exv10w1



 





Exhibit 10.1




ESCROW AGREEMENT




     THIS ESCROW AGREEMENT (this “Agreement”), dated as of August 9, 2005 (the “Effective Time”),
is by and among Zix Corporation, a Texas corporation (the “Company”), and JPMorgan Chase Bank,
N.A., a national banking association, as escrow agent hereunder (the “Escrow Agent”).



Preamble




     The Company presently intends to raise capital in a private offering of its securities (the
“Offering”) pursuant to that certain Securities Purchase Agreement, dated of even date herewith
(the “Securities Purchase Agreement”), by and among the Company and each of the purchasers listed
on Schedule A thereto (collectively, the “Purchasers”). As required by the Securities
Purchase Agreement, the proceeds with respect to the Excess Units, as such term is defined in the
Securities Purchase Agreement, and identified on Schedule A to the Securities Purchase
Agreement and Schedule A hereto as the “Excess Funds” are to be placed in escrow hereunder
with the Escrow Agent (the “Escrow Funds”). The Escrow Agent is willing to hold and administer
such Escrow Funds and any income thereon and additions thereto, and to pay and distribute the
amounts held by it in accordance with the terms of this Agreement.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:



ARTICLE I

ESTABLISHMENT OF ESCROW




     Section 1.1 Escrow Funds. Contemporaneously with the Company’s receipt of the
proceeds of the Offering, the Company shall immediately deposit, or arrange for the immediate
deposit of, the Escrow Funds with the Escrow Agent. From and after receipt of the Escrow Funds by
the Escrow Agent, the Escrow Agent will hold and disburse the Escrow Funds (together with any cash
or other property received in respect thereof or earned thereon, which shall become a part of the
Escrow Funds) only in accordance with the provisions of this Agreement. Prior to the release and
distribution of the Escrow Funds, the Escrow Agent shall hold the Escrow Funds for the benefit of
the Company and the Purchasers pursuant to the terms of this Agreement.



     Section 1.2 Investments. The Escrow Agent shall invest and reinvest the Escrow Funds
and any other cash received by the Escrow Agent with respect thereto in such Eligible Investments
as the Company designates in writing to the Escrow Agent and shall not be responsible or liable for
any loss, tax or other charge accruing from any investment made in accordance herewith. The
“Eligible Investments” shall be those investments set forth in Schedule B attached hereto.
All earnings received from the investment of the Escrow Funds (the “Investment Earnings”) shall be
credited to, and shall become a part of, the Escrow Funds (and any losses on such investments shall be



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debited from the Escrow Funds). Unless otherwise directed in writing, the Escrow Funds shall be
invested and reinvested in the JPMorgan Chase Cash Escrow. The Escrow Agent or any of its
affiliates may receive compensation with respect to any investment directed hereunder.



     Section 1.3 Additional Interest. In accordance with Section 1(b)(ii) of the
Securities Purchase Agreement, while held by the Escrow Agent, the Escrow Funds shall accrue
interest from and including the day following the Closing Date (as defined in the Securities
Purchase Agreement) to and excluding the date of release at a rate of 7.0% per annum (computed on
the basis of a 365-day year) (the “Interest Amount”). If the Escrow Funds are released to the
Company pursuant to Section 2.2(a), the Company shall promptly pay the Interest Amount to
the Purchasers. If the Escrow Funds are released to the Purchasers pursuant to Section
2.2(b), to the extent the Investment Earnings are less than the Interest Amount, the Company
shall promptly pay to the Purchasers the amount, if any, equal to such shortfall.



ARTICLE II

TERM; RELEASE OF ESCROW FUNDS




     Section 2.1 Term. The term of this Agreement shall commence at the Effective Time
and shall terminate at such time as all Escrow Funds have been distributed pursuant to the terms of
this Agreement.



     Section 2.2 Release of Escrow Funds. The Escrow Agent shall release and distribute
the Escrow Funds (including any Investment Earnings) as follows:




     (a) to the Company, upon the Escrow Agent’s receipt of a certificate substantially in
the form of Exhibit A, executed by a duly authorized officer of the Company and
certifying to the Escrow Agent that the Shareholder Approval contemplated by Section
5(d) of the Securities Purchase Agreement has been obtained on or before 5:00 P.M. CST,
Houston, Texas time, on November 22, 2005.




     (b) to the Purchasers, upon the Escrow Agent’s receipt from the Company of a
certificate substantially in the form of Exhibit A, executed by a duly authorized
officer of the Company and certifying to the Escrow Agent that the Shareholder Approval
contemplated by Section 5(d) of the Purchase Agreement was not obtained on or
before 5:00 P.M. CST, Houston, Texas time, on November 22, 2005, with each Purchaser to
receive a portion of the Escrow Funds equal to the sum of:




     (i) the amount of funds set forth next to its name on Schedule A
attached hereto under the column entitled “Excess Funds”; and



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     (ii) such Purchaser’s pro rata share, based upon such Purchaser’s Excess Funds
vis-a-vis other Purchasers, of any Investment Earnings accrued on the Escrow Funds
while held by the Escrow Agent.




