EXHIBIT 10.25.1
THIS INDENTURE MADE AS OF THE 17TH DAY OF SEPTEMBER 1997.
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED, a Private company incorporated
under the laws of Ontario (hereinafter called the "Lessor")
OF THE FIRST PART,
and IMAGE PROCESSING SYSTEMS INC.
(hereinafter called the "Lessee")
WITNESSETH:
Premises:
1. That in consideration of the rents, covenants and agreements hereinafter
reserved and contained on the part of the Lessee to he paid, observed and
performed, the Landlord doth demise and Lease unto the lessee all and singular
that certain parcel or tract of land and premises situated, lying and being in
the town of MARKHAM and Province of Ontario and being municipally known as ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ all of which said property is sometimes hereinafter referred to
as "demised premises" or "premises", as more particularly described and outlined
in red on Schedule "B" hereto annexed: consisting of approximately 50,015 square
feet more or less.
(a) The Lease is based on the terms and conditions set out in the Offer to
Lease.
2. TO HAVE AND TO HOLD the demised premises for and during the term of
years to be computed from and inclusive of the 1ST day of JULY, 1997 and from
thenceforth next ensuing and ended on the 31ST day of OCTOBER, 2002.
(a) OPTION TO RENEW
The Lessee shall have two (2) options to renew said Lease for a term of five (5)
years each on the same terms and conditions, save and except for further renewal
and the net rental rate which shall be determined at time of renewal by way of
common agreement, based on the current market rental rate for space of equal
quality with equal services in the same areas, or failing which, by arbitration
by a competent and reputable real estate appraiser or real estate broker agreed
upon by the parties herein.
The Lessee shall notify the Lessor in writing at least six (6) months prior to
the expiry of the initial term of its intent to exercise said option. If Lessee
does not wish to renew, the Lessor shall place a "for rent" sign on the property
and they or their agents may be allowed to show the property to prospective
tenants during reasonable hours.
(b) SUBLET AND ASSIGN
The Lessee may assign or sublet said premises in whole or in part subject to the
Lessor's consent; such consent shall not be unreasonably delayed or withheld.
The Lessee reserves the right to assign or sublet the lease to an associated,
related, subsidiary or holding company or to the Lessee's lender of Lessee's
interest in the Lease without the Landlord's consent; provided the Lessee
remains responsible under the Lease. In addition, the Lessee may assign the said
premises, without the Landlord's consent to any corporation with which the
Lessee is being merged or consolidated, provided the resulting corporation has a
net worth at least equal to the net worth of the Lessee as of the date hereof.
All other provisions of subletting shall be as agreed to herein.
3. OPTION TO PURCHASE AND/OR LEASE
Should the Lessor receive an offer to Purchase or Lease the land or other two
buildings on the "site" as outlined in blue on Schedule "B" herein, the Lessee
herein shall have a first right of refusal to purchase or lease same on the same
terms and conditions as contained in such third party offer.
-2-
Such right to be exercised within five (5) business days after the Lessee's
written notice is received from the Lessor.
4. USE:
The Lessee shall use and occupy the demised premises for the purposes of
OFFICES, SHOWROOM, WAREHOUSING, LABORATORY AND ASSEMBLY FOR COMPUTER/ELECTRONICS
COMPANY and any other related and ancilliary uses the Lessee may reasonably
require, providing the Lessee, in the use and occupation of the demised premises
and in the prosection or conduct of any business therein, shall comply with all
requirements of all laws, orders, ordinances, rules and regulations of the
Federal, Provincial and/or Municipal authorities and with any direction or
certificate of occupancy issued pursuant to any law by any Public Officer(s)
save and except any requirement, direction, order, etc. which arose due to the
premises not being in compliance as of the date of the Lessee's occupancy of the
premises. The Lessee covenants that it will not use or permit to be used any
part of the demised premises for any unlawful or dangerous, noxious or
offensive trade or business and will not cause or maintain any nuisance, in, at,
or on the demised premises Which may reasonably cause annoyance to the Lessor or
any other Lessee's on the premises.
5. PARKING
The Lessee shall have the exclusive use of all parking spaces around said
building, free of charge during the Lease term and option periods.
Further, should the Lessee require additional parking at any time during the
initial lease period or any renewal period, the Lessee may approach the Lessor
with a request to pave all or part of the adjoining site to the north of subject
building; if available. The cost of same to be borne by the Lessee who shall
have exclusive use of same. Prior to proceeding with same, the Lessor and Lessee
shall negotiate the terms and conditions of such agreement.
6. SIGNAGE
The Lessee shall have the right, at its expense, to erect signage on said
building in multiple locations, provided said signage is not affixed to the side
of said building by virtue of holes being drilled in the concrete fascia,
without consent of the Lessor, such consent not to be unreasonably withheld,
however, said signs may be hung from and affixed to roof.
All such signs shall be dignified in appearance and shall comply with the lawful
requirements of all relevant Municipal amd Governmental authorities. They shall
remain the property of the Lessee and shall be removed by Lessee upon the
termination of the term hereby granted. Upon the removal of any such signs the
Lessee shall repair any damage caused to the demised premises by such removal.
The Lessee shall indemnify the Lessor against any loss or damage caused to any
person or thing as a result of the placing or use of any sign on the demised
premises.
Further, the Lessee shall have the exclusive use at its expense, to use the
street ▇▇▇▇▇ sign.
7. RENT:
YIELDING AND PAYING THEREFORE, yearly and every year without any abatement or
reduction for any reason whatsoever, during the term of:
JULY 1/97 - OCT 31/99 $200,060.00/ANNUAL OR $16,671.67/MONTHLY $4.00
NOV 1/99 - OCT 31/01 $262,578.75/ANNUAL OR $21,881.56/MONTHLY $5.25
NOV 1/01 - OCT 31/02 $300,090.00/ANNUAL OR $25,007.50/MONTMLY $6.00
NET/NET of lawful money of Canada to be paid in advance in equal consecutive
monthly instalments on the first day of each and every month in each year of the
term of this lease and any renewal thereof.
-3-
(a) NET RENT FREE PERIOD
Based upon ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Contracting Limited performing contracted work
outlined in SCHEDULE "D"
The Lessee shall have vacant possession of said premises, net rent free for a
period of four (4) months, intended to be from July 1, 1997 to October 31, 1997
for the purpose of setting up business, provided that the Lessee shall be
responsible for all payments with regard to realty taxes, outside maintenance,
building insurance and utilities with their applicable Goods and Services taxes
for said building. All terms and conditions, save and except payment of net
rental of the Lease shall be in full force and effect throughout the net rent
free period.
Based upon ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Contracting Limited NOT being awarded contract work
outined in SCHEDULE "D"
Net Rent Free period shall commence July 1, 1997 finishing August 31, 1997.
8. PAYMENTS:
All payments required to be made by the Lessee under and in respect of this
Lease shall be made to the Lessor at the Lessor's office at ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇-▇▇▇ or to such agent or agents of the
Landlord or at such other places as the Landlord shall hereinafter from time to
time direct in writing to the Lessee.
