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
ZIX CORPORATION
AMENDMENT NO. 1
TO
PURCHASE AGREEMENT
CONVERTIBLE NOTE DUE 2005-2008
AND
COMMON STOCK PURCHASE WARRANT
TABLE OF CONTENTS
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
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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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:
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 Xxxxx X Xxxxx, Penthouse
Suite, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
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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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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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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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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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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 the terms of the Original
Registration Rights Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Company that:
4.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Purchaser will acquire
the Amended Note and the Amended Warrant for the Purchaser's own account, not as
nominee or agent, and not with a view to the resale or distribution of any part
thereof in violation of applicable securities laws, and the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same in violation of applicable securities laws.
4.2 INVESTMENT EXPERIENCE. The Purchaser acknowledges that it can
bear the economic risk and complete loss of its investment in the Securities and
has such knowledge of and experience with securities and financial or business
matters that it is capable of evaluating the merits and risks of the purchase of
the Amended Note and the Amended Warrant.
4.3 DISCLOSURE OF INFORMATION. The Purchaser has had an opportunity
to receive documents related to the Company and to ask questions of and receive
answers from the Company regarding the terms and conditions of the offering of
the Securities; provided however, that neither such inquiries nor any other
investigation conducted by the Purchaser shall modify, amend, limit or
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otherwise affect the Purchaser's right to rely on the Company's representations
and warranties contained in the Transaction Documents and the Amendment
Transaction Documents or made pursuant to the Transaction Documents or the
Amendment Transaction Documents.
4.4 RESTRICTED SECURITIES. The Purchaser understands that the
Amended Note, the Amended Warrant, the Underlying Shares issued prior to two
years after the Closing Date, the Warrant Shares issued for cash, and the
Warrant Shares issued on a cashless or net exercise basis prior to two years
after the Closing Date are, or will be upon issuance, characterized as
"restricted securities" under the U.S. federal securities laws inasmuch as they
are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may
be resold without registration under the 1933 Act only in certain limited
circumstances.
4.5 ACCREDITED INVESTOR. The Purchaser is an "accredited investor"
as defined in Rule 501(a) of
Regulation D.
4.6 NO GENERAL SOLICITATION. The Purchaser did not learn of the
offering of the Amended Note and the Amended Warrant through any public
advertising or general solicitation (as these terms are used in Regulation D).
4.7 RESIDENCY OF PURCHASER. The Purchaser is a resident of the state
or other jurisdiction indicated below the Purchaser's name on the signature
pages to this Agreement.
4.8 BROKERS AND FINDERS. The Company shall have no liability or
responsibility for the payment of any commission or finder's fee to any third
party in connection with or resulting from this Agreement or the transactions
contemplated by this Agreement by reason of any agreement of the Purchaser; and
the Purchaser has not engaged any such broker or finder in connection with the
negotiation, execution and delivery of this Agreement.
4.9 RISK FACTORS. Without limiting any of the Purchaser's other
representations and warranties hereunder, the Purchaser acknowledges that the
Purchaser has reviewed and is aware of the risk factors described in the SEC
Filings.
4.10 RELIANCE. The Purchaser has consulted its own financial, legal
and tax advisors with respect to the economic, legal and tax consequences of an
investment in the Amended Note and the Amended Warrant and has not relied on the
SEC Filings or the Company, its officers, directors or professional advisors as
to such consequences.
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4.11 AUTHORIZATION. The Purchaser has full corporate power and
authority and has taken all requisite action on the part of the Purchaser, its
partners, officers, directors and stockholders necessary for (i) the
authorization, execution and delivery of the Amendment Transaction Documents and
(ii) authorization of the performance of all obligations of the Purchaser under
the Amendment Transaction Documents. Each of the Amendment Transaction
Documents, when executed and delivered by the Purchaser, will constitute the
legal, valid and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors' rights generally.
