exv10w1



 





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 the
Subleased Premises in Red
	 	 	11	 
	 
	 	 	 	 
	SCHEDULE “B” ZIX LEASE AS DISCLOSED TO SUBTENANT
	 	 	12	 
	 
	 	 	 	 
	SCHEDULE “C” PROVISIONS OF THE ZIX SUBLEASE NOT APPLICABLE TO THE
SUBTENANT
	 	 	13	 
	 
	 	 	 	 
	SCHEDULE “D” HEAD LANDLORD’S CONSENT
	 	 	14	 






 









 






THIS SUBLEASE dated the 20th day of July, 2006




BETWEEN:



ZIXCORP CANADA, INC. and ZIX CORPORATION



(hereinafter called the “Tenant”)




OF THE FIRST PART




AND



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 350
Palladium Drive Inc. and 856581 Alberta Ltd. (the “Head Landlord”) and Intelligent
Photonics Control Corp. (“IPC”), the Head Landlord leased to IPC part of a building
municipally known as 350 Palladium Drive (the “Building”), in the City of Ottawa,
which premises are more particularly described in the Head Lease and are hereinafter
referred 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 shown
on Schedule “A” to the Zix Sublease (the “Zix Premises”) for a term commencing on
September 1, 2005 and ending one minute prior to the expiry of the term of the Head
Lease;
	 
	C.	 	The Head Landlord consented to the Zix Sublease pursuant to a consent document
dated the 22nd day of June, 2005 among the Head Landlord, IPC, and the
Tenant (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 and
Confirmation of Sublease”), the Head Landlord assumed all the benefits and
obligations 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 as
amended by the Consent and the Amendment and Confirmation of Sublease shall
hereafter collectively be referred to as the “Zix Lease”;
	 
	F.	 	The Tenant has agreed to sublease to the Subtenant that portion of the second floor
of the Building as shown outlined in red on the floor plan attached to this Sublease
as Schedule “A” and having an aggregate area of approximately One Thousand Three
Hundred and Seventy-four (1,374) square feet (the “Subleased Premises”) subject to
the terms and conditions of this Sublease.





     NOW THEREFORE in consideration of the rents reserved under this Sublease and the
covenants 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 in
Recital 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 approximately
656 square feet more particularly shown on Schedule ”A” to this Sublease;




“Meeting Room” means that portion of the Subleased Premises, comprising
approximately 497 square feet more particularly shown on Schedule “A” to this
Sublease;




“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 even
date for certain premises contained on the second floor of the Building comprising
approximately 3,831 square feet;




“Rent” means the Minimum Rent and Additional Rent;




“Server Room” means that portion of the Subleased Premises, comprising
approximately 221 square feet more particularly shown on Schedule ”A” to this
Sublease;




“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 Consent





In the event of any conflict or discrepancy between the provisions in this Sublease and
the 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 of
reference 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 singular
include 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 a
declaration of invalidity or unenforceability of any such provision or part thereof by a
court of competent jurisdiction will not affect the validity or enforceability of any
other provision hereof.




1.6 Entire Agreement.



This Sublease constitutes the entire agreement between the parties pertaining to the
subletting of the Subleased Premises to the Subtenant and supersedes in its entirety all
prior agreements, understandings, negotiations and discussions, whether oral or written,
of the parties. There are no representations, warranties or other agreements between the
parties in connection with such subject matter except as specifically set forth or
referred to in this Sublease. All the provisions of this Sublease will be construed as
covenants and agreements. Except as expressly provided in this Sublease, no amendment of
this 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 the
Province 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 or
approval of the Tenant or Subtenant is required under this Sublease, such consent or
approval, as the case may be, shall not be unreasonably withheld or unduly delayed and if
denied, written reasons for such denial shall be concurrently delivered to the other
party.