Lessor acknowledges receipt of first month's net rent plus taxes plus GST and
last month's net rent plus taxes deposit in the amount of $53,199.29
9. SQUARE FOOTAGE CERTIFICATION
The rental shall be calculated at a price per square foot basis per annum as set
forth in Section 7 herein. The annual rental shall be decreased or increased
pro-rated according to final measurements made by the Lessor's Architect or such
other measurements as is mutually agreeable.
10. LESSEE'S COVENANTS:
The Lessee covenants with the said Landlord:
(a) To pay rent, and all additional rental as herein set forth.
(b) The Lessee shall pay to the Lessor as additional rent, in each and every
year during said term, all Realty Tax and assessments that may be levied or
rated against said property currently estimated to be $5001.50 per month ($1.20
per square foot per annum 1996 assessment to be adjusted from time to time
according to actual costs). Ontario Capital Tax not to exceed 50% of the
presently assessed Capital tax estimated at .07 dollars per square foot and not
to exceed .035 dollars per square foot. The Lessor convenants not to reorganize
or alter its affairs so as to artificially inflate its Ontario Capitaltax during
the Lease term or any renewal. Building insurance, outside maintenance and
general maintenance is to be adjusted from time to time according to actual
costs. During any renewal of the said Lease, that portion of the additional rent
relating to Ontario Capital Tax shall be assessed in the same manner as above.
(c) The Lessee is to provide necessary ventillation exhaust systems as may
be required by existing By-Laws or regulations set out by local government or
agencies, relating to the Lessee's use of the premises. The lessee shall pay all
charges for public and private utilities, including without limitation, water,
gas, electrical power or energy, steam or hot water used upon or in respect of
the demised premises and for fittings, machines apparatus, meters or other
things leased in respect thereof, and for all work or services performed by any
corporation or commission in connection with such public or private utilities,
save and except for structural/capital expenditures as outlined in Subsection
11(a) below.
-4-
11. REPAIRS AND MAINTENANCE:
The Lessee, at its sole cost, shall maintain and keep the demised premises and
every part thereof in good order and condition. The Lessee and the Lessor shall
act reasonably in the determination thereof and the Lessee shall promptly make
all needed repairs to keep the demised premises in good order and condition. In
addition the Lessee shall promptly make all needed repairs and replacements,
damage by fire, lighting, and tempest, structural defect only excepted and
without limiting the generality of the foregoing, the Lessee shall keep the
demised premises well painted, clean and in such condition as a careful owner
would do. The Lessee's obligation to repair as aforementioned shall extend to
repairs and maintenance including replacement of plate glass, and subject to
Subsection 11(c) below, heating, plumbing and electrical systems, to the
building maintenance, to all driveways, sidewalks, parking areas and landscaping
generally on the demised premises, including the sidewalks, parking areas and
driveways in a clean and orderly condition, free of accumulation of dirt,
rubbish, snow and ice.
(a) STRUCTURAL REPAIRS
The Lessor shall be responsible at the Lessor's sole cost and expense for
structural repairs to the building, structure of the roof, walls and floors not
resulting from the Lessee's negligence or default. The Lessor shall undertake
any such repairs promptly upon receipt of notice from the Lessee, in accordance
with the provisions of the Lease.
(b) ROOF
Any repair or replacement required to 10% or more of the non-structural roof
including items such as roof membrane, flashing etc. shall be repaired by the
Lessor. Lessee shall pay the Lessor an amount calculated by the cost of said
repairs and divided by a lifespan of ten (10) years times the number of years
remaining on Lease or any option periods exercised.
(c) HVAC SYSTEMS
For current existing HVAC Systems only, the Lessee shall service and maintain
(through a service contract with a contractor reasonably acceptable to the
Lessor), the HVAC units throughout the term of the Lease and the option periods.
Should any or all of the said units or major components need to be replaced at
any time during the Lease or option periods, the Lessee shall pay the Lessor an
amount calculated by the capital cost of the unit, divided by the manufacturer's
represented lifespan of said units times the number of years remaining on the
Lease or any option periods exercised.
The Lessee further covenants to heat the demised premises at all times to
protect the demised premises and all of their contents from damage by cold or
frost.
(d) BUILDING EQUIPMENT
The Lessee shall have the use of electronic security and monitoring systems in
said building and the right to add additional security systems if desired.
12. ENTRY BY LANDLORD:
It shall be lawful for the Lessor and its agents, at all reasonable times upon
reasonable notice and, if required by the Lessee, accompanied by an employee of
the Lessee, during the said term, to enter the demised premises to inspect the
condition thereof, where an inspection reveals repairs are necessary, the Lessor
shall give the Tenant notice in writing and thereupon the Lessee will, within
thirty (30) days of the date of delivery of the notice, or such longer period as
is reasonably necessary to effect such repairs provided the Lessee has commenced
and is diligently completing such repairs, make the repairs in a good, and
workmanlike manner.
-5-
13. PREMISES REPAIR:
(a) And further, the Lessee will, at the expiration or sooner determination
of the said term, peaceably surrender and yield up unto the Landlord the said
premises hereby demised with the appurtances, together with all buildings or
erections which at any time during the said term shall be made therein or
thereon save and except any Lessee trade fixtures, furniture, equipment,
fixtures constructed by the Lessee or on the Lessee's behalf, network cabling
and telephones or previous Tenant trade fixtures all of which shall be the
property of the Lessee in good and substantial repair and condition, reasonable
wear and tear, damage by fire, lighting and tempest only excepted.
(b) The Lessee, at its own expense shall observe and promptly comply with
all statutes order-in-council, by-laws, rules, regulations and requirements of
all Federal, Provincial and Municipal governments and appropriate departments
thereof, and the orders, rules and regulations of the Board of
Fire-Underwriters, Board of Health, Police or Fire Departments or any other body
hereafter constituted exercising similar functions which may be applicable as
they relate solely to the use or manner of use of the Leased Premises by the
Lessee. To the extent that such compliance and the expense thereof relates to
other than the use or manner of use of the Leased Premises by the Lessee, the
Lessee shall pay, at the commencement of each Lease year of the term and any
renewal, an amount determined by dividing the expense of such compliance by the
remaining useful life of the building determined as at the time such expense is
paid by the Lessor (the remaining useful life of the building being twenty five
years on the date hereof).
14. INSURANCE:
(a) The Lessor shall, during the term hereof, insure the building or
buildings from time to time on the demised premises and keep them insured
against:
(i) Loss or damage by fire, or other hazards covered by normal
extended coverage, in the sum of their full insurable
replacement value, of the building, improvements and equipment
thereon:
(ii) Loss by explosion in the sum of their full insurable replacement
value, (including without limitation loss or damage by the
explosion, cracking, bulging, rupture or burnout of any boiler
or object generating steam or any pressure vessel which shall be
operated on the demised premises:
(iii) Loss of Rents and payment of Real Estate Taxes in the event of
destruction or partial destruction of the demised premises for a
period commencing at the time of such destruction and continuing
until the earlier of
(a) The termination of this Lease, or
(b) The date on which the building upon the demised premises
shall have been rebuilt, repaired or replaced:
(iv) Public liability for an adequate sum and in any case not less
than $ 2,000,000.00 for any one claim:
All losses payable under such Insurance, policy or policies
shall be payable to the Landlord and the Tenant as their
interest may appear.