5. REGISTRATION RIGHTS AGREEMENT.
5.1 REGISTRATION RIGHTS AGREEMENT. The Company acknowledges and
agrees that the Company's execution and delivery of, and full performance of its
obligations under, the Registration Rights Agreement is a material inducement to
the Purchaser to execute and deliver this Agreement, to complete the Amendment
Closing and to accept the Amended Note and the Amended Warrant. The Company
agrees to execute and deliver to the Purchaser the Registration Rights Agreement
at or before the Amendment Closing.
6. CERTAIN COVENANTS OF THE COMPANY AND THE PURCHASER.
6.1 PRESS RELEASES. Any press release or other publicity concerning
this Agreement or the transactions contemplated by this Agreement shall be
submitted to the Purchaser for comment at least two Business Days prior to
issuance, unless the release is required to be issued within a shorter period of
time by law or pursuant to the rules of the Nasdaq or a national securities
exchange or the Purchaser consents to a shorter period. The Company shall, on
the date of the Execution Time or if the Execution Time occurs after 4:30 p.m.,
Eastern time, then prior to the open of trading on Nasdaq on the Trading Day
next succeeding the Execution Time, issue a press release, in the form attached
as EXHIBIT F, concerning the transactions contemplated hereby. The Company's
other press releases and other public information, to the extent concerning the
Amendment Transaction Documents, shall contain such information as reasonably
requested by the Purchaser and be reasonably approved by the Purchaser in
writing prior to issuance.
6.2 NO CONFLICTING AGREEMENTS. The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any material respect with the obligations to the Purchaser under the
Amendment Transaction Documents.
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6.3 FORM 8-K. Within one Business Day after the Execution Time, the
Company will publicly report the transactions contemplated by this Agreement and
the Other Agreement by filing with the SEC a Current Report on Form 8-K under
the 1934 Act which report shall describe the material terms and include as
exhibits to such report copies of the Amendment Transaction Documents and the
actual press release issued by the Company in the form attached as EXHIBIT F.
6.4 AMENDMENTS TO PURCHASE AGREEMENT. Upon the terms and subject to
the conditions of this Agreement, effective upon the Amendment Closing the
Purchase Agreement shall be amended as follows:
(a) AMENDMENT OF CERTAIN DEFINITIONS. Section 1.3 of the Purchase
Agreement shall be amended by deleting the terms "Maximum Share Amount",
"Maximum Share Amount Deficiency", "Maximum Share Amount Redemption Price",
"Stockholder Meeting" and "Underlying Shares" and the accompanying definitions
thereof and substituting in lieu thereof in their respective alphabetical order
the following:
"Maximum Share Amount" means 6,430,562 shares of Common Stock, which
amount constitutes 19.99 percent of the shares of Common Stock outstanding
on the date of this Agreement and is subject to equitable adjustment from
time to time for stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to the Common Stock occurring
after the date of this Agreement, less (i) 166,667 shares of Common Stock
underlying the Placement Agent Warrants (subject to adjustments only for
stock splits, stock dividends, combinations, capital reorganizations and
similar events relating to the Common Stock occurring after the date of
this Agreement) and (ii) such number of shares of Common Stock as may be
issued or issuable in a transaction required by Nasdaq to be integrated
with that contemplated by this Agreement and the Other Purchase Agreement
(without in any way limiting the Purchaser's rights under Section 6.2).
"Maximum Share Amount Deficiency" means that the Purchaser's share
of the Maximum Share Amount that has been allocated to it in accordance
with Section 6.16(a) constitutes less than the sum of (1) the number of
Underlying Shares and Warrant Shares issued or issuable to the Purchaser,
assuming conversion or exercise in full of the amounts of the Note, the
Warrant and the Redemption Warrant at the time outstanding and held by it
and determined without regard to any limitation on conversion or exercise
contained in the Transaction Documents, plus (2) the number of Underlying
Shares theretofore issued to the Purchaser in lieu of cash payment of
interest on the Note.
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"Maximum Share Amount Redemption Price" means with respect to
redemption of the Note or any portion thereof pursuant to Section
6.16(b)(3), an amount in cash equal to the sum of (i) the outstanding
principal amount of the Note that the Purchaser has elected to be so
redeemed plus (ii) accrued and unpaid interest on such principal amount to
the applicable redemption date plus (iii) accrued and unpaid Default
Interest, if any, thereon at the rate provided in the Note to the
applicable Maximum Share Amount Redemption Date.
