AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
EXHIBIT 4.3
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of ___, 2005 (this
“Agreement”), by and between ZIX CORPORATION, a Texas corporation (the “Company”), and ___, a
___(the “Investor”).
WITNESSETH:
WHEREAS, in connection with the Purchase Agreement (such capitalized term and all other
capitalized terms used herein having the respective meanings provided herein), the Company has
agreed to provide certain registration rights under the 1933 Act and applicable state securities
laws with respect to the Registrable Securities issuable upon conversion, exercise or redemption
of, or otherwise in connection with, the securities issued pursuant to the Purchase Agreement;
WHEREAS, the Company and the Investor have previously executed and delivered, one to the
other, the Original Registration Rights Agreement; and
WHEREAS, in connection with the execution and delivery by the Company and the Investor, one to
the other, of the Purchase Agreement Amendment, the Company and the Investor wish to amend and
restate the Original Registration Rights Agreement upon the terms and subject to the conditions
provided in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Holders hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, the terms “Agreement,” “Company” and “Investor” shall have the
respective meanings assigned to such terms in the introductory paragraph of this Agreement.
(b) 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.
(c) 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 Registrable Securities” means any shares of Common Stock which are included within
the definition of Registrable Securities but not required by this Agreement to be included in any
Registration Statement filed pursuant to Section 2(a)(i) below.
“Allowed Delay” shall have the meaning provided in Section 2(c)(ii).
“AMEX” means the American Stock Exchange, Inc.
“Approved Market” shall have the meaning provided in Section 2(c)(i).
“Availability Date” shall have the meanings provided in Section 3(m).
“Closing Warrant” means the Amended and Restated Common Stock Purchase Warrant issued by the
Company to the Investor pursuant to the Purchase Agreement, as such warrant has been amended and
restated pursuant to the Purchase Agreement Amendment, and any similar instrument issued upon
transfer or split up thereof.
“Common Stock” means the Common Stock, par value $0.01 per share, of the Company.
“Compensation Event” shall have the meaning provided in Section 2(c)(i).
“Compensation Payments” shall have the meaning provided in Section 2(c)(i).
“Compensation Period” shall have the meaning provided in Section 2(c)(i).
“Compensation Rate” shall mean the rate of one percent per month during the first 30 days in
the aggregate in which any one or more Compensation Periods are in effect and two percent per month
thereafter.
“Conversion Price” shall have the meaning provided in the Note.
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“Holder” means the Investor and each subsequent holder of the Note, the Warrants, Registrable
Securities or Additional Registrable Securities, or any portion thereof which subsequent holder has
rights under this Agreement assigned to it in accordance with Section 7(c).
“Initial Registrable Securities Amount” shall have the meaning provided in Section 2(a)(i).
“Interest Share Price” shall have the meaning provided in the Note.
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“NASD” means the National Association of Securities Dealers, Inc.
“Nasdaq” means the Nasdaq National Market.
“Note” means the Amended and Restated Convertible Note due 2005-2008 issued by the Company
pursuant to the Purchase Agreement and amended and restated as provided in the Purchase Agreement
Amendment.
“NYSE” means the New York Stock Exchange, Inc.
“Original Registration Rights Agreement” means the Registration Rights Agreement, dated as of
November 2, 2004, by and between the Company and Investor.
“Other Registration Rights Agreements” means the several Amended and Restated Registration
Rights Agreements, dated as of the date hereof, by and between the Company and the several
investors parties thereto who purchased or acquired Amended and Restated Convertible Notes due
2005-2008 and Common Stock Purchase Warrants issued by the Company.
“Principal Market” means the Nasdaq or such other U.S. market or exchange which is the
principal market on which the Common Stock is then listed for trading.
“Prospectus” means the prospectus forming part of or relating to any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the terms of the offering
of any portion of the Registrable Securities or Additional Registrable Securities covered by such
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Registration Statement and by all other amendments and supplements to the prospectus, including
post-effective amendments and all material incorporated by reference in such prospectus.
“Purchase Agreement” means the Purchase Agreement, dated as of November 1, 2004, by and
between the Company and the Investor, as amended by the Purchase Agreement Amendment.
“Purchase Agreement Amendment” means Amendment No. 1 to Purchase Agreement, dated as of April
___, 2005, by and between the Company and the Investor.
“Purchase Price” when used with respect to a particular Warrant, shall have the meaning
provided in such Warrant.
“Redemption Warrant” shall have the meaning provided in the Note.
“register,” “registered” and “registration” refer to a registration made by preparing and
filing a registration statement or similar document in compliance with the 1933 Act, and the
declaration or ordering of effectiveness of such registration statement or document by the SEC.
