder which includes the identity and address of any purchaser, assignor, or
transferee. On such delivery, the Company will, subject to conditions set forth
herein, execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in such instrument of
assignment, and this Warrant will promptly be canceled. The conditions to
transferability specified in this Warrant are intended to provide certain
protections to the Holder and the Company and to ensure compliance with the
provisions of the Securities Act and applicable state securities laws in respect
of the transfer of any Warrant or any Warrant Shares and are to be strictly
construed.
7.2 LOST, STOLEN, DESTROYED OR MUTILATED WARRANTS. In case any Warrant
is mutilated, lost, stolen or destroyed, the Company agrees to issue a new
Warrant of like date, tenor and denomination and deliver the same in exchange
and substitution for and upon surrender and cancellation of any mutilated
Warrant, or in lieu of any Warrant lost, stolen or destroyed, on receipt of
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant.
VIII. MISCELLANEOUS.
8.1 NOTICES. Any notice, demand or communication required or permitted
to be given by any provision of this Warrant must be in writing and will be
deemed to have been given and received when delivered personally or by
telefacsimile to the party designated to receive such notice, or on the date
following the day sent by overnight courier, or on the third (3rd) business day
after the same is sent by certified mail, postage and charges prepaid, directed
to the following addresses or to such other or additional addresses as any party
might designate by written notice to the other parties:
To the Company: Zixit Corporation
One Galleria Tower
13355 Noel Road
Suite 1555
Dallas, Texas 75240-6604
Attn: President
Fax: (972) 702-7056
To the Holder:
------------------------
------------------------
------------------------
8.2 EXPENSES; TAXES. Any sales tax, stamp duty, deed transfer or other
tax (except only taxes based on the income of Holder) arising out of the
issuance and sale of this Warrant or the Warrant Shares issuable upon exercise
of this Warrant and consummation of the transactions contemplated by this
Warrant Certificate shall be paid by the Company.
8.3 AMENDMENT; WAIVER. This Warrant Certificate may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by the Company and
-7-
<PAGE> 8
the Holder. No failure to exercise, and no delay in exercising, any right, power
or privilege under this Warrant Certificate shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be
impled from any course of dealing between the Company and the Holder. No
extension of time for performance of any obligations or other acts hereunder or
under any other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts.
8.4 HEADINGS. The headings contained in this Warrant Certificate are
for convenience of reference only and are not to be given any legal effect and
shall not affect the meaning or interpretation of this Warrant Certificate.
8.5 GOVERNING LAW. This Warrant is being delivered and is intended to
be performed in the State of Texas and will be construed and enforced in
accordance with, and the rights of the parties will be governed by, the law of
such state, without regard to its conflict of laws principles.
8.6 SEVERABILITY. Should any part of this Warrant for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in full force and effect as if
this Warrant had been executed with the invalid portion thereof eliminated, and
it is hereby declared the intention of the parties hereto that they would have
executed and accepted the remaining portion of this Warrant without including
therein any such part, parts or portion which may, for any reason, be hereafter
declared invalid.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed and delivered as of the day and year first above written.
ZIXIT CORPORATION,
a Texas corporation
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
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<PAGE> 9
EXHIBIT A
EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
The undersigned registered owner of the attached Warrant Certificate
irrevocably exercises this Warrant for the purchase of the number of shares of
Common Stock of Zixit Corporation (the "Company") as is set forth below, and
herewith makes payment therefor, all at the price and on the terms and
conditions specified in the attached Warrant Certificate and requests that
certificates for the shares of Common Stock hereby purchased (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to the person specified below whose address is set forth below, and,
if such shares of Common Stock shall not include all of the shares of Common
Stock now and hereafter issuable as provided in the attached Warrant
Certificate, then the Company shall, at its own expense, promptly issue to the
undersigned a new Warrant Certificate of like tenor and date for the balance of
the shares of Common Stock issuable thereunder.