"Stockholder Meeting" means an annual or special meeting of
stockholders of the Company duly called and convened in accordance with
the Texas Business Corporation Act and the Company's Articles of
Incorporation and By-Laws.
"Underlying Shares" means the shares of Common Stock issued or
issuable (1) upon conversion of the Note, (2) upon any Share Redemption of
the Note or (3) in lieu of cash payment of interest on the Note.
(b) ADDITIONAL DEFINED TERMS. Section 1.3 of the Purchase Agreement
shall be amended by adding new defined terms and definitions thereof, in the
places constituting their respective alphabetical orders, as follows:
"Optional Redemption Date" shall have the meaning provided in the
Note.
"Optional Redemption Notice" shall have the meaning provided in the
Note.
"Share Redemption Daily Amount" shall have the meaning provided in
the Note.
"Share Redemption" shall have the meaning provided in the Note.
(c) AMENDMENT OF SECTION 6.16. Section 6.16 of the Purchase
Agreement shall be amended by deleting the second and third sentences of
Sections 6.16(b), 6.16(c) and 6.16(d) of the Purchase Agreement in their
entirety and substituting in lieu thereof the following:
(b) (1) The Company shall promptly, but in no event later than five
Business Days, after the occurrence of a Maximum Share Amount Deficiency
give a Maximum Share Amount Notice to the Purchaser, and the Purchaser may
at any time after the occurrence of a Maximum Share Amount Deficiency give
a Maximum Share Amount Notice to the Company, in either case if at any
time there shall be a Maximum Share Amount Deficiency.
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(2) If the Company shall have given a Maximum Share Amount Notice,
or if the Purchaser shall have given a Maximum Share Amount Notice, in
either such case with respect to a Maximum Share Amount Deficiency that
occurs or exists on or after January 1, 2006, then for a period of 30 days
after the Maximum Share Amount Notice Date for such Maximum Share Amount
Notice, the Purchaser shall have the right, exercisable by notice given to
the Company, to require the Company to redeem all, or such portion as
elected by the Purchaser in its discretion, of the portion of the Note
that has become inconvertible into shares of Common Stock by reason of a
Maximum Share Amount Deficiency. Such redemption shall be made in the
manner, for the consideration and otherwise on the terms and conditions of
Section 2(b) of the Note as if the redemption notice from the Purchaser
under this Section 6.16(b)(2) were an Optional Redemption Notice given by
the Company; provided, however, that the Optional Redemption Date for such
redemption shall be the date that is 60 days after the date the Purchaser
gives the applicable redemption notice under this Section 6.16(b)(2); and
provided further, however, that for any such redemption required by this
Section 6.16(b)(2) the requirements of clause (G) of Section 2(b)(1) of
the Note need not be satisfied.