“Registrable Securities” means (i) the Underlying Shares, the Warrant Shares and the shares of
Common Stock or other securities issued or issuable to each Holder or its permitted transferee or
designee (a) upon conversion or redemption of the Note and upon exercise of the Warrants, or (b)
upon any distribution with respect to, any exchange for or any replacement of the Note or the
Warrants, or (c) upon any conversion, exercise or exchange of any securities issued in connection
with any such distribution, exchange or replacement; (ii) securities issued or issuable upon any
stock split, stock dividend, recapitalization or similar event with respect to the Common Stock or
other securities referred to in clause (i) of this definition; and (iii) any other security issued
as a dividend or other distribution with respect to, in exchange for, or in replacement of, the
Note, the Warrants or the securities referred to in the preceding clauses of this definition.
“Registration Insufficiency Event” shall have the meaning provided in Section 2(a)(i).
“Registration Period” shall have the meaning provided in Section 3(a).
“Registration Statement” shall mean any registration statement of the Company filed under the
1933 Act that covers the resale of any of the Registrable Securities or Additional Registrable
Securities pursuant to the provisions of this Agreement, amendments and supplements to such
Registration Statement,
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including post-effective amendments, all exhibits and all material incorporated by reference in
such Registration Statement.
“SEC” means the U.S. Securities and Exchange Commission.
“Share Redemption” shall have the meaning provided in the Note.
“Share Redemption Date” shall have the meaning provided in the Note.
“Trading Day” means at any time a day on which the securities exchange or market that at such
time constitutes the Principal Market is open for general trading of securities.
“Underlying Shares” means the shares of Common Stock issuable or issued upon conversion of, or
otherwise in respect of or in exchange for, the Note or any other security (other than the
Redemption Warrant) issued in respect of or in exchange for the Note, including, without
limitation, shares of Common Stock issuable pursuant to Section 2(c) of the Note.
“VWAP” means for any Trading Day the volume-weighted average price of the Common Stock on the
Principal Market, as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m.,
Eastern Time, to 4:00 p.m., Eastern Time) using the AQR function, on such Trading Day.
“Warrants” means, collectively, the Closing Warrant and the Redemption Warrant.
“Warrant Shares” means the shares of Common Stock issuable upon exercise of, or otherwise in
respect of, the Warrants.
(d) Capitalized terms used herein but not otherwise defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement.
2. Registration.
(a) Registration Statements.
(i) Registrable Securities. Promptly following the Closing Date (but, subject to Section
2(a)(iii), no later than 30 days after the Closing Date), the Company shall prepare and file with
the SEC one Registration Statement on Form S-3 covering the resale of the Registrable Securities in
an amount at least equal to the sum of (1) 150% of the number of Underlying Shares that would be
issuable
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upon conversion of the Note in full or, in case the Note were to be redeemed
pursuant to Section 2(b) thereof, upon exercise of the Redemption Warrant in full for cash plus (2)
150% of the number of shares of Common Stock issuable upon exercise of the Closing Warrant in full
for cash, plus (3) such number of additional Registrable Securities as the Company wishes to have
available to issue in lieu of cash payment of interest on the Note, in each case in the preceding
clauses (1) through (3), determined without regard to any restrictions on beneficial ownership
contained in the Note, the Warrants or the Purchase Agreement (such sum the “Initial Registrable
Securities Amount”). Such Registration Statement also shall cover, to the extent permitted by the
1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of
additional shares of Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Registrable Securities. No securities other than the Registrable
Securities and the securities being registered by the Company in accordance with the Other
Registration Rights Agreements shall be included in the Registration Statement without the consent
of the Holder. If at any time the number of Registrable Securities of the types specified in
clauses (1) and (2) of the definition of Initial Registrable Securities Amount that is included in
a Registration Statement and remaining unsold thereunder shall be insufficient to cover the resale
of Registrable Securities in an amount at least equal to 140% of the sum of:
(x) the number of Underlying Shares issued and remaining unsold under the Registration
Statement, or that would be issuable, upon conversion in full of the Note or, in case the
Note were to be redeemed pursuant to Section 2(b) thereof, upon exercise of the Redemption
Warrant in full for cash plus
(y) without duplication of the amount specified in the preceding clause (x), the number
of shares of Common Stock that have been issued and remain unsold under the Registration
Statement, or would be issuable, upon redemption of the Note pursuant to Section 2(c) of the
Note as required by Section 2(d)(2) of the Note, determined on any 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 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 Note plus
(z) the number of shares of Common Stock issued and remaining unsold under the
Registration Statement, or that would be issuable upon exercise of the Warrants outstanding
at such time in full for cash,
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in each case in the preceding clauses (x) through (z) determined without regard to any restrictions
on beneficial ownership contained in the Note, the Warrants or the
Purchase Agreement (a “Registration Insufficiency Event”), then promptly, but in no event later
than 30 days after such insufficiency shall occur, the Company shall file with the SEC an
additional Registration Statement on Form S–3 (or, if Form S-3 is not then available to the
Company, on such form of registration statement as is then available to effect a registration for
resale of such additional Registrable Securities) covering such number of shares of Common Stock as
shall be sufficient to cover such amount. Except as set forth above, the requirements with respect
to a subsequent Registration Statement shall be the same as those applicable to the initial
Registration Statement.