     If the Shareholder Approval contemplated by Section 5(d) of the Securities
Purchase Agreement is not obtained and the Company does not deliver a certificate to the
Escrow Agent pursuant to this Section 2.2(b) within 2 business days following
November 22, 2005, the Escrow Agent shall deliver the Escrow Funds, including any earnings
accrued on the Escrow Funds, to the Purchasers at the address or accounts, as applicable,
provided on Schedule A.



     The Escrow Agent shall promptly (and in any event within two business days from receipt of
notice) release and distribute the Escrow Funds (and any earnings accrued thereon), as described
above, in accordance with the payment instructions provided by an executed certificate
substantially in the form of Exhibit A provided to the Escrow Agent by the Company.



     Section 2.3 Effect of Final Delivery. This Agreement shall continue in full force
and effect until the Escrow Agent has delivered all of the Escrow Funds pursuant to the terms
hereof. Except as set forth in Section 4.12, after all of such funds have been so
delivered, all rights, duties and obligations of the respective parties hereunder shall terminate.



ARTICLE III

THE ESCROW AGENT




     Section 3.1 Appointment. The Company hereby designates and appoints the Escrow Agent
as “Escrow Agent” under this Agreement, and the Escrow Agent hereby accepts such designation and
appointment, subject to all of the provisions of this Agreement.



Section 3.2 Compensation; Expenses Reimbursement.





     (a) The Company agrees to pay the Escrow Agent’s compensation for its normal services
hereunder in accordance with the executed fee proposal, by and between the Escrow Agent and
the Company, which may be subject to change as mutually agreed upon from time to time
between the Company and the Escrow Agent.




     (b) The Company agrees to reimburse the Escrow Agent on demand for all costs and
expenses incurred in connection with the administration of this Agreement or the escrow
created hereby or the performance or observance of its duties hereunder which are in excess
of its compensation for normal services hereunder, including payment of any reasonable
legal fees and expenses incurred by the Escrow Agent in connection with resolution of any
claim by any party hereunder.



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     Section 3.3 Escrow Agent Terms and Conditions.




     (a) The duties, responsibilities and obligations of the Escrow Agent shall be limited
to those expressly set forth herein, and no duties, responsibilities or obligations shall
be inferred or implied. The Escrow Agent, in its capacity as such, shall not be subject
to, nor required to comply with, any other agreement to which the Company is a party, even
though reference thereto may be made herein, or to comply with any direction or instruction
(other than those contained herein or delivered in accordance with this Agreement) from the
Company or any entity acting on its behalf. The Escrow Agent shall not be required to, and
shall not, expend or risk any of its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder.




     (b) If at any time the Escrow Agent is served with any judicial or administrative
order, judgment, decree, writ or other form of judicial or administrative process which in
any way affects the Escrow Funds (including but not limited to orders of attachment or
garnishment or other forms of levies or injunctions or stays relating to the transfer of
the Escrow Funds), the Escrow Agent is authorized to comply therewith in any manner as it
or legal counsel of its own choosing deems appropriate; and if the Escrow Agent complies
with any such judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Escrow Agent shall not be liable to any of the
parties hereto or to any other person or entity even though such order, judgment, decree,
writ or process may be subsequently modified or vacated or otherwise determined to have
been without legal force or effect.




     (c) (i) The Escrow Agent shall not be liable for any action taken or omitted, or for
any loss or injury resulting from its actions or its performance or lack of performance of
its duties hereunder in the absence of gross negligence or willful misconduct on its part.
In no event shall the Escrow Agent be liable (A) for acting in accordance with or relying
upon any instruction, notice, demand, certificate or document from the Company or any
entity acting on behalf of the Company, to the extent such reliance is contemplated by this
Agreement, (B) in no event shall the Escrow Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action, (C) for the acts or omissions of its nominees,
correspondents, designees, subagents or subcustodians selected with reasonable care, or (D)
for an amount in excess of the value of the Escrow Funds.




          (ii) If any fees, expenses or costs incurred by, or any obligations owed to, the
Escrow Agent hereunder are not promptly paid when due, the Escrow Agent may reimburse
itself therefor from the Escrow Funds. In such event, the Escrow Agent shall notify the
Company of any such reimbursement from the Escrow Funds and shall furnish to the Company
copies
of all related invoices and other statements, and the Company shall promptly restore any
amount deducted from the Escrow Funds.



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          (iii) The Escrow Agent may consult with legal counsel of its own selection at the
expense of the Company as to any matter relating to this Agreement, and the Escrow Agent
shall not incur any liability in acting in good faith in accordance with any advice from
such counsel.




          (iv) The Escrow Agent shall not incur any liability for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence
beyond the control of the Escrow Agent (including, but not limited to, any act or provision
of any present or future law or regulation or governmental authority, any act of God or
war, or the unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).




     (d) The Escrow Agent shall provide the Company with monthly statements identifying
transactions, transfers or holdings of the Escrow Funds, and each such statement shall be
deemed to be correct and final upon receipt thereof by such party unless the Escrow Agent
is notified in writing to the contrary within thirty (30) business days of the date of such
statement.