(3) In addition to the rights of the Purchaser under Section
6.16(b)(2), if after (x) the applicable Optional Redemption Date, in any
case in which the Purchaser has required redemption of the Note, or a
portion thereof, pursuant to Section 6.16(b)(2), or (y) the expiration of
the 30-day period specified in Section 6.16(b)(2) during which the
Purchaser may exercise its right to require redemption of the Note without
the Purchaser having exercised such right, in any such case in the
immediately preceding clause (x) or (y) a Maximum Share Amount Deficiency
exists, then Section 6.16(b)(1) shall continue to apply thereto and if the
Company shall have given or been required to give a Maximum Share Amount
Notice, or if the Purchaser shall have given a Maximum Share Amount
Notice, in either such case with respect to such Maximum Share Amount
Deficiency, then the Company shall seek, and use its best efforts to
obtain, on or before the date which is 60 days after the applicable
Maximum Share Amount Notice Date, the Stockholder Approval. If required by
this Section to seek the Stockholder Approval, the Company shall call a
Stockholder Meeting to be held within 60 days after the applicable Maximum
Share Amount Notice Date, shall prepare and file with the SEC as promptly
as practical, but in no event later than 15 days after the applicable
Maximum Share Amount Notice Date, preliminary proxy materials that meet
the requirements of Section 14 of the 1934 Act and the SEC's rules and
regulations thereunder and which shall set forth a proposal to seek the
Stockholder Approval, and the Board of Directors shall recommend approval
thereof by the Company's stockholders. The Company
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shall mail and distribute its proxy materials for the Stockholder Meeting
to its stockholders at least 30 days prior to the date of the Stockholder
Meeting, shall actively solicit proxies to vote for the Stockholder
Approval and, prior to mailing such proxy materials to its stockholders,
shall retain a proxy solicitation firm of recognized national standing to
assist in the solicitation. The Company shall provide the Purchaser an
opportunity to review and comment on such proxy materials by providing
(which may be by e-mail) copies of such proxy materials and any revised
preliminary proxy materials to the Purchaser a reasonable period of time
prior to their filing with the SEC. The Company shall provide (which may
be by e-mail) the Purchaser copies of all correspondence from or to the
SEC or its staff concerning the proxy materials for the Stockholder
Meeting promptly after the same is sent or received by the Company and
summaries of any comments of the SEC staff which the Company receives
orally promptly after receiving such oral comments. The Company shall
furnish (which may be by e-mail) to the Purchaser and its legal counsel a
copy of its definitive proxy materials for the Stockholder Meeting and any
amendments or supplements thereto promptly after the same are first used,
mailed to stockholders or filed with the SEC, shall inform the Purchaser
of the progress of solicitation of proxies for such meeting and shall
inform the Purchaser of any adjournment of the Stockholder Meeting and
shall report the result of the vote of stockholders on such proposition at
the conclusion of the Stockholder Meeting. If the Company shall have
failed to obtain the Stockholder Approval within 60 days after the
applicable Maximum Share Amount Notice Date, then, unless under the rules
or policies of Nasdaq the existence of this right would be impermissible
in connection with the Stockholder Approval (determination of which
impermissibility may be made prior to the time the Company first files
preliminary proxy materials with the SEC relating to seeking the
Stockholder Approval), until the Company obtains the Stockholder Approval,
the Purchaser shall have the right, exercisable by giving a Maximum Share
Amount Redemption Notice (which notice may be contained in a Maximum Share
Amount Notice given by the Purchaser) to the Company, to require the
Company to redeem all, or from time to time any part, as specified in such
Maximum Share Amount Redemption Notice, of the portion of the Purchaser's
outstanding Note (which, if applicable, shall be all of the Purchaser's
outstanding Note) as shall not, on the Business Day prior to the date of
such redemption, be convertible into shares of Common Stock by reason of
the limitation imposed by the portion of the Maximum Share Amount
allocated to the Purchaser (determined without regard to any limitation on
conversion or exercise contained in the Transaction Documents), within ten
Business Days after the Purchaser so notifies the Company, at the
applicable Maximum Share Amount Redemption Price. The Company shall not
seek the Stockholder Approval except when required by this Section
6.16(b)(3).
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(c) Nothing in this Section 6.16 shall relieve the Company of its
obligation to pay the principal of and interest on and all other amounts
due in respect of the Note and the other Transaction Documents as and when
required by the terms hereof and thereof. Notwithstanding the giving of
any Maximum Share Amount Notice, the giving or the absence of any Maximum
Share Amount Redemption Notice by the Purchaser or any redemption of the
Note, or any portion thereof, held by the Purchaser pursuant to this
Section, thereafter the provisions of this Section shall continue to be
applicable on any subsequent occasion. The Company shall not take any
action, other than Share Redemptions, that would result in a Maximum Share
Amount Deficiency. The Company shall limit the portion of the Maximum
Share Amount available to the holder of the Placement Agent Warrants to
166,667 shares of Common Stock subject to adjustments only for stock
splits, stock dividends, combinations, capital reorganizations and similar
events relating to the Common Stock occurring after the date of this
Agreement.