(ii) Additional Registrable Securities. At any time and from time to time, promptly following
the written demand of the Holder following the issuance of any Additional Registrable Securities or
the issuance of any securities convertible into, exchangeable for, or otherwise entitling the
Holder to acquire, Additional Registrable Securities, and in any event within 30 days following
such demand, the Company shall prepare and file with the SEC a new Registration Statement on Form
S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement
as is then available to effect a registration for resale of the Additional Registrable Securities)
covering the resale of the Additional Registrable Securities in an amount equal to the number of
Additional Registrable Securities. Such Registration Statement also shall cover, to the extent
permitted by the 1933 Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock splits, stock
dividends or similar transactions with respect to the Additional Registrable Securities. The
Registration Statement required by this Section 2(a)(ii) (and each amendment or supplement thereto)
shall be provided in accordance with Section 3(c) to the Holder and its counsel prior to its filing
or other submission. Nothing herein shall limit the Company’s obligations or the Holder’s rights
under Section 6(e) of the Note, Section 10 of the Closing Warrant or Section 5 of the Redemption
Warrant.
(iii) Certain Other Registration Statements. If the Company proposes to file with the SEC a
registration statement (other than on Form S-8) relating to securities other than the Registrable
Securities or Additional Registrable Securities prior to the deadline for filing such Registration
Statement hereunder, then on or before the date the Company files such other registration statement
with the SEC the Company shall file the Registration Statement required by Section 2(a)(i) or
2(a)(ii), as the case may be, with the SEC. Except as required pursuant to the Registration Rights
Agreement, dated as of September 16, 2002, by and among the Company and the parties named therein,
or the Registration Rights Agreement, dated as of September 17, 2002, by and among the Company and
the parties named therein, the Company shall not request acceleration of effectiveness of such
other
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registration statement unless simultaneously therewith the Company requests
acceleration of effectiveness of the Registration Statement to the same date and time as so
requested for such other registration statement.
(iv) Certain Disclosures. If the Company proposes to include disclosure in any Registration
Statement to be filed with the SEC of the circumstances under which the Holder acquired the
Registrable Securities to be offered pursuant to such Registration Statement, such disclosure shall
include statements to the effect that the securities being offered may include Registrable
Securities (1) issued upon conversion of, or in lieu of payment of cash interest on, the Note, (2)
issued upon exercise of the Closing Warrant or, in case of redemption of the Note pursuant to
Section 2(b) thereof, upon exercise of the Redemption Warrant and (3) issued in exchange for, or
otherwise in respect of, the Note or the Warrants.
(b) Expenses. All expenses, other than underwriting discounts and commissions and other fees
and expenses of investment bankers and other than brokerage commissions, incurred in connection
with registrations, filing or qualifications pursuant to this Agreement, including, without
limitation, all registration, listing and qualifications fees, printers and accounting fees and the
fees and disbursements of counsel for the Company, shall be borne by the Company.
(c) Effectiveness.
(i) The Company shall use its best efforts to have each Registration Statement declared
effective as soon as practicable after it is filed with the SEC. If (A) the Company fails to file
with the SEC a Registration Statement in accordance with all of the requirements of this Agreement
on or before the date by which the Company is required to file the Registration Statement pursuant
to Section 2(a)(i) above, (B) the Company fails to file with the SEC the Registration Statement
covering Additional Registrable Securities in accordance with all of the requirements of this
Agreement within 30 days following demand of the Holder relating to the Additional Registrable
Securities to be covered thereby, (C) the Company fails to file with the SEC a request for
acceleration of effectiveness of a Registration Statement to a time and date not more than 48 hours
after the submission of such request, within three Trading Days after the date the Company learns
that no review of the Registration Statement will be made by the staff of the SEC or that the staff
of the SEC has no further comments on the Registration Statement, as the case may be, (D) the
Registration Statement covering Registrable Securities is not declared effective by the SEC within
75 days (or 105 days in case the SEC staff reviews such Registration Statement) following the
Closing Date, or the Registration Statement covering additional Registrable Securities is not
declared effective by the SEC within 75 days (or 105 days in case the SEC staff reviews such
Registration Statement) following the date on which a Registration
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Insufficiency Event occurs, or
the Registration Statement covering Additional
Registrable Securities is not declared effective by the SEC within 75 days (or 105 days in case the
SEC staff reviews such Registration Statement) following demand of the Holder relating to the
Additional Registrable Securities to be covered thereby, (E) except as otherwise permitted by
Section 2(c)(ii), after a Registration Statement has been declared effective by the SEC sales
