Document:

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                                                                     EXHIBIT 4.6

                                FORM OF WARRANT

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B)
AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS
WARRANT SHOULD CAREFULLY REVIEW THE TERMS OF THIS WARRANT, INCLUDING SECTION
2(f) HEREOF. THE SECURITIES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE
NUMBER SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 2(f) HEREOF.

                                 ZIX CORPORATION

                        WARRANT TO PURCHASE COMMON STOCK

Warrant No.:                                     Number of Shares:
             ------------                                          ------------

Date of Issuance: September 18, 2002

Zix Corporation, a Texas corporation (the "COMPANY"), hereby certifies that, for
Ten United States Dollars ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, ________________,
the registered holder hereof or its permitted assigns, is entitled, subject to
the terms set forth below, to purchase from the Company upon surrender of this
Warrant (if required by Section 2(f)), at any time or times on or after the date
hereof, but not after 11:59 P.M. New York Time on the Expiration Date (as
defined herein) ___________________________ (________) [INSERT THE QUOTIENT OF
(A) 20% OF THE PRINCIPAL AMOUNT OF NOTES PURCHASED BY THE HOLDER, DIVIDED BY (B)
THE WARRANT EXERCISE PRICE] fully paid nonassessable shares of Common Stock (as
defined herein) of the Company (the "WARRANT SHARES") at the purchase price per
share provided in Section 1(b) below; provided, however, that in no event shall
the holder be entitled to exercise this Warrant for a number of Warrant Shares
in excess of that number of Warrant Shares that, upon giving effect to such
exercise, would cause the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates to exceed 4.99% of the
outstanding shares of the Common Stock following such exercise. For purposes of
the foregoing proviso, the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such proviso is being made, but shall exclude shares
of Common Stock that would be issuable upon (i) exercise of the remaining,
unexercised Warrants beneficially owned by the holder and its affiliates and
(ii) exercise, conversion or

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exchange of the unexercised, unconverted or unexchanged portion of any other
securities of the Company beneficially owned by the holder and its affiliates
(including, without limitation, any convertible notes or preferred stock)
subject to a limitation on conversion, exercise or exchange analogous to the
limitation contained herein. Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock a holder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company's most recent Form 10-Q or Form
10-K, as the case may be, (2) a more recent public announcement by the Company
or (3) any other notice by the Company or its transfer agent setting forth the
number of shares of Common Stock outstanding. Upon the written request of any
holder, the Company shall promptly, but in no event later than two (2) Business
Days following the receipt of such notice, confirm in writing to any such holder
the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to
the conversion, exercise or exchange of securities of the Company, including the
Notes (as defined below) and the SPA Warrants (as defined below), since the date
as of which such number of outstanding shares of Common Stock was reported.

         Section 1.

                  (a) Securities Purchase Agreement. This Warrant is one of the
warrants (the "SPA WARRANTS") issued pursuant to Section 1 of that certain
Securities Purchase Agreement dated as of September 17, 2002, among the Company
and the Persons (as defined below) referred to therein (as such agreement may be
amended from time to time as provided in such agreement, the "SECURITIES
PURCHASE AGREEMENT").

                  (b) Definitions. The following words and terms as used in this
Warrant shall have the following meanings:

         (i) "APPROVED STOCK PLAN" means any employee benefit plan that has been
         approved by the Board of Directors of the Company prior to the date of
         the Securities Purchase Agreement, pursuant to which the Company's
         securities may be issued to any consultant, employee, officer or
         director for services provided to the Company.

         (ii) "BUSINESS DAY" means any day other than Saturday, Sunday or other
         day on which commercial banks in the City of New York are authorized or
         required by law to remain closed.

         (iii) "COMMON STOCK" means (i) the Company's common stock, $0.01 par
         value per share, and (ii) any capital stock into which such Common
         Stock shall have been changed or any capital stock resulting from a
         reclassification of such Common Stock.

         (iv) "CONVERTIBLE SECURITIES" means any stock or securities (other than
         Options) directly or indirectly convertible into or exchangeable or
         exercisable for Common Stock.

         (v) "EXPIRATION DATE" means the date that is three (3) years after the
         Warrant Date

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         (as defined in Section 13) or, if such date does not fall on a Business
         Day or on a day on which trading takes place on the Principal Market,
         then the next Business Day.

         (vi) "FUTURE APPROVED STOCK PLAN" means any employee benefit plan that
         has been approved by the shareholders of the Company after the date of
         the Securities Purchase Agreement, pursuant to which the Company's
         securities may be issued to any consultant, employee, officer or
         director for services provided to the Company.

         (vii) "NOTES" means the convertible notes of the Company issued
         pursuant to the Securities Purchase Agreement, and all convertible
         notes issued in exchange therefor or replacement thereof pursuant to
         the terms of such convertible notes.

         (viii) "OPTIONS" means any rights, warrants or options to subscribe for
         or purchase Common Stock or Convertible Securities.

         (ix) "PERSON" means an individual, a limited liability company, a
         partnership, a joint venture, a corporation, a trust, an unincorporated
         organization and a government or any department or agency thereof or
         any other legal entity.

         (x) "PRINCIPAL MARKET" means, with respect to the Common Stock or any
         other security, the Nasdaq National Market, or, if the Common Stock or
         any other security is not traded on the Nasdaq National Market, then
         the principal securities exchange or trading market for the Common
         Stock or such other security.

         (xi) "REGISTRATION RIGHTS AGREEMENT" means that agreement dated
         September 17, 2002 by and among the Company and the Persons referred to
         therein, as such agreement may be amended from time to time as provided
         in such agreement.

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

         (xiii) "WARRANT" means this Warrant and all Warrants issued in
         exchange, transfer or replacement thereof pursuant to the terms of such
         Warrants.

         (xiv) "WARRANT EXERCISE PRICE" shall be equal to, with respect to any
         Warrant Share, $4.14, subject to adjustment as hereinafter provided.

         (xv) "WEIGHTED AVERAGE PRICE" means, for any security as of any date,
         the dollar volume-weighted average price for such security on the
         Principal Market during the period beginning at 9:30 a.m., New York
         City Time (or such other time as the Principal Market publicly
         announces is the official open of trading), and ending at 4:00 p.m.,
         New York City Time (or such other time as the Principal Market publicly
         announces is the official close of trading), as reported by Bloomberg
         Financial Markets ("BLOOMBERG") through its "Volume at Price" functions
         (ignoring any trade of more than 30,000 shares of such security
         pursuant to an individual transaction (subject to adjustment for stock
         splits, stock dividends, stock combinations and other similar
         transactions involving such security after the Warrant Date)), or, if
         the foregoing does not apply, the dollar

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         volume-weighted average price of such security in the over-the-counter
         market on the electronic bulletin board for such security during the
         period beginning at 9:30 a.m., New York City Time (or such other time
         as the Principal Market publicly announces is the official open of
         trading), and ending at 4:00 p.m., New York City Time (or such other
         time as the Principal Market publicly announces is the official close
         of trading), as reported by Bloomberg, or, if no dollar volume-weighted
         average price is reported for such security by Bloomberg for such
         hours, the average of the highest closing bid price and the lowest
         closing ask price of any of the market makers for such security as
         reported in the "pink sheets" by the National Quotation Bureau, Inc. If
         the Weighted Average Price cannot be calculated for such security on
         such date on any of the foregoing bases, the Weighted Average Price of
         such security on such date shall be the fair market value as mutually
         determined by the Company and the holders of the SPA Warrants
         representing at least two-thirds of the shares of Common Stock issuable
         upon exercise of the SPA Warrants then outstanding. If the Company and
         the holders of the SPA Warrants representing at least two-thirds of the
         shares of Common Stock issuable upon exercise of the SPA Warrants then
         outstanding are unable to agree upon the fair market value of the
         Common Stock, then such dispute shall be resolved pursuant to Section
         2(a) below. All such determinations to be appropriately adjusted for
         any stock dividend, stock split, stock combination or other similar
         transaction during any period during which the Weighted Average Price
         is being determined.

         Section 2. Exercise of Warrant.

                  (a) Subject to the terms and conditions hereof, this Warrant
may be exercised by the holder hereof then registered on the books of the
Company, in whole or in part, at any time on any Business Day on or after the
opening of business on the date hereof and prior to 11:59 P.M. New York Time on
the Expiration Date by (i) delivery of a written notice, in the form of the
subscription form attached as Exhibit A hereto (the "EXERCISE NOTICE"), of such
holder's election to exercise this Warrant, which notice shall specify the
number of Warrant Shares to be purchased, (ii) (A) payment to the Company of an
amount equal to the Warrant Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (the "AGGREGATE EXERCISE
PRICE") by wire transfer of immediately available funds (or by check if the
Company has not provided the holder of this Warrant with wire transfer
instructions for such payment) or (B) by notifying the Company that this Warrant
is being exercised pursuant to a Cashless Exercise (as defined in Section 2(e)),
and (iii) if required by Section 2(f) or unless the Holder has previously
delivered this Warrant to the Company and it or a new replacement Warrant has
not yet been delivered to the Holder, the surrender to a common carrier for
overnight delivery to the Company as soon as practicable following such date,
this Warrant (or an indemnification undertaking with respect to this Warrant in
the case of its loss, theft or destruction); provided, that if such Warrant
Shares are to be issued in any name other than that of the registered holder of
this Warrant, such issuance shall be deemed a transfer and the provisions of
Section 7 shall be applicable. In the event of any exercise of the rights
represented by this Warrant in compliance with this Section 2(a), the Company
shall on the second (2nd) Business Day (the "WARRANT SHARE DELIVERY DATE")
following the date of its receipt of the Exercise Notice, the Aggregate Exercise
Price (or notice of Cashless Exercise) and if required by Section 2(f) (or
unless the Holder has previously delivered this Warrant to the