Date:
----------------------
Amount of Shares Purchased:
--------------
Aggregate Purchase Price: $
-------------
Printed Name of Registered Holder:
----------------------------------------------
Signature of Registered Holder:
-------------------------------------------------
NOTICE: The signature on this Exercise Notice must correspond with the
name as written upon the face of the attached Warrant
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Stock Certificates to be issued and registered in the following name, and
delivered to the following address:
-----------------------------------------
(Name)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
<PAGE> 10
EXHIBIT B
ASSIGNMENT NOTICE
[To be executed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the person named below, whose address is set forth below, the rights
represented by the attached Warrant Certificate to purchase the number of shares
of Common Stock of Zixit Corporation (the "Company") as is set forth below, to
which the attached Warrant Certificate relates, and appoints ___________
_________________ attorney to transfer such rights on the books of the Company
with full power of substitution in the premises. If such shares of Common Stock
of the Company shall not include all of the shares of Common Stock now and
hereafter issuable as provided in the attached Warrant Certificate, then the
Company, at its own expense, shall promptly issue to the undersigned a new
Warrant Certificate of like tenor and date for the balance of the Common Stock
issuable thereunder.
Date:
----------------------
Amount of Shares Purchased:
--------------
Aggregate Purchase Price: $
-------------
Printed Name of Registered Holder:
----------------------------------------------
Signature of Registered Holder:
-------------------------------------------------
NOTICE: The signature on this Assignment Notice must
correspond with the name as written upon the face of
the attached Warrant Certificate in every particular,
without alteration or enlargement or any change
whatsoever.
Warrant Certificate for transferred Warrants to be issued and registered in the
following name, and delivered to the following address:
-----------------------------------------
(Name)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
<PAGE> 1
EXHIBIT 2.4
NON-NEGOTIABLE
SECURED PROMISSORY NOTE
The capitalized and defined terms used in this Non-Negotiable
Promissory Note shall have the following meanings:
HOLDER: ZIXIT CORPORATION, a Texas corporation, whose address is One Galleria
Tower, 13355 Noel Road, Dallas, Texas 75240-6604.
MAKER: ___________________________________________________, whose address is
_____________________________________________.
DATE: April __, 2000 PLACE OF EXECUTION: ,
------------- -----------
PRINCIPAL AMOUNT: $
---------------
GOVERNING LAW: The laws of Texas, MATURITY DATE:
without regard to its conflicts of law September 1, 2000.
principles, shall govern all matters hereunder.
PLEDGE AGREEMENT: Stock Pledge and SECURITY:
Security Agreement of even date herewith The property described in
from Maker to Holder. and conveyed or encumbered
by the Pledge Agreement.
FOR VALUE RECEIVED, Maker, jointly and severally if more than one,
hereby promises to pay to Holder, in lawful money of the United States of
America at the address of the office of the Holder set forth above, or at such
other place as Holder may designate in writing, the Principal Amount, without
interest thereon, as follows:
Maker shall pay to Holder three equal installments of principal, each
in an amount equal to one-third of the Principal Amount set forth
above, on May 1, 2000, on June 30, 2000 and on September 1, 2000.
The outstanding principal balance of this Note shall not accrue interest unless
and until there is a default under this Note, at which time this Note shall bear
interest at a rate equal to the lesser of twelve percent (12%) per annum or the
highest lawful rate permitted under applicable law until
<PAGE> 2
repaid in full. This Note may be prepaid in whole or in part prior to the
Maturity Date, without premium or penalty.
The payment of this Note is secured by the Pledge Agreement, which is
by this reference incorporated herein.
If Maker shall fail to pay the full amount of any installment of
principal due under this Note within two (2) business days of the date it is
due, or if Maker breaches any of the terms of the Pledge Agreement, and such
breach is not cured in accordance with and within the grace period provided by
the terms of the Pledge Agreement, or if Maker is adjudicated insolvent or
bankrupt or is dissolved or liquidated, then the entire outstanding principal
amount hereunder shall become due and payable at the option of the Holder upon
written notice to Maker (or, in the event Holder is adjudicated insolvent or
bankrupt, without further act or notice). Maker agrees to pay Holder reasonable
attorneys' fees and paralegal fees for the services and expenses of counsel
employed after acceleration or maturity to collect this Note, or to protect or
enforce Holder's rights in the Security (including such fees and expenses
incurred in any bankruptcy proceedings or appeals relating to such enforcement
proceedings).
