EXHIBIT 10.6
SUBLEASE
THIS SUBLEASE dated as of the 24th day of June 2004.
BETWEEN:
PARADIGM GEOPHYSICAL CANADA LTD.
(hereinafter referred to as "the Sublandlord")
OF THE FIRST PART
- and-
BRYCOL CONSULTING LTD.
(hereinafter referred to as the "Subtenant")
OF THE SECOND PART
WHEREAS by a Lease dated June 30, 2003 between Consolidated Properties (520 -
5th Avenue) Ltd. as landlord and Paradigm Geophysical Canada Ltd. as tenant,
(hereinafter referred to as the "Lease"), Paradigm Geophysical Canada Ltd. did
lease from Consolidated Properties (520 - 5th Avenue) Ltd. certain leased
premises in the building municipally described as ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ the ("Building") as more particularly described in the Lease, a copy of
which is attached hereto as Schedule "B".
AND WHEREAS the Sublandlord and Subtenant have agreed to enter into this
Sublease on the terms and conditions hereinafter set forth;
NOW, THEREFORE, WITNESSETH that in consideration of the rents, covenants, and
agreements to be paid and observed the Subtenant does sublease from the
Sublandlord the Subleased Premises, on the terms and conditions hereinafter set
forth (hereinafter referred to as the "Sublease").
1. SUBLEASED PREMISES
The premises to be subleased by the Sublandlord to the Subtenant shall
consist of a rentable area (the "Rental Area") of eight thousand and
seventy six (8,076) square feet, comprising of the twenty-fifth (25th)
floor of the Building as outlined in red on the floor plan attached hereto
as Schedule "A" (hereinafter referred to as the "Subleased Premises").
2. TERM
The term of this Sublease (hereinafter referred to as the "Term") shall be
for a period of four (4) years and six (6) months less one (1) day. The
Term shall commence on July 1, 2004 (hereinafter referred to as the
"Commencement Date") and shall expire on December 30, 2008 (hereinafter
referred to as the "Expiry Date").
3. RENT
Rent (hereinafter referred to as "Basic Rent") for the Subleased Premises
throughout the Term shall be equal to:
Term:
Annual Basic Rent
Monthly Basic Rent
Augl5,2004-Dec30,2008
$125,178.00 ($15.50 /sq.ft.)
$10,431.50
Basic Rent shall be payable in advance on the first day of each and every
month of the Term in equal monthly installments. Partial months will be
based on a proportionate share. For further clarification, the Subtenant
will not be obligated to pay Basic Rent for the month of July and (1/2) of
August 2004 (the "Free Basic Rent Period"). All other terms and conditions
of the Sublease will apply during the Free Basic Rent Period.
In addition to the Basic Rent payable by the Subtenant to the Sublandlord,
the Subtenant shall also pay to the Sublandlord monthly, in advance
one-twelfth (1/12) of the annual operating costs and all other charges
under the Sublease which are referable to and related to the Subleased
Premises, including without limitation, all items referred to in paragraph
4 hereof.
4. TAXES, OPERATING AND ADDITIONAL COSTS
The Subtenant further covenants and agrees to pay to the Sublandlord
during the Term, in addition to Basic Rent, all costs incurred or payable
by the Sublandlord (excepting Basic Rent) under the Lease as these costs
relate to the Subleased Premises, including but not limited to taxes,
insurance, operating costs, and utilities (hereinafter referred to as
"Additional Rent").
Subtenant's Additional Rent shall be based on the proportion, which the
Rental Area of the Subleased Premises bears to the Rental Area of the
Leased Premises. Sublandlord shall provide to Subtenant copies of the
budgets, invoices and statements of operating costs, taxes, insurance and
utilities as and when such budgets, invoices or statements are given to
Sublandlord by Landlord under the Lease. Subtenant's Additional Rent shall
be due and payable to the Sublandlord at the times and in the manner that
such costs are due and payable by the Sublandlord to the Landlord.
