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<PAGE>
EXHIBIT 4.1
AMENDMENT NO. 1
TO
PURCHASE AGREEMENT
DATED AS OF APRIL 13, 2005
BY AND BETWEEN
ZIX CORPORATION
AND
OMICRON MASTER TRUST
CONVERTIBLE NOTE DUE 2005-2008
AND
COMMON STOCK PURCHASE WARRANT
<PAGE>
ZIX CORPORATION
AMENDMENT NO. 1
TO
PURCHASE AGREEMENT
CONVERTIBLE NOTE DUE 2005-2008
AND
COMMON STOCK PURCHASE WARRANT
TABLE OF CONTENTS
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PAGE
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1.
Definitions......................................................
2
2. Amendments; Amendment
Closing.................................... 4
2.1 Amendment Closing.......................................
4
3. Representations and Warranties of the
Company.................... 4
3.1 Organization, Good Standing and Qualification...........
4
3.2 Authorization...........................................
5
3.3 Capitalization..........................................
5
3.4 Valid Issuance, Enforceable Obligation..................
5
3.5 Consents................................................
6
3.6 SEC Filings; Non-Public Information.....................
6
3.7 Form S-3 Eligibility....................................
6
3.8 No Conflict, Breach, Violation or Default...............
7
3.9 Compliance with Nasdaq Continued Listing Requirements...
7
3.10 Acknowledgement of Potential Dilution...................
7
3.11 Brokers and Finders.....................................
8
3.12 No Directed Selling Efforts or General Solicitation.....
8
3.13 No Integrated Offering..................................
8
3.14 Concerning the Collateral...............................
8
3.15 Disclosures.............................................
8
3.16 Absence of Rights Agreement.............................
9
3.17 Concerning the Transaction Documents....................
9
3.18 Concerning Registration.................................
9
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4. Representations and Warranties of the
Purchaser.................. 9
4.1 Purchase Entirely for Own Account.......................
9
4.2 Investment Experience...................................
9
4.3 Disclosure of Information...............................
9
4.4 Restricted Securities...................................
10
4.5 Accredited Investor.....................................
10
4.6 No General Solicitation.................................
10
4.7 Residency of Purchaser..................................
10
4.8 Brokers and Finders.....................................
10
4.9 Risk Factors............................................
10
4.10 Reliance................................................
10
4.11 Authorization...........................................
11
5. Registration Rights
Agreement.................................... 11
5.1 Registration Rights Agreement...........................
11
6. Certain Covenants of the Company and the
Purchaser............... 11
6.1 Press Releases..........................................
11
6.2 No Conflicting Agreements...............................
11
6.3 Form 8-K................................................
12
6.4 Amendments to Purchase Agreement........................
12
6.5 Amendment and Restatement of Note.......................
16
6.6 Amendment and Restatement of Warrant....................
17
6.7 Effect of Amendment; Confirmation.......................
17
6.8 Waiver..................................................
17
6.9 SEC Registration Matters................................
18
6.10 Prospectus Supplement...................................
18
7. Conditions to the Company's Obligations to Issue and
Sell........ 18
8. Conditions to the Purchaser's Obligations to
Purchase............ 19
9.
Miscellaneous....................................................
21
9.1 Successors and Assigns..................................
21
9.2 Counterparts............................................
21
9.3 Titles and Subtitles....................................
21
9.4 Notices.................................................
21
9.5 Expenses................................................
21
9.6 Amendments and Waivers..................................
21
9.7 Severability............................................
21
9.8 Entire Agreement........................................
22
9.9 Further Assurances......................................
22
9.10 Applicable Law..........................................
22
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9.11 Remedies................................................
22
9.12 Jurisdiction............................................
22
9.13 Survival................................................
23
9.14 Construction; Purchaser Status..........................
23
9.15 Termination by Purchaser................................
23
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EXHIBITS
Exhibit A - Form of Amended and Restated Convertible Note due
2005-2008
Exhibit B - Form of Amended and Restated Common Stock Purchase
Warrant
Exhibit C - Form of Amended and Restated Registration Rights
Agreement
Exhibit D - Form of Opinion of Legal Counsel to the Company
Exhibit E - Form of Opinion of Senior Vice President and General
Counsel of
the Company
Exhibit F - Form of Press Release
Exhibit G - Form of Opinion of Counsel Specified in Section
8(h)(2)
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<PAGE>
AMENDMENT NO. 1 TO PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO PURCHASE AGREEMENT, dated as of April
13,
2005 (this "Agreement"), by and between ZIX CORPORATION, a Texas
corporation
(the "Company"), and OMICRON MASTER TRUST, a Bermuda trust (the
"Purchaser"),
amends the PURCHASE AGREEMENT, dated as of November 1, 2004, by
and between the
Company and the Purchaser (the "Purchase Agreement").
