Document:

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                                                                     EXHIBIT 4.3

                         REGISTRATION RIGHTS AGREEMENT

                                     BETWEEN

                          THE WILLIAMS COMPANIES, INC.,

                                   AS ISSUER,

                                       AND

                              LEHMAN BROTHERS INC.,

                              AS INITIAL PURCHASER

                            DATED AS OF MAY 28, 2003

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         REGISTRATION RIGHTS AGREEMENT dated as of May 28, 2003 between The
Williams Companies, Inc., a Delaware corporation (the "COMPANY"), and Lehman
Brothers Inc. (the "INITIAL PURCHASER") pursuant to the Purchase Agreement dated
May 20, 2003 (the "PURCHASE AGREEMENT"), between the Company and the Initial
Purchaser. In order to induce the Initial Purchaser to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement.

         The Company agrees with the Initial Purchaser, (i) for its benefit as
Initial Purchaser and (ii) for the benefit of the beneficial owners (including
the Initial Purchaser) from time to time of the Debentures (as defined herein)
and the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Debentures (each of the foregoing
a "HOLDER" and together the "HOLDERS"), as follows:

         SECTION 1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

         "AFFILIATE" means with respect to any specified person, an "affiliate,"
as defined in Rule 144, of such person.

         "AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning set forth in
Section 2(d) hereof.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.

         "CLOSING DATE" has the meaning assigned such term in the Purchase
Agreement.

         "COMMON STOCK" means the shares of common stock, $1.00 par value per
share, of the Company.

         "CONVERSION PRICE" has the meaning assigned such term in the Indenture.

         "DAMAGES ACCRUAL PERIOD" has the meaning set forth in Section 2(e)
hereof.

         "DAMAGES PAYMENT DATE" means each March 1, June 1, September 1 and
December 1, beginning September 1, 2003.

         "DEBENTURES" means the 5.50% Junior Subordinated Convertible Debentures
due 2033 of the Company to be purchased pursuant to the Purchase Agreement.

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         "DEFERRAL NOTICE" has the meaning set forth in Section 3(h) hereof.

         "DEFERRAL PERIOD" has the meaning set forth in Section 3(h) hereof.

         "EFFECTIVENESS DEADLINE DATE" has the meaning set forth in Section 2(a)
         hereof.

         "EFFECTIVENESS PERIOD" means the period commencing on the date hereof
and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.

         "EVENT" has the meaning set forth in Section 2(e) hereof.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

         "FILING DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.

         "HOLDER" has the meaning set forth in the second paragraph of this
Agreement.

         "INDENTURE" means the Indenture, dated as of May 28, 2003, between the
Company and JPMorgan Chase Bank, as trustee, pursuant to which the Debentures
are being issued.

         "INITIAL PURCHASER" means Lehman Brothers Inc.

         "INITIAL SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a) hereof.

         "ISSUE DATE" means the Closing Date.

         "LIQUIDATED DAMAGES AMOUNT" has the meaning set forth in Section 2(e)
hereof.

         "MATERIAL EVENT" has the meaning set forth in Section 3(h) hereof.

         "NOTICE AND QUESTIONNAIRE" means a written notice delivered to the
Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated May 20, 2003 relating to the Debentures.

         "NOTICE HOLDER" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.

         "PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof.

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         "PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 43OA promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

         "RECORD HOLDER" means with respect to any Damages Payment Date relating
to any Debentures or Underlying Common Stock as to which any Liquidated Damages
Amount has accrued, the registered holder of such Debenture or Underlying Common
Stock on the February 15, May 15, August 15 and November 15, as the case may be,
immediately preceding a Damages Payment Date.

         "REGISTRABLE SECURITIES" means the Debentures until such Debentures
have been converted into or exchanged for the Underlying Common Stock and, at
all times subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with the Registration Statement covering it, (ii) expiration of the
holding period that would be applicable thereto under Rule 144(k) or (iii) its
sale to the public pursuant to Rule 144 (or any similar provision then in force,
but not Rule 144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legend with respect to transfer restrictions required under the Indenture is
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be.

         "REGISTRATION STATEMENT" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

         "RESTRICTED SECURITIES" means "Restricted Securities" as defined in
Rule 144.

         "RULE 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

         "RULE 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

         "SEC" means the Securities and Exchange Commission.

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         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

         "SHELF REGISTRATION STATEMENT" has the meaning set forth in Section
2(a) hereof.

         "SPECIAL COUNSEL" means Davis Polk & Wardwell or one such other
successor counsel as shall be specified by the Holders of a majority of the
Registrable Securities, but which may, with the written consent of the Initial
Purchaser (which shall not be unreasonably withheld), be another nationally
recognized law firm experienced in securities law matters designated by the
Company, the reasonable fees and expenses of which will be paid by the Company
pursuant to Section 5 hereof. For purposes of determining the holders of a
majority of the Registrable Securities in this definition, Holders of Debentures
shall be deemed to be the Holders of the number of shares of Underlying Common
Stock into which such Debentures are or would be convertible as of the date the
consent is requested.

         "SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(b) hereof.

         "TIA" means the Trust Indenture Act of 1939, as amended.

         "TRUSTEE" means JPMorgan Chase Bank, the Trustee under the Indenture.

         "UNDERLYING COMMON STOCK" means the Common Stock into which the
Debentures are convertible or issued upon any such conversion.

         SECTION 2. Shelf Registration, (a) The Company shall prepare and file
or cause to be prepared and filed with the SEC, not later than the date (the
"FILING DEADLINE DATE") ninety (90) days after the Issue Date, a Registration
Statement for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 of the Securities Act (a "SHELF REGISTRATION STATEMENT") registering
the resale from time to time by Holders thereof of all of the Registrable
Securities (the "INITIAL SHELF REGISTRATION STATEMENT"). The Initial Shelf
Registration Statement shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders in accordance with the methods of distribution elected by the Holders
and set forth in the Initial Shelf Registration Statement. The Company shall use
its reasonable best efforts to cause the Initial Shelf Registration Statement to
be declared effective under the Securities Act by the date (the "EFFECTIVENESS
DEADLINE DATE") that is one hundred eighty (180) days after the Issue Date, and
to keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. At the time the Initial Shelf
Registration Statement is declared effective, each Holder that became a Notice
Holder on or prior to the date ten (10) Business Days prior to such time of
effectiveness shall be named as a selling securityholder in the Initial Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to

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deliver such Prospectus to purchasers of Registrable Securities in accordance
with applicable law. None of the Company's security holders (other than the
Holders of Registrable Securities) shall have the right to include any of the
Company's securities in the Shelf Registration Statement.

         (b)      If the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement ceases to be effective for any reason at any time
during the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "SUBSEQUENT SHELF REGISTRATION STATEMENT"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is reasonably practicable after such filing and
to keep such Registration Statement (or Subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

         (c)      The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as necessary to name a Notice Holder as a
selling securityholder pursuant to Section (d) below.

         (d)      Each Holder agrees that if such Holder wishes to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(d) and Section
3(h) and Section 4 of this Agreement. Following the date that the Initial Shelf
Registration Statement is declared effective, each Holder wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
ten (10) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as practicable after the date a Notice and Questionnaire is
delivered pursuant to Section 8(c), and in any event upon the later of (x)
fifteen (15) Business Days after such date or (y) fifteen (15) Business Days
after the expiration of any Deferral Period in effect when the Notice and
Questionnaire is delivered or put into effect within fifteen (15) Business Days
of such delivery date:

                  (i) if required by applicable law, file with the SEC a
         post-effective amendment to the Shelf Registration Statement or prepare
         and, if required by applicable law, file a supplement to the related
         Prospectus or a supplement or amendment to any document

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         incorporated therein by reference or file any other required document
         so that the Holder delivering such Notice and Questionnaire is named as
         a selling securityholder in the Shelf Registration Statement and the
         related Prospectus in such a manner as to permit such Holder to deliver
         such Prospectus to purchasers of the Registrable Securities in
         accordance with applicable law and, if the Company shall file a
         post-effective amendment to the Shelf Registration Statement, use its
         reasonable best efforts to cause such post-effective amendment to be
         declared effective under the Securities Act as promptly as is
         reasonably practicable, but in any event by the date (the "AMENDMENT
         EFFECTIVENESS DEADLINE DATE") that is forty-five (45) days after the
         date such post-effective amendment is required by this clause to be
         filed;

                  (ii) provide such Holder copies of any documents filed
         pursuant to Section 2(d)(i); and

                  (iii) notify such Holder as promptly as practicable after the
         effectiveness under the Securities Act of any post-effective amendment
         filed pursuant to Section 2(d)(i);

 provided, that if such Notice and Questionnaire is delivered during a Deferral
 Period, the Company shall so inform the Holder delivering such Notice and
 Questionnaire and shall, to the extent required, take the actions set forth in
 clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
 accordance with Section 3(h). Notwithstanding anything contained herein to the
 contrary, (i) the Company shall be under no obligation to name any Holder that
 is not a Notice Holder as a selling securityholder in any Registration
 Statement or related Prospectus and (ii) the Amendment Effectiveness Deadline
 Date shall be extended by up to ten (10) Business Days from the expiration of a
 Deferral Period (and the Company shall incur no obligation to pay Liquidated
 Damages during such extension) if such Deferral Period shall be in effect on
 the Amendment Effectiveness Deadline Date.