(d) On each Maximum Share Amount Redemption Date, the Company shall
make payment to the Purchaser in immediately available funds of the
applicable Maximum Share Amount Redemption Price of the Note (or portion
thereof) to be redeemed to or upon the order of the Purchaser as specified
by the Purchaser to the Company at least one Business Day prior to such
Maximum Share Amount Redemption Date. Upon redemption of less than all of
the outstanding principal amount of the Note, promptly, but in no event
later than three Trading Days after surrender of the certificate therefor
to the Company, the Company shall issue and deliver to the Purchaser a
replacement certificate for the portion of the Note, evidenced by the
certificate so surrendered which has not been redeemed.
6.5 AMENDMENT AND RESTATEMENT OF NOTE. Upon the terms and subject to
the conditions of this Agreement, effective upon the Amendment Closing, the Note
shall be amended and restated to read as provided in the Amended Note. The
Company acknowledges that, for purposes of determining the holding period under
Rule 144 under the 1933 Act (1) for the Amended Note, the holding period of the
Amended Note shall be tacked to the holding period of the Note, and (2) for the
Underlying Shares issued upon a Share Redemption, the holding period of such
Underlying Shares shall be tacked to the holding period of the Amended Note. The
Company agrees not to take a position contrary thereto unless the SEC or its
staff by rule or interpretation changes its rules and interpretations thereof in
effect on the date of this Agreement or such rules or interpretations are held
invalid or incorrect by a court of competent jurisdiction. Nothing in this
Section 6.5 shall affect the requirement in Section 6.11 of the Purchase
Agreement for delivery of an opinion of counsel as and when required thereby.
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6.6 AMENDMENT AND RESTATEMENT OF WARRANT. Upon the terms and subject
to the conditions of this Agreement, effective upon the Amendment Closing the
Warrant shall be amended and restated to read as provided in the Amended
Warrant. The Company acknowledges that, for purposes of determining the holding
period under Rule 144 under the 1933 Act for the Amended Warrant, the holding
period of the Amended Warrant shall be tacked to the holding period of the
Warrant. The Company agrees not to take a position contrary thereto unless the
SEC or its staff by rule or interpretation changes its rules and interpretations
thereof in effect on the date of this Agreement or such rules or interpretations
are held invalid or incorrect by a court of competent jurisdiction. Nothing in
this Section 6.5 shall affect the requirement in Section 6.11 of the Purchase
Agreement for delivery of an opinion of counsel as and when required thereby.
6.7 EFFECT OF AMENDMENT; CONFIRMATION.
(a) From and after the Amendment Closing on the Amendment Closing
Date, the rights and obligations of the Company and the Purchaser under the
Transaction Documents and all other agreements, documents and instruments
contemplated hereby and thereby shall apply with full force and effect to the
Purchase Agreement, as amended by this Agreement, and each reference to the
Purchase Agreement in the Transaction Documents shall be deemed to be a
reference to the Purchase Agreement, as amended by this Agreement. From and
after the Amendment Closing on the Amendment Closing Date, each reference in the
Transaction Documents to (1) the Note shall be deemed to be a reference to the
Amended Note (2) to the Warrant shall be deemed to be a reference to the Amended
Warrant (3) to the Other Note shall be deemed a reference to the Other Amended
Note, (4) to the common stock purchase warrant issued pursuant to the Other
Purchase Agreement shall be deemed a reference to the Amended and Restated
Common Stock Purchase Warrant issued pursuant to the Other Agreement, and (5) to
the Other Purchase Agreement shall be deemed to be a reference to the Other
Purchase Agreement as amended by the Other Agreement.
(b) Except as amended by this Agreement, the Amended Note, the
Amended Warrant and the Registration Rights Agreement, the Transaction Documents
shall remain in full force and effect in accordance with their respective terms.
6.8 WAIVER. Effective upon the Amendment Closing, the Purchaser
hereby waives its rights (1) under Section 6.2 of the Purchase Agreement to the
extent and only to the extent the same would prohibit the issuance of the
Amended Note, the Amended Warrant or the issuance of like securities under the
Other Agreement and (2) under Section 6.3 of the Purchase Agreement to the
extent and only to the extent the same would entitle the Purchaser to purchase
any amount of
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the securities to be issued by the Company pursuant to the Other Agreement or
pursuant to the securities issuable or issued pursuant to the Other Agreement.
