Document:

exv4w2

 

Exhibit 4.2

FORM OF WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT COVERING
SUCH SECURITIES IS EFFECTIVE UNDER THE SECURITIES ACT OR (II) THE TRANSACTION IS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT AND, IF THE COMPANY REQUESTS, AN OPINION SATISFACTORY TO THE
COMPANY TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.

ZIX CORPORATION

WARRANT

	 	 	 
	Warrant
No. 2005-[   ]

	 	Dated: August 9, 2005

     Zix Corporation, a Texas Corporation (the “Company”), hereby certifies that, for value
received, [                    ] or its registered assigns (including permitted transferees, the
“Holder”), is entitled to purchase from the Company up to a total of [          ] shares (as adjusted from
time to time as provided in Section 9) of Common Stock (as defined below) (each such share,
a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $3.04
per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any
time and from time to time from and after the six-month anniversary of the Original Issue Date
through and including August 9, 2010 (the “Expiration Date”), and subject to the following terms
and conditions. This Warrant is one of a series of similar warrants (the “Warrants”) issued
pursuant to that certain Securities Purchase Agreement, dated as of the Original Issue Date, by and
among the Company, the Holder and certain other purchasers listed on Schedule A thereto
(the “Purchase Agreement”), providing for the issuance and sale of Common Stock and Warrants by the
Company to the Holder and such other investors.

     1. Definitions. The capitalized terms used herein and not otherwise defined shall
have the meanings set forth below:

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified Person. For purposes
of this definition, “control” as used with respect to any person or entity means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or otherwise.

     “Common Stock” means the Common Stock of the Company, par value $.01 per share, as constituted
on the Original Issue Date.

     “Company Offer” means any tender offer (including exchange offer), as amended

 

 

from time to time, made by the Company or any of its subsidiaries for the purchase (including
the acquisition pursuant to an exchange offer) of all or any portion of the outstanding shares of
Common Stock, except as permitted pursuant to Rule 10b-18 promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”).

     “Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange or
Nasdaq.

     “Market Price” means, as to any security, (i) if the principal trading market for such
security is an exchange, the average of the last reported sale prices per share for the last five
previous Trading Days in which a sale was reported, as officially reported on any consolidated
tape, (ii) if clause (i) is not applicable, the average of the closing bid price per share for the
last five previous Trading Days as set forth by Nasdaq or on the OTC Bulletin Board or (iii) if
clauses (i) and (ii) are not applicable, the average of the closing bid price per share for the
last five previous Trading Days as set forth in the National Quotation Bureau sheet listing for
such security. Notwithstanding the foregoing, if there is no reported sales price or closing bid
price, as the case may be, on any of the ten Trading Days preceding the event requiring a
determination of Market Price hereunder, then the Market Price shall be determined in good faith by
resolution of the Board of Directors of the Company, based on the best information available to it.

     “Nasdaq” means the Nasdaq SmallCap Market or Nasdaq National Market.

     “Original Issue Date” means August 9, 2005.

     “Other Securities” refers to any capital stock (other than Common Stock) and other securities
of the Company or any other Person which the Holder of this Warrant at any time shall be entitled
to receive, or shall have received, upon the exercise of this Warrant, in lieu of or in addition to
Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to Section 9 hereof or
otherwise.

     “Person” means any individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

     “Registration Statement” shall have the meaning set forth in the Purchase Agreement.

     “Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on
any Eligible Market or (b) if the Common Stock is not then quoted and traded on any Eligible
Market, then a day on which trading occurs on Nasdaq (or any successor thereto).

     “Transfer Agent” shall mean Computershare Investor Services, LLC or such other Person as the
Company may appoint from time to time.

     “Warrant Shares” shall initially mean shares of Common Stock and, in addition, may include
Other Securities and Distributed Property (as defined in Section 9(d)) issued or issuable
from time to time upon exercise of this Warrant.

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     2. Registration of Warrant. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.

     3. Registration of Transfers. The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached hereto as Appendix A duly completed and signed, to the Company at its
address specified herein. Upon any such registration and transfer, a new warrant in substantially
the form of a Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.
Each New Warrant evidencing the Warrant so transferred shall bear the appropriate restrictive
legend set forth in Section 4(k)(ii) of the Purchase Agreement. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the
rights and obligations of a holder of a Warrant, and such transferee shall be subject to the terms
and conditions of the Purchase Agreement, including, without limitation, the restrictions on
transfer set forth in Section 4(j) of the Purchase Agreement.