-6-
(b) From time to time, the Lessor shall also maintain such other additional
Insurance and in such amounts as at the time customarily is carried in respect
of buildings and building equipment similar in character, general location, use
and occupancy to the buildings and building equipment then on the Leased
premises and shall also maintain such other or additional Insurance and in such
amounts as may reasonably be required by the holder of any mortgage of the
premises pursuant to the terms of the particular mortgage.
(c) The Lessor shall on request provide the Lessee, on an annual basis, with
evidence of the insurance coverage required hereunder.
(d) The Lessee shall comply with all regulations of the Canadian
Underwriters Association or of any liability or Fire Insurance company by which
the Lessor may be insured, which are necessary to maintain such Insurance. Such
Insurance shall, at the commencement of the Lease, be effected with such
Insurance Company or Companies as the Landlord may reasonably approve. The cost
of such building Insurance shall be added to the Rent hereby reserved and the
amount thereof shall be payable with the next ensuing instalment of Rent, and
the Landlord in the event of non-payment, shall be entitled to all remedies for
the recovery of the same as for Rent in arrears.
(e) Lessee covenants that nothing will be done or omitted to be done whereby
any Insurance policy shall be cancelled or the premises rendered uninsurable. If
the premium for any Insurance on the demised premises or any part thereof
carried by the Lessor shall be increased by reason of the use made of the
demised premises or by reason of anything done by the Lessee or any person
subject to the Lessee, the Lessee shall pay to the Lessor on demand as
additional rental the amount of such increase.
(f) The Lessor shall use its best efforts to obtain from its insurer a
waiver of the insurer's right of subrogation against the Lessee and/or its
insurer.
15. DAMAGE AND DESTRUCTION:
(a) If, and whenever during the term hereby demised the building erected on
the demised premises shall be destroyed or damaged by fire, lightening or
tempest, or any of the perils insured against as hereinbefore stated, then and
in every such event:
(b) If damage or destruction is such that the building erected on the
demised premises is rendered wholly unfit for occupancy or it is impossible and
unsafe to use and occupy, and if in either event the damage, in the opinion of
the Lessor's Architect or other independent qualified agent to be given to the
Lessee in writing within ten (10) days of the happening of such damage or
destruction, cannot be repaired with reasonable diligence within One Hundred and
Twenty (120) days from the happening of such damage or destruction, then either
the Lessor or the Lessee may, with five (5) days next succeeding the giving of
the Lessor's opinion as aforesaid, terminate this Lease by giving to the other
notice in writing of such termination, in which event this Lease and the term
hereby demised shall cease and be at an end as of the date of such destruction
or damage and the Rent and all other payments for which Lessee is liable under
the terms of this Lease shall be apportioned and paid in full to the date of
such destruction or damage. In the event that neither Lessor nor Lessee shall
terminate this Lease, then Lessor shall repair the said building with all
reasonable speed and the Rent hereby reserved shall ▇▇▇▇▇ from the date of
happening of the damage until the damage shall be made good to the extent of
enabling Lessee to use and occupy the demised premises.
(c) If the damage be such that the building erected on the demised premises
is wholly unfit for occupancy or if it is impossible or unsafe to use or occupy
it, but if in either event the damage, in the opinion of the Lessor's Architect
or other independent qualified agent to be given to the Lessee in writing within
ten (10) days from the happening of such damage, can be repaired with reasonable
diligence
-7-
within One Hundred and Twenty (120) days from the happening of such damage, then
the Rent hereby reserved shall ▇▇▇▇▇ from the date of the happening of such
damage until the damage shall be made good to the extent of enabling the Lessee
to use and occupy the said building and the Lessor shall repair the damage with
all reasonable speed.
(d) If, in the opinion of the Lessor, after notice of the damage, damage can
be made good as aforesaid within 120 days of the happening of such destruction
or damage and the damage is such that a portion of the building upon the demised
premises is capable of being partially used for the purposes for which it is
hereby demised, then until such damage has been repaired, the Rent shall ▇▇▇▇▇
in the proportion that the part of the portion of the building demised is
rendered unfit for occupancy bears to the whole of the said building and the
Landlord shall repair the damage with all reasonable speed.
(e) PROVIDED it is hereby expressly agreed that if and whenever during the
term hereby demised, the building of which the demised premises forms a part
shall be destroyed or damaged so as to render the premises wholly unfit for
occupancy by any cause not referred to hereinbefore in this Lease in the term
hereby demised shall cease and be at an end as of the date of such destruction
or damage and the Rent and all other payments for which the Lessee is liable
under the terms of this Lease shall be apportioned and paid in full to the date
of such destruction or damage.
16. SEIZURE AND BANKRUPTCY:
PROVIDED AND IT IS HEREBY EXPRESSLY AGREED That in case, without the written
consent of Lessor, the demised premises shall become and remain vacant or not
used for a period of fifteen (15) days and the Lessee has not taken all steps to
protect the demised premises from weather or damage while the same are suitable
for use by the Lessee, or be used by any other person than Lessee, save as
permitted herein, or in case the term hereby granted or any of the goods and
chattels of Lessee shall be at any time seized or taken in execution or in
attachment by any creditor of Lessee or Lessee's shall make any assignment for
the benefit of creditors or give any ▇▇▇▇ of Sale without complying with the
Bulk Sales Act (Ontario) or become bankrupt or insolvent or take the benefit of
any Act now or hereafter in force for bankrupt or insolvent debtors or any Order
shall be made for the winding up of Lessee and any of the foregoing events are
not remedied or set aside within fifteen (15) days after receipt of written
notice from the Lessor, then and in every such case the then current month's
Rent and the next ensuing three (3) months's Rent shall immediately become
forfeited and void, in which event the Lessor may re-enter and take possession
of the demised premises as though the Lessee or any occupant or occupants of the
demised premises was or were holding over after the expiration of the term
without any right whatever.
17. NO EXCEPTIONS FOR DISTRESS:
That notwithstanding the benefit of any present or future statute taking away or
limiting the Lessor's right or distress, none of the goods or chattels of the
Lessee on the demised premises at any time during the said term shall be
exempted from levy by distress for Rent in arrears.
18. PUBLIC LIABILITY:
(a) That the Lessor shall not in any event whatsoever be liable or
responsible in anyway for any personal injury or death that may be suffered or
sustained by the Lessee or any employee of the Lessee or any other person who
may be upon the demised premises save and except the Lessor or its servants or
contractors, or for any loss or damage or injury to any property belonging to
the Lessee or to it's Employees or to any other person while such property is on
the demised premises and, in particular, (but without limiting the generality of
the foregoing) Lessor shall not be liable for any damage to any such property
caused by steam, water, rain, or snow which may leak into, issue or flow from
any part of the said building or adjoining premises or from the water, steam,
sprinkler or drainage pipes or plumbing
-8-
works of the same or from any other place, or quarter or for any damage caused
by or attributable to the condition or arrangement of any electrical or other
wiring or of any damage caused by anything done or omitted to be done by the
Lessee except as occasioned by the negligence of the Landlord or its agents,
servants or contractors.