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Company and it or a new replacement Warrant has not yet been delivered to the
Holder), this Warrant (or an indemnification undertaking with respect to this
Warrant in the case of its loss, theft or destruction) (the "EXERCISE DELIVERY
DOCUMENTS") (A) provided that the transfer agent is participating in The
Depository Trust Company ("DTC") Fast Automated Securities Transfer Program and
provided that the holder is eligible to receive shares through DTC, credit such
aggregate number of shares of Common Stock to which the holder shall be entitled
to the holder's or its designee's balance account with DTC through its Deposit
Withdrawal Agent Commission system or (B) issue and deliver to the address
specified in the Exercise Notice, a certificate, registered in the name of the
holder or its designee, for the number of shares of Common Stock to which the
holder shall be entitled. Upon (x) delivery of the Exercise Notice and (y) the
Aggregate Exercise Price referred to in clause (ii)(A) above or notification to
the Company of a Cashless Exercise referred to in Section 2(e), the holder of
this Warrant shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to which this Warrant has
been exercised, irrespective of the date of delivery of this Warrant as required
by clause (iii) above or the certificates evidencing such Warrant Shares. In the
case of a dispute as to the determination of the Warrant Exercise Price, the
Weighted Average Price of a security or the arithmetic calculation of the number
of Warrant Shares, the Company shall promptly issue to the holder the number of
shares of Common Stock that is not disputed and shall submit the disputed
determinations or arithmetic calculations to the holder via facsimile within one
(1) Business Day of receipt of the holder's Exercise Notice. If the holder and
the Company are unable to agree upon the determination of the Warrant Exercise
Price, the Weighted Average Price or arithmetic calculation of the number of
Warrant Shares within one (1) Business Day of such disputed determination or
arithmetic calculation being submitted to the holder, then the Company shall
within two (2) Business Days submit via facsimile (i) the disputed determination
of the Warrant Exercise Price or the Weighted Average Price to an independent,
reputable investment banking firm selected from a list of such investment banks
agreed to by the Company and the holders of the SPA Warrants representing at
least two-thirds (2/3) of the Warrant Shares issuable upon exercise of the SPA
Warrants at or prior to the Warrant Date (the "AGREED UPON LIST") or (ii) the
disputed arithmetic calculation of the number of Warrant Shares to its
independent, outside accountant. The Company shall cause the investment banking
firm or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the holder of the results no later than
three (3) Business Days from the time it receives the disputed determinations or
calculations. Such investment banking firm's or accountant's determination or
calculation, as the case may be, shall be deemed conclusive absent error.

                  (b) If this Warrant is submitted for exercise, as may be
required by Section 2(f), and unless the rights represented by this Warrant
shall have expired or shall have been fully exercised, the Company shall, as
soon as practicable and in no event later than three (3) Business Days after
receipt of this Warrant (the "WARRANT DELIVERY DATE") and at its own expense,
issue a new Warrant identical in all respects to this Warrant exercised except
it shall represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which such Warrant is exercised.

                  (c) No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but rather the number of shares of Common Stock
issued upon exercise of this Warrant shall be rounded up or down to the nearest
whole number.

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                  (d) If the Company shall fail for any reason or for no reason
(x) to issue and deliver to the holder within three (3) Business Days of receipt
of the Exercise Delivery Documents a certificate for the number of shares of
Common Stock to which the holder is entitled or to credit the holder's balance
account with DTC for such number of shares of Common Stock to which the holder
is entitled upon the holder's exercise of this Warrant or (y) to issue and
deliver to the holder on the Warrant Delivery Date a new Warrant for the number
of shares of Common Stock to which such holder is entitled pursuant to Section
2(b) hereof, if any, then the Company shall, in addition to any other remedies
under this Warrant or the Securities Purchase Agreement or otherwise available
to such holder, including any indemnification under Section 8 of the Securities
Purchase Agreement, pay as additional damages in cash to such holder on each day
after such third (3rd) Business Day that such shares of Common Stock are not
issued and delivered to the holder, in the case of clause (x) above, or such
third (3rd) Business Day that such Warrant is not delivered, in the case of
clause (y) above, in an amount equal to the sum of (i) 0.5% of the product of
(A) the number of shares of Common Stock not issued to the holder on or prior to
the Warrant Share Delivery Date and (B) the Weighted Average Price of the Common
Stock on the Warrant Share Delivery Date, in the case of the failure to deliver
Common Stock, and (ii) if the Company has failed to deliver a Warrant to the
holder on or prior to the Warrant Delivery Date, 0.1% of the product of (x) the
number of shares of Common Stock issuable upon exercise of the Warrant as of the
Warrant Delivery Date, and (y) the Weighted Average Price of the Common Stock on
the Warrant Delivery Date; provided that in no event shall cash damages accrue
pursuant to this Section 2(d) during the period, if any, in which any Warrant
Shares are the subject of a bona fide dispute that is subject to and being
resolved pursuant to, and in compliance with the time periods and other
provisions of, the dispute resolution provisions of Section 2(a). Alternatively,
subject to the dispute resolution provisions of Section 2(a), at the election of
the holder made in the holder's sole discretion, the Company shall pay to the
holder, in lieu of the additional damages referred to in the preceding sentence
(but in addition to all other available remedies that the holder may pursue
hereunder and under the Securities Purchase Agreement (including indemnification
pursuant to Section 8 thereof)), 110% of the amount by that (A) the holder's
total purchase price (including brokerage commissions, if any) for shares of
Common Stock purchased to make delivery in satisfaction of a sale by such holder
of the shares of Common Stock to which the holder is entitled but has not
received upon an exercise, exceeds (B) the net proceeds received by the holder
from the sale of the shares of Common Stock to which the holder is entitled but
has not received upon such exercise.

                  (e) If, despite the Company's obligations under the Securities
Purchase Agreement and the Registration Rights Agreement, the Warrant Shares to
be issued are not registered and available for resale pursuant to a registration
statement in accordance with the Registration Rights Agreement, including during
a Grace Period (as defined in the Registration Rights Agreement), then
notwithstanding anything contained herein to the contrary, the holder of this
Warrant may, at its election exercised in its sole discretion, exercise this
Warrant in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the "Net
Number" of shares of Common Stock determined according to the following formula
(a "CASHLESS EXERCISE"):

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         Net Number = (A x B) - (A x C)
                      -----------------
                                B

                  For purposes of the foregoing formula:

                           A = the total number of shares with respect to which
                           this Warrant is then being exercised.

                           B = the Weighted Average Price of the Common Stock on
                           the trading day immediately preceding the date of the
                           delivery of the Exercise Notice.

                           C = the Warrant Exercise Price then in effect for the
                           applicable Warrant Shares at the time of such
                           exercise.

                  (f) Book-Entry. Notwithstanding anything to the contrary set
forth herein, upon exercise of this Warrant in accordance with the terms hereof,
the Holder shall not be required to physically surrender this Warrant to the
Company unless it is being exercised for all of the Warrant Shares represented
by the Warrant. The Holder and the Company shall maintain records showing the
number of Warrant Shares exercised and issued and the dates of such exercises or
shall use such other method, reasonably satisfactory to the Holder and the
Company, so as not to require physical surrender of this Warrant upon each such
exercise. In the event of any dispute or discrepancy, such records of the
Company establishing the number of Warrant Shares to which the Holder is
entitled shall be controlling and determinative in the absence of error.
Notwithstanding the foregoing, if this Warrant is exercised as aforesaid, the
Holder may not transfer this Warrant unless the Holder first physically
surrenders this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant of like tenor,
registered as the Holder may request, representing in the aggregate the
remaining number of Warrant Shares represented by this Warrant. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following exercises of any portion
of this Warrant, the number of Warrant Shares represented by this Warrant may be
less than the number stated on the face hereof. Each Warrant shall bear the
following legend:

                  ANY TRANSFEREE OF THIS WARRANT SHOULD CAREFULLY REVIEW THE
                  TERMS OF THIS WARRANT, INCLUDING SECTION 2(f) HEREOF. THE
                  SECURITIES REPRESENTED BY THIS WARRANT MAY BE LESS THAN THE
                  NUMBER SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 2(f)
                  HEREOF.

         Section 3. Covenants as to Common Stock. The Company hereby covenants
and agrees as follows:

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                  (a) This Warrant is, and any Warrants issued in substitution
for or replacement of this Warrant will upon issuance be, duly authorized and
validly issued.

                  (b) All Warrant Shares that may be issued upon the exercise of
the rights represented by this Warrant will, upon issuance, be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issue thereof.

                  (c) During the period within which the rights represented by
this Warrant may be exercised, the Company will at all times have authorized and
reserved at least 110% of the number of shares of Common Stock needed to provide
for the exercise of the rights then represented by this Warrant.

                  (d) The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant on the Principal
Market (subject to official notice of issuance upon exercise of this Warrant)
and shall maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all shares of Common Stock from time to time issuable
upon the exercise of this Warrant; and the Company shall so list on the
Principal Market and shall maintain such listing of, any other shares of capital
+stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such Principal Market.

                  (e) The Company will not, by amendment of its Restated
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may reasonably be requested by the holder of
this Warrant in order to protect the exercise privilege of the holder of this
Warrant against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above $0.01 per share, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

                  (f) This Warrant will be binding upon any entity succeeding to
the Company by merger, consolidation or acquisition of all or substantially all
of the Company's assets.

         Section 4. Taxes. The Company shall pay any and all taxes that may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant; provided, however, that the holder of this warrant
shall pay any taxes in connection with any transfers of this warrant or the
transfer of the Warrant Shares issuable upon exercise hereof.

