Exhibit 10.40
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AGREEMENT OF LEASE
BETWEEN
SITQ INC.
For: SITQ INDUSTRIEL INC.,
ABRIM 14 INC.,
149855 CANADA INC.,
▇▇▇▇▇▇ ▇▇▇▇▇▇ INC.,
The Lessor
AND
H. POWER ENTERPRISES OF CANADA INC.
The Lessee
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TABLE OF CONTENTS
TITLES PAGES
DEFINITIONS, INTENT AND INTERPRETATION.......................................1
LEASE AND DELIVERY OF LEASED PREMISES........................................6
RENT.........................................................................7
OPERATING EXPENSES AND REAL ESTATE TAXES.....................................7
TAXES........................................................................8
HEATING, VENTILATION AND AIR CONDITIONING....................................8
USE, MAINTENANCE AND REPAIR OF THE LEASED PREMISES AND OF THE
COMMON AREAS......................................................8
LEASEHOLD IMPROVEMENTS......................................................10
INSURANCE...................................................................11
DAMAGE AND DESTRUCTION......................................................12
DAMAGES AND SANCTION........................................................13
EXPROPRIATION...............................................................13
SIGNS AND ADVERTISING.......................................................13
COMPLIANCE WITH LAWS AND INDEMNIFICATION....................................14
ASSIGNMENT AND SUBLEASE.....................................................14
SUBORDINATION AND ATTORNMENT................................................15
DEFAULT AND RECOURSE........................................................16
NOTICE......................................................................18
TERMINATION OF LEASE........................................................18
UNAVOIDABLE DELAY...........................................................18
MISCELLANEOUS PROVISIONS....................................................18
REGULATIONS.................................................................20
ENVIRONMENTAL MATTERS.......................................................20
LANGUAGE....................................................................22
SPECIAL PROVISIONS..........................................................22
SCHEDULES:
SCHEDULE "A" ENVIRONMENTAL QUESTIONNAIRE
20
SCHEDULE "B" PLAN OF LEASED PREMISES
SCHEDULE "C" DESCRIPTION OF LAND ON WHICH THE IMMOVABLE IS
ERECTED
SCHEDULE "D" REGULATIONS
SCHEDULE "E" STANDARD RESOLUTION
AGREEMENT OF LEASE
SAINT-LAURENT / INDUSTRIAL
BETWEEN: SITQ INDUSTRIEL INC., ABRIM 14 INC., 149855 CANADA INC., ▇▇▇▇▇▇
▇▇▇▇▇▇ INC., duly represented by their mandatary, SITQ INC., a duly
constituted company, represented by Mr. ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Leasing Director, Industrial Division, duly
authorized for the purposes hereof as they so declare;
(hereinafter called the Lessor)
AND: H. POWER ENTERPRISES OF CANADA INC., a duly constituted company,
represented by ▇▇▇▇▇ ▇▇▇▇▇▇▇, duly authorized for the purposes
hereof as he so declares and pursuant to the resolution annexed
hereto in Schedule "E";
(hereinafter called the Lessee)
THE PARTIES HEREBY MUTUALLY AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS, INTENT AND INTERPRETATION
1.1 Definitions - When used in the Lease, the following expressions and
words shall have the meanings hereinafter set forth, unless the
context indicates otherwise:
1.1.1 Additional Rent: means all financial obligations of the
Lessee other than the Minimum Rent.
1.1.2 Commencement of the Lease: October 1st 1997.
1.1.3 Common Areas: means all those interior or exterior areas
and parts of the Immovable which, are not intended for
the exclusive use of a lessee.
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1.1.4 Contaminants and Hazardous Materials: have the meaning
attributed thereto in the Environmental Legislation and
include any material which, because of its properties,
presents a real or potential hazard to the environment
or the health of users of the Immovable or of the Leased
Premises.
1.1.5 Environmental Legislation: means all federal, provincial
or municipal legislative and regulatory environmental
provisions, including, in all cases, any judgments,
orders, notices, notices of offence, decrees, codes,
rules, instructions, policies, guidelines and guides,
authorizations, certificates of authorization,
approvals, permits and licences issued by any authority
having jurisdiction, the whole as amended from time to
time ;
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1.1.6 Fiscal Period: means the calendar year or any other
period which the Lessor may determine.
1.1.7 Immovable: means the constructions erected on the
land described in Schedule "C".
1.1.8 Land: means all lots or parts of lots described in
Schedule "C" of this Lease.
1.1.9 Leasable Area of the Immovable: means the total area
of all of the premises leased or intended for lease
in the immovable.
1.1.10 Lease: means this agreement and all its schedules as
well as any modifications thereto.
1.1.11 Leased Premises: means those premises leased by the
Leasee and outlined in red on Schedule "B", having an
approximate area of nine thousand (9,000) square
feet, situated at 1069 Begin in the City of St.
Laurent, Quebea.
1.1.12 Lessee: means the Lessee or its successor.
1.1.13 Lessor: means the owner of the immovable or its
mandatary.
1.1.14 Minimum Rent: means, during the Term, the annual
Minimum Rent equal to SIXTY-NINE THOUSAND, THREE
HUNDRED AND NINETY DOLLARS ($69,390.00) payable in
equal, monthly and consecutive instalments of FIVE
THOUSAND, SEVEN HUNDRED AND EIGHTY-TWO DOLLARS AND
FIFTY CENTS ($5,782.50), in advance on the first day
of each month representing SEVEN DOLLARS AND
SEVENTY-ONE CENTS ($7.71) per square foot net net per
annum.
1.1.15 Operating Expenses: means all of the Lessor's
expenses incurred (2) in the operation,
administration, maintenance, repair, supervision and
management of the immovable, including without
limiting the following:
1.1.15.1 salaries, wages and costs related to
fringe benefits and pension plan benefits
of the employees of the Lessor engaged in
the operation, administration,
maintenance, repair, supervision and
management of the immovable;
1.1.15.2 the reasonable rental value of the space
occupied by the employees of the Lessor
engaged in the operation, administration,
maintenance, repair, supervision and
management of the immovable, as well as
of any space utilized or required in the
immovable for the purposes of security,
protection or other similar services;
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(1) Provided that no change in the Fiscal Period result in the Lessee
paying any amount in excess of the amount which it would have paid had
the Fiscal Period not have been changed.
(2) without duplication or profit to the Lessor or any affiliates (as that
term is defined in the Canada Business Corporation Act)
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1.1.15.3 the cost of all goods and services
furnished, employed or utilized in the
operation, administration, maintenance,
repair, supervision and management of the
Immovable and of the Common Areas;
1.1.15.4 the cost of works, replacements or of
repairs made to the Common Areas or to the
Immovable, except those relating to the
structure of the Immovable which shall be
paid by the Lessor, subject to article 7.3.
The term "structure" means the
foundations,(1) and the frame of the
Immovable;
1.1.15.5 the Cost Of(2) modifications, improvements
and additions to the Immovable and to the
equipment thereof as well as the specialized
equipment or services necessary for the
establishment, in the Immovable, of energy
conservation measures, when, in the opinion
of the Lessor, these costs are likely to
reduce the Operating Expenses of the
Immovable, improve the welfare or the
security of the lessees of the Immovable or
are required by law;
1.1.15.6 the capital cost, calculated according to a
method of depreciation determined by the
Lessor, of work or of equipment required for
the operation, administration, maintenance,
repair, supervision, management,
modification or improvement of the Immovable
or the Common Areas or of energy
conservation measures as well as interest,
at the Prime Rate, on the undepreciated
capital cost of all such items;
1.1.15.7 expenses incurred to redo, improve, modify
or increase the insulation of the Immovable
when, in the opinion of an expert in such
matters, such expenses may reduce the cost
of the electricity or gas consumed in the
Leased Premises;
1.1.15.8 the cost of insurance premiums subscribed
for by the Lessor in respect of the
Immovable;
1.1.15.9 annual administrative fees of fifteen
percent (15%) calculated on the total of the
Operating Expenses.(3)
1.1.16 Prime Rate: means the prime rate of the National Bank of
Canada, plus(4).