     4. Exercise and Duration of Warrant.

          (a) This Warrant shall be exercisable by the registered Holder at any time and from time to
time on and after the six-month anniversary of the Original Issue Date through and including the
Expiration Date. At 5:00 P.M., Dallas, Texas time on the Expiration Date, the portion of this
Warrant not exercised prior thereto shall be and become void and of no value, regardless of whether
this Warrant shall be returned to the Company.

          (b) A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in
the form attached hereto as Appendix B (the “Exercise Notice”), appropriately completed and
duly signed and (ii) payment of the Exercise Price for the number of Warrant Shares as to which
this Warrant is being exercised (as set forth in Section 4(c) below), and the date such
items are received by the Company is an “Exercise Date.” Execution and delivery of the Exercise
Notice shall have the same effect as cancellation of the original Warrant and issuance of a New
Warrant evidencing the right to purchase the remaining number of Warrant Shares, if any.

          (c) The Holder shall pay the Exercise Price (i) in cash, by certified bank check payable to
the order of the Company or by wire transfer of immediately available funds in accordance with the
Company’s instructions or (ii) if at any time on or after the six-month anniversary of the Original
Issue Date, (x) there is no effective Registration Statement registering the resale of the Warrant
Shares by the Holder and (y) the Market Price exceeds the Exercise Price, by means of a “cashless
exercise”, by presenting and surrendering to the Company this Warrant, in which event the Company
shall issue to the Holder the number of Warrant Shares determined as follows:

	 	 	 	 	 	 	 
	 

	 	X
	 	=
	 	Y [(A-B)/A]

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	 	 	where:
	 
	 	 	 	 	 	 
	 

	 	X
	 	=
	 	the number of Warrant Shares to be issued to the Holder upon
	 

	 	 	 	 	 	such cashless exercise;
	 
	 	 	 	 	 	 
	 

	 	Y
	 	=
	 	the number of Warrant Shares with respect to which this
	 

	 	 	 	 	 	Warrant is being exercised;
	 
	 	 	 	 	 	 
	 

	 	A
	 	=
	 	the Market Price on the Exercise Date; and
	 
	 	 	 	 	 	 
	 

	 	B
	 	=
	 	the Exercise Price.

          (d) If an exercise of this Warrant is to be made in connection with a registered public
offering or sale of the Company, such exercise may, at the election of the Holder, be conditioned
on the consummation of the public offering or sale of the Company, in which case such exercise
shall not be deemed effective until the consummation of such transaction.

     5. Delivery of Warrant Shares.

          (a) Upon exercise of this Warrant, the Company shall promptly, but in no event later than the
third (3rd) Trading Day following such exercise, issue or cause to be issued and deliver or cause
to be delivered to the Holder, in such name or names as the Holder may designate, a certificate for
the Warrant Shares issuable upon such exercise bearing (only if such legend is required by
applicable law) the restrictive legend set forth in Section 4(k)(i) of the Purchase
Agreement. The Holder, or any Person so designated by the Holder to receive the Warrant Shares,
shall be deemed to have become holder of record of such Warrant Shares as of the Exercise Date.

          (b) This Warrant is exercisable, either in its entirety or, from time to time, for a portion
of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial
exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares.

     6. Charges, Taxes and Expenses.

          (a) Issuance and delivery of certificates for shares of Common Stock upon exercise of this
Warrant shall be made without charge to the Holder for any issue or transfer tax, transfer agent
fee or other incidental tax or expense in respect of the issuance of such certificates, all of
which taxes and expenses shall be paid by the Company; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer involved in the
registration of any certificates for Warrant Shares or Warrant in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may arise as a result of
holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

          (b) Notwithstanding any other provision of this Warrant, for income tax purposes, the Holder
and any assignee or transferee thereof shall agree that the Company and the Transfer Agent shall be
permitted to withhold from any amounts payable to the Holder or such

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assignee or transferee any taxes required by law to be withheld from such amounts. Unless
exempt from the obligation to do so, the Holder and each assignee or transferee thereof shall
execute and deliver to the Company or the Transfer Agent, as applicable, properly completed Form
W-8 or W-9, indicating that the Holder or such assignee or transferee is not subject to back-up
withholding for United Stated federal income tax purposes. If such form is not delivered pursuant
to the preceding sentence, the Holder, assignee or transferee, as the case may be, shall have the
burden of proving to the Company’s reasonable satisfaction that it is exempt from such requirement.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and in substitution for this Warrant, a New Warrant, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction
and customary and reasonable indemnity, if requested.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable
and deliverable upon the exercise of this entire Warrant, free from all taxes, liens, claims,
encumbrances with respect to the issuance of such Warrant Shares and will not be subject to any
pre-emptive rights or similar rights (taking into account the adjustments and restrictions of
Section 9 hereof). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued, fully paid and nonassessable. The
Company will take all such action as may be necessary to assure that such shares of Common Stock
may be issued as provided herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which the Common Stock
may be listed or quoted, as the case may be.