6.9 SEC REGISTRATION MATTERS. The Company shall, with the advice of
its legal counsel, use its best efforts to determine, as promptly as possible
after the Execution Time, the position of the staff of the SEC as to whether the
Existing Registration Statement covers the registration for resale of shares of
Common Stock issued upon Share Redemptions of the Note and the Other Note, up to
the number of shares of Common Stock registered in the Existing Registration
Statement. If on or before April 25, 2005 the Company is unable to satisfy the
condition precedent in clause (1) of Section 8(h) of this Agreement, then the
Company shall, not later than April 25, 2005, file with the SEC a Registration
Statement on Form S-3 covering the resale by the Purchaser of a number of shares
of Common Stock which are issuable or issued to the Purchaser upon Share
Redemptions of the Note in an amount at least equal to 200 percent of the number
of shares of Common Stock that would be issuable upon redemption of the Amended
Note pursuant to Section 2(c) of the Amended Note as required by Section 2(d)(2)
of the Amended Note if the Amended Note were outstanding, determined on such
date (A) as if such date were a Share Redemption Date on which all remaining
outstanding principal installments required by Section 2(d)(2) of the Amended
Note to be redeemed pursuant to Section 2(c) of the Note were being redeemed on
such date of determination, and (B) without regard to any limitation on the
number of shares of Common Stock issuable in such Share Redemption by reason of
any Share Redemption Daily Limitation or Section 2(c)(9) of the Amended Note
(the "Additional Registration Statement"). The Additional Registration Statement
shall be prepared, filed and otherwise treated for purposes of the Original
Registration Rights Agreement as a "Registration Statement" under and as defined
in the Original Registration Rights Agreement, and any prospectus forming part
of or relating to the Additional Registration Statement shall be combined with
the prospectus forming part of the Existing Registration Statement as permitted
by Rule 429 under the 1933 Act.
6.10 PROSPECTUS SUPPLEMENT. On the date of the Execution Time the
Company shall prepare and file with the SEC pursuant to Rule 424 under the 1933
Act a prospectus supplement or amended prospectus for the prospectus forming
part of the Existing Registration Statement that includes all information
relating to this Agreement and the transactions contemplated hereby that is
required to be disclosed in such prospectus.
7. CONDITIONS TO THE COMPANY'S OBLIGATIONS TO ISSUE AND SELL. The
Company's obligation to issue and deliver the Amended Note and the Amended
Warrant to the Purchaser pursuant to this Agreement is conditioned upon
satisfaction of the following conditions precedent on or before the Amendment
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Closing Date (any or all of which may be waived by the Company in its sole
discretion):
(a) On the Amendment Closing Date, no legal action, suit or
proceeding shall be pending or threatened which seeks to restrain or prohibit
the transactions contemplated by this Agreement; and
(b) The representations and warranties of the Purchaser contained in
this Agreement shall have been true and correct on the date of this Agreement
and the representations and warranties of the Purchaser contained in this
Agreement shall be true and correct on the Amendment Closing Date as if made on
and as of the Amendment Closing Date (except for representations made as of a
specific date, which representations shall be true and correct as of such date),
and on or before the Amendment Closing Date the Purchaser shall have performed
all covenants and agreements of the Purchaser contained herein or in any of the
other Amendment Transaction Documents required to be performed by the Purchaser
on or before the Amendment Closing Date.