RIDER PAGE 3A
1.1.15 Operating Expenses chargeable to the Lessee shall not
include :
1) salaries and bonuses of officers and
executives of the Lessor;
2) the costs of any work or service performed
on an extra cost basis for any tenant of the
Immovable to a materially greater extent or
in a materially more
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(1) the sub-floors, outer walls, structural columns and beams, common
walls, floors (except floor coverings)
(2) non-structural
(3) See Rider Page 3A
(4) two percentage points (2%)
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favourable manner that furnished generally
to the tenants or other occupants of the
Immovable (including the Lessee);
3) the cost of any work or services performed
for any facility other than the Immovable;
4) the cost and other Operating Expenses
related to any additions to the Immovable
after the original construction;
5) interest on debt or principal amortization
payments or any other payments on any
hypothec and rental or any other payments
under any emphyteutic lease or other
underlying lease;
6) any fees or costs incurred in procuring or
attempting to procure other tenants
including, but not necessarily limited to,
finders' fees, attorneys' fees and expenses,
entertainment costs and travel expenses;
7) any costs included in Operating Expenses
representing an amount paid to a person,
firm, corporation or other entity related
(as defined in the Income Tax Act (Canada)
to the Lessor which is in excess of the
amount which would have been paid on an
arm's-length basis in the absence of such
relationship;
8) the costs of initial cleaning of, and
rubbish removal from, the Immovable to be
performed prior to final completion of any
tenant's space;
9) attorney fees, costs and other expenditures
incurred in connection with leasing disputes
with other tenants or occupants of the
Immovable or with other third persons and/or
claims by such other tenants or occupants or
third persons;
10) the cost of advertising or promoting for the
Immovable;
11) taxes and insurance on tenant improvements
in locations other than the Leased Premises;
12) the cost of curing any violation of any law,
ordinance, or regulation applicable to the
Immovable or remedying any environmental
problem, unless such condition was caused by
the Lessee.
1.1.17 Proportionate Share: means the ratio of the area of the
Leased Premises to the Leasable Area of the Immovable,
which the parties have set as being NINETEEN PER CENT
AND TWENTY-THREE HUNDREDTHS ( 19.23 % ); this percentage
may vary in the event of a change of the area of the
Leased Premises or of the Leasable Area of the
Immovable.
1.1.18 Real Estate Taxes: means all taxes or surtaxes that a
local municipality or a school board imposes on an
immovable or in respect of the immovable if the tax or
surtax is imposed regardless of use, including interest
on deferred payments and annual administration fees of
fifteen percent (15%) calculated on the total of the
Real Estate Taxes, but excluding tax on the income or on
the capital of the Lessor and excluding any tax on real
estate transfers.
1.1.19 Rent: means the Minimum Rent and the Additional Rent.
1.1.20 Taxes: means all governmental levies of whatever nature
normally paid by lessees (for example, business and
water taxes, G.S.T., Q.S.T.), whether they relate to the
Leased Premises, to the contents thereof or to the
business carried on therein.
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1.1.21 Taxing Authority: means any governmental authority
authorized to impose taxes.
1.1.22 Term: means the period commencing at the Commencement of
the Lease and terminating at the Termination of the
Lease.
1.1.23 Termination of the Lease: September 30th 2000.
1.1.24 Unavoidable delay: means a delay caused by circumstances
(other than the financial situation of either of the
parties) which are beyond the control of the Lessor or
of the Lessee.
1.1.25 Use of the Leased Premises: OFFICE, WAREHOUSE AND
MANUFACTURE OF FUEL CELLS AND FUEL CELL COMPONENTS and
for no other purposes.
1.2 Intent - It is the intention of the parties that the Lessor collect
an entirely net rent. The Lessor shall not be liable for any costs
of any nature whatsoever relating to the Leased Premises, which
costs shall be entirely borne by the Lessee, except as expressly
otherwise provided herein.
ARTICLE 2
LEASE AND DELIVERY OF LEASED PREMISES
2.1 Inspection and Delivery of Leased Premises - The Lessee acknowledges
having carefully inspected the Leased Premises and acknowledges to be
entirely satisfied therewith. If such inspection has not been made,
the Lessee undertakes to do so at the time of the delivery of the
Leased Premises and to notify the Lessor, within(1) days of the said
delivery, of any defects in the Leased Premises failing which, the
Lessee shall be deemed to have taken delivery of the Leased Premises
in a good state and to be satisfied therewith and shall acknowledge
that the Lessor has discharged all of its obligations with respect to
the preparation and delivery of the Leased Premises.(2)
2.2 Delay in the Leasehold Improvements of the Lessee - The Term shall in
no way be affected, if the Lessor agrees that the Lessee undertake
leasehold improvements for the Leased Premises and that same have not
been completed prior to the Commencement of the Lease.
2.3 Delay in the Leasehold Improvements of the Lessor - The Term shall in
no way be affected, if the Lessor agrees to undertake leasehold
improvements for the Leased Premises and that same have not been
completed prior to the Commencement of the Lease due to a reason
attributable to the Lessee. If the delay is attributable to the
Lessor, the Lessee may not claim any damages but the Commencement of
the Lease shall be delayed by the number of days equal to the number
of days for which the delay has occurred.(3)
2.4 Minor Deficiencies - The Leased Premises shall be deemed ready for
delivery and consequently there shall be Commencement of the Lease
notwithstanding uncompleted work, insofar as they do not
significantly interfere with the use of the Leased Premises.
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(1) thirty (30)
(2) Exceptions to the foregoing relate to latent or structural defects,
as well as defects which cannot be determined within said thirty
(30) day period as a result of the time of year when delivery of the
Leased Premises is given to the Lessee (e.g. the heating system).
(3) Should the Lessor be unable to have completed the Initial Leasehold
Improvements prior to the Commencement of the Lease, the Lessor
covenants that the lease signed between the parties shall be
entitled, therefore the Lessee shall be entitled to continue to
occupy the temporary office space it presently occupies at 3300
Cote-Vertu, suite 204 until such time as the Lessor will have
completed the Initial Leasehold Improvements.
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ARTICLE 3
RENT
3.1 The Rent shall be paid on the first day of each month, without
compensation nor reduction and remitted at the office designated by
the Lessor. Any adjustments for parts of months shall be made on a
per diem basis.
ARTICLE 4
OPERATING EXPENSES AND REAL ESTATE TAXES
4.1 Upon the Commencement of the Lease and thereafter prior to or at the
beginning of each Fiscal Period, the Lessor shall estimate the amount
of the Operating Expenses which will be incurred for the upcoming
year. The Lessee shall pay the Lessor, on a monthly basis, an
Additional Rent equal to one-twelfth (1/12th) of its Proportionate
Share of such Operating Expenses. The Lessor has estimated the
Operating Expenses for 1997 to be EIGHTY-SIX CENTS per square foot
($0.86/sq. ft.) per annum of the area of the Leased Premises.
4.2 At the end of each Fiscal Period, the Lessor shall remit to the
Lessee a statement audited by an independent firm of chartered
accountants indicating the actual Operating Expenses incurred for the
said Fiscal Period. This statement shall bind the parties. If it is
determined that the payments made by the Lessee are incorrect, the
parties shall make the necessary adjustments.
4.3 Should the Fiscal Period be modified or should a part only of a
Fiscal Period be comprised in the Term, the parties shall immediately
make the necessary adjustments.
4.4 The Lessor may, during the course of the Fiscal Period, reevaluate
its estimate of the Operating Expenses and, in such a case, the
Additional Rent shall be adjusted accordingly.
4.5 During the course of each Fiscal Period, the Lessee shall pay its
Proportionate Share of the Real Estate Taxes at such time indicated
by the Lessor(1) and following the remittance of an invoice. The
Lessor has estimated the Real Estate Taxes for 1997 to be ONE DOLLAR
AND SIXTY-EIGHT CENTS per square foot ($1.68/ sq. ft.) per annum of
the area of the Leased Premises.
