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Exhibit 10.6
SUBLEASE
IN PURSUANCE OF THE SHORT FORMS OF LEASES ACT
B E T W E E N:
ALLIANCE FOR CONVERGING TECHNOLOGIES CORP.
(hereinafter called the "SUBLANDLORD")
OF THE FIRST PART
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MEDIA SYNERGY INC.
(hereinafter called the "SUBTENANT")
OF THE SECOND PART
WHEREAS the Sublandlord has entered into a lease dated May 10, 1996 (the "HEAD
LEASE"), with The Manufacturers Life Insurance Company, by its agent Enterprise
Property Group Limited (the "HEAD LANDLORD") (a copy of which the Subtenant
acknowledges having received) of the premises more particularly described in the
Head Lease containing three thousand nine hundred seventeen (3,917) square feet
of Rentable Area (as defined in the Head Lease) on the first floor and legally
described in Schedule "A" attached hereto and known municipally as 260 King
Street East, Suite B-100, Toronto, Ontario, M5A 4L5 (the "LEASED PREMISES");
AND WHEREAS the Sublandlord and the Subtenant have agreed to enter into a
Sublease of all of the Leased Premises as crosshatched on the floor plan
attached as Schedule "B" hereto (the "SUBLEASED PREMISES") for the term, at a
rental and on such terms as are hereinafter set forth;
AND WHEREAS the Head Landlord has given its consent, in writing, to the Sublease
in accordance with the terms and provisions of the Head Lease;
NOW THEREFORE IN CONSIDERATION of the rents, covenants and agreements herein
contained the Sublandlord and Subtenant agree as follows:
TERM
1. The Sublandlord hereby subleases the Subleased Premises to the
Subtenant; TO HAVE AND TO HOLD the Subleased Premises for a term of one
(1) year, ten (10) months and twenty-four (24) days to commence the 6th
day of September, 1999, or such other
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mutually acceptable date agreed upon between the parties hereto acting
reasonably, which in no event shall be later than October 15, 1999, and
to expire the 30th day of July, 2001 (the "SUBTERM").
RENT
2. The Subtenant shall pay to the Sublandlord from and after the date of
commencement of the Subterm as an annual base rent the sum of Thirty
One Thousand Three Hundred Thirty-Five Dollars Ninety-Six Cents
($31,335.96) per annum, being Two Thousand Six Hundred Eleven Dollars
Thirty-Three Cents ($2,611.33) per month based on Eight Dollars ($8.00)
per square foot of Rentable Area (the "SUBLEASE BASE RENT") payable in
advance on the first day of each and every month during the Subterm
with the rent for any broken portion of a calendar month in which the
Subterm of this Sublease shall commence or terminate shall be
pro-rated.
The Sublandlord acknowledges receipt of the sum of Fourteen Thousand
One Hundred Sixty-Six Dollars Twenty Two Cents ($14,166.22) as a
deposit to be held by the Sublandlord pending completion or other
termination of this Sublease and to be held as a security deposit and
to be applied against the Sublease Base Rent for the first rent due
plus GST pursuant to the terms of this Sublease.
ADDITIONAL RENT
3. The Subtenant agrees to pay to the Sublandlord that proportionate share
of all payments which the Sublandlord is required to pay to the Head
Landlord under the Head Lease as Additional Rent (as this term is
defined in the Head Lease) chargeable to, or attributable to the
Subleased Premises. Additional Rent is presently estimated by the Head
Landlord to amount to approximately Twelve Dollars, Twenty-Eight Cents
($12.28) per square foot per annum including utilities for the calendar
year 1999.
SUBTENANT'S COVENANTS
4. The Subtenant covenants with the Sublandlord:
(a) to pay Sublease Base Rent and Additional Rent;
(b) to pay all business taxes in respect of the business carried
on by the Subtenant in and upon or by reason of its occupancy
of the Subleased Premises;
(c) to keep the Subleased Premises clean and in good and
tenantable condition;
(d) to keep the Subleased Premises, reasonable wear and tear and
damage by fire, lightning and tempest only excepted;
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(e) to observe and perform all covenants and obligations of the
Subtenant under this Sublease;
(f) to use the Subleased Premises only for the purpose of carrying
on the business of general offices and for no other purpose
and not to do or omit to do any act or thing upon the
Subleased Premises which would cause a breach of any of the
Sublandlord's obligations under the Head Lease; and
(g) to perform or cause to be performed with respect to the
Subleased Premises all of the covenants of the Sublandlord as
Head Tenant under the Head Lease, including the performance of
the Sublandlord's obligations as to the use of the Leased
Premises and the performance of tenants' repairs therein.
