Exhibit 10.1**SUBLEASE****ZIXCORP CANADA, INC. and ZIX CORPORATION**AND**PELETON PHOTONIC SYSTEMS INC.****350 PALLADIUM DRIVE**
 

 
**TABLE OF CONTENTS**           **1** **INTERPRETATION**  **2**               1.1  Definitions  2    1.2  Schedules  3    1.3  Headings and Table of Contents  4    1.4  Gender and Number  4    1.5  Invalidity of Provisions  4    1.6  Entire Agreement  4    1.7  Governing Law  4    1.8  Time of the Essence  4    1.9  Consents and Approvals  4            **2** **GRANT AND TERM**  **5**               2.1  Grant and Term  5    2.2  Sublease to be on Same Terms as Zix Lease  5    2.3  Quiet Enjoyment  5    2.4  Rules and Regulations  5            **3** **RENT**  **5**               3.1  Rent  5    3.2  Direct Charges for Additional Services Provided by the Head Landlord  6    3.3  Goods and Services Tax  6            **4** **ZIX LEASE**  **7**               4.1  Lease Covenants and Rights  7    4.2  Covenants of the Tenant  7    4.3  Zix Lease Remedies  7    4.4  Provisions of the Zix Lease Inapplicable to the Subtenant  8    4.5  Notice  8            **5** **SUBTENANT**  **8**               5.1  Subtenant Alterations  8    5.2  Assignment and Subletting  8            **6** **GENERAL PROVISIONS**  **8**               6.1  Non-waiver  8    6.2  Binding on Successors  9    6.3  Condition Precedent  9    6.4  Termination  9    6.5  Head Landlord’s Consent  9 
 

 
     **SCHEDULE “A” Floor Plan of the Second Floor of the Building Showing theSubleased Premises in Red**  **11**      **SCHEDULE “B” ZIX LEASE AS DISCLOSED TO SUBTENANT**  **12**      **SCHEDULE “C” PROVISIONS OF THE ZIX SUBLEASE NOT APPLICABLE TO THESUBTENANT**  **13**      **SCHEDULE “D” HEAD LANDLORD’S CONSENT**  **14** 
 

 
**THIS SUBLEASE**dated the 20th day of July, 2006BETWEEN:**ZIXCORP CANADA, INC. and ZIX CORPORATION**(hereinafter called the “**Tenant**”)OF THE FIRST PARTAND**PELETON PHOTONIC SYSTEMS INC.**(hereinafter called the “**Subtenant**”)OF THE SECOND PART**WHEREAS:**A. By a lease dated the 13th day of January, 2004, (the “**Head Lease**”)between Elk Property Management Limited, as agent for PBX Properties Ltd. and 350Palladium Drive Inc. and 856581 Alberta Ltd. (the “**Head Landlord**”) and IntelligentPhotonics Control Corp. (“**IPC**”), the Head Landlord leased to IPC part of a buildingmunicipally known as 350 Palladium Drive (the “**Building**”), in the City of Ottawa,which premises are more particularly described in the Head Lease and are hereinafterreferred to as the “**IPC Premises**”; B. By a sublease dated the 20th day of May, 2005 (the “**Zix Sublease**”)between IPC and the Tenant, IPC sublet to the Tenant a portion of the IPC Premises,comprising approximately 8,400 square feet of rentable area more particularly shownon Schedule “A” to the Zix Sublease (the “**Zix Premises**”) for a term commencing onSeptember 1, 2005 and ending one minute prior to the expiry of the term of the HeadLease; C. The Head Landlord consented to the Zix Sublease pursuant to a consent documentdated the 22nd day of June, 2005 among the Head Landlord, IPC, and theTenant (the “**Consent**”);
 