4.6 Only the Lessor may contest the property evaluation of the Immovable
as well as the collection or imposition of Real Estate Taxes. All
costs associated with such contestation shall be included in the
Operating Expenses and any reimbursement of Real Estate Taxes shall
be credited to the Lessee.
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(1) in two (2) instalments
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4.7 If, during the Term, the system of real estate taxation is modified
or if in addition to or instead of the Real Estate Taxes a new tax
or levy is imposed with respect to the Immovable, the words "Real
Estate Taxes" shall include such new tax or levy.
ARTICLE 5
TAXES
5.1 The Lessee shall pay all Taxes when due. If the method of collecting
such Taxes is altered so as to make the Lessor liable for payment
thereof, the Lessee shall reimburse the Lessor on demand.
ARTICLE 6
HEATING, VENTILATION AND AIR CONDITIONING
6.1 Heating - The Lessee shall ensure that the Leased Premises are
adequately heated.
6.2 Services - The Lessee shall pay to the public utilities all costs
relating to heating, gas, electricity, lighting and as well as all
other services used by it in the Leased Premises.
6.3 Maintenance and Repair of Equipment - The Lessee shall retain at its
expense the services of experts in order to repair, maintain or
replace equipment and accessories necessary for the heating,
ventilation and air conditioning, if any, of the Leased Premises.
The Lessee shall provide the Lessor with a duly executed copy of the
service contract with respect to the foregoing within thirty (30)
days from the date of the signature of the Lease. The Lessor may, at
its sole discretion, provide the repair and maintenance service for
the equipment, and in such a case, the related expenses shall be
included in the Operating Expenses.
ARTICLE 7
USE, MAINTENANCE AND REPAIR OF THE
LEASED PREMISES AND OF THE COMMON AREAS
7.1 Use of the Leased Premises - The Lessee undertakes to use the Leased
Premises with prudence and diligence. The Lessee undertakes not to
disturb the peaceful enjoyment of the other lessees failing which
the Lessee will be liable towards the Lessor and the other lessees
for any damage that may result, whether such damage is caused by the
Lessee's own fault, acts or omissions or by the fault, acts or
omissions of persons it allows to use or to have access to the
Leased Premises.
7.2 (1)
7.3 [Maintenance and Repair of the Leased Premises] - The Lessor shall
not effect any work, replacement, repairs or maintenance in the
Leased Premises, unless as expressly otherwise provided herein.
Notwithstanding any law to the contrary, the Lessee shall undertake,
without delay and at its expense, all such works, replacements,
repairs, and maintenance of any nature whatsoever in order to keep
the Leased Premises in a good state. The present provision includes
the Lessee's obligations to pay for the works, replacements, repairs
and maintenance relating to the structure of the Immovable when such
are attributable to an act or omission of the Lessee or of any
person the Lessee allows to use or to have access to the Leased
Premises.
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(1) The Lessee shall have the right to leave the Leased Premises vacant
but shall respect all of its monetary obligations under the Lease
until the Termination of the Lease.
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The Lessee shall not effect in the Leased Premises, in the Immovable
or in the Common Areas, such works, replacements, repairs and
maintenance for which the Lessor is liable pursuant to the Lease or
by law.
7.4 Inspection and Repairs - The Lessor may enter the Leased Premises at
all times to examine their condition.(1) If the Lessee neglects to
undertake the works, replacements, repairs and maintenance to which
it is bound, the Lessor may, after having given five (5) days prior
written notice, enter the Leased Premises and carry them out in the
place and at the expense of the Lessee. The cost thereof, plus an
administration fee equal to fifteen percent (15%), shall be paid by
the Lessee as Additional Rent, subject to the rights and recourses
of the Lessor pursuant to the Lease.
7.5 Notice of Defects - The Lessee(2) shall notify the Lessor within a
reasonable delay of any defect or deterioration which is susceptible
of damaging the Leased Premises, the Immovable or the Common Areas.
7.6 Use of the Common Areas - The Lessee may use the Common Areas with
all others who are also entitled to use them
The Lessor may at all times, (3) court authorization (4), change the
form and the destination of the Immovable and of its Common Areas
and carry out all works, replacements, repairs and maintenance which
it deems necessary to ensure the conservation and the enjoyment of
the Immovable and the Leased Premises. If the Lessor proceeds with
such works, it shall ensure that the enjoyment of the Leased
Premises is not materially diminished. If necessitated by the nature
of the work, replacements, repairs or maintenance, the Lessor may,
without court authorization, require the Lessee to vacate or be
temporarily dispossessed of the Leased Premises; and in such a case,
the Lessor shall compensate the Lessee.
7.7 Right of Access - If the Lessor deems it necessary to install in the
Leased Premises some portions of the systems serving the Immovable,
the Lessee shall authorize the Lessor to carry out such work without
being compensated, provided that the enjoyment of the Leased
Premises is not diminished(5).
(6)
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(1) Such entry shall be preceded by at least twenty-four (24) hour
notice, save in the event of an emergency, when no prior notice is
necessary.
(2) upon becoming aware of same,
(3) with
(4) and prior written notice
(5) and the Lessor compensated the Lessee for any damage caused to the
Leased Premises or any property therein
(6) 7.8 The Lessor shall throughout the Term, subject to the
provisions of Section 7.3, Article 11 and Article 20
hereof, be responsible to effect in a timely and proper
manner all repairs which are the responsibility of the
Lessor as provided for in this Lease, and all repairs
which are the consequence of the negligent act or
omissions of the Lessor or those for whom the Lessor is
responsible in law or things under the Lessor's custody.
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ARTICLE 8
LEASEHOLD IMPROVEMENTS
8.1 All of the leasehold improvements carried out in the Leased Premises
shall be subject to the prior approval of the Lessor and to the
following conditions:
8.1.1 If the leasehold improvements are effected by the
Lessor, the Lessee must pay all costs thereof on demand
and an additional amount equal to fifteen percent (15%)
as a coordination and supervision fee.
8.1.2 If such leasehold improvements are effected by the
Lessee, it shall, at its expense, under pain of
suspension of the work, execute such work by contractors
approved by the Lessor. Such contractors shall:
(a) furnish to the Lessor the plans and
specifications of the proposed leasehold
improvements; if the plans and
specifications are approved, such leasehold
improvements must be made in accordance with
same(1);
(b) obtain all required permits and
authorizations;
(c) effect the leasehold improvements pursuant
to instructions from the Lessor; and
(d) subscribe for liability insurance covering
their activities in the Immovable for a
minimum amount of three million dollars
($3,000,000).
8.1.3 Should the Lessee carry out the leasehold improvements,
it recognizes that it is not the mandatary of the Lessor
and the Lessee also acknowledges that such leasehold
improvements have been requested and carried out by it
for its own benefit.
8.1.4 Should the Lessee carry out the leasehold improvements,
it shall pay to the Lessor a sum equal to five percent
(5%) of the cost of such work to compensate the Lessor
for the review and approval of the plans and
specifications.
8.2 Any leasehold improvements, whether they have been effected by the
Lessee or by the Lessor, prior to or during the Term, shall, upon
their completion, become a part of the Leased Premises and shall be
surrendered with the Leased Premises at the Termination of the
Lease, without any compensation being due by the Lessor to the
Lessee. Alternatively, the Lessor may require the Lessee to remove
at Lessee's cost any(2), in such a case, the Lessee shall restore
the Leased Premises to their original condition including repairs
resulting from the normal aging of the Leased Premises.
The Lessee may, at the Termination of the Lease, remove all movable
property found on the Leased Premises, subject to the fulfilment of
all of its obligations pursuant to the Lease. All movable property
found on the Leased Premises after the Termination of the Lease(3),
shall be deemed to have been abandoned and the Lessor may dispose of
same at its sole discretion without compensation.