cannot be made pursuant to such Registration Statement or the related Prospectus for any reason,
including, without limitation, by reason of a stop order, misstatements or omissions in such
Registration Statement or Prospectus, or the Company’s failure to update such Registration
Statement or Prospectus, excluding any such inability to make sales that results from an untrue
statement of a material fact in such Registration Statement or Prospectus or omission to state a
material fact required to be stated in such Registration Statement or Prospectus in order to make
the statements therein not misleading, which misstatement or omission was made by the Holder in
written information it furnished to the Company specifically for inclusion in such Registration
Statement or Prospectus which such information was substantially relied upon by the Company in
preparation of the Registration Statement or Prospectus or any amendment or supplement thereto,
unless the Company shall have failed timely to amend or supplement such Registration Statement or
Prospectus after the Holder shall have corrected such misstatement or omission, or (F) the Common
Stock generally or the Registrable Securities (or Additional Registrable Securities after issuance)
specifically are not listed or included for quotation on the Nasdaq, the NYSE or the AMEX (each an
“Approved Market”), or trading of the Common Stock is suspended or halted on the Approved Market
which at the time constitutes the Principal Market for the Common Stock (each of the events in the
preceding clauses (A) through (F) a “Compensation Event”), then the Company will make payments to
the Holder as partial liquidated damages for the minimum amount of damages to the Holder by reason
thereof, and not as a penalty, at the Compensation Rate (the “Compensation Payments”) on the sum of
(x) the outstanding principal amount of, and accrued interest on, the Note held at such time by the
Holder plus (y) the amount, if any, by which the product of (i) the average of the daily VWAPs for
all of the Trading Days during the particular portion of the Compensation Period for which such
computation is being made times (ii) the number of Warrant Shares issuable upon exercise for cash
of the unexercised portion of the Warrants held at such time by the Holder exceeds the aggregate
Purchase Price of the number of Warrant Shares issuable upon exercise for cash of the unexercised
portion of the Warrants held at such time by the Holder, plus (z) the product of (1) the number of
outstanding Registrable Securities held at such time by the Holder times (2) the greater of (i) the
average of the daily VWAPs for all of the Trading Days in the particular portion of the
Compensation Period for which such computation is being made and (ii) the Purchase Price of such
Registrable Securities (in the case of Registrable Securities issued upon exercise of the
Warrants), the Conversion Price of such Registrable Securities (in the case of Registrable
Securities issued upon conversion of the Note), the Interest Share Price
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(in the case of
Registrable Securities issued in lieu of payment of cash interest on
the Note) or the Computed Price used to compute that portion of the Share Redemption Share Amount
consisting of such shares (in the case of Registrable Securities issued in a Share Redemption of
the Note), in each such case for each day on which any Compensation Event is continuing (the
“Compensation Period”). Each such payment shall be due and payable within five days after the end
of each calendar month of the Compensation Period until the termination of the Compensation Period
and within five days after such termination. Such payments shall be in partial compensation to the
Holder, and shall not constitute the Holder’s exclusive remedy for any Compensation Event;
provided, however, that if because of a particular Compensation Event the Holder is successful in
recovering on a claim for damages under this Agreement from such Compensation Event, the amount of
Compensation Payments previously paid by the Company to the Holder with respect to such
Compensation Event shall be applied to reduce the amount of such recovery to the extent of such
Compensation Event. A particular Compensation Period shall terminate upon (v) the filing of the
applicable Registration Statement in the case of clauses (A) and (B) above; (w) the effectiveness
of the applicable Registration Statement in the case of clauses (C) and (D) above; (x) the date
sales can once again be made under the Registration Statement in the case of clause (E) above, (y)
listing or inclusion and/or trading of the Common Stock on an Approved Market, as the case may be,
in the case of clause (F) above; and (z) in the case of the events described in clauses (C), (D) or
(E) above, the earlier termination of the Registration Period (as defined in Section 3(a) below),
and in each such case any Compensation Period that commences by reason of the occurrence of such
event shall terminate if at the time no other Compensation Event is continuing. The amounts
payable as partial liquidated damages pursuant to this paragraph shall be payable in lawful money
of the United States. If the Company fails to pay any liquidated damages pursuant to this Section
in full within three days after the date payable, the Company will pay interest thereon at a rate
of 18% per annum (or such lesser rate that is the highest rate permitted by applicable law) to the
Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all
such interest thereon, are paid in full. Amounts payable as partial liquidated damages hereunder
shall cease when the Holder no longer holds any Note, the Warrants, Registrable Securities or
Additional Registrable Securities.