W I T N E S S E T H:
WHEREAS, the Company and the Purchaser have previously executed
and
delivered, one to the other, the Purchase Agreement and the
Original
Registration Rights Agreement (such capitalized term and all
other capitalized
terms used herein having the respective meanings provided
herein) and the
Company has issued to the Purchaser the Note and the
Warrant;
WHEREAS, the Company and the Purchaser wish to amend and restate
the
Note and the Warrant, upon the terms and subject to the
conditions of this
Agreement;
WHEREAS, the Company and the Purchaser wish to amend the
Purchase
Agreement as provided in this Agreement; and
WHEREAS, at or before the Amendment Closing, the parties hereto
are
amending and restating the Original Registration Rights
Agreement by executing
and delivering, one to the other, the Registration Rights
Agreement, pursuant to
which, among other things, the Company will agree to amend the
terms and
conditions upon which it provides certain registration rights
under the 1933
Act, and the rules and regulations promulgated thereunder, and
applicable state
securities laws for the resale of the shares of Common Stock
issuable or issued
upon (1) conversion or redemption of, or otherwise in connection
with, the
Amended Note or (2) exercise of the Warrant and the Redemption
Warrant;
NOW THEREFORE, in consideration of the premises and the
mutual
covenants made herein and for other good and valuable
consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as
follows:
<PAGE>
1. DEFINITIONS.
1.1 As used in this Agreement, the terms "Agreement",
"Company",
"Purchase Agreement" and "Purchaser" shall have the respective
meanings assigned
to such terms in the introductory paragraph of this
Agreement.
1.2 Capitalized terms used in this Agreement and not defined in
this
Agreement shall have the respective meanings provided in the
Purchase Agreement.
1.3 All the agreements or instruments herein defined shall mean
such
agreements or instruments as the same may from time to time be
supplemented or
amended or the terms thereof waived or modified to the extent
permitted by, and
in accordance with, the terms thereof and of this Agreement.
1.4 The following terms shall have the following meanings
(such
meanings to be equally applicable to both the singular and
plural forms of the
terms defined):
"Additional Registration Statement" shall have the meaning
provided
in Section 6.9.
"Amended Note" means the Company's Amended and Restated
Convertible
Note due 2005-2008 in the principal amount of $10,000,000.00 in
the form
attached as EXHIBIT A.
"Amended Warrant" means the Company's Amended and Restated
Common
Stock Purchase Warrant in the form attached as EXHIBIT B.
"Amendment Closing" means the closing of the amendment and
restatement of the Note and the Warrant as provided in this
Agreement on the
Amendment Closing Date.
"Amendment Closing Date" means 10 a.m., New York City time, on
the
date on which the condition precedent set forth in Section 8(h)
is satisfied,
but in no event later than June 6, 2005, or such other time or
date as mutually
agreed by the parties hereto.
"Amendment Transaction Documents" means this Agreement, the
Amended
Note, the Amended Warrant, the Registration Rights Agreement and
the other
agreements, instruments and documents contemplated hereby and
thereby.
"Closing Location" means the Law Offices of Brian W Pusch,
Penthouse
Suite, 29 West 57th Street, New York, New York.
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"Event of Default" shall have the meaning to be provided or
provided
in the Amended Note.
"Execution Time" means the date on which and time at which
the
Company and the Purchaser execute and deliver this Agreement,
one to the other.
"Existing Registration Statement" means the Company's
Registration
Statement on Form S-3, as amended (Registration No. 333 -
120548), ordered
effective by the SEC on February 3, 2005.
"Optional Redemption Notice" shall have the meaning provided in
the
Amended Note.
"Original Registration Rights Agreement" means the
Registration
Rights Agreement, dated as of November 2, 2004, by and between
the Company and
the Purchaser.
"Other Agreement" means the Amendment No. 1 to Purchase
Agreement,
dated as of the date hereof, relating to, among other things,
amendment and
restatement of the Other Note.
"Other Amended Note" means the Amended and Restated Convertible
Note
due 2005-2008 issuable or issued pursuant to the Other
Agreement.
"Registration Rights Agreement" means the Amended and
Restated
Registration Rights Agreement by and between the Company and the
Purchaser in
the form attached as EXHIBIT C.
"Registration Statement" shall have the meaning provided in
the
Registration Rights Agreement.