(4)
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(1) in all material respects
(2) trade fixtures
(3) , which is not removed within ten (10) days following receipt of
written notice to this effect
(4) At the expiration or earlier termination of the Term, the Lessee
will have no obligation to restore the Leased Premises to any
previous or base-building condition. For greater certainty, the
Lessee shall have no obligation to remove the Initial Leasehold
Improvements and, should the Lessor desire to remove any of same,
all costs relating thereto shall be borne solely by the Lessor.
Notwithstanding the foregoing, the Lessee shall be permitted to
remove any of the Initial Leasehold Improvements, provided that the
Lessee shall repair any damage caused by such removal.
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ARTICLE 9
INSURANCE
9.1 The Lessee shall, at its own expense and throughout the Term, keep
in force:
(a) insurance coverage for public liability of
business, covering the Leased Premises and
the movable property located therein, for an
amount equal to a minimum of THREE MILLION
DOLLARS 03,000,000) for each occurrence or
for any greater amount which the Lessor may
reasonably request from time to time, which
insurance must contain such guarantees as
required by the Lessor;
(b) a broad form insurance coverage for all of
the movable property located in the Leased
Premises, and namely the leasehold
improvements, for an amount equal to their
replacement cost, without any deductions for
depreciation, which insurance shall, in
addition, have the following endorsements:
replacement value and any other endorsements
required by the Lessor;
(c) business interruption insurance "broad form"
providing standard coverage of a minimum
period of TWELVE (12) months, in such amount
to compensate the Lessee for all loss of
earnings and for additional expenses
attributable namely to the perils to be
insured against pursuant to sub-paragraphs
(a), (b) and (c) mentioned above, which
insurance shall also include such
endorsements as required by the Lessor;
(d) all other insurance which the Lessor may
reasonably require from time to time.
9.2 All insurance policies shall satisfy the following conditions:
(a) they shall be subscribed with insurers
acceptable to the Lessor; and
(b) they shall provide that they will not be
permitted to lapse or be modified unless the
insurer gives the Lessor a prior written
notice of at least thirty (30) days to that
effect.
9.3 Increase in Risk - The Lessee shall:
(a) not do anything which increases the risk of
fire and the insurance premium rates for the
Immovable;
(b) comply with the requirements of the Lessor's
insurers or of any associations of insurers
having jurisdiction in such matters; and
(c) not keep dangerous materials in the Leased
Premises unless same are required for its
business and, in such case, in such
quantities as are permitted by the Lessor's
insurance policies, failing which the Lessee
shall pay to the Lessor any resulting
increase of the insurance premiums.
9.4 Certificates - The Lessee shall furnish the Lessor with certificates
of insurance at least ten (10) days prior to taking possession of
the Leased Premises and thereafter, within ten (10) days of the
renewal thereof. If the Lessee fails to subscribe for the insurance
for which it is
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permitted to remove any of the Initial Leasehold Improvements,
provided that the Lessee shall repair any damage caused by such
removal.
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bound, the Lessor(1) may do so in the name of the Lessee and in
such event, all premiums paid by the Lessor shall be reimbursed by
the Lessee.
9.5 Notwithstanding the fact that the Lessee pays its Proportionate
Share of the Lessor's insurance premiums, the Lessee acknowledges
that it shall not be a co-insured, that it shall not have any
insurable interest in the policies and that it shall remain liable
for any damage that might be caused by its fault, acts or omissions
or those of the persons the Lessee allows to use or to have access
to the Leased Premises. The Lessor or its insurers shall not waive
their right to claim from the Lessee any damage that the Lessee is
responsible for under the Lease or the law.
9.6 Lessor shall, at all times throughout the Term, carry all-risks
property insurance on the Immovable and comprehensive boiler and
machinery insurance on the equipment contained therein and owned by
the Lessor, in such reasonable amounts and with such reasonable
deductions as would be carried by the prudent owner of a reasonably
similar building having regard to size, age and geographical
location.
ARTICLE 10
DAMAGE AND DESTRUCTION
10.1 Destruction of Leased Premises - Should the Leased Premises(2) be
damaged by a loss covered by the Lessor's insurance,(3) the Lessor
shall notify the Lessee, by way of written notice transmitted within
thirty (30) days of such loss, that the Leased Premises are:
10.1.1 wholly uninhabitable or that their utilization is
dangerous and cannot be reasonably repaired within one
hundred and eighty (180) days following the loss, as the
case may be, either party may resiliate the Lease with
retroactive effect to the date of the loss(4);
10.1.2 wholly uninhabitable or that their utilization is
dangerous but are reasonably reparable within one
hundred and eighty (180) days following the loss, then,
in such a case(5), the payment of Rent shall ▇▇▇▇▇ from
the date of the loss until such time that the Leased
Premises are repaired and ready to be occupied by the
Lessee;
10.1.3 reasonably reparable within one hundred and eighty (180)
days following the loss and are partly usable in the
interim; then, in such a case, payment of Rent shall
▇▇▇▇▇, with respect to the unusable area, from the date
of the loss until such time that the damages have been
substantially repaired.
(6)
10.2 No Obligation to Rebuild - The Lessor shall not have the obligation
to repair or rebuild the Immovable, the Leased Premises or their
contents(7).
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(1) , subject to Section 17.1 (a) (iii),
(2) or access thereto or egress therefrom,
(3) to the extent that the Lessee shall no longer be able to carry on
its business.
(4) by written notice given to the other party within twenty (20) days
of receipt of the aforesaid notice. If neither party reiliates the
Lease within such period, Lessor shall be obliged to repair, replace
or reconstruct the Leased Premisis in an expeditious and diligent
manner
(5) the Lessor shall repair, replace or reconstruct the Leased Premises
in an expeditious and diligent manner
(6) For the purpose of this Section 10.1, the term "uninhabitable" shall
include the situation where access to or egress from the Leased
Premises are materially adversely affected, whether or not the
Leased Premises itself are damaged or destroyed.
(7) , unless the loss can reasonably be repaired within one hundred and
eighty (180) days following the loss
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ARTICLE 11
DAMAGES AND SANCTION
11.1 Liability of the Lessee - The Lessee shall be liable for damages
caused by its fault,(2) acts or omissions or of those of such
persons for whom(3). The Lessee shall hold the Lessor harmless from
any claim made by any person following such damages.
11.2 Non Liability of the Lessor - The Lessor shall not be liable for
damages occurring inside or outside the Leased Premises resulting
from any cause whatsoever, unless such damages are to the fault(4)
of the Lessor(5). The Lessor shall not be liable for damages
suffered by the Lessee resulting from the fault, acts or omissions
attributable to a lessee or a third party even if such lessee or
third party is a person whom the Lessee or another lessee of the
Immovable allows to use or to have access to the Leased Premises.
11.3 Limited Liability - Even if the damages are directly attributable to
the fault of the Lessor, its liability shall extend only to the
movable property and to the ordinary fixtures of the Lessee located
in the Leased Premises and shall not extend to documents and
securities.
11.4 Sanction - Unless otherwise stipulated in the Lease, the Lessee
shall not in any case have the right to a reduction of Rent or to
the resiliation of the Lease, even if the damage suffered by the
Lessee is attributable to the fault, an act or an omission of the
Lessor or of the other lessees or occupants of the Immovable.
Nevertheless, the Lessee may, where a court grants it, obtain from
the Lessor compensation resulting from damages directly attributable
to the fault of the Lessor.
ARTICLE 12
EXPROPRIATION
12.1 Resiliation of the Lease - In the case of an expropriation or of a
taking of possession ("Expropriation") which, according to the
Lessor, renders the Immovable or the Leased Premises unusable,(6)
may terminate the Lease from the date of the Expropriation by way of
a written notice to the(7) Lessee. The Lessee may claim any damages
from the expropriating party and not from the Lessor. The Lessor is
not obligated to contest the Expropriation.
