Contract
Exhibit 4.3
[EXECUTION VERSION]
[EXECUTION VERSION]
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS AND ACCORDINGLY
MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. ZIX CORPORATION (THE “COMPANY”) WILL TRANSFER SUCH WARRANT AND ANY SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE THEREOF ONLY UPON RECEIPT OF AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE REGISTRATION PROVISIONS OF SUCH ACT HAVE
BEEN COMPLIED WITH OR THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT SUCH TRANSFER WILL NOT
VIOLATE ANY APPLICABLE STATE SECURITIES LAWS.
COMMON STOCK WARRANT CERTIFICATE
ZIX CORPORATION
February 22, 2007
For the Purchase of 145,853 Shares of Common
Stock of Zix Corporation
FOR VALUE RECEIVED, sanofi-aventis U.S. Inc., a Delaware corporation, or its permitted assigns
(the “Holder”) is hereby granted the right to purchase from Zix Corporation, a Texas corporation
(the “Company”), up to a total of 145,853 shares (the “Warrant Shares”, which number shall be
adjusted from time to time in accordance with Section 2 hereof) of the Company’s common stock, par
value $.01 per share (the “Common Stock”), at a purchase price of $4.48 per share (as adjusted from
time to time in accordance with Section 2 hereof, the “Exercise Price”), exercisable in whole or in
part at any time and from time to time from January 30, 2007 until 6:00 p.m. New York time on the
date that is five (5) years after the date thereof (the “Exercise Period”), on the terms and
conditions set forth in this Warrant (this “Warrant”).
| I. | Exercise. |
1.1 Exercise of Warrant. This Warrant may be exercised, in whole or in part, at any
time or from time to time, during the Exercise Period by (i) surrendering this Warrant Certificate,
with the form of exercise notice attached hereto as Exhibit A duly executed by the Holder,
to the Company at its principal office, and (ii) (a) making payment to the Company of the aggregate
Exercise Price for the applicable Warrant Shares in cash, by certified check, bank check or wire
transfer to an account designated by the Company, or (b) providing notice to the Company of the
Holder’s election to utilize the cashless exercise feature of this Warrant set forth in Section 1.2
below. The minimum number of shares of Common Stock with respect to which this Warrant may be
exercised, in whole or in part, at any time shall be the lesser of (1) ten percent (10%) of the
total number of Warrant Shares which may be purchased under this Warrant or (2) the maximum number
of Warrant Shares available for purchase under this Warrant at the time of exercise. Upon any
partial exercise of this Warrant, the Company, at its expense, shall promptly issue to the Holder
for Holder’s surrendered Warrant Certificate a replacement Warrant Certificate identical in all
respects to this Warrant Certificate, except that the number of Warrant Shares shall be reduced
accordingly.
1.2 Cashless Exercise. The Holder may, in its sole discretion, notify the Company
in an exercise notice of its election to utilize cashless exercise in accordance with the terms
and conditions of Section 1.1 hereof, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:
| X = Y [(A-B) / A] | ||||
where: |
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| X = | the number of Warrant Shares to be issued to the Holder. | |||
| Y = | the number of Warrant Shares with respect to which this Warrant is being exercised. | |||
| A = | the lower of (i) the average of the closing prices for the twenty (20) trading days immediately prior to, but not including, the Exercise Date (as defined in Section 1.3) and (ii) the average of the closing prices for the five (5) trading days immediately prior to, but not including, the Exercise Date (as defined in Section 1.3). | |||
| B = | the Exercise Price. | |||
For purposes of Rule 144 promulgated under the Securities Act (as defined in Section 5.1), it is
intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding period for the
Warrant Shares shall be deemed to have commenced, on the date the holding period for this Warrant
commenced.
The number of Warrant Shares for which this Warrant is exercisable and the Exercise Price
shall be subject to adjustment from time to time as set forth below.