INSURANCE
5. The Subtenant shall take out and keep in force during the Subterm such
insurance in respect of the Subleased Premises as shall comply with the
obligations of the Sublandlord as Head Tenant under the Head Lease and
shall be subject to the same obligations and same limitations of
liability with respect to damage, loss or injury as are set out in the
Head Lease.
COVENANTS OF THE SUBLANDLORD
6. The Sublandlord covenants with the Subtenant:
(a) for quiet enjoyment;
(b) to observe and perform all covenants and obligations of the
Sublandlord under the Sublease; and
(c) to pay all Base Rent (as defined in the Head Lease) and
Additional Rent reserved under the Head Lease and to duly
perform and observe all the obligations of the Sublandlord as
Head Tenant under the Head Lease and to indemnify and hold the
Subtenant harmless from and against any cost, loss or damage
resulting from the Sublandlord's default under the Head Lease.
ABATEMENT AND TERMINATION
7. In the event of damage to the Subleased Premises:
(a) rent in respect of the Subleased Premises shall abate if and
to the extent rent under the Head Lease abates under the terms
of the Head Lease; and
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(b) this Sublease shall terminate if either the Head Landlord or
the Head Tenant shall become entitled to terminate the Head
Lease pursuant to the provisions of the Head Lease.
RIGHT TO SUBLEASE
8. Subject to the provisions of Article 17 of the Head Lease and any other
relevant provisions contained in the Head Lease, the Sublandlord agrees
that the Subtenant shall have the right to sub-sublet and/or assign all
or part of the Subleased Premises at any time during the Subterm,
subject to the approval of the Sublandlord and/or the Head Landlord
which approvals shall not be unreasonably withheld.
LEASEHOLD IMPROVEMENTS
9. The Subtenant acknowledges that it is leasing the Subleased Premises on
an "AS IS" basis. Subject to the provisions of Article 13, and in
particular Section 13.02, of the Head Lease, all leasehold improvements
shall be at the Subtenant's sole cost and expense and the Subtenant
must first obtain the prior written approval of both the Sublandlord
and the Head Landlord prior to the installation and/or construction of
any leasehold improvement, such approval not to be unreasonably
withheld. The Sublandlord acknowledges that the Subleased Premises, as
viewed, shall be turned over to the Subtenant, with all existing
improvements located therein in their existing state of repair.
PARKING
10. The Sublandlord agrees to sublease to the Subtenant for the Subterm the
three (3) parking spaces at the rate, and pursuant to the provisions,
contained in Section 10.02 of the Head Lease.
APPLICATION OF HEAD LEASE
11. Except as hereinbefore expressly provided, all terms, conditions,
covenants and agreements contained in the Head Lease shall apply to and
be binding upon the parties hereto, and their respective successors and
permitted assigns, the appropriate changes of reference being deemed to
have been made with the intent that such clauses shall govern the
relationship in respect of such matters as between the Sublandlord and
the Subtenant.
NOTICE
12. The provisions of the Head Lease shall govern the giving of notice
hereunder. The address of the Sublandlord for the purpose of such
notice shall be 360 Adelaide Street West, 4th Floor, Toronto, Ontario,
M5V 2L2 and the address for the Subtenant for the purpose of such
notice shall be the Subleased Premises.
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IN WITNESS WHEREOF the parties herein have affixed their corporate seals under
the hands of their proper signing officers duly authorized in that behalf.
ALLIANCE FOR CONVERGING TECHNOLOGIES CORP.
Per: /s/ David Agnew
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Name: David Agnew
Title: Executive Director
I have the authority to bind the corporation.
MEDIA SYNERGY INC.
Per: /s/ Martha Miller
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Name: Martha Miller
Title: Controller
I have the authority to bind the corporation.
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SCHEDULE "A"
LEGAL DESCRIPTION
Lots 1, 2, 3, 4, 5, 6 and Lane Registered Plan D-84;
Town Lot 8, South Side Adelaide Street
Town Lot 8, Parts of Town Lots 6 and 7,
North side of King Street, Town of York Plan;
all designated as Parts 9 and 10, Plan 63R-3338
City of Toronto
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SCHEDULE "B"
FLOOR PLAN