ARTICLE 13
SIGNS AND ADVERTISING
13.1 Consent of the Lessor - Any sign or notice visible from the exterior
of the Leased Premises shall be approved by the Lessor. The Lessee
shall repair at its expense any damage which may be caused by their
installation or removal.
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1) In any event, should the Leased Premises not have been substantially
completed, repaired or rebuilt within two hundred and forty (240)
days of the damage or destruction, the Lessee shall have the right
to terminate the Lease on thirty (30) day notice sent to the Lessor.
(2) negligent
(3) it is responsible in law
(4) negligent act or omission
(5) , or those for whom the Lessor is responsible in law. Subject to the
foregoing,
(6) either party
(7) other party
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ARTICLE 14
COMPLIANCE WITH LAWS AND INDEMNIFICATION
14.1 Compliance with Laws and Regulations - The Lessee shall comply with
all laws and regulations governing the business conducted in the
Leased Premises. The Lessee shall carry out any changes to the
Leased Premises or to the business conducted therein which may be
legally required by the competent authorities, failing which, the
Lessor, after having given written notice to the Lessee, may make
such changes in its place and at its expense. The Lessee shall
indemnify the Lessor against any penalty payable by the Lessor
resulting from the Lessee's breach to comply with the present
article, including all related expenses and legal fees incurred by
the Lessor.
ARTICLE 15
ASSIGNMENT AND SUBLEASE
15.1 Mandatory Consent of the Lessor - The Lessee shall not assign the
Lease or sublet the Leased Premises in whole or in part, nor suffer
a portion or all of the Leased Premises to be utilized by another
person without the written consent of the Lessor, which consent may
not be withheld without a serious reason.
15.3 Information to be provided - If the Lessee wishes to sublet the
Leased Premises or assign the Lease, it shall provide the Lessor
with the following information:
15.3.1 the name, address and telephone number of the proposed
sublessee or assignee or in the case of a change in the
effective control of a corporation, a company, a general
partnership, a limited partnership or an undeclared
partnership the names, addresses and telephone numbers
of the senior executives of a corporation, a company, a
general partnership, a limited partnership or an
undeclared partnership acquiring the control thereof;
15.3.2 references from banks and other credit organizations,
financial statements (if available) and any other
information relating to commercial experience which the
Lessor may reasonably require for the purposes of its
evaluation;
15.3.3 if the sublessee or the assignee is a corporation, a
company, a general partnership, a limited partnership or
an undeclared partnership, the constituting documents or
declarations thereof, as the case may be; and
15.3.4 the agreement of sublease or assignment.
15.4 Justified Refusal - The Lessor may refuse the sublet or the
assignment, for any serious reason, including the following:
15.4.1 failure to provide the required information pursuant to
section 15.3;
15.4.2 ;
15.4.3 the poor reputation or precarious financial situation of
the sublessee or the assignee;
15.4.4 should the Lessor be of the view that the sublessee or
the assignee has the intention to modify the use of the
Leased Premises or may carry out activities which may
cause injury to the Lessor.
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15.5 Answer of Lessor - Within thirty (30) days from the receipt of the
information and documents requested, the Lessor shall notify the
Lessee whether it has accepted or refused the sublease or the
assignment and shall stipulate the reasons therefor or may choose
to:
(i) resiliate the Lease from the fifteenth (15") day of the
date of the Lessor's notice, in which case the Lessee
may desist from its request to sublet or to assign the
Lease within such fifteen (15) day delay; or
(ii) require that the sublessee or the assignee execute a new
lease to which the Lessee shall intervene as guarantor
of all of the obligations of the lessee pursuant to such
new lease.
15.6 Solidarity - Where the Lease is assigned, the Lessee's liability
shall remain solidary with the assignee for all of the Lessee's
obligations pursuant to the Lease so that the Lessor may compel the
Lessee to observe all of the obligations of the Lease as if no
assignment had occurred.
15.7 Default of the Lessor - Should the Lessor fail to perform its
obligations for which it is bound to the Lessee, the sublessee may
not exercise the rights and remedies of the Lessee against the
Lessor.
15.8 Default of the Sublessee - Should the sublessee fail to perform its
obligations and therefore causes damage to the Lessor or to the
other lessees or occupants of the Immovable, the Lessor may apply
for the resiliation of the sublease.
15.9 Expenses of the Sublease or the Assignment - If the sublease or the
assignment is accepted, the Lessee shall reimburse the Lessor for
the related administrative expenses in the amount of [three hundred
and fifty dollars ($350)] which shall be payable by certified cheque
and shall be remitted at the time of signature of the agreement of
sublease or of assignment.
15.10 Approval of Signs - The Lessee shall not place any signs or notices
announcing that it wishes to assign the Lease or sublet the Leased
Premises if same is visible from the exterior thereof(1).
ARTICLE 16
SUBORDINATION AND ATTORNMENT
16.1 Assignment by the Lessor - In the event of the sale of the Immovable
or the assignment by the Lessor of the Lease in favor of a third
party (the "Assignee"), the Lessor shall be released of all of
its(2) obligations towards the Lessee, subject to the condition that
such obligations be assumed by the Assignee.
16.2 Subordination - All of the Lessee's rights under this Lease shall be
subordinate to those of any creditor holding a charge against the
Immovable or of any other Assignee of the Lessor's rights under this
Lease. The Lessor shall ensure that the Lessee's rights pursuant to
this Lease are not thereby affected.
16.3 Signature of Documents - The Lessee shall sign any document and
shall do all things required by the Lessor in order to subordinate
the Lease to any charge to which the Immovable is or may be subject.
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(1) without first having obtained the prior consent of the Lessor.
(2) future
15
ARTICLE 17
DEFAULT AND RECOURSE
17.1 A default shall occur in the following cases:xxx
(a) if the Lessee does not fulfil any of its
obligations pursuant to the Lease and if
this default continues:
(i) in the case of a pecuniary obligation, for
more than five (5) days following the
receipt by the Lessee of a written notice
from the Lessor;
(ii) in all other cases, for more than fifteen
(15) days following the receipt of a written
notice from the Lessor (unless the default
cannot be remedied within said delay, in
which case the Lessee shall have commenced
to remedy the default within the prescribed
delay and to continue to do so with
diligence) or within a shorter delay
stipulated in the Lease (the latter delay
taking precedence);
(b) if the Lessee is party to bankruptcy or
dissolution proceedings or loses control of
the property located in the Leased Premises;
(c) if the Lessee makes a sale of an
enterprise(1)I or if the property located in
the Leased Premises is seized and that a
release thereof is not obtained within
fifteen (15) days.
The sole lapse of time with respect to the delays mentioned above or
with respect to any other delay referred to in the Lease shall have
the effect of putting the Lessee in default.
In the event of a default, the Lessor may, notwithstanding any law
to the contrary and subject to its other rights and remedies
provided by the Lease or by law:
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(1) (other than pursuant to an assignment or sublet permitted hereunder)
16
(d) enter into the Leased Premises and remedy
the default on behalf of and at the expense
of the Lessee and recover from the Lessee
all damages suffered by the Lessor,
including all expenses incurred by it,
whether such expenses result directly from
the default;
(e) resiliate the Lease without legal
proceedings.
17.2 Consequences of the Resillation - If the Lessor resiliates the Lease
pursuant to the present article then:
(a) the Lessee shall immediately leave the
Leased Premises, failing which the Lessor
may: enter the Leased Premises, as mandatary
of the Lessee, re-let them for the duration
of the Term and on conditions which the
Lessor may determine at its discretion,
collect the Rent, take possession, as
mandatary of the Lessee, of all movable
property located in the Leased Premises and,
in such a case, store the movable property
at the cost and risk of the Lessee or sell
or assign it in such manner as the Lessor
deems appropriate without notice to the
Lessee; make modifications to the Leased
Premises in order to facilitate their
re-letting; apply the proceeds of any sale
or re-letting to the payment of all expenses
incurred by the Lessor in connection with
such re letting or of such sale and of any
other debt of the Lessee towards the Lessor
and, lastly, to the payment of Rent in
arrears or of Rent to become due. The Lessee
shall remain liable to the Lessor for any
deficiency;
(b) the Lessor shall have the right to recover
from the Lessee all damages suffered by the
Lessor and all expenses incurred by same
including the Rent to be due until the
Termination of the Lease as liquidated
damages;
(c) should the resiliation of the Lease result
from the Lessee's bankruptcy or insolvency,
the Lessor may recover arrears of Rent for a
period of three (3) months preceding the
bankruptcy and of three (3) months' Rent in
advance following the bankruptcy.