The remedies of Holder as provided herein and in the Pledge Agreement
shall be cumulative and concurrent, and may be pursued singly, successively or
together, at the sole discretion of Holder, and may be exercised as often as
occasion therefor shall arise. No act of omission or commission of Holder,
including specifically any failure to exercise any right, remedy or recourse,
shall be effective unless it is set forth in a written document executed by
Holder and then only to the extent specifically recited therein. A waiver or
release with reference to one event shall not be construed as continuing, as a
bar to, or as a waiver or release of, any subsequent right, remedy or recourse
as to any subsequent event.
Maker hereby: (a) waives demand, presentment for payment, notice of
nonpayment, protest, notice of protest and all other notice, filing of suit and
diligence in collecting this Note, in enforcing any of the security rights under
the Pledge Agreement or in proceedings against the Security; (b) agrees to any
substitution, exchange, addition or release of any of the Security or the
addition or release of any party or person primarily or secondarily liable
hereon; (c) agrees that Holder shall not be required first to institute any
suit, or to exhaust its remedies against Maker or any other person or party to
become liable hereunder or against the Security in order to enforce payment of
this Note; (d) consents to any extension, rearrangement, renewal or postponement
of time of payment of this Note and to any other indulgency with respect hereto
without notice, consent or consideration to any of the foregoing; and (e) agrees
that, notwithstanding the occurrence of any of the foregoing (except the express
written release by Holder of Maker), Maker shall be and remain directly and
primarily, and jointly and severally if more than one, liable for all sums due
under this Note.
All notices hereunder shall be made in accordance with the terms of the
Pledge Agreement. Whenever used in this Note, the singular number shall include
the plural, the plural the singular, and the masculine shall include the
feminine and the neuter, and the words "Maker" and "Holder" shall
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<PAGE> 3
be deemed to include Maker and Holder as defined herein and their respective
successors and assigns.
This Note shall be construed and enforced in accordance with the
Governing Law.
Maker hereby knowingly, voluntarily and intentionally waives any right
Maker may have to a trial by jury in respect of any litigation based herein, or
arising out of, under or in connection with this Note or the Pledge Agreement,
and any agreement contemplated to be executed in conjunction therewith, or any
course of conduct, course of dealing, statements (whether verbal or written) or
actions of either party. This provision is a material inducement for Holder
entering into this loan.
IN WITNESS WHEREOF, Maker has executed this Note as of the date first
hereinabove written.
-----------------------------------------
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<PAGE> 1
EXHIBIT 2.5
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT ("Agreement") is
entered into as of April ___, 2000, by and between the undersigned pledgor (the
"Pledgor"), and ZIXIT CORPORATION, a Texas corporation (the "Pledgee").
WHEREAS, pursuant to the terms of that certain Common Stock
and Warrant Purchase Agreement (the "Purchase Agreement") of even date herewith
among the Pledgee, the Pledgor and others, the Pledgor has executed and
delivered to the Pledgee a Non-Negotiable Secured Promissory Note of even date
herewith (the "Note") in the principal amount of ______________________ Dollars
($__________) in order to evidence the Pledgor's promise to pay such amount to
the Pledgee in consideration of the sale and delivery by the Pledgee to the
Pledgor of the number of shares of common stock of Zixit Corporation, par value
$.01 per share ("Common Stock") and Warrants more particularly described on
Exhibit "A" attached hereto (collectively, the "Pledged Securities"); and
WHEREAS, pursuant to the terms of the Purchase Agreement, the
Pledgor has agreed to make the pledge contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the Pledgor hereby agrees with the Pledgee as
follows:
1. PLEDGE.
A. Pledged Collateral. Subject to the provisions of Section
1.B below, the Pledgor hereby pledges to the Pledgee, and grants to the Pledgee
a security interest in, the following (the "Pledged Collateral"): (i) all of the
Pledged Securities; (ii) any certificates issued by the Pledgee that represent
the Pledged Securities; and (iii) all dividends, cash, instruments and other
property or proceeds, from time to time received, receivable or otherwise
distributed in respect of, in exchange for, or upon exercise of, any or all of
the Pledged Securities.