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2.2 Dividends and Distributions in Other Securities. If the Company shall, at any
time or from time to time, make (or fix a record date for the holders of shares of its Common
Stock entitled to receive) a dividend or other distribution payable in other securities of the
Company or in the securities of any subsidiary of the Company (other than shares of Common Stock),
then lawful and adequate provision shall be made so that the Holder of this Warrant shall be
entitled to receive upon exercise of this Warrant, for the aggregate Exercise Price in effect
prior thereto, in addition to the number of Warrant Shares immediately theretofore issuable upon
exercise of this Warrant, the kind and number of other securities of the Company or securities of
any subsidiary of the Company, which the Holder would have owned and been entitled to receive had
this Warrant been exercised immediately prior to that date.
2.3 Cash Dividends and Distributions. If the Company shall, at any time or from time
to time, make (or fix a record date for the holders of shares of its Common Stock entitled to
receive) a dividend payable in, or other distribution of cash, then the number of Warrant Shares
issuable upon the exercise of the Warrant, for the aggregate Exercise Price in effect prior
thereto, immediately prior to the occurrence of any such event shall be increased by: (i) the
amount of the dividend the Holder of this Warrant would have received had the Holder exercised its
warrant immediately prior to the record date (or, if no record date has been set the date of
distribution or dividend), divided by (ii) the Current Market Price of the Company’s Common Stock.
As used in this Warrant the term “Current Market Price” means with respect to any security: (a)
for so long as the issuer is a Public Entity (as hereafter defined), and the security is traded on
an organized exchange the average closing price of the security on the stock exchange where the
security is traded or the last bid price as quoted on the NASDAQ for the immediately preceding
five (5) trading days; and (b) for so long as the issuer is not a Public Entity or the security is
not traded on an organized exchange, the price per share of the security as determined in good
faith by the Company’s board of directors. If such valuation is objected to by the Holder of this
Warrant, such valuation will be made by a reputable investment bank of national standing mutually
selected by the Holder and the Company, the expense of which will be paid by the Company. “Public
Entity” will mean: (i) an entity that has registered its Common Stock pursuant to Section 12(b) or
Section 12(g) of the Securities Exchange Act of 1934, as amended, and (ii) the aggregate market
value of Common Stock which is then available for public trading is not less than Ten Million
Dollars
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($10,000,000), computed by reference to the closing price of the Common Stock on the stock
exchange where the Common Stock is traded or the last bid price as quoted on the NASDAQ.
(a) the Company shall fix a record date for the holders of shares of its Common Stock
for the purpose of entitling them to receive any dividend or other distribution of shares
of Common Stock or other securities of the Company; or
(b) the Company shall enter into any agreement or adopt any plan for a Special
Transaction; or
(c) the Company shall adopt any plan for or otherwise shall become subject to any
voluntary or involuntary dissolution, liquidation or winding up of the Company; or
(d) the Company shall propose to take any other action which would require an
adjustment pursuant to Sections 2.1 through 2.4,
then, and in each such case, the Company shall mail or cause to be mailed to the Holder of this
Warrant a notice specifying, as the case may be: (i) the date on which a record is to be fixed for
the purpose of such dividend or distribution, and stating the amount and character of such
dividend or distribution, or (ii) the date on which such reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up or other action is to become effective, and the
time, if any, to be fixed, as to which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for securities or other property deliverable upon such
reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up or other
action. Such notice shall be mailed at least twenty (20) days prior to the date therein specified
and this Warrant may be exercised prior to said date during the Exercise Period.
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2.7 Effect of Alternate Securities. If at any time, as a result of an adjustment
made pursuant to this Section 2, the Holder of this Warrant shall thereafter become entitled to
receive any securities of the Company other than shares of Common Stock, then the number of such
other securities receivable upon exercise of this Warrant shall be subject to adjustment from time
to time on terms as nearly equivalent as practicable to the provisions with respect to the Warrant
Shares as contained in this Section 2.