17.3 Waiver - Should the Lessor have served a notice of resiliation of
the Lease, the Lessee may not avoid such resiliation by curing the
default, notwithstanding any law or custom to the contrary.
17.4 Indemnity - Should the Lessor retain the services of legal counsel
in connection with the nonperformance of the Lessee's obligations
under this Lease, the Lessee shall pay to the Lessor the judicial
fees.
17.5 Guarantee of Performance - The Lessee hereby deposits with the
Lessor the sum of SIXTEEN THOUSAND, FOUR HUNDRED AND FORTY-SEVEN
DOLLARS AND EIGHTY CENTS ($16 447.80), EIGHT THOUSAND, SEVEN HUNDRED
AND SIXTY DOLLARS AND THIRTY CENTS ($8,760.30) of which as a prepaid
Rent payment for the first month of the Term, including G.S.T. and
Q.S.T., and SEVEN THOUSAND, SIX HUNDRED AND EIGHTY-SEVEN DOLLARS AND
FIFTY CENTS ($7,687.50) of which as a security deposit to guarantee
the fulfillment of the Lessee's obligations contained in the Lease.
This security deposit may be used by the Lessor(1) in order to
cure any of the Lessee's defaults and in such a case, the Lessee
shall be bound to furnish the Lessor with a new security deposit, by
remitting without delay an amount equal to the sum used. If at the
Termination of the Lease the Lessee is not in default pursuant to
the Lease and if the Lessor has not used the security deposit to
cure a default, this security deposit or any part thereof shall be
reimbursed to the Lessee. This security deposit is not deemed to be
a prepayment of Rent. The Lessee, by signing these presents,
expressly
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(1) , following the expiration of all delays provided for in Section
17.1,
17
acknowledges that no declaration guaranteeing the reimbursement of
this security deposit has been made other than in accordance with
the provisions of this article.
ARTICLE 18
NOTICE
18.1 Any notice under this Lease shall be sent by registered mail or by
telecopier transmission or delivered in person at the addresses
indicated below. The Lessor reserves the right to change its
address.
Notices sent by registered mail and delivered in person shall be
deemed to have been received the day of its reception and those sent
by telecopier transmission to have been received(1) its
transmission. The Lessee elects domicile in the Leased Premises for
all purposes relating hereto.
Lessor's address Lessee's address
SITQ INC. H. POWER ENTERPRISES OF CANADA INC.
3300 Cote Vertu ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇
St-Laurent, Quebec H4R 1V8
H4R 2137
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier : (514) _________________
(2)
ARTICLE 19
TERMINATION OF LEASE
19.1 Unless an option to renew the Lease has been granted to the Lessee,
the occupation of the Leased Premises by the Lessee after the
Termination of the Lease shall not have the effect of extending or
of expressly or tacitly renewing the Lease. If the Lessee continues
to occupy the Leased Premises after the Termination of the Lease,
the Lessor may require the eviction of the Lessee or may permit the
Lessee to continue to occupy the Leased Premises pursuant to a
monthly lease in consideration of a monthly Minimum Rent which is(3)
greater than the last monthly Minimum Rent of the Term, the other
terms and conditions of the Lease remaining the same.
ARTICLE 20
UNAVOIDABLE DELAY
20.1 Except for the payment of an amount of money, the parties shall not
be deemed to be in default of the performance of any obligation
under this Lease if they are prevented from so doing by Unavoidable
Delay; any period of time for the performance of such obligation
shall be extended accordingly. The parties shall respectively notify
each other of the cause, the probable duration and the effect of any
Unavoidable Delay.
ARTICLE 21
MISCELLANEOUS PROVISIONS
21.1 Modification of Lease - Any modification of the Lease shall be valid
only if expressly agreed to in writing by the Lessor and the Lessee.
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(1) upon confirmation of receipt of
(2) copies of default notices to be forwarded to head office:
H. POWER ENTERPRISES INC.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(3) twenty-five percent (25%)
18
21.2 Performance by Third Party - A third party may not acquire any
rights under this Lease by the performance of any obligation to
which the Lessee is bound.
21.3 Declaration of Intent - In this Lease, it is intended to give to
words or expressions their wider meaning, unless the context
dictates otherwise.
21.4 Absence of Waiver - The fact that one or the other party has not
exercised any of its rights hereunder shall not constitute a waiver
thereof.
21.5 Cancellation of Previous Agreements - This Lease represents the
entire agreement between the parties in connection with the Leased
Premises. It replaces all previous documents and discussions between
the parties.
21.6 Successors and Assigns - The Lease shall bind the successors and
assignees of the parties.
21.7 Brokerage Commission - Any brokerage commission with respect to this
Lease shall be borne exclusively by the Lessee who shall indemnify
the Lessor against any claim with respect thereto, unless the Lessor
has bound itself in writing to pay a commission.
21.8 Access to the Leased Premises - During the last(1) months of the
Term, the Lessor may exhibit the Leased Premises during business
hours to persons interested in leasing the Leased Premises. During
the Term, the Lessee may exhibit the Leased Premises at any time
during business hours to any broker, purchaser or evaluator. The
Lessor shall exercise its right in a reasonable manner.
21.9 Cumulative Rights - The rights of the Lessor(2) are cumulative and
not exclusive.
21.10 Undertaking to Cooperate - The parties undertake to sign all
documents and to take all necessary or desirable steps to give
effect to these presents.
21.11 Publication of Rights - The Lessee may register the Lease by summary
only, to the extent that such summary does not refer to any
financial terms and conditions and that the prior approval of the
Lessor has been obtained. The Lessee shall pay the cost of
registration and shall provide the Lessor with one (1) registered
copy of the summary. The Lessee will, at the Termination of the
Lease, cause the registration of the summary to be canceled at its
expense, failing which the Lessor(3) may do so at the Lessee's
expense.
21.13 Partial Invalidity - All of the parts of this Lease are divisible.
If for any reason whatsoever a provision thereof is judged to be
illegal or unenforceable, the other provisions of the Lease shall
remain in effect mutatis mutandis.
21.14 Interpretation - In this Lease, unless the context dictates
otherwise, the masculine includes the feminine and the singular
includes the plural and the words "herein above" and "these
presents" as well as similar words or expressions shall refer to the
Lease in its entirety.
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(1) six (6)
(2) and the Lessee
(3) , following the expiration of five (5) days notice to Lessee
19
21.15 Laws - The Lease shall be governed by the laws of the province of
Quebec(1) and the parties shall take all proceedings in the court of
jurisdiction for the judicial district of Montreal.
21.16 Late Payments - The acceptance by the Lessor of any ante-dated
cheque or of any late payment shall be considered as a means of
collection only, subject to the rights of the Lessor pursuant to
these presents. Any sums unpaid by the Lessee(2), shall bear
interest at the Prime Rate.
21.17 Partial payment of Rent - The payment by the Lessee of an amount
inferior to the Rent, shall not be deemed to be an acknowledgment of
total payment of the Rent and the Lessor shall be deemed to have
accepted such payment as partial payment without prejudices to or
under reserve of the Lessor's rights and recourses in order to
recover the balance due.
21.18 Solidary Liability - Should the Lease be signed by several persons
their liability shall be solidary so that each of them shall be
liable for all of the obligations of the Lessee under this Lease.
21.19 Titles - The titles and the numbering of the articles have been
inserted as a matter of convenience and shall not be used to
interpret the text thereof.