     (e) The Escrow Agent shall not be responsible in any respect for the form, execution,
validity, value or genuineness of documents or securities deposited hereunder, or for any
description therein, or for the identity, authority or rights of persons executing or
delivering or purporting to execute or deliver any such document, security or endorsement.




     (f) Notices, instructions or other communications shall be in writing and shall be
given to the address set forth in the “Notices” provision herein (or to such other address
as may be substituted therefor by written notification to the Escrow Agent or the Company).
Notices to the Escrow Agent shall be deemed to be given when actually received by the
Escrow Agent. The Escrow Agent is authorized to comply with and rely upon any notices,
instructions or other communications believed by it in good faith to have been sent or
given by the Company or by a person or persons authorized by the Company. Whenever under
the terms hereof the time for giving a notice or performing an act falls upon a Saturday,
Sunday, or New York Stock Exchange holiday, such time shall be extended to the next day on
which the Escrow Agent is open for business.




     (h) The Company shall be liable for and shall reimburse and indemnify the Escrow Agent
and hold the Escrow Agent harmless from and against any and all claims, losses,
liabilities, costs, damages or expenses (including reasonable attorneys’ fees and expenses)
(collectively, “Losses”) arising from or in connection with or related to this Agreement or
being the Escrow Agent hereunder (including, but not limited to, Losses incurred by the
Escrow Agent in connection with its successful defense, in whole or in part, of



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any claim of gross negligence or willful misconduct on its part); provided, however, that
nothing contained herein shall require the Escrow Agent to be indemnified for Losses caused
by its own gross negligence or willful misconduct.




     (i) (i) The Company may remove the Escrow Agent at any time by giving to the Escrow
Agent thirty (30) calendar days’ prior notice in writing signed by the Company. The Escrow
Agent may resign at any time by giving the Company thirty (30) calendar days’ prior written
notice thereof.




          (ii) Within five (5) calendar days after giving the foregoing notice of removal to the
Escrow Agent or receiving the foregoing notice of resignation from the Escrow Agent, the
Company shall appoint a successor escrow agent. If a successor escrow agent has not
accepted such appointment within thirty (30) days after the giving of such notice, the
Escrow Agent may apply to a court of competent jurisdiction for the appointment of a
successor escrow agent or for other appropriate relief. The costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Escrow Agent in connection with
such proceeding shall be paid by the Company.




          (iii) Upon receipt of the identity of the successor escrow agent, the Escrow Agent
shall either deliver the Escrow Funds then held hereunder to the successor escrow agent,
less the Escrow Agent’s earned but unpaid fees, costs and expenses or other obligations
owed to the Escrow Agent, or hold such Escrow Funds (or any portion thereof, without any
obligation to reinvest the same), pending distribution, until all such fees, costs and
expenses or other obligations are paid.




          (iv) Upon delivery of the Escrow Funds to the successor escrow agent, the Escrow Agent
shall have no further duties, responsibilities or obligations hereunder.




     (j) (i) In the event of any ambiguity or uncertainty hereunder or in any notice,
instruction or other communication received by the Escrow Agent hereunder, the Escrow Agent
may, in its sole discretion, refrain from taking any action other than retain possession of
the Escrow Funds, until the Escrow Agent receives written instructions, signed by the
Company and the Purchasers, which eliminate such ambiguity or uncertainty.




          (ii) IN THE EVENT OF ANY DISPUTE BETWEEN OR CONFLICTING CLAIMS BY OR AMONG THE COMPANY
AND/OR ANY OTHER PERSON OR ENTITY WITH RESPECT TO ANY ESCROW FUNDS, THE ESCROW AGENT SHALL
BE ENTITLED, IN ITS SOLE DISCRETION, TO REFUSE TO COMPLY WITH ANY AND ALL CLAIMS, DEMANDS
OR INSTRUCTIONS WITH RESPECT TO SUCH ESCROW FUNDS SO LONG AS SUCH DISPUTE OR CONFLICT SHALL
CONTINUE, AND THE ESCROW AGENT SHALL NOT BE OR BECOME LIABLE IN ANY WAY TO



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THE COMPANY FOR FAILURE OR REFUSAL TO COMPLY WITH SUCH CONFLICTING CLAIMS, DEMANDS OR
INSTRUCTIONS. THE ESCROW AGENT SHALL BE ENTITLED TO REFUSE TO ACT UNTIL, IN ITS SOLE
DISCRETION, EITHER (I) SUCH CONFLICTING OR ADVERSE CLAIMS OR DEMANDS SHALL HAVE BEEN
DETERMINED BY A FINAL ORDER, JUDGMENT OR DECREE OF A COURT OF COMPETENT JURISDICTION, WHICH
ORDER, JUDGMENT OR DECREE IS NOT SUBJECT TO APPEAL, OR SETTLED BY AGREEMENT BETWEEN THE
CONFLICTING PARTIES AS EVIDENCED IN A WRITING SATISFACTORY TO THE ESCROW AGENT OR (II) THE
ESCROW AGENT SHALL HAVE RECEIVED SECURITY OR AN INDEMNITY SATISFACTORY TO IT SUFFICIENT TO
HOLD IT HARMLESS FROM AND AGAINST ANY AND ALL LOSSES WHICH IT MAY INCUR BY REASON OF SO
ACTING. THE ESCROW AGENT MAY, IN ADDITION, ELECT, IN ITS SOLE DISCRETION, TO COMMENCE AN
INTERPLEADER ACTION OR SEEK OTHER JUDICIAL RELIEF OR ORDERS AS IT MAY DEEM, IN ITS SOLE
DISCRETION, NECESSARY. THE COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND
EXPENSES) INCURRED IN CONNECTION WITH SUCH PROCEEDING SHALL BE PAID BY, AND SHALL BE DEEMED
AN OBLIGATION OF THE COMPANY.




