Document:

exv10w40

 

Exhibit 10.40

AMENDMENT AND CONFIRMATION OF SUBLEASE

     THIS AGREEMENT made this 27th day of February, 2006

AMONGST:

ELK PROPERTY MANAGEMENT LIMITED,

as agent for PBX PROPERTIES LTD. and

350 PALLADIUM DRIVE INC. and

856581 ALBERTA LTD.

(the “Landlord”)

OF THE FIRST PART

     AND:

INTELLIGENT PHOTONICS CONTROL CORP.

(the “Tenant”)

OF THE SECOND PART

AND:

6447309 CANADA INC.

(the “Assignee”)

OF THE THIRD PART

AND:

ZIXCORP CANADA, INC. and ZIX CORPORATION

(“ZIXCORP” and “Zix”, respectively)

OF THE FOURTH PART

     WHEREAS:

	A.	 	By lease (the “Lease”) dated the 13th day of January, 2004, the Landlord leased
to the Tenant approximately 13,209 square feet of rentable area (the “Premises”) on the
second floor of the building municipally known as 350 Palladium Drive, Ottawa, Ontario (the
“Building”) for a term commencing July 1, 2004 and ending on the 30th day of June,
2009;

 

 

	B.	 	By a sublease dated May 20th, 2005
(the “ZIXCORP Sublease”) between the Tenant and ZIXCORP,
the Tenant sublet to ZIXCORP a portion of the Premises
comprising approximately 8,400 square feet of rentable
area more particularly shown on Schedule “A” to the
ZIXCORP Sublease (the “Subleased Premises”) for a term
commencing September 1, 2005 and ending one minute prior
to the expiry of the term of the Lease;
	 
	C.	 	The Landlord consented to the ZIXCORP Sublease pursuant
to a consent document dated the 22nd day of
June, 2005 among the Landlord, the Sublandlord, ZIXCORP
and Zix (the “Consent”);
	 
	D.	 	The Tenant proposes to assign the Lease to the Assignee
with the consent of the Landlord;
	 
	E.	 	The Landlord, the Tenant, the Assignee and Peleton
Photonic Systems Inc. (“Peleton”) intend to enter into
an agreement (the “Amending Agreement”) to amend the
Lease and pursuant to which, effective October 1, 2006:

	 	(i)	 	the Premises shall be
reduced to comprise that portion of the Premises
described in subparagraph 5(b)(i) of this Agreement; and
	 
	 	(ii)	 	the Landlord will assume all the
benefits and obligations of the Tenant and Assignee as
sublandlord under the ZIXCORP Sublease, as amended by
this Agreement (together, the “Amended Sublease”).

	F.	 	The Landlord, the Tenant and the Assignee have requested
that ZIXCORP and Zix acknowledge and agree to the
foregoing.

     NOW THEREFORE, for good, valuable and sufficient consideration flowing amongst
the parties hereto, receipt of which is by each of them acknowledged, the parties hereto
covenant and agree as follows:

	1.	 	ZIXCORP and Zix agrees with the Landlord, the
Tenant and the Assignee that the ZIXCORP Sublease is a
valid and binding obligation of ZIXCORP and that, to
ZIXCORP’s and Zix’s knowledge, the Tenant has fulfilled
all of the obligations of the Tenant to be fulfilled by
it under the ZIXCORP Sublease to the date of this
Agreement.
	 
	2.	 	The Tenant acknowledges that ZIXCORP has fulfilled all
of its obligations under the ZIXCORP Sublease to the
date of this Agreement.
	 
	3.	 	ZIXCORP, Zix, the Tenant and the Assignee acknowledge
and agree that (i) the furniture referred to in Section
20 of the Sublease is as listed in Schedule “A” hereto
under the heading “IPC Furniture List”, and (ii) the
furniture listed on Schedule “A” hereto under the
heading “Common Area Items Belonging to ZixCorp” is
furniture belonging to ZIXCORP and currently located in
the

 

 

	 	 	Common Areas. The Tenant and the Assignee hereby agree to sell to
ZixCorp for the sum of $1.00 the furniture listed is Schedule A hereto under
the heading “IPC Furniture List” on September 30, 2006 and all IPC owned
contents within the kitchen and cafeteria area, including tables, chairs,
utensils, cutlery and kitchen plates and cups, but excluding fixtures such as
the sink, built-in dishwasher and lights which (by the operation of the Lease)
are the property of the Landlord. These items are sold to ZixCorp “as is,”
“where is,” without warranties of any type, other than a warranty of title and
a warranty that these items will be free and clear of any liens, claims, or
encumbrances.