         (e)      The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if, other than as permitted
hereunder,

                  (i) the Initial Shelf Registration Statement has not been
         declared effective under the Securities Act on or prior to the
         Effectiveness Deadline Date,

                  (ii) the Company has failed to perform its obligations set
         forth in Section 2(d)(i) within the time period required therein,

                  (iii) any post-effective amendment to a Shelf Registration
         Statement filed pursuant to Section 2(d)(i) has not become effective
         under the Securities Act on or prior to the Amendment Effectiveness
         Deadline Date,

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                  (iv) the aggregate duration of Deferral Periods in any period
         exceeds the number of days permitted in respect of such period pursuant
         to Section 3(h) hereof, or

                  (v) the number of Deferral Periods in any period exceeds the
         number permitted in respect of such period pursuant to Section 3(h)
         hereof.

Each event described in any of the foregoing clauses (i) through (v) is
individually referred to herein as an "EVENT". For purposes of this Agreement,
each Event set forth above shall begin and end on the dates set forth in the
table below:

<TABLE>
<CAPTION>
 Type of
Event by               Beginning                      Ending
 Clause                  Date                          Date
 ------                  ----                          ----
<S>              <C>                          <C>
(i)              Effectiveness Deadline       the date the Initial Shelf
                 Date                         Registration Statement
                                              becomes effective under
                                              the Securities Act

(ii)            the date by which the         the date the Company
                Company is required to        performs its obligations set
                perform its obligations       forth in Section 2(d)(i)
                under Section 2(d)(i)

(iii)           the Amendment                 the date the applicable
                Effectiveness Deadline        post-effective amendment
                Date                          to a Shelf Registration
                                              Statement becomes
                                              effective under the
                                              Securities Act

(iv)            the date on which the         termination of the Deferral
                aggregate duration of         Period that caused the limit
                Deferral Periods in any       on the aggregate duration
                period exceeds the number     of Deferral Periods to be
                of days permitted by          exceeded
                Section 3(h)
</TABLE>

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<TABLE>
<CAPTION>
 Type of
Event by               Beginning                      Ending
 Clause                  Date                          Date
 ------                  ----                          ----
<S>             <C>                           <C>
(v)             the date of commencement      termination of the Deferral
                of a Deferral Period that     Period that caused the
                causes the number of          number of Deferral Periods
                Deferral Periods to exceed    to exceed the number
                the number permitted by       permitted by Section 3(h)
                Section 3(h)
</TABLE>

For purposes of this Agreement, Events shall begin on the dates set forth in the
table above and shall continue until the ending dates set forth in the table
above.

         Commencing on (and including) any date that an Event has begun and
ending on (but excluding) the next date on which there are no Events that have
occurred and are continuing (a "DAMAGES ACCRUAL PERIOD"), the Company shall pay,
as liquidated damages and not as a penalty, to Record Holders of Registrable
Securities an amount (the "LIQUIDATED DAMAGES AMOUNT") accruing, for each day in
the Damages Accrual Period, (i) in respect of any Debenture, at a rate per annum
equal to 0.5% of the aggregate principal amount of such Debenture and (ii) in
respect of each share of Underlying Common Stock at a rate per annum equal to
0.5% of the Conversion Price on such date, as the case may be; provided that in
the case of a Damages Accrual Period that is in effect solely as a result of an
Event of the type described in clause (ii) or (iii) of the preceding paragraph,
such Liquidated Damages Amount shall be paid only to the Holders (as set forth
in the succeeding paragraph) that have delivered Notices and Questionnaires that
caused the Company to incur the obligations set forth in Section 2(d) the
non-performance of which is the basis of such Event. In calculating the
Liquidated Damages Amount on any date on which no Debentures are outstanding,
the Conversion Price and the Liquidated Damages Amount payable with respect to
shares of Common Stock which are Registrable Securities shall be calculated as
if the Debentures were still outstanding. Notwithstanding the foregoing, no
Liquidated Damages Amount shall accrue as to any Registrable Security from and
after the earlier of (x) the date such security is no longer a Registrable
Security and (y) expiration of the Effectiveness Period. The rate of accrual of
the Liquidated Damages Amount with respect to any period shall not exceed the
rate provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events.

         The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the Damages Accrual Period (and on the Damages Payment Date next
succeeding the end of the Damages Accrual Period if the Damage Accrual Period
does not end on a Damages Payment Date) to the Record Holders of the Registrable
Securities entitled thereto; provided that any Liquidated Damages Amount accrued
with respect to any Debenture or portion thereof redeemed

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by the Company on a redemption date or converted into Underlying Common Stock on
a conversion date prior to the Damages Payment Date, shall, in any such event,
be paid instead to the Holder who submitted such Debenture or portion thereof
for redemption or conversion on the applicable redemption date or conversion
date, as the case may be, on such date (or promptly following the conversion
date, in the case of conversion); provided, further, that, in the case of an
Event of the type described in clause (ii) or (iii) of the first paragraph of
this Section 2(e), such Liquidated Damages Amount shall be paid only to the
Holders entitled thereto pursuant to such first paragraph by check mailed to the
address set forth in the Notice and Questionnaire delivered by such Holder. The
Trustee shall be entitled, on behalf of registered holders of Debentures or
Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of such Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude any Holder from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.

         All of the Company's obligations set forth in this Section 2(e) that
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

         The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

         SECTION 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, during the Effectiveness
Period, the Company shall:

                  (a) Prepare and file with the SEC a Registration Statement or
         Registration Statements on Form S-3 or another appropriate form under
         the Securities Act available for the sale of the Registrable Securities
         by the Holders thereof in accordance with the intended method or
         methods of distribution thereof, and use its reasonable best efforts to
         cause each such Registration Statement to become effective and remain
         effective as provided herein; provided that before filing any
         Registration Statement or Prospectus or any amendments or supplements
         thereto with the SEC, furnish to the Initial Purchaser and the Special
         Counsel of such offering, if any, copies of all such documents proposed
         to be filed at least three (3) Business Days prior to the filing of
         such Registration Statement or amendment thereto or Prospectus or
         supplement thereto.

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                  (b) Subject to Section 3(h), prepare and file with the SEC
         such amendments and post-effective amendments to each Registration
         Statement as may be necessary to keep such Registration Statement
         continuously effective for the applicable period specified in Section
         2(a); cause the related Prospectus to be supplemented by any required
         prospectus supplement, and as so supplemented to be filed pursuant to
         Rule 424 (or any similar provisions then in force) under the Securities
         Act; and use its reasonable best efforts to comply with the provisions
         of the Securities Act applicable to it with respect to the disposition
         of all securities covered by such Registration Statement during the
         Effectiveness Period in accordance with the intended methods of
         disposition by the sellers thereof set forth in such Registration
         Statement as so amended or such Prospectus as so supplemented.

                  (c) As promptly as practicable give notice to the Notice
         Holders, the Initial Purchaser and the Special Counsel, (i) when any
         Prospectus, prospectus supplement, Registration Statement or
         post-effective amendment to a Registration Statement has been filed
         with the SEC and, with respect to a Registration Statement or any
         post-effective amendment, when the same has been declared effective,
         (ii) of any request, following the effectiveness of the Initial Shelf
         Registration Statement under the Securities Act, by the SEC or any
         other federal or state governmental authority for amendments or
         supplements to any Registration Statement or related Prospectus or for
         additional information, (iii) of the issuance by the SEC or any other
         federal or state governmental authority of any stop order suspending
         the effectiveness of any Registration Statement or the initiation or
         threatening of any proceedings for that purpose, (iv) of the receipt by
         the Company of any notification with respect to the suspension of the
         qualification or exemption from qualification of any of the Registrable
         Securities for sale in any jurisdiction or the initiation or
         threatening of any proceeding for such purpose, (v) of the occurrence
         of, but not the nature of or details concerning, a Material Event and
         (vi) of the determination by the Company that a post-effective
         amendment to a Registration Statement will be filed with the SEC, which
         notice may, at the discretion of the Company (or as required pursuant
         to Section 3(h)), state that it constitutes a Deferral Notice, in which
         event the provisions of Section 3(h) shall apply.

                  (d) Use its reasonable best efforts to obtain the withdrawal
         of any order suspending the effectiveness of a Registration Statement
         or the lifting of any suspension of the qualification (or exemption
         from qualification) of any of the Registrable Securities for sale in
         any jurisdiction in which they have been qualified for sale, in either
         case at the earliest possible moment, and provide immediate notice to
         each Notice Holder and the Initial Purchaser of the withdrawal of any
         such order.

                  (e) As promptly as practicable furnish to each Notice Holder,
         the Special Counsel and the Initial Purchaser, upon request and
         without charge, at least one (1) conformed copy of the Registration
         Statement and any amendment thereto, including

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         exhibits and all documents incorporated or deemed to be incorporated
         therein by reference.