         Section 5. Warrant Holder Not Deemed a Stockholder. No holder, as such,
of this Warrant shall be entitled to vote or receive dividends or be deemed the
holder of shares of the Company for any purpose (other than to the extent that
the holder is deemed to be a beneficial

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holder of shares under applicable securities laws after taking into account the
limitation set forth in the first paragraph of this Warrant), nor shall anything
contained in this Warrant be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization,
issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the holder of this Warrant of the
Warrant Shares that he or she is then entitled to receive upon the due exercise
of this Warrant. In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on such holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

         Section 6. Representations of Holder. The holder of this Warrant, by
the acceptance hereof, represents that it is acquiring this Warrant, and upon
exercise hereof (other than pursuant to a Cashless Exercise) will acquire the
Warrant Shares, for its own account and not with a view towards, or for resale
in connection with, the public sale or distribution of this Warrant or the
Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided, however, that by making the representations herein,
the holder does not agree to hold this Warrant or any of the Warrant Shares for
any minimum or other specific term and reserves the right to dispose of this
Warrant and the Warrant Shares at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. The holder of
this Warrant further represents, by acceptance hereof, that, as of this date,
such holder is an "accredited investor" as such term is defined in Rule
501(a)(3) of Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act (an "ACCREDITED INVESTOR"). Each delivery of an
Exercise Notice, other than in connection with a Cashless Exercise shall
constitute confirmation at such time by the holder of the representations
concerning the Warrant Shares set forth in the first two sentences of this
Section 6, unless contemporaneous with the delivery of such Exercise Notice the
holder notifies the Company in writing that it is not making such
representations (a "REPRESENTATION NOTICE"). If the holder delivers a
Representation Notice in connection with an exercise, it shall be a condition to
such holder's exercise of this Warrant and the Company's obligations set forth
in Section 2 in connection with such exercise, that the Company receive such
other representations as the Company considers reasonably necessary to assure
the Company that the issuance of its securities upon exercise of this Warrant
shall not violate any United States or state securities laws.

         Section 7. Ownership and Transfer.

                  (a) The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee. The Company may
treat the person in whose name any Warrant is registered on the register as the
owner and holder thereof for all purposes, notwithstanding any notice to the
contrary, but in

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all events recognizing any transfers made in accordance with the terms of this
Warrant.

                  (b) This Warrant and the rights granted hereunder shall be
assignable by the holder hereof without the consent of the Company.

                  (c) The Company is obligated to register the Warrant Shares
for resale under the Securities Act pursuant to the Registration Rights
Agreement and the initial holder of this Warrant (and certain assignees thereof)
is entitled to the registration rights in respect of the Warrant Shares as set
forth in the Registration Rights Agreement.

                  (d) This Warrant and the shares issuable upon exercise of this
Warrant (collectively the "SECURITIES") have not been registered under the
Securities Act or applicable state securities laws and may not be offered for
sale, sold, assigned or transferred unless (A) subsequently registered
thereunder, (B) such Buyer shall have delivered to the Company an opinion of
counsel, in a generally acceptable form, to the effect that such Securities to
be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration, or (C) such Holder provides the Company
with reasonable assurance that such Securities can be sold, assigned or
transferred pursuant to Rule 144 promulgated under the 1933 Act, as amended (or
a successor rule thereto) ("RULE 144"); (ii) any sale of the Securities made in
reliance on Rule 144 may be made only in accordance with the terms of Rule 144
and further, if Rule 144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register the Securities under the 1933 Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder. Notwithstanding the foregoing, the Securities may be
pledged in connection with a bona fide margin account or other loan or financing
arrangement secured by the Securities.

         Section 8. Adjustment of Warrant Exercise Price and Number of Shares.
The Warrant Exercise Price and the number of shares of Common Stock issuable
upon exercise of this Warrant shall be adjusted from time to time as follows:

                  (a) Adjustment of Warrant Exercise Price and Number of Shares
upon Issuance of Common Stock. If and whenever on or after the Warrant Date, the
Company issues or sells, or is deemed to have issued or sold, any shares of
Common Stock (including the issuance or sale of shares of Common Stock owned or
held by or for the account of the Company, but excluding Exempted Issuances (as
defined below)) for a consideration per share less than a price (the "APPLICABLE
PRICE") equal to the Warrant Exercise Price in effect immediately prior to such
issuance or sale, then immediately after such issue or sale the Warrant Exercise
Price then in effect shall be reduced to an amount equal to such consideration
per share. Upon each such adjustment of the Warrant Exercise Price pursuant to
the immediately preceding sentence, the number of shares of Common Stock
acquirable upon exercise of this Warrant shall be adjusted to the number of
shares determined by multiplying the Warrant Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
acquirable upon exercise of this Warrant immediately prior to such adjustment
and dividing the

                                      -10-
<PAGE>

product thereof by the Warrant Exercise Price resulting from such adjustment.
For purposes of this Warrant, "EXEMPTED ISSUANCES" shall mean: (I) shares of
Common Stock issued or deemed to have been issued by the Company in connection
with an Approved Stock Plan and up to 4,000,000 shares (subject to adjustment
for stock splits, stock dividends, stock combinations and other similar
transactions after the Warrant Date) issued in connection with a Future Approved
Stock Plan; (II) shares of Common Stock issued or deemed issued upon the
conversion, exchange or exercise of any right, option, obligation or security
outstanding on the date prior to the Warrant Date and set forth in Schedule 3(c)
of the Securities Purchase Agreement, provided that the terms of such option,
obligation or security are not amended on or after the Warrant Date, (III)
shares of Common Stock deemed to have been issued upon the issuance of the
Company's Series A Convertible Preferred Stock or Series B Convertible Preferred
Stock and the warrants issued in connection therewith, so long as the number and
terms of such Series A and Series B Convertible Preferred Stock and the terms of
such warrants are not amended or otherwise altered on or after the Warrant Date;
(IV) shares of Common Stock issued by the Company upon conversion of its Series
A Convertible Preferred Stock or Series B Convertible Preferred Stock, and
shares of Common Stock issued by the Company upon exercise of the warrants
issued in connection with the issuance of the Series A Convertible Preferred
Stock and Series B Convertible Preferred Stock, so long as the number and terms
of such Series A and Series B Convertible Preferred Stock and the terms of such
warrants have not been amended or otherwise altered on or after the Warrant
Date; (V) shares of Common Stock issued or deemed to have been issued by the
Company upon conversion of the Notes or exercise of the SPA Warrants; (VI)
shares of Common Stock issued or deemed to have been issued either (x) to
parties that are suppliers, customers or strategic partners investing in
connection with a commercial relationship with the Company, the primary purpose
of which is not to raise capital, or (y) as consideration for mergers or
consolidations or acquisitions of businesses or their tangible or intangible
assets (each an "ACQUISITION TRANSACTION"), excluding Acquisition Transactions
in which cash or cash equivalents represent a majority of the assets acquired;
provided that such issuances or deemed issuances pursuant to this clause (VI)
shall not exceed 400,000 shares of Common Stock in the aggregate (subject to
adjustment for stock splits, stock dividends, stock combinations or other
similar transactions after the Warrant Date); (VII) shares of Common Stock
issued or deemed to have been issued in connection with leases; and (VIII)
shares of Common Stock issued or deemed to have been issued to former employees
in satisfaction of severance obligations of the Company.

                  (b) Effect on Warrant Exercise Price of Certain Events. For
purposes of determining the adjusted Warrant Exercise Price under Section 8(a)
above, the following shall be applicable:

         (i) Issuance of Options. If the Company in any manner grants or sells
         any Options and the lowest price per share for which one share of
         Common Stock is issuable upon the exercise of any such Option or upon
         conversion, exchange or exercise of any Convertible Securities issuable
         upon exercise of any such Option is less than the Applicable Price,
         then such share of Common Stock shall be deemed to be outstanding and
         to have been issued and sold by the Company at the time of the granting
         or sale of such Option for such price per share. For purposes of this
         Section 8(b)(i), the "lowest price per share for which one share of
         Common Stock is issuable upon exercise of any such Option or upon

                                      -11-
<PAGE>

         conversion, exchange or exercise of any Convertible Security issuable
         upon exercise of any such Option" shall be equal to the sum of the
         lowest amounts of consideration (if any) received or receivable by the
         Company with respect to any one share of Common Stock upon the granting
         or sale of the Option, upon exercise of the Option and upon conversion,
         exchange or exercise of any Convertible Security issuable upon exercise
         of such Option. No further adjustment of the Warrant Exercise Price
         shall be made upon the actual issuance of such Common Stock or of such
         Convertible Securities upon the exercise of such Options or upon the
         actual issuance of such Common Stock upon conversion, exchange or
         exercise of such Convertible Securities.

         (ii) Issuance of Convertible Securities. If the Company in any manner
         issues or sells any Convertible Securities and the lowest price per
         share for which one share of Common Stock is issuable upon such
         conversion, exchange or exercise thereof is less than the Applicable
         Price, then such share of Common Stock shall be deemed to be
         outstanding and to have been issued and sold by the Company at the time
         of the issuance or sale of such Convertible Securities for such price
         per share. For the purposes of this Section 8(b)(ii), the "lowest price
         per share for which one share of Common Stock is issuable upon such
         conversion, exchange or exercise" shall be equal to the sum of the
         lowest amounts of consideration (if any) received or receivable by the
         Company with respect to one share of Common Stock upon the issuance or
         sale of the Convertible Security and upon conversion, exchange or
         exercise of such Convertible Security. No further adjustment of the
         Warrant Exercise Price shall be made upon the actual issuance of such
         Common Stock upon conversion, exchange or exercise of such Convertible
         Securities, and if any such issue or sale of such Convertible
         Securities is made upon exercise of any Options for which adjustment of
         the Warrant Exercise Price had been or are to be made pursuant to other
         provisions of this Section 8(b), no further adjustment of the Warrant
         Exercise Price shall be made by reason of such issue or sale.