19. INDEMNIFICATION OF LANDLORD:
The Lessee will indemnify and save harmless the Lessor from any and all
liabilities, fines, suits, claims, demands, costs and actions of any kind or
nature whatsoever to which the Lessor shall or may become liable for, or suffer
by reason of any breach, violation or non-performance by the Lessee of any
covenant, term or provisions hereof, or by reason of any injury, loss damage or
death resulting from, occasioned to or suffered by any person or persons, or any
property by reason of any act, neglect or default on the part of the Lessee, or
any of its agents, customers, employees, servants, contractors (other than the
Lessor and its agents, employees, servants or contractors), licensees or
invitees, in or about the demised premises or any part thereof save and except
any injury, loss, damage or death resulting from the negligence of the Lessor or
those for whom it is responsible; such indemnification in respect of any such
breach, violation, non-performance, damage to property, loss, injury or death
occurring during the term of this Lease shall survive any termination of this
Lease, anything in this Lease to the contrary notwithstanding.
(b) INDEMNIFICATION OF LESSEE:
The lessor will indemnify and save harmless the Lessee from any and all
liabilities, fines, suites, claims, demands, costs and actions of any kind or
nature whatsoever to which the Lessee shall or may become liable for, or suffer
by reason of any breach, violation of non-performance by the Lessor of any
covenant, term or provisions hereof; such indemnification in respect of any such
breach, violation, non-performance, damage to property, loss, injury or death
occuring during the term of this Lease shall survive any termination of this
Lease, anything in this Lease to the contrary notwithstanding.
20. HOLDING OVER:
That if the Lessee shall continue to occupy the demised premises after the
expiration of this Lease, without the consent of the Lessor, and without any
further written agreement, the Lessee shall be a monthly Lessee at a monthly
rental herein deemed to be 125% of rental rates herein.
21. OVERLOADING:
That the Lessee will not bring upon the demised premises or any part thereof any
machinery, equipment, article or thing that by reason of its weight, size or use
might damage the floors of the demised premises and that if any damage is caused
to the demised premises by any machinery, equipment, article or thing or by
overloading or by any act, neglect or misuse on the part of the Lessee or any of
its servants, agents or employees or any person having business with the Lessee,
the Lessee will forthwith repair the same or pay to the Lessor the cost of
making good for same.
22. PAYMENTS DEEMED RENT:
That in the event of the Lessee failing to pay any Taxes, Rates, Insurance
premiums or other charges, maintenance or replacements as it has herein
covenanted to do, the Lessor may after having provided the Lessee with written
notice and fifteen (15) days to cure such default, pay or, as herein provide,
perform the same, and shall be entitled to charge the sums so paid or the cost
of such performance to the Lessee who shall pay them forthwith on demand, and
Lessor, in addition to any other rights, shall have the same remedies and may
take the same steps for the recovery of all such sums together with interest
thereon at a rate of 10% per annum, as it might have and take for the recovery
of Rent in arrears under the terms of this Lease; all such payments required to
be made under the terms of this lease shall be deemed Rent.
-9-
23. REFUSE:
That the Lessee will keep the demised premises and every part thereof in a clean
and tidy condition and will not permit waste paper, garbage, ashes or waste or
objectionable material to accumulate thereon.
24. DEMISED PREMISES DEFINED:
Whenever in this Lease reference is made to the demised premises it shall
include all structures, improvements and erections in or upon the demised
premises or any part thereof from time to time.
25. EVIDENCE OF PAYMENTS BY TENANT:
The Lessee shall from time to time at the request of the Lessor produce to the
Lessor satisfactory evidence of the due payment by the Lessee of all payments
required to be made by the Lessee under this Lease.
26. PAYMENT OF TAXES:
Lessor will at the commencement of this lease and thereafter at the commencement
of each tax year, estimate the Taxes (including local improvements rates),
Ontario Capital Tax (as qualified in paragraph 10(b) herein) and assessments
levied against the said lands and buildings for the next ensuing year and Lessee
agrees to pay ten monthly installments in accordance with such estimate at the
times at which Rent is payable hereunder. When Final Tax bills in any year have
been received Lessor and Lessee will adjust such taxes in accordance with such
Final Tax ▇▇▇▇.
27 FIXTURES:
PROVIDED that the Lessee may remove its trade fixtures, furniture and equipment,
any improvements installed by the Lessee or on its behalf, network cabling,
telephones and previous tenant fixtures at any time during the term or any
renewal; provided further that the Lessee shall not remove or carry away from
the said premises any building or any plumbing, heating or ventilating plant or
equipment or other building services save and except any plant or equipment
installed by or on behalf of the Lessee at any time and any fixtures removed by
the Lessee which cause any damage at all, the demised premises will be promptly
repaired to the original state or cost thereof.
28. RE-ENTRY:
PROVISION FOR RE-ENTRY by the said Lessor on non-payment of net rent for a
period of Seven (7) business days and for any other rent for fifteen (15)
business days or non-performance of covenant for fifteen (15) days or such
longer period as is reasonably required to cure such default after written
notice from the Lessor. The above powers may be exercised whether legal demand
for the rent has been made of not. Provided, further, that upon such re-entry by
the Lessor under the terms of this paragraph, or any other provision or
provisions of this lease, the landlord may, in addition to any other remedies to
which the Lessor my be entitled, at its option, at any time and from time to
time relet the demised premises or any part or parts thereof for the account of
the Lessee or otherwise and receive and collect the rents thereof, applying the
same first to the payment of such expenses as the Lessor may have incurred in
recovering possession of the demised premises including the legal expenses and
solicitors' fees and for putting the same into good order or condition or
preparing or altering the same for re-rental and all other expenses, commissions
and charges paid, assumed or incurred by the Lessor in or about re-letting the
premises and then to the fulfilment of the covenants of the tenant hereunder.
Any such re-letting herein provided for may be for the remainder of the term as
originally granted or for a longer or shorter period. In any such case, and
whether or not the demised premises or any part hereof be re-let, the Tenant
shall pay to the Lessor the rental hereby reserved and all other sums required
to be
-10-
paid by the Tenant up to the time of the termination of this lease or of
recovery of possession of the demised premises by the Lessor, as the case may
be, and thereafter the Lessee covenants and agrees, if required by the Lessor,
to pay to the Lessor until the end of the term of this lease, the equivalent of
the amount of all the rental hereby reserved and all other sums required to be
paid by the Lessee hereunder, less the net avails or re-letting, if any, and the
same shall be due and payable by the Lessee to the Lessor on the days herein
provided for rental, that is to say upon each of the days herein provided for
the payment of rental, the Lessee shall pay to the Lessor the amount of the
deficiency then existing.