 
D. By an amendment and confirmation of sublease between the Head Landlord, IPC,6447309 Canada Inc. and the Tenant dated February 27, 2006 (the **“Amendment andConfirmation of Sublease”**), the Head Landlord assumed all the benefits andobligations of IPC as sublandlord under the Zix Sublease effective as of October 1,2006; E. The Zix Sublease, as read with the applicable provisions of the Head Lease, and asamended by the Consent and the Amendment and Confirmation of Sublease shallhereafter collectively be referred to as the **“Zix Lease”**; F. The Tenant has agreed to sublease to the Subtenant that portion of the second floorof the Building as shown outlined in red on the floor plan attached to this Subleaseas Schedule “A” and having an aggregate area of approximately One Thousand ThreeHundred and Seventy-four (1,374) square feet (the **“Subleased Premises”**) subject tothe terms and conditions of this Sublease.     **NOW THEREFORE**in consideration of the rents reserved under this Sublease and thecovenants to be performed by the parties, the parties agree as follows:**1 INTERPRETATION****1.1 Definitions.**In this Sublease,**“Additional Rent”**has the meaning attributed to such term in Section 3.1 hereof;**“Amendment and Confirmation of Sublease”**has the meaning attributed to such term inRecital D of this Sublease;**“Building”**has the meaning attributed to such term in Recital A of this Sublease;**“Common Elements”**means the common area of the second floor which is marked in yellow on Schedule A;**“Head Landlord”**has the meaning attributed to such term in Recital A of this Sublease;**“Head Lease”**has the meaning attributed to such term in Recital A of this Sublease;**“IPC”**has the meaning attributed to such term in Recital A of this Sublease;**“IPC Premises”**has the meaning attributed to such term in Recital A of this Sublease;
 

 
**“Lunch Room”**means that portion of the Subleased Premises, comprising approximately656 square feet more particularly shown on Schedule ”A” to this Sublease;**“Meeting Room”**means that portion of the Subleased Premises, comprisingapproximately 497 square feet more particularly shown on Schedule “A” to thisSublease;**“Minimum Rent”**has the meaning attributed to such term in Section 3.1 hereof;**“Peleton Lease”**means the lease between the Subtenant and the Head Landlord of evendate for certain premises contained on the second floor of the Building comprisingapproximately 3,831 square feet;**“Rent”**means the Minimum Rent and Additional Rent;**“Server Room”**means that portion of the Subleased Premises, comprisingapproximately 221 square feet more particularly shown on Schedule ”A” to thisSublease;**“Sublease Term”**means a period of two (2) years commencing on October 1, 2006 (the**“Sublease Commencement Date”**) and ending September 30, 2008;**“Zix Lease”**has the meaning attributed to such term in Recital E of this Sublease;**“Zix Premises”**has the meaning attributed to such term in Recital B of this Sublease;**“Zix Sublease”**has the meaning attributed to such term in Recital B of this Sublease;**1.2 Schedules.**The following are the schedules attached to and forming part of this Sublease:     Schedule “A” — Floor Plan of the Second Floor of the Building showing the Subleased Premises outlined in red.     Schedule “B” — Zix Lease as disclosed to the Subtenant     Schedule “C” — Provisions of the Zix Lease Inapplicable to the Subtenant     Schedule “D” — Head Landlord’s ConsentIn the event of any conflict or discrepancy between the provisions in this Sublease andthe Schedules, the provisions of this Sublease (excluding such Schedules) shall prevail.
 

 
**1.3 Headings and Table of Contents.**The inclusion of headings and a table of contents in this Sublease is for convenience ofreference only and will not affect the construction or interpretation thereof.**1.4 Gender and Number.**In this Sublease, unless the context otherwise requires, words importing the singularinclude the plural and vice versa and words importing gender include all genders.**1.5 Invalidity of Provisions.**Each of the provisions contained in this Sublease is distinct and severable and adeclaration of invalidity or unenforceability of any such provision or part thereof by acourt of competent jurisdiction will not affect the validity or enforceability of anyother provision hereof.**1.6 Entire Agreement.**This Sublease constitutes the entire agreement between the parties pertaining to thesubletting of the Subleased Premises to the Subtenant and supersedes in its entirety allprior agreements, understandings, negotiations and discussions, whether oral or written,of the parties. There are no representations, warranties or other agreements between theparties in connection with such subject matter except as specifically set forth orreferred to in this Sublease. All the provisions of this Sublease will be construed ascovenants and agreements. Except as expressly provided in this Sublease, no amendment ofthis Sublease will be binding unless executed in writing by the parties.**1.7 Governing Law.**This Sublease will be governed by and construed in accordance with the laws of theProvince of Ontario and the laws of Canada applicable therein.**1.8 Time of the Essence.**Time is of the essence of this Sublease and every part hereof.**1.9 Consents and Approvals.**Unless specifically provided to the contrary in this Sublease, whenever any consent orapproval of the Tenant or Subtenant is required under this Sublease, such consent orapproval, as the case may be, shall not be unreasonably withheld or unduly delayed and ifdenied, written reasons for such denial shall be concurrently delivered to the otherparty.
 