                  (f) During the Effectiveness Period, deliver to each Notice
         Holder, the Special Counsel, if any, and the Initial Purchaser, in
         connection with any sale of Registrable Securities pursuant to a
         Registration Statement, without charge, as many copies of the
         Prospectus or Prospectuses relating to such Registrable Securities
         (including each preliminary prospectus) and any amendment or supplement
         thereto as such Notice Holder may reasonably request; and the Company
         hereby consents (except during such periods that a Deferral Notice is
         outstanding and has not been revoked) to the use of such Prospectus or
         each amendment or supplement thereto by each Notice Holder in
         connection with any offering and sale of the Registrable Securities
         covered by such Prospectus or any amendment or supplement thereto in
         the manner set forth therein.

                  (g) Prior to any public offering of the Registrable Securities
         pursuant to a Registration Statement, use its reasonable best efforts
         to register or qualify or cooperate with the Notice Holders and the
         Special Counsel in connection with the registration or qualification
         (or exemption from such registration or qualification) of such
         Registrable Securities for offer and sale under the securities or Blue
         Sky laws of such jurisdictions within the United States as any Notice
         Holder reasonably requests in writing (which request may be included in
         the Notice and Questionnaire); prior to any public offering of the
         Registrable Securities pursuant to the Shelf Registration Statement,
         use its reasonable best efforts to keep each such registration or
         qualification (or exemption therefrom) effective during the
         Effectiveness Period in connection with such Notice Holder's offer and
         sale of Registrable Securities pursuant to such registration or
         qualification (or exemption therefrom) and do any and all other acts or
         things reasonably necessary or advisable to enable the disposition in
         such jurisdictions of such Registrable Securities in the manner set
         forth in the relevant Registration Statement and the related
         Prospectus; provided that the Company will not be required to (i)
         qualify as a foreign corporation or as a dealer in securities in any
         jurisdiction where it would not otherwise be required to qualify but
         for this Agreement or (ii) take any action that would subject it to
         general service of process in suits or to taxation in any such
         jurisdiction where it is not then so subject.

                  (h) Upon (A) the issuance by the SEC of a stop order
         suspending the effectiveness of the Shelf Registration Statement or the
         initiation of proceedings with respect to the Shelf Registration
         Statement under Section 8(d) or 8(e) of the Securities Act, (B) the
         occurrence of any event or the existence of any fact (a "MATERIAL
         Event") as a result of which any Registration Statement shall contain
         any untrue statement of a material fact or omit to state any material
         fact required to be stated therein or necessary to make the statements
         therein not misleading, or any Prospectus shall contain any untrue
         statement of a material fact or omit to state any material fact
         required to be stated therein

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         or necessary to make the statements therein, in the light of the
         circumstances under which they were made, not misleading, or (C) the
         occurrence or existence of any pending corporate development that, in
         the sole judgment of the Company, makes it appropriate to suspend the
         availability of the Shelf Registration Statement and the related
         Prospectus:

                           (i) in the case of clause (B) above, subject to the
                  next sentence, as promptly as reasonably practicable prepare
                  and file, if necessary pursuant to applicable law, a
                  post-effective amendment to such Registration Statement or a
                  supplement to the related Prospectus or any document
                  incorporated therein by reference or file any other required
                  document that would be incorporated by reference into such
                  Registration Statement and Prospectus so that such
                  Registration Statement does not contain any untrue statement
                  of a material fact or omit to state any material fact required
                  to be stated therein or necessary to make the statements
                  therein not misleading, and such Prospectus does not contain
                  any untrue statement of a material fact or omit to state any
                  material fact required to be stated therein or necessary to
                  make the statements therein, in the light of the circumstances
                  under which they were made, not misleading, as thereafter
                  delivered to the purchasers of the Registrable Securities
                  being sold thereunder, and, in the case of a post-effective
                  amendment to a Registration Statement, subject to the next
                  sentence, use its reasonable best efforts to cause it to be
                  declared effective as promptly as is practicable, and

                           (ii) give notice to the Notice Holders, and the
                  Special Counsel, if any, that the availability of the Shelf
                  Registration Statement is suspended (a "DEFERRAL NOTICE") and,
                  upon receipt of any Deferral Notice, each Notice Holder agrees
                  not to sell any Registrable Securities pursuant to the
                  Registration Statement until such Notice Holder's receipt of
                  copies of the supplemented or amended Prospectus provided for
                  in clause (i) above, or until it is advised in writing by the
                  Company that the Prospectus may be used, and has received
                  copies of any additional or supplemental filings that are
                  incorporated or deemed incorporated by reference in such
                  Prospectus.

The Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is
reasonably practicable, (y) in the case of clause (B) above, as soon as, in the
sole judgment of the Company, public disclosure of such Material Event would not
be prejudicial to or contrary to the interests of the Company or, if necessary
to avoid unreasonable burden or expense, as soon as reasonably practicable
thereafter and (z) in the case of clause (C) above, as soon as in the sole
judgment of the Company, such suspension is no longer appropriate. The Company
shall be entitled to exercise its right under this Section 3(h) to suspend the
availability of the Shelf Registration Statement or any Prospectus, without
incurring or accruing any obligation to pay liquidated damages pursuant to
Section 2(e), and any such period during which the availability of the
Registration Statement and

                                       13

<PAGE>

any Prospectus is suspended (the "DEFERRAL PERIOD") shall, without incurring any
obligation to pay liquidated damages pursuant to Section 2(e), not exceed 45
days; provided that the aggregate duration of any Deferral Periods shall not
exceed 45 days in any 90-day period (or 75 days in any 90-day period in the
event of a Material Event pursuant to which the Company has delivered a second
notice as permitted below) or 90 days in any 360-day period; provided that in
the case of a Material Event relating to an acquisition or a probable
acquisition or financing, recapitalization, business combination or other
similar transaction, the Company may, without incurring any obligation to pay
liquidated damages pursuant to Section 2(e), deliver to Notice Holders a second
notice to the effect set forth above, which shall have the effect of extending
the Deferral Period by up to an additional 30 days, or such shorter period of
time as is specified in such second notice. Each Notice Holder agrees to hold
any notice by the Company in respect of any Deferral Period or Material Event
described in the last clause of the preceding sentence in confidence.

                  (i) If requested in writing in connection with an
         underwritten disposition of Registrable Securities pursuant to a
         Registration Statement, make reasonably available for inspection during
         normal business hours by a representative for the underwriters of such
         Registrable Securities, any attorneys and accountants retained by such
         underwriters all relevant financial and other records and pertinent
         corporate documents and properties of the Company and its subsidiaries,
         and cause the appropriate officers, directors and employees of the
         Company and its subsidiaries to make reasonably available for
         inspection during normal business hours on reasonable notice all
         relevant information reasonably requested by such representative for
         such underwriters, or any attorneys or accountants in connection with
         such disposition, in each case as is customary for similar "due
         diligence" examinations; provided that such persons shall first agree
         in writing with the Company that any non-public information shall be
         kept confidential by such persons and shall be used solely for the
         purposes of exercising rights under this Agreement, unless (i)
         disclosure of such information is required by court or administrative
         order or is necessary to respond to inquiries of regulatory
         authorities, (ii) disclosure of such information is required by law
         (including any disclosure requirements pursuant to federal securities
         laws in connection with the filing of any Registration Statement or the
         use of any prospectus referred to in this Agreement), (iii) such
         information becomes generally available to the public other than as a
         result of a disclosure or failure to safeguard by any such person or
         (iv) such information becomes available to any such person from a
         source other than the Company and such source is not bound by a
         confidentiality agreement, and provided further that the foregoing
         inspection and information gathering shall, to the greatest extent
         possible, be coordinated on behalf of all underwriters and the other
         parties entitled thereto by Special Counsel. Any person legally
         compelled to disclose any such confidential information made available
         for inspection shall provide the Company with prompt prior written
         notice of such requirement so that the Company may seek a protective
         order or other appropriate remedy.

                                       14

<PAGE>

                  (j) Comply with all applicable rules and regulations of the
         SEC and make generally available to its securityholders earning
         statements (which need not be audited) satisfying the provisions of
         Section 1l(a) of the Securities Act and Rule 158 thereunder (or any
         similar rule promulgated under the Securities Act) for a 12-month
         period commencing on the first day of the first fiscal quarter of the
         Company commencing after the effective date of a Registration
         Statement, which statements shall be made available no later than 45
         days after the end of the 12-month period or 90 days if the 12-month
         period coincides with the fiscal year of the Company.

                  (k) Cooperate with each Notice Holder to facilitate the timely
         preparation and delivery of certificates representing Registrable
         Securities sold or to be sold pursuant to a Registration Statement,
         which certificates shall not bear any restrictive legends, and cause
         such Registrable Securities to be in such denominations as are
         permitted by the Indenture and registered in such names as such Notice
         Holder may request in writing at least one (1) Business Day prior to
         any sale of such Registrable Securities.