     (k) The Escrow Agent shall be under no duty to enforce payment of any subscription
which is to be paid to and held by it.




     (l) The Escrow Agent shall in no event have any liability in connection with its
investment, reinvestment or liquidation, in good faith and in accordance with the terms
hereof, of any Escrow Funds held by it hereunder, including, without limitation, any
liability for any delay not resulting from gross negligence or willful misconduct in such
investment, reinvestment or liquidation, or for any loss of income incident to any such
delay.




     (m) The Escrow Agent shall not be called upon to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect to, any securities
or other property deposited hereunder.




     (n) It is understood that fees and usual charges agreed upon from the Escrow Agent’s
services shall be considered compensation for its services as contemplated by this
Agreement, and if the Escrow Agent renders any service not provided for in this Agreement,
or if there is any assignment of any interest in the subject matter of this Agreement by
the Company or any modification of this Agreement, or if any controversy arises under this
Agreement or the Escrow Agent is made a party to any litigation pertaining to this
Agreement, or the subject matter of this Agreement, the Escrow Agent shall be reasonably
compensated for those extraordinary services and reimbursed for all costs and expenses
occasioned by such services, controversy or litigation and the Company hereby promises to
pay such sums upon demand.



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ARTICLE IV

MISCELLANEOUS




     Section 4.1 Governing Law. This Agreement shall be interpreted, construed, enforced
and administered in accordance with the internal substantive laws (and not the choice of law rules)
of the State of Texas.



     Section 4.2 Amendment. Except as otherwise permitted herein, this Agreement may be
modified only by a written amendment signed by all the parties hereto, and no waiver of any
provision hereof shall be effective unless expressed in a writing signed by the party to be
charged.



     Section 4.3 Waiver. The rights and remedies conferred upon the parties hereto shall
be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit
the exercise of any additional rights or remedies. The waiver of any right or remedy hereunder
shall not preclude the subsequent exercise of such right or remedy.



     Section 4.4 Binding Obligation. The Company hereby represents and warrants (a) that
this Agreement has been duly authorized, executed and delivered on its behalf and constitutes its
legal, valid and binding obligation and (b) that the execution, delivery and performance of this
Agreement by the Company do not and will not violate any applicable law or regulation.



     Section 4.5 Severability. The invalidity, illegality or unenforceability of any
provision of this Agreement shall in no way affect the validity, legality or enforceability of any
other provision; and if any provision is held to be unenforceable as a matter of law, the other
provisions shall not be affected thereby and shall remain in full force and effect.



     Section 4.6 Entire Agreement. This Agreement shall constitute the entire agreement
of the parties with respect to the subject matter and supersedes all prior oral or written
agreements in regard thereto.



     Section 4.7 Headings. The headings contained in this Agreement are for convenience
of reference only and shall have no effect on the interpretation or operation hereof.



     Section 4.8 Counterparts. This Agreement may be executed, by facsimile or otherwise,
by each of the parties hereto in any number of counterparts, each of which counterpart, when so
executed and delivered, shall be deemed to be an original and all such counterparts shall together
constitute one and the same agreement.



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     Section 4.9 Transferability; Third Party Beneficiaries. The parties to this
Agreement may not transfer any interest in the Escrow Funds or any other right under this Agreement
to any other party without the prior written consent of the other party to this Agreement. It is
expressly acknowledged and agreed by the parties that the Purchasers are intended to be and shall
be third party beneficiaries of this Agreement entitled to the benefits specified herein. Except
as set forth in this Section 4.9, this Agreement is for the exclusive benefit of the
parties hereto and their respective successors hereunder, and shall not be deemed to give, either
express or implied, any legal or equitable right, remedy, or claim to any other entity or person
whatsoever.



     Section 4.10 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the respective heirs, executors, administrators, successors and assigns of the parties
hereto.



     Section 4.11 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage prepaid, or by courier or overnight carrier,
to the persons at the addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so delivered:



     If to Company:


Zix Corporation

2711 N. Haskell Avenue, Suite 2200

Dallas, Texas 75204

Attn: Ronald A. Woessner, General Counsel

Facsimile: (214) 515-7385



     with a copy to:


Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201-2980

Attn: Sarah Rechter

Facsimile: (214) 661-4419



     If to the Escrow Agent:


JPMorgan Chase Bank, N.A.