 









 








2 GRANT AND TERM




2.1 Grant and Term.



Subject to the termination clause contained in Section 6.4 herein, the Tenant subleases
the Subleased Premises to the Subtenant and the Subtenant subleases the Subleased
Premises from the Tenant for the Sublease Term, together with a license in common with
others entitled thereto to use the Common Elements. The parties acknowledge and agree
that the Subtenant shall have the exclusive use of the Meeting Room but shall share in
common with the Tenant the Lunch Room and Server Room. The parties further agree that the
Subtenant shall have access to and be granted use of all furniture currently in the
Subleased 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 terms
and 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 any
cure period herein provided, the Subtenant shall be entitled to peaceably and quietly hold
and enjoy the Subleased Premises throughout the Sublease Term, without interruption by the
Tenant 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) and
shall 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 throughout
the 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, operating
expenses, and utilities attributable to the Premises (the “Additional Rent”), payable to
the Tenant as outlined in the table above of minimum rent.. This cost is estimated at
Twelve Dollars Fifty Six Cents ($12.56) per square foot per year for the year ending
December 31, 2006. This cost is subject to adjustment at year-end in accordance with the
terms 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 monthly
instalments, each in advance, commencing on the 1st day of October, 2006, and
thereafter 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 Subtenant
requests be made available to it and provided the Head Landlord is prepared to offer such
service to the Subtenant, the Subtenant shall pay to the Head Landlord, the cost of such
service as determined by the Head Landlord.



With respect to cleaning services, the Subleased Premises will be vacuumed by the
Head Landlord’s contracted cleaning service and refuse will be removed from containers
within 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 Sublease
Commencement 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 under
this Sublease or the provision or supply of any goods, services or utilities whatsoever by
either or both the Head Landlord or Tenant to the Subtenant under this Sublease, whether
any such tax, rate, duty, levy, fee, charge or assessment is called or characterized as a
sales, use, consumption, value-added, business transfer or goods and services tax or
otherwise (collectively, “G.S.T.”). Despite any other provision of this Sublease, the
amount or amounts from time to time payable by the Subtenant under this section shall be
deemed not to be consideration for the supply of space under this Sublease, but shall be
considered to be Rent for purposes of the Tenant’s rights and remedies for non-payment and
recovery 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 this
Sublease. The Subtenant covenants with the Tenant to be bound by the Zix Lease, as
disclosed, and to perform and observe all of the covenants on the part of the Tenant under
the provisions of the Zix Lease, as disclosed, to the extent such covenants pertain to the
Subleased Premises, as if all of the covenants of the Tenant contained therein had been
fully incorporated into this Sublease as covenants of the Subtenant, mutatis mutandis,
except to the extent this Sublease specifically amends, reduces or extends the Subtenant’s
obligations thereunder. Except as otherwise provided in this Sublease the Subtenant shall
have the same rights against the Tenant under this Sublease as the Tenant has against the
Head Landlord under the Zix Lease; provided, that the rights that the Subtenant is granted
by virtue of the Head Lease shall exist only against the Head Landlord. The Tenant shall
have no duty to perform any of the obligations of the Head Landlord and shall under no
circumstances be responsible or liable to the Subtenant for any default, failure, or delay
on the part of the Head Landlord in the performance of any obligations under the Head
Lease, nor shall any default of the Head Landlord affect this Sublease or waive or defer
the 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 Subleased
Premises upon notice from and at the request of the Subtenant, and at the cost of
the Subtenant;
	 
	4.2.3	 	to the best of the knowledge of the Tenant, it is not in default of any of its
obligations, nor has it breached any of its obligations under the Zix Lease, and
that there exists no state of events which would, with the giving of notice or the
lapse 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 provisions
of this Sublease, the Tenant shall, in addition to any right of re-entry, have all of the
same 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 by
reference, 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 to
the 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 this
Sublease 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, without
limitation, the installation of trade fixtures, required by the Subtenant shall be the
responsibility of the Subtenant at the Subtenant’s sole cost and expense, and shall be
subject to the prior approval of both the Tenant and the Head Landlord subject to the
provisions of the Zix Lease.




5.2 Assignment and Subletting.



The Subtenant may not assign this Sublease or sublet the whole or any part of the
Subleased Premises, except in strict accordance with Section 13 of the Zix Lease, mutatis
mutandis.