8. CONDITIONS TO THE PURCHASER'S OBLIGATIONS TO PURCHASE. The
Purchaser's obligation to acquire the Amended Note and the Amended Warrant is
conditioned upon satisfaction of the following conditions precedent on or before
the Amendment Closing Date (any or all of which may be waived by the Purchaser
in its sole discretion):
(a) On the Amendment Closing Date, no legal action, suit or
proceeding shall be pending or threatened which seeks to restrain or prohibit
the transactions contemplated by this Agreement;
(b) The representations and warranties of the Company contained in
this Agreement shall have been true and correct on the date of this Agreement
and the representations and warranties of the Company contained in the Amendment
Transaction Documents shall be true and correct on the Amendment Closing Date as
if made on and as of the Amendment Closing Date (except for representations made
as of a specific date, which representations shall be true and correct as of
such date), and on or before the Amendment Closing Date the Company shall have
performed all covenants and agreements of the Company contained herein or in any
of the other Amendment Transaction Documents required to be performed by the
Company on or before the Amendment Closing Date;
(c) No event which would constitute an Event of Default under the
Note or the Amended Note or which, with the giving of notice or the passage of
time, or both, would constitute such an Event of Default shall have occurred and
be continuing; and no event which would constitute a Repurchase Event under the
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Note or the Amended Note or which, with the giving of notice or passage of time,
or both, would constitute such a Repurchase Event shall have occurred and be
continuing.
(d) The Company shall have delivered to the Purchaser a certificate,
dated the Amendment Closing Date, duly executed by its Chief Executive Officer
or Chief Financial Officer, to the effect set forth in subparagraphs (a), (b)
and (c) of this Section 8;
(e) The Company shall have delivered to the Purchaser a certificate,
dated the Amendment Closing Date, of the Secretary of the Company certifying (A)
that there has been no change in the Articles of Incorporation or By-Laws of the
Company from the copies thereof certified to the Purchaser at the Closing under
the Purchase Agreement and (B) all resolutions of the Board of Directors (and
committees thereof) of the Company relating to this Agreement and the other
Amendment Transaction Documents and the transactions contemplated hereby and
thereby;
(f) On the Amendment Closing Date, the Purchaser shall have received
an opinion of Xxxxx Xxxxx L.L.P., counsel for the Company, dated the Amendment
Closing Date, addressed to the Purchaser, in form, scope and substance
reasonably satisfactory to the Purchaser, substantially in the form attached as
EXHIBIT D;
(g) On the Amendment Closing Date, the Purchaser shall have received
an opinion of the Senior Vice President and General Counsel of the Company,
dated the Amendment Closing Date, addressed to the Purchaser, in form, scope and
substance reasonably satisfactory to the Purchaser, substantially in the form
attached as EXHIBIT E; and
(h) On the Amendment Closing Date:
(1) the Purchaser shall have received an opinion of outside legal
counsel to the Company reasonably acceptable to the Purchaser, dated the
Amendment Closing Date, addressed to the Purchaser, in form, scope and
substance satisfactory to the Purchaser substantially to the effect that
the shares of Common Stock issuable to the Purchaser in connection with
Share Redemptions under Section 2(c) of the Amended Note have been
registered on the Existing Registration Statement for resale by the
Purchaser or
(2) the Additional Registration Statement shall have been ordered
effective by the SEC, no stop order with respect thereto shall have been
issued and no proceedings seeking to terminate or suspend such
effectiveness shall be pending or threatened, the Additional Registration
Statement shall
-20-
be effective and available for use by the Purchaser for resale of shares
of Common Stock that may be issued upon Share Redemptions and the
Purchaser shall have received an opinion of outside legal counsel to the
Company, dated the Amendment Closing Date, addressed to the Purchaser,
substantially in the form attached as EXHIBIT G.
9. MISCELLANEOUS.
9.1 SUCCESSORS AND ASSIGNS. The provisions of Section 8.1 of the
Purchase Agreement shall be applicable to this Agreement as if this Agreement
were the "Agreement" referred to in Section 8.1 of the Purchase Agreement.
9.2 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.3 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 NOTICES. Any notice required or permitted under this Agreement
shall be given as provided in the Purchase Agreement.
9.5 EXPENSES. The Company shall pay its own costs and expenses in
connection herewith and shall pay or reimburse the Purchaser on demand, at the
Execution Time and thereafter from time to time, for the Purchaser's legal and
due diligence expenses incurred in connection herewith. The Company shall pay
all fees and expenses of any placement agents or advisers in connection with the
transactions contemplated by this Agreement pursuant to a separate agreement, if
any, between such parties.