B. Released Collateral. Notwithstanding anything to the
contrary contained in this Agreement: (i) upon payment in full of the first
installment of principal due under the Note, one- third of the number of shares
of Common Stock and Warrants pledged hereunder ("Released Pledged Securities"),
together with any of the items referenced in Subsections 1A(ii) and (iii) hereof
with respect to such Released Pledged Securities (collectively, the "Released
Collateral"), automatically shall be deemed released from the security interest
granted hereunder and shall no longer be deemed Pledged Collateral, and
thereupon the security interest, the pledge and all other provisions of this
Agreement with respect to such Released Collateral shall automatically cease and
terminate and be of no further force or effect and Pledgee shall immediately
cause the Released Collateral to be delivered to Pledgor; (ii) provided that no
payment Event of Default (defined below) shall have occurred and be continuing,
upon payment in full of the second installment of principal due under the Note,
one-third of the original number of shares of Common Stock and Warrants pledged
<PAGE> 2
hereunder ("Additional Released Pledged Securities"), together with any of the
items referenced in Subsections 1A(ii) and (iii) hereof with respect to such
Additional Released Pledged Securities (collectively, the "Additional Released
Collateral"), automatically shall be deemed released from the security interest
granted hereunder and shall no longer be deemed Pledged Collateral, and
thereupon the security interest, the pledge and all other provisions of this
Agreement with respect to such Additional Released Collateral shall
automatically cease and terminate and be of no further force or effect and
Pledgee shall immediately cause the Additional Released Collateral to be
delivered to Pledgor; and (iii) provided that no payment Event of Default shall
have occurred and is continuing, upon payment in full of the third installment
of principal due under the Note, all of the remaining Pledged Collateral
hereunder automatically shall be deemed released from the security interest
granted hereunder, shall be deemed Additional Released Collateral and shall no
longer be deemed Pledged Collateral, and thereupon the security interest, the
pledge and all other provisions of this Agreement with respect to such
Additional Released Collateral shall automatically cease and terminate and be of
no further force or effect, and Pledgee shall immediately cause such Additional
Released Collateral to be delivered to Pledgor. Notwithstanding the foregoing,
upon the prepayment of the Note, provided that no payment Event of Default shall
have occurred and is continuing, the entire Pledged Collateral automatically
shall be deemed released from the security interest granted hereunder, shall be
deemed Released Collateral and Additional Released Collateral and shall no
longer be deemed Pledged Collateral, and thereupon the security interest, the
pledge and all other provisions of this Agreement with respect to such
collateral shall automatically cease and terminate and be of no further force or
effect and Pledgee shall immediately cause such collateral to be delivered to
Pledgor.
2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the Pledged
Collateral is security for, the full and prompt payment when due of the
outstanding principal balance of, and interest, if any, on, the Note (such
principal and interest, if any, the "Secured Obligation").
3. DELIVERY OF PLEDGED COLLATERAL. All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of the Pledgee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed. The Pledgee shall
have the right, at any time after the occurrence of an Event of Default (defined
below) and after written notice to the Pledgor, to transfer to or to register in
its name or in the name of any of its nominees any or all of the Pledged
Collateral.
4. FURTHER ASSURANCES. The Pledgor agrees to execute and deliver all
further instruments and documents, and take all further action, that may be
reasonably necessary, upon the Pledgee's written request, in order to perfect
the lien and security interest granted hereby.
5. VOTING RIGHTS; DIVIDENDS; ETC.
A. Unless and until a default shall have occurred in the
payment of principal due under the Note or in the performance of any of
Pledgor's agreements under the Note or hereunder,
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<PAGE> 3
and the Pledgor shall have failed to cure such default within the applicable
cure period under the Note or cure any default hereunder within five (5)
business days following written notice delivered by the Pledgee to the Pledgor
(each, an "Event of Default"):
(i) The Pledgor shall be entitled to exercise any and
all voting and other rights, powers and privileges pertaining to the
Pledged Collateral or any part thereof for any purpose not inconsistent
with the terms of this Agreement;
(ii) The Pledgor shall be entitled to receive and
retain any and all dividends and other distributions paid in respect of
the Pledged Collateral, which dividends and distributions shall become
part of the Pledged Collateral and shall be released to Pledgor
pursuant to the terms of Section 1.B; and
(iii) The Pledgee shall execute and deliver (or cause
to be executed and delivered) to the Pledgor all such proxies and other
instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to exercise the voting and other rights which it
is entitled to exercise pursuant to paragraph (i) above and to receive
the dividends and other distributions which it is authorized to receive
and retain pursuant to paragraph (ii) above.