2.8 Successive Application; Readjustment. The provisions of this Section 2 shall
similarly apply from time to time to successive events covered by this Section. If the Company
shall fix a record date for the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution and shall, thereafter and before the distribution to
shareholders thereof, legally abandon its plan to pay or deliver such dividend or distribution,
then thereafter no adjustment shall be required by reason of the taking of such record date and
any such adjustment previously made in respect thereof shall be rescinded and annulled.
| III. | Rights of the Holder. |
3.1 No Rights as Shareholder. The Holder shall not, solely by virtue of this Warrant
and prior to the issuance of the Warrant Shares upon due exercise hereof, be entitled to any
rights of a shareholder in the Company.
3.2 No Impairment; Certain Covenants. The Company shall not by any action including,
without limitation, amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate to protect the rights of the
Holder against impairment. Without limiting the generality of the foregoing, the Company will (a)
take all such action as may be necessary or appropriate in order that the Warrant Shares will,
upon issuance in accordance with the terms hereof and the payment of the Exercise Price therefor,
be duly authorized, validly issued and outstanding, fully paid and non-assessable, and free from
all taxes, liens and charges with respect to the issuance thereof, (b) at all times during the
Exercise Period have authorized and reserved sufficient shares of Common Stock to provide for the
exercise of this Warrant in full, and (c) use its best efforts to obtain all such authorizations,
exemptions or
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consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
The Company represents and warrants to and agrees with the Holder as follows:
4.1 Sufficient Shares. The Company has authorized sufficient shares of Common Stock
to fulfill the Company’s obligations under this Warrant and all of the other warrants, options and
convertible securities issued by the Company. On exercise of this Warrant and satisfaction of the
Exercise Price, the Warrant Shares issued to the Holder will be validly issued, fully paid,
non-assessable and free and clear of all liens, claims and encumbrances, except any liens, claims,
or encumbrances permitted by or imposed by the Holder.
4.2 Authority. The Company has taken all necessary action to authorize the execution
and delivery of this Warrant and the issuance of the Warrant Shares on the exercise of this
Warrant. This Warrant is a valid, binding and enforceable obligation of the Company. The
execution, delivery and performance of this Warrant will not violate: (a) any provision of the
organizational documents or charter of the Company; (b) any order, writ, injunction or decree of
any court, administrative agency or governmental body applicable to the Company or the Common
Stock; or (c) any contract, lease, note, bond, mortgage or other agreement to which the Company is
a party, by which the Company is bound or to which any of the Company’s assets are subject.
5.1 This Warrant is being acquired and any Warrant Shares to be acquired by the Holder
pursuant to this Warrant (collectively, “Securities”) will be acquired for investment for the
Holder’s own account and not for resale in connection with any distribution of such Securities
within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). The
Securities will not be sold, transferred or otherwise disposed of without registration under the
Securities Act and state securities laws or qualification for exemptions therefrom. The Holder
agrees that, until the Company has caused the registration of such shares under the Securities
Act, each certificate evidencing the Warrant Shares may be inscribed with a legend to the
foregoing effect, which legend will be as follows:
The shares represented by this certificate have been acquired solely
for investment purposes and have not been registered under the
Securities Act of 1933, as amended, or the securities laws of any
state. The shares may not be sold, transferred, assigned or
otherwise disposed of unless and until such shares are first
registered under the
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Securities Act of 1933, as amended, all
applicable state securities laws and all rules and regulations
promulgated thereunder or unless and until the holder hereof
provides either (i) information reasonably satisfactory to the
Company that such registration is not required or (ii) an opinion of
counsel reasonably acceptable to the Company to the effect that such
registration is not required.