                  (l) Provide a CUSIP number for all Registrable Securities
         covered by each Registration Statement not later than the effective
         date of such Registration Statement and provide the Trustee and the
         transfer agent for the Common Stock with printed certificates for the
         Registrable Securities that are in a form eligible for deposit with The
         Depository Trust Company.

                  (m) Cooperate and assist in any filings required to be made
         with the National Association of Securities Dealers, Inc.

                  (n) Upon (i) the filing of the Initial Shelf Registration
         Statement and (ii) the effectiveness of the Initial Shelf Registration
         Statement, announce the same, in each case by release to Reuters
         Economic Services and Bloomberg Business News.

         SECTION 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with a
Notice and Questionnaire as required pursuant to Section 2(d) hereof (including
the information required to be included in such Notice and Questionnaire and the
information set forth in the next sentence and a sales notice (a "SALES NOTICE")
setting forth the amount of Registrable Securities to be sold and the proposed
sales date not later than three Business Days prior to the proposed sales date).

         Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Notice Holder not misleading and any other
information regarding such Notice Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably

                                       15

<PAGE>

request. Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus delivered
by such Holder in connection with such disposition, that such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Holder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary to
make the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.

         Each Holder acknowledges and agrees that a Sales Notice will only be
valid for a period of five Business Days commencing with the proposed sales date
and that if any of the Registrable Securities to which such Sales Notice relates
are not sold during such period, a new Sales Notice will need to be submitted to
the Company not later than three Business Days prior to the new proposed sales
date. Notwithstanding the foregoing, no Sales Notice may be submitted, or if
submitted will be of no force and effect, and no Registrable Securities may be
sold pursuant to the Shelf Registration Statement if a Deferral Period is then
in effect.

         SECTION 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any
Registration Statement is declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel in
connection with Blue Sky qualifications of the Registrable Securities under the
laws of such jurisdictions as Notice Holders may designate pursuant to Section
3(g) of this Agreement and any filings required to be made with the National
Association of Securities Dealers, Inc.), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
in a form eligible for deposit with The Depository Trust Company), (iii)
duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) reasonable fees and
disbursements of counsel for the Company and of Special Counsel in connection
with the Shelf Registration Statement, (v) reasonable fees and disbursements of
the Trustee and its counsel and of the registrar and transfer agent for the
Common Stock and (vi) any Securities Act liability insurance obtained by the
Company in its sole discretion. In addition, the Company shall pay the internal
expenses of the Company (including, without limitation, all salaries and
expenses of officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the listing by the Company of the Registrable Securities on any securities
exchange on which similar securities of the Company are then listed and the fees
and expenses of any person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 5, each seller of Registrable
Securities shall pay selling expenses,

                                       16

<PAGE>

including any underwriting discount and commissions, and all registration
expenses to the extent required by applicable law.

         SECTION 6. Indemnification and Contribution.

         (a)      Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder, each person, if any, who controls any
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, and each affiliate of any Holder within the meaning of
Rule 405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Holder furnished to the
Company in writing by such Holder expressly for use therein; provided that the
indemnification contained in this paragraph shall not inure to the benefit of
any Holder (or to the benefit of any person controlling such Holder) on account
of any such losses, claims, damages or liabilities caused by any untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus; provided in each case the Company has performed its
obligations under Section 3(f) hereof if either (A) (x) such Holder failed to
send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale by such Holder to the person asserting the
claim from which such losses, claims, damages or liabilities arise and (y) the
Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B) (x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such Prospectus
as so amended or supplemented, with or prior to the delivery of written
confirmation of the sale of a Registrable Security to the person asserting the
claim from which such losses, claims, damages or liabilities arise.

         (b)      Indemnification by Holders. Each Holder agrees severally and
not jointly to indemnify and hold harmless the Company and its directors, its
officers and each person, if any, who controls the Company (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act)
and each affiliate of the Company within the meaning of Rule 405 under the
Securities Act or any other Holder, to the same extent as the foregoing
indemnity from the Company to such Holder, but only with reference to
information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in such Registration

                                       17

<PAGE>

Statement or Prospectus or amendment or supplement thereto. In no event shall
the liability of any Holder hereunder be greater in amount than the dollar
amount of the proceeds received by such Holder upon the sale of the Registrable
Securities pursuant to the Registration Statement giving rise to such
indemnification obligation.

         (c)      Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b) hereof, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by, in the case of
parties indemnified pursuant to Section 6(a), the Holders of a majority (with
Holders of Debentures deemed to be the Holders, for purposes of determining such
majority, of the number of shares of Underlying Common Stock into which such
Debentures are or would be convertible as of the date on which such designation
is made) of the Registrable Securities covered by the Registration Statement
held by Holders that are indemnified parties pursuant to Section 6(a) and, in
the case of parties indemnified pursuant to Section 6(b), the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

         Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such

                                       18
<PAGE>

settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

         (d)      Contribution. To the extent that the indemnification provided
for in Section 6(a) or 6(b) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company shall be deemed to
be equal to the total net proceeds from the initial placement pursuant to the
Purchase Agreement (before deducting expenses) of the Registrable Securities to
which such losses, claims, damages or liabilities relate. The relative benefits
received by any Holder shall be deemed to be equal to the value of receiving
Registrable Securities that are registered under the Securities Act. The
relative fault of the Holders on the one hand and the Company on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Holders or by
the Company, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 6 are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rota
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 6, no indemnifying party that is a selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party has otherwise been

                                       19

<PAGE>

required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 1l(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

         (e)      The remedies provided for in THIS SECTION 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
an indemnified party at law or in equity, hereunder, under the Purchase
Agreement or otherwise.

         (f)      The indemnity and contribution provisions contained in THIS
SECTION 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder, any person controlling any Holder or any affiliate of any Holder
or by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any
Holder.

         SECTION 7. Information Requirements. The Company covenants that, if at
any time before the end of the Effectiveness Period the Company is not subject
to the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further commercially reasonable action as any Holder may
reasonably request in writing (including, without limitation, making such
reasonable representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 and Rule 144A under the Securities Act
and customarily taken in connection with sales pursuant to such exemptions. Upon
the written request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in THIS SECTION 7 shall be deemed to require the Company
to register any of its securities (other than the Common Stock) under any
section of the Exchange Act.

         SECTION 8. Miscellaneous,

         (a)      No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders in this Agreement. The Company represents and
warrants that the rights granted to the Holders hereunder do not in any way
conflict with the rights granted to the holders of the Company's securities
under any other agreements.

         (b)       Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has

                                       20

<PAGE>

obtained the written consent of Holders of a majority of the then outstanding
Underlying Common Stock constituting Registrable Securities (with Holders of
Debentures deemed to be the Holders, for purposes of this Section, of the number
of outstanding shares of Underlying Common Stock into which such Debentures are
or would be convertible as of the date on which such consent is requested).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect the rights of other Holders may be
given by Holders of at least a majority of the Registrable Securities being sold
by such Holders pursuant to such Registration Statement; provided that the
provisions of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the immediately preceding sentence.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended by
written agreement signed by the Company and the Initial Purchaser, without the
consent of the Holders of Registrable Securities, to cure any ambiguity or to
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provision contained herein, or to make such other
provisions in regard to matters or questions arising under this Agreement that
shall not adversely affect the interests of the Holders of Registrable
Securities. Each Holder of Registrable Securities outstanding at the time of any
such amendment, modification, supplement, waiver or consent or thereafter shall
be bound by any such amendment, modification, supplement, waiver or consent
effected pursuant to THIS SECTION 8(b), whether or not any notice, writing or
marking indicating such amendment, modification, supplement, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.

         (c)      Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

                  (i)   if to a Holder, at the most current address given by
         such Holder to the Company in a Notice and Questionnaire or any
         amendment thereto;

                  (ii)  if to the Company, to:

                           The Williams Companies, Inc.
                           One Williams Center
                           Tulsa, Oklahoma 74172
                           Attention: Treasurer
                           Telecopy No.: (918) 573-2065

                  (iii) if to the Initial Purchaser, to:

                                       21

<PAGE>

                           Lehman Brothers Inc.
                           399 Park Avenue, 11th Floor
                           New York, New York 10022
                           Attention: Syndicate Department
                           Fax No.: (212) 526-0943

                  with a copy, in the case of any notice pursuant to Section 6,
to the:

                           Director of Litigation,
                           Office of the General Counsel,
                           Lehman Brothers Inc.
                           399 Park Avenue, 15th Floor
                           New York, NY 10022

or to such other address as such person may have furnished to the other persons
identified in this SECTION 8(c) in writing in accordance herewith.

         (d)      Approval of Holders. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (as such
term is defined in Rule 405 under the Securities Act) (other than the Initial
Purchaser or subsequent Holders if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

         (e)      Successors and Assigns. Any person who purchases any
Registrable Securities from the Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of the Initial Purchaser. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities, Provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Indenture. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities, such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
person shall be entitled to receive the benefits hereof.

         (f)      Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

                                       22

<PAGE>

         (g)      Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

         (h)      Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

         (i)      Sever ability. If any term provision, covenant or restriction
of this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in fill force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

         (j)      Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement. In no event will such methods of
distribution take the form of an underwritten offering of the Registrable
Securities without the prior agreement of the Company.