B. Upon the occurrence of an Event of Default:
(i) Upon written notice by the Pledgee to the
Pledgor, all rights of the Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Section 5A(i) above shall cease, and all such rights shall
thereupon become vested in the Pledgee who shall thereupon have the
sole right to exercise such voting and other consensual rights;
(ii) All rights of the Pledgor to receive the
dividends which it would otherwise be authorized to receive and retain
pursuant to Section 5A(ii) above shall cease, and all such rights shall
thereupon become vested in the Pledgee who shall thereupon have the
sole right to receive and hold as Pledged Collateral such dividends;
and
(iii) All dividends which are received by the Pledgor
contrary to the provisions of paragraph (ii) of this Section 5(B) shall
be received in trust for the benefit of the Pledgee and shall be paid
over to the Pledgee.
6. TRANSFERS AND OTHER LIENS. The Pledgor agrees that it will not (i)
sell or otherwise dispose of, or grant any option or warrant with respect to,
any of the Pledged Collateral, or (ii) create or permit to exist any lien upon
or with respect to any of the Pledged Collateral, except for the lien and the
security interest created pursuant to this Agreement.
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<PAGE> 4
7. ATTORNEY-IN-FACT. Upon the occurrence and during the continuance of
an Event of Default, the Pledgor hereby irrevocably appoints the Pledgee as the
Pledgor's attorney-in-fact and proxy, with full authority in the place of the
Pledgor and in the name of the Pledgor, from time to time in the Pledgee's
reasonable discretion and upon three (3) days' written notice to the Pledgor, to
take any action and to execute any instrument which the Pledgee reasonably may
deem necessary to accomplish the purposes of this Agreement, including, without
limitation, to receive, indorse and collect all instruments made payable to the
Pledgor representing any dividend or other distribution in respect of any
Pledged Collateral and to give full discharge for the same. The powers of
attorney granted pursuant to this Agreement shall not impose any duty upon the
attorney-in-fact to exercise such powers. Such powers of attorney are coupled
with an interest and are irrevocable.
8. REASONABLE CARE. The Pledgee shall exercise reasonable care in the
custody and preservation of the Pledged Collateral in its possession and, at a
minimum, shall ensure that the Pledged Collateral is accorded treatment
substantially equal to that which the Pledgee accords its own property.
9. REMEDIES UPON AN EVENT OF DEFAULT. Upon and after the occurrence of
an Event of Default, the Pledgee shall have the rights and remedies provided in
the Uniform Commercial Code in force in the State of Texas at the date of this
Agreement. In addition to and in conjunction with such rights and remedies, the
Pledgee may, by giving ten days' written notice to Pledgor by registered mail,
sell all the Pledged Collateral in accordance with the requirements of the Texas
Uniform Commercial Code. At any bona fide public sale, Pledgee may purchase all
or any part of the Pledged Collateral. Pledgee may retain out of the proceeds of
any sale an amount equal to the amounts outstanding under the Note, including
the reasonable expenses of the sale, and shall pay any balance of the proceeds
to Pledgor. If the sale proceeds are insufficient to cover the Secured
Obligation, Pledgor shall remain liable to Pledgee for the deficiency.
10. AMENDMENTS. No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
the Pledgor and the Pledgee, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
11. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing and mailed by certified mail, return
receipt requested, confirmed telecopy, or delivered by courier, if to the
Pledgor or the Pledgee, addressed to the Pledgor or the Pledgee, as the case may
be, at its address specified in the Note, or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party complying as to delivery with the terms of this Section. All such notices
and other communications shall be deemed delivered within three (3) business
days after the date mailed or upon delivery if sent by courier.
12. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall: (i) subject to
the provisions of Section 1.B above, remain in full force and effect until
indefeasible payment in full of the Secured Obligation; (ii) be binding
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<PAGE> 5
upon the parties hereto and their respective successors and assigns; and (iii)
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, transferees and assigns.
13. GOVERNING LAW; SEVERABILITY; DEFINED TERMS. This Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Texas, without regard to its conflict of laws principles. Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity and
without invalidating the remaining provisions of this Agreement. Unless
otherwise defined herein, terms defined in Article 9 of the Uniform Commercial
Code as in effect in the State of Texas are used herein as therein defined.
14. TITLES. The Section titles contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not part of this Agreement.
15. 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.
IN WITNESS WHEREOF, each of the Pledgor and the Pledgee has
caused this Agreement to be duly executed and delivered by its duly authorized
officer on the date first above written.