         (iii) Change in Option Price or Rate of Conversion. If the purchase,
         exchange or exercise price provided for in any Options, the additional
         consideration, if any, payable upon the issue, conversion, exchange or
         exercise of any Convertible Securities, or the rate at which any
         Options or Convertible Securities are convertible into or exchangeable
         or exercisable for Common Stock changes at any time, the Warrant
         Exercise Price in effect at the time of such change shall be adjusted
         to the Warrant Exercise Price that would have been in effect at such
         time had such Options or Convertible Securities provided for such
         changed purchase, exchange or exercise price, additional consideration
         or changed conversion rate, as the case may be, at the time initially
         granted, issued or sold and the number of shares of Common Stock
         acquirable hereunder shall be correspondingly readjusted. For purposes
         of this Section 8(b)(iii), if the terms of any Option or Convertible
         Security that was outstanding as of the date of issuance of this
         Warrant are changed in the manner described in the immediately
         preceding sentence, then such Option or Convertible Security and the
         Common Stock deemed issuable upon exercise, conversion or exchange
         thereof shall be deemed to have been issued as of the date of such
         change. No adjustment shall be made if such adjustment would result in
         an increase of the Warrant Exercise Price then in effect.

                                      -12-
<PAGE>

                  (c) Effect on Warrant Exercise Price of Certain Events. For
purposes of determining the adjusted Warrant Exercise Price under Sections 8(a)
and 8(b), the following shall be applicable:

         (i) Calculation of Consideration Received. In case any Option is issued
         in connection with the issue or sale of other securities of the
         Company, together comprising one integrated transaction in which no
         specific consideration is allocated to such Options by the parties
         thereto, the Options will be deemed to have been issued for a
         consideration of $.01. If any Common Stock, Options or Convertible
         Securities are issued or sold or deemed to have been issued or sold for
         cash, the consideration received therefor will be deemed to be the net
         amount received by the Company therefor. If any Common Stock, Options
         or Convertible Securities are issued or sold for a consideration other
         than cash, the amount of such consideration received by the Company
         will be the fair value of such consideration, except where such
         consideration consists of marketable securities, in which case the
         amount of consideration received by the Company will be the Weighted
         Average Price of such securities on the date of receipt of such
         securities. If any Common Stock, Options or Convertible Securities are
         issued to the owners of the non-surviving entity in connection with any
         merger in which the Company is the surviving entity, the amount of
         consideration therefor will be deemed to be the fair value of such
         portion of the net assets and business of the non-surviving entity as
         is attributable to such Common Stock, Options or Convertible
         Securities, as the case may be. The fair value of any consideration
         other than cash or securities will be determined jointly by the Company
         and the holders of SPA Warrants representing at least two-thirds of the
         shares of Common Stock obtainable upon exercise of the SPA Warrants
         then outstanding. If such parties are unable to reach agreement within
         ten (10) days after the occurrence of an event requiring valuation (the
         "VALUATION EVENT"), the fair value of such consideration will be
         determined within five (5) Business Days after the tenth (10th) day
         following the Valuation Event by an independent, reputable appraiser
         jointly selected by the Company and the holders of SPA Warrants
         representing at least two-thirds of the shares of Common Stock
         obtainable upon exercise of the SPA Warrants then outstanding. The
         determination of such appraiser shall be final and binding upon all
         parties absent error and the fees and expenses of such appraiser shall
         be borne by the Company.

         (ii) Record Date. If the Company takes a record of the holders of
         Common Stock for the purpose of entitling them (1) to receive a
         dividend or other distribution payable in Common Stock, Options or in
         Convertible Securities or (2) to subscribe for or purchase Common
         Stock, Options or Convertible Securities, then such record date will be
         deemed to be the date of the issue or sale of the shares of Common
         Stock deemed to have been issued or sold upon the declaration of such
         dividend or the making of such other distribution or the date of the
         granting of such right of subscription or purchase, as the case may be.

                  (d) Adjustment of Warrant Exercise Price upon Subdivision or
Combination of Common Stock. If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding shares of Common Stock into a
greater number of shares, the Warrant Exercise Price in effect

                                      -13-
<PAGE>

immediately prior to such subdivision will be proportionately reduced and the
number of shares of Common Stock obtainable upon exercise of this Warrant will
be proportionately increased. If the Company at any time after the date of
issuance of this Warrant combines (by combination, reverse stock split or
otherwise) its outstanding shares of Common Stock into a smaller number of
shares, the Warrant Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of shares of Common
Stock obtainable upon exercise of this Warrant will be proportionately
decreased. Any adjustment under this Section 8(d) shall become effective at the
close of business on the date the subdivision or combination becomes effective

                  (e) Distribution of Assets. If the Company shall declare or
make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a
"DISTRIBUTION"), at any time after the issuance of this Warrant, then, in each
such case:

         (i) the Warrant Exercise Price in effect immediately prior to the close
         of business on the record date fixed for the determination of holders
         of Common Stock entitled to receive the Distribution shall be reduced,
         effective as of the close of business on such record date, to a price
         determined by multiplying such Warrant Exercise Price by a fraction of
         which (A) the numerator shall be the Weighted Average Price of the
         Common Stock on the trading day immediately preceding such record date
         minus the value of the Distribution (as determined in good faith by the
         Company's Board of Directors) applicable to one share of Common Stock,
         and (B) the denominator shall be the Weighted Average Price of the
         Common Stock on the trading day immediately preceding such record date;
         and

         (ii) either (A) the number of Warrant Shares obtainable upon exercise
         of this Warrant shall be increased to a number of shares equal to the
         number of shares of Common Stock obtainable immediately prior to the
         close of business on the record date fixed for the determination of
         holders of Common Stock entitled to receive the Distribution multiplied
         by the reciprocal of the fraction set forth in the immediately
         preceding clause (i), or (B) in the event that the Distribution is of
         common stock of a company whose common stock is traded on a national
         securities exchange or a national automated quotation system, then the
         holder of this Warrant shall receive an additional warrant, the terms
         of which shall be identical to those of this Warrant, except that such
         warrant shall be exercisable for the amount of the assets that would
         have been payable to the holder of this Warrant pursuant to the
         Distribution had the holder exercised this Warrant immediately prior to
         such record date and with an exercise price equal to the amount by
         which the exercise price of this Warrant was decreased with respect to
         the Distribution pursuant to the terms of the immediately preceding
         clause (i).

                  (f) Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 8 but not expressly provided for
by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with

                                      -14-
<PAGE>

equity features), then the Company's Board of Directors will make an appropriate
adjustment in the Warrant Exercise Price and the number of shares of Common
Stock obtainable upon exercise of this Warrant so as to protect the rights of
the holders of the SPA Warrants; provided that no such adjustment will increase
the Warrant Exercise Price or decrease the number of shares of Common Stock
obtainable as otherwise determined pursuant to this Section 8.

                  (g) Optional Redemption Upon a Cash Private Transaction. (i)
In addition to the rights of the holder of this Warrant under Section 9, upon a
Cash Private Transaction (as defined in the Securities Purchase Agreement) the
holder hereof shall have the right, at such holder's option, to require the
Company to redeem all or any portion of this Warrant at a price equal to 105% of
the Black-Scholes Amount, as determined in Section 8(g)(ii) below (the "CASH
PRIVATE TRANSACTION REDEMPTION PRICE"). No sooner than 40 nor later than 30
Business Days prior to the consummation of a Cash Private Transaction, but not
prior to the public announcement of such Cash Private Transaction, the Company
shall deliver written notice thereof via facsimile and overnight courier (a
"NOTICE OF CASH PRIVATE TRANSACTION") to the holder of this Warrant. At any time
during the period beginning after such holder's receipt of a Notice of Cash
Private Transaction (or, in the event a Notice of Cash Private Transaction is
not delivered at least 30 Business Days prior to a Cash Private Transaction, at
any time on or after the date which is 30 Business Days prior to a Cash Private
Transaction) and ending on and including the date which is ten (10) Business
Days prior to the date of such Cash Private Transaction, the holder hereof may
require the Company to redeem all or any portion of this Warrant by delivering
written notice thereof via facsimile and overnight courier (a "NOTICE OF
REDEMPTION UPON CASH PRIVATE TRANSACTION") to the Company, which Notice of
Redemption Upon Cash Private Transaction shall indicate the portion (as stated
in Warrant Shares) of this Warrant that the holder hereof is submitting for
redemption. The date of the delivery by the holder of this Warrant of the Notice
of Redemption Upon Cash Private Transaction to the Company is referred to herein
as the "WARRANT REDEMPTION NOTICE DATE". Upon the Company's receipt of a
Notice(s) of Redemption Upon Cash Private Transaction from any holder of SPA
Warrants, the Company will promptly, but in no event later than one (1) Business
Day following such receipt, notify the holder of this Warrant by facsimile of
the Company's receipt of such Notice(s) of Redemption Upon Cash Private
Transaction. The Company shall deliver the Cash Private Transaction Redemption
Price simultaneously with the consummation of the Cash Private Transaction (the
"WARRANT REDEMPTION DATE"); provided that, if required by Section 2(f), this
Warrant shall have been so delivered to the Company. The Company shall not enter
into any binding agreement or other arrangement with respect to a Cash Private
Transaction unless the Company provides that the payments provided for in this
Section 8(g) shall have priority to payments to stockholders in connection with
such Cash Private Transaction and the Company complies with such provision.