     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 9.

          (a) Dividends. If the Company, at any time while this Warrant is outstanding, pays a
dividend on its Common Stock payable in additional shares of Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common Stock, then in each
such case the Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be
the number of shares of Common Stock outstanding immediately prior to the opening of business on
the day after the record date for the determination of stockholders entitled to receive such
dividend or distribution and (B) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event. Any adjustment made pursuant to this Section
9(a) shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution; provided, however, that if such
record date shall have been fixed and such dividend is not fully paid or if such distribution is
not fully made on the date fixed therefor, any such adjustment shall become effective as of the
time of actual payment of such dividends or distribution.

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          (b) Stock Splits. If the Company, at any time while this Warrant is outstanding, (i)
subdivides outstanding shares of Common Stock into a larger number of shares, or (ii) combines
outstanding shares of Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and (B) the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such event. Any
adjustment pursuant to this Section 9(b) shall become effective immediately after the
effective date of such subdivision or combination.

          (c) Reclassifications. A reclassification of the Common Stock (other than any such
reclassification in connection with a merger or consolidation to which Section 9(e)
applies) into shares of any other class of stock shall be deemed:

                    (i) a distribution by the Company to the holders of its Common Stock of such shares of such
other class of stock for the purposes and within the meaning of this Section 9; and

                    (ii) if the outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as part of such reclassification, such change shall be deemed a
subdivision or combination, as the case may be, of the outstanding shares of Common Stock for the
purposes and within the meaning of Section 9(b).

          (d) Other Distributions. If the Company, at any time while this Warrant is outstanding,
distributes to holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other
than a distribution of Common Stock covered by Section 9(a)), (iii) rights or warrants to
subscribe for or purchase any security or (iv) any other asset (in each case, “Distributed
Property”), then in each such case the Exercise Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such distribution (and the
Exercise Price thereafter applicable) shall be adjusted (effective on and after such record date)
to equal the product of such Exercise Price multiplied by a fraction, (A) the numerator of which
shall be Market Price on such record date less the then fair market value per share of the
Distributed Property distributed in respect of one outstanding share of Common Stock, which, if the
Distributed Property is other than cash or marketable securities, shall be as determined in good
faith by the Board of Directors of the Company, and (B) the denominator of which shall be the
Market Price on such record date.

          (e) Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another Person, (ii) the
Company effects any sale of all or substantially all of its assets in one or a series of related
transactions or (iii) there shall occur any merger of another Person into the Company whereby the
Common Stock is cancelled, converted or reclassified into or exchanged for other securities, cash
or property (in any such case, a “Fundamental Transaction”), then, as a condition to the
consummation of such Fundamental Transaction, the Company shall (or, in the case of any Fundamental
Transaction in which the Company is not the surviving entity, the Company shall take all reasonable
steps to cause such other Person to) execute and deliver to

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each Holder of Warrants a written instrument providing that:

                    (x) so long as any Warrant remains outstanding on such terms and subject to such conditions as
shall be as nearly equivalent as may be practicable to the provisions set forth in this Warrant,
each Warrant, upon the exercise thereof at any time on or after the consummation of such
Fundamental Transaction, shall be exercisable into, in lieu of Common Stock issuable upon such
exercise prior to such consummation, the securities or other property (the “Substituted Property”)
that would have been received in connection with such Fundamental Transaction by a holder of the
number of shares of Common Stock into which such Warrant was exercisable immediately prior to the
consummation of such Fundamental Transaction, assuming such holder of Common Stock:

                              (A) is not a Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the case may be (a
“Constituent Person”), or an Affiliate of a Constituent Person; and

                              (B) failed to exercise such Holder’s rights of election, if any, as to the kind or amount of
securities, cash and other property receivable in connection with such Fundamental Transaction
(provided, however, that if the kind or amount of securities, cash or other property receivable in
connection with such Fundamental Transaction is not the same for each share of Common Stock held
immediately prior to such Fundamental Transaction by a Person other than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have been exercised (a
“Non-Electing Share”), then, for the purposes of this Section 9(e), the kind and amount of
securities, cash and other property receivable in connection with such Fundamental Transaction by
each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares); and

                    (y) the rights and obligations of the Company (or, in the event of a transaction in which the
Company is not the surviving Person, such other Person) and the Holders in respect of Substituted
Property shall be as nearly equivalent as may be practicable to the rights and obligations of the
Company and Holders in respect of Common Stock hereunder.