In addition to the foregoing the Subtenant shall pay from the Commencement
Date and thereafter, all business taxes that may be assessed against the
Subtenant in connection with the Subleased Premises and the Subtenant
shall also pay from the Commencement Date and thereafter all other costs
and other charges directly pertaining to the Subleased Premises which are
not included in monthly installments of operating costs or occupancy costs
payable by the Sublandlord under the Lease and the costs of all other
services related to the use or possession of the Subleased Premises by the
Subtenant. For the purposes of this Sublease, Basic Rent, Additional Rent
and any other amounts payable by the Subtenant to the Sublandlord may be
referred to as Rent.
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5. USE
The Subleased Premises shall only be used solely as office space, provided
such purposes complies with the provisions of the Lease and all applicable
laws, by-laws, regulations or other governmental ordinances from time to
time in existence.
6. SUBTENANT'S COVENANTS
The Subtenant covenants and agrees with the Sublandlord as follows:
(a) it will pay to the Sublandlord without any deduction, set-off or
abatement all amounts due pursuant to paragraphs 3 and 4 hereof;
(b) The Subtenant will perform all of the terms, covenants and
conditions on the part of the Sublandlord to be observed and
performed under the provisions of the Lease as they relate to the
Subleased Premises ;
(c) the Subtenant shall not commit or permit to be committed on the
Subleased Premises or in the Building, any act or omission which
shall violate any term or condition of the Lease or this Sublease.
In the event of the termination of the Sublandlord's interest as
tenant under the Lease for any reason, then this Sublease shall
terminate coincidentally therewith and, without any liability of the
Sublandlord to the Subtenant, except where such termination of this
Sublease arises from or is a result of the non-performance or breach
of the terms, covenants and conditions of the Sublandlord under
paragraph 7 hereof.
7. SUBLANDLORD'S COVENANTS
The Sublandlord does hereby covenant and agree with the Subtenant as
follows:
(a) to pay the rent and other amounts payable by it pursuant to the
terms of the Lease ;
(b) to perform and observe the covenants on its part contained in the
Lease with respect to the Subleased Premises so far as such
covenants are not required to be performed and observed by the
Subtenant under this Sublease;
(c) to grant to the Subtenant quiet enjoyment of the Subleased Premises
during the Term hereof; and
(d) at the request of the Subtenant, to take such action at the cost of
the Subtenant as may be required and allowed for in the Lease to
ensure that the landlord under the Lease acts reasonably in the
exercise of any rights it may have with respect to the Subleased
Premises.
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8. APPROVAL
Upon execution by the Sublandlord, and the consent of the Landlord, this
Sublease shall be binding upon the parties hereto. If not consented to by
the Landlord this Sublease shall be null and void without the necessity of
any further formality, notice, delay, or recourse by any party hereto.
Neither the preparation of this or any other form of Sublease nor any
negotiations entered into in connection with its submission constitutes or
implies any commitment by the Sublandlord unless this Sublease has been
consented to in writing by the Landlord.
9. SECURITY DEPOSIT
The Sublandlord acknowledges receipt from the Subtenant of a Security
Deposit in the amount of thirty five thousand dollars ($35,000.00) to be
applied to Basic Rent, Additional Rent and GST falling due for the first
one (1) month and the balance to be applied against the last one (1) month
of the Term. If the Subtenant defaults under this Sublease, then the
Sublandlord may use all or part of the Security Deposit then remaining to
remedy the default.
10. ASSIGNMENT OR SUBLETTING
The Subtenant shall not have any right to assign this Sublease or sublet
or transfer the Subleased Premises without first complying with the
provisions of the Lease dealing with same, and without the prior written
consent of the Sublandlord and the Landlord. Any such permitted assignment
or subletting shall not release or relieve the Subtenant of its covenants
and obligations under this Sublease.
11. INSURANCE
All insurance required to be obtained by the Sublandlord pursuant to the
Lease in respect of the Subleased Premises shall be obtained by the
Subtenant at its sole cost and shall name the Sublandlord and the Landlord
as additional named insureds. The Subtenant shall provide the Sublandlord
and the Landlord with copies of the said policy of insurance or
certificates setting out the full particulars of such policy, prior to
taking possession of the Subleased Premises and from time to time
thereafter shall provide written notification of any changes thereto.