 
**2 GRANT AND TERM****2.1 Grant and Term.**Subject to the termination clause contained in Section 6.4 herein, the Tenant subleasesthe Subleased Premises to the Subtenant and the Subtenant subleases the SubleasedPremises from the Tenant for the Sublease Term, together with a license in common withothers entitled thereto to use the Common Elements. The parties acknowledge and agreethat the Subtenant shall have the exclusive use of the Meeting Room but shall share incommon with the Tenant the Lunch Room and Server Room. The parties further agree that theSubtenant shall have access to and be granted use of all furniture currently in theSubleased Premises during the Sublease Term.**2.2 Sublease to be on Same Terms as Zix Lease.**Except as otherwise provided in this Sublease, this Sublease shall be on the same termsand conditions as the Zix Lease, *mutatis mutandis.***2.3 Quiet Enjoyment.**Provided the Subtenant is not in default of any of its obligations hereunder beyond anycure period herein provided, the Subtenant shall be entitled to peaceably and quietly holdand enjoy the Subleased Premises throughout the Sublease Term, without interruption by theTenant or any other person lawfully claiming by, through or under the Tenant.**2.4 Rules and Regulations.**The Subtenant shall comply with the rules and regulations in force under the Zix Lease(provided such rules and regulations do not contradict the terms of this Sublease) andshall cause such rules and regulations to be observed and performed by its employees,servants, agents and invitees.**3 RENT****3.1 Rent**Subject to what is hereafter set forth, the Subtenant shall pay to the Tenant throughoutthe Sublease Term, minimum annual rent (the “**Minimum Rent**”) as follows:     **Room** ** Approximate Area** ** Minimum Rent per square foot**Meeting Room  497 Sq. Ft.  $5.00 per square foot per annum     Lunch Room  656 Sq. Ft.  50% of $5.00 per square foot per annum     Server Room  221 Sq. Ft.  50% of $5.00 per square foot per annum
 

 
     The Subtenant shall also pay its share of the real estate taxes, operatingexpenses, and utilities attributable to the Premises (the “**Additional Rent**”), payable tothe Tenant as outlined in the table above of minimum rent.. This cost is estimated atTwelve Dollars Fifty Six Cents ($12.56) per square foot per year for the year endingDecember 31, 2006. This cost is subject to adjustment at year-end in accordance with theterms of the Head Lease.The Subtenant shall pay the Rent to the Tenant, or as it directs, without set-off,deduction, abatement or compensation whatsoever, in equal consecutive monthlyinstalments, each in advance, commencing on the 1st day of October, 2006, andthereafter on the first day of each and every month during the Sublease Term.**3.2 Direct Charges for Additional Services Provided by the Head Landlord.**If the Head Landlord provides any service to the Subleased Premises which the Subtenantrequests be made available to it and provided the Head Landlord is prepared to offer suchservice to the Subtenant, the Subtenant shall pay to the Head Landlord, the cost of suchservice as determined by the Head Landlord.With respect to cleaning services, the Subleased Premises will be vacuumed by theHead Landlord’s contracted cleaning service and refuse will be removed from containerswithin the Subleased Premises pursuant to the provisions of the Head Lease.**3.3 Goods and Services Tax.**The Subtenant shall pay an amount equal to any and all taxes, rates, duties, levies, fees,charges and assessments whatsoever, whether or not in existence at the SubleaseCommencement Date, assessed, charged, imposed, levied or rated by any taxing authority,whether federal, provincial, municipal or otherwise, on or against the Head Landlord,Tenant or Subtenant, with respect to the Rent payable by the Subtenant to the Tenant underthis Sublease or the provision or supply of any goods, services or utilities whatsoever byeither or both the Head Landlord or Tenant to the Subtenant under this Sublease, whetherany such tax, rate, duty, levy, fee, charge or assessment is called or characterized as asales, use, consumption, value-added, business transfer or goods and services tax orotherwise (collectively, “**G.S.T.**”). Despite any other provision of this Sublease, theamount or amounts from time to time payable by the Subtenant under this section shall bedeemed not to be consideration for the supply of space under this Sublease, but shall beconsidered to be Rent for purposes of the Tenant’s rights and remedies for non-payment andrecovery of any such amounts.
 