     Such written instrument shall provide for adjustments which, for events subsequent to the
effective date of such written instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in Section 9. The above provisions of this Section
9(e) shall similarly apply to successive Fundamental Transactions.

          (f) Adjustment of Number of Warrant Shares. Simultaneously with any adjustment to the
Exercise Price pursuant to paragraphs (a) through (d) of this Section 9, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for
the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise
Price payable for the Warrant Shares immediately prior to such adjustment.

          (g) Calculations. All calculations under this Section 9 shall be made to the

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nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.

          (h) Adjustments. Notwithstanding any provision of this Section 9, no adjustment of
the Exercise Price shall be required if such adjustment is less than $0.05; provided, however, that
any adjustments which by reason of this Section 9(h) are not required to be made shall be
carried forward and taken into account for purposes of any subsequent adjustment.

          (i) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company will promptly deliver to the Holder a certificate executed by the
Company’s Chief Financial Officer setting forth, in reasonable detail, the event requiring such
adjustment and the method by which such adjustment was calculated, the adjusted Exercise Price and
the adjusted number or type of Warrant Shares or other securities issuable upon exercise of this
Warrant (as applicable). The Company will retain at its office copies of all such certificates and
cause the same to be available for inspection at said office during normal business hours by the
Holder or any prospective purchaser of the Warrant designated by the Holder.

          (j) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including,
without limitation, any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any subsidiary of the Company, (ii) authorizes, approves, enters into any
agreement contemplating, or solicits stockholder approval for, any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then
the Company shall deliver to the Holder a notice describing the material terms and conditions of
such transaction at least 15 calendar days prior to the applicable record or effective date on
which a Person would need to hold Common Stock in order to participate in or vote with respect to
such transaction and the Company will take all steps reasonably necessary in order to ensure that
the Holder is given the practical opportunity to exercise this Warrant prior to such time;
provided, however, that the failure to deliver such notice or any defect therein shall not affect
the validity of the corporate action required to be described in such notice.

     10. Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant
Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant,
the Company shall make a cash payment to the Holder equal to (a) such fraction multiplied by (b)
the Market Price on the Exercise Date of one full Warrant Share.

     11. Restricted Securities. The Holder represents and warrants that it (i) understands
that the Warrant and the Warrant Shares have not been registered under the Securities Act and (ii)
understands the restrictions set forth on the legend printed on the face of this Warrant.

     12. No Rights as Shareholder. Except as otherwise specifically provided herein, prior
to the exercise of this Warrant, the Holder shall not be entitled, as such, to any rights of a
shareholder of the Company, including, without limitation, the right to vote or to consent to any
action of the shareholders of the Company, to receive dividends or other distributions, to exercise

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any preemptive right or to receive any notice of meetings of shareholders of the Company or of
any proceedings of the Company.

     13. Remedies. The Company stipulates that the remedies at law of the Holder of this
Warrant in the event of any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be adequate, and that such
terms may be specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

     14. Notices. Any and all notices or other communications or deliveries hereunder
(including without limitation any Exercise Notice) shall be in writing and shall be mailed by
certified mail, return receipt requested, or by a nationally recognized courier service or
delivered (in person or by facsimile), against receipt to the party to whom such notice or other
communication is to be given. The address for such notices or communications shall be as set forth
in the Purchase Agreement entered into by the Holder and the Company. Any notice or other
communication given by means permitted by this Section 14 shall be deemed given at the time
of receipt thereof.

     15. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any Person into which
any new warrant agent may be merged, any Person resulting from any consolidation to which any new
warrant agent shall be a party or any Person to which any new warrant agent transfers substantially
all of its corporate trust or stockholders services business shall be a successor warrant agent
under this Warrant without any further act. Any such successor warrant agent shall promptly cause
notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to
the Holder at the Holder’s last address as shown on the Warrant Register.

     16. Miscellaneous. (a) The Company shall not assign this Warrant or any of its
rights or obligations hereunder, except (i) to a successor in interest in the event of a
Fundamental Transaction or (ii) upon the prior written consent of the Holder. This Warrant may be
assigned by the Holder, provided that such transfer is in compliance with the terms and conditions
of this Warrant and Section 4(j) of the Purchase Agreement and permitted by federal and
state securities laws. This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in
this Warrant shall be construed to give to any Person other than the Company and the Holder any
legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be
amended only in writing signed by the Company and the Holder and their successors and assigns.