PLEDGOR:
-----------------------------------------
PLEDGEE:
ZIXIT CORPORATION,
a Texas corporation
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
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<PAGE> 6
EXHIBIT "A"
TO STOCK PLEDGE AND SECURITY AGREEMENT
DESCRIPTION OF THE PLEDGED SECURITIES
A. __________________ shares of the common stock, par value $.01 per
share, of Zixit Corporation ("Common Stock").
B. Warrants ("$57.60 Warrants") to acquire _______________ shares of
Common Stock ("Warrant Shares") at an exercise price of $57.60 per
Warrant Share.
C. Warrants ("$12.00 Warrants", and collectively with the $57.60 Warrants,
the "Warrants") to acquire _____ shares of Common Stock ("Warrant
Shares") at an exercise price of $12.00 per Warrant Share.
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<PAGE> 1
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. Wayne Huizenga, 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.
<PAGE> 2
"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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<PAGE> 3
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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<PAGE> 6
(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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<PAGE> 8
(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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<PAGE> 9
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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<PAGE> 10
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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<PAGE> 11
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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<PAGE> 12
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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<PAGE> 13
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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<PAGE> 14
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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<PAGE> 15
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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<PAGE> 16
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, 13355 Noel Road, Suite 1555, Dallas, Texas 75240-6604 Attention:
President, Facsimile: (972) 702-7054 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:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
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<PAGE> 17
HOLDERS:
-----------------------------------------
H. Wayne Huizenga
COUNTERPART SIGNATURE PAGES FOR EACH
HOLDER ARE ATTACHED HERETO
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<PAGE> 18
COUNTERPART SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT
The undersigned Holder hereby executes the Registration Rights
Agreement among ZixIt Corporation, H. Wayne Huizenga and his affiliates and
assigns as of the date first set forth above.
-----------------------------------------
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SCHEDULE 1
<PAGE> 1
EXHIBIT 99.1
[ZIXIT CORPORATION LETTERHEAD]
NEWS RELEASE
For immediate release
Page 1 of 2
INVESTOR CONTACT: BEVERLY V. FUORTES (972) 702-7057 [email protected]
ZIXIT CORPORATION ANNOUNCES TERMS OF INVESTMENT BY HUIZENGA GROUP
GROUP OPTS FOR MAXIMUM $44 MILLION INVESTMENT
DALLAS - April 10, 2000 - ZixIt Corporation (Nasdaq: ZIXI) announced today that
a group of investors led by H. Wayne Huizenga has opted to invest the maximum
$44 million amount available under the investment arrangement previously
announced on March 23, 2000.
The Huizenga Group will purchase 916,667 shares of common stock for $44 million,
or $48.00 per share, which reflects a premium of $1.25 per share over the
ten-day average closing price of the stock on March 1, the day before the
conditional arrangement was agreed in principle. Additionally, the Huizenga
Group will receive 10-year warrants to purchase an additional 916,667 shares at
a price of $57.60 per share, a 23% premium over the 10-day average closing
price.
The Huizenga Group includes H. Wayne Huizenga, as well as a number of senior
executives from both Huizenga-related and non-related companies.
In connection with the transaction, David P. Cook, chairman and chief executive
officer of ZixIt Corporation, will reallocate 1,222,223 of his personal option
shares in the company to the investor group. This will be the second time that
Mr. Cook has contributed a portion of his personal shareholdings for the
long-term benefit of the company and its shareholders. As previously announced,
Mr. Cook reallocated approximately 254,000 option shares to internal ZixIt
personnel, primarily technical employees. Mr. Cook retains approximately 2.5
million option shares.
The completion of this transaction is subject to definitive agreements and the
approval of ZixIt Corporation's board of directors.
- more -
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ZixIt Corporation Announces Terms of Investment by Huizenga Group
Page 2 of 2
ZixIt Corporation provides products and services that enhance security, privacy,
and convenience on the Internet. ZixIt's flagship product, ZixMail(TM), is a
secure document delivery, private email, and message tracking service that
enables users worldwide to easily send and receive encrypted and digitally
signed communications using their existing email systems and addresses. ZixIt is
also developing ZixCharge(TM) - a shopping portal and Internet payment
authorization system. For further information, visit www.zixit.com or contact
investor relations at 972-702-7057.
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