         (k)      Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

                                       23

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                                    THE WILLIAMS COMPANIES, INC.

                                                    By: /s/ James G. Ivey
                                                       -----------------------
                                                       Name:
                                                       Title:

Confirmed and accepted as of
the date first above written:

By: LEHMAN BROTHERS INC.

By: ________________________
    Name:
    Title:

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                                 THE WILLIAMS COMPANIES, INC.

                                                 By: ___________________________
                                                     Name:
                                                     Title:

Confirmed and accepted as of
the date first above written:

By: LEHMAN BROTHERS INC.

By: /s/ Robert Pierce
    ------------------------
    Name:
    Title:<PAGE>

                                                                     EXHIBIT 4.1

                          SECURITIES PURCHASE AGREEMENT

         This Securities Purchase Agreement (this "AGREEMENT") is dated as of
June 24, 2003, among Zix Corporation, a Texas corporation (the "COMPANY"), and
the purchasers identified on the signature pages hereto (each, a "PURCHASER" and
collectively, the "PURCHASERS").

         WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act (as defined below)
and Rule 506 promulgated thereunder, the Company desires to issue and sell to
the Purchasers, and the Purchasers, severally and not jointly, desire to
purchase from the Company certain securities of the Company, as more fully
described in this Agreement.

         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

         1.1      Definitions. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms shall
have the meanings indicated in this Section 1.1:

                  "ACTION" means any action, suit, inquiry, notice of violation,
proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, local or foreign), stock market, stock exchange or
trading facility.

                  "AFFILIATE" means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule
144.

                  "BUSINESS DAY" means any day except Saturday, Sunday and any
day which shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

                  "CLOSING" means the closing of the purchase and sale of the
Securities pursuant to Section 2.

                  "CLOSING DATE" means the date of the Closing.

                  "COMMISSION" means the Securities and Exchange Commission.

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                  "COMMON STOCK" means the common stock of the Company, $.01 par
value per share, and any securities into which such common stock may hereafter
be reclassified.

                  "COMMON STOCK EQUIVALENTS" means any securities of the Company
or any Subsidiary which entitle the holder thereof to acquire Common Stock at
any time, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.

                  "COMPANY COUNSEL" means Weil, Gotshal & Manges LLP.

                  "EFFECTIVE DATE" means the date that the Registration
Statement required by the Registration Rights Agreement is first declared
effective by the Commission.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                  "INVESTMENT AMOUNT" means, with respect to each Purchaser, the
investment amount indicated below such Purchaser's name on the signature page of
this Agreement.

                  "LIEN" means any lien, charge, encumbrance, security interest,
right of first refusal or other restrictions of any kind.

                  "PER UNIT PURCHASE PRICE" equals $3.67.

                  "PERSON" means an 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.

                  "PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

                  "REGISTRATION STATEMENT" means a registration statement
meeting the requirements set forth in the Registration Rights Agreement and
covering the resale by the Purchasers of the Shares and the Warrant Shares.

                  "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company and the
Purchasers, in the form of Exhibit B.

                  "RULE 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

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                  "SECURITIES" means the Shares, the Warrants and the Warrant
Shares.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SHARES" means the shares of Common Stock issued or issuable
to the Purchasers at the Closing pursuant to this Agreement.

                  "SUBSIDIARY" means any subsidiary of the Company that is
required to be listed in Schedule 3.1(a).

                  "TRADING DAY" means (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not listed on a
Trading Market, a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
to its functions of reporting prices); provided, that in the event that the
Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.

                  "TRADING MARKET" means whichever of the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq
SmallCap Market on which the Common Stock is listed or quoted for trading on the
date in question.

                  "TRANSACTION DOCUMENTS" means this Agreement, the Warrants,
the Registration Rights Agreement, the Transfer Agent Instructions and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.

                  "TRANSFER AGENT INSTRUCTIONS" means the Company's Transfer
Agent Instructions in the form of Exhibit C.

                  "WARRANTS" means the Common Stock purchase warrants, each in
the form of Exhibit A, which are issuable to the Purchasers at the Closing.

                  "WARRANT SHARES" means the shares of Common Stock issuable
upon exercise of the Warrants.

                                  ARTICLE II.
                                PURCHASE AND SALE

         2.1      Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company,
the Shares and the Warrants representing such Purchaser's Investment Amount. The
Closing shall take place at the offices of Bryan Cave LLP,

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1290 Avenue of the Americas, New York, NY 10104 on the date this Agreement is
executed and delivered by the parties or at such other location or time as the
parties may agree.

         2.2      Closing Deliveries. (a) At the Closing, the Company shall
deliver or cause to be delivered to each Purchaser the following:

                           (i)      a certificate evidencing a number of Shares
equal to such Purchaser's Investment Amount divided by the Per Unit Purchase
Price, registered in the name of such Purchaser;

                           (ii)     a Warrant, registered in the name of such
Purchaser, pursuant to which such Purchaser shall have the right to acquire the
number of shares of Common Stock equal to 20% of the quotient obtained by
dividing such Purchaser's Investment Amount by $4.96;

                           (iii)    the legal opinion of Company Counsel, in
agreed form, addressed to the Purchasers;

                           (iv)     the Registration Rights Agreement duly
executed by the Company; and

                           (v)      the Transfer Agent Instructions executed by
the Company and delivered to and acknowledged by the Company's transfer agent.

                  (b)      At the Closing, each Purchaser shall deliver or cause
to be delivered to the Company the following:

                           (i)      such Purchaser's Investment Amount, in
United States dollars and in immediately available funds, by wire transfer to an
account designated in writing by the Company for such purpose; and

                           (ii)     the Registration Rights Agreement duly
executed by such Purchaser.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

         3.1      Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to each Purchaser:

                  (a)      Subsidiaries. The Company has no direct or indirect
Subsidiaries other than those listed in Schedule 3.1(a). Except as disclosed in
Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital
stock of each Subsidiary free and clear of any and all Liens, and all the issued
and outstanding shares of capital stock of each Subsidiary are validly issued
and are fully paid, non-assessable and free of preemptive and similar rights.

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                  (b)      Organization and Qualification. Each of the Company
and each Subsidiary is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted. Neither the Company nor any Subsidiary is in violation
of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and each Subsidiary is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, have
or reasonably be expected to result in (i) an adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material and
adverse effect on the results of operations, assets, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) an adverse impairment to the Company's ability to perform on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii),
a "MATERIAL ADVERSE EFFECT").

                  (c)      Authorization; Enforcement. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise to
carry out its obligations thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company in connection therewith. Each Transaction Document has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.

                  (d)      No Conflicts. The execution, delivery and performance
of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated thereby do not and will not (i) conflict with
or violate any provision of the Company's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or charter documents,
or (ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses

                                      -5-

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(ii) and (iii), such as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.

                  (e)      Filings, Consents and Approvals. The Company is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than (i) the filing with the Commission of one or more
Registration Statements in accordance with the requirements Registration Rights
Agreement, (ii) the application(s) to the Nasdaq National Market for the listing
of the Shares and Warrant Shares for trading thereon in the time and manner
required thereby, (iii) the filing of a Form D with the Commission, and (iv) any
notice filings required under applicable blue sky or state securities laws.

                  (f)      Issuance of the Securities. The Securities have been
duly authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to
this Agreement and the Warrants in order to issue the full number of Warrant
Shares as are or may become issuable in accordance with the Warrants.

                  (g)      Capitalization. The number of shares and type of all
authorized, issued and outstanding capital stock of the Company is set forth in
Schedule 3.1(g). Except as set forth in Schedule 3.1(g), no securities of the
Company are entitled to preemptive or similar rights, and no Person has any
right of first refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction
Documents. Except as a result of the purchase and sale of the Securities and
except as disclosed in Schedule 3.1(g), there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock. Except as set forth in Schedule
3.1(g), the issue and sale of the Securities will not, immediately or with the
passage of time, obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.

                  (h)      SEC Reports; Financial Statements. The Company has
filed all reports required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
twelve months preceding the date hereof (or such shorter period as the Company
was required by law to file such reports) (the foregoing materials being
collectively referred to herein as the "SEC REPORTS" and, together with the
Schedules to this

                                      -6-

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Agreement, the "DISCLOSURE MATERIALS") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. The Company has delivered to the Purchasers a
copy of all SEC Reports filed within the 10 days preceding the date hereof. As
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules
and regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved ("GAAP"), except as may be
otherwise specified in such financial statements or the notes thereto or, in the
case of unaudited financial statements, as permitted by Rule 10-1 of Regulation
S-X, and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.

                  (i)      Press Releases. The press releases disseminated by
the Company during the three (3) years preceding the date of this Agreement did
not, when publicly released, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

                  (j)      Material Changes. Since the date of the latest
audited financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports or as specified in Schedule 3.1(j),
(i) there has been no event, occurrence or development that has had or that
could reasonably be expected to result in a Material Adverse Effect, (ii) the
Company has not incurred any liabilities (contingent or otherwise) other than
(A) trade payables, accrued expenses or deferred income incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company's financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans. The Company
does not have pending before the Commission any request for confidential
treatment of information.