600 Travis Street, 53rd Floor

Houston, Texas 77002

Attn: Luis Bustamante

Facsimile: (713) 216-6927



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If to any Purchaser, at such Purchaser’s address or facsimile number set forth on Schedule
A to this Agreement;


or such other person or address as shall be furnished in writing by any of the parties and any such
notice or communication shall be deemed to have been given as of the date so mailed.




     Section 4.12 Survival. The following provisions shall survive any termination of
this Agreement or the resignation or removal of the Escrow Agent: Sections 3.2,
3.3(c), 3.3(h), 3.3(j)(ii), 4.9 and this Section 4.12.



     Section 4.13 Account Opening Information/TINs.




     (a) Account Opening Information. For accounts opened in the US, to help the
government fight the funding of terrorism and money laundering activities, Federal law
requires all financial institutions to obtain, verify, and record information that
identifies each person who opens an account. Accordingly, when an account is opened, the
Escrow Agent will ask for information that will allow it to identify relevant parties.




     (b) TINs. Tax Matters. The Company represents that its correct Taxpayer
Identification Number (“TIN”) assigned by the Internal Revenue Service (“IRS”) or any other
taxing authority is set forth on the signature page hereof. In addition, all interest or
other income earned under this Agreement shall be allocated and/or paid as directed by this
Agreement and reported by the recipient to the Internal Revenue Service or any other taxing
authority. Notwithstanding such written directions, the Escrow Agent shall report and, as
required, withhold any taxes as it determines may be required by any law or regulation in
effect at the time of the distribution. In the absence of timely direction, all Escrow
Funds shall be retained and reinvested from time to time by the Escrow Agent as provided in
Section 1.2. In the event that any earnings remain undistributed at the end of any
calendar year, the Escrow Agent shall report to the Internal Revenue Service or such other
authority such earnings as it deems appropriate or as required by any applicable law or
regulation or, to the extent consistent therewith, as directed in writing by the Company.
In the absence of such written directions, undistributed earnings will be attributed to and
reported on as belonging to the Company. In addition, the Escrow Agent shall withhold any
taxes it deems appropriate and shall remit such taxes to the appropriate authorities. Any
tax returns or reports required to be prepared and filed on behalf of or by the Company or
Purchasers, as applicable, will be prepared and filed by the Company or the Purchasers, as
applicable, and the Escrow Agent shall have no responsibility for the preparation and/or
filing or any tax return with respect to the Escrow Funds. In addition, any tax or other
payments required to be made pursuant to such tax return or filing will be paid by the
Company or Purchasers, as appropriate. The Escrow Agent shall have no
responsibility for such payment unless directed to do so by the appropriate authorized
party.



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     Section 4.14 Security Procedures. In the event funds transfer instructions are
given, whether in writing, by telecopier or otherwise, the Escrow Agent is authorized to seek
confirmation of such instructions by telephone call-back to the person or persons designated on
Schedule C hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting
to be the person or persons so designated. The persons and telephone numbers for call-backs may be
changed only in a writing actually received and acknowledged by the Escrow Agent. If the Escrow
Agent is unable to contact any of the authorized representatives identified in Schedule C,
the Escrow Agent is hereby authorized to seek confirmation of such instructions by telephone
call-back to any one or more of the Company’s executive officers (“Executive Officers”), which
shall include the titles of Chief Executive Officer, Chief Financial Officer, General Counsel and
Senior Vice President, as the Escrow Agent may select. Such Executive Officer shall deliver to the
Escrow Agent a fully executed incumbency certificate evidencing the authority of such Executive
Officer, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such
officer. The Escrow Agent and the Company’s or any Purchaser’s bank in any funds transfer may rely
solely upon any account numbers or similar identifying numbers provided by the Company to identify
(i) the Company or any Purchaser, (ii) the Company’s or any Purchaser’s bank, or (iii) an
intermediary bank. The Escrow Agent may apply any of the Escrow Funds for any payment order it
executes using any such identifying number, even when its use may result in a person other than the
Company or a Purchaser being paid, or the transfer of Escrow Funds to a bank other than the
Company’s or a Purchaser’ bank or an intermediary bank designated. The parties to this Agreement
acknowledge that these security procedures are commercially reasonable.



[Signatures on following page]





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     IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the day and year
first above written.







	 	 	 	 	 
	 	ESCROW AGENT

 	 
	 	By:  	/s/ May Ng 	 
	 	 	Name:  	May Ng 	 
	 	 	Title:  	Vice President, Trust Officer 	 
	 








Tax Certification: Taxpayer ID#: 75-2216818



Customer is a (check one):




	 	 	 	 	 	 	 
	  X  Corporation
	 	___Municipality	 	___Partnership	 	___Non-profit or Charitable Org
	___Individual

	 	___REMIC
	 	___Trust
	 	___Other ___






Under the penalties of perjury, the undersigned certifies that:





	(1)	 	the entity is organized under the laws of the United States
	 
	(2)	 	the number shown above is its correct Taxpayer Identification Number (or it is waiting for a
number to be issued to it); and
	 
	(3)	 	it is not subject to backup withholding because: (a) it is exempt from backup withholding or
(b) it has not been notified by the Internal Revenue Service (IRS) that it is subject to
backup withholding as a result of failure to report all interest or dividends, or (c) the IRS
has notified it that it is no longer subject to backup withholding.





