INCREMENTAL AMENDMENT NO. 1 AND
FIRST AMENDMENT TO CREDIT AGREEMENT
INCREMENTAL AMENDMENT NO. 1 AND FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of November 5, 2020 (this Amendment), is entered into by and among Zix Corporation, a Texas corporation (the Borrower), each of the financial institutions set forth on Schedule I hereto under the heading Incremental Term Lender (each, an Incremental Term Lender and, collectively, the Incremental Term Lenders) and Truist Bank, successor by merger to SunTrust Bank, as Administrative Agent (the Administrative Agent).
WHEREAS, reference is made to that certain Credit Agreement, dated as of February 20, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the Credit Agreement), by and among the Borrower, the Lenders from time to time party thereto and the Administrative Agent; capitalized terms used in this Amendment but not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement;
WHEREAS, the Borrower intends to acquire, directly or indirectly, 100% of the Equity Interests of each of Chameleon and CloudAlly (each as defined below) as follows: (a) acquisition of 100% of the Equity Interests of Chameleon Holdings Ltd., a company incorporated under the laws of Israel (Chameleon), the direct owner of a majority of the Equity Interests of CloudAlly (the Chameleon Acquisition) and (b) immediately following the Chameleon Acquisition, acquisition via sale to Chameleon of all of the Equity Interests of CloudAlly Ltd., a company incorporated under the laws of Israel (CloudAlly and, together with Chameleon and their respective Subsidiaries, the Target) not owned by Chameleon, in each case, pursuant to that certain Share Purchase Agreement, dated as of the date hereof, among Chameleon, CloudAlly, the Borrower, as buyer, the Founder and the Selling Shareholders (each as defined therein) and the other parties thereto (the Acquisition Agreement; such acquisitions pursuant to this clause (b), collectively, the CloudAlly Acquisition and, together with the Chameleon Acquisition, the Acquisitions);
WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the Borrower has requested an Incremental Term Facility (the Incremental Term Facility) in the form of an increase to the Initial Term Commitments in an aggregate principal amount equal to $35,000,000 (with such amount to be incurred pursuant to clause (c) of the definition of Incremental Cap under the Credit Agreement);
WHEREAS, the Borrower intends to incur the Incremental Term Loans (as defined below), the proceeds of which will be used on the Amendment Effective Date (as defined below), together with cash on hand at the Borrower, (a) to pay the Acquisition Costs (as defined below), (b) to repay all Revolving Loans outstanding as of the Amendment Effective Date and (c) solely to the extent any proceeds remain, for working capital or any other purpose not prohibited by the Credit Agreement;
WHEREAS, the Incremental Term Lenders are willing to provide the requested Incremental Term Facility to the Borrower on the Amendment Effective Date on the terms and subject to the conditions set forth herein;
WHEREAS, the Incremental Term Lenders constitute the Required Lenders for purposes of amending the Credit Agreement; and
WHEREAS, this Amendment constitutes an Incremental Facility Amendment and a Loan Document for all purposes of the Credit Agreement.