(ii) For not more than ten consecutive Trading Days or for a total of not more than 20 Trading
Days in any period of 12 consecutive months, the Company may suspend the use of the Registration
Statement(s) that are effective at such time because the Company determines to delay the disclosure
of material non-public information concerning the Company, if the disclosure of such information at
the time is not, in the good faith opinion of the Company, in the best interests of the Company or
would be unduly detrimental to the Company’s affairs (an “Allowed Delay”); provided, that the
Company shall not later than the date a suspension goes into effect (a) notify the Holder in
writing of the suspension of use of the
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Registration Statement (but in no event, without the prior
written consent of the
Holder, shall the Company disclose to the Holder any of the material non-public information giving
rise to an Allowed Delay), and (b) advise the Holder in writing to cease all sales under the
Registration Statement until the end of the Allowed Delay. The Company shall notify the Holder on
the date a Registration Statement the use of which has been suspended under this Section 2(c)(ii)
is once again available for use. If the Company shall have suspended the use of the Registration
Statement, then no period of Allowed Delay subsequent to such suspension shall commence sooner than
30 days after the date on which the Company notifies the Holder that such earlier suspension shall
have been lifted.
(d) Other Registration. If at any time or from time to time a new Registration Statement is
necessary or appropriate to afford the Holders the rights and benefits intended to be provided to
them by this Agreement, the Company shall, upon request of any Holder, promptly prepare on the
appropriate SEC form, file with the SEC, and use its best efforts to obtain and maintain
effectiveness of, a new Registration Statement to the same extent as any other Registration
Statement provided for in this Agreement.
3. Company Obligations. The Company will use its best efforts to effect the registration of
the Registrable Securities and Additional Registrable Securities at the times and for the periods
specified in this Agreement. The Company hereby covenants and agrees to:
(a) use its best efforts to cause such Registration Statement to become effective and to
remain continuously effective and available for use by the Holders named therein as selling
stockholders for a period (the “Registration Period”) that will terminate upon the earlier of (i)
the date on which all Registrable Securities or Additional Registrable Securities have been sold
(and the Note and the Warrants no longer remain outstanding) and (ii) the date on which all
Registrable Securities or Additional Registrable Securities, as the case may be, that are issued
or may be issued are eligible for sale by the Holder pursuant to Rule 144(k) promulgated under the
1933 Act;
(b) prepare and file with the SEC such amendments, post-effective amendments and prospectus
supplements to the Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective and available for use by the Holders named therein as selling
stockholders for the period specified in Section 3(a) and to comply with the provisions of the 1933
Act and the 1934 Act with respect to the distribution of all Registrable Securities and Additional
Registrable Securities; provided that, at a time reasonably, but not less than four Business Days,
prior to the filing of a Registration Statement or Prospectus, or any amendments or supplements
thereto, with the SEC the Company will furnish to the Holder copies of all documents proposed to be
filed, which documents will be subject to the comments, if any, that the Holder provides to the
Company reasonably
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promptly after receipt of such documents; not later than two Business Days after the Amendment
Closing Date, file with the SEC a Current Report on Form 8-K that includes copies of the Purchase
Agreement Amendment and the exhibits thereto; and not later than the Amendment Closing Date, file
with the SEC a prospectus supplement or amended Prospectus pursuant to Rule 424 under the 1933 Act
that includes all information relating to the Purchase Agreement Amendment and the transactions
contemplated thereby that is required to be disclosed in the Prospectus;
(c) permit counsel designated by the Holder to review each Registration Statement and
Prospectus and all amendments and supplements thereto no fewer than four Business Days (or as many
Business Days as possible if SEC rules do not allow such time for such review) prior to their
filing with the SEC and not file any document to which such counsel reasonably objects;
(d) furnish to the Holder and its legal counsel (i) promptly after the same is prepared and
publicly distributed, filed with the SEC, or received by the Company, one copy of any Registration
Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment
or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the
staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each
case relating to such Registration Statement (other than any portion of any thereof which contains
information for which the Company has sought confidential treatment), and (ii) within two Business
Days after the effective date of each Registration Statement and within two days after any
Prospectus or amendment or supplement thereto is prepared or filed with the SEC, at least five
copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements
thereto, and such other documents as the Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities and Additional Registrable Securities owned by the
Holder, and thereafter promptly after the Holder from time to time requests, such additional number
of copies thereof as the Holder may request;
(e) in the event the Holder selects an underwriter for the offering, enter into and perform
its obligations under an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the underwriter of such
offering;
(f) if the Holder is described in the Registration Statement as an underwriter, the Company
shall use its best efforts to furnish, on the effective date of the Registration Statement and at
periodic intervals thereafter from time to time on request, (i) an opinion, dated as of such date,
from outside legal counsel representing the Company for purposes of such Registration Statement, in
form, scope and substance as is customarily given in an underwritten public offering,
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addressed to the Holder and (ii) a letter, dated such date, from the Company’s independent
certified public accountants in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed to the Holder;
(g) use its best efforts to prevent the issuance of any stop order or other suspension of
effectiveness and, if such order is issued, use its best efforts to obtain the withdrawal of any
such order at the earliest possible moment;
(h) furnish to the Holder at least five copies of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules by reputable
overnight courier within three Business Days after the effective date thereof;
(i) use its commercially reasonable best efforts to register or qualify the Registrable
Securities or Additional Registrable Securities, as applicable, for offer and sale under the
securities or blue sky laws of such jurisdictions requested by the Holder prior to the effective
date with the SEC of the applicable Registration Statement and do any and all other reasonable acts
or things necessary or advisable to enable the distribution in such jurisdictions of the
Registrable Securities or Additional Registrable Securities covered by the Registration Statement;
provided, however, that the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not otherwise be required
to qualify but for this Section 3(i), (b) subject itself to general taxation in any such
jurisdiction, (c) file a general consent to service of process in any such jurisdiction, or (d)
make any change in its charter or bylaws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its shareholders.