29. NET LEASE:
(a) The Lessee acknowledges and agrees that it is intended that save as
provided for herein this lease shall be a completely carefree NET Lease for the
Lessor, that save as provided for herein the Lessor shall not be responsible
during the term of the lease for any costs, charges, and all Taxes, including
Capital Tax (as qualified in paragraph 10(b) herein) and impositions, expenses
and outlays of every nature whatsoever in respect of the lands, buildings or
improvements on the whole or part of the demised premises, or the contents
thereof, excepting only the Lessor's Income Tax, and principal and interest
payment to be made in connection with any mortgage or mortgages placed on the
lands and premises by the Lessor and except as may be herein specifically noted,
herein.
(b) Notwithstanding anything else contained in this Lease to the contrary
the Lessee shall not be responsible to pay for any of the following costs and
expenses:
(1) all income tax or similar taxes such as taxes for corporate, profit,
excess profit, gift, estate, succession, inheritance, franchise, land transfer,
non-residential, business (other than those business taxes specifically payable
by the Lessee), and any other taxes personal to the Lessor. Lessee shall be
responsible for Lessee's Business tax if any and Capital tax (as qualified in
paragraph 10(b) herein) as applicable to demised premises.
(2) all penalties, interest or carrying charges relating to the late payment
of Realty Taxes unless the late payment resulted from a late payment by the
Lessee of any instalment due hereunder;
(3) all fines suits, claims, demands, actions, costs, charges and expenses
of any kind or nature for which the Lessor is or may become liable by reason of
any negligent or willful act or omission to act on the part of the Lessor or
those for whom it is in law responsible or by reason of any breach or violation
or non-performance by the Lessor of any convenant, term or provision contained
in the Lease and any other agreements entered into by the Lessor in respect of
the premises.
(4) all work to the premises, or any part thereof, made necessary by the
Lessor's non-compliance with governing codes, by-laws and/or ordinances;
regulations and ordinances relating to the construction of the premises; for
which the Lessor may be responsible under this Lease.
30. QUIET ENJOYMENT:
The Lessor covenants with the Lessee for quiet enjoyment.
31. INSPECTION OF PREMISES:
The Lessor, or any other person producing a written order signed by the Lessor
or its agents, shall have the right to enter the leased premises at all
reasonable times upon reasonable notice to the Lessee, and at the option of the
Lessee accompanied by an employee of the Lessee, in a manner so as not to
unreasonably interfere with the operations of the Lessee or any of its
Sub-Tenants for the purposes of:
-11-
(a) making of any repairs to the leased premises and performing any work
therein that may be necessary by reason of the Tenant's default under the terms
of this lease continuing beyond the applicable periods of grace; and
(b) exhibiting the leased premises for the purpose of sale or mortgage; and
(c) exhibiting the leased premises within six (6) months prior to the
expiration of the term of this lease to prospective tenants.
32. REMOVAL OF GOODS:
PROVIDED that in case of removal by the Lessee of the goods and chattels of the
Lessee from off the premises, Lessor may follow the same for thirty (30) days in
the same manner as provided for in the Landlord and Tenant Act.
33. IMPROVEMENTS AND ALTERATIONS:
That if the Lessee shall during the said term desire to affix or erect
partitions, counters or fixtures in any part of the walls, floors or ceilings of
the demised premises, it may do so at its own expense at any time, and from time
to time, provided that the Lessee's rights to make such alterations to the
demised premises shall be subject to the following conditions:
(a) That before undertaking any such alterations the Lessee shall notify the
Lessor of the nature and extent of such alterations which are of structural in
nature and the Lessee shall submit to the Lessor a plan showing the proposed
alterations and shall obtain the approval and consent of the Lessor to the same
and that such approval and consent shall not be unreasonably withheld;
(b) That all such alterations shall conform to all buildings by-laws, if
any, then in force affecting the demised premises and such alterations or
improvements shall be completed in a good and workmanlike manner;
(c) That such alterations will not be of such kind or extent as to in any
manner weaken the structure of the building after the alterations are completed
or reduce the value of the building;
That at the expiration of the term of this Lease, provided that the Lessee is
not in default hereunder, the Lessee, at the option of the Lessor acting
reasonably shall remove all such alterations and improvements provided that in
each instance such removal shall be attended to in a good and workmanlike manner
and any damage to the demised premises occasioned thereby shall be promptly
repaired by the Lessee at its own expense. Should the Lessee not repair any
removal of alterations or improvements, the Landlord may effect such repairs and
charge to the Tenant any and all costs incurred by the Landlord in doing so.
This requirement shall not include those initial alterations and improvements
made to the two storey office portion of the building on both the first and
second floors designated F to K and 1X to 4X in accordance with drawing number
A2 project A-85-140F prepared by Deacon ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ dated February
14, 1989.
34. ASSIGNMENT BY THE LANDLORD:
LESSOR DECLARES that it may assign its rights under this lease to a lending
institution as collateral security for a loan to the Lessor and in the event
that such an assignment is given and executed by the Lessor and notification
thereof is given to the Lessee by or on behalf of the Lessor, it is expressly
agreed between the Lessor and the Lessee that this Lease shall not be cancelled
or modified for any reason whatsoever except as provided for, anticipate or
permitted by the terms of this Lease or by law, without the consent in writing
of such Lending Institution.
-12-
(a) LESSEE AND LESSOR COVENANTS AND AGREES WITH EACH OTHER that each will,
if and whenever reasonably required by the other party and at the requesting
party's expense to consent to and become a party to any instrument relating to
this Lease which may be required by or on behalf of any purchaser, bank or
mortgagee from time to time of the said premises provided, always, that the
rights of the Lessee and Lessor as hereinbefore set out not be altered or varied
by the terms of such instrument or document.
35. LIMITATIONS OF LESSOR'S LIABILITY:
The term "Lessor" as used in this Lease so far as covenants or obligations on
the part of the Lessor are concerned, shall be limited to mean and include only
the owner or owners at the time in question of the demised premises, and in the
event of any transfer or transfers of ownership, the Landlord herein named, and
in case of any subsequent transfers or conveyances, the then vendor or
transferor, shall be automatically freed and relieved from and after the date of
such transfer or conveyance, of all personal liability as respects the
performance of any covenants or obligations on the part of the Lessor contained
in this lease thereafter to be performed, provided that:
(a) Any funds in the hands of such Lessor or the then Vendor or transferor
at the time of such transfer, in which the Lessee has an interest, shall be
turned over to the purchaser or transferor and any amount then due and payable
to the Lessee by the Lessor or the then Vendor or transferor under any provision
of this Lease, shall be paid to the Lessee; and
(b) Upon any such transfer, the purchaser or transferor shall be deemed to
have assumed, subject to the limitations of this paragraph, all of the terms,
covenants and conditions in this Lease contained to be performed on the part of
the Lessor; it being intended hereby that the covenants and obligations
contained in this Lease on the part of the Lessor shall, subject as aforesaid,
be binding on the Lessor, its successors and assigns, only during and in respect
of their respective successive periods of ownership.