                                      -7-

<PAGE>

                  (k)      Litigation. There is no Action which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect. Except as specified in Schedule
3.1(k), neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act.

                  (l)      Labor Relations. No material labor dispute exists or,
to the knowledge of the Company, is imminent with respect to any of the
employees of the Company.

                  (m)      Compliance. Neither the Company nor any Subsidiary
(i) is in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.

                  (n)      Regulatory Permits. The Company and the Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as described in the SEC Reports, except where the
failure to possess such permits would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect ("MATERIAL
PERMITS"), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.

                  (o)      Title to Assets. The Company and the Subsidiaries
have good and marketable title in fee simple to all real property owned by them
that is material to their respective businesses and good and marketable title in
all personal property owned by them that is material to their respective
businesses, in each case free and clear of all Liens, except for Liens specified
in Schedule 3.1(o) and such other Liens as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such

                                      -8-

<PAGE>

property by the Company and the Subsidiaries. Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases of which the Company and the
Subsidiaries are in compliance.

                  (p)      Patents and Trademarks. The Company and the
Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
licenses and other similar rights that are necessary or material for use in
connection with their respective businesses as described in the SEC Reports and
which the failure to so have could, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect (collectively, the
"INTELLECTUAL PROPERTY RIGHTS"). Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or any Subsidiary violates or infringes upon the rights of any Person.
Except as set forth in the SEC Reports, to the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights.

                  (q)      Insurance. The Company and the Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which the Company and the Subsidiaries are engaged. The Company has no reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.

                  (r)      Transactions With Affiliates and Employees. Except as
set forth in the SEC Reports or as specified in Schedule 3.1(r), none of the
officers or directors of the Company and, to the knowledge of the Company, none
of the employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

                  (s)      Internal Accounting Controls. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for significant assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

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                  (t)      Certain Fees. Except as specified in Schedule 3.1(t),
no brokerage or finder's fees or commissions are or will be payable by the
Company to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchasers shall have no obligation with
respect to any fees or with respect to any claims (other than such fees or
commissions owed by a Purchaser pursuant to written agreements executed by such
Purchaser which fees or commissions shall be the sole responsibility of such
Purchaser) made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.

                  (u)      Certain Registration Matters. Assuming the accuracy
of the Purchasers' representations and warranties set forth in Section
3.2(b)-(f), no registration under the Securities Act is required for the offer
and sale of the Shares and Warrant Shares by the Company to the Purchasers under
the Transaction Documents. The Company is eligible to register the resale of its
Common Stock for resale by the Purchasers under Form S-3 promulgated under the
Securities Act. Except as specified in Schedule 3.1(u), the Company has not
granted or agreed to grant to any Person any rights (including "piggy-back"
registration rights) to have any securities of the Company registered with the
Commission or any other governmental authority that have not been satisfied.

                  (v)      Listing and Maintenance Requirements. The Company has
not, in the two years preceding the date hereof, received notice (written or
oral) from the Nasdaq National Market to the effect that the Company is not in
compliance with the listing or maintenance requirements thereof. The Company is,
and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the Nasdaq National Market. The issuance and sale
of the Securities hereunder does not contravene the rules and regulations of the
Nasdaq National Market and no approval of the shareholders of the Company is
required for the Company to issue and deliver to the Purchasers the maximum
number of Securities contemplated by Transaction Documents.

                  (w)      Investment Company. The Company is not, and is not an
Affiliate of, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

                  (x)      Application of Takeover Protections. The Company has
taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Company's Certificate of Incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the
Purchasers as a result of the Purchasers and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents,
including without limitation the Company's issuance of the Securities and the
Purchasers' ownership of the Securities.

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                  (y)      Disclosure. The Company confirms that neither it nor
any Person acting on its behalf has provided any of the Purchasers or their
agents or counsel with any information that the Company believes constitutes
material, non-public information. The Company understands and confirms that the
Purchasers will rely on the foregoing representations and covenants in effecting
transactions in securities of the Company. Neither this Agreement nor any other
Transaction Document contains any untrue statement of material fact concerning
the Company, its Subsidiaries or this offer and sale of Securities, or omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading.

         3.2      Representations and Warranties of the Purchasers. Each
Purchaser hereby, for itself and for no other Purchaser, represents and warrants
to the Company as follows:

                  (a)      Organization; Authority. Such Purchaser is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations thereunder. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement has been duly
authorized by all necessary corporate or, if such Purchaser is not a
corporation, such partnership, limited liability company or other applicable
like action, on the part of such Purchaser. Each of this Agreement and the
Registration Rights Agreement has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with terms hereof, will constitute the
valid and legally binding obligation of such Purchaser, enforceable against it
in accordance with its terms.

                  (b)      Investment Intent. Such Purchaser is acquiring the
Securities as principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such Securities or any part
thereof, without prejudice, however, to such Purchaser's right at all times to
sell or otherwise dispose of all or any part of such Securities in compliance
with applicable federal and state securities laws. Nothing contained herein
shall be deemed a representation or warranty by such Purchaser to hold the
Securities for any period of time. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such Purchaser does not have
any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.

                  (c)      Purchaser Status. At the time such Purchaser was
offered the Securities, it was, and at the date hereof it is, and on each date
on which it exercises the Warrants it will be, an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Such Purchaser is not a
registered broker-dealer under Section 15 of the Exchange Act.

                  (d)      Experience of such Purchaser. Such Purchaser, either
alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such

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Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.

                  (e)      General Solicitation. Such Purchaser is not
purchasing the Securities as a result of any advertisement, article, notice or
other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.

                  (f)      Access to Information. Such Purchaser acknowledges
that it has reviewed the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Shares and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or
on behalf of such Purchaser or its representatives or counsel shall modify,
amend or affect such Purchaser's right to rely on the truth, accuracy and
completeness of the Disclosure Materials and the Company's representations and
warranties contained in the Transaction Documents.

The Company acknowledges and agrees that each Purchaser does not make or has not
made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

                                  ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

         4.1      (a)      Securities may only be disposed of in compliance with
state and federal securities laws. In connection with any transfer of the
Securities other than pursuant to an effective registration statement, to the
Company, to an Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.

                  (b)      Certificates evidencing the Securities will contain
the following legend, so long as is required by this Section 4.1(b):

                  [NEITHER] THESE SECURITIES [NOR THE SECURITIES ISSUABLE UPON
                  EXERCISE OF THESE SECURITIES] HAVE [NOT] BEEN REGISTERED WITH
                  THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
                  COMMISSION OF ANY STATE IN RELIANCE UPON

                                      -12-

<PAGE>

                  AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
                  1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
                  NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
                  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
                  AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
                  TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
                  ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED
                  BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH
                  EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
                  TO THE COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE
                  UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION
                  WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
                  SECURITIES.

                  The Company acknowledges and agrees that a Purchaser may from
time to time pledge pursuant to a bona fide margin agreement or grant a security
interest in some or all of the Securities and, if required under the terms of
such arrangement, such Purchaser may transfer pledged or secured Securities to
the pledgees or secured parties. Such a pledge or transfer would not be subject
to approval or consent of the Company and no legal opinion of legal counsel to
the pledgee, secured party or pledgor shall be required in connection therewith.
Further, no notice shall be required of such pledge. At the appropriate
Purchaser's expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities including the
preparation and filing of any required prospectus supplement under Rule
424(b)(3) of the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of Selling Stockholders thereunder.

                  (c)      Certificates evidencing the Shares and Warrant Shares
shall not contain any legend (including the legend set forth in Section 4.1(b)):
(i) while a registration statement (including the Registration Statement)
covering the resale of such Shares and Warrant Shares is effective under the
Securities Act, or (ii) following any sale of such Shares or Warrant Shares
pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible for
sale under Rule 144(k). The Company agrees that it will cause its counsel to
issue any required legal opinions and directives to the Company's Transfer Agent
to permit issuance of shares as described in this Section. Following the
Effective Date or at such earlier time as a legend is no longer required for the
Shares and Warrant Shares under this Section 4.1(c), the Company will, no
later than three Trading Days following the delivery by a Purchaser to the
Company or the Company's transfer agent of a certificate representing Shares or
Warrant Shares containing a restrictive legend, deliver or cause to be delivered
to such Purchaser a certificate representing such Shares or Warrant Shares that
is free from all restrictive and other legends. The Company may not make any
notation on its records or give instructions to any transfer agent of the
Company that enlarge the restrictions on transfer set forth in this Section.

                                      -13-

<PAGE>

         4.2      Furnishing of Information. As long as any Purchaser owns the
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as any Purchaser owns Securities, if the Company is no
longer subject to the periodic reporting requirements of the Exchange Act and
the Securities are not then entitled to the benefits of Rule 144(k), it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c)(2) such information as is required for the Purchasers to sell
the Shares and Warrant Shares under Rule 144.

         4.3      Integration. The Company shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or
that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market.

         4.4      Subsequent Registrations. Other than the Registration
Statement, prior to the Effective Date, the Company may not file any
registration statement (other than on Form S-8) with the Commission with respect
to any securities of the Company.