          (b) The Company will not, by amendment of its governing documents 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 action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any Warrant Shares above the

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amount payable therefor upon exercise thereof, (ii) will take all such action as may be
reasonably necessary or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares on the exercise of this Warrant, free from all taxes, liens,
claims and encumbrances and (iii) will not close its stockholder books or records in any manner
which interferes with the timely exercise of this Warrant.

          (c) This Warrant shall be governed by and construed and enforced in accordance with the laws
of the State of New York without regard to conflicts of laws principles thereof. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and Federal courts sitting in the
City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of the Purchase Agreement), and hereby irrevocably waives, and agrees
not to assert any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. THE PARTIES HEREBY WAIVE ALL RIGHTS TO A
TRIAL BY JURY.

          (d) Neither party shall be deemed in default of any provision of this Warrant, to the extent
that performance of its obligations or attempts to cure a breach hereof are delayed or prevented by
any event reasonably beyond the control of such party, including, without limitation, war,
hostilities, acts of terrorism, revolution, riot, civil commotion, national emergency, strike,
lockout, unavailability of supplies, epidemic, fire, flood, earthquake, force of nature, explosion,
embargo, or any other Act of God, or any law, proclamation, regulation, ordinance, or other act or
order of any court, government or governmental agency, provided that such party gives the other
party written notice thereof promptly upon discovery thereof and uses reasonable efforts to cure or
mitigate the delay or failure to perform.

          (e) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

          (f) In case any one or more of the provisions of this Warrant shall be deemed invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 
	 	ZIX CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 
	Acknowledged and agreed:

	 	 
	 
	 	 
	 

	 	 
	Holder

	 	 

	 	 	 
	By:
	 	 
	 

	 	 
	 

	 	Name:
	 

	 	Title:

Signature Page to Warrant

 

 

APPENDIX A

FORM OF ASSIGNMENT

(to be completed and signed only upon transfer of Warrant)

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                             the right represented by the within Warrant to purchase
                     shares of Common Stock of Zix Corporation to which the within Warrant relates and
appoints                                          attorney to transfer said right on the books of Zix Corporation
with full power of substitution in the premises.

	 	 	 	 	 	 	 	 	 
	Dated:

	 	 
	 	 
	 	 
	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature must conform in all respects to name of
	 	 	 	 	 	 	Holder as specified on face of the Warrant)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Address of Transferee:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	In the presence of:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

APPENDIX B

FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase

shares of Common Stock under the foregoing Warrant)

To: Zix Corporation

The undersigned is the Holder of Warrant No. 2005-___(the “Warrant”) issued by Zix Corporation, a
Texas Corporation (the “Company”). Capitalized terms used herein and not otherwise defined have
the respective meanings set forth in the Warrant.

	1.	 	The Warrant is currently exercisable to purchase a total of ___Warrant Shares.
	 
	2.	 	The undersigned Holder hereby exercises its right to purchase Warrant Shares pursuant to the
Warrant.
	 
	3.	 	The Holder intends that payment of the Exercise Price shall be made as (check one):

Cash Exercise___

Cashless Exercise___

	4.	 	If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $                     to the
Company in accordance with the terms of the Warrant.
	 
	5.	 	If the Holder has elected a Cashless Exercise, a certificate shall be issued to the Holder
for the number of shares equal to the whole number portion of the product of the calculation
set forth below, which is                     . The Company shall pay a cash adjustment in respect of
the fractional portion of the product of the calculation set forth below in an amount equal to
the product of the fractional portion of such product and the Market Price on the Exercise
Day, which product is                     .

X = Y[(A-B)/A]

X = the number of Warrant Shares to be issued to the Holder.

Number of Warrant Shares being exercised:                     (“Y”).

Market Price on the Exercise Day:                     (“A”).

Exercise Price:                    (“B”)

	6.	 	Pursuant to this exercise, the Company shall deliver to the Holder Warrant Shares in
accordance with the terms of the Warrant.

 

 

	7.	 	Following this exercise, the Warrant shall be exercisable to purchase a total of                      Warrant Shares.
	 
	8.	 	The Holder of this Warrant confirms the continuing validity of, and reaffirms as of the date
hereof, its representations and warranties set forth on Section 4 of the Purchase Agreement.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	Name of Holder:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(Print)	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature must conform in all respects to name of
	 	 	 	 	 	 	Holder as specified on the face of the Warrant)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

1

 

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

2

 

     (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.

3

 

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

4

 

of all related invoices and other statements, and the Company shall promptly restore any
amount deducted from the Escrow Funds.

          (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

5

 

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

6

 

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.

7

 

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.

8

 

     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

9

 

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

10

 

responsibility for such payment unless directed to do so by the appropriate authorized
party.

     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]

11

 

     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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}]]