         (ii) Black-Scholes Amount. The Black-Scholes Amount referred to in the
         first sentence of Section 8(g)(i) shall mean the amount resulting from
         applying the Black-Scholes pricing model to the portion (as expressed
         in Warrant Shares) of this Warrant, which calculation is made with the
         following inputs: (i) the "option striking price" being equal to the
         Warrant Exercise Price in effect on the fifth (5th) Business Day
         following the public announcement of the pending, proposed, intended or
         consummated Cash Private Transaction (such fifth (5th) Business Day is
         referred to as the "WARRANT REDEMPTION

                                      -15-
<PAGE>

         MEASUREMENT DATE"), (ii) the "interest rate" being equal to the
         interest rate on one year United States Treasury Bills issued most
         recently prior to the Warrant Redemption Measurement Date, (iii) the
         "time until option expiration" being the time from the Warrant
         Redemption Measurement Date until the Expiration Date, (iv) the
         "current stock price" being equal to the Weighted Average Price of the
         Common Stock on the Warrant Redemption Measurement Date, (v) the
         "volatility" being the 100-day historical volatility of the Common
         Stock as of the Warrant Redemption Measurement Date (as reported by the
         Bloomberg "HVT" screen), (vi) the number of Warrant Shares issuable
         upon exercise of the portion of this Warrant being redeemed being equal
         to the number of Warrant Shares set forth in the holder's Notice of
         Redemption Upon Cash Private Transaction, and (vii) the "dividend rate"
         being equal to zero. Within three (3) Business Days after the Company
         Warrant Redemption Measurement Date, each of the Company and the holder
         of this Warrant shall deliver to the other a written calculation of its
         determination of the Black-Scholes Amount. If the holder and the
         Company are unable to agree upon the calculation of the Black-Scholes
         Amount within four (4) Business Days of the Warrant Redemption
         Measurement Date, then the Company shall submit via facsimile the
         disputed calculation to an investment banking firm included on the
         Agreed Upon List (as defined in Section 2(a)) within six (6) Business
         Days of the Warrant Redemption Measurement Date. The Company shall
         cause such investment banking firm to perform the calculations and
         notify the company and the holder of the results no later than eight
         (8) Business Days after the Company Warrant Redemption Notice Date.
         Such investment banking firm's calculation of the Black-Scholes Amount
         shall be deemed conclusive absent error. The Company shall bear the
         fees and expenses of such investment banking firm for providing such
         calculation.

In the event that the Company does not pay the Cash Private Transaction
Redemption Price in full on the Warrant Redemption Date, then in addition to any
remedy the holder of this Warrant may have under this Warrant and the Securities
Purchase Agreement (including indemnification pursuant to Section 8 thereof) the
Cash Private Transaction Redemption Price payable in respect of this unredeemed
Warrant shall bear interest at the rate of the lesser of 2.0% per month
(prorated for partial months) or the highest lawful maximum interest rate until
paid in full.

                  (h) Notices.

         (i) Immediately upon any adjustment of the Warrant Exercise Price, the
         Company will give written notice thereof to the holder of this Warrant,
         setting forth in reasonable detail, and certifying, the calculation of
         such adjustment.

         (ii) The Company will give written notice to the holder of this Warrant
         at least ten (10) days prior to the date on which the Company closes
         its books or takes a record (A) with respect to any dividend or
         distribution upon the Common Stock, (B) with respect to any pro rata
         subscription offer to holders of Common Stock or (C) for determining
         rights to vote with respect to any Organic Change (as defined below),
         dissolution or liquidation, provided that such information shall be
         made known to the public prior to or in conjunction with such notice
         being provided to such holder.

                                      -16-
<PAGE>

         (iii) The Company will also give written notice to the holder of this
         Warrant at least ten (10) days prior to the date on which any Organic
         Change, dissolution or liquidation will take place, provided that such
         information shall be made known to the public prior to or in
         conjunction with such notice being provided to such holder.

         Section 9. Purchase Rights; Reorganization, Reclassification,
Consolidation, Merger or Sale. (a) In addition to any adjustments pursuant to
Section 8 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of its capital stock
(the "PURCHASE RIGHTS"), then the holder of this Warrant will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights that such holder could have acquired if such holder had held the
number of shares of Common Stock acquirable upon complete exercise of this
Warrant immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

                  (b) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction that is effected in such a way that
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as "ORGANIC CHANGE." Prior to
the consummation of any (i) sale of all or substantially all of the Company's
assets to an acquiring Person or (ii) other Organic Change following which the
Company is not a surviving entity, the Company will secure from the Person
purchasing such assets or the successor resulting from such Organic Change (in
each case, the "ACQUIRING ENTITY") a written agreement (in form and substance
satisfactory to the holders of SPA Warrants representing at least two-thirds of
the shares of Common Stock obtainable upon exercise of the SPA Warrants then
outstanding) to deliver to each holder of SPA Warrants in exchange for such SPA
Warrants, a security of the Acquiring Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant and satisfactory to
the holders of the SPA Warrants (including, an adjusted warrant exercise price
equal to the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and exercisable for a corresponding number of
shares of Common Stock acquirable and receivable upon exercise of the SPA
Warrants (without regard to any limitations on exercises), if the value so
reflected is less than the Warrant Exercise Price in effect immediately prior to
such consolidation, merger or sale). Prior to the consummation of any other
Organic Change, the Company shall make appropriate provision (in form and
substance satisfactory to the holders of SPA Warrants representing at least
two-thirds of the shares of Common Stock obtainable upon exercise of the SPA
Warrants then outstanding) to ensure that each of the holders of the SPA
Warrants will thereafter have the right to acquire and receive in lieu of or in
addition to (as the case may be) the shares of Common Stock immediately
theretofore acquirable and receivable upon the exercise of such holder's SPA
Warrants (without regard to any limitations on exercises), such shares of stock,
securities or assets that would have been issued or payable in such Organic
Change with respect to or in exchange for the number of shares of Common Stock
that would have been acquirable and receivable upon the exercise of such
holder's Warrant as of the date of such Organic Change (without taking into
account any limitations or restrictions on the exerciseability of this Warrant).

                                      -17-
<PAGE>

         Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly, on
receipt of an indemnification undertaking (or in the case of a mutilated
Warrant, the Warrant), issue a new Warrant of like denomination and tenor as
this Warrant so lost, stolen, mutilated or destroyed.

         Section 11. Notice. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this Warrant
must be in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

                  If to the Company:

                           Zix Corporation
                           2711 N. Haskell Avenue
                           Suite 2300
                           Dallas, Texas 75204
                           Telephone: 214-370-2000
                           Facsimile: 214-515-7385
                           Attention: General Counsel

                  With copy to:

                           Hughes & Luce L.L.P.
                           111 Congress Avenue; 9th Avenue
                           Austin, Texas 78701
                           Telephone: 512-482-6800
                           Facsimile: 512-482-6859
                           Attention: Bryan C. Wittman, Esq.

If to a holder of this Warrant, to it at the address and facsimile number set
forth on the Schedule of Buyers to the Securities Purchase Agreement, with
copies to such holder's representatives as set forth on such Schedule of Buyers,
or, in the case of the holder or any other Person named above, at such other
address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice to the other party at least
five (5) days prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender's
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a nationally
recognized overnight delivery service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

                                      -18-
<PAGE>

         Section 12. Limitation on Number of Warrant Shares. The Company shall
not be obligated to issue any shares of Common Stock upon exercise of the SPA
Warrants or conversion of the Notes in excess of 2,753,163 (subject to
adjustment for stock splits, stock dividends, stock combinations and other
similar transactions involving the Common Stock after the Warrant Date, and
further subject to increase as described below, the "EXCHANGE CAP"), except that
such limitation shall not apply in the event that the Company obtains the
approval of its stockholders as required by the applicable rules of the
Principal Market (or any successor rule or regulation) for issuances of Common
Stock in excess of the number of shares of Common Stock that the Company may
issue upon the exercise of the SPA Warrants or conversion of the Notes without
breaching the Company's obligations under the rules and regulations of the
Principal Market. Until such approval is obtained, the holder of this Warrant
shall not be issued, upon exercise of the SPA Warrants or conversion of the
Notes, shares of Common Stock in an amount greater than such holder's Cap
Allocation Amount (as defined in the Notes). The Company may increase the
Exchange Cap from time to time by delivering written notice (each an "INCREASE
NOTICE") of such increase to the holder of this Warrant at least five (5)
Business Days prior to the effective date of such increase, provided that prior
to delivering such Increase Notice the Company shall have obtained all necessary
shareholder and governmental or regulatory approvals in connection with the
relevant increase of the Exchange Cap. Each Increase Notice shall (A) state the
number of shares of Common Stock by which the Exchange Cap has been increased
and the resulting new Exchange Cap, (B) state that the Company has obtained all
necessary shareholder and governmental or regulatory approvals in connection
with the relevant increase of the Exchange Cap and (C) attach to such Increase
Notice evidence of the Company's satisfaction of its statement in the
immediately preceding clause (B). The increase in the Exchange Cap shall be
effective on the fifth (5th) Business Day (or such later date as the Company may
specify in the Increase Notice) following the Holder's receipt of an Increase
Notice complying with the immediately preceding sentence. In the event the
Company is prohibited from issuing Warrant Shares as a result of the operation
of this Section 12, the Company shall redeem for cash the portion of this
Warrant with respect to the Warrant Shares that cannot be issued as a result of
this Section 12, at a price per Warrant Share equal to the difference between
the Weighted Average Price and the Warrant Exercise Price of the Common Stock as
of the date of the attempted exercise.

         Section 13. Date. The date of this Warrant is September 18, 2002 (the
"WARRANT DATE"). This Warrant, in all events, shall be wholly void and of no
effect after 11:59 P.M. New York Time on the Expiration Date, except that
notwithstanding any other provisions hereof, the provisions of Section 7 shall
continue in full force and effect after such date as to any Warrant Shares or
other securities issued upon the exercise of this Warrant.