6 GENERAL PROVISIONS




6.1 Non-waiver.



The failure by either the Tenant or Subtenant to insist upon the strict performance of any
term, covenant or condition herein contained shall not be deemed to be a waiver of such
term, 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 or
payment thereof by the Subtenant shall not be deemed to be a waiver of any preceding
breach by the Tenant or the Subtenant, as the case may be, of any term, covenant or
condition 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 or
acceptance of such Rent. No covenant, term or condition of this Sublease shall be deemed
to 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 respective
heirs, executors, administrators, successors and permitted assigns.



6.3 Condition Precedent



This Sublease and the obligations of the Tenant and Subtenant hereunder are subject to the
Tenant obtaining the consent of the Head Landlord under the Zix Lease to this Sublease on
terms satisfactory to each of the Tenant and Subtenant, acting reasonably. The Tenant
shall take all reasonable steps to obtain such consent. If such consent has not been
obtained by the Sublease Commencement Date then either the Tenant or the Subtenant may
terminate this Sublease by notice in writing to the other of them and thereupon, neither
party 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 prior
to the expiry of the Sublease Term, the Subtenant shall have the right to terminate this
Sublease upon prior written notice to the Tenant, with the effect that this Sublease
shall terminate on the later of the date that is co-terminus with the Peleton Lease and
the date that is ninety (90) days after the Subtenant has given written notice of early
termination to the Tenant, and thereafter this Sublease shall automatically terminate and
shall be null and void.




6.5 Head Landlord’s Consent



This Sublease is conditional on the approval of the Head Landlord pursuant to the
terms of the Head Lease in accordance with the Landlord’s Consent attached hereto as
Schedule “D”. If this condition is not satisfied within ten (10) business days following
mutual acceptance of this Sublease, then this Sublease shall be null and void and of no
further force or effect.




[Signature page to follow]




 









 








     IN WITNESS WHEREOF the parties have executed this Sublease under seal by the hands
of their proper signing officers.



	 	 	 	 	 	 	 	 	 	 	 
	SIGNED, SEALED AND DELIVERED

	 	 	)	 	 	 	 	 	 	 
	     In the presence of	 	 	)	 	 	ZIXCORP CANADA, INC.	 	 
	 

	 	 	)	 	 	 	 	 	 	 
	 

	 	 	)	 	 	Per:
	 	/s/ Russell
Morgan                            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




THIS
CONSENT TO SUBLEASE dated the 20th day of July  , 2006.




BETWEEN:



Elk Property Management Limited,

as agent for PBX Properties Ltd

and 350 Palladium Drive Inc. and 856581 Alberta Ltd.




(the “Landlord”)




AND:



Zixcorp Canada Inc. and Zix Corporation




(the “Tenant”)




AND:



Peleton Photonic Systems Inc.




(the “Subtenant”)




WITNESS THAT WHEREAS:





	 	a)	 	By a lease (the “Lease”) dated the 13th day of January, 2004, the Landlord leased to
Intelligent Photonics Control Corp. ( hereafter IPC) those Premises situate in the Building
municipally known as 350 Palladium Drive, Kanata (now Ottawa), Ontario (the “Building”) and
more particularly described in the Lease (the “Premises”) for a term ending on the
30th day of June, 2009;
	 
	 	b)	 	By an offer to sublease dated the 20th day of May, 2005, the
Tenant sublet, from IPC approximately 8,400 square feet of the Premises as more
particularly described in that sublease document for a term of 3 years and 10
months commencing on the 1st day of September, 2005 and ending on the
30th day of June, 2009;
	 
	 	c)	 	Whereas such May 20th, 2005 sublease agreement was amended
pursuant to an agreement dated 27th February 2006 ( hereafter referred
to as the “Amendment and Confirmation of Sublease”) between the Tenant, 6447309
Canada Inc., IPC and the Landlord and whereas pursuant to such amendment,
effective October 1st, 2006, the Tenant has committed to lease that
portion of the second floor of the Building as shown on Schedule A attached
hereto ( hereafter the Zix Premises) with the rentable area of the premises to
include a portion of the common area of the Building which shall include the
common area of the second floor which is marked in yellow on the attached
schedule (this will be schedule C from the “Amendment and Confirmation of
Sublease”)
	 
	 	d)	 	By an offer to sublease (the “Sublease”) dated the 20th day of
July, 2006, the Subtenant proposes to sublet from and/or share with the Tenant
approximately 1,374 square feet of the Premises as more particularly described in
the Sublease (the “Sublet Premises”) for a term of 2 years commencing on the
1st day of October, 2006 and ending on the 30th day of September  , 2008
(the “Sublease Term”), subject to the Landlord’s consent;