(c) PROVIDED that the Lessor shall have the right during the term of this
Lease to place upon the demised premises a notice stating that the demised
premises are for sale or, within six (6) months prior to the expiration of the
term, for lease and further provided that the Lessee will not remove such notice
or condone the same to be removed.
36. LIENS:
If any mechanics or other liens or order for the payment of money shall be filed
against the leased premises by reason or arising out of any labour or material
furnished to the tenant or to anyone claiming through the Lessee, Lessee shall
unless the Lessor is contracted to perform the work outlined in Schedule "D" and
the lien is in relation to such work, in which case the Lessee shall be
responsible to remove such lien within fifteen (15) days after notice to the
Lessee of the filing thereof, cause the same to be discharged by bonding,
deposit, payment, court order or otherwise. The Lessee shall defend all suits to
endorse such lien, or order, whether against Lessee or Lessor, at Lessee's sole
expense. The Lessee hereby indemnified the Lessor against any expense or damage
as a result of such liens or orders.
37. WAIVERS/CUMULATIVE REMEDIES:
Any condoning, excusing or overlooking by the Lessor or the Lessee of any
default, breach or non-observance by the Lessee or the Lessor as the case may be
at any time or times in respect of any covenant, provision or condition
hereincontained or the acceptance of any Rent while any such default, breach or
non-observance exists shall not (any law, statutory or otherwise, to the
contrary notwithstanding) operate as a waiver of the Lessor's or lessee's as the
case may be, rights hereunder in respect of any continuing or subsequent
default, breach or non-observance,
-13-
nor so as to defeat or effect in any way the rights of the Lessor hereunder in
respect of any such continuing or subsequent default, breach or non-observance
and all rights and remedies herein contained of the Lessor or the Lessee shall
be deemed to be cumulative and not alternative and the taking of any proceeding
or step shall not preclude the taking of any other proceeding or step.
38. INVALIDITY OF PARTICULAR PROVISIONS:
If any term or provision of this Lease or the application thereof to any person
or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or enforceable,
shall not be affected thereby and each term and provision of this Lease shall be
valid and enforced to the fullest extent permitted by law.
39. LANDLORD MAY CURE TENANT'S DEFAULTS:
(a) If Lessee shall default in the performance of any of the terms,
covenants and conditions of this Lease, Lessor may, after thirty (30) days
notice to Lessee specifying such default, or without notice if in the reasonable
exercise of Lessor's judgement an emergency exists, but shall not be obligated
to, perform the same for the account and at the expense (including reasonable
counsel fees) of Lessee and the amount of any payments made or reasonable
expenses incurred by Lessor for such purpose, with interest thereon at the rate
of Ten Percent (10%) per annum, shall become due and payable by Lessee as
additional Rent with the next or any subsequent instalment of Rent which shall
become due after such expenditure by Lessor: but any such expenditure by Lessor
shall not be deemed to waive or release Lessee's default or the right of Lessor
to take such action as may be permissible under the terms of this lease in the
event of such default. When no emergency exists, the provisions of this
Paragraph shall be inapplicable if, within thirty (30) days after such notice by
Lessor, Lessee shall have cured such default or shall have commenced and is
diligently proceeding to cure same.
(b) If the Lessor shall default in any of the covenants or agreements herein
contained, to be kept by the Lessor and the Lessor shall not commence to cure
and correct such default and to diligently pursue the work thereafter required
to correct such default after thirty (30) days notice in writing from the Lessee
it shall be lawful for the Lessee to correct such default itself and offset the
cost to correct such default against any payment of the rent.
40. NOTICES AND CERTIFICATES:
(a) The Lessee or Lessor shall, without charge, at any time and from time to
time, within ten (10) days after request by Lessor or Lessee, certify by written
instrument, duly executed, acknowledged and delivered to Lessor or any other
person, firm or corporation specified by Lessor or Lessee, as the case may be.
(i) That this Lease is unmodified and in full force and effect, or,
if there have been any modifications, that the same is in full
force and effect as modified and stating the modifications; and
(ii) Whether or not there are then existing any setoffs or defence
against the enforcement of any of the agreements, terms,
covenants or conditions of this Lease upon the part of the
Lessee or Lessor to be performed or complied with and, if so,
specifying the same; and
(iii) The date, if any, to which the Net Rent, additional Rent and any
other charges hereunder have been paid.
-14-
(b) Any notice to be given by the provisions of this Lease shall be
sufficiently given if served personally, by facsimile transmission or if mailed
postage prepaid at any one of Her Majesty's Post Offices in the Province of
Ontario and registered letter addressed:
(i) In the case of a notice to the Lessor, at ▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇.
(ii) In the case of a notice to the Lessee, to it at the demised
premises; or to such other address as the party concerned shall
have notified the other in writing. Any notice so mailed shall
be held conclusively to have been given 96 hours after such
mailing. Either party may from time to time by notice to the
other change the address to which notices are to be given.
41. SURRENDER PREMISES:
(a) The Lessee, upon termination of this Lease, shall peaceably and quietly
surrender the leased premises and any improvements thereon in good order, repair
and condition, save and except reasonable wear and tear.
(b) In addition to the specific obligations elsewhere in this Lease reserved
and contained on the part of the Lessee to be observed and performed, and
without in anyway limiting the generality thereof, the condition, maintenance,
operation and management of the demised premises, the buildings, appurtenances
thereto and other improvements from time to time thereon and all machinery,
equipment and other facilities therein of thereon shall be the sole
responsibility of the Lessee throughout the term thereof and the Lessee shall
make all payments, foreseen, unforeseen, ordinary and/or extraordinary, required
to be made not only with respect to the observance and performance of such
specific obligations but also with respect to the general obligation in this
clause contained, subject to any responsibilities which are the Lessors.
(c) Any payment required to be made by any provision of this Lease shall be
made in lawful money of Canada.
(d) The Lessee acknowledges the leased premises to be subject to all local
ordinances and building restrictions as the same may effect the demised
premises. Lessee accepts the Lessor's title to the demised premises.
(e) This lease contains the entire agreement between the parties and shall
not be modified in any manner except by an instrument in writing executed by the
parties.
(f) The marginal notes contained in this lease are for convenience and
reference only and in no way affect this lease.
(g) Words importing the singular number only shall include the plural and
vice-versa, and works importing the masculine gender shall include the feminine
gender and words importing persons shall include firms, corporations and
vice-versa.
(h) This indenture and everything herein contained shall extend to and bind
and enure to the benefit of the respective heirs, executors, administrators,
successors and assigns (as the case may be) of each and every of the parties
hereto, subject to the consent of the Lessor being obtained, as hereinbefore
provided to any assignment or Sub-Lease by Lessee which requires the Lessor's
consent. All rights and powers reserved to Lessor may be exercised by either
Lessor or its agents or representatives.