 
**4 ZIX LEASE****4.1 Lease Covenants and Rights.**A copy of the Zix Lease as disclosed to the Subtenant is attached as Schedule “B” to thisSublease. The Subtenant covenants with the Tenant to be bound by the Zix Lease, asdisclosed, and to perform and observe all of the covenants on the part of the Tenant underthe provisions of the Zix Lease, as disclosed, to the extent such covenants pertain to theSubleased Premises, as if all of the covenants of the Tenant contained therein had beenfully incorporated into this Sublease as covenants of the Subtenant, *mutatis mutandis*,except to the extent this Sublease specifically amends, reduces or extends the Subtenant’sobligations thereunder. Except as otherwise provided in this Sublease the Subtenant shallhave the same rights against the Tenant under this Sublease as the Tenant has against theHead Landlord under the Zix Lease; provided, that the rights that the Subtenant is grantedby virtue of the Head Lease shall exist only against the Head Landlord. The Tenant shallhave no duty to perform any of the obligations of the Head Landlord and shall under nocircumstances be responsible or liable to the Subtenant for any default, failure, or delayon the part of the Head Landlord in the performance of any obligations under the HeadLease, nor shall any default of the Head Landlord affect this Sublease or waive or deferthe performance of any of the Subtenant’s obligations under it.**4.2 Covenants of the Tenant.**The Tenant covenants with the Subtenant as follows:4.2.1 to perform and observe all of the covenants of the Tenant under the Zix Lease,except to the extent such covenants are to be performed by the Subtenant hereunder; 4.2.2 to enforce its rights as Tenant under the Zix Lease with respect to the SubleasedPremises upon notice from and at the request of the Subtenant, and at the cost ofthe Subtenant; 4.2.3 to the best of the knowledge of the Tenant, it is not in default of any of itsobligations, nor has it breached any of its obligations under the Zix Lease, andthat there exists no state of events which would, with the giving of notice or thelapse of time, or both, or otherwise, constitute a default under the Zix Lease; and 4.2.4 it has full power, authority and right to grant this Sublease.**4.3 Zix Lease Remedies.**In the event of any default or non-performance by the Subtenant of any of the provisionsof this Sublease, the Tenant shall, in addition to any right of re-entry, have all of thesame rights as the Head Landlord would have in respect of a similar default by the Tenant,as tenant, under the Zix Lease, all of which rights and all of which remedies
 

 
available to the Landlord shall be considered to be incorporated into this Sublease byreference, *mutatis mutandis*.**4.4 Provisions of the Zix Lease Inapplicable to the Subtenant.**The provisions of the Zix Lease listed in Schedule “C” to this Sublease shall not apply tothe Subtenant nor the subtenancy created by this Sublease.**4.5 Notice.**The notice provision found at Section 15 of the Zix Lease shall for the purposes of thisSublease be deemed to be amended to include the following:          If to the Subtenant: At the Peleton Premises       Attention:  Chief Executive Officer  Telephone:  (613)599-7880  Facsimile:  (613)599-2728**5 SUBTENANT****5.1 Subtenant Alterations.**All leasehold improvements and alterations to the Subleased Premises, including, withoutlimitation, the installation of trade fixtures, required by the Subtenant shall be theresponsibility of the Subtenant at the Subtenant’s sole cost and expense, and shall besubject to the prior approval of both the Tenant and the Head Landlord subject to theprovisions of the Zix Lease.**5.2 Assignment and Subletting.**The Subtenant may not assign this Sublease or sublet the whole or any part of theSubleased Premises, except in strict accordance with Section 13 of the Zix Lease, *mutatismutandis.***6 GENERAL PROVISIONS****6.1 Non-waiver.**The failure by either the Tenant or Subtenant to insist upon the strict performance of anyterm, covenant or condition herein contained shall not be deemed to be a waiver of suchterm, covenant or condition, or any subsequent breach of the same or any other term,covenant or condition herein confirmed. The subsequent acceptance of Rent by the Tenant orpayment thereof by the Subtenant shall not be deemed to be a waiver of any precedingbreach by the Tenant or the Subtenant, as the case may be, of any term, covenant orcondition of this Sublease, regardless of the Subtenant’s or the Tenant’s
 