9.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Purchaser;
provided, however, that any such amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any Securities purchased
under this Agreement at the time outstanding, each future holder of all such
securities, and the Company.
9.7 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
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such provision were so excluded and shall be enforceable in accordance with its
terms.
9.8 ENTIRE AGREEMENT. This Agreement, including the Exhibits and
Schedules hereto, the other Amendment Transaction Documents and other documents
contemplated hereby and thereby constitute the entire agreement among the
parties hereof with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.
9.9 FURTHER ASSURANCES. The parties shall execute and deliver all
such further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
9.10 APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
9.11 REMEDIES.
(a) The Purchaser shall be entitled to specific performance of the
Company's obligations under the Amendment Transaction Documents.
(b) The Company, on the one hand, and the Purchaser, on the other
hand, shall indemnify the other and hold it harmless from any loss, cost,
expense or fees (including reasonable attorneys' fees and expenses) arising out
of any breach of any of its representations, warranties, covenants or agreements
in any of the Amendment Transaction Documents, or arising out of the enforcement
of this Section 9.11.
9.12 JURISDICTION. The parties hereby agree that all actions or
proceedings arising directly or indirectly from or in connection with this
Agreement shall be litigated only in the Supreme Court of the State of New York
or the United States District Court for the Southern District of New York
located in New York County, New York. The parties consent and submit to the
jurisdiction and venue of the foregoing courts and consent that any process or
notice of motion or other application to either of said courts or a judge
thereof may be served inside or outside the State of New York or the Southern
District of New York (but with respect to any party hereto, such consent shall
not be deemed a general consent to jurisdiction and service for any third
parties) by registered mail, return receipt requested, directed to the party
being served at its address provided in or pursuant to this Agreement (and
service so made shall be deemed complete three (3) days after the same has been
posted as aforesaid) or by personal service or in such other manner as may be
-22-
permissible under the rules of said courts. The Company hereby waives any right
to a jury trial in connection with any litigation pursuant to this Agreement.
9.13 SURVIVAL. The respective representations, warranties, covenants
and agreements of the Company and the Purchaser contained in this Agreement and
the documents delivered in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Amendment Transaction
Documents and the Amendment Closing and issuance and delivery of the Amended
Note, and the Amended Warrant, and shall remain in full force and effect
regardless of any investigation made by or on behalf of the Purchaser or any
Person controlling or acting on behalf of the Purchaser or by the Company or any
Person controlling or acting on behalf of the Company.
9.14 CONSTRUCTION; PURCHASER STATUS. 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. The Purchaser is not acting as part of a "group" (as that term is
used in Section 13(d) of the 0000 Xxx) in negotiating and entering into this
Agreement or purchasing the Amended Note and the Amended Warrant, or acquiring,
disposing of or voting any of the Underlying Shares or the Warrant Shares. The
Company hereby confirms that it understands and agrees that the Purchaser is not
acting as part of any such group.
9.15 TERMINATION BY PURCHASER. Notwithstanding any other provision
of this Agreement, if the Amendment Closing shall not have occurred on or before
June 6, 2005, then at any time thereafter the Purchaser shall have the right,
exercisable by notice to the Company, to terminate this Agreement, whereupon the
Purchaser and the Company shall have no further liability or obligation of any
kind whatsoever one to the other under this Agreement or in connection with the
amendment transactions contemplated hereby other than under Section 9.5 and
other than any liability or obligation arising from a breach of this Agreement
or any of the Transaction Documents which breach occurred prior to such
termination.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have duly executed and delivered
this Agreement by their respective officers or other representatives thereunto
duly authorized as of the date first above written.
ZIX CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
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OMICRON MASTER TRUST
BY: OMICRON CAPITAL, L.P.,
AS INVESTMENT ADVISER
BY: OMICRON CAPITAL, INC.,
GENERAL PARTNER
By: /s/ XXXXXXX XXXXXX
-------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
Omicron Master Trust
Xxxxxxxx House
00 Xxxx Xxxxxx
Xxxxxxxx XX 11
Bermuda
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