 









 






	 	e)	 	The Lease contains a prohibition against subletting without the consent in
writing of the Landlord;
	 
	 	f)	 	The Tenant and the Subtenant have requested that the Landlord give its consent
to the Sublease;




NOW THEREFORE in consideration of the mutual covenants and agreements contained in this
Agreement and other good and valuable consideration (the receipt and sufficiency of which
are acknowledged by each of the parties), the parties covenant and agree as follows:




1. INTERPRETATION AND AGREEMENTS



1.1 All capitalized terms used in this Agreement which are not otherwise defined in it
shall have the meaning given to those terms in the Lease.



1.2 The Tenant and the Subtenant acknowledge and agree with the Landlord that there are
no agreements, representations or warranties (express or implied) by the Landlord
concerning:





	 	a)	 	the Lease or the Sublease;
	 
	 	b)	 	the condition or state of repair of the Premises and/or Sublet Premises
and/or Building; or
	 
	 	c)	 	the suitability or fitness for use of the Sublet Premises and/or Building for
the Subtenant’s intended use thereof;




other than those that are expressly set out in this Agreement, if any. Without in any way
limiting the generality of the foregoing the Tenant and Subtenant specifically
acknowledge and agree with the Landlord that the Subtenant is subleasing the Sublet
Premises on an “as is where is” basis and the Landlord has no obligation or liability to
do any additional work of any nature or type whatsoever to the Sublet Premises and/or
Building.



1.3 The Tenant and the Subtenant further acknowledge and agree with the Landlord that:





	 	a)	 	the Sublet Premises shall only be used for the permitted use as set forth in the Lease.
That being said, the Landlord makes absolutely no representation as to the suitability of
the Sublet Premises for the Subtenant’s use and it is the Subtenant’s sole responsibility
and obligation to ensure that all uses or activities conducted by it in the Building comply
with all governmental authorities including but not limited to applicable zoning and
building by-laws or regulations. The Subtenant also accepts and agrees that any failure to
comply and any resulting prohibition by any governmental authority of any or all of the
Subtenant’s use, work, or activity in the Building shall not relieve the Subtenant from any
of its rental or other obligations to the Landlord and Tenant. Nothing in the Sublease
shall bind the Landlord to perform anything beyond its obligations in the Lease.
	 
	 	b)	 	any and all alterations, installations, additions, partitions, removals or other
changes to be made to the Premises or Sublet Premises shall require the prior written
consent of the Landlord in accordance with the provisions of the Lease; No such consent,
shall compromise the Landlord’s right under the Lease, to require the Tenant to restore the
Sublet Premises to the state they were in at the commencement of the term of the Lease. Any
parking spaces allocated by the Tenant for the use of the Subtenant shall be taken solely
from those parking spaces allocated to the Tenant in the May 20th, 2005 sublease
agreement , and the Landlord shall have no obligation to provide any additional parking
spaces to the Tenant and/or Subtenant in excess of what is specifically stated in




 









 






	 	 	 	the Lease or the May 20th, 2005 sublease agreement or any other agreement which
the Landlord has given its specific written consent to ;
	 
	 	c)	 	all new signage and changes in any existing signage shall require the prior written
consent of the Landlord in accordance with the provisions of the Lease;
	 
	 	d)	 	The Subtenant and Tenant agree and acknowledge that all of the Landlord’s improvements
and covenants to be performed by the Landlord under the Lease or any other agreement
involving the Landlord and any of the Tenant or Subtenant have been performed to the
satisfaction of the Tenant and Subtenant.