(If the entity is subject to backup withholding, cross out the words after the (3) above.)




Investors who do not supply a tax identification number will be subject to backup withholding in

accordance with IRS regulations.



Note: The IRS does not require your consent to any provision of this document other than the
certifications required to avoid backup withholding .








	 	 	 	 	 
	 	COMPANY 

 	 
	 	By:  	/s/ Brad Almond 	 
	 	 	Name:  	Brad Almond 	 
	 	 	Title:  	Chief Financial Officer 	 
	 







Signature Page to Escrow Agreement





 









 





Exhibit A




Form of Certificate

for Release of Escrow Funds




          Reference is made to that certain Escrow Agreement (the “Escrow Agreement”), dated as of
___, 2005, between Zix Corporation, a Texas corporation (the “Company”), and ___,
a ___(the “Escrow Agent”). Capitalized terms used herein and not otherwise defined
shall have the respective meanings specified in the Escrow Agreement. The undersigned, duly
authorized officer of the Company, hereby certifies to the Escrow Agent as follows:




     (1) The conditions set forth in [Section 2.2(a)/Section 2.2(b)] for the release of the Escrow
Funds to the [Company/Purchasers] have been satisfied; and



     (2) The Escrow Agent is hereby directed to release the Escrow Funds (including the Investment
Earnings) to the [Company/Purchasers] pursuant to [Section 2.2(a)/Section 2.2(b)] of the Escrow
Agreement.



          Please disburse the Escrow Funds to the [Company/Purchasers] in accordance with [Section
2.2(a)/Section 2.2(b)] of the Escrow Agreement to [___] by wire transfer of
immediately available funds to [wire instructions to be inserted].




          In WITNESS WHEREOF, the undersigned has executed and delivered this certificate on the ___
day of ___, ___.




	 	 	 	 	 
	 	ZIX CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





SCHEDULE A




PURCHASERS




	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Schottenfeld Qualified Associates, L.P. 


800 Third Avenue

10th Floor

New York, New York 10022

Tel: 212.300.2218

Fax: 212.838.5820

Attn: Richard Schottenfeld
	 	$	250,000.00	 
	 
	 	 	 	 
	Cranshire Capital, L.P.


666 Dundee Road, Suite 1901

Northbrook, IL 60062

Tel: 847.562.9030

Fax: 847.562.9031

Attn: Mitchell Kopin
	 	$	100,000.00	 
	 
	 	 	 	 
	Nite Capital LP


100 East Cook Avenue

Suite 201

Libertyville, IL 60048

Tel: 847.968.2655

Fax: 847.968.2648

Attn: Keith A. Goodman
	 	$	80,000.00	 
	 
	 	 	 	 
	Bluegrass Growth Fund, LP


122 E. 42nd Street

Suite 2606

New York, NY 10168

Tel: 212.682.2392

Fax: 212.202.9624

Attn: Brian Shatz
	 	$	100,000.00	 
	 
	 	 	 	 
	Alpha Capital AG


Pradefant 7

a490 Furstentus

Vaduz, Lichtenstein

Tel:

Fax:

Attn: Mr. Konrad Ackerman
	 	$	80,000.00	 







 









 





	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Gryphon Master Fund, L.P.


100 Crescent Court

Suite 490

Dallas, Texas 75201

Tel: 214.871.6752

Fax: 214.871.6711

Attn: Mr. Tim Stobaugh
	 	$	260,000.00	 
	 
	 	 	 	 
	GSSF Master Fund, LP


100 Crescent Court

Suite 490

Dallas, Texas 75201

Tel: 214.871.6752

Fax: 214.871.6711

Attn: Mr. Tim Stobaugh
	 	$	140,000.00	 
	 
	 	 	 	 
	Precept Capital Master Fund, G.P.


100 Crescent Court

Suite 850

Dallas, Texas 75201

Tel: 214.880.7444

Fax: 214.880.0082

Attn: John Bateman
	 	$	115,000.00	 
	 
	 	 	 	 
	JMG Capital Partners, LP


11601 Wilshire Blvd.

Suite 2180

Los Angeles, CA 90025

Tel: 310.601.2825

Fax: 310.61.2890

Attn: Mr. Jonathan Glaser
	 	$	200,000.00	 
	 
	 	 	 	 
	JMG Triton Offshore Fund, Ltd.


11601 Wilshire Blvd.

Suite 2180

Los Angeles, CA 90025

Tel: 310.601.2825

Fax: 310.61.2890

Attn: Mr. Jonathan Glaser
	 	$	200,000.00	 
	 
	 	 	 	 
	Heartland Value Plus Fund c/o Brown
Brothers Harriman & Co.


c/o Heartland Group, Inc.