12. CONDITION OF SUBLEASED PREMISES
The Subleased Premises shall be accepted and leased by Subtenant on an
"as-is" basis. The Subtenant agrees not to make, erect, install or alter
any other leasehold improvements in the Subleased Premises without having
obtained the prior written approval of the Sublandlord and the Landlord.
The Subtenant shall comply with all terms and conditions of the
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Sublandlord's and Landlord's approval and the applicable provisions of the
Lease dealing with same. The Subtenant shall be entitled to vacant
possession of the Subleased Premises July 1, 2004 (assuming this Sublease
Lease Agreement has been signed by the Subtenant and the Sublandlord) to
carry out any approved modifications to the Subleased Premises and for
move-in purposes. At all times prior to the Commencement Date that the
Subtenant is in possession of the Subleased Premises whether carrying on
business or not, it shall be bound by all the provisions of the Sublease
and the Lease except that the Subtenant shall not be obligated to pay
Basic Rent and Additional Rent until the Commencement Date.
Air handling unit / Raised floor - The air handling unit and the raised
floor (the Equipment Fixtures") located in the computer room of the
Subleased Premises shall be for the sole and exclusive use of the
Subtenant. The daily maintenance of the Equipment Fixtures shall be the
sole responsibility of the Subtenant. Provided the Subtenant is in
occupancy of the Subleased Premises the Equipment Fixtures shall be the
sole exclusive use of the Subtenant. If the Subtenant is not in occupancy
of the Subleased Premises, the Equipment Fixtures, including and
restoration, shall revert to the Sublandlord/Landlord.
13. PARKING
The Sublandlord agrees to provide for the use of the Subtenant three (3)
parking spaces in the garage beneath the Building for the Term of the
Sublease in accordance with the terms of the Landlord's standard parking
agreement. The cost for this space shall be at the prevailing parking rate
charged by the Landlord to the Sublandlord from time to time. The
Subtenant shall ensure that all payments required for the parking space
are fully paid monthly in advance.
14. NET SUBLEASE
The Subtenant hereby acknowledges, confirms and agrees that it is the
intention of the Sublandlord and the Subtenant that, except as expressly
set out herein, this Sublease shall be a completely net Sublease for the
Sublandlord and that, subject to the provisions contained in the Sublease,
the Sublandlord shall not be responsible during the Term for any
obligations, losses, charges, expenses, or outlays of any nature and kind
whatsoever arising from or relating to the Subtenant's use and occupation
of the Subleased Premises or the contents thereof and that the Subtenant
shall pay all charges, impositions and expenses of every kind and nature
relating to its use and occupation of the Subleased Premises . The
Subtenant acknowledges that it has reviewed the Lease attached hereto as
Schedule "B" and is familiar with it. The Subtenant further acknowledges
and agrees that the Sublandlord shall have all the rights and remedies
against the Subtenant in respect of this Sublease as though the
Sublandlord was the landlord named in the Lease and the Subtenant was the
tenant named in the Lease, mutatis mutandis, in relation to the matters
which are expressly dealt with in this Sublease.
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15. INDEMNITY BY SUBTENANT
Except for occurrences resulting from the negligence or willful misconduct
of the Landlord or the Sublandlord or those for whom the Landlord or the
Sublandlord are responsible at law, the Subtenant shall be liable for and
shall indemnify the Sublandlord from and against all claims, actions,
damages, liabilities and expenses for any breach or non-performance of any
term or provision of this Sublease by the Subtenant or in connection with
losses of life, personal injury, damage to property, or any other loss,
damage or injury, whether or not of a nature related to the foregoing
arising from any occurrence on the Subleased Premises for which the
Subtenant is responsible at law; or from the occupancy or use of the
Subleased Premises by the Subtenant or occasioned wholly or in part by an
act or omission of the Subtenant, its agents, servants, employees or
contractors or by anyone permitted by the Subtenant to be on the Subleased
Premises . In case the Sublandlord, without fault on its part, is made a
party to litigation begun by or against the Subtenant, excepting a bona
fide action by the Subtenant against the Sublandlord, the Subtenant will
protect and hold harmless the Sublandlord and will pay all costs, expenses
and reasonable legal fees incurred or paid by the Sublandlord in
connection with the litigation. The Subtenant will also pay all costs,
expenses and reasonable legal fees incurred by the Sublandlord in
enforcing the terms and covenants of the Subtenant under this Sublease.