"Securities" means the Amended Note, the Underlying Shares,
the
Amended Warrant, the Redemption Warrant, and the Warrant
Shares.
"Share Redemption" shall have the meaning to be provided or
provided
in the Amended Note.
"2004 10-K" means the Company's Annual Report on Form 10-K for
the
fiscal year ended December 31, 2004.
"Underlying Shares" means the shares of Common Stock issued
or
issuable (1) upon conversion of the Amended Note, (2) upon any
Share Redemption
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<PAGE>
of the Amended Note or (3) in lieu of cash payment of interest
on the Amended
Note.
"Warrant" means the Common Stock Purchase Warrant issued by
the
Company pursuant to the Purchase Agreement.
2. AMENDMENTS; AMENDMENT CLOSING.
2.1 AMENDMENT CLOSING. The amendment and restatement of the Note
and
the Warrant and the issuance and delivery of the Amended Note
and the Amended
Warrant shall occur on the Amendment Closing Date at the Closing
Location. At
the Amendment Closing on the Amendment Closing Date, upon the
terms and subject
to the conditions of this Agreement,
(a) the Company shall issue and deliver to the Purchaser:
(1) the Amended Note, duly executed by the Company, against
surrender of the Note to the Company, duly endorsed in blank
or
accompanied by a power in blank duly executed by the Purchaser;
and
(2) the Amended Warrant, duly executed by the Company,
against
surrender of the Warrant to the Company, duly endorsed in blank
or
accompanied by a power in blank duly executed by the Purchaser;
and
(b) the Purchaser shall surrender to the Company:
(1) the Note, duly endorsed in blank or accompanied by a power
in
blank duly executed by the Purchaser, against issuance and
delivery by the
Company to the Purchaser of the Amended Note, duly executed by
the
Company; and
(2) the Warrant, duly endorsed in blank or accompanied by a
power in
blank duly executed by the Purchaser, against issuance and
delivery by the
Company to the Purchaser of the Amended Warrant, duly executed
by the
Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby
represents and warrants to, and covenants and agrees with, the
Purchaser that:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company
and
each Subsidiary is a corporation duly incorporated, validly
existing and
subsisting and in good standing under the laws of the
jurisdiction of its
incorporation and has all requisite corporate power and
authority to carry on
its
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<PAGE>
business as now conducted and to own its properties. The Company
and each
Subsidiary is duly qualified to do business as a foreign
corporation and is in
good standing in each jurisdiction in which the conduct of its
business or its
ownership or leasing of property makes such qualification or
licensing necessary
unless the failure to so qualify could not be reasonably likely
to have a
Material Adverse Effect. The Company has no Subsidiaries other
than those listed
in EXHIBIT 21 to the 2004 10-K and has no investment in any
other Person except
such investments as would be classified as current assets on a
balance sheet of
the Company, prepared in accordance with Generally Accepted
Accounting
Principles.
3.2 AUTHORIZATION. The Company has full corporate power and
authority and has taken all requisite action on the part of the
Company, its
officers, directors and stockholders necessary for (i) the
authorization,
execution and delivery of the Amendment Transaction Documents,
(ii)
authorization of the performance of all obligations of the
Company under the
Amendment Transaction Documents, and (iii) the authorization,
issuance (or
reservation for issuance) and delivery of the Securities, other
than approval by
the stockholders of the Company of issuance of shares of Common
Stock in excess
of the number permitted by Rule 4350(i) of Nasdaq to the extent
such rule
requires such approval. Each of the Amendment Transaction
Documents, when
executed and delivered by the Company, will constitute the
legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium
and similar laws of general applicability, relating to or
affecting creditors'
rights generally.
3.3 CAPITALIZATION. All of the issued and outstanding shares of
the
Company's capital stock have been duly authorized and validly
issued and are
fully paid, nonassessable and free of preemptive rights. Except
as set forth in
Section 6.3 of the Purchase Agreement and the Other Purchase
Agreements, no
Person is entitled to preemptive or similar statutory or
contractual rights with
respect to any securities of the Company.
3.4 VALID ISSUANCE, ENFORCEABLE OBLIGATION. The aggregate number
of
shares of Common Stock authorized is 175,000,000, issued is
34,647,101,
outstanding is 32,169,920 and reserved for issuance (including,
without
limitation, for issuance in connection with the Note, the Other
Note, the
Warrant, the Redemption Warrant, the common stock purchase
warrant issued
pursuant to the Other Purchase Agreement and the common stock
purchase warrant
issuable pursuant to the Other Note) is 14,926,581. The Company
does not have
any obligation to issue shares of Common Stock for which it has
not reserved the
number of shares of Common Stock it may be obligated to issue.