| VII. | Miscellaneous. |
7.1 Notices. Any notice, demand or communication required or permitted to be given
by any provision of this Warrant must be in writing and will be deemed to have been given and
received when delivered personally or by telefacsimile to the party designated to receive such
notice, or on the date following the day sent by overnight courier, or on the third (3rd) business
day after the same is sent by certified mail, postage and charges prepaid, directed to the
following addresses or to such other or additional addresses as any party might designate by
written notice to the other parties:
| To the Company: | Zix Corporation | |||
| 0000 Xxxxx Xxxxxxx Xxxxxx | ||||
| Xxxxx 0000, XX 36 | ||||
| Dallas, Texas 75204-2960 | ||||
| Attn: Legal Department | ||||
| Fax: (000) 000-0000 |
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| To the Holder: | sanofi-aventis U.S. Inc. | |||
| 00 Xxxxxxxxx Xxxxx | ||||
| Xxxxxxxxxxx, Xxx Xxxxxx 00000 | ||||
| Mail Stop: 55A-320B | ||||
| Attention: Treasury Department | ||||
| Facsimile No.: (000) 000-0000 | ||||
| With a copy to: | General Counsel’s office | |||
| Mail Stop: 55A-525A | ||||
| Facsimile No.: (000) 000-0000 |
7.2 Expenses; Taxes. Any sales tax, stamp duty, deed transfer or other tax (except
only taxes based on the income of Holder) arising out of the issuance and sale of this Warrant or
the Warrant Shares issuable upon exercise of this Warrant and consummation of the transactions
contemplated by this Warrant Certificate shall be paid by the Company.
7.5 Governing Law. This Warrant is being delivered and is intended to be performed
in the State of New York and will be construed and enforced in accordance with, and the rights of
the parties will be governed by, the law of such state, without regard to its conflict of laws
principles.
7.6 Severability. Should any part of this Warrant for any reason be declared
invalid, such decision shall not affect the validity of any remaining portion, which remaining
portion shall remain in full force and effect as if this Warrant had been executed with the
invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto
that they would have executed and accepted the remaining portion of this Warrant without including
therein any such part, parts or portion which may, for any reason, be hereafter declared invalid.
[Remainder of page intentionally left blank]
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| ZIX CORPORATION, | ||||||||
| a Texas corporation | ||||||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||||||
| Name: | Xxxxxx X. Xxxxxxxx
|
|||||||
| Title: | Senior Vice President
|
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SIGNATURE PAGE TO WARRANT
EXHIBIT A
[To be executed only upon exercise of Warrant]
The undersigned registered owner of the attached Warrant Certificate irrevocably exercises
this Warrant for the purchase of the number of shares of Common Stock of Zix Corporation (the
“Company”) as is set forth below, and herewith makes payment therefor, all at the price and on the
terms and conditions specified in the attached Warrant Certificate and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to the person specified below whose
address is set forth below, and, if such shares of Common Stock shall not include all of the
shares of Common Stock now and hereafter issuable as provided in the attached Warrant Certificate,
then the Company shall, at its own expense, promptly issue to the undersigned a new Warrant
Certificate of like tenor and date for the balance of the shares of Common Stock issuable
thereunder.
Date: |
Amount of Shares Purchased: |
Aggregate Purchase Price: $ OR
Cashless Exercise
|
Printed Name of Registered Holder: |
||
Signature of Registered Holder: |
||
NOTICE:
|
The signature on this Exercise Notice must correspond with the name as written upon the face of the attached Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. |
Stock Certificates to be issued and registered in the following name, and delivered to the
following address:
| (Name) | ||||||
| (Street Address) | ||||||
| (City) | (State) | (Zip Code) | ||||
EXHIBIT B
[To be executed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the person named
below, whose address is set forth below, the rights represented by the attached Warrant
Certificate to purchase the number of shares of Common Stock of Zix Corporation (the “Company”) as
is set forth below, to which the attached Warrant Certificate relates, and appoints
attorney to transfer such rights on the books of the Company with full power of
substitution in the premises. If such shares of Common Stock of the Company shall not include all
of the shares of Common Stock now and hereafter issuable as provided in the attached Warrant
Certificate, then the Company, at its own expense, shall promptly issue to the undersigned a new
Warrant Certificate of like tenor and date for the balance of the Common Stock issuable
thereunder.
Date: |
Number of Shares Assigned: |
Printed Name of Registered Holder: |
||
Signature of Registered Holder: |
||
| NOTICE: | The signature on this Assignment Notice must correspond with the name as written upon the face of the attached Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever. |
Warrant Certificate for transferred Warrants to be issued and registered in the following name,
and delivered to the following address:
| (Name) | ||||||
| (Street Address) | ||||||
| (City) | (State) | (Zip Code) | ||||