789 N. Water St., Suite 500

Milwaukee, WI 53202

Tel: 414.977.8748

Fax: 414.347.0364

Attn: Nicole J. Best
	 	$	600,000.00	 







 









 





	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Diamond Opportunity Fund, LLC


500 Skokie Blvd.

Suite 310

Northbrook, IL 60062

Tel: 847.559.1002

Fax: 847.919.4410

Attn: Richard Marks
	 	$	100,000.00	 
	 
	 	 	 	 
	Andrew J. Hoff


731 N. Jackson Street

Suite 812

Milwaukee, WI 53202

Tel: 414.276.8576

Fax: 414.831.0122
	 	$	2,000,000.00	 
	 
	 	 	 	 
	George W. Haywood


3023 Q. Street, N.W.

Washington, D.C. 20007

Tel: 917.699.3522

Fax: 516.937.5050 (Attn: Gary Moomjian)
	 	$	800,000.00	 
	 
	 	 	 	 
	Superius Securities GP Profit
Sharing Plan


94 Grand Avenue

Englewood, NJ 07631

Tel: 201.568.8800

Fax: 201.568.9392

Attn: Mr. James Hudgins
	 	$	400,000.00	 
	 
	 	 	 	 
	Arthur R. Puglia


23499 Columbus Rd.

Columbus, NJ 08022

Tel: 609.298.1809

Fax: 609.291.0942
	 	$	22,000.00	 
	 
	 	 	 	 
	Manickam Ganesh


5 Eccleston Court

Montville, NJ 07045

Tel: 973.263.2345

Fax: 973.669.1687
	 	$	20,000.00	 
	 
	 	 	 	 
	William McCauley


492 Ackerson Avenue

Wyckoff, NJ 07481

Tel: 201.891.7798
	 	$	20,000.00	 







 









 





	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Alapatt P. Thomas, MD


9 Manor Drive

Warren, NJ 07059

Tel: 973.374.4187

Fax: 973.374.3473
	 	$	40,000.00	 
	 
	 	 	 	 
	Hersey Norris


8553 Caratoke Hwy, US Hwy 158

Harbinger, NC 27941

Tel: 252.491.2673

Fax: 252.991.8302
	 	$	22,600.00	 
	 
	 	 	 	 
	Howard Raphaelson


10 Chauncey Place

Woodbury, NY 11797

Tel: 212.268.3222

Fax: 212.268.3313
	 	$	37,400.00	 
	 
	 	 	 	 
	Ronald S. Carvalho


107 Osborne Place

Cranford, NJ 07016

Tel: 908.208.3060

Fax: 908.709.1886
	 	$	20,000.00	 
	 
	 	 	 	 
	William R. Leggio


2 Charlton Street

Apt. 11K

New York, NY 10014

Tel: 212.966.4443

Fax: 212.431.9369
	 	$	30,000.00	 
	 
	 	 	 	 
	Capra Global Managed Assets, Ltd.


c/o Walkers SPV Limited

P.O. Box 908GT, Walker House

Mary Street, Georgetown

Grand Cayman, Cayman Islands

Tel: 914.925.7750

Fax: 914.925.8856

Attn: Mr. John Briggs
	 	$	139,600.00	 
	 
	 	 	 	 
	CGMA Special Accounts, LLC


c/o Walkers SPV Limited

P.O. Box 908GT, Walker House

Mary Street, Georgetown

Grand Cayman, Cayman Islands

Tel: 914.925.7750

Fax: 914.925.8856

Attn: Mr. John Briggs
	 	$	60,400.00	 







 









 





	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Antonio R. Sanchez, Jr.


1920 Sandman Street

Laredo, Texas 78041

Tel: 956.722.8092

Fax: 956.722.1017
	 	$	200,000.00	 
	 
	 	 	 	 
	Con Egan


225 East 70th

Penthouse B

New York, NY 10021

Tel: 212.317.4815

Fax: 212.317.4819
	 	$	200,000.00	 
	 
	 	 	 	 
	Conor O’Driscoll


355 Locust Avenue

Rye, NY 10580

Tel: 916.967.8726

Fax: 212.317.4819
	 	$	150,000.00	 
	 
	 	 	 	 
	Fulvio Dobrich


c/o Galileo Asset Management

570 Lexington Avenue

24th Floor

New York, NY 10022

Tel: 212.812.7661

Fax: 212.812.7666
	 	$	120,000.00	 
	 
	 	 	 	 
	John M. Craig


46 Cheese Spring Road

Wilton, CT 06897

Tel: 203.761.9846

Fax: 203.761.9846

(phone prior to fax)
	 	$	100,000.00	 
	 
	 	 	 	 
	Anthony J. Pannella


Wilentz, Goldman & Spitzer PA

90 Woodbridge Center Drive

Woodbridge, NJ 07095

Tel: 732.855.6460

Fax: 732.726.6528
	 	$	60,000.00	 
	 
	 	 	 	 
	Stephen D. Baksa


2 Woods Lane

Chatham, NJ 07928

Tel: 973.635.4710
	 	$	60,000.00	 







 









 