The Amended Note
and the Amended Warrant are duly authorized by all necessary
actions, corporate
or otherwise, on the part of the Company; the Underlying Shares
and the Warrant
Shares have been duly authorized and the Underlying Shares,
when
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issued in accordance with the Purchase Agreement and the terms
of the Amended
Note, and the Warrant Shares, when issued in accordance with the
Purchase
Agreement and the terms of the Amended Warrant, in each such
case will be
validly issued, fully paid, non-assessable and free and clear of
all
Encumbrances and restrictions, except for restrictions on
transfer imposed by
applicable securities laws; and the Amended Note, the Amended
Warrant, and, when
issued in accordance with the terms of the Amended Note, the
Redemption Warrant,
in each such case will be free and clear of all Encumbrances and
restrictions,
except for restrictions on transfer imposed by applicable
securities laws and
the requirements for transfer set forth in the Purchase
Agreement, the other
Transaction Documents and the Amendment Transaction
Documents.
3.5 CONSENTS. The execution, delivery and performance by the
Company
of the Amendment Transaction Documents and the offer, issuance
and sale of the
Securities require no consent of, action by or in respect of, or
filing with,
any Person, governmental body, agency, or official other than
(1) filings that
have been or will be made pursuant to applicable state
securities laws and, in
accordance with the requirements of the Nasdaq, the listing of
additional shares
of Common Stock in excess of the number heretofore approved for
listing in
connection with the Purchase Agreement and the Other Purchase
Agreement and
other than the filing of a Form D by the Company with the SEC,
each of which the
Company undertakes to file within the applicable time periods
after the Closing,
and (2) registration with the SEC of the resale of shares of
Common Stock, if
any, in excess of the number registered on the Company's
Registration Statement
on Form S-3 (Registration No. 333-120548).
3.6 SEC FILINGS; NON-PUBLIC INFORMATION. The Company has
timely
filed all material reports and other documents required to be
filed with the SEC
pursuant to the 1934 Act since November 1, 2004. At their
respective times of
filing with the SEC, such documents complied in all material
respects with the
requirements of the 1934 Act and did not contain any untrue
statement of a
material fact or omit to state any material fact necessary in
order to make the
statements made therein, in the light of the circumstances under
which they were
made, not misleading, in any such case that has not been
corrected in a
subsequent filing by the Company with the SEC under the 1934 Act
made prior to
the date of this Agreement. Except for information relating to
this Agreement
and the Other Agreement and transactions contemplated hereby and
thereby, the
Company has not provided to any Purchaser (i) any information
required to be
filed or disclosed under the 1934 Act that has not been so filed
or disclosed or
(ii) any material non-public information concerning the Company
and the
Subsidiaries.
3.7 FORM S-3 ELIGIBILITY. The Company will be eligible to
register
the resale of its Common Stock in a secondary offering on a
registration
statement on Form S-3 under the 1933 Act.
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<PAGE>
3.8 NO CONFLICT, BREACH, VIOLATION OR DEFAULT. (a) The
execution,
delivery and performance of the Amendment Transaction Documents
by the Company
and the issuance and sale of the Securities will not conflict
with or result in
a breach or violation of any of the terms and provisions of, or
constitute a
default under, or result in the creation or imposition of any
lien, charge,
security interest or encumbrance (other than pursuant to the
Security Agreement)
under (i) the Company's Articles of Incorporation (including any
articles of
amendment or articles designating series of shares) or the
Company's Bylaws,
(ii) any statute, rule, regulation or order of any governmental
agency or body
or any court, domestic or foreign, having jurisdiction over the
Company or any
Subsidiary or any of their respective assets or properties, or
(iii) any
agreement or instrument to which the Company or any Subsidiary
is a party or by
which the Company or any Subsidiary is bound or to which any of
the properties
of the Company or any Subsidiary is subject.
(b) The Company and each Subsidiary (i) is not in violation of
any
statute, rule or regulation applicable to the Company or any
Subsidiary or its
assets, (ii) is not in violation of any judgment, order or
decree applicable to
the Company or any Subsidiary or any of their respective assets,
and (iii) is
not in breach or violation of any agreement, note or instrument
to which it or
its assets are a party or are bound or subject, except for
breaches or
violations which, individually or in aggregate, could not
reasonably be likely
to have a Material Adverse Effect. To the best of the Company's
knowledge,
neither the Company nor any Subsidiary has received notice from
any Person of
any claim or investigation that, if adversely determined, would
render the
representations or warranties in the preceding sentence untrue
or incomplete.