	4.	 	ZIXCORP, Zix, the Tenant and the Assignee agree that the floor
plan annexed hereto as Schedule “B” shows shaded in blue the portion of the
Premises subleased to ZIXCORP and of which it has exclusive use and shows
shaded in yellow the Common Areas.
	 
	5.	 	If the Amending Agreement, as recited in paragraph E. above, is
entered into amongst the Landlord, the Tenant, the Assignee and Peleton,
then:

	 	(a)	 	section 22 of the Sublease is deleted as of the date of this Agreement; and
	 
	 	(b)	 	from and after October 1, 2006:

	 	(i)	 	for all purposes of the ZIXCORP Sublease and the Consent,
the “exclusive use” area of the Subleased Premises shall be deemed to be
expanded and comprised of the areas shaded in blue on Schedule
“C”to this
Agreement (comprising approximately 9,378 square feet of Rentable Area,
subject to certification by the Landlord’s architect upon completion of
renovations for creating a multi-tenancy floor) and Basic Rent and
Additional Rent shall be payable on the increased Rentable Area of the
Subleased Premises, as so expanded, from and after October 1, 2006;
	 
	 	(ii)	 	for all purposes of the ZIXCORP Sublease and the Consent
(and notwithstanding anything to the contrary in the ZIXCORP Sublease and
Consent), the Common Areas shall be deemed to be comprised only of the
Common Areas shown shaded in yellow on the floor plan in Schedule “C” to
this Agreement, subject to such other future changes to the Common Areas as
may be reasonably required by the Landlord so long as ZIXCORP shall
continue to enjoy reasonable access to the Subleased Premises (and if any
such other future changes occur, the Subleased Premises shall be remeasured
in accordance with the most current BOMA standards and Basic Rent and
Additional Rent adjusted accordingly);
	 
	 	(iii)	 	the Subleased Premises shall be modified at the sole
cost of Tenant, as required to provide direct access via installation of a

 

 

	 	 	 	door from the main corridor within the current Subleased Premises to the
conference room that is currently being leased by Tenant, but that will
become a portion of the Subleased Premises beginning October 1, 2006. The
cafeteria and kitchen area in the Subleased Premises shall also be
modified at the sole cost of the Tenant to provide a permanent barrier
(either a wall or lockable door) to securely enclose the Subleased
Premises;
	 
	 	(iv)	 	all sums due under the Amended Sublease, for the period
commencing October 1, 2006, shall be paid to the Landlord or as it may
direct;
	 
	 	(v)	 	all benefits and obligations of the Tenant and Assignee, as
sublandlord under the Amended Sublease, shall be for the account of the
Landlord and the Landlord shall be entitled to enforce all of the obligations
of ZIXCORP under the Amended Sublease in the name of the Landlord, the Tenant
or the Assignee, as the Landlord may elect; and
	 
	 	(vi)	 	the Landlord shall fulfill all of the obligations of the
Tenant and the Assignee under the Amended Sublease for the period commencing
October 1, 2006 and expiring at the expiration or earlier termination of the
term of the Amended Sublease. For greater certainty, the Landlord shall have
no liability with respect to the obligations of the Tenant or Assignee under
the Amended Sublease for the period prior to October 1, 2006

	6.	 	Except as specifically amended by this Agreement, the Sublease and Consent
continue in full force and effect in accordance with their terms. For greater
certainty, the parties acknowledge that there is no merger of the Lease and the
Amended Sublease. Capitalized terms used in this Agreement that are not defined
in it have the meaning given to them in the Sublease.
	 
	7.	 	This Agreement shall be construed in accordance with the laws of the Province of
Ontario and of Canada applicable therein.
	 
	8.	 	This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
	 
	 	 	IN WITNESS THEREOF the parties have executed this Agreement.