21.20 Protection of Information - The Lessee specifically authorizes the
Lessor to collect (and to establish a file, if the Lessor so wishes)
all information on the Lessee , including the solvency of the Lessee
which may be relevant or necessary for the execution of the Lease.
To this end, any person, including personal information agents
(credit bureaus), banks, sub-contractors and suppliers, having such
information are, by these presents, authorized to give such
information to the Lessor during the Term and subsequently thereto
if necessary.
21.21 Understanding of the Lease - Notwithstanding that the Lease was
drawn up and submitted by the Lessor, the Lessee acknowledges that
it has negotiated the Lease, that it understands all of its
provisions and that the Lessor has given the Lessee adequate
explanations as to the nature and extent of the Lease.
ARTICLE 22
REGULATIONS
22.1 The Lessee shall observe the regulations respecting the use of the
Immovable and of the Common Areas, which are annexed hereto as
Schedule "C", as such regulations may be modified by the Lessor, to
the extent that they are not in contradiction with the Lease. The
regulations may differ depending on the type of business located in
the Immovable but may not be discriminatory.
ARTICLE 23
ENVIRONMENTAL MATTERS
23.1 During the Term, the Lessee agrees to respect the Environmental
Legislation and comply therewith promptly at its expense and to
immediately notify the Lessor of any release and discharge and
presence inside or outside the Leased Premises of any Contaminants
and Hazardous Materials which are in breach of the Environmental
Legislation.
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(1) and the laws of Canada applicable therein
(2) or the Lessor, as the case may be,
20
The Lessee is liable for any damage whatsoever caused in or to the
Immovable or the Leased Premises as a result of non-compliance with
the Environmental Legislation, which damage may also entail the
termination of the Lease.
Notwithstanding anything to the contrary, the Lessee undertakes to
save and hold harmless the Lessor, its representatives, agents or
employees from any claims, losses, costs, fees, expenses, damages
for bodily injury, moral damages, property damages, actions, suits
or proceedings arising from or attributable to Lessee's act,
refusal, negligence or omission to comply with the Environmental
Legislation. (1)
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(1) The foregoing provisions of this Section 23.1 shall apply, "mutatis
mutandis," to the Lessor's obligations to respect the Environmental
Legislation.
21
ARTICLE 24
LANGUAGE
24.1 The Parties specifically declare that they have requested the
present lease and all documents relating thereto to be drawn up in
the English Language. Les Parties declarent qu'elles ont demande que
le present Bail et tout document s'y relatant soient rediges en
anglais.
ARTICLE 25
SPECIAL PROVISIONS
25.1 LEASEHOLD IMPROVEMENTS
The Lessor declares that at the commencement of the Lease, all
utilities and services such as heating, air conditioning, if any,
electricity and doors shall be properly functional(1).
The Lessee declares that it has examined the Leased Premises and
that it is satisfied and content therewith. The Lessee agrees and
covenants to take the Leased Premises "AS IS", in their present
state and condition, save and except for leasehold improvements
(hereinafter referred to as "Initial Leasehold Improvements") which
shall be performed by the Lessor, at its cost, in accordance with
final plans to be prepared by the Lessor and approved by both
parties(2). The cost of the Leasehold Improvements, including the
cost for all base building items, the cost incurred by the Lessor to
have the final plans prepared, the administration, supervision,
design and professional fees are estimated at ONE HUNDRED AND SIXTY
THOUSAND DOLLARS ( $ 160,000.00) excluding G.S.T. and G.S.T.
Notwithstanding anything contained in this article, the Lessor's
liability for the cost of the Initial Leasehold Improvements shall
not exceed ONE HUNDRED THOUSAND DOLLARS ( $ 100,000.00 ) excluding
G.S.T. and Q.S.T., any sum in excess thereof being the
responsibility of the Lessee.
25.2 OPTIONS TO RENEW
First Option
Provided the Lessee is not or has not at any time been in default
pursuant to the Lease, the Lessor shall grant to the Lessee a first
option to renew the Lease. ((hereinafter called "First Option") for
an additional period of ONE (1) year, commencing on the date of the
Termination of the Lease and ending ONE (1) year later, provided the
Lessee notifies the Lessor of such intention in writing by
registered or certified mail at least SIX (6) months prior to the
Termination of the Lease, failing which, the First Option shall
become null and void and of no legal effect whatsoever. In the event
of the Lessee exercising the First Option, all terms and conditions
of the Lease shall remain in effect for the renewal period, save
that:
(i) The Minimum Rent shall be at a rate equal to the then
current market value for comparable space in the
Building in which the Leased Premises are located;
(ii) The Lessor shall not be obliged to execute any leasehold
improvements in the Leased Premises.
Second Option
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(1) Should same not be the case, all costs relating to the remedying of
this situation shall be borne solely by the Lessor.
(2) , and save for any latent or structural defects, which shall be
remedied by Lessor at its sole cost
22
Provided the Lessee has exercised the First Option and provided it
shall not at any time be in default pursuant to the Lease, the
Lessor shall grant to the Lessee a second option to renew the Lease
(hereinafter called "Second Option") for an additional period of ONE
(1) year, commencing on the date of the expiration of the First
Option and ending ONE (1) year later, provided the Lessee notifies
the Lessor of such intention in writing by registered or certified
mail at least SIX (6) months prior to the expiration of the First
Option, failing which, the Second Option shall become null and void
and of no legal effect whatsoever. In the event of the Lessee
exercising the Second Option, all terms and conditions of the Lease
shall remain in effect for the second renewal period, save that:
(i) The Minimum Rent shall be at a rate equal to the then
current market value for comparable space in the
Building in which the Leased Premises are located;
(ii) The Lessor shall not be obliged to execute any leasehold
improvements in the Leased Premises.
Third Option
Provided the Lessee has exercised the Second Option and provided it
shall not at any time be in default pursuant to the Lease, the
Lessor shall grant to the Lessee a third option to renew the Lease
(hereinafter called "Third Option") for an additional period of ONE
(1) year, commencing on the date of the expiration of the Second
Option and ending ONE (1) year later, provided the Lessee notifies
the Lessor of such intention in writing by registered or certified
mail at least SIX (6) months prior to the expiration of the Second
Option, failing which, the Third Option shall become null and void
and of no legal effect whatsoever. In the event of the Lessee
exercising the Third Option, all terms and conditions of the Lease
shall remain in effect for the third renewal period, save that:
(i) The Minimum Rent shall be at a rate equal to the then
current market value for comparable space in the
Building in which the Leased Premises are located;
(ii) The Lessor shall not be obliged to execute any leasehold
improvements in the Leased Premises.
Fourth Option
Provided the Lessee has exercised the Third Option and provided it
shall not at any time be in default pursuant to the Lease, the
Lessor shall grant to the Lessee a fourth option to renew the Lease
(hereinafter called "Fourth Option") for an additional period of ONE
(1) year, commencing on the date of the expiration of the Third
Option and ending ONE (1) year later, provided the Lessee notifies
the Lessor of such intention in writing by registered or certified
mail at least SIX (6) months prior to the expiration of the Third
Option, failing which, the Fourth Option shall become null and void
and of no legal effect whatsoever. In the event of the Lessee
exercising the Fourth Option, all terms and conditions of the Lease
shall remain in effect for the fourth renewal period, save that:
(i) The Minimum Rent shall be at a rate equal to the then
current market value for comparable space in the
Building in which the Leased Premises are located;
(ii) The Lessor shall not be obliged to execute any leasehold
improvements in the Leased Premises;
(iii) The present option shall cease to remain in force.
25.3 LESSOR'S ENTRY
In all instances in this Lease where the entry by the Lessor into
the Leased Premises is provided, the Lessor, its agents or
representatives shall provide the Lessee with not less than
twenty-four (24) hour advance written notice (unless longer notice
is provided for elsewhere
23
in the Lease) in each instance prior to its entry upon the Leased
Premises, except in the cases of emergency or routine janitorial
service. In cases of emergency, the Lessor shall use its best
efforts to notify the Lessee prior to entering upon the Leased
Premises.