2. CONSENT



2.1 The Landlord consents, in accordance with the terms and conditions of this Consent to
Sublease including, but not limited to, compliance with the provisions of Sections 2.2 to
the sublease of the Sublet Premises by the Tenant to the Subtenant pursuant to the
Sublease for the Sublease Term.



2.2 The Landlord’s consent in Section 2.1 shall not be effective until the Landlord
receives $250 for its costs to process this sublet and until this Agreement is executed by
each party and a fully executed copy is delivered to the Landlord. The parties acknowledge
and agree that by giving its consent pursuant to this Agreement, the Landlord does not
acknowledge or approve of any of the terms contained in the Sublease.



2.3 The Tenant confirms and acknowledges the Landlord’s consent to the Sublease in no way
alters or diminishes the Tenant’s obligations pursuant to the terms of the Lease or any
other agreement between the Landlord and the Tenant including but not limited to the
Amendment and Confirmation of Sublease.




3. NO WAIVER OF RIGHTS



3.1 The parties acknowledge and agree that nothing in this Agreement shall waive or modify
in any respect the rights of the Landlord contained in the Lease or any other agreement
between the Landlord and the Tenant including but not limited to the Amendment and
Confirmation of Sublease or relieve the Tenant or the Subtenant from the observance or
performance of all the conditions and covenants contained in the Lease or any other
agreement between the Landlord and the Tenant including but not limited to the Amendment
and Confirmation of Sublease or of the Sublease, as the case may be, to be performed and
observed by it (including, without limitation, all duties to cause and keep the Landlord
and others named or referred to in the Lease fully insured and indemnified with respect to
any acts or omissions of the Subtenant or its agents, employees or invitees or other
matters arising by reason of the Sublease or the Subtenant’s use and occupancy of the
Sublet Premises or any portion of them), notwithstanding any provision to the contrary in
the Sublease.



3.2 The Tenant shall be liable to the Landlord for any default under the Lease or any
other agreement between the Landlord and the Tenant including but not limited to the
Amendment and Confirmation of Sublease, whether that default is caused by the Tenant or
the Subtenant or anyone claiming by or through either the Tenant or the Subtenant, but the
foregoing shall not be deemed to restrict or diminish any right which the Landlord may
have against the Subtenant pursuant to the Lease, in law or in equity for violation of the
Lease or any other agreement between the Landlord and the Tenant including but not limited
to the Amendment and Confirmation of Sublease including, without limitation, the right to
enjoin or otherwise restrain any violation of the Lease by the Subtenant.



3.3 The Landlord’s consent in Section 2.1 is restricted to the subletting of the Sublet
Premises by the Tenant to the Subtenant under the Sublease for the Sublease Term and the
prohibition in the Lease against entering into, consenting to or permitting any Transfer
without


 









 






the Landlord’s prior written consent shall otherwise remain in full force and effect.
This consent shall not be deemed to be a consent to nor waiver of the requirements for
the Landlord’s consent to any subsequent Transfer.




4. SUBTENANT’S COVENANTS



4.1 The Subtenant covenants and agrees with the Landlord as follows:





	 	a)	 	the Subtenant shall perform and observe during the Sublease Term (and any
renewals or extensions of it) all the obligations, covenants and conditions
contained in the Lease to be performed and observed on the part of the Tenant as
they pertain in any way to the Sublet Premises and the Subtenant shall indemnify
and save harmless the Landlord from all loss, damage, cost and expense suffered or
incurred by the Landlord as a result of the breach, non-observance or
non-performance of any such obligations, covenants, and conditions to the extent
that they relate in any way to the Sublet Premises and the Subtenant acknowledges
receipt of a copy of the Lease;
	 
	 	b)	 	the Subtenant shall neither assign the Sublease nor sublet or part with or
share possession of the Sublet Premises or any part of them, except in accordance
with the provisions of the Lease;
	 