Any obligation of the Subtenant to indemnify the Sublandlord hereunder,
shall survive the termination of this Sublease in respect of every
happening during the Term.
16. EXCULPATORY PROVISION
Except for occurrences resulting from the negligence or willful misconduct
of the Landlord or the Sublandlord, or those for whom the Landlord or the
Sublandlord are responsible at law, the Sublandlord shall not be liable
for death of or injury to the Subtenant or others on the Subleased
Premises, or for the loss of or damage to property of the Subtenant or
others by theft or otherwise. Without limiting the generality of the
foregoing, the Sublandlord shall not be liable for death, injury, loss or
damage of or to persons or property resulting or arising from fire,
explosion, falling plaster, steam, gas, electricity, water, rain or snow
or leaks from any part of the Subleased Premises or from the pipes,
appliances or plumbing works or from the road, street or subsurface, or
from any other place, or by dampness, or by other cause of any kind and
the Sublandlord is not liable for death, injury, loss or damage caused by
other tenants or occupants or other persons in the Subleased Premises or
in any other part of the Building, or resulting from construction,
alteration or repair of the Subleased Premises or the Building. All
property of the Subtenant kept or stored in the Subleased Premises will be
kept or stored at the risk of the Subtenant only and the Subtenant will
hold the Sublandlord harmless from all claims arising out of damage to it,
including subrogation claims (if any) by the Subtenant's insurers.
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17. INDEMNITY BY THE SUBLANDLORD
The Sublandlord shall indemnify and hold harmless the Subtenant from and
against any injury and damage to the person or property of the Subtenant
where the injury and damage is caused by negligence of the Sublandlord,
its agents, servants, employees or contractors or others for whom the
Sublandlord is responsible at law or any injury or damage to person or
property as a result of any breach or non-performance of any covenant or
term required to be observed and performed by the Sublandlord under the
Lease or this Sublease.
18. DEFAULT AND RE-ENTRY
It is agreed that (hereinafter called "an event of default"):
(i) if the Subtenant shall be in default in the payment of Rent or
amounts collectable hereunder as rent and such default shall
continue for a period of five (5) days after notice by the
Sublandlord to the Subtenant of such default and requiring the same
to be remedied; or
(ii) if the Subtenant shall be in default of any of its covenants and
agreements hereunder (other than its covenant to pay Rent or amounts
collectable hereunder as rent) and such default shall continue for a
period of fifteen (15) days (or such longer period as may be
reasonably necessary to cure such default considering the nature
thereof) after notice by the Sublandlord to the Subtenant of such
default and requiring the same to be remedied; or
(iii) if the Subtenant shall make an assignment for the benefit of
creditors, or shall make an assignment or have a receiving order
made against it under the Bankruptcy Act, or becoming bankrupt or
insolvent or shall make application for relief under the provisions
of any statute now or hereafter in force concerning bankrupt or
insolvent debtors, or any action whatsoever, legislative or
otherwise, shall be taken with a view to the winding-up, dissolution
of or liquidation of the Subtenant; or
(iv) if the term of this Sublease hereby granted or any of the goods or
chattels on the Subleased Premises are at any time possessed,
seized, or taken in execution or attachment by any creditor of the
Subtenant; or
(v) if a writ of execution or replevin order issues against the goods or
chattels of the Subtenant;
Then, at the option of the Sublandlord, the current month's Rent,
together with the Rent for the three (3) months ensuing, shall
immediately become due and payable and, at the option of the
Sublandlord, the term hereby granted shall become forfeited and
void, and the Sublandlord may without notice or any form of legal
process whatsoever forthwith re-enter upon the Subleased Premises,
or any part thereof, in the name of the whole and repossess and
enjoy the same as its former estate, anything contained in any
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statute or law to the contrary notwithstanding. No re-entry or
taking possession of the Subleased Premises shall be construed as an
election on the part of the Sublandlord to terminate this Sublease
unless at the time of or subsequent to such re-entry or taking of
possession written notice of such intention has been given to the
Subtenant.