         4.5      Securities Laws Disclosure; Publicity. Within one Trading Day
following the Closing Date, the Company shall issue a press release reasonably
acceptable to the Purchasers disclosing the transactions contemplated hereby and
file a Current Report on Form 8-K disclosing the transactions contemplated
hereby. In addition, the Company will make such other filings and notices in the
manner and time required by the Commission and the Trading Market on which the
Common Stock is listed. Notwithstanding the foregoing, the Company shall not
publicly disclose in writing the name of any Purchaser, or include the name of
any Purchaser in any filing other than the Registration Statement or the
exhibits to filings under the Exchange Act with the Commission or any regulatory
agency or Trading Market, without the prior written consent of such Purchaser,
except to the extent such disclosure is required by law or Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
notice of such disclosure.

         4.6      Indemnification of Purchasers. In addition to the indemnity
provided in the Registration Rights Agreement, the Company will indemnify and
hold the Purchasers and their directors, officers, shareholders, partners,
employees and agents (each, a "PURCHASER PARTY") harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys' fees and costs of investigation (collectively, "LOSSES")
that any such Purchaser Party may suffer or incur as a result of or relating to
any misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Company in any Transaction Document; provided,
that such indemnity (other than as to any indemnity called for under the
Registration Rights Agreement or expenses due to be reimbursed in accordance
with the

                                      -14-

<PAGE>

following sentence of this Section) does not exceed, in the aggregate, the
Investment Amount of such Purchaser. In addition to the indemnity contained
herein, the Company will reimburse each Purchaser Party for its reasonable legal
and other expenses (including the cost of any investigation, preparation and
travel in connection therewith) incurred in connection therewith, as such
expenses are incurred. Except as set forth above, the mechanics and procedures
with respect to the rights and obligations under this Section 4.6 will be the
same as those set forth in the Registration Rights Agreement.

         4.7      Certain Trading Restrictions.

         (a)      Restrictions. So long as a Purchaser continues to hold any
Securities acquired hereunder, such Purchaser will not, nor will it knowingly
through its Affiliates, engage in any "short sales" (as defined in Rule 3b-3
promulgated under the Exchange Act) of the Common Stock (each a "SHORT SALE"),
except on those days (each a "PERMITTED DAY") on which the aggregate short
position with respect to the Common Stock of such Purchaser prior to giving
effect to any Short Sales by such Purchaser on such Permitted Day does not
exceed such Purchaser's Permitted Share Position (as defined below) on such
Permitted Day; provided, however, that a Purchaser will only be entitled to
engage in transactions that constitute Short Sales on a Permitted Day to the
extent that following such transaction, the aggregate short position with
respect to the Common Stock of such Purchaser does not exceed such Purchaser's
Permitted Share Position. For purposes of this Section 4.7, a Purchaser's
"PERMITTED SHARE POSITION" means, with respect to any date of determination, the
number of shares of Common Stock owned by such Purchaser (including Shares) plus
the maximum number of Warrant Shares then issuable (including as to portions of
Warrants not yet exercised and without regard to any exercise caps or other
exercise restrictions applicable to the Warrants) to such Purchaser.

         (b)      Other Transactions Permitted. Subject to Section 4.7(a) and
applicable securities laws, the Company acknowledges and agrees that nothing in
this Section 4.7 or elsewhere in any Transaction Document prohibits any
Purchaser from, and each Purchaser is permitted to, engage, directly or
indirectly, in hedging transactions involving the Securities and the Common
Stock (including, without limitation, by way of short sales, purchases and sales
of options, swap transactions and synthetic transactions) at any time.

         4.8      Non-Public Information. The Company covenants and agrees that
neither it nor any other Person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.

         4.9      Use of Proceeds. The Company shall use the net proceeds from
the sale of the Securities hereunder for working capital purposes and does not
have plans or intentions to redeem any Company equity or equity-equivalent
securities with such proceeds.

                                      -15-

<PAGE>

                                   ARTICLE V.
                                  MISCELLANEOUS

         5.1      Fees and Expenses. At the Closing, the Company shall pay to
Bryan Cave LLP $15,000 in connection with the preparation of the Transaction
Documents (less any portion thereof previously paid), it being understood that
Bryan Cave LLP has not rendered any legal advice to the Company in connection
with the transactions contemplated hereby and that the Company has relied for
such matters on the advice of its own counsel. Except as specified in the
immediately preceding sentence and as contemplated in the Registration Rights
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the sale of the Securities.

         5.2      Entire Agreement. The Transaction Documents, together with the
Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

         5.3      Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:

         If to the Company:      Zix Corporation
                                 2711 North Haskell Avenue
                                 Suite 2300 LB36
                                 Dallas, TX 75204
                                 Attn:  Chief Financial Officer
                                 Facsimile No.: (214) 515-7390

         With a copy to:         Weil, Gotshal & Manges LLP
                                 200 Crescent Court, Suite 300
                                 Dallas, Texas  75201
                                 Attn:  R. Scott Cohen, Esq.
                                 Facsimile No.: (214) 746-7777

                                      -16-

<PAGE>

         If to a Purchaser:      To the address set forth under such Purchaser's
                                 name on the signature pages hereof;

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

         5.4      Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and each of the Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.

         5.5      Construction. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents.

         5.6      Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Purchasers. Any Purchaser may
assign any or all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Securities, provided such transferee agrees
in writing to be bound, with respect to the transferred Securities, by the
provisions hereof that apply to the "Purchasers."

         5.7      No Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.6.

         5.8      Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates,

                                      -17-

<PAGE>

employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York, Borough of Manhattan (the "NEW YORK
COURTS"). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts 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 any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such 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 Agreement 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. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

         5.9      Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery of the
Shares and Warrant Shares, as applicable.

         5.10     Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.

         5.11     Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

         5.12     Rescission and Withdrawal Right. Notwithstanding anything to
the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time

                                      -18-

<PAGE>

to time upon written notice to the Company, any relevant notice, demand or
election in whole or in part without prejudice to its future actions and rights.

         5.13     Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new certificate
or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities. If a replacement
certificate or instrument evidencing any Securities is requested due to a
mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

         5.14     Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

         5.15     Payment Set Aside. To the extent that the Company makes a
payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

         5.16     Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of
the other

                                      -19-

<PAGE>

Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                             SIGNATURE PAGES FOLLOW]

                                      -20-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

                                        ZIX CORPORATION

                                        /s/ Ronald A. Woessner
                                        ----------------------------------------
                                        Name:  Ronald A. Woessner
                                        Title: Senior Vice President

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Securities Purchase
Agreement as of the date first written above.

                                    Gryphon Master Fund, LP

                                    By: /s/ E.B. Lyon IV
                                        ----------------------------------------
                                        Name:  E.B. Lyon IV
                                        Title: Authorized Agent

                                    Investment Amount:   $1,499,998.73

                                    Address for Notice:  500 Crescent Court #270
                                                         Dallas, TX 75201
                                    Facsimile No.:       Tel: 214-871-6900
                                    Attn:                Fax: 214-871-6909

                                    DEEPHAVEN SMALL CAP GROWTH FUND, LLC

                                    By: /s/ Jim Korn
                                        ----------------------------------------
                                        Name:  Jim Korn
                                        Title: Chief Legal Counsel

                                    Investment Amount:   $500,000

                                    Address for Notice:  130 Cheshire Lane
                                                         Minnetonka, MN 55305

                                    Facsimile No.:       (952) 249-5320
                                    Attn:                Bruce Lieberman

                                    Vertical Ventures Investments, LLC

                                    By: /s/ Joshua Silverman
                                        ----------------------------------------
                                        Name:  Joshua Silverman
                                        Title: Manager

                                    Investment Amount:   $500,000.80

                                    Address for Notice:  641 Lexington Avenue,
                                                         26th Floor
                                                         New York, NY 10022
                                    Facsimile No.:       212-207-3454
                                    Attn:                Joshua Silverman

<PAGE>

                                    Bonanza Master Fund Ltd.

                                    By: /s/ Brian Ladin
                                        ----------------------------------------
                                        Name:  Brian Ladin
                                        Title: Managing Director

                                    Investment Amount:   $500,000

                                    Address for Notice:  8235 Douglas, Suite 423
                                                         Dallas, TX 75225
                                    Facsimile No.:       214.853.5013
                                    Attn:                Brian Ladin

                                    LANGLEY PARTNERS, L.P.

                                    By: /s/ Jeffrey Thorp
                                        ----------------------------------------
                                        Name:  JEFFREY THORP
                                        Title: MANAGING PARTNER OF G.P.

                                    Address:       c/o Langley Capital, LLC 535
                                                   Madison Avenue, 7th Floor
                                                   New York, NY 10022
                                                   (212) 850-7528 Telephone
                                                   (212) 850-7589 Facsimile
                                                   jt@lcap.com

                                    Investment Amount:   $500,000

                                    ALPHA CAPITAL A.G.