	 	c)	 	the voluntary or other surrender of the Lease by the Tenant or the
cancellation or other termination of the Lease by the Landlord, whether with or
without consent of the Tenant, shall not work a merger and shall, at the
Landlord’s option, either terminate the Sublease and the subtenancy created by it
or operate as an assignment to the Landlord of the Sublease and that subtenancy.
For this purpose, the Subtenant specifically disclaims all of its rights under
Section 21 of the Commercial Tenancies Act (Ontario) (the “Act”), as amended from
time to time. The Landlord’s option hereunder shall be exercised by notice to the
Subtenant;
	 
	 	d)	 	the Subtenant waives any rights it may have as under-tenant under Section 32
of the Act or any like rights under common law. For the purpose of clarity, the
Subtenant agrees that notwithstanding that the Landlord has consented to the
Sublease, if the Landlord distrains or threatens to distrain any goods or chattels
situate on the Premises (including the Sublet Premises), the Subtenant shall not
seek to protect such chattels from the Landlord’s distress as contemplated by
Section 32 of the Act; and
	 
	 	e)	 	the Subtenant waives any rights it may have under Subsection 39(2) of the
Act, or any like rights under common law. For the purpose of clarity, the
Subtenant agrees that notwithstanding that the Landlord has consented to the
Sublease, if a receiving order in bankruptcy or a winding-up order has been made
against the Tenant, the Subtenant agrees not to exercise its election as
under-lessee to stand in the same position with the Landlord as though the
Subtenant were a direct lessee of the Landlord.





5. NOTICE



5.1 Any notice required or permitted under this Agreement or the Lease may be given in
the manner set out in the Lease:





	 	a)	 	to the Subtenant at:
	 
	 	 	 	the Sublet Premises;
	 
	 	b)	 	to the Tenant at:
	 
	 	 	 	the Premises.




 









 











6. GOVERNING LAW



6.1 This Agreement shall be construed in accordance with the laws of Ontario.




7. CAPTIONS



7.1 The captions appearing in this Agreement have been inserted as a matter of
convenience and for reference only and in no way define, limit or enlarge the scope or
meaning of this Agreement or any provision of it.




8. BROKER



8.1 The Tenant and Subtenant each represent and warrant that they have dealt with no
broker, finder, agent or other person in connection with the Sublease, or if they have
then they shall solely be obligated to pay all commissions or other forms or compensation
to such broker, finder, agent or other person, and they agree to indemnify and hold the
Landlord harmless from and against any claims or causes of action for a commission or
other form of compensation arising from the Sublease or the Lease. The provisions of this
section shall survive the termination of the Lease, the Sublease and any renewal of
either or both of them.




9. ENUREMENT



9.1 This Agreement shall enure to the benefit of and be binding upon each of the parties
to it and their respective successors and permitted assigns.



IN WITNESS WHEREOF the Landlord, the Tenant and Subtenant have duly executed and
delivered this agreement.




	 	 	 	 	 	 	 	 	 	 	 
	SIGNED, SEALED AND DELIVERED

	 	 	)	 	 	 	 	 	 	 
	     in the presence of

	 	 	)	 	 	 	 	 	 	 
	 	 	 	)	 	 	Elk Property Management Limited	 	 
	 

	 	 	)	 	 	 	 	 	 	 
	 

	 	 	)	 	 	Per:
	 	/s/ George Gaty	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	Name: George Gaty	 	 
	 

	 	 	)	 	 	 	 	Position: President	 	 
	 

	 	 	)	 	 	 	 	I have authority to bind the Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	)	 	 	Zixcorp Canada Inc. and Zix Corporation	 	 
	 

	 	 	)	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 	 	 
	 

	 	 	)	 	 	Per:
	 	/s/ Russell Morgan	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	Name: Russell Morgan	 	 
	 

	 	 	)	 	 	 	 	Position: V.P.Client Services	 	 
	 

	 	 	)	 	 	 	 	I have authority to bind the Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	)	 	 	Peleton Photonic Systems Inc.	 	 
	 

	 	 	)	 	 	 	 	 	 	 
	 

	 	 	)	 	 	Per:
	 	/s/ Richard Pepin	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	Name: Richard Pepin	 	 
	 

	 	 	)	 	 	 	 	Position: President	 	 
	 

	 	 	)	 	 	 	 	I have authority to bind the Corporation