         Section 14. Amendment and Waiver. Except as otherwise provided herein,
the provisions of the SPA Warrants may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of SPA Warrants representing at least two-thirds of the shares of Common
Stock obtainable upon exercise of the SPA Warrants then outstanding; provided
that no such action may increase the Warrant Exercise Price of the SPA Warrants
or decrease the number of shares or change the class of stock obtainable upon
exercise of any SPA Warrants without the written consent of the holder of such
SPA Warrant.

                                      -19-
<PAGE>

         Section 15. Descriptive Headings; Governing Law. The descriptive
headings of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. All questions
concerning the construction, validity, enforcement and interpretation of this
Warrant shall be governed by the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.

                                      -20-
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
Ronald A. Woessner, its Senior Vice President and General Counsel, as of the
18th day of September.

                                               ZIX CORPORATION

                                               By:
                                                   ----------------------------
                                               Name:  Ronald A. Woessner
                                               Title: Senior Vice President and
                                                      General Counsel

<PAGE>

                              EXHIBIT A TO WARRANT
                                 EXERCISE NOTICE
        TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                                 ZIX CORPORATION

         The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("WARRANT SHARES") of Zix
Corporation (formerly known as Zixit Corporation), a Texas corporation (the
"COMPANY"), evidenced by the attached Warrant (the "WARRANT"). Capitalized terms
used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

         1. Form of Exercise Price. The Holder intends that payment of the
Warrant Exercise Price shall be made as:

                              a "CASH EXERCISE" with respect to _______________
              -----------     Warrant Shares; and/or

                              a "CASHLESS EXERCISE" with respect to ___________
              -----------     Warrant Shares (to the extent permitted by the
                              terms of the Warrant).

         2. Payment of Exercise Price. In the event that the holder has elected
a Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Company in accordance with the terms of the Warrant.

         3. Delivery of Warrant Shares. The Company shall deliver __________
Warrant Shares in accordance with the terms of the Warrant in the following name
and to the following address:

Issue to:
         ----------------------------------------------------------------------

         Facsimile Number:
                          -----------------------------------------------------

         DTC Participant Number and Name (if electronic book
         entry transfer):
                         ------------------------------------------------------
         Account Number  (if electronic book entry transfer):
                                                             ------------------
Date:                   ,
      --------------- --  ------

--------------------------------
   Name of Registered Holder

By:
   -----------------------------
Name:
Title:

<PAGE>

                                 ACKNOWLEDGMENT

         The Company hereby acknowledges this Exercise Notice and hereby directs
[TRANSFER AGENT] to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated ________________, 200_
from the Company and acknowledged and agreed to by [TRANSFER AGENT].

                                               ZIX CORPORATION

                                               By:
                                                   ----------------------------
                                               Name:
                                                    ---------------------------
                                               Title:
                                                      -------------------------

<PAGE>

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of Zix Corporation, a Texas
corporation, represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.

Dated: _____________, 200_

                                               --------------------------------

                                               Name:
                                                    ---------------------------
                                               Title:
                                                      -------------------------<PAGE>

                                                                     EXHIBIT 4.7

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of September
17, 2002, by and among Zix Corporation (formerly known as Zixit Corporation), a
Texas corporation, with headquarters located at 2711 N. Haskell Avenue, Suite
2300, Dallas, Texas 75204 (the "COMPANY"), and the undersigned buyers (each, a
"BUYER" and collectively, the "BUYERS").

         WHEREAS:

         A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue and sell to the Buyers (i) convertible
notes of the Company (including accrued and unpaid interest thereon, the
"NOTES"), which will be convertible into shares of the Company's common stock,
$0.01 par value per share (the "COMMON STOCK") (as converted, the "CONVERSION
Shares"), in accordance with the terms of the Notes, and (ii) warrants to
purchase shares of Common Stock (the "WARRANTS," and as exercised, the "WARRANT
SHARES");

         B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 ACT"), and
applicable state securities laws.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:

         1.       DEFINITIONS.

                  As used in this Agreement, the following terms shall have the
following meanings:

                  a. "INVESTOR" means a Buyer, any transferee or assignee
thereof to whom a Buyer assigns its rights under this Agreement and who agrees
to become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.

                  b. "PERSON" means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a governmental or any department or agency thereof.

                  c. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in

<PAGE>

compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous or delayed
basis ("RULE 415"), and the declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and Exchange
Commission (the "SEC").

                  d. "REGISTRABLE SECURITIES" means (i) the Conversion Shares
issued or issuable upon conversion of the Notes, (ii) the Warrant Shares issued
or issuable upon exercise of the Warrants and (iii) any shares of capital stock
issued or issuable with respect to the Conversion Shares, the Notes, the Warrant
Shares and the Warrants as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of Notes or exercises of Warrants.

                  e. "REGISTRATION STATEMENT" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

         2.       REGISTRATION.

                  a. Mandatory Registration. The Company shall prepare, and, as
soon as practicable but in no event later than 20 days after the Closing Date
(as defined in the Securities Purchase Agreement) (the "FILING DEADLINE"), file
with the SEC a Registration Statement on Form S-3 covering the resale of all of
the Registrable Securities. In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration, subject to the provisions of Section 2(d). The Registration
Statement prepared pursuant hereto shall register for resale at least that
number of shares of Common Stock equal to the sum of (x) 110% of the number of
Warrant Shares issuable upon exercise of all the outstanding Warrants (without
regard to any limitations on the exercise thereof) as of the second trading day
immediately preceding the date the Registration Statement is initially filed
with the SEC and (y) 110% of the number of Conversion Shares issuable upon
conversion of all the outstanding Notes (without regard to any limitations on
the conversion thereof) as of the second trading day immediately preceding the
date the Registration Statement is initially filed with the SEC, subject to
adjustment as provided in Section 2(e). The Company shall use its best efforts
to have the Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the date which is 105 days after the
Closing Date (the "EFFECTIVENESS DEADLINE").

                  b. Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and each increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor's Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any shares of

                                       2
<PAGE>

Common Stock included in a Registration Statement and which remain allocated to
any Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata
based on the number of Registrable Securities then held by such Investors which
are covered by such Registration Statement.

                  c. Legal Counsel. Subject to Section 5 hereof, the Buyers
holding securities representing at least two-thirds (2/3) of the Registrable
Securities shall have the right to select one legal counsel to review and
oversee any offering pursuant to this Section 2 ("LEGAL COUNSEL"), which shall
be Katten Muchin Zavis Rosenman or such other counsel as thereafter designated
by the holders of at least two-thirds (2/3) of the Registrable Securities. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company's obligations under this Agreement.

                  d. Ineligibility for Form S-3. In the event that Form S-3 is
not available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the holder of at
least two-thirds (2/3) of the Registrable Securities and (ii) undertake to
register the Registrable Securities on Form S-3 as soon as such form is
available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the SEC.

                  e. Sufficient Number of Shares Registered. In the event the
number of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities required
to be covered by such Registration Statement or an Investor's allocated portion
of the Registrable Securities pursuant to Section 2(b), the Company shall amend
the Registration Statement, or file a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover at least 100%
of the number of such Registrable Securities as of the trading day immediately
preceding the date of the filing of such amendment or new Registration
Statement, in each case, as soon as practicable, but in any event not later than
fifteen (15) days after the necessity therefor arises. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. For purposes of
the foregoing provision, the number of shares available under a Registration
Statement shall be deemed "insufficient to cover all of the Registrable
Securities" if at any time the number of Registrable Securities issued or
issuable upon conversion of the Notes and exercise of the Warrants covered by
such Registration Statement is greater than the number of shares of Common Stock
available for resale under such Registration Statement. The calculation set
forth in the foregoing sentence shall be made without regard to any limitations
on the conversion of the Notes or exercise of the Warrants and such calculation
shall assume that the Notes and the Warrants are then convertible and
exercisable, respectively, into shares of Common Stock at the then prevailing
Conversion Rate (as defined in the Notes) and Warrant Exercise Price (as defined
in the Warrants), respectively, if applicable.

                  f. Effect of Failure to File and Obtain and Maintain
Effectiveness of Registration Statement. If (i) a Registration Statement
covering all the Registrable Securities and

                                       3
<PAGE>

required to be filed by the Company pursuant to this Agreement is not (A) filed
with the SEC on or before the Fling Deadline or (B) declared effective by the
SEC on or before the Effectiveness Deadline or (ii) on any day after the
Registration Statement has been declared effective by the SEC sales of all the
Registrable Securities required to be included on such Registration Statement
cannot be made (other than during an Allowable Grace Period (as defined in
Section 3(t))) pursuant to the Registration Statement (including, without
limitation, because of a failure to keep the Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to
the Registration Statement or to register sufficient shares of Common Stock),
then, as partial relief for the damages to any holder by reason of any such
delay in or reduction of its ability to sell the underlying shares of Common
Stock (which remedy shall not be exclusive of any other remedies available at
law or in equity), the Company shall pay to each holder of Notes an amount in
cash equal to the product of (i) the principal amount of the Notes held by each
holder multiplied by (ii) the sum of (A) 0.02, if the Registration Statement is
not filed by the Filing Deadline, plus (B) 0.02, if the Registration Statement
is not declared effective by the Effectiveness Deadline, plus, (C) the product
of (I) 0.000667 multiplied by (II) the sum (without duplication) of (x) the
number of days after the Filing Deadline that such Registration Statement is not
filed with the SEC, plus (y) the number of days after the applicable
Effectiveness Deadline that the Registration Statement is not declared effective
by the SEC, plus (z) the number of days after the Registration Statement has
been declared effective by the SEC that such Registration Statement is not
available (other than during an Allowable Grace Period) for the sale of at least
all the Registrable Securities required to be included on such Registration
Statement pursuant to Section 2(e). The payments to which a holder shall be
entitled pursuant to this Section 2(f) are referred to herein as "REGISTRATION
DELAY PAYMENTS." Registration Delay Payments shall be paid on the earlier of (I)
the last day of the calendar month during which such Registration Delay Payments
are incurred and (II) the third Business Day after the event or failure giving
rise to the Registration Delay Payments is cured. In the event the Company fails
to make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of the lesser of 2.0% per month
(prorated for partial months) or the highest lawful maximum interest rate, in
each case, until paid in full.