-15-
42. SUBORDINATION:
PROVIDED THAT at the request of the Lessor this Lease and everything herein
contained shall be deemed to be subordinate to any charge or charges from time
to time created by the Lessor with respect to the demised premises, by way of
mortgage, and the Lessee hereby covenants and agrees that it will promptly at
any time, and from time to time, as required by the Lessor, during the term
hereof, execute all documents and give all further assurances to this proviso as
may be reasonably required to effectuate the postponement of its rights and
privileges hereunder to the holder or holders of such charge or charges;
provided that all holders of any such charge or charges shall agree not to
disturb the Lessee's occupancy of the demised premises under this Lease so long
as;
(i) All rent reserved under this Lease is duly and punctually paid
in accordance with the terms of this Lease;
(ii) All the terms, covenants and conditions of this Lease on the
part of the Tenant to be observed and performed are duly and
punctually observed and performed
43. REGISTRATION:
The Lessee covenants that it will not register nor cause to be registered the
within Lease against the registered title of the lands. It is understood
however, that in the event either Lessor or Lessee shall require notice of such
lease to be registered, then such notice shall be prepared and registered at the
expense of the party requesting same and in accordance with the regulations
governing such Notice of Lease as may appear from time to time under the
provisions of the Registry Act, R.S.O. 1970 and amendments together with
regulations and both parties agree to execute such Notice to Lease upon request.
44. EXPANSION
If during the term of the Lease or during any renewal period, the Lessee
requires expansion space, the Lessor will attempt to accommodate such expansion,
in one of the following ways:
.. Construction of an addition on subject building if land is available
.. Relocate to one of the other facilities if available on or adjoining to this
site.
.. And/or a design-build facility on adjoining land if available or on other
lands owned at the time by the Lessor in the vicinity of Whitehall Drive.
Expansion/Accommodation to be mutually agreed upon, including rental rate(s).
Expansion/Accommodation terms and rental rates shall be determined at time of
renewal by way of common agreement.
46. NON DISTURBANCE AGREEMENT
The Lessor shall provide to the Lessee upon execution of the Lease a Non
Disturbance agreement from any mortgagee or other encumberancor of the property
in form and substance reasonably satisfactory to the Lessee, whereby in the
event of a default under any mortgage or encumbrance by the Lessor, the Lessee
shall be entitled to remain in possession of premises provided it continues to
meet all obligations under the Lease.
47. SCHEDULES
Schedules listed hereunder and attached forms part of this Lease.
Schedule "A" Additional Terms and Conditions
Schedule "B" Diagram of building
Schedule "Bl" Diagram of Lessee's work
Schedule "B2" Diagram of electrical layout
Schedule "B3" Diagram of Lessee's Work (2nd Floor)
Schedule "C" Lessor's work
Schedule "D" Lessee's work (pages 1-3)
-16-
IN WITNESS WHEREOF the Lessor and the Lessee have hereunto affixed their
respective corporate seals duly attested by the hands of their respective
officers duly authorized in that behalf.
WITNESSED: ____________________
DATED AT: [ILLEGIBLE]
THIS 23 DAY OF Sept., 1997
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ CONTRACTING LIMITED
PER: /s/ [ILLEGIBLE]
-----------------------------------
WITNESSED: [ILLEGIBLE]
DATED: Toronto, Ontario
THIS 26th DAY OF Sept., 1997
IMAGE PROCESSING SYSTEMS INC.
PER: /s/ [ILLEGIBLE]
-----------------------------------
SCHEDULE "A"
ANNEXED HERETO FORMS PART OF THIS LEASE DATED: JUNE 16, 1997
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED, as Lessor
AND: IMAGE PROCESSING SYSTEMS INC., as Lessee
RE: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
FACSIMILE TRANSMISSION:
The parties hereto agree that notice of acceptance and delivery of the within
Offer to Lease and all communications thereto may be made by facsimile machine
addressed to the parties hereto or their solicitors or their agents. The
parties hereto acknowledge said copies shall constitute a legal and binding
agreement.
WARRANTY:
The LESSOR warrants that all existing shipping doors, electrical, lighting,
mechanical, plumbing, heating and air conditioning systems and fixtures will be
in good working order upon occupancy of said premises, and that there is no
asbestos or urea formaldehyde foam insulation in the premises. In the event any
of the foregoing systems or fixtures are not in good working order upon
occupancy or there exists asbestos or urea formaldehyde insulation, such will be
repaired or removed as the case may be at Lessee's option, at the Lessor's sole
expense forthwith.
LEGAL ADVICE:
The parties hereto acknowledge that Royal LePage Commercial Inc. and ▇▇▇▇▇▇▇
Real Estate Limited recommends that any legal advice be obtained through their
own legal counsel and further acknowledge that no information provided by Royal
LePage Commercial Inc. and ▇▇▇▇▇▇▇ Real Estate Limited are to be construed as
legal, tax or engineering advice.
AGENCY DISCLOSURE:
The Lessor and Lessee acknowledge and agree that Royal LePage Commercial Inc. is
acting on behalf of the Lessor and is to be compensated solely by the Lessor
upon successful completion of this transaction, and ▇▇▇▇▇▇▇ Real Estate Limited
is acting on behalf of the Lessee and is to be compensated solely by the Lessor
upon successful completion of this transaction.
G.S.T.:
The LESSEE shall pay all applicable Goods and Services Tax (G.S.T.)
REASONABILITY:
Despite anything in the Offer to Lease or the lease, the Lessor agrees that any
allocation of any cost or expense to be determined by the Lessor, shall be
reasonable and equitable.
LESSOR'S CONSENT:
Wherever Lessor's consent is required, said consent shall not be unreasonably
withheld or delayed.
LESSOR'S COVENANT:
The Lessor warrants that all taxes are paid and up to date on said building and
property, and that there are no liens on the building or property, and that the
building conforms to all municipal regulations and bylaws.
SCHEDULE "B"
ANNEXED HERETO FORMS PART OF THIS LEASE DATED: JUNE 16, 1997
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED, as Lessor
AND: IMAGE PROCESSING SYSTEMS INC., as Lessee
RE: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
[GRAPHIC APPEARS HERE]
SCHEDULE "B1"
ANNEXED HERETO FORMS PART OF THIS LEASE DATED: JUNE 16, 1997
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED., as Lessor
AND: IMAGE PROCESSING SYSTEMS INC., as Lessee
RE: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE]
SCHEDULE "B2"
ANNEXED HERETO FORMS PART OF THIS LEASE DATED: JUNE 16, 1997
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED., as Lessor
AND: IMAGE PROCESSING SYSTEMS INC., as Lessee
RE: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE]
SCHEDULE "B3"
ANNEXED HERETO FORMS PART OF THIS LEASE DATED: JUNE 16, 1997
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED., as Lessor
AND: IMAGE PROCESSING SYSTEMS INC., as Lessee
RE: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE]
SCHEDULE "C"
ANNEXED HERETO FORMS PART OF THIS LEASE DATED: JUNE 16, 1997
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED, as Lessor
AND: IMAGE PROCESSING SYSTEMS INC., as Lessee
RE: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
LESSOR'S WORK AT LESSOR'S EXPENSE:
The Lessor shall provide and install at its expense, prior to __ __, 1997 the
following:
1) clean and repair all lights and lenses;
2) [NOT USED]
3) insure all HVAC and heating units in proper working order prior to
occupancy;
4) replace any damaged or stained ceiling tiles;
5) clean all window coverings and replace any that are damaged or missing
with the same style and colour;
6) steam clean existing carpeting;
7) warehouse to be in a broom-swept condition; Repair collapsed floor in
Subsystem Assembly Area and seal all cracks in warehouse floors;
8) Landlord to remove film from outside of second storey windows provided
time to do this does not exceed 3 man days;
9) install additional weather stripping to retard air leakage around all
shipping doors;
10) remove any and all debris from parking/shipping areas;
11) repair peeling paint from outside front overhangs;
12) Provided the Lessor is retained to perform all Schedule "D" work, the
Lessor shall ensure that there is sufficient excess capacity in the
electrical vault and panels to accommodate the functioning of all of the
Lessee's electrical requirements as described in Schedule "D" and up to
40 tons of additional HVAC systems in the warehouse area. Otherwise the
Lessee shall satisfy itself to said electrical capacity and accepts same
on an "as-is" basis.