(j) without limiting the Company’s obligation under the Transaction Documents to maintain the
listing of the Common Stock on an Approved Market, cause all Registrable Securities or Additional
Registrable Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar securities issued by the
Company are then listed;
(k) cooperate with the Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as the Holder may request;
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(l) immediately notify the Holder at any time when a Prospectus relating to the Registrable
Securities or Additional Registrable Securities is required to be delivered under the 1933 Act,
upon discovery that, or upon the happening of any event as a result of which, the Prospectus
included in such Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which made, not misleading and
promptly prepare and furnish to such holder a reasonable number of copies of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers
of such Registrable Securities or Additional Registrable Securities, as applicable, such Prospectus
shall not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading in the light of the
circumstances then existing; and
(m) otherwise comply with all applicable rules and regulations of the SEC under the 1933 Act
and the 1934 Act, take such other actions as may be reasonably necessary to facilitate the
registration of the Registrable Securities and Additional Registrable Securities, if applicable,
hereunder; and make available to its security holders, as soon as reasonably practicable, but not
later than the Availability Date, an earnings statement covering a period of at least twelve
months, beginning after the effective date of each Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the 1933 Act. “Availability Date” means, with
respect to a particular Registration Statement, (1) the day on which the Company’s Quarterly Report
on Form 10-Q for the fourth consecutive fiscal quarter following the fiscal quarter that includes
the effective date of such Registration Statement is due for filing with the SEC (after giving
effect to any extension permitted by Rule 12b-25 under the 1934 Act and claimed by the Company), in
case such fourth fiscal quarter is one of the first three fiscal quarters of the Company’s fiscal
year, or (2) the day on which the Company’s Annual Report on Form 10-K covering a fiscal year that
ends at the end of the fourth fiscal quarter following the fiscal quarter that includes the
effective date of such Registration Statement is due for filing with the SEC (after giving effect
to any extension permitted by Rule 12b-25 under the 1934 Act and claimed by the Company) in case
such fourth fiscal quarter is the fourth fiscal quarter of the Company’s fiscal year.
4. Due Diligence Review; Information. The Company shall make available, during normal
business hours, for inspection and review by the Holder, advisors to and representatives of the
Holder (who may or may not be affiliated with the Holder and who are reasonably acceptable to the
Company), and any underwriter participating in any disposition of Common Stock on behalf of the
Holder pursuant to the Registration Statement or amendments or supplements thereto or any blue sky,
NASD, or other filing, all financial and other records, all
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SEC Filings and other filings with the SEC, and all other corporate documents and properties of the
Company as may be reasonably necessary for the purpose of establishing a due diligence defense
under applicable securities laws and such other reasonable purposes, and cause the Company’s
officers, directors and employees, within a reasonable time period, to supply all such information
reasonably requested by the Holder or any such representative, advisor or underwriter in connection
with such Registration Statement (including, without limitation, in response to all questions and
other inquiries reasonably made or submitted by any of them), prior to and from time to time after
the filing and effectiveness of the Registration Statement for the sole purpose of enabling the
Holder and such representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy
of the Registration Statement.
The above to the contrary notwithstanding, the Company shall not disclose material nonpublic
information to the Holder, or to advisors to or representatives of the Holder, unless prior to
disclosure of such information the Company identifies such information as being material nonpublic
information and provides the Holder, such advisors and representatives with the opportunity to
accept or refuse to accept such material nonpublic information for review. The Company may, as a
condition to disclosing any material nonpublic information hereunder, require the Holder’s advisors
and representatives to enter into a confidentiality agreement (including an agreement with such
advisors and representatives prohibiting them from trading in Common Stock during such period of
time as they are in possession of material nonpublic information) in form reasonably satisfactory
to the Company and the Holder.