                                    By: /s/  Konrad Ackermann
                                        ----------------------------------------
                                       Name:  Konrad Ackermann
                                       Title: Director

                                    Investment Amount:   $250,000

                                    Address for Notice:

                                    Pradafant 7, Furstentums 9490
                                    Vaduz Liechtenstein
                                    Facsimile No.:
                                    Attn:

                                    Superius Securities Group, Inc
                                    Money Purchase Plan

                                    By: /s/ James Hudgins
                                        ----------------------------------------
                                       Name: James Hudgins
                                       Title: Trustee

                                    Investment Amount:   $2,000,000

                                    Address for Notice:

                                    94 Grand Avenue
                                    Englewood, NJ 07631
                                    Facsimile No.: 201-568-9392
                                    Attn: James Hudgins

<PAGE>

                                                               Execution Version

                   SCHEDULES TO SECURITIES PURCHASE AGREEMENT

         All capitalized terms used but not otherwise defined in the attached
Schedules have the meanings given them in the Securities Purchase Agreement by
and among Zix Corporation, a Texas corporation ("Company"), and each of the
purchasers set forth on the signature pages thereto (the "Purchasers"), dated as
of June 24, 2003 (the "Agreement"). Each of the disclosures set forth in the
Schedules are made as an exception to the specified provision in the Agreement
under which it is made. Disclosure of any matters in the Schedules should not be
construed as indicating that such matter is necessarily required to be disclosed
in order for any representation or warranty in the Agreement to be true and
correct to the extent required in the Agreement.

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(a)

                                  SUBSIDIARIES

ZixCorp Canada, Inc., a Canadian corporation

ZixIt.com, Inc., a Delaware corporation

ZixIt Management Services Corporation, a Delaware corporation (payroll entity)

ZixMail.com, Inc., a Delaware corporation

ZixMail Technology Company, a Delaware corporation

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(g)

                                 CAPITALIZATION

As of the date hereof, the authorized capital stock of the Company consists of
(i) 175,000,000 shares of Common Stock, of which 21,178,722 shares are issued
and outstanding, 8,541,563 shares are reserved for issuance pursuant to the
Company's stock option plans, and 5,445,047 shares are issuable and reserved for
issuance pursuant to securities (other than the Securities) exercisable or
exchangeable for, or convertible into, shares of Common Stock and (ii)
10,000,000 shares of Preferred Stock, $1.00 par value, of which 819,886 shares
have been designated Series A Convertible Preferred Stock, of which 616,667 are
issued and outstanding, and 1,304,815 shares have been designated Series B
Convertible Preferred Stock, of which 1,037,748 are issued and outstanding.

     1.  There are options outstanding to employees, directors, and consultants
         and former employees, directors, and consultants to purchase an
         aggregate 7,123,124 shares of the Company's Common Stock at an average
         exercise price per share of $8.07 (exercise prices range from $2.50 to
         $73.75 per share), with expiration dates through 2013, of which
         approximately 4,733,522 option shares are currently exercisable.

     2.  There are warrants outstanding held by approximately 68
         persons/entities, who were investors in the Company's May 2000 equity
         financing, to purchase an aggregate 2,138,890 shares of the Company's
         Common Stock on the following terms:

         a.       1,222,223 warrant shares with an exercise price of $12.00 per
                  share, expiration of 4/30/04, 100% exercisable.

         b.       916,667 warrant shares with an exercise price of $57.60 per
                  share, expiration of 4/30/10, 100% exercisable.

     3.  There are options outstanding to former third-party vendors to purchase
         an aggregate 179,722 shares of the Company's Common Stock at prices
         ranging from $7.94 to $80.00, with expiration dates through 2007.

     4.  The Series A and Series B Convertible Preferred Stock shares (and
         related warrants) referred to above are convertible into 2,671,418
         shares of the Company's Common Stock. The conversion and exercise price
         of these shares and warrants will be reduced and reset by a nominal
         amount, in accordance with a formula that is based upon the price per
         share of the Shares.

     5.  There are currently exercisable warrants outstanding to the former
         convertible note holders to purchase an aggregate 455,017 shares of the
         Company's Common Stock at $5.00 per share, expiring in 2005. The
         exercise price of these warrants will reset to the price per share of
         the Shares.

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(j)

                                MATERIAL CHANGES

(i - iii)         None.

(iv - v)          Effective May 19, 2003, 77,083 shares of Series A Convertible
                  Preferred Stock were converted into 80,405 shares of the
                  Company's Common Stock, and 129,718 shares of Series B
                  Convertible Preferred Stock were converted into 128,864 shares
                  of the Company's Common Stock in accordance with the terms of
                  the respective securities. The Series A and Series B
                  Convertible Preferred Stock shares carry a 6.5% dividend.

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(k)

                                   LITIGATION

The Company's President and CEO, John A. Ryan, is a defendant (in his capacity
as a director and officer) in a securities related lawsuit, which arose while he
was an officer and director of Entrust, Inc.

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(o)

                                      LIENS

The Company has pledged a $250,000 (plus accrued interest) certificate of
deposit to support a credit card processing agreement with Bank of America.

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(r)

                   TRANSACTIONS WITH AFFILIATES AND EMPLOYEES

The Company is a party to severance agreements with various employees, including
certain officers, which require the Company to pay approximately $3.4 million,
in the aggregate, if within 180 days after the occurrence of a "change in
control," the employment of such employees is terminated voluntarily, for cause,
good reason or any other reason. For the purposes of these agreements, a "change
of control" includes (i) any person or group of persons becoming the beneficial
owners of 35% of the outstanding voting securities of the Company; (ii) mergers,
consolidations and similar transactions; (iii) substantial asset sales by the
Company; (iv) changes in the composition of the Company's board of directors;
(v) any event that the Company's board, in its sole discretion, determines to be
a "change of control."

In September 2002, in exchange for $750,000 in cash, the Company issued to John
A. Ryan, the Company's chairman, president and chief executive officer, 189,205
shares of its Series A Convertible Preferred Stock and warrants to purchase
66,518 shares of its Common Stock. In connection therewith, Mr. Ryan received
certain registration rights with respect to these shares.

In September 2002, in exchange for $2,000,000 in cash, the Company issued to
Antonio R. Sanchez, Jr., a former director and approximate 12.6% shareholder of
the Company, and related entities, 504,545 shares of its Series A Convertible
Preferred Stock and warrants to purchase 177,381 shares of its Common Stock. In
connection therewith, Mr. Sanchez received certain registration rights whereby
he can demand the registration of up to 666,667 of previously owned shares.

In September 2002, in exchange for $3,450,000 in cash, the Company issued to
George W. Haywood, a private investor and approximate 25.4% shareholder of the
Company, 947,708 shares of its Series B Convertible Preferred Stock and warrants
to purchase 304,986 shares of its Common Stock. In connection therewith, Mr.
Haywood received certain registration rights whereby he can demand the
registration of up to 1,333,333 of previously owned shares.

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(t)

                                  CERTAIN FEES

         A three percent (3%) fee will be paid with respect to amounts invested
by the following persons:

     -   Bonanza Capital (and affiliates)

     -   Gryphon Capital (and affiliates)

     -   Langley Partners (and affiliates)

     -   Southwell Partners (and affiliates)

     -   Alpha Capital (and affiliates)

     -   Deephaven

<PAGE>

                                                               Execution Version

                                 SCHEDULE 3.1(u)

                          CERTAIN REGISTRATION MATTERS

In September 2002, in exchange for $2,000,000 in cash, the Company issued to
Antonio R. Sanchez, Jr., a former director and approximate 12.6% shareholder of
the Company, and related entities, 504,545 shares of its Series A Convertible
Preferred Stock and warrants to purchase 177,381 shares of its Common Stock. In
connection therewith, Mr. Sanchez received (i) certain registration rights
whereby he can demand the registration of up to 666,667 of previously owned
shares and (ii) piggyback rights if the Company fails to maintain effectiveness
of any registration statement required to be filed pursuant to the foregoing
registration rights.

In September 2002, in exchange for $3,450,000 in cash, the Company issued to
George W. Haywood, a private investor and approximate 25.4% shareholder of the
Company, 947,708 shares of its Series B Convertible Preferred Stock and warrants
to purchase 304,986 shares of its Common Stock. In connection therewith, Mr.
Haywood received (i) certain registration rights whereby he can demand the
registration of up to 1,333,333 of previously owned shares and (ii) piggyback
rights if the Company fails to maintain effectiveness of any registration
statement required to be filed pursuant to the foregoing registration rights.

In August 1999, the Company issued to CStone Consulting, Inc. options to acquire
50,000 shares of the Company's Common Stock. In connection therewith, CStone
received certain registration rights whereby it can demand the registration of
the 50,000 vested shares.

The Company has issued to Henry Kuehne options to acquire 50,000 shares of the
Company's Common Stock. In connection therewith, the first 25,000 vested shares
have been registered with the Securities and Exchange Commission. Mr. Kuehne
received certain registration rights whereby he can demand the registration of
the remaining 25,000 vested shares.

<PAGE>

                                                               Execution Version

                                  SCHEDULE 4.4

                            SUBSEQUENT REGISTRATIONS

                               See Schedule 3.1(u)

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