SCHEDULE "D"
ANNEXED HERETO FORMS PART OF THIS LEASE DATED: JUNE 16, 1997
BETWEEN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CONTRACTING LIMITED, as Lessor
AND: IMAGE PROCESSING SYSTEMS INC., as Lessee
RE: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
LESSEE'S WORK:
The Lessor shall allow the Lessee access to said building after execution of the
lease, and waiver of all conditions. Said access shall be for the purpose of
completing type of construction listed below. Said access to be without net cost
to the Lessee until See Schedule "A" "NET RENT FREE PERIOD". No work to be
carried out prior to execution of the Lease and proof of insurance (copy of
insurance certificate to be given to Lessor).
The Lessor agrees to allow the Lessee to undertake at its expense, any or all
work as listed below. This list is general/preliminary only, and may be changed
in scope or detail upon further investigation by the Lessee, subject to the
approval of the Lessor. Said approval not unreasonably withheld. All said work
shall be in compliance with all municipal building codes.
Should Lessee use their own trades/contractors, Lessor to approve same to
ascertain qualifications of said trades, said approval not to be unreasonably
withheld.
In Warehouse Area
1. The Lessor shall install additional engineering area of approximately
7,000 sq.ft and 400 sq.ft. Of washroom/kitchen area as indicated on
Schedule "B1". Said areas shall have
.. Drop ceilings in 2x4 grids with sprinkler heads. Said ceilings to be at
a 10ft. height from floor;
.. HVAC Systems, vents and diffusers adequate to heat/cool said space;
.. electrical outlets as specified in point 2;
.. fluorescent lighting to provide 70 candle power at desk top;
.. drywall demising walls (2 coat) painted to drop ceiling;
.. 24oz. Glue down carpet;
.. double doors and single doors shall be installed and painted as
indicated:
20 single doors and frames
6 double doors and frames;
.. all walls facing Subsystem Assembly area to be 18 feet height, fire
rated with sound absorbing batting and unpainted;
.. washrooms (male and female) to have (toilet/urinal/sink) and (2
toilets/sink) respectively;
.. kitchen to have hot and cold running water with drain. Cabinets from R&D
room to be moved to new kitchen area;
.. Venting to accommodate a cafeteria style kitchen to be installed in new
kitchen area;
.. create a walkway with fire door through File Room to access Kitchen
Area.
Further, drywall partitioned and double doors shall be provided to create:
a. a 2,500 sq.ft. stock room/Receiving Area, said walls to be 18ft. high;
b. a 1,000 sq.ft. machine shop; walls to be 10ft. high;
c. a 100 sq.ft. Entrance to stockroom with counter and doorway; walls to be
10ft. high.
2) ELECTRICAL WORK: (As indicated on diagram labelled Schedule B2)
a) Offices/Laboratory/Assembly Areas/Warehouse:
. Convert/install 78 duplex outlets at 10 amps per duplex outlet
(One (1) duplex outlet per circuit only) in locations to be
designated by Lessee;
b) Machine Shop:
. install additional duplex outlets so that there is a total of
4 duplex outlets at locations to be designated by Lessee;
. each duplex outlet shall be fifteen (15) amps on one circuit
only;
SCHEDULED "D" - PAGE TWO -
c) ADDITIONAL REQUIREMENTS:
- install (14) additional 220 volt, 3-phase service outlet for
heavy equipment in assembly and machine shop areas.
Subsystem Assembly ... 2 outlets
System Assembly ... 7 outlets
Machine Shop ... 1 outlet
Quality Assurance ... 1 outlet
R&D ... 1 outlet
Design Engineering ... 1 outlet
Conveyor Test ... 1 outlet
All outlets in warehouse areas to be run down and attached to building support
columns or as otherwise indicated.
3. Seal warehouse floors with clear sealant - approximately 25,000 square
feet.
4. Move three (3) existing roof suspended gas fired heating system from new
warehouse engineering area to Subsystem and System Assembly Area as
indicated on Schedule B1 to ensure adequate heating in said areas.
5. One 4'x4' skylight in Subsystem Assembly Area.
In existing Office Area -
1. Remove and install as indicated, partitioning and doors' in:
. File Room
. Existing Kitchen
. Accounting
. Customer Support Eng.
. R&D
Doors: 7 new single doors
1 new double door
All doors, frames and walls to be primed and two coat painted.
ADDITIONAL WORK:
The Lessee shall have the right at its expense to make additional internal
changes to said unit at any time. Work to be done in a professional and
workmanlike manner, meeting all municipal and fire regulations. The Lessee
shall advise the Lessor of all work contemplated and shall receive the Lessor's
consent to do same, said consent shall not be unreasonably withheld or delayed.
The Lessee shall have the right at its expense, to install additional
Office/Laboratory/Engineering/Assembly space as required in the future. The
Lessor shall obtain Lessor's consent for same. Sold consent shall not be
unreasonably withheld.
SCHEDULE "D" - PAGE THREE -
Said Office/Laboratory/Engineering/Assembly space may have the following:
.. drop ceiling with sprinkler heads;
.. HVAC Systems, vents and diffusers adequate to heat/cool said space;
.. fluorescent lighting;
.. drywall demising walls;
.. electrical outlets;
.. carpeting or vinyl flooring.
SATELLITE DISH:
The Lessee shall have the right at its expense, to install a Satellite Dish
[ILLEGIBLE] on the roof of said building at any time during the lease period or
option periods. Lessee to remove same and repair any damage caused by this
installation should Lessor request same at Lease termination.
UNIT'S ORIGINAL CONDITION:
Upon submission of the Lessee's plans, the Lessor shall determine at that time
what, if any, leasehold improvements to be made by Lessee, shall be acceptable
to the Lessor to remain upon expiry of the Lease. The Lessor shall advise in
writing at this time what shall be put back into base building condition.