5. Obligations of the Holder.
(a) The Holder shall furnish in writing to the Company such information regarding itself, the
Registrable Securities or Additional Registrable Securities, as applicable, held by it and the
intended method of disposition of the Registrable Securities or Additional Registrable Securities,
as applicable, held by it, as shall be required by the 1933 Act to effect the registration of such
Registrable Securities or Additional Registrable Securities, as applicable, and shall execute such
documents in connection with such registration as the Company may reasonably request. At least
five Business Days prior to the first anticipated filing date of any Registration Statement (or
such shorter period as may be agreed to by the Holder), the Company shall notify the Holder of the
information the Company requires from the Holder if the Holder’s Registrable Securities or
Additional Registrable Securities are to be included in the Registration Statement.
(b) The Holder, by its acceptance of the Registrable Securities and Additional Registrable
Securities, if any, agrees to cooperate with the Company as
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reasonably requested by the Company in connection with the preparation and filing of a Registration
Statement hereunder, unless the Holder has notified the Company in writing of its election to
exclude all of its Registrable Securities or Additional Registrable Securities, as applicable, from
the Registration Statement.
(c) The Holder agrees that, upon receipt of any notice from the Company of the happening of
any event rendering a Registration Statement no longer effective or available for use by the
Holder, the Holder will immediately discontinue disposition of Registrable Securities or Additional
Registrable Securities pursuant to the Registration Statement covering such Registrable Securities
or Additional Registrable Securities, until the Holder’s receipt of the copies of the supplemented
or amended Prospectus filed with the SEC and declared effective and, if so directed by the Company,
the Holder shall deliver to the Company (at the expense of the Company) or destroy all copies in
the Holder’s possession, or instruct its agents or other representatives to deliver to the Company
(at the Company’s expense) or destroy all copies in such agents’ or other representatives’
possession, in either case of the Prospectus covering the Registrable Securities or Additional
Registrable Securities, as applicable, current at the time of receipt of such notice.
6. Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and hold harmless, to the
fullest extent permitted by law, the Holder, each investment advisor and investment sub-advisor of
the Holder and each of their respective officers, directors, partners, members and employees and
each person who controls the Holder (within the meaning of the 0000 Xxx) against all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable attorney’s fees) and
expenses imposed on such person caused by (i) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus or any preliminary prospectus or any
amendment or supplement thereto or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based upon any information furnished in writing to the Company by
the Holder, expressly for use therein, or (ii) any violation by the Company of any federal, state
or common law, rule or regulation applicable to the Company in connection with any Registration
Statement, Prospectus or any preliminary prospectus, or any amendment or supplement thereto, and
shall reimburse in accordance with subparagraph (c) below, each of the foregoing persons for any
legal and any other expenses reasonably incurred in connection with investigating or defending any
such claims. The foregoing is subject to the condition that, insofar as the foregoing indemnities
relate to any untrue statement, alleged untrue statement, omission or alleged omission made in any
preliminary prospectus or Prospectus that is eliminated or remedied in any Prospectus or
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amendment or supplement thereto, the above indemnity obligations of the Company shall not inure to
the benefit of any indemnified party if a copy of such corrected Prospectus or amendment or
supplement thereto had been timely provided to such indemnified party and was not sent or given by
such indemnified party at or prior to the time such action was required of such indemnified party
by the 1933 Act and if delivery of such Prospectus or amendment or supplement thereto would have
eliminated (or been a sufficient defense to) any liability of such indemnified party with respect
to such statement or omission. Indemnity under this Section 5(a) shall remain in full force and
effect regardless of any investigation made by or on behalf of any indemnified party and shall
survive the transfer of the Registrable Securities and Additional Registrable Securities.
(b) Indemnification by Holder. In connection with any registration pursuant to the terms of
this Agreement, the Holder will furnish to the Company in writing such information as required by
the 1933 Act concerning the Holder or the proposed manner of distribution for use in connection
with any Registration Statement or Prospectus and agrees to indemnify and hold harmless, to the
fullest extent permitted by law, the Company, its directors, officers, and each person who controls
the Company (within the meaning of the 0000 Xxx) against any losses, claims, damages, liabilities
and expense (including reasonable attorney’s fees) resulting from any untrue statement of a
material fact in the Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or any omission of a material fact required to be stated in the Registration
Statement or Prospectus or preliminary prospectus or amendment or supplement thereto necessary to
make the statements therein not misleading, to the extent, but only to the extent that such untrue
statement is contained or such omission is made in any information about the Holder furnished in
writing by such Holder to the Company specifically for inclusion in such Registration Statement or
Prospectus or amendment or supplement thereto and that such information was substantially relied
upon by the Company in preparation of the Registration Statement or Prospectus or any amendment or
supplement thereto. In no event shall the liability of the Holder be greater in amount than the
dollar amount of the proceeds (net of the cost of the Registrable Securities and Additional
Registrable Securities sold and all expenses paid by the Holder and not reimbursed by the Company
and the amount of any damages the Holder has otherwise been required to pay by reason of such
untrue statement or omission) received by the Holder upon the sale of the Registrable Securities or
Additional Registrable Securities included in the Registration Statement giving rise to such
indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder
shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks
indemnification, (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party and (iii) by notice to the
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indemnifying party, require the indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, however, that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the expense of such
person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to such person or (c) in the reasonable judgment of any such person, based
upon written advice of its counsel, a conflict of interest exists between such person and the
indemnifying party with respect to such claims (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, however, further, that the failure of any
indemnified party to give notice as provided herein shall not relieve the indemnifying party of its
obligations hereunder, except to the extent that such failure to give notice shall materially
adversely affect the indemnifying party in the defense of any such claim or litigation. It is
understood that the indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any
time for all such indemnified parties. No indemnifying party will, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification provided for in the preceding
paragraphs (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless,
other than as expressly specified therein, then the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation.