3.9 COMPLIANCE WITH NASDAQ CONTINUED LISTING REQUIREMENTS.
The
Company is in compliance with all applicable Nasdaq continued
listing
requirements, except where failure to comply would not result in
de-listing from
or the imposition of restrictions or limitations by Nasdaq, and
is in good
standing on such market. There are no proceedings pending or to
the Company's
knowledge threatened against the Company relating to the
continued listing of
the Company's Common Stock on Nasdaq and the Company has not
received any notice
of, nor to the knowledge of the Company is there any basis for,
the suspension
of trading of the Common Stock on, or delisting of the Common
Stock from,
Nasdaq.
3.10 ACKNOWLEDGEMENT OF POTENTIAL DILUTION. The Company
understands
that the number of shares of Common Stock issuable pursuant to
the Amended Note,
the Amended Warrant, the Redemption Warrant, the Other Note and
the other
securities issuable pursuant to the Other Purchase Agreement or
the
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<PAGE>
Other Note may be substantial and that such issuance may have a
dilutive effect
on the Company's equity capitalization.
3.11 BROKERS AND FINDERS. The Purchaser shall have no liability
or
responsibility for the payment of any commission or finder's fee
to any third
party in connection with this Agreement or the transactions
contemplated by this
Agreement by reason of any agreement of or action taken by the
Company.
3.12 NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION.
Neither
the Company nor any Person acting on its behalf has conducted
any general
solicitation or general advertising (as those terms are used in
Regulation D) in
connection with the offer or sale of any of the Securities. The
Company has not
offered or sold and will not offer or sell any securities
similar to the Amended
Note or the Amended Warrant as part of the offering of the
Securities to the
Purchaser pursuant to this Agreement and the Purchase Agreement,
other than
pursuant to the Other Agreement and the Other Purchase
Agreement.
3.13 NO INTEGRATED OFFERING. Neither the Company nor any of
its
Affiliates, nor any Person acting on its or their behalf has,
directly or
indirectly, made any offers or sales of any security or
solicited any offers to
buy any security, under circumstances that would (1) adversely
affect reliance
by the Company on Section 4(2) of the 1933 Act and Regulation D
for the
exemption from registration under the 1933 Act for the
transactions contemplated
hereby or would require registration of the offer and sale of
the Securities to
the Purchaser under the 1933 Act; or (2) require the integration
of the offering
of the Securities with any other offering of securities for
purposes of
determining the need to obtain stockholder approval of the
transactions
contemplated hereby under the rules of Nasdaq.
3.14 CONCERNING THE COLLATERAL. Notwithstanding the execution
and
delivery of this Agreement and completion of the transactions
contemplated
hereby, the Collateral Agent will continue to have a first
priority perfected
security interest in the Collateral for the ratable benefit of
the holders of
the Amended Note and the Other Amended Note.
3.15 DISCLOSURES. For purposes of this Agreement and the
transactions contemplated hereby, none of the representations or
warranties made
by the Company under any of the Amendment Transaction Documents
and no written
information furnished by the Company pursuant hereto, or in any
other document,
certificate or written statement furnished by the Company to the
Purchaser or
any authorized representative of the Purchaser pursuant to the
Amendment
Transaction Documents or in connection therewith, contains any
untrue statement
of a material fact or omits to state a material fact necessary
in order to make
the statements contained herein and therein, in light of the
circumstances under
which they were made, not misleading.
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3.16 ABSENCE OF RIGHTS AGREEMENT. The Company has not adopted
a
shareholder rights plan or similar arrangement relating to
accumulations of
beneficial ownership of Common Stock or a change of control in
the Company.
3.17 CONCERNING THE TRANSACTION DOCUMENTS. The representations
and
warranties made by the Company pursuant to the Transaction
Documents were true
and correct when made and were true and correct on the Closing
Date as if made
on the Closing Date. The Company is in compliance in all
material respects with
its obligations under the Transaction Documents; no Event of
Default or event or
circumstance that, with the giving of notice or the passage of
time, or both,
would constitute an Event of Default has occurred and is
continuing; and no
Repurchase Event or event or circumstances that, with the giving
of notice or
the passage of time, or both, would constitute a Repurchase
Event has occurred
and is continuing.
3.18 CONCERNING REGISTRATION. Upon the filing by the Company
with
the SEC of a Current Report on Form 8-K in accordance with
Section 6.3, the
Existing Registration Statement will be available for use by the
Purchaser for
the resale of "Underlying Shares" and "Warrant Shares," as such
terms are
defined in the Purchase Agreement, subject to
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