	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Antonio R. Sanchez, III


1111 Bagby

Suite 1600

Houston, Texas 77002

Tel: 713.783.8000

Fax: 713.783.0915
	 	$	40,000.22	 
	 
	 	 	 	 
	Robert P. Janke and Debbie Hansman


121 Highland Blvd.

Bozeman, MT 59715

Tel: 406.586.7537

Attn: Mr. Robert Janke
	 	$	40,000.00	 
	 
	 	 	 	 
	Richard D. Spurr


2711 North Haskell

Suite 2200, LB 36

Dallas, Texas 75204

Tel: 214.370.2031

Fax: 214.370.2295
	 	$	20,003.10	 
	 
	 	 	 	 
	Bradley Christian Almond


1541 El Campo

Dallas, Texas 75218

Tel: 214.370.2097
	 	$	4,000.62	 
	 
	 	 	 	 
	Charles N. Kahn, III


4545 Glebe Road

Arlington, VA 22207

Tel: 202.624.1534

Fax: 202.737.6832
	 	$	4,000.62	 
	 
	 	 	 	 
	Anthony V. Milone


1 Hillview Court

Armonk, NY 10504


or


c/o HAN

1305 Maroneck Avenue

White Plains, NY 10605


Tel: 914.328.3300 x19

Fax: 914.328.3380
	 	$	100,000.00	 







 









 





	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Sapphire Capital Partners, L.P.


527 Madison Avenue

7th Floor

New York, NY 10013

Tel: 212.419.3948

Fax: 212.419.3952

Attn: Mr. Matthew Buton
	 	$	50,000.00	 
	 
	 	 	 	 
	Reuben Taub


607 West End Avenue

Apartment 4A

New York, NY 10024

Tel: 917.312.8099

Fax: 212.496.6307
	 	$	80,000.00	 
	 
	 	 	 	 
	C.E. Unterberg, Towbin Capital
Partners I, L.P.


c/o C.E. Unterberg, Towbin

350 Madison Avenue

New York, NY 10017

Tel: 212.389.8055

Fax: 212.389.8455

Attn: Andrew Arno
	 	$	400,000.00	 
	 
	 	 	 	 
	SRB Greenway Capital, L.P.


300 Crescent Court

Suite 1111

Dallas, Texas 75201

Tel: 214.756.6073

Fax: 214.756.6079

Attn: Joe Worsham
	 	$	23,920.00	 
	 
	 	 	 	 
	SRB Greenway Capital (QP), L.P.


300 Crescent Court

Suite 1111

Dallas, Texas 75201

Tel: 214.756.6073

Fax: 214.756.6079

Attn: Joe Worsham
	 	$	162,680.00	 
	 
	 	 	 	 
	SRB Greenway Offshore Operating Fund, L.P.


300 Crescent Court

Suite 1111

Dallas, Texas 75201

Tel: 214.756.6073

Fax: 214.756.6079

Attn: Joe Worsham
	 	$	13,400.00	 







 









 





	 	 	 	 	 
	Name and Address	 	Excess Funds	 
	Shea Ventures, LLC


655 Brea Canyon Road

Walnut, CA 91789

Tel: 909.594.9500

Fax: 909.869.0840

Attn: Mr. Edmund H. Shea, Jr.
	 	$	200,000.00	 
	 
	 	 	 	 
	Amulet Limited


c/o Dundee Leeds Management Services (Cayman) Ltd.

28N. Church Street, Waterfront Centre, George Town, 

Grand Cayman,

Cayman Islands, British West Indies


with copies to:


c/o Amaranth Advisors L.L.C.

One American Lane

Greenwich, CT 06831

Tel: 203.422.3340

Fax: 203.422.3540

Attn: General Counsel
	 	$	2,250,000.00	 
	 
	 	 	 	 
	Omicron Master Trust


c/o Omicron Capital, L.P.

650 Fifth Avenue

24th Floor

New York, NY 10019

Tel: 212.258.2323

Fax: 212.258.2315

Attn: Brian Daly
	 	$	400,000.00	 
	 
	 	 	 	 
	Total:
	 	$	10,515,004.56	 








 










 





Schedule B




Eligible Investments





	1.	 	Direct obligations of, or obligations the principal and interest on which is unconditionally
guaranteed by, the United States, maturing not more than 90 days after the acquisition
thereof.
	 
	2.	 	Trust funds, trust accounts, interest-bearing demand or time deposits (including certificates
of deposit) in a federally insured commercial bank incorporated under the laws of the United
States or any State thereof so long as the commercial paper or other short-term debt
obligations of such commercial bank have a short-term credit rating of at least A-1 by
Standard & Poor’s Corporation or P-1 by Moody’s Investors Services, Inc., maturing not more
than 90 days after the acquisition thereof.





 









 





Schedule C




Telephone Number(s) for Call-Backs and

Person(s) Designated to Confirm Funds Transfer Instructions




Company:




	 	 	 
	Name	 	Telephone Number
	1. Bradley C. Almond, Chief Financial Officer

	 	214-370-2000
	2. Ronald A. Woessner, General Counsel

	 	214-370-2000