         3.       RELATED OBLIGATIONS.

                  At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a) or 2(e), the
Company will use its best efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and,
pursuant thereto, the Company shall have the following obligations:

                  a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the applicable Registrable Securities
(but in no event later than the applicable Filing Deadline) and use its best
efforts to cause such Registration Statement relating to the Registrable
Securities to become effective as soon as practicable after such filing (but in
no event later than the applicable Effectiveness Deadline). The Company shall
keep each Registration Statement effective pursuant to Rule 415 at all times
until the earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the
1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities

                                       4
<PAGE>

covered by such Registration Statement (the "REGISTRATION PERIOD"). Such
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. The term "best efforts" shall mean, among other
things, that the Company shall submit to the SEC, within two (2) Business Days
after the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments
on the Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request.

                  b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration Statement
which are required to be filed pursuant to this Agreement (including pursuant to
this Section 3(b)) by reason of the Company filing a report on Form 10-K, Form
10-Q or Form 8-K or any analogous report under the Securities Exchange Act of
1934, as amended (the "1934 ACT"), the Company shall have incorporated such
report by reference into the Registration Statement, if applicable, or shall
file such amendments or supplements with the SEC on the same day on which the
1934 Act report is filed which created the requirement for the Company to amend
or supplement the Registration Statement.

                  c. The Company shall (A) permit Legal Counsel to review and
comment upon (i) the initial Registration Statement at least four (4) Business
Days prior to its filing with the SEC and (ii) all other Registration Statements
and all amendments and supplements to all Registration Statements (except for
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K and any similar or successor reports) within a reasonable number of
days prior to their filing with the SEC, and (B) not file any document,
registration statement, amendment or supplement described in the foregoing
clause (A) in a form to which Legal Counsel reasonably objects. The Company
shall not submit a request for acceleration of the effectiveness of a
Registration Statement or any amendment or supplement thereto without providing
prior notice thereof to Legal Counsel and each Investor. The Company shall
furnish to Legal Counsel, without charge, (i) promptly after the same is
prepared and filed with the SEC, one copy of any Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, and all exhibits and (ii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company's obligations pursuant to this Section 3.

                                       5
<PAGE>

                  d. The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably request)
and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.

                  e. The Company shall use its best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by the Investors of the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of all the states of
the United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(e), (y) subject itself to general taxation in any such jurisdiction,
or (z) file a general consent to service of process in any such jurisdiction.
The Company shall promptly notify Legal Counsel and each Investor who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky" laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.

                  f. The Company shall notify Legal Counsel and each Investor in
writing of the happening of any event, as promptly as practicable after becoming
aware of such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (provided that in no event shall such
notice contain any material, nonpublic information), and promptly prepare a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such supplement or
amendment to Legal Counsel and each Investor (or such other number of copies as
Legal Counsel or such Investor may reasonably request). The Company shall also
promptly notify Legal Counsel and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, and
when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the same day of such effectiveness and
by overnight mail), (ii) of any request by the SEC for amendments or supplements
to a

                                       6
<PAGE>

Registration Statement or related prospectus or related information, and (iii)
of the Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.

                  g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify Legal Counsel and each Investor who
holds Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or threat
of any proceeding for such purpose.

                  h. At the reasonable request (in the context of the securities
laws) of any Investor, the Company shall furnish to such Investor, on the date
of the effectiveness of the Registration Statement and thereafter from time to
time on such dates as an Investor may reasonably request (i) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
Investors, and (ii) an opinion, dated as of such date, of counsel representing
the Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the Investors.

                  i. At the reasonable request (in the context of the securities
laws) of any Investor, the Company shall make available for inspection during
regular business hours by (i) any Investor, (ii) Legal Counsel and (iii) one
firm of accountants or other agents retained by the Investors (collectively, the
"INSPECTORS"), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the "RECORDS"),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company's officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree to hold in strict confidence and shall not make any disclosure (except to
an Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (c) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
has knowledge. Each Investor agrees that it shall, upon learning that disclosure
of such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Each Inspector which exercises its rights under this Section 3(i)
shall be obligated to execute a non-disclosure agreement containing such
reasonable terms as the Company may request. The fees and expenses of the
Inspectors shall be borne by the applicable Investor.

                                       7
<PAGE>

                  j. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

                  k. The Company shall use its best efforts either to (i) cause
all the Registrable Securities covered by a Registration Statement to be listed
on each securities exchange on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure designation and quotation of all the Registrable Securities covered
by the Registration Statement on the Nasdaq National Market System, or (iii) if,
despite the Company's best efforts to satisfy the preceding clause (i) or (ii),
the Company is unsuccessful in satisfying the preceding clause (i) or (ii), to
secure the inclusion for quotation on The Nasdaq SmallCap Market for such
Registrable Securities and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register with the National Association
of Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).

                  l. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.

                  m. The Company shall provide a transfer agent and registrar of
all such Registrable Securities not later than the effective date of the
applicable Registration Statement.

                  n. If requested by an Investor, the Company shall (i) as soon
as practicable incorporate in a prospectus supplement or post-effective
amendment such information as an Investor requests to be included therein
relating to the sale and distribution of Registrable Securities, including,
without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor and any
other terms of the offering of the Registrable Securities to be sold in such
offering; (ii) as soon as practicable make all required filings of such
prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or make amendments to
any Registration Statement if reasonably requested by an Investor of such
Registrable Securities.

                                       8
<PAGE>

                  o. The Company shall use its best efforts to cause the
Registrable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or authorities
in the United States as may be necessary to consummate the disposition of such
Registrable Securities.

                  p. The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.

                  q. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.

                  r. Within two (2) Business Days after a Registration Statement
which covers applicable Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as Exhibit A.

                  s. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by Investors of Registrable
Securities pursuant to a Registration Statement.

                  t. Notwithstanding anything to the contrary in Section 3(f),
at any time after the applicable Registration Statement has been declared
effective by the SEC, the Company may delay the disclosure of material
non-public information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company
and its counsel, in the best interest of the Company and, in the opinion of
counsel to the Company, otherwise required (a "GRACE PERIOD"); provided, that
the Company shall promptly (i) notify the Investors in writing of the existence
of material non-public information giving rise to a Grace Period (provided that
in each notice the Company will not disclose the content of such material
non-public information to the Investors) and the date on which the Grace Period
will begin, and (ii) notify the Investors in writing of the date on which the
Grace Period ends; and, provided further, that no Grace Period shall exceed 15
consecutive days and during any 365 day period such Grace Periods shall not
exceed an aggregate of 30 days and the first day of any Grace Period must be at
least two (2) trading days after the last day of any prior Grace Period (an
"ALLOWABLE GRACE PERIOD"). For purposes of determining the length of a Grace
Period above, the Grace Period shall begin on and include the date the holders
receive the notice referred to in clause (i) and shall end on and include the
later of the date the holders receive the notice referred to in clause (ii) and
the date referred to in such notice. The provisions of 3(g) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon expiration of
the Grace Period, the Company shall again be bound by the first sentence of
Section 3(f) with respect to the information giving rise thereto unless such
material non-public information is no longer applicable.

                                       9
<PAGE>

         4.       OBLIGATIONS OF THE INVESTORS.

                  a. At least seven (7) Business Days prior to the first
anticipated filing date of a Registration Statement and at lease five (5)
Business Days prior to the filing of any amendment or supplement to a
Registration Statement, the Company shall notify each Investor in writing of the
information, if any, the Company requires from each such Investor if such
Investor elects to have any of such Investor's Registrable Securities included
in such Registration Statement or, with respect to an amendment or a supplement,
if such Investor's Registrable Securities are included in such Registration
Statement (each an "INFORMATION REQUEST"). Provided that the Company shall have
complied with its obligations set forth in the preceding sentence, it shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company, in response to an Information Request, such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

                  b. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.

                  c. Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(g)
or the first sentence of 3(f) or written notice from the company of a Grace
Period, such Investor will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement(s) covering such Registrable
Securities until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3(g) or the first sentence of 3(f) or
receipt of notice that no supplement or amendment is required or that the Grace
Period has ended. Notwithstanding anything to the contrary, the Company shall
cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities with
respect to which an Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(g) or the first sentence of 3(f) and for which
the Investor has not yet settled.

         5.       EXPENSES OF REGISTRATION.

                  All reasonable expenses, other than underwriting discounts and
commissions and the fees and expenses of Legal Counsel or other legal and
professional advisors to any Investor, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and

                                       10
<PAGE>

accounting fees, and fees and disbursements of counsel for the Company shall be
paid by the Company.