Forfeiture of this Sublease by the Subtenant shall be wholly without
prejudice to the right of the Sublandlord to recover arrears of Rent
or damages for any antecedent breach of covenant on the part of the
Subtenant and, notwithstanding any such forfeiture, the Sublandlord
may subsequently recover from the Subtenant damages for loss of Rent
suffered by reason of the Sublease having been terminated prior to
the end of the Term of this Sublease as set out herein and this
subsection and the rights hereunder shall survive the termination of
this Sublease whether by act of the parties or by operation by law.
The rights and remedies of the Sublandlord under this Section 17 are
in addition to the rights and remedies of the Sublandlord at law or
as contained in the Lease.
19. GENERAL
Subject to the provisions of this Sublease respecting assignment, this
Sublease shall enure to the benefit of and be binding upon the Sublandlord
and the Subtenant and their respective successors and permitted assigns.
In the event that there is any conflict between the terms of the Lease and
the terms and conditions contained in this Sublease, then the terms and
conditions contained in this Sublease shall govern.
This Sublease shall be construed in accordance with and governed by the
laws of the Province of Alberta.
This Sublease or a counterpart hereof may be executed and transmitted by
fax, with transmission confirmed as complete, and if so, executed and
transmitted, this Sublease shall be for all purposes as effective and
binding upon such party as if such party had delivered an originally
executed document. A party transmitting an executed document by telecopy
shall forthwith deliver the original of the executed document.
20. ARBITRATION
Any dispute, controversy or claim arising out of or relating to this
Sublease, or the breach, termination or validity thereof, shall be settled
by arbitration in front of a single arbitrator agreed to by the parties
or, failing that, appointed by the Court of Queen's Bench, in accordance
with the Arbitration Act (Alberta) as then in force.
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21. OTHER
It is understood that this Sublease does not provide for any renewal,
right of first refusal or any Landlord inducements in favor of the
Subtenant.
22. REPRESENTATIONS
The Subtenant acknowledges that there are no representations, conditions,
warranties, or collateral agreements, express or implied, made by or on
behalf of the Sublandlord other than are expressed herein.
23. GOODS AND SERVICES TAX
The Subtenant shall be responsible for and pay to the Sublandlord on the
same date as the payments of Basic Rent, Additional Rent and all other
amounts are due, all taxes, charges, sums and amounts as contemplated in
an Act to amend the Excise Tax Act and related Acts, Statutes of Canada
1990, c.45, as amended from time to time, or any legislation substituted
therefore (the "Excise Tax Act") whether characterized as a goods and
services tax, value added tax, consumption tax, sales tax or otherwise
(except income taxes under the Income Tax Act (Canada), (collectively the
"GST") arising in connection with or by virtue of the supply of any goods
or services by the Landlord or the Sublandlord to, or for the benefit of
the Subtenant, or the payment by the Subtenant to the Sublandlord of Basic
Rent or Additional Rent pursuant to this Sublease or the Lease . The
amount of the GST shall be calculated by the Sublandlord and payable by
the Subtenant on the dates stipulated herein. Unless otherwise noted,
amounts quoted in this Sublease do not include GST.
24. NOTICES
Any notices herein provided or permitted to be given under this Sublease
shall be addressed as follows:
(i) Notice by the Subtenant to the Sublandlord: Paradigm Geophysical
Canada Ltd. 1700,125-9th Avenue SW
Calgary, AB
T2G OP6
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(ii) Notice by the Sublandlord to Subtenant: Brycol Consulting Ltd. 2500,
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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IN WITNESS WHEREOF Brycol Consulting Ltd. does hereby accept this Sublease of
the Subleased Premises to be held by it as Subtenant, subject to the conditions,
restrictions and covenants set forth herein.
The Sublease has been executed by the parties as of the day and year first above
written.
Subtenant
Per: /s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Per: /s/ ▇. ▇▇▇▇▇▇
-------------------------------- ----------------------------------
BRYCOL CONSULTING LTD. PARADIGM GEOPHYSICAL CANADA LTD.