 

 

	 	 	 	 	 	 	 
	 	 	ELK PROPERTY MANAGEMENT
LIMITED, as agent for PBX
PROPERTIES LTD. and
350 PALLADIUM DRIVE INC. and
856581 ALBERTA LTD.
	 
	 	 	 	 	 	 
	 	 	Per: /s/ George Gaty
	 	 	 	 	 
	 	 	 	 	Name: George Gaty
	 	 	 	 	Title: President
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	INTELLIGENT PHOTONICS
	 	 	CONTROL CORP.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	6447309 CANADA INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIXCORP CANADA, INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIX CORPORATION
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.

 

 

	 	 	 	 	 	 	 
	 	 	ELK PROPERTY MANAGEMENT
LIMITED, as agent for PBX
PROPERTIES LTD. and
350 PALLADIUM DRIVE INC. and
856581 ALBERTA LTD.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	INTELLIGENT PHOTONICS CONTROL CORP.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	/s/ Alain Belanger
	 	 	 	 	 
	 	 	 	 	Name: Alain Belanger
	 	 	 	 	Title: Vice Chairman
	 
	 	 	 	 	 	 
	 	 	I have authority to
bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	6447309 CANADA INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIXCORP CANADA, INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIX CORPORATION
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.

 

 

	 	 	 	 	 	 	 
	 	 	ELK PROPERTY MANAGEMENT
LIMITED, as agent for PBX PROPERTIES LTD.
and 350 PALLADIUM DRIVE INC. and 856581 ALBERTA LTD.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	INTELLIGENT PHOTONICS CONTROL CORP.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to
bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	6447309 CANADA INC.
	 
	 	 	 	 	 	 
	 	 	Per:	 	/s/ Ross Morgan
	 	 	 	 	 
	 	 	 	 	Name: Ross Morgan
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIXCORP CANADA, INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIX CORPORATION
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.

 

 

	 	 	 	 	 	 	 
	 	 	ELK PROPERTY MANAGEMENT LIMITED,
as agent for PBX
PROPERTIES LTD. and 350 PALLADIUM DRIVE INC. and 856581 ALBERTA
LTD.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	INTELLIGENT PHOTONICS CONTROL CORP.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	6447309 CANADA INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIX CORP CANADA, INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	/s/ Russell Morgan	 	 
	 	 	 	 	 
	 	 	 	 	Name: Russell Morgan
	 	 	 	 	Title: President
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIX CORPORATION
	 
	 	 	 	 	 	 
	 

	 	Per:	 	/s/ Russell Morgan	 	 
	 	 	 	 	 
	 	 	 	 	Name: Russell Morgan
	 	 	 	 	Title: VP Client Services
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.

 

 

	 	 	 	 	 	 	 
	 	 	ELK PROPERTY MANAGEMENT LIMITED,
as agent for PBX
PROPERTIES LTD. and 350 PALLADIUM DRIVE INC. and 856581 ALBERTA
LTD.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	INTELLIGENT PHOTONICS CONTROL CORP.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	6447309 CANADA INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	I have authority to bind the Corporation.
	 
	 	 	 	 	 	 
	 	 	ZIXCORP CANADA, INC.
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	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.exv10w41

 

Exhibit 10.41

DESCRIPTION OF

ZIX CORPORATION 2006 MANAGEMENT VARIABLE COMPENSATION PLAN

          The Company’s 2006 Management Variable Compensation Plan (the “Plan”)
provides for variable compensation to be paid to certain Company employees,
based upon the achievement by December 31, 2006 relative to the metrics listed
below. A total of $639,000 is available for payment under the Plan. A total of
nine employees are eligible to participate in the Plan, as of February 28, 2006.

Achievement of Plan based on performance in these full-year business areas:

Secure Messaging — New First Year Orders

Core Product Revenue Growth

Number of New Healthcare Payors for the Company’s e-prescribing Service

New Physicians Sponsored by Healthcare Payors

Active Physician Prescribers

Script Volume Per Quarter (by Q4)

Average Script Fee (by Q4)

Ending (Q4 06) Cash Burn PocketScript

Non-restricted Cash Balance as of December 31, 2006

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