         6.       INDEMNIFICATION.

                  In the event any Registrable Securities are included in a
Registration Statement under this Agreement:

                  a. To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Investor, the
directors, officers, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the 1933 Act or
the 1934 Act (each, an "INDEMNIFIED PERSON"), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys' fees, amounts paid in settlement or expenses, joint or several,
(collectively, "CLAIMS") incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto ("INDEMNIFIED DAMAGES"),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("BLUE SKY FILING"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material violation
of this Agreement by the Company (the matters in the foregoing clauses (i)
through (iv) being, collectively, "VIOLATIONS"). Subject to Section 6(c), the
Company shall reimburse the Indemnified Persons, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by such Indemnified Person for such Indemnified Person expressly
for use in connection with the preparation of the Registration Statement or any
such amendment thereof or supplement thereto; (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such person from
whom the person asserting any such Claim purchased the Registrable Securities
that are the subject thereof

                                       11
<PAGE>

(or to the benefit of any person controlling such person) if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected in the prospectus, as then amended or supplemented, if such
prospectus was timely made available by the Company pursuant to Section 3(d),
and the Indemnified Person was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used it; (iii) shall not be
available to the extent such Claim is based on a failure of the Investor to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(d); and (iv) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.

                  b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors,
employees, agents and representatives, each of its officers who signs the
Registration Statement, each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act (each an "INDEMNIFIED PARTY"), against
any Claim or Indemnified Damages to which any of them may become subject, under
the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified
Damages arise out of or are based upon any Violation, in each case to the
extent, and only to the extent, that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject
to Section 6(c), such Investor will reimburse any legal or other expenses
reasonably incurred by an Indemnified Party in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution
contained in Section 7 shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of such
Investor, which consent shall not be unreasonably withheld; provided, further,
however, that the Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(b) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.

                  c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this

                                       12
<PAGE>

Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses of not more than one counsel
for such Indemnified Person or Indemnified Party to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Investors holding at
least two-thirds (2/3) in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise that imposes obligations on the
Indemnified Party or the Indemnified Person, respectively, and which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.

                  d. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.

                  e. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

                                       13
<PAGE>

         7.       CONTRIBUTION.

                  To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) in connection with such sale, shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement.

         8.       REPORTS UNDER THE 1934 ACT.

                  With a view to making available to the Investors the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("RULE 144"), the
Company agrees to:

                  a. make and keep public information available, as those terms
are understood and defined in Rule 144;

                  b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

                  c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the investors to sell such securities pursuant to Rule 144 without
registration.

         9.       ASSIGNMENT OF REGISTRATION RIGHTS.

                  The rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of
Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such transfer or
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities
by

                                       14
<PAGE>

the transferee or assignee is restricted under the 1933 Act and applicable state
securities laws; (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this sentence the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions
contained herein; and (v) such transfer shall have been made in accordance with
the applicable requirements of the Securities Purchase Agreement.

         10.      AMENDMENT OF REGISTRATION RIGHTS.

                  Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who then hold at least two-thirds (2/3) of the Registrable
Securities. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

         11.      MISCELLANEOUS.

                  a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.

                  b. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

                  If to the Company:

                           Zix Corporation
                           2711 N. Haskell Avenue
                           Suite 2300
                           Dallas, Texas 75204
                           Telephone:       214-370-2000
                           Facsimile:       214-515-7385
                           Attention:       General Counsel

                                       15
<PAGE>

                  With a copy to:

                           Hughes & Luce L.L.P.
                           111 Congress Avenue
                           Suite 900
                           Austin, Texas 78701
                           Telephone:       512-482-6800
                           Facsimile:       512-482-6859
                           Attention:       Bryan Wittman, Esq.

                  If to Legal Counsel:

                           Katten Muchin Zavis Rosenman
                           525 West Monroe Street, Suite 1600
                           Chicago, Illinois 60661-3693
                           Telephone:  312-902-5200
                           Facsimile:  312-902-1061
                           Attention:  Robert J. Brantman, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or, in the case of a Buyer or other party named
above, to such other address and/or facsimile number and/or to the attention of
such other person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.

                  c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

                  d. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
the City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices

                                       16
<PAGE>

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. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

                  e. This Agreement, the Securities Purchase Agreement, the
Warrants and the Notes constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement, the Securities Purchase
Agreement, the Warrants and the Notes supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

                  f. Subject to the requirements of Section 9, this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

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

                  h. This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

                  i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

                  j. All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding at least two-thirds (2/3) of the
Registrable Securities, determined as if all of the Notes and the Warrants then
outstanding have been converted into or exercised for Registrable Securities
without regard to any limitations on conversion of the Notes or the exercise of
the Warrants.

                  k. 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.

                  l. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                                  * * * * * *

                                       17
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.

COMPANY:                                 BUYERS:

ZIX CORPORATION                          HFTP INVESTMENT L.L.C.
                                         By:  Promethean Asset Management L.L.C.
                                         Its: Investment Manager
By: /s/ Ronald A. Woessner
    ---------------------------------
         Name:  Ronald A. Woessner
         Title: Senior Vice President    By: /s/ James F. O'Brien
                and General Counsel          -----------------------------------
                                                  Name:  James F. O'Brien
                                                  Title: Managing Member

                                         GAIA OFFSHORE MASTER FUND, LTD.
                                         By:  Promethean Asset Management L.L.C.
                                         Its: Investment Manager

                                         By: /s/ James F. O'Brien
                                             -----------------------------------
                                                  Name:  James F. O'Brien
                                                  Title: Managing Member

                                         CAERUS FUND LTD.
                                         By:  Promethean Asset Management L.L.C.
                                         Its: Investment Manager

                                         By: /s/ James F. O'Brien
                                             -----------------------------------
                                                  Name:  James F. O'Brien
                                                  Title: Managing Member
<PAGE>

                               SCHEDULE OF BUYERS

<Table>
<Caption>
                                                    INVESTOR ADDRESS                         INVESTOR'S LEGAL REPRESENTATIVES'
       INVESTOR'S NAME                            AND FACSIMILE NUMBER                         ADDRESS AND FACSIMILE NUMBER
       ---------------                            --------------------                       ---------------------------------
<S>                                      <C>                                              <C>

HFTP Investment L.L.C.                    c/o Promethean Asset Management L.L.C.           Promethean Investment Group, L.L.C.
                                          750 Lexington Avenue, 22nd Floor                 750 Lexington Ave., 22nd Floor
                                          New York, New York 10022                         New York, New York 10022
                                          Attention: David M. Kittay                       Attention: David M. Kittay
                                                     Greg Carney                                      Greg Carney
                                          Telephone: (212) 702-5200                        Telephone: 212-702-5200
                                          Facsimile: (212) 758-9334                        Facsimile: 212-758-9334

                                                                                           Katten Muchin Zavis Rosenman
                                                                                           525 W. Monroe Street
                                                                                           Chicago, Illinois 60661-3693
                                                                                           Attention: Robert J. Brantman, Esq.
                                                                                           Telephone: (312) 902-5200
                                                                                           Facsimile: (312) 902-1061

Gaia Offshore Master Fund, Ltd.           c/o Promethean Asset Management L.L.C.           Promethean Investment Group, L.L.C.
                                          750 Lexington Avenue, 22nd Floor                 750 Lexington Ave., 22nd Floor
                                          New York, New York 10022                         New York, New York 10022
                                          Attention: David M. Kittay                       Attention: David M. Kittay
                                                     Greg Carney                                      Greg Carney
                                          Telephone: (212) 702-5200                        Telephone: 212-702-5200
                                          Facsimile: (212) 758-9334                        Facsimile: 212-758-9334

                                                                                           Katten Muchin Zavis Rosenman
                                                                                           525 W. Monroe Street
                                                                                           Chicago, Illinois 60661-3693
                                                                                           Attention: Robert J. Brantman, Esq.
                                                                                           Telephone: (312) 902-5200
                                                                                           Facsimile: (312) 902-1061

Caerus Fund Ltd.                          c/o Promethean Asset Management L.L.C.           Promethean Investment Group, L.L.C.
                                          750 Lexington Avenue, 22nd Floor                 750 Lexington Ave., 22nd Floor
                                          New York, New York 10022                         New York, New York 10022
                                          Attention: David M. Kittay                       Attention: David M. Kittay
                                                     Greg Carney                                      Greg Carney
                                          Telephone: (212) 702-5200                        Telephone: 212-702-5200
                                          Facsimile: (212) 758-9334                        Facsimile: 212-758-9334

                                                                                           Katten Muchin Zavis Rosenman
                                                                                           525 W. Monroe Street
                                                                                           Chicago, Illinois 60661-3693
                                                                                           Attention: Robert J. Brantman, Esq.
                                                                                           Telephone: (312) 902-5200
                                                                                           Facsimile: (312) 902-1061
</Table>
<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[TRANSFER AGENT]
ATTN:
     ----------------

                  RE:      ZIX CORPORATION

Ladies and Gentlemen:

         We are counsel to Zix Corporation, a Texas corporation (the "COMPANY"),
and have represented the Company in connection with that certain Securities
Purchase Agreement (the "PURCHASE AGREEMENT") entered into by and among the
Company and the buyers named therein (collectively, the "HOLDERS") pursuant to
which the Company issued to the Holders convertible notes (the "NOTES"),
convertible into shares of the Company's common stock, $0.01 par value per share
(the "COMMON STOCK"), and warrants to purchase an aggregate of _________ shares
of Common Stock, subject to adjustment (the "WARRANTS"). Pursuant to the
Purchase Agreement, the Company also has entered into a Registration Rights
Agreement with the Holders (the "REGISTRATION RIGHTS AGREEMENT") pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
shares of Common Stock issuable upon conversion of the Notes and exercise of the
Warrants, under the Securities Act of 1933, as amended (the "1933 ACT"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ____________ ___, 200_, the Company filed a Registration Statement
on Form S-3 (File No. 333-_____________) (the "REGISTRATION STATEMENT") with the
Securities and Exchange Commission (the "SEC") relating to the Registrable
Securities which names each of the Holders as a selling stockholder thereunder.

         In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

                                             Very truly yours,

                                             [ISSUER'S COUNSEL]

                                             By:
                                                --------------------------------

cc:      [LIST NAMES OF HOLDERS]

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