In no event shall the contribution obligation of a holder of Registrable Securities or Additional
Registrable Securities be greater in amount than the dollar amount of the proceeds (net of the cost
of the Registrable Securities or Additional Registrable Securities sold and all expenses paid by
such holder and not reimbursed by the Company and the amount of any damages such holder has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission) received by it upon the sale of the Registrable Securities or Additional
Registrable Securities giving rise to such contribution obligation.
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7. Miscellaneous.
(a) Amendments and Waivers. Prior to the date the Registration Statement contemplated by
Section 2(a)(i) is first ordered effective by the SEC or at any time thereafter during the
Registration Period that the Registration Statement or Prospectus shall not be effective or
available for use by the Holder to sell Registrable Securities, this Agreement may be amended only
by a writing signed by the Company and the Holder. Except as provided in the immediately preceding
sentence, the Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, in any such case after the Registration Statement covering the
Initial Registrable Securities Amount is declared effective by the SEC only if the Company shall
have obtained the written consent to such amendment, action or omission to act, of the Holder and
holders under the Other Registration Rights Agreements who hold, directly or indirectly, at least
66 2/3% of the aggregate number of Registrable Securities and Additional Registrable Securities (as
defined herein or in the Other Registration Rights Agreements) held by the Holder and such other
holders.
(b) Notices. All notices and other communications provided for or permitted hereunder shall
be made as set forth in Section 8.4 of the Purchase Agreement or, in the case of any Holder other
than the Investor, to such Holders address set forth in the instrument signed by such Holder
pursuant to Section 7(c) or such other address as provided by such Holder by notice to the Company.
(c) Assignments and Transfers by Holder. This Agreement and the rights and obligations of the
Holder hereunder may be assigned or transferred in whole to any transferee or assignee of the Note,
the Warrants, the Registrable Securities or the Additional Registrable Securities or in part to any
transferee or assignee of any portion thereof, except as otherwise set forth herein. The Holder
may make such assignment or transfer to any transferee or assignee of the Note, the Warrants, the
Registrable Securities or the Additional Registrable Securities; provided, that (i) such
transfer is made expressly subject to this Agreement and the transferee agrees in writing to be
bound by the terms and conditions hereof, and (ii) the Company is provided with written notice of
such assignment.
(d) Assignments and Transfers by the Company. This Agreement may not be assigned by the
Company without the prior written consent of the Holder but, in any case of any
successor-in-interest to the Company or any Person other than the Company who is an issuer of
Registrable Securities or Additional Registrable Securities, such successor-in-interest or other
issuer, shall assume, jointly and severally with the Company, the rights and duties of the Company
hereunder, in the event of a merger or consolidation of the Company with or into another
corporation or the sale of all or substantially all of the Company’s
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assets (and it shall be a condition to any such merger, consolidation or sale that such
successor-in-interest or other issuer assume in writing all obligations hereunder jointly and
severally with the Company as provided herein and in the Note and the Warrants).
(e) Benefits of the Agreement. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any party other than the
parties hereto or their respective permitted successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.
(f) 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.
(g) 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.
(h) 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 such provision were so excluded and shall be enforceable in
accordance with its terms to the fullest extent permitted by law.
(i) 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.
(j) Entire Agreement. This Agreement, together with the Purchase Agreement, the Note and the
Warrants and documents contemplated thereby, is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein. This
Agreement, together with the Purchase Agreement, the Note and the Warrants and documents
contemplated thereby, supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(k) 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 law.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be duly
executed by their respective officers or other representatives thereunto duly authorized as of the
date first written above.
| ZIX CORPORATION | ||||
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| Name: | ||||
| Title: | ||||
| [ | ] | |||
| By: | ||||
| Name: | ||||
| Title: | ||||
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