 
knowledge, as the case may be, of such preceding breach at the time of payment oracceptance of such Rent. No covenant, term or condition of this Sublease shall be deemedto have been waived or extended unless in writing signed by the Tenant or the Subtenant,as the case may be, waiving its rights or extending the time hereunder.6.2 **Binding on Successors**     The Sublease shall bind and enure to the benefit of the parties and their respectiveheirs, executors, administrators, successors and permitted assigns.**6.3 Condition Precedent**This Sublease and the obligations of the Tenant and Subtenant hereunder are subject to theTenant obtaining the consent of the Head Landlord under the Zix Lease to this Sublease onterms satisfactory to each of the Tenant and Subtenant, acting reasonably. The Tenantshall take all reasonable steps to obtain such consent. If such consent has not beenobtained by the Sublease Commencement Date then either the Tenant or the Subtenant mayterminate this Sublease by notice in writing to the other of them and thereupon, neitherparty shall have any obligations to the other of them hereunder.6.4 **Termination**In the event the term of the Peleton Lease is terminated for any cause whatsoever priorto the expiry of the Sublease Term, the Subtenant shall have the right to terminate thisSublease upon prior written notice to the Tenant, with the effect that this Subleaseshall terminate on the later of the date that is co-terminus with the Peleton Lease andthe date that is ninety (90) days after the Subtenant has given written notice of earlytermination to the Tenant, and thereafter this Sublease shall automatically terminate andshall be null and void.**6.5 Head Landlord’s Consent**This Sublease is conditional on the approval of the Head Landlord pursuant to theterms of the Head Lease in accordance with the Landlord’s Consent attached hereto asSchedule “D”. If this condition is not satisfied within ten (10) business days followingmutual acceptance of this Sublease, then this Sublease shall be null and void and of nofurther force or effect.**[Signature page to follow]**
 

 
     **IN WITNESS WHEREOF**the parties have executed this Sublease under seal by the handsof their proper signing officers.           SIGNED, SEALED AND DELIVERED  )            In the presence of  )  **ZIXCORP CANADA, INC.**     )          )  Per: /s/ RussellMorgan                            20/7/06                )  Name: Russell Morgan     )  Title: V.P. Client Services     )  I have authority to bind the Corporation.     )          )          )  **ZIX CORPORATION**     )          )          )  Per: /s/ Ronald A. Woessner                )  Name Ronald A. Woessner     )  Title: SVP     )  I have authority to bind the Corporation.     )          )          )  **PELETON PHOTONIC SYSTEMS INC.**     )          )  Per: /s/ Richard Pepin                )  Name: Richard Pepin     )  Title: President and CEO     )  I have authority to bind the Corporation.  
 

 
**SCHEDULE “A”****Floor Plan of the Second Floor of the Building Showing the Subleased Premises in Red**
 

 
**SCHEDULE “B”****ZIX LEASE AS DISCLOSED TO SUBTENANT**
 

 
**SCHEDULE “C”****PROVISIONS OF THE ZIX SUBLEASE NOT APPLICABLE TO THE SUBTENANT**Sections 1(1), 1(2), 6, 7, 12, 20, 21, 22 and 23
 

 
**SCHEDULE “D”****HEAD LANDLORD’S CONSENT****THISCONSENT TO SUBLEASE**dated the 20th day of July  , 2006.**BETWEEN:****Elk Property Management Limited,**