25.4 LESSEE'S ACCESS TO LEASED PREMISES
The Lessee shall be allowed full access to the Leased Premises and
the use of all services in respect thereof at all times, seven (7)
days per week, twenty-four (24) hours per day, the whole at no
additional cost to the Lessee.
24
25.5 LESSOR'S OBLIGATIONS TO OPERATE
The Lessor covenants and aggress throughout the Term of the Lease,
it will operate the Immovable in a first class manner and will
maintain and keep in good order and repair, the Common Areas,
including, without limitation, the parking area, and will keep it
properly drained and free of ice and snow and in suitable condition
for the purposes of the Lessee and other tenants of the Immovable
and their employees, customers and suppliers at all times as may be
required for the purposes of business operations of the Immovable.
25.6 LESSOR'S OBLIGATION TO PERFORM WORK
Notwithstanding anything contained in the Lease, and subject to the
Lessee's obligations contained in article 7.3, in the event that any
statute, by-law, law, ordinance, regulation, order or requirement of
law or any insurance advisory body requires work of a structural
nature to be made to the Leased Premises, same shall be performed by
the Lessor at its sole cost and expense.
25
Signed in the City of Saint-Laurent,
This 23rd day of September 1997.
SITQ INC.
for:
SITQ INDUSTRIEL INC.,
ABRIM 14 INC.,
149855 CANADA INC.,
▇▇▇▇▇▇ ▇▇▇▇▇▇ INC.,
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------- --------------------------------
Witness ▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- --------------------------------
Witness ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Signed in the City of New Jersey
This 15th day of September 1997.
H. POWER ENTERPRISES OF CANADA INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- --------------------------------
Witness ▇▇▇▇▇ ▇▇▇▇▇▇▇
By:
--------------------------- --------------------------------
Witness
26
SCHEDULE "A"
ENVIRONMENTAL QUESTIONNAIRE
(The following questionnaire must be completed and signed by the Lessee)
COMPANY NAME: H. POWER ENTERPRISES OF CANADA INC.
TENANT NUMBER: 2350-50-1069-11
Person responsible for environmental risks: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Telephone No.: Office: ▇▇▇-▇▇▇-▇▇▇▇ Residence: ▇▇▇-▇▇▇-▇▇▇▇
Ext. 449
GENERAL INFORMATION
A) Describe the business activities carried on in the Leased Premises.
Research and Development Activities in the area of fuel cell
technology development in support of anticipated future
manufacturing requirements.
B) Will the business activities to be carried on in the Leased Premises
entail the use of Contaminants and Hazardous Materials? If so,
describe them.
Materials to be used in the above described activities are not
considered to be hazardous or contaminants. Lab quantities of
Hydrogen and other gasses will be present in approved storage
containers.
C) Indicate the approximate amounts of Contaminants and Hazardous
Materials which will be generated, monthly or annually, in the
Leased Premises.
Storage cylinders of Hydrogen up to 10 will be in the facility under
approved storage methods.
D) How do you intend to store the Contaminants and Hazardous Materials
described in C)?
Material storage will have the required isolation of material and
proper securing of storage tanks,.
E) How will you dispose of the Contaminants and Hazardous Materials
generated in the Leased Premises by your business and who will be
the carrier?
The Hydrogen will be consumed in the fuel cell process. No
contaminants are generated in the process.
Cont'd / Questionnaire / Page ii
F) Will the business activities to be carried on in the Leased Premises
require that you obtain any certificate of authorization, permit or
environmental approval? If so, give details and attach your
certificate.
It is not anticipated that any environmental permitting will be
required at this time. Should the nature of the activity change in
the future the appropriate permits will be obtained at that time.
G) Will the business activities to be carried on in the Leased Premises
entail the discharge of Contaminants and Hazardous Material in the
water system or in the air?
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H) Will pollution control equipment be required in the Leased Premises
to ensure that the discharge of Contaminants or Hazardous Materials
in the water system or in the air will comply with the Environmental
Legislation? If so, give details and list the standards to be met
Not at this time. If the nature of the operation changes this will
be addressed at that time.
I) Will the business activities to be carried on in the Leased Premises
necessitate the installation of an underground or surface storage
tank in the Leased Premises ? If so, describe in detail the tank to
be installed and material to be stored.
No.
J) Do you intend to have a prevention training or emergency plan in
place to prevent an environmental incident? If so, give details and
attach a copy of the plan and training procedure.
As a part of good business operation all HPEC employees will receive
training in the appropriate areas. Since there are no materials of
concern a specific environmental training plan is not required.
DATE: SIGNATURE:
------------------- ----------------------
SCHEDULE"B"
PLAN OF LEASED PREMISES
[Insert Picture]
[Insert Picture]
SCHEDULE"C"
DESCRIPTION OF LAND
ON WHICH THE IMMOVABLE IS ERECTED
That certain emplacement fronting on Begin Street, known and
designated as lot number TWELVE of original lot number TWO HUNDRED
AND FIVE (205-12) on the said Official Plan and Book of Reference of
the Parish of Saint-Laurent.
With the one storey industrial building thereon erected bearing
civic numbers 1055 to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇.
SCHEDULE"D"
REGULATIONS
The Lessee shall observe the following provisions regulating the use and
occupation of the Leased Premises and of the Common Areas:
1. keep the windows of the Leased Premises clean;
2. promptly replace, at its expense, any cracked or broken windows by
windows of the same nature and quality;
3. keep, at its expense, the Leased Premises clean and in a good state
and ensure the absence of insects, rodents or other vermin;
4. keep all refuse, waste or rubbish in such containers which the
Lessor deems acceptable and in a location it determines;
5. not to place or keep any article or merchandise in the Common Areas;
6. not to permit any undue accumulation of rubbish, waste or refuse in
the Leased Premises and in the Common Areas;
7. not to permit the parking of delivery vehicles in such a manner as
to hinder the use of the exterior Common Areas;
8. not to use the plumbing installations for purposes other than for
which they were destined and not to discard any toxic substance
whatsoever therein;
9. not to use, make or keep in the Leased Premises any product,
substance or contaminant which risks the Lessor of being exposed to
any claim whatsoever;
10. in order to facilitate snow removal, not to park any vehicle
overnight on the parking lot from the first (1st) day of November to
the first (1st) day of April. Any vehicles left on the parking lot
overnight shall be removed, unless prior written authorization has
been given by the Lessor;
11. provide to the Lessor a list of emergency telephone numbers so that
the Lessee may be contacted seven (7) days a week;
12. not to obstruct or disrupt the operation of the heating, ventilation
and air conditioning systems serving the Leased Premises.
SCHEDULE "E"
RESOLUTION
EXCERPT OF THE MINUTES OF A MEETING OF THE DIRECTORS OF H. POWER ENTERPRISES OF
CANADA INC., (THE "COMPANY") HELD THIS 17th DAY OF SEPTEMBER 1997.
IT IS RESOLVED THAT:
The Company enter into a Lease (the "Lease") with SITQ INDUSTRIAL INC., ABRIM 14
INC., 149855 CANADA INC., ▇▇▇▇▇▇ ▇▇▇▇▇▇ INC., represented by their mandatary,
SITQ INC., for the premises located in 1069 Begin, St-Laurent (Quebec), the
whole in accordance with a Lease which has been submitted to the meeting and
that ▇▇▇▇▇ ▇▇▇▇▇▇▇ be authorized to sign the Lease on behalf of the Company and
to make all modifications which he deems at his sole discretion, to be
appropriate.
I, THE UNDERSIGNED, CERTIFY that the foregoing is a true copy of a resolution
adopted at a meeting of the directors of H POWER ENTERPRISES OF CANADA INC.,
duly called and held this 17th day of September 1997.
This 17th day of September 1997.
Secretary